After news leaked out early last year that Asahi Koma Law Offices was in discussions with Nishimura & Partners about a potential merger, the two firms were forced to publicly confirm the merger plans, leaving the entire process wide open to the prolonged scrutiny of the firms' competitors and clients, as well as the media.
The end result was far from what senior lawyers within the firms originally envisioned, with Asahi Koma disintegrating into a number of pieces and only half of the firm's headcount (as at the end of 2006) likely to join Nishimura by July 1st. This was due in part to the open merger process and the level of market scrutiny, but the main reason was no doubt the differing decisions of factions within Asahi itself.
After a vote on the merger amongst the Asahi Koma partnership did not achieve the required two-thirds majority, it emerged that the faction pushing for the merger would join Nishimura regardless - in effect splitting the firm. Following the decision, Asahi began to break apart, with small and large groups of lawyers joining competing firms. Since late last year, approximately 20 lawyers have left for TMI Associates, 11 decided to make the move to Nagashima Ohno & Tsunematsu, and two partners left for Allen & Overy to establish its Japanese law capability. However, the biggest blow for both Asahi and Nishimura was the decision by name partner Fumio Koma, along with senior bengoshi partners Yasunori Hashiguchi and Shinichiro Abe and German lawyer Markus Janssen, to join the Tokyo office of Baker & McKenzie, taking with them a group of other partners, counsel and associates, and forcing the re-branding of Asahi Koma Law Offices to "Asahi Law Offices" very late in the merger process.
Although the situation will continue to be very dynamic until the merger settles down after July 1st, the result is that the international division of Asahi, at around 80 lawyers (plus or minus 10) will merge with Nishimura & Partners to create the new firm Nishimura & Asahi. The domestic division, likely to number around 25 lawyers, will remain independent. The rest of the firm's lawyers, which numbered around 175 late last year, have gone elsewhere.
The end result is a fall from grace for Asahi Law Offices. Only a year ago the 5th largest full-service law firm in Japan, the independent firm has within one year ceased to hold sway as the firm of choice outside the circle of the Japanese big four. The remaining domestic firm however does retain talent, and will remain focused in litigation.
For Nishimura the result might be embarrassing and far from ideal, but in the end can be considered a success for the firm. Though only succeeding in attracting around half of Asahi's headcount, it was with lawyers from Asahi Koma's international division that discussions were originally commenced. The newly merged firm can also claim its crown as the largest in Japan when it is inaugurated on July 1st, with a headcount of over 300 lawyers - probably about 310-320. With an aggressive recruitment campaign planned by the firm this year as the number of Japanese graduates begins to increase, this headcount is expected to surpass 350 by the end of the year.
However, perhaps the surprise winner from the break-up of Asahi Koma has been Baker & McKenzie, which will have seen the status of its GJBJ Tokyo Aoyama Aoki Law Office (Gaikokuho Joint Enterprise) rise as a result of its coup in snaring Fumio Koma and his group. Baker & McKenzie Tokyo managing partner Jeremy Pitts says that with the addition of the new lawyers the firm now has 116 in Tokyo, with an expectation this will rise to 130 by the end of the year, putting it about 50 ahead of its international competitors when measured on pure headcount. With many international firms in Tokyo having difficulty enlisting the services of top local lawyers, already flush with clients and deals at their own firms, it is a big win for Bakers. Fumio Koma told ALB he was attracted to the firm as a result of its international network and the degree of autonomy it offers Japanese lawyers. Pitts says Shinichi Saito, a senior partner at Baker & McKenzie who has recently been nominated for ALB's lifetime achievement award, was also fundamental in the successful recruitment of the group of lawyers under Koma.
Finally, having lured a number of its lawyers, TMI Associates has also profited from the fall of Asahi Koma. The firm is now clearly the 5th largest in Japan, making it part of that essential go-to circle of firms needed on big-ticket deals that involve multiple parties all requiring local Japanese legal advice.