Japan has had an up-and-down year so far, with the COVID-19 pandemic continuing to disrupt life and business, even as the country successfully hosted the Olympic and Paralympic Games. Leaders of law firms in Japan say that while they had to institute new ways of work in order to adapt to this “new normal,” they have been heartened by the resilience shown by their firms, which will hold them in good stead going forward. 

 

ALB: In Japan, in addition to the pandemic, there has also been uncertainty around the potential risks from the Olympics (now completed successfully), and an upcoming election. How have you seen this impact your clients, and how have you stepped up to help them during these challenging times?

Eric Roose, partner, Withersworldwide: The global pandemic and ongoing geopolitical uncertainties have certainly reshaped many aspects of our lives. It has undeniably affected the way we interact with friends and family, our work patterns, and economic activities. With the exception of hospitality industry clients, the business of most of our clients has remained amazingly strong throughout the past year and a half. This has been especially true for many of our real estate and investment fund clients. My expectation is that with the higher vaccination rates now being achieved in Japan, the economy will snap back quicker than many believe, and the pace of business activity by our clients will rapidly accelerate.

“We provide clients with legal solutions to mitigate the worst consequences of the pandemic. Where necessary, we are also assisting clients in repositioning their business to adapt to this new world, and support them in realising opportunities that emerge from this evolving situation.
— Eric N. Roose, Withersworldwide

Disruption and innovation go hand-in-hand and this has never been truer than with the pandemic. Technology has played a critical role in helping us to adapt to remote working. It is also playing a critical role in helping the world navigate out of this crisis, whether through vaccination programmes or track-and-trace. We provide clients with legal solutions to mitigate the worst consequences of the pandemic. Where necessary, we are also assisting clients in repositioning their business to adapt to this new world, and support them in realising opportunities that emerge from this evolving situation.

As we look beyond the immediate emergency, and return to work, deal with the impact on our businesses, embrace new technology and adapt to new circumstances, we must understand how the world might change, and the innovations which will shape our lives in the future. And as we now assess the return to work, and businesses begin to open their doors across the world, businesses must safeguard key assets and plan carefully for the way ahead.

Ryutaro Nakayama, managing partner, Nishimura & Asahi: In the eyes of the Japanese public, the COVID-19 pandemic has been fundamentally linked to both the Olympics/Paralympics and the upcoming national election. It is diffi -cult to predict the possible scenarios at this stage, however, our fi rm is always actively gathering information via various channels, such as through our close ties with relevant authorities and our large clientele. Our lawyers use their diverse expertise and perspectives to analyse such information and educate our clients so that they can adapt themselves to changing regulations or new legal frameworks on time. Just one such example is our Myanmar practice team’s actions after the political change in Myanmar. Our Myanmar practice team has shared the latest information with our clients via almost weekly webinars and newsletters, providing insightful – and well-appreciated – advice.

Yuto Matsumura, managing partner, Mori Hamada & Matsumoto: The onset of the pandemic did quash expectations of a positive economic impact from the Olympics/Paralympics. The Japanese government and the Olympic organizers seem to have done a relatively good job in adapting to diffi cult circumstances and controlling the spread of the virus at the Games. Therefore, it seems that some initial anxiety about proceeding with the Olympics has now been alleviated, and the national mood in the wake of the Games may have brightened a bit. The public disapproval ratings of the current administration, however, have continued to rise, which reflects public discontent with the pace of COVID vaccinations and the control of the pandemic. On the other hand, many Japanese companies have an optimistic forecast for the current fiscal year, with expectation to recover from the negative impact of the pandemic. Against such background, it is hard to assess the impact of the election on our clients at this stage, but issues of social change that have been highlighted in course of the pandemic are likely to be hotly debated.

Kazuhiro Yoshii, partner, Anderson Mori & Tomotsune: Our office has provided support to pandemic-impacted companies – in particular regarding human resources and fundraising concerns – by helping them manage their corporate financing and restructuring needs. M&A and fundraising activities have thus been on the increase within our clientele.

Ryuichi Nozaki, senior partner, Atsumi & Sakai: The experience of hosting the Japan Rugby World Cup 2019 and the Tokyo 2020 Olympic and Paralympic Games has demonstrated that the ecosystem and business opportunities around international events are developing in Japan. There were many activities such as practices to protect the rights of the stakeholders including international sports organisations, hospitality companies and sponsors; improvement of governance of organisations; and public legacy facilities construction projects, in which our fi rm participated and accumulated experience as a core legal services player. We expect to advise key stakeholders in other events In Japan as well as in other parts of Asia, such as the Beijing 2022 Olympic Games, the 2023 FIBA Basketball World Cup (co-hosted by the Philippines, Japan and Indonesia), the 2025 Osaka-Kansai Expo, the 20th Asian Games Aichi-Nagoya 2026, and the 2030 Winter Olympic Games (for which Sapporo City is a host-city candidate).

