JAPAN

Team size
Teams of between six and 20, as was the case last year, are most common this year with 40.9 percent working in departments within these parameters. This was followed by in-house units of two-to-five, an answer given by 31.8 percent of respondents. 18.2 percent of those surveyed work in teams sized 21-50, and the remainder either work alone (4.5 percent) or with 50 or more people (also 4.5 percent).
As was the case in last year’s survey, no one in Japan expects their in-house team to shrink in the coming 12 months, with 78.3 percent stating that they anticipate their teams to remain the same size and the other 21.7 percent under the impression that their teams would grow.

Though economic issues and budgetary constraints were noted as reasons for participants believing their teams would remain the same size, more common were optimistic responses such as the current headcount working for the business, a lack of change in the legal environment and plans to increase the utilisation of external counsel.

Increasing workload and business size were the main two reasons people expected growth, suggesting that the economic and budgetary concerns had by some are not evident throughout the jurisdiction. And as no one stated that their teams would shrink, the signs are that the drawbacks mentioned are not as much of a hindrance as they may appear to be.

Recruitment
Legal recruiters, at 53.8 percent, are the most common method by which companies locate and hire in-house lawyers in Japan. No other approach is nearly as popular, with referrals by other in-house lawyers coming second with a comparatively meagre 11.5 percent of the votes. Placement of job advertisements, use of job sites, hiring directly from external counsel and referrals from others within the company are all preferred ways of hiring by 7.7 percent of those surveyed.

KEY ISSUES AND CONCERNS
The speed with which the market advances makes practising in Japan tough according to many in our community there, as does trying to cope with current cutbacks. Some also said it’s hard to be seen by management as a business partner, possibly exacerbated by what others stated: that they have previously worked in-house with lawyers that lack competence and basic skills.

Many in-house counsel in Japan are preoccupied with both regional and global issues: “It is challenging to find local solutions for each country we operate in as we do not have locally qualified lawyers for each jurisdiction”. For others, the challenge is “to establish a global compliance programme, and the group governance of subsidiaries”.

On the domestic front, many counsel drew attention to the impact of “new technology” and “responding fully to a rapidly-changing business environment” at home.

Over the coming 12 months, respondents expect compliance to be at the forefront of their concerns. Some were more specific, saying the revisions to the Civil Code would require a lot of input from them. Trying to change business colleagues’ perceptions of the in-house function as “too costly” is also a hurdle some will try to overcome in the coming year.

Working with external counsel
Along with all of those surveyed in Japan expecting their teams to either grow or remain the same size, a vast majority either anticipate using external counsel to the same extent (43.5 percent) or more (52.2 percent) than last year, with only 4.3 percent saying they will probably use external aid less. If these two predictions prove correct, it would suggest that those employed in the country’s legal sector can expect a fair degree of job security over the coming 12 months.

Expansion into new areas – both legal and geographical – was the main reason Japan’s In-House Community expected to use external counsel more, along with added complexity to their work and required specialisation. Those projecting a similar reliance on external help tended to do so as a result of a lack of change in their workload and a stable legal environment, while those planning to seek less external help did so as a result of their in-house departments becoming more capable and equipped over the next year due to, among other things, successful training programmes.

In-house lawyers in Japan seek expertise in a specific area over any other factor, as 73.1 percent of those surveyed agree. Other high priorities include personal relationship with a lawyer (46.2 percent), responsiveness (42.3 percent) and fees (34.6 percent), though with 26.9 percent claiming that this was a must, relationship between company and law firm is important too. (Figure 17)

Excessive fees are the most common complaint about external counsel over the past 12 months, with 34.6 percent of respondents pointing this out. Failure to answer questions in a reasonable time and unexplained fees were popular choices too, each receiving 19.2 percent of the votes. (Figure 18)