The Harvard International Law Journal (Vol. 27, p. 499) in 1986. That article is very informative and goes into far greater detail than this paper, which primarily updates the numerical information in the original. Also, sections on the bench and the prosecutor's office have been included. Whether you are attempting to retain local counsel in Japan for the first time or simply would like more information on Japanese legal services, the material which follows should be worthy of your time and attention.

Around 15,000 lawyers practice in Japan, while in the United States, with just two times the population, there are approximately 800,000 lawyers. Because there are so few lawyers in Japan, they must specialize in litigation, while non-lawyers perform much of what is typically thought of as legal work outside Japan.

Among all the aspects of the regulation of the Japanese legal services industry, the entry barriers, advertising restrictions, and fee schedules are the most strict. Among these three, perhaps the most draconian are the barriers to entry(1).

• Structure of the Shihou Shiken :
  -Part 1: Multiple choice exam on Constitutional law, Civil law, and Criminal law
• This part of the exam has a pass rate of roughly twenty-one percent among all examinees.
  -Part 2: A written essay exam on six selected subject areas (two questions each)
• This part of the exam has a pass rate of roughly seventeen percent among the roughly twenty-one percent of examinees who passed the multiple choice exam.
  -Part 3:Oral Examination on six selected subject areas
• This part of the exam has a pass rate of roughly ninety-three percent among the remaining examinees who passed both the multiple choice and written exams.

Attend the Legal Training and Research Institute, or Shihou Kenshuusho.

• The Supreme Court is responsible for the Institute. Trainees receive a third then fourth year government employee salary level (at the highest salary grade in the level) during their two year enrollment.
• The first portion of the training at the Institute is a four month period of substantive study and preparation for the practical training which is to follow.
• The second period consists of practical training sub-periods of four months each throughout the country in a civil court, a criminal court, a prosecutor's office, and an attorney's office, although not particularly in that order. The trainees work on actual cases and receive a complete overview of the profession.
• The final four month period synthesizes all of the prior training. Prior to graduation, there is a second and final test, the nikai shiken. Virtually all trainees pass this exam and any who fail it are given a re-test.

1. Be appointed a Supreme Court Justice
2. Work five-plus years in a law-related job and pass the National Legal Examination
3. Work five-plus years as a law professor

After completion of training, attorneys register on the Registration for Practicing Attorneys, or Bengoshi Meibo. This registration is controlled by the JFBA, or Nihon Bengoshi Rengou Kai. Before registration there is screening by the Admission Council (with a right of appeal to the Association itself and then to the Tokyo High Court). Attorneys also register with the local Bar Association of their choice.

There are Bar Associations in each of the district court circuits. An attorney may have an office in only one district but may practice within any district. The local Bar Associations are primarily responsible for controlling the profession. The JFBA has the authority to review decisions made by the local Bar Associations and to impose sanctions on individual attorneys.

There is little specialization within the bar as a whole. General practices are common, partnerships are few, and professional service corporations are illegal. Specialization does occur though in the areas of international law, intellectual property law, and labor law(5). Attorneys' work is confined mostly to litigation. Under Japanese law, only an attorney may represent a party in court(6). There are exceptions, however, for administrative and summary courts(7). Almost twenty-one percent of cases go to district court without representation, however(8).

The JFBA's advertising rules allow fairly limited advertising, limiting both content and media used. Then, in turn, at the grassroots level, advertising is even more closely regulated by the local Bar Associations. Moderately liberalizing reforms are expected to be made within the coming years.

Attorneys Fees & Earnings
Each individual case taken by an attorney must have a separate fee. The initial retainer for a given case, or the chakushukin, is payable when the representation is undertaken. It is calculated on the economic value of the subject matter in issue (around 7% [typically 5-10%]).

The success fee, or seikou houshuu, is payable upon successful resolution of a contested or disputed matter. It is generally based on a fixed percentage of the economic value of the benefit secured for the client through counsel's favorable resolution of the case. If the representation continues on appeal, the success fee is not paid until after the appeals are complete. The initial retainer is usually set at a lower percentage than the success fee (which may commonly be 6 and 8%, respectively). Clients must also pay any necessary court costs & fees as well as attorney expenses.

Where there is no apparent measure of "success" in a particular case, a service fee, or tesuuryou, can be charged upon the resolution of a matter. When the service fee is used, no initial retainer will be collected. The amount of the tesuuryou may be something like what would otherwise have been the initial retainer and success fee combined.

