Japan is the third-largest economy in the world – and, as one practitioner put it, “To a large extent Japan’s troubles and successes are everyone’s troubles and successes.” Despite the country’s recent economic struggles, 2016 has been a year of important milestones – particularly across the infrastructure, energy, financial and trade sectors. While Japan suffered badly in 2011 from the Tōhoku earthquake and subsequent Fukushima Daiichi nuclear disaster, the 2020 Olympic Games (to be held in Tokyo) have stimulated large-scale development and growth across the country. With just four years to go until the Games, legal practitioners report that 2016 has been an exciting time for their practices, due to an increase in demand for legal services and a robust market to work in.
Following last year’s economic troubles, Japan has so far managed to successfully avoid a recession, with the economy growing faster than anticipated in the first three months of 2016. Higher government spending has helped to offset any weakness in business investment and exports, leading to a growth pace of 1.7 per cent in gross domestic product. The Japanese government has been trying to boost its stagnating economy for years through a reform package, dubbed “Abenomics”, which began in 2012 – but has so far been unsuccessful in spurring the amount of economic growth laid out in the reform guidelines. Yet with the avoidance of a recession, law firms have reported an uptick in corporate-related work, including M&A transactions. In particular practitioners at international law firms have seen their workload dominated by outbound M&A, and local firms report that many Japanese companies have money to invest and are looking abroad for opportunities to acquire assets, particularly in Africa and Eastern Europe. In addition, domestic capital market lawyers have also seen an increase in activity. Global Capital reports that Japan’s stock market has experienced an 87 per cent growth since the 2012 election win for Shinzo Abe. Practitioners consider that Abenomics will continue to encourage stock market activity; as such, this will be a fruitful practice area for law firms throughout the coming months.
There has also been positive news regarding Japan’s trade outlook. The country has reported its first half-year trade surplus since the 2011 Fukushima nuclear disaster. It logged a January-June surplus of 1.8 trillion yen this year, after the recent severe drop in oil and gas prices took pressure off the country’s trade balance. The economy was severely affected by the quake-tsunami that led to the accident at Fukushima, resulting in soaring energy import bills and a string of trade deficits. The county’s export figures remain unsteady, with the value of shipments to significant markets such as China being down by 10 per cent in June and to the United States by 6.5 per cent. Yet overall Japan’s trade balance is positive, with lawyers reporting that trade departments in firms are “doing well” with “a strong amount of both litigation and advisory work around”.
And then, of course, there’s the Olympics – considered by many to be behind Japan’s improving economy. The Games are driving much of the development that has taken place in the country over this past year, as the government looks to increase the capacity for tourism from 13 million visitors to 20 million in time for 2020. Sources anticipate that the efforts to accommodate this increase in foreign visitors will result in a boom in construction and infrastructure activity, especially in relation to the hospitality and tourism sectors. Demand for such services has led to a noticeable increase in interest and activity from foreign investors, and indeed the construction market predicts a 1.6 per cent compound annual growth between 2015 and 2020. Law firms in the jurisdiction are poised and ready to take advantage of the increased demand for the provision of legal services.
Practitioners working in relation to the technology, media and telecommunications (TMT) sector have also felt the effects of this Olympic Games impetus. The country completed its broadband infrastructure in 2016, achieving a penetration rate of 100 per cent for consumers nationwide. In addition, there has been the extension of free Wi-Fi accessibility, combined with the streamlining of telecommunications regulations to better serve foreign visitors’ mobile devices. As a result TMT lawyers are expecting an uptick in demand for their legal services, from companies across the industry sectors hoping to take advantage of increased internet capabilities across Japan and the resultant market for a range of services and goods.
