 
Vol.14 : David Price (Robert Half International)
May 30, 2007
Bank's bottom lines sag; future growth path unclear
Abe unveils bold post-Kyoto initiative
How to deal with the 'other' party
Anti-TOB measures being adopted
Expanded coverage: Tourists catch glimpse of real Tokyo
recruitment services：採用業務
financial deliverables：資産報告書に含まれるレポートのひとつ
SOX：上場企業会計改革および投資家保護法
audit：会計
interim：暫定的な
turnover：売り上げ
joint ventures：合弁事業を興すこと 、共同企業体
（ D: David, P: Peter ）
| P : |
Hello, this is Peter Barakan. Today I am talking to David Price, who is Managing Director of Robert Half Japan. First of all, perhaps you could explain for some of the people listening to this podcast that don't know what your company does, what Robert Half Japan is? |
| D : |
Robert Half is the world's leader in specialized recruitment services. Robert Half International actually consists of Robert Half, which has various recruiting lines of business as well as Protiviti, the world's largest specialist in financial deliverables, SOX, internal audit consulting, management risk, and Robert Half Recruitment Services consists of specialized recruitment for permanent as well as interim management contract positions.
|
| P : |
Okay, you are headhunters. |
| D : |
That's another way of saying it Peter. We are recruiters. We are headhunters. |
| P : |
But you are a pretty big company, okay, so obviously you are dealing in fairly large numbers of permanent executives. |
| D : |
We have 13,000 staff globally. Our turnover for 2006 was a bit over 4 billion. We have over 350 offices globally for the recruitment business, and Protiviti has another 50 plus offices. So yes, we are pretty large. Globally, we are pretty much everywhere.
We have offices in North America, Australia, Europe, Tokyo, Singapore, Hong Kong; soon to be several other locations I probably shouldn't mention them yet.
|
| P : |
Now, so in your case even now 90 something percent of the company is going to be foreign companies, are they, or... |
| D : |
In our case now, we are dealing...
|
| D : |
...we are dealing more, I would say, maybe not 90, a little bit less. We have a little bit more than 10% of Japanese companies we are dealing with because from the beginning, one of the reasons I came here I was able to create a company with a culture that I - the culture and to go after the business that I felt was happening in Japan now or would be happening in the future.
In other words, to face the realities in the market as they are and as they will be because as I said earlier this market is changing and becoming more like us, where if you look at England or Australia or America, the recruiting companies work with the whole market.
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| D : |
And traditionally here some of the Japanese recruiting companies work with the whole market, but they don't do specialized recruiting for various reasons particularly well, if I may say so. And most of the foreign recruiting companies that are here just work primarily, if not entirely, with foreign companies. That's a very small slice of the business pie.
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| P : |
Right. Well, I can remember going back to when I first came here in the mid '70s and most Japanese people had a very negative attitude towards changing jobs, period.
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| P : |
That obviously has changed gradually over the years and I guess the bursting of the bubble, as it were, in the early '90s had a big effect on that. People realized that, you know, the lifetime employment environment changed an aweful lot to the point where you couldn't rely on having a job for 20, 30 years, like you could before.
|
| D : |
...one of the ways the market is changing is that specialized skill: finance, sales, technology, legal for some, a few examples.
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| P : |
Really specialized people, yeah.
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| D : |
But such people, if they have the skill set, in some cases they don't need the bilingual ability, in some cases they do but they don't have to be - companies are having to forget about nationality here if there is such a skill. For example, with the SOX, Sarbanes-Oxley, the legislation that all companies listed on the US Stock Exchange have to pass this checklist when they do their financials every year.
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| D : |
These professionals are in such sort supply that if someone can do it and someone is bilingual and if someone has the skill set and the language capabilities...
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| P : |
There are about 100 companies who will want them.
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| D : |
Yeah, they have to bring them in, they have to bring them in on a contract basis from wherever they can get them practically and it's going to be even worse with J-SOX because the Japanese companies are going to have to be and they are going to need - there's going to be all the Japanese companies that are going to have to pass this yearly regulatory sort of audit checklist.
