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ALB Insights #23: The surreal experience of doing North Korea work (August 22, 2017)



For lawyers, North Korea remains a surreal place to do business

Frequently in the news of late, North Korea has a well-earned reputation for being isolated, eccentric, and completely unpredictable. South Korean lawyers who do regular work in or related to the hermit kingdom say that their experience backs up this perception, finds John Kang.

In the past few weeks, the world might have been riveted by North Korea and its threats to attack the United States, but for South Korean law firms that do DPRK work, the reality has been far more mundane – negotiating agreements, advising government bodies and meeting with officials from their northern neighbour. But in one aspect, there is no difference: in private, the North is just as unpredictable as it is in public.  
 
There are just a handful of South Korea law firms that have dedicated DPRK practices, and these include Big Five firms like Bae, Kim & Lee and Shin & Kim. In 2002, BKL became the first firm to launch a North Korea practice, and that currently has 14 attorneys, including five partners. Shin & Kim officially launched its DPRK practice in 2013, and that currently has eight lawyers, including four partners.

According to the two firms, “North Korea work” covers a wide range of services, from assisting South Korean businesses investing there to advising the government on legal issues related to inter-Korean relations, to even the legal aspects of a Korean unification.
 
Despite the variety of services offered, there is understandably a very limited number of clients for North Korea work, according to Lee Chan-ho, a senior foreign attorney in BKL’s North Korea practice. One of those is the South Korean government, which turn to law firms for advice on matters such as North Korean sanctions and the opening, and then suspending, of the Kaesong industrial project – a joint industrial complex between the two Koreas.

The practice is not limited to just North Korean law and its legal system, notes Kim Se-jin, a foreign attorney with BKL. “We also provide advice in connection with international law in general,” he says. “A lot of the sanctions on North Korea and their commercial relationships with other countries all need to be understood in the context of international law.”


ACCESS IS A CHALLENGE

Working with North Korea is obviously not easy. It’s a challenge to even get access to North Korean laws and regulations, or understand how North Korean officials enforce their laws in the real world, says Lee, explaining that North Korean law is still classified within the country, although it did start to publish court documents about 10 years ago.

This makes finding legal sources and precedents challenging as well, adds Kim. “Even if there is a law, there’s the question of how that law is actually interpreted,” he says.

For partner Yoo Wook, who launched BKL’s North Korea practice, the most difficult part of doing North Korea work is the lack of a transparent dispute resolution system. “North Koreans have their own court system, and we have no information regarding how cases are actually heard,” says Yoo, who also heads the firm’s legislative and regulatory consulting team. “And since we do not have any information related to how rulings are handed down, the only way to resolve disputes is through arbitration.”
 
But even that is far from foolproof. “North Korea is not part of the New York Convention, so it’s impossible to enforce arbitration awards in North Korea,” says Yoo.

Lee Soo-hyun, a partner at Shin & Kim who leads the firm’s North Korea practice, faces similar difficulties. “If we put a clause in a contract, we cannot predict that the clause will be enforceable by law, or taken seriously by a court,” he says. “In North Korea, there is no concept of court precedent.”

Lee shares an example where South Korean companies wanted to invest in North Korea through a joint venture together with Russia, but all his team could do was draft the contract and hope for the best. “We had no faith that, if there was a dispute, we could go to an independent court to plead our case and obtain a judgment,” he says. “There is no way to enforce a contract when there is a dispute. You just have to trust the North Koreans to honour the contract.”

Another challenge when it comes to North Korea work is verification. “There is no way to verify ownership of property,” he says. “Since there is no concept of private property in North Korea.”

“When working on a transaction, we first try to verify who owns a certain property, and then we can negotiate carefully and reach an agreement,” Lee continues. “In the case of a contract with North Korea, we cannot even verify if the property exists or not.”

And this problem also applies to people. “North Koreans don’t carry business cards,” he adds. “There is really no way to verify if a person is who he says he is.”

To contact the writer, please email john.kang@tr.com.



Bootstrapping tales; or how to launch a foreign law practice in Myanmar

Even as economic conditions improve in Myanmar, the Southeast Asian country remains a difficult place to open an office, given the poor infrastructure and shortage of qualified talent. Raj Gunashekar speaks to international law firms about the challenges they faced in launching a Myanmar branch. 
 
Regular visitors to Myanmar are frequently impressed by the rapid improvements taking place in the country, which endured minimal development during its decades of isolation.
 
However, while liberalisation has brought understandable benefits including robust economic growth, businesses looking to set up in one of Asia’s most exciting economies still face several challenges. These include a limited mobile network and poor infrastructure as well as the paucity of hotel spaces that meet international standards and the looming presence of financial and trade sanctions.

The situation is no different for international law firms. Take for example, Allen & Overy, which entered Myanmar in 2013. 
 
“We had to import all the furniture, IT equipment and other things that you need for an office, including getting business cards printed offshore. We struggled – and indeed we still do – with poor internet connectivity and power outages,” says Simon Makinson, head of Myanmar practice, Allen & Overy.
 
But the biggest challenge was office space, as there were very few purpose-built office buildings in Yangon. The firm ended up opening an office at the Inya Lake Hotel.