Despite this positivity, Japan’s energy sector is continuing to experience turbulent times. Following 2011’s Tōhoku earthquake and successive Fukushima Daiichi nuclear disaster, all nuclear plants were shut down by May 2012. The Ōi nuclear power plant resumed activity in June 2012, while the two nuclear reactors of the Sendai nuclear power plant were restarted last year (in August and November respectively). The country currently produces around 10 per cent of its electricity from renewable sources and is working towards a goal of 20 per cent by 2020. With only four years left to meet this target, energy lawyers are experiencing a surge in demand for regulatory and compliance advice, as well as environmental strategic planning assistance for traditional energy companies looking to diversify their portfolios. Practitioners who specialise in renewable energy law are finding themselves particularly well placed to take advantage of this increased activity, and firms looking to augment their market share would do well to consider expanding their expertise in relation to renewable energy sources. Practitioners also report that legal advice regarding environmental and ethical business practices has been in growing demand across all industry sectors, providing the opportunity for firms to expand the breath of their environmental practices and provide legal services to a wider range of companies and industries not just traditionally affected by environmental and energy concerns.
Despite the focus on renewables, since the Fukushima Daiichi disaster there has been an increased use of coal and gas to compensate for lost nuclear capability. This is reflected in the fact that Japan’s carbon emissions have increased by over 3 per cent, illustrating that lawyers operating in the more traditional energy spaces are still experiencing plenty of activity.
Another very significant development in recent months is the full liberalisation of the electricity market in Japan, which came to in effect earlier this year. Previously, electricity used in homes and businesses was sold only by a monopolistic power company in each region; however, from April 2016 full liberalisation of new entries into the retail electricity market means that all consumers, including families and shops, can choose at liberty from a range of power companies and price tariffs. This is part of a gradual roll-out lasting 16 years: liberalisation of the electricity market began for factories and other large-scale consumers in March 2000, and for small and medium-sized factories and buildings between April 2004 and April 2005. Such liberalisation of the market will offer Japanese lawyers wider opportunities to tailor their expertise to multiple electricity companies, who significantly will have yet to establish their own in-house teams, and create an increased client base from which local lawyers can solicit work.
The legal market itself has undergone some changes over the past year. Japan’s domestic market remains relatively closed with the “big five” law firms continuing to dominate in the country. With their growth plans focusing on South East Asia, these firms are also becoming contenders in regional work. Nagashima Ohno & Tsunematsu, TMI Associates, Anderson Mori & Tomotsune, Nishimura & Asahi and Mori Hamada & Matsumoto are considered the leading law firms for Japanese business legal advice and representation. There is still a significant language barrier faced by foreign practitioners looking to practice in Japan, which results in a clear division between local and international firms. Domestic firms are thus particularly well placed to offer their services to foreign and domestic companies looking to operate and invest in Japan, and thus the domestic market remains very robust. The international legal market includes Japanese lawyers that specialise in international business matters, and this last year has seen the dissolution of Bingham McCutchen which resulted in many of its former members moving to Anderson Mori & Tomotsune. Yet the international market is still doing well, illustrated by the entrance of the new King & Spalding Gaikokuho Jimu Bengoshi Jimusho office in Tokyo in 2015 which has hired a number of ex-Ashurst partners. Sources spoke of this development as “something to watch in the future” for its impact on the legal landscape.
With global networks, international firms are able to thrive as “the first port of call” for foreign and domestic companies regarding advice concerning in-bound transactions and out-bound strategic transactions involving Japanese entities. As Japan’s economy looks set to improve, the number of such transactions are expected to increase over the coming months and for all practitioners in Japan there is a real sense of optimism as they consider the near future.
Arbitration continues the steady growth it has previously demonstrated in Japan, and while national firms have become more internationalised, international firms also display an increasing presence in the jurisdiction. The Japan Commercial Arbitration Association sees a healthy number of cases per year, but still looks to its more eminent partners in the region for guidance on its Commercial Arbitration Rules, particularly Hong Kong and Singapore. However, with Japanese businesses adopting a more global outlook, arbitration looks set to increase its foothold in what could become an important market in the future. This year, 14 practitioners based in the country are considered to be the leading minds in domestic and international arbitration.