They have to comply and they have to have J-SOX specialists. There's going to be a huge demand for that, all companies listed on the first section...
|
downturn：沈滞
recession：景気後退
business acumen：商才
cold calling：売り込み電話
CPA：公認会計士
sought after skill：求められているスキル
（ D: David, P: Peter ）
| P : |
You were talking about some of the differences in the recruiting business here and in other countries; you mentioned places like Europe and Australia. I remember going to Australia once actually and being amazed that somebody I had only met five minutes before offered me a job.
And again, this was about 30 years ago, maybe the Australian market has changed somewhat since then; perhaps they are not quite so adventurous. But what do you think are the unique challenges that you find here in the Japanese market?
|
| D : |
Well, getting enough good candidates, to me I hate to keep coming back to the same thing but it's just such a candidate-short market and it has been even before this current boom and it will be afterwards in some areas.
In some areas, not as much; if you look financial services front office, when there is a downturn that slackens quite a bit, but if you look at finance and accounting, financial control for manufacturing and service companies, they need better people.
Even when there is a recession, they need people who can help them cut costs. They need - they meaning manufacturing service companies in Japan, need professionals that can work cross departmentally and better operational, very good business acumen, critical thinking skills, and increasingly as the market internationalizes and then the different industries here open up and the trade barriers drop.
It's happened, you know, in the tech world, it's happening, in medicine, it will happen in construction more in the future. They are going to need these type of professionals. And likewise, sales here is not so much relationship-based as it used to be, so they need people who have, dare I say, western sales abilities; cold calling, business development, not just taking all the relationships and carrying them forward.
So, I would think if I could say two broad areas where need is the greatest is finance and sales; having said that because of all the changes in business, legal.
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| D : |
And the challenge is just as there are only 20,000 CPAs, compared to 300 and plus 1000 in America, country a little over twice the size of Japan. There are I believe I read there are only 21,000 Bengoshis here and there are hundreds and thousands of them in the States...
And because of this great demand and just various things pulling businesses in different directions, there is more and more of a need for contract positions now not just in tech but also in finance, we are seeing some in marketing, sales and marketing, creative positions. Once again, like you will see in other parts of the world, marketing and creative positions or advertising companies are being contracted out increasingly. I think we will see it in HR, legal...
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| P : |
When you say contract positions, you are talking about short term or...
|
| D : |
Paid either by the hour...
|
| D : |
Essentially by the hour, day, week or month, you know... |
| D : |
...depending upon the role and...
|
| P : |
You were saying that a lot of these people are going to be bilingual and what's crossing my mind is that a lot of Japanese people who are going to be bilingual and have these special skills are people who have studied at universities in other countries, a lot of them in the US I would imagine.
And if they have these skills, if they have the bilingual ability, they are going to be much better paid working in the US probably. Are they are going to be coming, I mean do you find a lot of the people you are looking for are not coming back to Japan to work? And if so, do you find out wherever they are and bring them back?
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| D : |
Well, we are betting a lot on - another reason I came to this company is because, for example, we have over 275 offices in the States and some of them have been there for decades, so I know we are in touch with a lot of bilingual people who are or will be coming back and that's one of the things we are working to do is networking with those offices so we can have a good connection.
Networking with universities, networking with associations, so we can have - because it's all about the candidates. I mean don't get me wrong, I value our clients and we work for them, they pay the bills, but in order to serve them we have to get the candidates...
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| D : |
So we definitely - I would say other than the East Coast, New York, DC, maybe Chicago and of course the West Coast with LA and San Francisco, the salaries are definitely higher here, among the highest in the world.
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| D : |
So they soon should be coming back and a lot of Japanese nationals eventually want to come back. Some of them are like me and they like living outside of their country, maybe better; but a lot of them end up coming back.
