Law Firms to Set Up Shop in Japan

Law firms in the Southland are racing to set up offices in Tokyo in the wake of a government-to-government agreement allowing American and other non-Japanese attorneys to practice law in Japan for the first time in more than 30 years.

The accord, which went into effect April 1, permits U.S. lawyers to advise Japanese clients on U.S. or international law. However, the agreement continues to keep Japan’s courts closed to all but about 15,000 specially trained practitioners, almost all of whom are Japanese.

Paul, Hastings, Janofsky & Walker, the fourth-largest law firm in Los Angeles with 250 lawyers, last week became the first Southland firm to formally announce its intention to open an office in Tokyo.

Although Paul, Hastings was first to trumpet its intentions, the planning for Tokyo offices among its larger competitors is well under way. “We expect to be in the first wave of firms to establish an office in Tokyo,” said a spokesman for Gibson, Dunn & Crutcher.

“We have had a partner in Tokyo for the past month planning our new office,” added Charles Wharton, executive director of O’Melveny & Myers.

Of the four biggest firms in Los Angeles, only Latham & Watkins has “no specific plans” open up shop in Tokyo, a spokesman said.

The lure for U.S. lawyers in Tokyo, of course, is the burgeoning trade--and attendant trade tensions--between the U.S. and Japan, as well as Japan’s steadily growing portfolio of investments in the United States.

Already, Paul, Hastings’ Japan practice group includes four partners and seven associates in Los Angeles, Washington, New York and Atlanta.

The firm represented Toyota in its joint-venture negotiations with General Motors on their plant in Fremont, Calif., and serves as general counsel here for Kawasaki Motors Corp.

“We will staff our Tokyo office with two lawyers,” said Kaoruhiko Suzuki, a Japanese national who is a Paul, Hastings partner in Los Angeles and heads the firm’s Japan practice group.

Both are U.S. citizens although one is a Japanese-American, Suzuki said. Suzuki, a 1975 graduate of Harvard Law School who first came to the United States as an exchange student at St. Paul’s prep school in New Hampshire, will continue to oversee the practice from Los Angeles.

Suzuki, 39, echoing other U.S. lawyers who are opening Japanese offices, said there is no substitute for proximity to Japanese clients. “For the Japanese, most decisions concerning U.S. investments in, say, factories are headquarters decisions,” he said.

The new office won’t be cheap. Paul, Hastings expects to pay $220 a square foot for Tokyo office space, compared to its $30 to $35 a square foot annual occupancy expense in Los Angeles.

“We ran through all sorts of financial models,” Suzuki said, “and concluded it was worth it.”