The start of 2016 saw the Bank of Japan introduce a negative interest rate of -0.1 per cent on commercial banks. The move looks to encourage these banks’ use of cash reserves and increase lending to businesses in order to stimulate the country’s suffering economy. At a grassroots level, the government continues to steer away from its traditional cash-based society, and encourage the use of modern alternatives such as debit cards and internet banking among its citizens. As the Japanese administration focuses on the development of modern banking and forces commercial activity, lawyers expect a diverse range of work over the coming year. This year we recognise 19 leaders in the field.
Historically, Japan has always ranked among the least corrupt countries in the world. As a country with the world’s third-largest economy by GDP, whose corporations find themselves well established in the market, Japan has never been at the epicentre of an enforcement action under the FCPA rules. Despite the perception that Japan lags behind in terms of foreign enforcement, anti-corruption is a key concern to the Japanese government and large corporate entities.
Despite the growing pressure on yen rates as a result of the aggressive easing policies from the Bank of Japan, lawyers have highlighted that the domestic capital markets have been very active over the past year. According to Global Capital, Japan’s stock market has seen an increase of 87 per cent since Prime Minister Shinzo Abe’s election win in 2012. As the Japanese administration continues to pursue “Abenomics”, lawyers believe that stock market activity will continue to grow, providing the legal community with much work over the coming year. We highlight 25 leading lawyers for their work in the field.
Since 2013, when Kazuyuki Sugimoto took office as chairman of the Japan Fair Trade Commission (JFTC), there has been a considerable focus on procedural change, culminating in the Antitrust Reform Act which took effect on 1 April 2015. Under this reform, JFTC orders are subject to review by judicial courts under the applicable administrative procedures laws, and a defendant company may file a complaint directly with the Tokyo District Court to quash such JFTC orders. The next areas of focus are reported to be fining guidelines for cartels and increasing the rights of defence in Japan. In this dynamic sector we recognise 32 lawyers specialised in merger control, cartel regulation and questions of dominance and market power.
As Japan continues to experiment with negative interest rates, the recent growth of the construction and real estate industry in the country has been uncertain. However, the construction of office buildings and factories nationally increased by 17.5 per cent and 18.8 per cent respectively in 2015, while the 2020 Tokyo Summer Olympics is also expected to boost the sector further; the construction market expects to see 1.6 per cent compound annual growth over 2015–2020. J-REITS and real estate acquisition and construction by private funds are also steady; many believe that whatever risks may have been associated with Prime Minister Shinzo Abe’s economic policies, these are not so great as to deter significant investment, and the worst of such uncertainty seems to be over. Twenty six individuals have been recommended as Japan’s leading experts.
Japan is under increasing pressure to accept more immigrants as its workforce shrinks. Government data released in November 2015 showed the number of workers in Japan is projected to fall by 7.9 million to 55.61 million in 2030. Despite this, prime minister Shinzo Abe ruled out any significant changes to Japan’s approach to immigration at the UN general assembly in New York in September 2015. With calls for Japan to help ease the refugee crisis in Europe, the debate looks set to continue. Five Gyōsei shoshi (administrative lawyers) and one bengoshi stand out in the market for their exceptional level of service.
Last year, the Japanese government enact the 2015 Tax Reform Bill with the aim of reducing the rate of corporate tax and lowering the annual rate of net operating loss deduction limitation. Coupled with this, the OECD’s Base Erosion and Profit shifting initiative has seemingly taken a more central role in public and government consciousness over the past year or so. While the Japanese government’s own plan is broadly in line with the BEPS initiatives, 2016 will see the government continue with their proactive approach to bring tax law in Japan into line with the new world tax order. In this chapter, nine practitioners are selected.
The Japanese energy sector has been experiencing turbulent times over the last year. Legal advice relating to the renewables sector has particularly seen an increase in demand following the restarting of the two nuclear reactors of the Sendai Nuclear Power Plant last year, after been turned off following Fukushima Daiichi nuclear disaster. In addition the country is working towards the goal of producing 20 per cent of its electricity from renewable sources by 2020.