So we definitely want to keep a good line and they are so valuable here and that's why it's all about value and they are so much in demand here that you will see the wages continue to go up for, once again, people and especially people with highly sought after skill set such as SOX. |
| P : |
Okay finally, Nikkei Weekly, are you a reader? |
| D : |
Occasionally, yes I am. I like the - I love the articles, the local and global articles and in fact we'll have to start bringing it in the office to subscribe.
|
| P : |
Will you find as a magazine it's of use to people like yourself and other people? |
| P : |
English natives, English-language natives working here. |
| D : |
Absolutely. It's got really a - I have enjoyed when I have read it. You know, a lot of the articles let me know what's going on in the business and social world here.
|
 Paul Sands / General Manager
Virgin Atlantic Japan 
Vol.13 : Robert Pickard (Edelman Public Relations)
May 23, 2007
Risk factors could test economy's sustainability
Setting rules for constitutional change
Rents in Tokyo rise skyward in 2007
Financial firms face modern challenges
Expanded coverage: With avenues that entertain, Kichijoji continues to charm
upsurge：急激な高まり
brand-building：ブランド構築
earned media coverage：メディアによる報道
palpable：手に取ってわかる
distilling：引き出すこと
rationale：理論的説明
win-win：お互いに有利な
（ R: Robert, P: Peter ）
| R : |
In our business -- the business of public relations -- there's a revolution going on in Japan right now.
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| R : |
Yeah, there's a tremendous upsurge in activity as Japanese companies -- that need to build their future communicating with foreign audiences overseas -- are driving because they realize that to build their business, to export from Japan, such a great trading nation, that they have to communicate effectively to all the people, who need to hear their stories so that those people will do and think what they want them to do or think...which is to buy Japanese products and to think highly of Japanese brands.
I think a lot of that thinking is now penetrating the consciousness of Japanese corporate headquarters in a far more worldwide brand-building way than has ever been the case before. So, our business was naturally attracted by the opportunities this trend represents.
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| P : |
That's really interesting because I've been living here for over 30 years and I wonder why nobody realized that they had to get a message out to the outside world until now. I mean, Japan has been an exporting country for a long time. |
| R : |
It sure has been, but I think what's new is that there's a 'generation gap' in Japan and a lot of the younger executives -- who through the rotation system spent some time in Europe or the United States -- can see the power of marketing, the power of new ideas in public relations, to move people, to create markets and to create a buzz where none existed before.
Now they are assigned overseas, but they come home to Japan, where we have had domination of marketing by the Dentsu model, where advertising and the power of advertisers has been far more important and controlling than the earned media coverage that public relations people undertake on behalf of clients.
Around the world, public relations is regarded as a profession. In Japan, not so much so because marketing is more understood as an advertising thing, a paid for thing, but that's changing now...
|
| P : |
Interesting, because working in the media, you get a palpable feel for how advertising is dropping in the media, especially in radio, its becoming almost dead now... |
| P : |
So much more of the advertising money is going towards the internet. |
| P : |
So, it makes a lot of sense, I mean, if people aren't getting satisfaction out of advertising then there has to be another route to go. What kind of PR would you, for example, be recommending to people that have traditionally worked more in advertising? |
| R : |
First of all, almost everything in public relations begins with relationship- building, making an introduction that starts with a logical rationale, connecting a company's interests to the interest of the journalists' readers and of course that would be of interest to their editors, and the advertising department (like creating a 'win-win').
A lot of our work is focused on taking the complexity of any company and distilling that complexity into a simple and compelling message that through repetition in a relentless way, through multiple communications channels, reaches the target audience and educates them about the premise our clients are trying to communicate.
I think in Japan in the past, the PR profession crystallized in the 1950's after World War II. The business was born at a time of simple press agentry, hospitality with journalists, sending out a press release, fairly straightforward and simple stuff, but today PR has evolved to all these new things like stakeholder relationship management, corporate reputation and blogger outreach.
