Allen & Overy is exploiting a joint venture loophole enabling it to advise on Japanese domestic legal issues.
Akatsuki International Law Office was set up two weeks ago by Kaoru Haraguchi who broke away from Tokyo practice Mitsui Yasuda Wani & Maeda where he was a partner.
Haraguchi is the only lawyer in the firm and he established his practice with a view to entering into a joint venture with A&O.
This arrangement would allow A&O to bypass the problems connected with Japanese legal practice rules which prevent A&O from hiring Haraguchi directly because foreign firms are prohibited from practising domestic law. Previously Haraguchi was seconded to the firm's London office by Mitsui Yasuda.
Andrew Castle, a partner in A&O's Tokyo office, says: "A&O was looking to provide Japanese legal advice. The bar association rules say you can only have a joint venture."
Joint ventures technically allow the firms to be separate. Freshfields also has a joint venture partner called Kinami & Co, although it operates under its English partner's name.
Haraguchi is working very closely with A&O. "He works in our office and he works in his own firm," says Castle.
The arrangement also allows A&O to expand its number of Japanese joint venture lawyers.
Castle says: "It is just him at the moment but he can recruit Japanese lawyers from his firm that we can use. We are looking for Japanese lawyers in banking and corporate finance, and other core business areas."
The only other A&O partner in Tokyo is Angus Duncan.