“What shocked us was the cost,” says Makinson. “We had to pay prices higher than Mayfair for our small office.”
 
And there were substantial issues with mobile and Internet connectivity. A SIM card for a local phone cost $1,000 and the firm was paying a fortune for Internet use.

“I think everyone was a bit frustrated, but having set up in several other developing markets, we all recognised that it would get better over time!” he adds.

Finding space has been easier for Stephenson Harwood, which will launch its own office in Yangon in September. The firm maintained an association with local law firm U Tin Yu & Associates between 2013 and 2016.

“As we now open our own office, we do so at Junction City – a mixed-use commercial joint venture between Myanmar conglomerate Shwe Taung and Singapore's Keppel Group,” says Tom Platts, who leads the firm’s Myanmar practice. “It could not be more different from the Yangon of just a few years ago.”
 
It was a similar experience for Dentons, which opened in Yangon last year. “The office space market in Yangon had softened a little, and there were plenty of choices,” says Mark Livingston, resident partner, and Janice Ngeow, director of Dentons Myanmar Ltd.

“The obvious choice would be either the mammoth Myanmar Plaza or the swanky new City Junction –  both felt no different from the typical Singapore modern steel-and-glass complexes with a mall attached.”

The firm eventually opened in the refurbished Strand Square, a former government building located on the banks of the Yangon River. 



STAFFING ISSUES

Finding office space is one thing; peopling it with quality local staff is another.  Law firms have not found it easy to hire the right staff in Yangon, either office support or in legal roles, as few had previous experience working for global law firms or even international companies.
 
“For historical and developmental reasons, most young professionals have had limited exposure to international business,” say Livingston and Ngeow. “ Some of the core practical skills that we might take for granted in other jurisdictions are therefore less prevalent in the local workforce at present.”
 
“Exacerbating this situation on the legal front, current practical legal training requirements are litigation-focused and don’t adequately address the commercial and transactional skills in demand for foreign investment work,” they explain.
 
Stephenson Harwood found it difficult as well. “It was a challenge to find an appropriate team of local legal personnel, with the ability to demonstrate the high standards expected of an international law firm, and to deliver a sophisticated and polished product to our domestic and global client base,” says Platts, who adds the recruitment process “took many months.”

Additionally, finding qualified English-speaking support staff with the right skills for contemporary international business is probably the biggest challenge for just about all foreign companies operating in Myanmar at present, and the legal profession is no exception, say Livingston and Ngeow.
 
The solution is using your network, and also banking on luck. “We struggled at the start, but we were very fortunate to be introduced to a very smart Burmese lady who had previously worked for NGOs in Myanmar and outside the country, who was able to use her network to find good, smart and reliable staff,” says Makinson. “It all comes down to having the right network and even today it can be challenging to find the right people and particularly those with relevant experience.”

To contact the writer, please email raj.gunashekar@tr.com.




ALB Hot Startups: LawGuide Singapore
 
ALB Hot Startups is a series that looks at the most promising new legal-tech companies in Asia. In this edition, we look at LawGuide, which claims to have launched Singapore’s first law-related chatbot. By Raj Gunashekar
 
Name: LawGuide Singapore

Year of founding: 2016

Located: Singapore

Founder: Jonathan Wong

What it does: LawGuide Singapore provides consumers with basic legal information through its website, social media channels and “Singapore’s first law-related chatbot.” The legal information is presented in bite-sized and jargon-free form through animation, videos and infographics.

Markets serving: Singapore

Capital raised till date: Undisclosed

Key clients: General public, lawyers, and law firms in Singapore

How the idea came about: Wong realised that when faced with a potential legal problem, people sought basic answers before engaging a lawyer and, in many cases, even before deciding whether they needed one.

“We decided to help by taking complex and often confusing information on commonly encountered legal issues and presenting them in short, simple pieces delivered in media-rich form through our website and social media channels – the focus of everyone’s attention in a digital-first and mobile-first economy,” he says.

He also notes that even though legal issues and law-related problems can turn up anytime, the sources of legal information were fragmented.

As he explains, “This meant that information about the law was not always easy to find because it can’t be sourced from a single dependable source or platform. To complicate things, even if a person did eventually find the information, it was not always easy to understand because information and knowledge about the law were often presented in long articles filled with technical legal terms and jargon.”

So while many people in Singapore can quickly get more information on what and where to eat, it’s not the case for dependable legal advice or assistance if they were in trouble, points out Wong. “Frankly, we felt that this was an uncomfortable proposition and reality that we shouldn’t have to accept. So, that's why LawGuide Singapore is changing that.”

He also believes that access to justice shouldn’t be limited to improving consumers’ access to lawyers or making legal services more affordable. “This is why with LawGuide Singapore, we are on a small, personal mission to educate and empower consumers by making information on basic but essential areas of Singapore law easier for the public to find, understand and use,” he adds.

The journey so far: According to the startup, LawGuide is Singapore’s fastest-growing and most-followed online legal information platform in terms of social media reach and engagement.

At present, LawGuide claims more than 19,000 Facebook followers and over 10,000 monthly unique website visitors. It says it reaches an average of about 150,000 people every week on average.

To contact the writer, please email raj.gunashekar@tr.com.