It's become a far more advanced business, and in Japan, change is happening only slowly, but all of a sudden it's happening now, massively across the full spectrum of industry.
|
modi operandi：運営方法
implementation：実行
painstaking：骨の折れる
ideation：観念作用
colossus：大国
lopsided：一方に傾いた
captive audience：（嫌な話でも）聞かなければならない聴衆
（ R: Robert, P: Peter ）
| R : |
...now we are seeing that around the world if you look at who is blogging today, more blog posts, according to Technorati (our recent researcher), are in Japanese compared to other languages. Isn't that a fantastic thing to know?
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| R : |
Of course, people assume it's English or maybe they assume Chinese, but no, number one is still Japanese, according to the most recent data, so the 'share of voice' for Japan in global communications can be much higher than it has been. I think the country can 'punch much more above its weight,' to use a boxing metaphor.
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| P : |
So, you are obviously keeping up with people, who do research on what -the things like you just mentioned - the fact that there's more blogging going on in Japanese than other languages, do you try to keep up-to-date with what's going on in other countries as well, I mean, on a global level? |
| R : |
I think that is what's unique about our business model here at Edelman because it's almost like in the public relations industry, in the world of communications, really there are two worlds in Japan. There is English and the foreigner -- that world -- and there's Japanese and 'us in Japan.'
The intersection between those two has not really been that great in the past, but now I think we see a tremendous integration of corporate communications. A large Japanese multinational historically -- almost all of them -- have had really decentralized communications, where American communications are done out of New York and European communications done out of London, and head-office in Japan has really been more concerned with domestic communications in Japan.
But now we are seeing headquarters in Tokyo wanting to play the leadership role in global communications, in an integrated way, where the Japanese world and the foreign world are the same world.
|
| P : |
Okay, so you've got two probably extremely different modi operandi. |
| R : |
Sure. You know, we are aware of the difference in communications overseas. Well in Northern Europe or North America, communication is direct to the point... |
| R : |
In Japan, context is important. It's up to the recipient of the information to interpret what is being communicated sometimes. A foreigner gets frustrated sometimes listening; thinking, "okay, well, get to the point," so with the languages themselves, with their styles being so different, building 'one voice global corporate communications' on behalf of a company or its products...that's really hard actually.
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| P : |
Up to now, are there any problems that you find unique to Japan or not necessarily even unique, but the things which you find hard to get your head around in this country? |
| R : |
I wouldn't call it a problem; I'd call it a difference or a distinctive quality. |
| R : |
When it comes to communications, quite often the big picture or the strategy is the most important thing. Every communications campaign needs a theme, it needs key messages that people can relate to, think of it like the lyrics to a song.
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| R : |
But in Japan, I think the big picture in a communication strategy does not come nearly as naturally or as quickly as the tactics of the program, the fine details of implementation.
So, when it comes to the quality of a communications program, every last detail in a methodical painstaking way is developed to the finest standard of perfection, but sometimes the big picture, the strategic ideation, 'what is the overall point here of what we're saying'... that especially as it relates to overseas communication does not come naturally. So, it takes to getting used to...
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| P : |
I know exactly what you are talking about, and we won't go into details of that now...how would you like to see your market develop here in Japan? |
| R : |
Well, think about Japan's size and reputation in the world, a global colossus in the automotive industry, consumer electronics, in all of these different areas Japan is supremely successful, but when it comes to marketing or communications, Japan is not known to be successful, so our objective here is to make Japan a world player and to project its power as a great country when it comes to communicating on behalf of Japanese interests.
We are a foreign company globally, but here in Japan -- incorporated in Japan as a Japanese entity -- we are using our business as a platform for the expression of that new Japanese voice in [international] PR, the public relations business, and that's never been done before. Japanese PR has dealt with Japanese audiences, so we are going to transcend all that [around the world].
