The depreciated yen is slowly but surely benefitting the economy, alongside other factors included in the ‘Abenomics’ master plan – introduced by Japanese Prime Minister Shinzo Abe. The government is looking to increase tourism from 13 million to 20 million in time for the 2020 Olympics, in conjunction with which lawyers anticipate a minor construction boom for the tourism and hospitality industries. However in the long term, many have speculated that Abe’s policies will not be advantageous due (in part) to the lack of structural reform. The domestic legal market is still relatively closed, primarily as a result of the language barrier faced by foreign practitioners, and there remains a clear division between local and international firms operating in the country.
Outbound M&A continues to dominate the workload for international firms in Japan, while local firms agree that cash-rich Japanese companies are continuing to look abroad for investment opportunities. Such investment is occurring primarily in Africa and Eastern Europe, relatively new jurisdictions for the trading houses compared to their traditional interests in Southeast Asia and the US.
The J-REIT market continues to do well, as does the renewable energy sector; and while nuclear energy has been dormant since the Fukushima disaster in 2011, firms are gearing up for future activity.
While shipping has remained relatively stable, the marine-construction sector has witnessed a trend towards consolidation (via merger) in an attempt to remain competitive before the seemingly ever-thriving Chinese and Korean companies in this industry. Concurrently, there has been a drop in charter rates, which has affected small shipping businesses.
Changes in labour legislation, which came into effect at the end of September 2015, means companies can now use temporary staff indefinitely, but with a requirement that they change staff every three years, in line with attempts to deregulate Japan’s labour market as part of the government’s growth strategy. In the intellectual property sector, the Patent Act has been amended to make infringements easier to take to court; the norms concerning trade secrets in competition law have also seen changes.
After recent expansion in Southeast Asia, the ‘Big Four’ law firms in Japan’s domestic market remain the same: Anderson Mori & Tomotsune, Mori Hamada & Matsumoto, Nagashima Ohno & Tsunematsu and Nishimura & Asahi.
While the dominant firms in the international market also remain largely unchanged, developments include new entrant King & Spalding Gaikokuho Jimu Bengoshi Jimusho, which hired a number of former Ashurst partners, and, following the dissolution of Bingham McCutchen, the movement of the majority of its members to Anderson Mori & Tomotsune. Several firms employ a different business model from other internationals and are particularly noted for the strength of their bengoshi (local lawyer) teams: these firms are Baker & McKenzie (Gaikokuho Joint Enterprise), Hogan Lovells Horitsu Jimusho Gaikokuho Kyodo Jigyo, Morrison & Foerster Ito & Mitomi and White & Case LLP – White & Case Law Offices (Registered Association).
Firms in the spotlight
Iwata Godo is one of Japan’s premier and oldest law firms. It was established in 1902 as one of the first business law firms by Chuzo Iwata, an attorney-at-law who subsequently held various positions, including serving as Minister of Justice and president of the Japan Federation of Bar Associations. It is a full-service firm and each of its practice areas is highly regarded. Its goal is not to be the largest law firm but to be the firm of choice for clients with respect to their most challenging legal issues, transactions and disputes.