In the run-up to the next elections for the House of Representatives in autumn, cabinet approval rating had fallen sharply as of early August, due to the spread of the Delta variant of the coronavirus, the repeated declaration of a state of emergency, and delays in the supply of vaccinations. According to a survey conducted with economists by Bloomberg published on July 7, half of them expect an economic package worth more than 20 trillion yen ($182 billion). It is expected that much of that will be spent on post-coronavirus growth strategies. The Japanese government’s growth strategy focuses on the promotion of digitisation, the use of hydrogen energy for decarbonisation, the development of facilities for electric vehicles, and the spread of renewable energy, which would be expected to stimulate the economy through investments in these sectors. We have signifi cant experience in advising on soft IP and data business as well as renewable energy projects and will continue to support companies operating in these fields.

ALB: What are some of the things which have surprised you, or that you’ve learnt about your firm/office or your industry since the pandemic began?

Roose: I was surprised by the ability of the fee-earners and support staff to fully function remotely from home whenever it was necessary – due to the multiple government-declared states of emergency – while still being able to service our clients at the highest levels. That is a strong testament to the flexibility of my colleagues, and to the excellent IT systems and business support teams our fi rm put in place to allow us to succeed. Although required due to the global pandemic, we have proven that we are able to navigate the move to remote working very successfully.

With that said, I was equally surprised by the strong desire by many of the fee-earners in my office to work in the office whenever possible, despite the proven ability to work remotely from home.

Nakayama: As with other industries, the rapid change of working style, that is to WFH, was inevitable from the outset of the pandemic. It was a big challenge for us in several regards. We needed to expand our IT capacity to accommodate a “full” home working style in a relatively short period. Accordingly, most meetings, both external and internal, have shifted to virtual platforms. It is surprising to me that our clients and members of our firm became accustomed to the situation quite rapidly.

We have found that the virtual working style has substantial merits, especially when considering time management. Owing to the virtual meeting regime, we can accommodate more meetings in a day with fewer and shorter intervals between them.

On the other hand, lack of casual communications among lawyers and staff could adversely affect our productivity in the mid-to-long run, especially from the creativity and education perspectives. It is the next and more diffi-cult challenge to balance the efficiency of the virtual working style and the productivity of face-to-face communication.

“We were obviously concerned whether our young lawyers would be able to cope and develop in a mostly remote work environment, but we have been reassured by the ability of all of our lawyers to adapt and continue to collaborate to serve our clients in adverse circumstances.”
— Yuto Matsumura, Mori Hamada & Matsumoto

Matsumura: It is as clear as ever that the demand for legal services increases in times of crisis and drastic change. To meet that demand, our firm has adapted flexibly to the precautionary changes required by the pandemic. In many ways, the challenges of the pandemic have brought about innovation, both for our clients and our firm. We were obviously concerned whether our young lawyers would be able to cope and develop in a mostly remote work environment, but we have been reassured by the ability of all of our lawyers to adapt and continue to collaborate to serve our clients in adverse circumstances. We will try to preserve this collegial, collaborative and innovative culture of the firm.

Yoshii: We have been able to quickly adapt our IT environment in line with the needs of a pandemic environment thanks to a timely expansion over the past few years of our IT team. Our operations have progressed unhindered, and our employees have been almost untouched by the virus. Responsiveness to the pandemic environment has varied depending on the size of any given office, but digital transformation technology has ensured that we have been able to conduct Court proceedings such as judicial deliberations online with all parties.

Although we had anticipated a slower rate of adoption of digital transformation technology within the legal community, digital collaboration between law firms and the courts proceeded more effortlessly than expected, although the pace of change has begun to slow down in tandem with a return to normalcy. It has been a thought-provoking experience that will reflect on future decisions impacting our office and the demands that can be made on our employees.

Nozaki: It was not a surprise, but we were able to recognise visible achievement of our objectives set before the COVID-19 pandemic; the enhancement of systems to support telecommuting and the strengthening of online communication tools led to safety and ease of work for each employee, which show-cases our management’s strength in this coronavirus era. It’s probably rare for a Japanese law firm, but our firm has hired an occupational health nurse to enhance our efforts to not only manage the risk of coronavirus infection but also care for the mental and physical health of employees. We strongly feel that these efforts have led to increasing employees’ trust, a sense of belonging, and morale in the office.