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| P : |
One impression I've had over the many years of living here is that corporations here in Japan, when they are trying to get their message out, they always try to do it from the point of view of themselves which is okay, I mean, obviously you know that has to be done too, but there seems to have been not enough emphasis put on the receiver and quite often - I don't know, I find it a little - it seems to be a little bit lopsided and perhaps corporations can actually acquire a negative image through not being sensitive enough to the way people receive their message. |
| R : |
Excellent question! It comes naturally for a Japanese corporation to communicate top-down in a one-way corporate monologue of control where there's a mass consumer that's the captive audience.
But these days these companies are realizing that credibility does not come from control, credibility comes from an actual conversation with those people, and a conversation means asking people what they think, it means if you are coming with a new product, maybe you give it some bloggers and they check it up beforehand and you take their feedback into consideration. This trend is called co-creation.
Think of the iPod; do you like your iPod if you have one because of the color of it or the way it feels in your hand? Probably not...most people like an iPod because it's their music when they want it, how they want it. So, they have to co-create the experience of that product, and I think if other companies follow that in terms of their communications, just as you were asking, they are going to be very successful.
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| P : |
Finally, how aware are you of The Nikkei Weekly? |
| R : |
Indeed indeed, and I would say that all of my employees are readers as well. I mean, we are in the public relations industry...our job is to consume the media.
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| R : |
I have the one job where it's okay to read the newspaper while I am working or to surf the website or to listen to the radio.
|
David Price / Managing Director
Robert Half Japan Ltd.
Vol.12 : Vivian M. Baines
May 16, 2007
Toyota faces uphill stretch on road to world No. 1
Shareholders suddenly getting vocal
Fine line for Abe on Yasukuni
Latest trend in travel: investment tourism
Expanded coverage: S&B Foods promotes spice of life
MITI：通商産業省(Ministry of International Trade and Industry)
low-end：低価格の
commission：歩合
prisoner-of-war camp：戦争捕虜キャンプ
blue chip stock：優良株
（ V: Vivian, P: Peter ）
| P : |
How did you find the business environment in the late '60s, early '70s and, well, I mean throughout if you like, but particularly going back that far, it must have been a lot more different from the western business environment then than it is now? |
| V : |
Yes, especially if you go back to say 1970, of course, Japan was having their big economic boom and yet, for example, our sort of business computers and terminals and cash registers and all that accounting machines, Japanese were still searching.
And so we could do very well here and people like Fujitsu and so on were still struggling, but they were getting a lot of support from MITI. So, the thing that I noticed most was there was a tremendous amount of government advice to put it right politely... |
| V : |
...guidance and it wasn't all bad, but they did sort of - well, we spent an awful lot of time worrying about, for example, what MITI thought or other ministries thought just to make sure we were doing things that wouldn't, you know, sort of offend the Japanese culture. Bear in mind, we were big. I mean, we had about 8,000 employees in 1970 which doesn't sound like much now but we were a very big company then.
And, you know, we were sort of a model company, we had a manufacturing here and, you know, so we tried to sort of be a good citizen. And as I say, lots of companies did things with us Japanese companies, wanted us to sell their products, even some of the stars today came and, sort of, asked us would we do stuff with them, yes, and in our arrogance too in many cases we said, "No." |
| P : |
Was that your decision to make in some cases? |
| V : |
No, unfortunately those were head office decisions...
...I don't know if you know much about NCR, but it was, you know, a huge monopoly, all cash registers in the world were sold by NCR and then gradually, gradually it changed, but that mentality existed that, you know, if it's not invented here in America it is, you know, it is not much good to us.
And they - I should say we learned the hard way in many instances that as Japanese progressed - for example, the first electronic cash register wasn't invented by us, it was invented by the Japanese.
|
| V : |
And many of our head office people said, "Well, you can't have an electronic cash register," it sounds laughable now.
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| V : |
And that was 1972, when the first electronic cash registers were sold here and then, of course, we responded and, you know, we did well. But the problem we had is the same sort of problem the automakers in the US have now is that our costs were higher and in fact we got out of that whole low-end cash register market.
But fortunately because of our retail expertise, you know, we could hang on to the department stores and, you know, the big sort of supermarkets and so on because we knew what they needed in terms of their infrastructure and so on whereas the Japanese were still learning.
