Japan’s present day legal sector is virtually unrecognisable from the one that existed prior to 1987. The presence of foreign law firms (FLFs) has irrevocably reshaped the complexion of the legal sector, lifted standards and changed the way business law is conducted in the country. Not only has their presence proved useful in helping wean Japanese business off government support and onto the welcoming bosom of business lawyers, it has also helped the development of domestic law firms (DLFs), who have gone from strength to strength.
The Japanese ‘Big Four’ (Anderson Mori & Tomotsune, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu, and Nishimura & Asahi) have gone from modest-sized firms to legal leviathans, casting a shadow over the legal market. After 22 years it is the DLFs who dominate the arena.
And while this is not likely to change in the foreseeable future, the cooperative consensus that has so far typified the relationship between DLFs and FLFs in Japan is set to change. In fact, the more observant may have already noticed signs of this occurring: from joint law ventures to the hiring of Japanese graduates by FLFs and gaiben by DLFs – if the past 22 years were about cooperation, it seems the next 22 will be about competition.
“The international law firms with large numbers of bengoshi [Japanese attorneys] or those with JVs or alliances with substantial local firms present the biggest threat to large independent local firms because they compete directly with them for domestic law transactional work.”Darrel Holstein, Milbank