Linklaters launched Japan’s first fully merged law firm last Friday (1 April), taking advantage of the recent regulatory changes that opened the door to integrated partnerships between Japanese and foreign lawyers.

The move followed the appointment last year of two name partners, Mitsuhiro Yasuda and Akihiro Wani, and 20 associates from leading domestic banking firm Mitsui Yasuda Wani & Maeda.

Although rival firms reluctantly admit that Linklaters’ capture of two of Japan’s leading bengoshi is a real coup, some argue that the magic circle firm is merely playing catch-up.

A senior partner at a rival firm claims: “Linklaters have had in place for four months what we’ve had for several years.”

Freshfields and Clifford Chance have five and eight bengoshi partners respectively, compared with Linklaters’ two.

Linklaters Asia managing partner Simon Davies argues that the key to building a leading domestic and international practice in Japan is not just about headcount. “I think the unique service we’re providing to clients derives from the quality of our lawyers,” Davies tells The Lawyer. “This is not about having the largest number of lawyers – although at 60 we have a great platform to meet client needs.”

He adds that the appointment of Wani as the joint managing partner of Linklaters’ Tokyo office is an indication of the strength of the partnership between the firm’s Japanese and foreign lawyers.

“The amount of work international law firms will get will depend on how integrated their Japanese and foreign offerings are,” continues Davies. “We think the full merger provides a more seamless service to clients.”

The reforms introduced on 1 April permit a full partnership between bengoshi and foreign lawyers to practise their own law in Japan in the form of a foreign law joint business. This is an extention of the old regime of ‘joint enterprises’, under which lawyers were only allowed to advise on the Japanese aspects of deals with an overseas element.

Although the relaxation of Japanese bar regulations is expected to start a trend towards combined firms, it is unlikely that many foreign firms will rush to join forces with domestic practices.

Clifford Chance, for example, claims that it has already been operating a joint venture successfully for around four years under the old regime. So currently, other than plans to reregister under a common Clifford Chance brand, the magic circle firm has no immediate ambition to merge with a local practice.

Indeed, Clifford Chance Tokyo managing partner Tim Jeffares says: “I perceive the new law as evolutionary rather than revolutionary, so I’m not expecting that [it] will, of itself, cause a new rush for foreign firms to link up with local lawyers.

“That said, the new law undoubtedly marks a further step along the road of recognising that the clients’ needs are often best served by the ability to engage one firm to deliver legal advice.”

Nevertheless, there is universal acceptance that the amount of work that foreign firms will receive in Japan will depend on how many locally qualified lawyers they employ. Jeffares says: “If a firm’s strategy is to focus on delivering combined Japanese and international advice, then clearly having a certain critical mass of experienced bengoshi is essential.”

However, the dire shortage of suitably qualified bengoshi remains a massive obstacle for foreign firms seeking to shore up their domestic offerings. “Today, there are relatively few experienced bengoshi, with the result that the best-known names are often severely stretched,” says Jeffares.

But more bengoshi are expected to be coming into the system thanks to the changes introduced 18 months ago to the training and qualification procedures.

Linklaters’ Japanese merger may not be as groundbreaking as the magic circle firm is claiming, but until the projected rise in bengoshi materialises, Davies is justified in saying that other firms may find it hard to replicate his firm’s capability in Japan.