Now, of course, it's a different game, everybody knows, but still amazingly at that top end of the market, NCR is still very good here in Japan. Department stores, we have a huge share of the market and that's partly because we have been so successful in the US, for example, Wal-Mart is our big customer, so...
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| P : |
Oh right, you don't get any bigger than that. |
| V : |
But we were ahead of the times and I think, you know, if I think back on my NCR career, almost everything we ever did here in Japan was ahead of the times. We were the first people to treat technicians in the same way as white collar workers. We were the first company to pay commissions in Japan, you know... |
| V : |
Yes, you know, for a big company to pay - we were the first company to do many things.
|
| P : |
And did all of those decisions pay off? |
| V : |
Absolutely. I mean, we were very, very successful as a result. In fact, I've got a magazine which I have shown Russell where we were on the cover in 1970, we were voted by President Magazine, the second best managed company in Japan and there is, you know, of course, all the statistics about profit and return on assets and everything else.
But the thing that struck them was that we were managed in a sort of hybrid fashion between the American ways and Japanese ways; try to take the best out of both and so, you know, it was a nice experience, yes.
|
| P : |
Do you think it was the flexibility in management style that was responsible for this? |
| V : |
Yes, very definitely here in Japan, this man Anderson, his boss was an Englishman, who - they had been in prisoner-of-war camp together. This guy gave him absolute autonomy and they bought buildings and they did this and they did that - all stuff which corporate didn't interfere with, and it was that flexibility which allowed the company to a) grow and b) you know, make an awful lot of money which perhaps in Europe and even in the US, they didn't sort of have.
In more recent years, the company became very centralized and they lost some of that and I think perhaps it hurt NCR a bit. You know, we were a public company here, we were a public company way, way back on the second exchange and then we got on to the first exchange, that was in the '50s.
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| V : |
And we were a blue chip stock. 70% was owned by head office, but 30% was our regional joint venture partners who sold off their shares and so on and so forth. So, you know, we were a very highly regarded company and very, sort of, well known in that sense.
|
entrepreneur：起業家
spout：とうとうと話す
triangular merger：三角合併
adamantly：かたくなに
（ V: Vivian, P: Peter ）
| P : |
So what kind of consulting do you like to do? What do you think is your forte? |
| V : |
Well, you know, especially I find with smaller companies, you know, they are somewhat wanting in management skills and that's not their fault. You know, you get an entrepreneur who has got a great idea and he runs with it and then he sort of doesn't quite know how to organize properly and, you know, all the sort of simple things that are not my sort of invention but that I remember from my past years and that seems to help people.
And I think, without being too boastful, you know, for younger people to have somebody, who is older just to sort of say to them, well, what you are doing is good and maybe you can tweak it a little and that perhaps is motivating to them. Then, I have had a few clients that are slightly bigger and that's where perhaps it's even easier for me because all I do is spout the stuff that I have known for years and years, you know, helping reorganize... |
| V : |
...people and so that is also quite fun, yes. |
| P : |
And what's it like guiding people through how to do business in Japan now compared with when you were NCR, right? Do you feel things have changed quite a lot? |
| V : |
I would say - and of course, I can't really answer that question in the sense that I never helped, you know, smaller companies in the old days, but my guess would be that it's easier now because rules and regulations are heck of a lot less and they are trying to, sort of, encourage a small business here and, you know, just one example is that you can start a company for next to nothing and so on and so forth. |
| V : |
And they really have been quite good. In fact I have been amazed at how flexible they have been in terms of helping all kinds of small businesses, including Japanese small businesses, but certainly foreigners have not been excluded and I think it's now extending, you know, up the ladder.
