28 Asian Legal Business | December 2024 Cover Story year’s first three quarters saw Japan’s four largest domestic law firms dominating the LSEG deal tables. Anderson Mori & Tomotsune led the pack, advising on 99 announced deals and successfully completing 89. Private equity played a pivotal role in Japan’s burgeoning dealmaking scene. With the ongoing corporate governance reforms upending archaic business practices and placing greater value on shareholder returns, Asia’s second-largest economy became the favoured playground for global buyout houses yearning for cheap deals and value creation. “The recent rise in international private equity to Japan has been the most noticeable change over the past 10 years,” says Jeremy White, global co-chair of M&A at Morrison Foerster in Tokyo. “We expect that this trend will continue and will have the most disruption in the short to midterm in the Japanese legal market.” As sophisticated buyers of legal services, PE houses required complex and multifaceted legal support for their operations, presenting a significant opportunity for global law firms with key insights into international practice. This mature level of international expertise could prove challenging for domestic law firms with limited global experience. “We expect PE houses will increasingly seek services from firms like ours,” says White. But while the market rush might have given international firms - many once found Japan an elusive legal market to crack - their moment under the sun, Japanese domestic firms entered a new era of international expansion. Mori Hamada & Matsumoto, already established in New York, zeroed in on the West Coast’s thriving tech sector by opening a San Francisco office. Firms such as TMI Associates, Atsumi & Sakai, and Anderson Mori & Tomotsune established a presence in Brussels, responding to Japanese corporates’ growing need for antitrust expertise in navigating the European Union’s complex regulatory landscape. Nishimura & Asahi, aspiring to transform from a domestic powerhouse into a global legal brand, unveiled plans to launch new offices in Hong Kong, London, and Brussels by early 2025. Atsumi & Sakai strengthened its foothold in Southeast Asia by establishing a branch in Ho Chi Minh City, Vietnam. “Companies expanding globally need to implement strategic legal approaches that encompass perspectives across Japan, the U.S., Europe, and Asia, not just the specific regions where they have their headquarters, branches, or factories,” says Ryutaro Nakayama, managing partner at Nishimura & Asahi. International expansion also allows these homegrown legal giants to diversify their revenue streams, offsetting the challenges posed by slow economic growth and rising competition in the home market. Going into 2025, Japan’s economic outlook presents a complex scenario: while potential slowdowns in key markets such as China may pose challenges, these same factors could also drive increased asset allocation to Japan as investors seek stability and diversification. On the domestic front, the Bank of Japan is toying with further interest rate hikes, a move that could tighten fundraising conditions and increase borrowing costs for businesses, potentially unleashing a fresh wave of bankruptcies. Against this backdrop of economic uncertainty, the Japan legal market is poised for further disruption and transformation. “Market forces will dictate the future trajectory of the legal market,” says White. (SW) India: Seismic shift An immense talent war, the impending entry of international law firms, strategic expansions and mass exoduses marked a year that saw Indian law firms break revenue records, expand into new markets and build a working relationship with generative AI. Perhaps the most notable was the industrial-scale expansion of top law firms, with Cyril Amarchand Mangaldas and JSA Advocates & Solicitors emerging as frontrunners in this competitive ecosystem, orchestrating bold moves that set new benchmarks for talent acquisition. CAM’s strategic recruitment of a 50-member capital markets team led by Manan Lahoty from IndusLaw exemplified the firm’s resilience in the face of significant partner migrations, while simultaneously expanding its corporate, funds, disputes, and intellectual property practices across multiple cities. Similarly, JSA introduced a groundbreaking equity- and revenue-sharing model that facilitated the largest group hires of the year, attracting industry titans like Nisha Kaur Uberoi and Iqbal Khan. The talent war also extended lower down the ranks, with law firms also seeing challenges in hiring at the principal associate and junior partner levels. A key trend was the movement of principal associates at tier one firms to partnerships at Tier 2 and Tier 3 law firms, owing to higher growth potential offered “AI will not replace lawyers, but lawyers with the ability to utilise technology will replace lawyers without the ability to utilise it. We will be attracted to lawyers who understand and utilise technology to provide better solutions to clients.” — Akshay Chudasama, Shardul Amarchand Mangaldas & Co
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