We explore how the old Japanese practice of settling disputes privately is putting pressure on law firms.
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How cultural traditions have defeated the modern law practice model in Japan

Posted by: Laurence Simons 01/06/16
The number of lawyers in Japan has more than doubled since 2000, in what was an attempt by officials to mimic Western systems and breathe life back into the Japanese legal sector. However the demand for legal services has not grown as expected, and low crime rates and a decreasing number of bankruptcies have led to many lawyers struggling to find work.

There are currently 36,415 lawyers in Japan, more than double than in the early 2000s. Yet despite the fact there are still only 287 attorneys per 100 million people in Japan, compared to 3,769 in the US, Japanese legal professionals are finding themselves competing for work. Many suggest that unlike the US, which has become renowned for its ‘compensation culture’, Japanese culture lends itself more to private negotiation as a means of settling disputes rather than formal ligation.

Despite efforts to emulate Western legal systems, the Japanese market remains a ‘cottage’ industry. Figures published by the Wall Street Journal indicate that 78% of private lawyers work in firms employing 10 people or less, and that only 6% worked in firms of 100 or more. The statistics also indicate that only 9 law firms in Japan employ 100 or more people, the largest of which is Nishimura & Asahi, with 522 lawyers globally.

Despite administrative and civil cases rising by 9.6% and 2.5% between 2004 and 2014 the number of new cases for criminal trials dropped by an astounding 36% over the same period. This drop in cases is taking a serious toll on the level of remuneration of legal professionals, which figures from The Bar Association indicate has dropped to ¥9 million—about $80,000—in 2014 from ¥17.5 million in 2006.

Even more worryingly, the number of new law school applicants has fallen to a seventh of its peak, and many blame the shift towards lengthy training and the hefty costs associated with the new legal education model. While the decreasing number of new legal professionals might mean significantly more cases for existing Japanese lawyers, it may not be such a positive sign for the stability and quality of the nation’s legal profession in the long term.
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