If the mere giving of oral advice is involved, the applicable charge will likely be the legal counseling fee, or soudanryou. This fee is generally calculated on an hourly basis at the particular hourly rate of the advising attorney, but there is a fixed minimum rate in the Bar Association fee schedule.

The legal opinion fee, or ikenshoryou, is used where the attorney gives a written legal opinion or handles some type of complicated non-litigation oriented legal matter. Charges for this type of fee may be made on an hourly basis, as with the legal counseling fee, or in a lump sum based on an estimate of the complexity of the matter involved.

Where an attorney is required to travel or, for other reasons, to forego gainful activity in order to represent a client, there is a per diem fee, or daily allowance, called the shutchounittou. This fee has a set minimum, but the maximum for the daily allowance will be determined by market forces.

The local Bar Association determines fee schedules, but the fees in them are not mandatory. However, too great a deviation from the approved rates would likely draw close scrutiny.

The mean and median net incomes of Japanese attorneys nationwide are about &yen15,440,000 and &yen11,030,000, respectively(9). The 1990 JFBA survey on lawyers' earnings showed a median income of &yen10,018,000 in Osaka and &yen12,740,000 in Tokyo with mean incomes of &yen14,020,000 and &yen17,850,000, respectively(10). Attorney income in the top decile nationally was just under &yen40,000,000, with Osaka comparing at just over &yen30,000,000 and Tokyo at just under &yen50,000,000(11). Perhaps the primary distortion in this data is that there is no separation in the averaging for partners and associates earnings. This lack of separation produces an average that is somewhat higher than what a "typical" attorney in Japan might earn.

Looking at substantially similar figures for the bar in the United States, in 1994 fifth year American associate attorneys in private firms showed median total compensation of $75,850, while all partners in private firms showed median total compensation of $206,118(12).

American attorneys' earnings varied significantly with firm size. To some extent, the same is likely true of Japanese attorneys, however, this type of data separation was not available at the time of this writing. In 1995 the median base salary of fifth year American associates in firms with two to twenty-five attorneys was $60,000, while that of similarly situated attorneys in firms with two hundred fifty or more attorneys was $81,500(13). In that same year, the mean of the average profits per partner for twenty-eight of America's largest law firms was $361,802(14).

The national government authorizes several categories of what may be considered "attorney-like" professions, however, it strictly limits entry into these fields as well.

Tax and accounting related matters are often handled by tax agents, zeirishi, and certified public accountants, kouninkaikeishi. To become a tax agent, one must pass a battery of five tests for which the overall pass rate has been about three to five percent(17). The roughly 60,000 tax agents and 10,000 certified accountants in Japan compare to some 200,000 certified public accountants in the United States(18).

Patent and trademark work may be done by patent agents, or benrishi. There are now approximately 3,500 members of this profession(19).

Two groups of personnel draft documents for clients to submit to courts and various administrative agencies. Generally called judicial and administrative scriveners, shihou shoshi and gyousei shoshi, respectively, some apparently do the type of work that lawyers do in the United States, while others perform a similar category of work as that of paralegals and skilled legal secretaries. Many individuals are licensed under both of these categories(20). Currently there are some 17,000 judicial scriveners and some 35,000 administrative scriveners.

In all, there are roughly 135,350 members of these "attorney-like" professions. The following are the entrance exam pass rates for entrance into professions in which "non-lawyers" perform law-related work in Japan:

• Pro Se Representation (occurs in almost sixty percent of all cases)(22)
  • Pro se representation is made more feasible in Japan by the relatively pro-active role of the court in the presentation of evidence in civil cases
• Black Market Legal Services
• Insurance Arbitration
• Corporate Legal Departments

Most legal services are used in either disputes or transactions. The former, at least, the bar has generally considered to be within its exclusive sphere of control. The Attorneys Act does, of course, provide that only attorneys may represent litigants in court as a career(23). Nevertheless, with their limited access to the services of the bar, those with disputes have found a number of ways to obtain legal services without retaining an attorney.

