Japan continues to combat the lingering effects of the COVID-19 pandemic, with strict border controls impacting both tourism and business travel, while companies begin to face the prospect of repaying pandemic-era government loans. Meanwhile new developments, including international turbulence around the Russia-Ukraine war and a historically weak yen, provide new obstacles to overcome.Despite this, expectations for the future of the economy remain positive, marked by a notable increase in incoming investment, with the real estate, technology, and green energy sectors in particular seeing a rise in activity. While this may be driven by the weak yen allowing foreign currencies greater returns, trends such as an increase in hotel related transactions suggest investors see positive returns in the long-term, with areas that are currently struggling set to rebound over coming years.The domestic market continues to be dominated by the traditional Big Four firms, Nishimura & Asahi, Nagashima Ohno & Tsunematsu, Anderson Mori & Tomotsune, and Mori Hamada & Matsumoto. Preeminent within Japan, these names have been looking to expand overseas coverage within recent years, building strong international relations, and opening new offices across Asia, the US, and Europe. Following closely behind the big four are TMI Associates and Atsumi & Sakai, full service firms with sizable teams and deep reserves of expertise of their own. These are in turn followed by long-established and well respected firms such as City-Yuwa Partners, Ushijima & Partners, Oh-Ebashi LPC & Partners, and Iwata Godo, which passes its 120th anniversary this year.The past decade has also seen the establishment and growth of multiple new firms, including southgate, ZeLo, a Foreign Law Joint Enterprise and Miura & Partners. Frequently comprised of individuals drawn from major domestic and international practices, these have been met with early success, and promise to be a major part of the legal landscape in the years to come.Baker McKenzie (Gaikokuho Joint Enterprise) and Morrison Foerster remain at the forefront of international firms, with strong multidisciplinary offerings. Competition between the foreign firms remains healthy, however, with names such as White & Case LLP - White & Case Law Offices (Registered Association) and Shearman & Sterling fielding strong teams of their own. The busy market of the past year has seen most firms looking to expand, with new personnel coming both from Japan and overseas, balancing domestic insight with international experience.TMT has been an extremely active sector, with the increasingly prominent venture capital market supplementing an already thriving tech M&A space. Government funding has further stimulated this area, with areas of focus including space development, self-driving cars, and the metaverse. Meanwhile Web3 development continues apace, with cryptocurrencies and NFTs remaining popular despite instabilities in Western markets.The tech industry has also been under increased scrutiny from regulators, with the JFTC closely monitoring the digital market. Regulators have been facing concerns beyond data protection and other technology-based issues, however, with cartel actions and a notable rise in merger applications keeping authorities highly active.One practice area that may be seen to have benefited from the turbulence of past years is dispute resolution, for which difficult times have generated a surplus of work. With Japanese firms increasingly looking outward, departments have been building robust international arbitration practices, with a notable case being Anderson Mori & Tomotsune recruiting David MacArthur from Korean firm Bae, Kim & Lee LLC to develop and co-lead its team.
Firms in the Spotlight Legal market overview
Herbert Smith Freehills
Our Tokyo office opened in 2000, and is consistently recognised as one of the leading law firms in Japan. We advise Japan’s largest and most high-profile companies and international corporations on inbound and outbound cross-border transactions, energy projects and dispute resolution. As our work focuses on multi-jurisdictional matters for Japanese and multinational corporations, we work …View Profile...