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Tuesday, March 2, 2010

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CHRIS MCKENZIE ILLUSTATION

THE ZEIT GIST

Attorney glut may hit foreign firms

Ministry ditching its 'French model' as bar graduates grope for raison d'etre


One of the interesting things about being part of Japan's new law school system and its role in greatly increasing the number of Japanese attorneys is this: Nobody seems to have bothered asking the Japanese people if they actually need more attorneys. The original target of increasing the number of people allowed to pass the annual Japanese bar exam to 3,000 by 2010 was based on a government target of achieving an attorney-to- population ratio comparable to France by the turn of the decade. (Why France? Nobody seems to know.)

No sooner had the first law school graduates (the class of 2006) who passed the exam hit the job market in the fall of 2007 than a hue and cry arose from bar associations across the country: There were too many new attorneys! There was not enough work for them all! Excessive competition would lead to lower quality! And the quality of these new attorneys is pretty iffy in any case!

As a result, the target of 3,000 new attorneys (by which I mean lawyers (bengoshi), judges and prosecutors who have passed the bar exam) per year now seems to have fallen by the wayside, with various bar associations calling for lower targets of 2,000 (roughly the number that passed in 2009), 1,500, or even as few as 1,000 per year. Bad news if you were one of the 74 law schools set up based on the assumptions underlying the "Be More Like France" plan.

Meanwhile, the Ministry of Education, Culture, Sports, Science and Technology (MEXT) has busied itself with finding out what is wrong with law school education, particularly at those schools whose graduates have a low pass rate. This process borders on the surreal, since more than anything else the pass rate is a function of the ratio of test takers (graduates) to the number of people allowed to pass. Furthermore, since their inception law schools have been subject to MEXT regulations and accreditation requirements about what and how they teach intended to prevent them from focusing too much on the bar exam. That being the case, judging schools based only on the results of four years' worth of bar exam results is almost cruel.

Needless to say, much of the current debate over law schools and "correct" numbers of attorneys bears many hallmarks of vested interests going into defense mode. Just like any business, attorneys don't want competition. Some people who passed the old bar exam (pass rate 2 percent) may not want to be equated with those who passed the new one (pass rate for 2009: 27 percent). And MEXT probably needs someone to blame for the fact that the law school system it set up is generally regarded as a disaster.

But there are nuggets of truth mixed in with at least some of the self-serving arguments. Last I heard, the number of students at law schools in Kyoto was greater than the number of attorneys registered with the Kyoto Bar Association. If this reflects a nationwide imbalance, it would be a serious concern, because no matter how "difficult" the bar exam is, it tests little in the way of knowledge that is immediately useful in practice. An apprenticeship is thus an important part of an attorney's training, so an excess of apprentices is a problem. Some new attorneys are being forced to start their own firms immediately upon being called to the bar; others are working with more experienced colleagues for free, just to get training. Just raising the number of attorneys does not seem to be increasing demand for their services.

The issue also has a little-mentioned dimension that may exacerbate the problem. Having participated in any number of symposiums and other meetings on the subject, I can say that a truly fascinating aspect of the debate over the number of attorneys Japan should have and the role of law schools in training them is that it completely ignores a very basic fact: Japan has a multiplicity of legal professions. These include administrative and judicial scriveners (some of whom have quietly taken to calling themselves "lawyers" in English), maritime law specialists, social insurance and labor consultants, patent agents, registered foreign attorneys and tax consultants. All provide a form of legal service in their own area of specialty.

Thus, while in the U.S. licensed attorneys have an almost complete monopoly over the provision of all legal services, the monopoly of Japanese attorneys is essentially limited to representing people in connection with litigation, and being able to call themselves "attorneys" (bengoshi). Attorneys provide other legal services too, of course, but there are a lot of gray areas where these overlap with the other professions, who seem to be providing for many of the public's needs in terms of legal services, possibly at a lower price.

That these other professions are ignored in discussions about the number of attorneys in Japan is inexplicable — or perhaps it is a sign of elitism on the part of those leading the debate. After all, attorneys passed a very challenging exam, and some simply may not think of themselves as being in the same class as those in these other legal vocations, all of which have their own (generally much less competitive) exam and qualifying process. Yet the competition between attorneys and judicial scriveners can be seen, for example, in the fact that both professions advertise what is essentially the same service — helping people reduce or consolidate their debts — in trains and subways (interestingly, in Kansai the two professions seem to stick to different train lines).

There may also be a certain amount of latent hostility between some of the professions: In 1995, for instance, an association of judicial scriveners won a defamation suit against an attorney who referred to them as "an inferior, low-grade occupational class."

Furthermore, these other professions appear to be positioning themselves to eat more of the attorneys' lunch at precisely a time when there are already too many attorneys at the buffet. Since 2007, a special category of social insurance and labor consultant has been able to represent workers in some employment- related dispute resolution proceedings. Judicial scriveners, who already have some ability to represent litigants in small claim court, are seeking to expand the scope of their services to family court and other litigation-related proceedings. Administrative scriveners are also reported to be seeking recognition of a role in representing disputants in certain circumstances. Since none of these other professions require a professional degree, in areas where their services overlap licensed attorneys who have to pay for two to three years of law school tuition (as well as possibly several additional years of studying for the bar exam) will be at a competitive disadvantage, at least when it comes to cost.

It may be fortuitous, then, that the government appears ready to roll out amendments to its civil litigation system that will make it easier to sue foreign companies in Japanese courts. This is one of the key features of a reform proposal issued by a sub-panel of the Justice Ministry's Legislative Council on Jan. 15.

Cross-border litigation is generally complex, and most courts in many countries are reticent to allow suits against a party that is not in that country (the U.S. being a notable exception). However, with the growth of global business and Internet commerce, consumers and companies alike increasingly have to deal with the issue of how to resolve legal disputes with a party on the other side of the world. Traditional rules of procedural fairness generally hold that the suits should be brought in the location of the defendant, so in cross-border cases the cost of litigating in another country alone can be a reason for plaintiffs to give up on an otherwise legitimate claim. The government's proposals thus probably represent much-needed updates clarifying the international jurisdiction of the nation's courts.

What may prove to be one of the more significant results of these changes is that they will make it possible for plaintiffs having an address in Japan to bring suits based on consumer contracts (which would presumably include most transactions over the Internet) in Japanese courts against foreign companies — even those that have no office or other physical presence in Japan. This could be a boon for Japanese lawyers who have not been blessed by a noticeable increase in domestic litigation despite the rapid growth in their numbers.

Now, I want to make clear that I am not so cynical or paranoid as to think that the timing of this proposal amid the current debate over Japan's lawyer population is anything more than a coincidence. But if it it does become law, it could be a win-win solution for everyone (except foreign companies, of course). While those behind Japan's legal system reform seem comfortable with the reality of there being significantly more attorneys, and the theoretical possibility, at least, of these attorneys helping Japanese people exercise their rights through more litigation, the trouble is that nobody in Japan actually wants or expects themselves to be the defendant in any of these new lawsuits.

No matter how many attorneys the country has, its web of interconnected vested interests may be a major obstacle to any great expansion of strictly domestic litigation. If this is the case, litigation against a global supply of anonymous foreign companies who have no connections to Japan may prove to be a nice new market for the next generation of Japanese attorneys.

Colin P. A. Jones is a professor at Doshisha Law School in Kyoto. Send comments and story ideas to community@japantimes.co.jp


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