We highlight four leading lawyers who are well thought of in franchising disputes as well as the structuring, negotiating and drafting of franchise agreements.
As Tokyo gears up to host the 2020 Summer Olympics for the second time in its history, lawyers are reporting that the related infrastructure projects and contract negotiation are still taking up the lion’s share of their time. EU trade negotiations are still yet to be concluded so the market remains dominated by Japanese contractors and will continue to be as the localised knowledge necessitated by this field is only open to the most experienced of lawyers.
As a result of the Bank of Japan’s easy money stimulus policies, the last year has seen Japanese insurance firms pursue opportunities in alternative markets. Last June, Tokio Marine Holdings Inc agreed to buy US insurer HCC Insurance Holdings Inc for $7.5 billion, making it, the largest acquisition ever by a Japanese insurer, according to Reuters. Foreign jurisdictions, in particular the US, are now garnering the attention of cash-rich Japanese companies who, facing a declining domestic market, are now looking elsewhere for business prospects. The practice area is particularly specialised, with only two leading individuals recognised here for their expert knowledge of the market.
The new IP Litigation chapter is designed to accommodate the unique IP legal marketplace in Japan. Clients who need representation before the Japan Patent Office (JPO), the Tokyo and Osaka District Courts, the IP High Court of Japan and the Supreme Court require the assistance of Japanese attorneys-at-law (bengoshi) and patent attorneys known as benrishi. The division between bengoshi and benrishi are similar to those in the Europe and the US, namely that benrishi usually (but not always) have technical backgrounds and handle prosecution matters, whereas bengoshi have a licence to litigate in the national courts and predominately come from non-technical backgrounds. However, often teams representing clients in infringement and invalidations proceedings are formed of patent attorneys, who have gained a licence to litigate before the courts (known as huki-benrishi) and act as a co-counsel with bengoshi. Aside from these divisions at the bar, the market is also made up of foreign attorneys-at-law, who although are not licensed to practice Japanese law often represent Japanese clients in jurisdictions abroad. The following 37 practitioners are licensed litigating benrishi, bengoshi or foreign attorneys at law, who are considered leading figures in the market.
Patent attorneys, known as benrishi, are typically persons who have passed the patent bar exam and are registered at the JPO, and who are often mandated to represent clients in prosecution matters before the JPO. Most have technical backgrounds in, among others subjects, chemistry, biotechnology, electronics and mechanical engineering; or have a non-technical specialisation in trademarks and design rights. The following 25 patent attorneys are among the most highly regarded in the market.
There have been several recent updates to labour and employment law in Japan – including the law to promote women in the workplace, which came into force as of 1 April 2016 and aims to counteract a decreasing workforce in the country by encouraging female participation in business. The Working Youth Welfare Act, meanwhile, aims to address the widespread practice of hiring large numbers of young employees and then forcing them to work excessive amounts of overtime, mostly without overtime pay. In this developing sector, six practitioners stand out for their ability to navigate the many laws, practices and amendments.
Recent advancements in medical technology and regenerative medicine are raising new challenges for Japan’s legal system. While the country’s pharmaceutical sector is almost completely dominated by domestic firms, the market is also the second largest in the world, with $115 billion of estimated sales in 2015. Coupled with an ageing population, the outlook for the sector’s growth continues to be bright, and the market is buoyant. Furthermore, with the Pharmaceuticals and Medical Devices Agency (PMDA) struggling to keep up with the pace of technological advancements, Japan proves itself an interesting and diverse jurisdiction for lawyers currently practicing. Thirteen lawyers stand out as the very best in the field working in Japan today.
Litigation is the most commonly used form of dispute resolution to settle large commercial disputes in Japan. The judiciary has a reputation globally for being honest, efficient and cost-effective. Cases are typically decided quickly, with an average 56 per cent of all cases being decided within six months. Civil cases are decided on average within nine months and patent cases are decided on average within 17 months. However in terms of the remedies available in Japan, damages are usually lower than, for example, the US and injunctions are more likely to be granted. We highlight 17 leading litigators in this chapter.