On the other hand, there is a dilemma that is difficult for us to overcome. For example, the publishing industry has been slow to bring legal books online. Lawyers must go through legal literature and documents for research, but they have to go to the office library as online books and documents are limited, and they cannot fully work from home.

ALB: How is the nature of the leadership role evolving, particularly in the last year? What advice do you have for individuals who aspire to be in a leadership position like yourself?

Roose: We have strong competitors at both the international law firm and domestic firm levels in Japan. Given that, it is increasingly important that a Tokyo office managing partner be highly strategic - in order to identify and take opportunities that are beneficial to the firm and the office.

My advice to anyone who aspires to manage a law firm office is to always keep in mind that perhaps your most important role is to be the biggest cheerleader for your partners. Use your position to get them the firm support and resources they need to succeed.

Diversity and inclusion is also a theme that has grown in importance and evolved over the past few years. Central to our business strategy is to create an inclusive employment environment. As a leader, I aim to ensure that all staff can bring their full selves to work and excel in their role. At Withersworldwide, diversity and inclusion is deeply embedded in our culture and having a diverse workforce at all levels within the firm has long been an essential guiding principle for us. We have set up a global working group with representation from our global offices to proactively plan for diversity and inclusion initiatives and activities. Raising awareness and understanding of diversity and inclusion in Asia is of particular importance to us, as the topic is still a relatively new concern for most employers here.

As a business, we also have a responsibility to the environment that goes beyond strict legal and regulatory requirements. We are fully aware of the challenges presented by climate change and the increasing importance of ensuring that our business is sustainable. We are committed to reducing our environmental impact and we strive continually to improve our environmental performance as part of our business strategy. Across the firm globally, we are reducing our carbon footprint significantly. Our policies and procedures are under constant review to maintain environmentally friendly workspaces, with ongoing initiatives such as using environmentally friendly materials, recycling and reducing single-use plastic.

“In this changing world, a clear and integrated vision and a simple message are more important than ever... It’s important to clearly portray our fundamental values and direction. This means we sometimes have to change specific policies to adapt our firm to uncertainties.”
— Ryutaro Nakayama, Nishimura & Asahi

Nakayama: As I was appointed as the managing partner this April, I would be the most enthusiastic respondent to this question. Nonetheless, if I dare to say something based on my very short experience so far, in this changing world, a clear and integrated vision and a simple message are more important than ever. Each member has their – often differing – opinions and feelings, especially in difficult times. While we value individual views and diversity, as a firm, it is important to clearly portray our funda-mental values and direction. This means we sometimes have to change specific policies to adapt our firm to surrounding uncertainties. However, management should always issue a clear message to members that our destination and value proposition have not changed, as this gives our members confidence and comfort.

Matsumura: We view our firm as basically an autonomous and self-propel-ling organisation that draws its strength from all our lawyers working collaboratively across many teams. The role of managing partner is to foster that autonomy by ensuring that the teams and the individual lawyers have the resources they need. Since the onset of the pandemic, face-to-face communication has been limited, so a top priority of management in these circumstances has been to ensure that alternative means of communication and collaboration are fully available. We would like to reassure our constituency that we have witnessed stable growth of the firm even during the pandemic.

“Management continues to place great importance on fast and effective communication, such as by circulating up-to-date internal newsletters. We have also established a cross-departmental COVID-19 response team to increase collaboration among general affairs, IT, and PR personnel.”
— Kazuhiro Yoshii, Anderson Mori & Tomotsune

Yoshii: It has become more important than ever for those in managing roles to be quick to adapt to changes and to communicate effectively. For example, due to the COVID-19 pandemic, AMT has encouraged all its employees to telecommute, and this has, in turn, created an opportunity for AMT’s management to improve its systems for actively disseminating information to the rest of the office and raising awareness to enable everyone to keep up with the rapidly changing circumstances. Management continues to place great importance on fast and effective communication, such as by circulating up-to-date internal newsletters. We have also established a cross-departmental COVID-19 response team to increase collaboration among our general affairs, IT, and public relations personnel.