First, disputants can simply handle any litigation themselves. In most civil cases in Japan, one or both parties litigate pro se. In only about forty percent(24) of all district court trials have both sides retained an attorney, and in Summary Court the figure falls to one and a half percent(25). Moreover, Japanese judges have traditionally considered themselves obligated to remedy any shortcomings in a pro se party's presentation. The reasons for this high rate of pro se representation are several. The small pool of attorneys available is paramount, of course. Exacerbating this problem, though, is the fact that public assistance for attorneys fees is quite limited. Attorneys fees are also usually not recoverable from the defeated party in Japanese civil litigation, providing a further disincentive to hiring counsel. Additionally, Japan's culture is still such that it is most often deemed inappropriate for an individual to hire a third-party professional to resolve his or her problems.

Second, despite the bar's codified monopoly over court-related work, disputants can try and obtain a limited range of litigation-related services from non-lawyers. Judicial scriveners, for example, advise litigants. Although generally neither trained nor legally authorized to do so, they provide advice to litigants and most charge less than attorneys. Police stations and insurance companies offer de facto legal counsel to individuals involved in automobile accidents. Also, litigants occasionally purchase advice in an entirely unlicensed and unregulated black market(26).

The single largest exception to the bar's exclusive litigation practice may be found in the insurance companies. The state has permitted them to issue special "settlement policies" and develop staffs of non-lawyer specialists to handle these claims. As a result of these policies, "Automobile Accident Dispute Centers" have been created. In these Centers disputants can obtain relatively fast and cheap settlements by which their insurers will abide Despite a steady increase in the number of automobile accidents, the number of court cases involving these types of claims fell by two-thirds at the beginning of this regime in the 1970's.

The bar's involvement with transactional work is much less extensive than its involvement with litigation. Parties to a transaction generally purchase legal services for two reasons: to use representations, warranties, and covenants to minimize expectational and informational asymmetry among or between them, and to draft any necessary documents in a way which minimizes the benefit to any party which behaves opportunistically. Neither task, by its nature, need be performed by an attorney(27).

In the transactional arena, large corporations provide legal services to their employees. Financial institutions and real estate agents increasingly offer legal advice. An active market exists for legal do-it-yourself books. Among all of the law-related professions, that which acts most attorney-like in this regard is the non-lawyer staff of the legal departments of large corporations. Japanese corporations typically use their own legal departments to the greatest permissible extent. Most of these personnel have studied law as undergraduates and some are highly skilled. Large corporations find it more efficient in the present legal services market to train their own specialists than to purchase professional legal services on the existing domestic market(28).

In the late 1960s and 1970s after massive growth and expansion, large Japanese enterprises found themselves operating in what for them was a very new and different legal environment, with a sudden increase in litigation against them, a growing number of governmental regulations with which to comply, and an increase in the number of legal problems associated with the internationalization of their activities. In response to these changes, the companies, realizing the limits of dependence on outside counsel, strengthened their in-house legal affairs departments. This kind of system was purported to have been adopted originally on a temporary basis due to the constraints of what was then seen as a Japanese bar under-manned in the short-term. It has since drawn the attention of some advocates in the U.S. concerned about the heavy social costs of the large number of lawyers and excessive litigation in their own country(29).

The employees in Japanese legal affairs departments have a stronger sense of belonging to their company than of belonging to the legal profession. This means that company legal affairs departments have minimal capacity to direct the company's activity from a purely disinterested legal point of view, and also that the department is likely to use the law only to serve the company's interests. In Japan objective legal standards do not play a major independent role in defining the general limits of a company's activities. While the law's low profile in the hands of these non-independent, non-lawyer, employee legal advisors has supported the vigorous pursuit of growth by Japanese enterprises, it has also apparently fostered negative aspects of this growth, as well.(30)

The bench in Japan is classified into five categories of judges: 1) the fifteen Supreme Court Justices, including the Chief Justice; 2) the eight chief judges (presidents) of the high court; 3) about 1350 full judges; 4) about 600 assistant judges; and 5) about 800 summary court judges. The four categories of judges other than Supreme Court Justices are generally called "inferior court judges". The distinction between Supreme Court Justices and inferior court judges is noteworthy because their method of selection is quite different(32).

The judges of Japan, except Supreme Court Justices and summary court judges, are mostly "career judges". Supreme Court Justices are appointed in roughly equal numbers from among three broad groups: 1) inferior court judges; 2) practicing lawyers; and 3) public prosecutors, law professors, or other persons of broad knowledge and experience. Summary court judges are usually appointed from among: 1) persons with certain required knowledge and experience; 2) retired inferior court judges or public prosecutors; and 3) (temporarily or concurrently) assistant judges or full judges. While the compulsory retirement age is sixty-five for ordinary inferior court judges and sixty-three for public prosecutors, summary court judges may serve until seventy(33).