The market has continued to see significant activity in the M&A space in Japan throughout 2016. Last year saw a number of Japanese companies spend big on acquisitions, with outbound transactions exceeding $82 billion for the first time ever. Despite market uncertainty and continued stagnation in Japan, the robust and buoyant M&A market seems to have continued into the first part of the year, and Japanese lawyers have reported no let-up in activity. A number of Japanese companies are still looking to acquire foreign companies – Asahi has made an offer for three Anheuser-Busch InBev beer brands including Peroni, Grolsch and Meantime – in order to grow outside of the shrinking Japanese market. Twenty-nine corporate specialists are selected in this chapter.
Long considered a difficult jurisdiction for private funds, Japan now looks to be opening up both domestically and internationally. Domestically, the country’s risk-averse culture seems to be warming towards the international private equity market, as Japan’s huge $1.2 trillion public pension fund looks to invest in private equity as a way to boost its profit margins. For international parties, the much-discussed Article 63 Exemption will now allow offshore managers seeking Japanese investors to circumvent stringent restrictions on foreign investors. This should make the country a more appetising jurisdiction for investment. Seven lawyers have been chosen as the key players in the market.
In a country that has often boasted some of the most cutting edge technology, product liability has always been a dynamic area for Japanese lawyers. With Japan’s famously litigation-averse culture, the recent number of product liability litigation cases compared to similar economies has been low. However, since the amendments to the Consumer Product Safety Law almost a decade ago, Japan’s increasing product regulation has provided much for the country’s legal community to consider. Four names stand out as the top practitioners in this sphere.
Project finance is one of the most active sectors for law firms in Japan. In early 2016 the country witnessed its largest ever project finance deal – involving the construction of two new airports in Osaka – arranged by SMBC and Mizuho Bank and worth US$1.68 billion. Japanese investors have also been looking further afield, and project finance commitments in Africa have risen by 576 per cent in the last five years alone. In this sector, 16 lawyers stand out.
According to lawyers, the past year has seen a decline in the number of insolvency proceedings in Japan, a trend mainly driven by government policy. Prime Minister Shinzo Abe has discouraged distressed companies from filing for insolvency, instead instructing the financial services agency to help them to reassess the terms of their payments. In December 2015, it was announced that a state-backed fund would assist Toshiba with the restructuring of its home electronics division. As the government continues to pursue this policy, lawyers expect a steady stream of restructuring rather than insolvency work over the next year. Six leading individuals are highlighted in this chapter.
Over the course of 2016, Japan has completed its broadband infrastructure to achieve a penetration rate of 100 per cent for consumers nationwide. The forthcoming 2020 Olympic Games in Tokyo are driving much of the development in this area, as the government has endeavoured to accommodate an increase in foreign visitors to the country. Measures include the extension of free Wi-Fi accessibility and the streamlining of telecommunications regulations to better serve visitors’ mobile devices. Lawyers working in this sector are therefore expecting an uptick in demand for their services, as companies across the industry sectors look to take advantage of the increased internet capabilities and the markets that this will produce. Against such developments we highlight 12 lawyers.
Japanese economic forecasts paint a negative picture of the future. Despite attempts by Japanese Prime Minister Shinzo Abe to jolt the economy out of its 20-year lull, the prospects of the Japanese market remain dim with household spending dipping for its third straight month in May 2016 and core consumer prices suffering their biggest drop since 2013. That said, Abe remains steadfast in his determination to improve fortunes in the country and has taken steps to hold off on the proposed consumption tax hike in the hope of boosting private spending. While the Japanese economy languishes, international trade is expected to suffer with Japan recording a 40.72 billion Yen deficit in May, the first deficit of the year. Exports dropped by 11.3 per cent, while imports were down by 13.8 per cent. With increasingly tough times due in the future, trade and customs lawyers can expect a busier time in terms of trade disputes as the regulatory authorities become more aggressive and multinationals seek to ensure that they remain competitive. In this chapter, seven practitioners across six firms are identified as the leading trade and customs experts in Japan.