The COVID-19 pandemic has affected all sorts of fields, so it has become necessary for the heads of each of our practice groups to take the lead in ensuring that the latest information is shared across various practice areas, as well as to encourage cooperation between the different practice groups (such as between our Restructuring/Insolvency and Bankruptcy, Finance and Financial Institutions, and M&A practice groups). We have also taken the initiative to improve our employee welfare system by providing employees with mental health counselling services and other measures to assuage their anxieties brought about by the COVID-19 pandemic.

As for individuals who aspire to be in a leadership position, it is important to know how to communicate and disseminate information actively and effectively in difficult situations, such as by conveying the current situation to others in a frank manner while also taking care to use appropriate language that takes into consideration their worries, rather than simply assuming that others will be able to understand the situation without being told. This is something that AMT would like to continue doing going forward.

Nozaki: It was a year in which management discussions, decisions and execution were well-organised and communications were streamlined, as our office size expanded and the number of employees working from home increased.

ALB: Does technology play a bigger role in your firm as a result of the pandemic? If so, in what ways?

Roose: The current pandemic brought about an acceleration of, rather than a change to, the firm’s technology strategy – which had already been put in place before the pandemic as we’re a global law firm.

A key enabler is our Digital Strategy that was designed after a review of our working practices across the firm, taking into account modern workflow and automation technologies. These technologies include softphone capabilities, cloud video conferencing capabilities, in-office technology to facilitate the client’s preferred cloud communication solution, and widespread adoption of Microsoft collaboration tools.

Withersworldwide’s range of mobile applications also allows scanning, expense management, collaboration, time-recording, partner voting, and intranet access to be available from any location.

Hardware aside, the Tokyo office took advantage of the firm’s Withers Tree of Life programme for staff, especially the morale-boosting initiatives such as group conversations on mental health, webinars on financial wellbeing, and even weekly virtual “Deskercise” sessions with a fitness coach leading short work-outs that help with core strength, spinal mobility and flexibility, and strength and injury prevention.

Nakayama: Absolutely yes. As I previously mentioned, virtual communication tools are indispensable for both client and internal communication. To this I can add that we have leveraged the timeliness and accessibility of webinars to reach more and larger audiences than ever before.

In addition, to work from home efficiently, digital platforms for knowledge management are key. While we had originally planned to update our legacy systems before the pandemic, we have accelerated our original plan to launch multiple new IT systems last year and this year. While some might consider such rapid change potentially burdensome for users, for example requiring them to adjust to more than one new system at a time, our members are very cooperative and remain positive and understanding of the fact that it is a necessary part of the “new normal.”

Related to this, client pressure for more efficient legal services has increased since the pandemic began. A key element in addressing such pressure is being able to leverage AI technology in our legal services. While it is still in the development stage, we are proactively exploring the use of AI technology in our services.

Last but not least, understanding and utilising technology is also quite important for our lawyers to advise our clients. To this end, we established a DX (digital transformation) practice group last year where lawyers with various legal expertise join and share the latest intelligence from both legal and technological perspectives. Undoubtedly, technological literacy continues to grow in importance for legal advisers.

Matsumura: Even before the pandemic, we realised that technology is key to the business of law. Therefore, it was fortunate that we had in place the technology that was well suited to enable remote work from the outset of the pandemic. Of course, the pandemic has only accelerated our focus on technology, with online communication tools and smartphone apps prevailing within the firm during last year.

Yoshii: During the early phase of the pandemic, AMT published a series of articles dealing with COVID-19 and its impact on employment, privacy, corporate restructuring, and other issues examined from a legal perspective. Additionally, our offices have accelerated their implementation of digital transformation technology and have introduced new work styles into the workplace by, for example, expanding telecommuting tools and options. Our firm has also accelerated its deployment of legal technology tools, especially in the domains of legal translation and legal research.

Nozaki: Technology is playing a bigger role in this coronavirus era: Online conference systems, a system for safely accessing office Intranet at home, chat tools in addition to e-mail systems, a system for sharing and receiving a large volume of documents, a system for enabling telephone extensions to be available at home, and the like. In addition, although it is not necessarily related to the COVID-19 pandemic, the introduction of AI automatic translation tools and other legal technologies is underway at the same time. On the other hand, as part of our effort to expand the pool of human resources, we are promoting (i) recruitment of staff who provide support services to employees in the core IT division and their related areas, (ii) hiring of experienced personnel responsible for system design and vendor management at major IT companies, (iii) hiring of outside IT consultants, (iv) recruitment of lawyers with programming skills, and (v) development and improvement of information and technology literacy of all employees.

ALB: What are your firm’s priorities for 2021-22?

