Nagashima, Ohno & Tsunematsu (NO&T), Mori Hamada & Matsumoto (MHM), Nishimura & Asahi (N&A) and Anderson Mori & Tomotsune (AM&T) have all indicated expansions and secondments into Asia as Japanese businesses shift from domestic markets and go regional.
Partners from all four law firms agree that a long-term structural shift in Japanese business-making patterns is underway – necessitating a regional growth strategy by the Japanese law firms to capture client workflows for the future.
“There is tremendous growth in Japanese outbound M&A,” said N&A attorney Stephen Bohrer.
“We’ve been riding that tide – we’ve formed a practice group to work with Japanese clients as they go overseas.”
According to MHM China and Asia practice partner Takuya Eguchi, there has been tremendous growth in Japanese M&A in Asia, with half of his workload now relating to Thailand, Vietnam, India and Indonesia.
“Two years ago, I used to deal mainly with China matters – 80% in fact. Currently, 50% of my matters relate to other Asian countries. This is why I believe our firm has made a big commitment to Asian businesses,” Eguchi said.
Last year, MHM seconded a lawyer to Thailand’s Chandler & Thong Ek. This year, lawyers have been seconded to Singapore’s Rajah & Tann and to an undisclosed firm in Hong Kong.
Some lawyers have attributed the structural shifts in pattern to the inflexible labour laws in Japan which makes cost-cutting and restructuring difficult in Japan, prompting many to move their operations overseas.
“Labour is protected in Japan and there is no flexibility in cost cutting or cost reduction. In addition, the market is also shrinking with an ageing population. So everyone is moving out of Japan to find a new frontier. The new frontier was China, originally, five to six years ago. But now China has matured, so we are moving into India and into other parts of Southeast Asia,” Anderson, Mori & Tomotsune partner Tsutomu Miyano said.
Earlier this year, N&A launched Beijing and Ho Chi Minh offices in June and September, respectively – Ho Chi Minh is also the first Japanese foreign law practice in Southeast Asia. “We are fully aware of this trend, and we are capitalising on it. We foresee this structural shift to take place in the months ahead,” Bohrer said. “I do believe that Japanese companies will be interested in capitalising and investing in Southeast Asia or the Asia-Pacific; there will always be strong ties with Europe and the US, but we see that we can add greater value in these burgeoning markets where the legal systems are not as developed and the connections are new.”
According to Miyano, AM&T has not ruled out opening an office in Southeast Asia and it is something that is up for consideration in the future. “Southeast Asia is a hotspot that a lot of Japanese firms are moving towards but we think it’s too early to open an office there for now; but we are quite keen to expand our network to the Asian region including India, Malaysia, Singapore and Hong Kong,” Miyano said. “Establishing a new branch is a big investment and is something we will consider very carefully.”
In the past 12 months, AM&T has seconded associates to J Sagar & Associates – one of India’s ‘Big three’, as well as to Malaysia’s Zaid Ibrahim & Co and to Korea’s Kim & Chang.
NO&T recently announced a strategic collaborative core alliance with Australian firm Allens Arthur Robinson to work closely together and utilise Allen’s regional reach through its 11 offices in Asia.
“These days Japanese companies are seeking to expand operations into Asia, especially into Southeast Asia, and because Allens has 11 offices in Asia, we thing it’s worth entering into an offshore core alliance relationship with Allens,” NO&T partner Jiro Mikami said.
At present, NO&T has seconded a senior associate to the Jakarta office with plans to second two extra lawyers to Ho Chi Minh and Bangkok next year.
“Japanese companies are seeking to expand their operations in Asia and that movement is accelerating these days,” Mikami said.
According to Mikami, the firm foresees growth in litigation and arbitration, infrastructure projects and corporate, including M&A work from the region.ALB
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