The Boston-based firm entered the Japanese market in 2007 through a merger with the firm of top insolvency lawyer Hideyuki Sakai. The firm now has a relatively large 81-lawyer Tokyo office, but most of its professionals are Japanese-qualified lawyers, or bengoshi. As a result, it’s rarely thought of as one of the top international firms in Japan; instead, it’s long been seen as more of a domestic practice, and a niche one at that.
Bingham now wants to change that perception.
“I think that in five years’ time there will be two giants in the market, and they will be Bingham and Morrison & Foerster,” says Tokyo mergers and acquisitions partner Steve Lewis. Morrison & Foerster is currently the largest international firm in Japan.
Lewis’s joining the firm last fall from Herbert Smith Freehills, where he had previously served ten years as Tokyo managing partner, was one of the first signs that Bingham was moving to broaden its Japan capabilities. In May, the firm recruited a seven-lawyer investment funds team from White & Case, led by partners Christopher Wells and Tomoko Fuminaga. Two months ago, former DLA Piper associate Chris Mizumoto joined Bingham as a Tokyo-based intellectual property and litigation partner.
The firm has also raised its profile in the market with its representation of Olympus Corp. throughout the $1.7 billion accounting scandal that rocked the company last year. Bingham advised the embattled electronics company on crisis management, corporate governance, claims litigation, and securities and financial regulatory issues, including working to keep the company’s stock from being delisted from the Tokyo Stock Exchange.
“That really is an example of a full-service representation,” says Tokyo partner Lisa Valentovish says.
But the biggest game in town for international law firms in recent years has been outbound M&A, which has boomed as Japanese companies seek growth abroad. There, Lewis acknowledges that Bingham is still well behind other firms in the market. Morrison & Foerster advised Softbank Corp. on its recent $20 billion takeover of Sprint Nextel Corp. Allen & Overy advised Bank of Tokyo–Mitsubishi UFJ on its $5.75 billion acquisition of a majority stake in a Thai bank. Last year, Davis Polk & Wardwell advised Osaka-based air conditioner maker Daikin Industries on its $3.7 billion acquisition of U.S. competitor Goodman Global.
Lewis, who was brought in to expand Bingham’s share of the outbound pie, says the firm may need to start off smaller in the face of such seasoned competition. “I don’t think Bingham has the name yet for the billion-dollar deals,” he says.
DLA Piper Japan managing partner Lance Miller says Bingham will be at a disadvantage competing for Japanese outbound work because it has fewer overseas offices, particularly in Asia. Many Japanese companies have targeted Southeast Asia in particular for growth and the past year or so has seen Tokyo’s Big Four corporate firms—Nishimura & Asahi, Anderson Mori & Tomotsune, Nagashima Ohno & Tsunematsu, and Mori Hamada & Matsumoto—as well as Morrison & Foerster open Singapore offices with that work in mind.
“Japan companies operate everywhere these days, and Bingham doesn’t quite have the platform to support all the opportunities that one might have when you’re looking at Japan outbound,” Miller says.
Lewis acknowledges that Bingham, which has no Southeast Asia offices, has a smaller network than some of its rivals. But he says there are many good local law firms to work with in those markets, where foreign firms are often barred from practicing local law, anyway. “The outbound M&A deals that you do are very rarely dependent upon your network,” he says.
Firm chairman Jay Zimmerman says the firm is not following any other firm’s playbook and is concentrating on areas that play to the firm’s strengths in the United States, such as asset management. “Our approach is not to do what MoFo did and nip at their heels, but instead to focus on our strengths,” he says.
The core of Bingham’s Japan practice remains Sakai’s restructuring team. Last year the firm represented bondholders in the $5.6 billion bankruptcy of chipmaker Elpida Memory Inc. It also acted for bondholders in the earlier restructuring of subprime lender Takefuji Corp. Sakai served as statutory auditor to Japan Airlines ahead of its 2010 bankruptcy filing.
Sakai, who is Bingham’s Tokyo managing partner, also says most of the firm’s restructuring lawyers handle a variety of matters and aren’t as countercyclical as some of their U.S counterparts. “It’s important not to look at our restructuring talent in narrow terms,” he says. “Many of our fund clients use our restructuring people regardless of the economy.”
He points out that of the top 20 matters in the office this month, only four are restructuring. Others matters include IP, antitrust, general corporate advice, and M&A. “These practices are not recessionary,” says Sakai.
Word is spreading as well, he says, about the firm’s expanded capabilities. “We are fortunate to have several loyal clients who have expressed willingness to use Bingham in areas where they have not traditionally used us,” he says.
Wells sees inbound M&A as an area that will clearly benefit from Sakai’s reputation in the restructuring area. “Most M&A opportunities come when the target is distressed, so I view it as a natural feeder” of work for the firm, he says.
He also sees opportunity in real estate finance, an area that was hot in Japan in the mid-2000s but just about collapsed by the end of the decade. Wells says the expiration of a law that protected small and medium-sized enterprises from foreclosure will likely create more opportunities for investment in at-risk loans.
“There’s plenty of it coming back,” he says. “In the funds area we’ve been seeing plenty of activity.”
Many in Japan are optimistic in general that Prime Minister Shinzo Abe’s economic policies will lead to a sustained turnaround in the country’s economic fortunes. A cornerstone of his strategy has been a weaker currency aimed at making Japanese exports more competitive, and the yen has fallen from 80 to the dollar last fall to 100 today. The falling yen also makes Japanese assets cheaper for potential foreign buyers.
“If Abenomics continues and the yen goes to 120-130, Japan’s going to look really attractive,” Wells says. He sees that as an opportunity for Bingham, though he admits that other international firms with strong local practices, such as Baker & McKenzie and Morrison & Foerster, are well positioned to capture that work as well.
Though optimistic about the firm’s future in Japan, Zimmerman says the firm hasn’t put deadlines on its plans for the market. “This is a long-term project,” he says. “It requires great patience.”
“I believe that we can be number one,” he says. But “if I’m going to talk about ten years later or 20 years later, we should probably consult the next generation of Bingham Tokyo leaders.”