There is, for example, this triangular merger kind of thing which big Japanese business didn't want and the government pushed it through, I think, quite rightly. I mean if you want to be a global - if you want to fight in the global arena, you have to play by global rules. |
| V : |
And I was really - I was astonished that Keidanren, for example, you know, adamantly opposed this triangular merger situation. |
| P : |
I expect they were quite honestly scared that a lot of large Japanese companies would be taken over by Americans. |
| V : |
Well, you know, I mean the arithmetic is clear. American companies are much bigger. But, I mean, all they are saying is our management is lousy because nobody is going to take over Toyota or Honda or, you know, a lot of very fine Japanese companies and it's only the ones who are trying to keep their jobs who worry.
But, you know, if you are a shareholder, you should welcome it, you know, because if someone is going to buy your company for a lot of more money than your current management can, you know, generate and share value, you should be very happy. But all these things take time, but I think the government for once really saw it correctly and this will shake things up. There is no question. It will shake things up. |
| V : |
And, of course, the first thing that the Japanese companies did, instead of sort of saying, "Well, let's manage better," they've all tried to, sort of, make maneuvers to make it more hard for companies to take them over and it's a sort of defensive mechanism and to be fair, there are lots of Japanese industries that are really poor by international standards.
For example, the whole pharmaceutical industry, I mean, they are right, because there are a couple of good companies, but most of them, I mean, could be snapped up because they don't - they are not really that good, but of course they do have market share and so they are very attractive to some of these huge foreign companies. |
| P : |
Finally, 'The Nikkei Weekly.' In your position working in Japan as an English speaker, have you been a reader of 'The Nikkei Weekly'? |
| V : |
Well, as you know it used to be called the 'Japanese Economic Journal', and I read it assiduously. |
Robert Pickard / President, North Asia
Edelman Japan
Vol.11 : Ken Siegel (Morrison & Foerster Japan)
May 9, 2007
Gov't, private firms join hands in race to secure resources
Heavy industry revives as demand soars
Partner robots help healthcare
Economists predict solid GDP growth
Expanded coverage: McDonald's CEO doesn't wait around
attorney：弁護士
affiliation：提携
legal entities：法人組織
litigation：訴訟
underwriter：（株式などの）引受人
public offering：公募
antitrust：独占禁止の
technology concerns：技術系企業
（ K: Ken, R: Russell ）
| R : |
So, I am here today with Ken Siegel, the Managing Partner of Morrison & Foerster Japan. When did you become the managing partner of Morrison & Foerster here in Japan? |
| K : |
1998. And at that time we had eight attorneys here. We had grown kind of slowly through the 90's with the weak economy.
So, we had grown from just 1 or 2 when we opened to maybe 8 or 10 after 10 years, and in the last 10 years, we have now grown from that 8 to now just over 90. So we are coming up on 100 attorneys pretty quickly.
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| R : |
Wow. I understand that Morrison & Foerster is Japan's largest international law firm. |
| R : |
That's very impressive. |
| K : |
And actually we are now one of the 10 largest firms in Japan, domestic or international, because there are very relatively few lawyers here.
Most of the international firms are quite small, maybe of 5 or 10 lawyers. And so, actually if you just look at the total, you know all the firms in Japan I think we are the 6th or 7th largest in Japan, now.
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| R : |
Right. And you have some kind of affiliation with a Japanese law firm... |
| R : |
Could you tell us a little bit about that? |
| K : |
We do. We have a Japanese firm, Ito Mitomi, which is technically separate from Morrison & Foerster but we work together in a very close, integrated way, all the attorneys are mixed up, there is no separation between the attorneys.
And so it is really at a practical level it is all the same law firm even though for supervision purposes and to make sure that the Japanese partners are supervising the Japanese associates, it's separate legal entities.
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| R : |
I see. Now I know that you yourself and Morrison & Foerster generally is quite well-known for high tech law. |
| R : |
But, I think there is more to it than, that and perhaps you could give a general overview of Morrison & Foerster's activities in Japan. |
| K : |
Sure. What we have tried to do is really have a broad-based, US-style law firm here in Japan. It's a little different model than some of the other firms which have come in and focused on one practice area, M&A, or capital markets you know, that were just picking one area.
