Japanese General Counsel are under less pressure to improve cost efficiency than their western counterparts and tend to be closer to the business, according to Said Business School Professor Mari Sako.Professor Sako visited Japan recently and compared the pace of change with that in the West. She said that because legal departments in Japan were not as big in size 'therefore the generated overhead cost are not yet noticed by top management or becoming an issue.' Furthermore, she noted that  corporate governance 'has a different spin in Japan - although shareholders have become a more important stakeholder group than before, the pressure to improve the return on equity by reducing the bottom line is still gentler than in other countries. The same applies to legal cost in general.'

Closer to the business

One of the most striking differences noticed by Professor Said was that the majority of the legal departments were not staffed with qualified lawyers. 'Just a handful of corporations have a qualified lawyer heading the legal department,' she said. Because the job was considered a life-long job, these legal department staffs have a very deep understanding of the business. With that they are closer to the business and act rather as risk-taking advisors than as risk-averse cops.'She said that the General Counsel in Japan faced similar challenges to those faced by their US or European counterparts. 'They are challenged by the sheer increasing legal work in particular caused by new regulation and risk management issues. The General Counsel is also experiencing an expanded scope of responsibility which is also reflected in him joining the executive management team.'  Source: University of St Gallen