Japan’s shipping industry has witnessed multiple exits from the market over the past year, as cargo activity has slowed down amid the decline in the Chinese economy. The country’s aviation market, on the other hand, has experienced a year of innovation. In November 2015 the Mitsubishi Regional Jet, Japan’s first ever domestic passenger jet, successfully embarked on a maiden test flight. This development comes as part of a programme designed to challenge major players in the aviation world and cultivate the domestic industry. This breakthrough looks set to spark a flurry of activity in the space, with lawyers forecasting a busy year ahead. 19 lawyers are recognised for their leading work in the field.
Anderson Mori & Tomotsune boasts a stellar reputation in the Japanese market as one of the country’s leading law firms. It prides itself on the combined expertise and resources of its practices, which allows it to deliver a full-service offering to a broad client base. Furthermore, it is internationally renowned for its ability to successfully handle some of the country’s largest and most complex transactions. The firm also has an expansive presence in the wider East Asia region, with an additional Japanese office in Nagoya, as well as foreign offices in Beijing, Shanghai, Singapore, Ho Chi Minh City, and Bangkok.
As part of Japan’s Big Four, the firm has a prestigious reputation both domestically and internationally. It is active on some of the country’s largest commercial and corporate law mandates, which are handled by large and multi-talented practice groups totalling 97 partners and over 200 associates. Since 2012, the firm has expanded exponentially in the region, opening sites in Singapore, Bangkok, Nagoya, Fukuoka, Yangon, Osaka and Jakarta, making it one of the legal powerhouses of East Asia. More than half the firm’s work has cross-border elements, with an array of multinational clients seeking its advice, particularly in relation to banking, capital markets, competition, real estate and corporate law.
US global heavyweight Morrison & Foerster was among one of the first international firms to open an office in Japan. The Tokyo offering has gone on from strength to strength since then, and now counts itself as the country’s sixth largest law firm – among both international and national law firms. It is a “dominant player” in cross border matters in the real-estate, corporate, competition, high-technology and IP sectors and is able to provide clients with the considerable reach and scope that only an international firm can offer.
Nagashima Ohno & Tsunematsu is one of Japan’s leading law firms. Founded 16 years ago, the firm consists of a team of 370 lawyers who provide advice and representation to foreign and domestic businesses and entities across the main areas of business law. In particular the firm excels across its capital markets, real estate and corporate practices, which all achieve a high number of listings in the edition. Following the merger of Nagashima & Ohno and Tsunematsu Yanase & Sekine, the firm Nagashima Ohno & Tsunematsu has opened six new offices since 2010, including in New York, Singapore and Shanghai and has extensive cross border abilities. The high calibre of practitioners is reflected in the firm achieving 41 listings across 16 different practice areas.
Nishimura & Asahi is Japan’s largest firm by number of attorneys, with around 500 lawyers including 112 partners, foreign lawyers, and other professionals working across Japan and South East Asia. They provide a full range of legal services both domestically and internationally and are adept at assisting on large, complex transactions. A wide-spread strengthening of cross-border practices in the region has seen the firm open offices in Bangkok, Beijing, Shanghai, Hanoi, Ho Chi Minh City, Jakarta, Singapore and Yangon in recent times.
Established in 1990 by 10 IP specialists, TMI Associates has grown into a full-service offering – and the fifth biggest firm in Japan. It prides itself on its high-quality service and breadth of legal offering. The firm is “forward thinking” in its approach to the delivery of legal services, and with a team of lawyers, patent attorneys and support staff, it aims to meet clients’ increasingly complex needs. Given the firm’s focus on adapting to the changing social environment, it is unsurprising that it is home to many distinguished practitioners in the fields of IP, TMT and life sciences.
It is not possible to buy entry into any Who's Who Legal publication
Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.