Roose: Our focus will be on developing our practice areas and continuing to grow in areas of the legal market that make sense for us. We will continue to explore profitable niches where we can be a Band 1 player, and areas where we can distinguish ourselves as a global law firm.

We also continue to see increased outbound and inbound activities in Japan, and with the Tokyo 2021 Olympics and Japanese companies looking for investments around the world, there will be even more opportunities from Tokyo.

Post-COVID we are looking forward to turning the experience to our advantage and building the capabilities required to thrive in the new reality. A priority we have going forward will be for our employees’ well-being, and clients to remain central to our organisation’s strategy.

In April this year, Withersworldwide conducted a global survey with 300 of our top clients to get a better understanding of the quality of our services and how our legal offerings can be improved. We were delighted to learn that 98 percent of our clients surveyed rated the quality of our service “outstanding” or “very good” – the best results ever seen by our market research company, that have conducted similar research with leading global law firms. Half of the clients who responded were also interested in hearing about how we can further support them in different areas of their business post-pandemic. This outstanding result is a testament to our lawyers’ dedication in providing the best service to our clients. COVID-19 can be seen as an opportunity to rethink our business and operating models, and our team is always looking for new ideas, technologies and capabilities to stand out from our competitors whilst providing exceptional services to our clients.

Nakayama: While we have much planned for the coming years, strengthening our global presence continues to be one of our highest priorities.

The pandemic has made frequent travel across borders quite difficult, but international legal services becoming increasingly valuable to our clients. Instead of clients travelling abroad for physical meetings, integrated virtual connections among local experts are becoming more important.

We have 18 local presences, including our exclusive affiliated firms around the world, so as to provide one-stop services to our clients, and we will continue to invest in strengthening our local capabilities in order to accommodate our clients’ increasing demands for cross-border legal services.

While our traditional main clientele is Japanese, we also increasingly serve non-Japanese clients. We have a strong and growing presence across the Southeast Asia (SEA) region, which is valuable for anyone, Japanese or otherwise, considering transactions relating to the SEA region.

Nishimura & Asahi is a Japanese firm, but we are also a true international law firm. I hope more clients will come to recognise more and more our international capability too.

As for sustainability, SDGs/ESG have become more and more important both for our clients and our firm. We believe that realizing a sustainable society is extremely necessary so as to bring about an affluent and fair society based on the rule of law, which is our firm’s fundamental mission. We have established a sustainability practice to contribute to the growth of our clients by providing more forward-looking advice, as well as embodying our commitment to the realization of a better society.

Diversity and inclusion is important to us also, as an imperative that we actively seek to promote and foster in all facets of our business. We have produced a Diversity & Inclusion Statement, which is published on our website. Our efforts and dedication to prioritising diversity and inclusion have been recognised externally, just most recently by being named the Asia-Pacific’s leading law firm for D&I at the FT Innovative Lawyers Awards 2021, the first Japanese firm to be so recognised.

Matsumura: We sincerely want to refocus on the human relationships that have been somewhat diluted through the social-distancing measures required by the pandemic. We will also continue to prioritise diversity and inclusion in order to secure the psychological welfare of our people.

Yoshii: Our external goals include further increasing the number of AMT personnel; actively pushing forward with our Foreign Law Joint Practice projects (such as actively hiring personnel and acquiring projects related to important practice areas such as cross-border M&A, international arbitration, and over-seas project finance); further cooperation with our overseas offices; and continuing to focus on developing our expertise in new fields such as fintech, technology/NFT, energy, healthcare, startup support, and data privacy.

In terms of our internal goals, we will continue to make improvements to our internal systems – such as the Steering Board and the group system – to improve the speed and efficiency of decision making in line with the increase in the number of personnel; and continue to invest in IT to improve our operational efficiency.

“A diversity of lawyers with a variety of backgrounds and experiences, and broad and deep relationships with clients and networks in other countries, as well as the organisational power to bring them together, are no doubt true sources of our capability to respond to clients’ needs.”
— Ryuichi Nozaki, Atsumi & Sakai

Nozaki: Even if vaccination rollout is accelerated in Japan, the risk of infection with the COVID-19 variants will remain, and care for the health of lawyers and staff members will remain the top priority.

A diversity of Japanese lawyers and foreign lawyers with a variety of backgrounds and experience in various practice areas, and broad and deep relationships with clients and networks in other countries, as well as the organisational power to bring them together, are no doubt true sources of our capability to respond to clients’ needs. We will continue to operate and manage our office in 2021 toward 2022 with these values in mind.

 

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