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San Francisco-headquartered Orrick Herrington & Sutcliffe opened its first permanent office abroad in Tokyo in 1997. As the firm celebrates 20 years in the city, John Kang speaks to Tokyo office leader Mark Weeks about growth, challenges and the Japanese legal market.
What have been some of the most significant milestones for Orrick's Tokyo office?
One way of looking at milestones is to examine the results we have achieved for our clients. Since 2013, we have acted for Setouchi Future Creation, a special-purpose company consisting of GE Energy Financial Services, Toyo Engineering and Kuni Umi Asset Management, as sponsor of the massive 231.44MW Setouchi Solar Project, which will be the largest PV solar project in Japan when it launches in 2019.
We have assisted clients such as Ricoh, NEC and Toshiba in successfully resolving some of their most significant IP and commercial litigation. And we have represented Tokyu Land in the development of the first full-block office development on Manhattan’s Park Avenue in nearly 30 years.
We’ve been especially pleased to grow the number of women partners in Tokyo by 25 percent since 2013. Orrick is very focused on recruiting, retaining and advancing women. We think it’s essential to tapping the top talent in the market and serving our clients.
In which practice areas are you seeing the biggest growth?
We are seeing demand increase in four areas: cross-border M&A; multi-jurisdictional litigation and compliance, including cybersecurity and data privacy; renewable energy; and corporate venture investing.
Cross-border M&A is driven by Japanese companies’ strong appetite for overseas investment. The underlying drivers are well-documented demographic trends and pressure – both from internal sources and shareholders – to put cash to work. That outbound deal flow, in turn, has generated dispute resolution and compliance issues.
The renewable energy trend is separate and flows from the nuclear meltdown at Fukushima and the subsequent shuttering of Japan’s nuclear reactors. To stimulate alternative energy growth, Japan introduced very attractive “feed-in-tariffs” for renewable energy (our team was fortunate to advise the government on this programme), which is generating the “green rush” we are experiencing today.
In tech, Japanese industrial companies are establishing funds and pursuing a corporate venture investing model to source new technologies. Much of this activity has been outbound, including in the Bay Area, Seattle, and other tech ecosystems.
What were some of your biggest challenges?
Some of the biggest challenges have been recruiting top-quality bengoshi (Japanese lawyers) and foreign-qualified lawyers and integrating them into our practice, diversifying after the global financial crisis, and continuing to grow after the Tōhoku earthquake and tsunami hit Japan in 2011.
Finding the best bengoshi and foreign-qualified lawyers took time and persistent effort. The pool of top-tier U.S.-qualified lawyers committed to living in Japan and Japan-qualified lawyers is small, and the demand for them is high. However, through patience and perseverance, we have put together an exceptional and extremely collegial team of U.S.- and Japan-qualified lawyers who work seamlessly as members of the same office and firm.
Heading into the financial crisis, finance was our largest practice area and Lehman Brothers was our biggest client in Tokyo. The market required that we diversify from our predominantly real estate, structured and energy-based finance practices. We focused our growth on our other strengths, growing our cross-border M&A, litigation, IP, compliance and, most recently, venture-investing practices.
After the 2011 disasters, much of our deal flow stopped for several months and we lost some team members. It was a difficult time. By the summer, however, our practices had rebounded, and 2011 turned out to be a fairly good year.
How has the Japanese legal market evolved in the past decade?
The market for global law firms has consolidated to a certain extent with several strong players dominating the market. In addition, major Japanese law firms are opening offices in other Asian countries. We have found it essential to offer “one-stop shopping” in the form of sophisticated bengoshi who can provide Japan law advice and a global network of attorneys in our global Japan practice who are experienced in working with Japanese clients on complex cross-border matters.
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