Other inferior court judges normally choose their position as a career. They are appointed assistant judges for a ten-year term after meeting three requirements. Career judges must graduate from a university (law department), pass the National Legal Examination, and complete two years of professional training required by law at the Legal Training and Research Institute.

After at least ten years service as assistant judges, career judges are usually appointed as full judges for a ten year term. The term is normally renewed so that these judges remain in the judiciary until their compulsory retirement at age sixty-five. They spend most of their lives as judges in a system much like the United States government civil service, except that the Japanese judiciary is separately managed by the Supreme Court. Some judges will also be appointed for a few years to administrative positions with the Supreme Court, the Ministry of Justice, or other governmental agencies(34).

The lists of nominees for assistant judgeships and judgeships are usually prepared and submitted by the Ministry of Justice to the cabinet at the time of graduation from the Legal Training and Research Institute in April every year. In other words, a number of new graduates, around one hundred twenty-five, because the vacancies are limited, apply for nomination as assistant judges. Simultaneously, most of the assistant judges who were appointed in April ten years earlier become qualified to serve as judges and are usually nominated as judges. They are normally appointed based upon lists prepared by the Supreme Court(35).

All inferior court judges in Japan are appointed without being permanently assigned to the court where they are to serve. The purpose is to avoid placing a judge on a specific court throughout his entire tenure, which is thought to hamper efficient administration of the judiciary from a personnel standpoint. Instead, the Supreme Court assigns each new appointee to a specific court immediately after his or her appointment as an inferior court judge.

In assigning newly appointed assistant judges, the Supreme Court has followed a policy of assigning them to large, medium, and small courts in rotation during their ten-year term, though not necessarily in a fixed order. This is to allow inexperienced assistant judges to become acquainted with a variety of courts. Although newly appointed judges may theoretically be assigned to any court without consent, they may not, once assigned, be moved to a different court absent their consent. In the case of judges, reassignment or change of assignment is generally less frequent(36).

The promotion of judges is related to the assignment of judges. Promotion usually means the transfer of judges from a lower or less important position to a higher or more important position. It can also mean a raise in judicial salary. A combination of many factors affect promotion, however, performance and seniority are probably of greatest importance. A judge's transfer from one court to another is legally a change of assignment, even if it is done for the purposes of promotion. Therefore, any such transfer must be approved by the Supreme Court with the consent of the judge concerned(37).

The role of the Prosecutor's Office is essentially outside the scope of this writing, which is intended to provide an overview of the Japanese legal profession in relation to civil and commercial practice issues. Criminal and Civil legal practice are, for virtually all purposes, completely distinct and separate within Japan's legal system, hence the very limited relevance of the prosecutor to most civil matters.

The choice of whether to become a prosecutor is essentially that of each individual trainee at the Legal Training and Research Institute. Upon obtaining the approval of his or her academic overseer, a trainee becomes free to enter the separate professional career track of prosecution and the Prosecutor's Office.

The number of trainees entering the Prosecutor's Office in a given year varies significantly. Recently, there has been an upward trend. In years following the exposure of a major public scandal, an increase in the number of trainees opting for prosecution is almost certain to be seen.

The enumerated roles of the Prosecutor's Office are fourfold: 1) to investigate evidence of criminal activity or wrongdoing; 2) to initiate prosecution of an alleged criminal offense if conviction is likely; 3) to refrain from prosection if the accused is believed not guilty of a chargeable offense, even if conviction would be a likely event; and 4) to execute other necessary and proper tasks under the law as a representative of the public and its interests(38).

Upon completion of training at the LTRI, the newly initiated prosecutors will begin their careers in one of Japan's major metropolitan areas. After a period of about one year, the members of this group will be dispersed to rural areas throughout Japan for another period of two years. They will then return to the major metropolitan areas briefly prior to being given more permanent assignments throughout the country, with upper echelon performers being retained there in the major metropolitan areas. Others in the group will receive "national" assignments in the Ministry of Justice, but the vast majority will take positions in local Prosecutor's Offices throughout the country. Advancement from this point forward is based generally on seniority within the particular place of assignment.