What we have tried to do is really have a broad-based group of attorneys, so we have a litigation group, which is very active on IP litigation and other things, obviously M&A, technology and other M&A, capital markets which represents mostly Japanese companies doing public offerings or raising funds.
For instance, we have represented Seiko Epson in - the underwriters for Seiko Epson in their public offering recently.
And then we have finance attorneys, we have technology attorneys that do nothing but licensing and then we have a bunch of people who are kind of specialized in just one particular area.
For instance, we have a former member of the JFTC who focuses just on anti-trust issues for us which international firms will encounter coming inbound or Japanese companies will bump into from time to time.
So we have a very broad-based...lots of different kind of transactions we are handling. We do have kind of a particular emphasis on technology-related deals and technology-related M&A.
I think that just comes from being a California firm originally. We are focused - our main headquarters is in San Francisco.
So we have a lot of US technology companies and so when we came over to Japan in the 80's we were representing Fujitsu and Toshiba and Hitachi and these big Japanese technology concerns...
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| R : |
And you are representing them, mostly when they are dealing with American firms? |
outlined cases：概要のついた事例集
reconcile：調和させる
compliance：（規則や要求などの）順守
adversely : 不利に
intermediary : 仲介者
talent-driven market：才能を持った人によって推進する市場
client-driven market：依頼人の要求によって推進する市場
illiquid：非流動的な
publicly-listed companies：公開上場企業
cross shareholding：株式相互保有
poison pills：乗っ取り防止策
vis-à-vis：～に相対して
tender offer：株式公開買い付け
（ K: Ken, R: Russell ）
| R : |
How do you find attitudes towards contracts and law and deals in general differ between the American mindset and the Japanese mindset, is there something that you have come across? |
| K : |
Well, yeah it's really completely different. You know, as a general matter, Japanese companies when they do legal documents, tend to draft the documents or want the documents to describe maybe the 10 or 20% most likely cases.
You know, they will have a deal, they have a certain business deal and they are just describing that business deal and if you are taking that approach, you can basically draft very short documents because the business people know what they are agreeing upfront.
US attorneys and US business people draft documents to cover the least likely, 10% up and down, so if the things go extremely well or extremely badly, you know, what's going to happen and they want the documents to cover those outlined cases.
And once you start getting into those cases where either it is so extraordinarily successful that there is way more in the deal than people expected or it is just extraordinarily different or unsuccessful and there is much less or much different stuff in the deal, that generates a huge amount of complexities.
So that's why, you know, Japanese companies because they leave those outlined cases to being discussed later they can get away with very short and sweet documents and US companies have these big 100, 200, 300 page contracts to deal with these circumstances so...
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| R : |
How do you reconcile those two approaches? |
| K : |
Well you basically work with your client. I mean a lot of what we do is, I think, when we're representing Japanese companies, help them understand, what the risks are that need to be addressed that maybe don't need to be addressed in a purely domestic deal.
You know, just regulatory issues, environmental issues, compliance issues, that just would not be as obvious to or apparent in a domestic transaction.
So, we try to get our clients to focus on those issues and understand when they are dealing with a global transaction that those things need to be addressed so we can extend out the documentation and give them better protection...
...because a lot of what you do in an M&A deal is just risk protection, it's making sure that there is not risk in the deal that hasn't been appropriately discussed and documented and addressed.
So, it is kind of a process of helping our clients understand what a global market standard is for appropriate legal documentation and the protection that they should get without unnecessarily burdening the other side.
You know in a lot of cases the Japanese companies are doing long-term strategic deals with continuing business partners, they don't want to push the other side so far that it adversely affects the relationship.
But they do want to get and expect to get appropriate coverage in the documents and so helping them get to the point where they are not leaving anything off on the table, where they are getting what they should get, but not pushing so hard as to damage the relationship, that's the key...
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| R : |
And being an intermediary in that discussion you become something of an expert I would imagine... How would you describe the market for international law firms in general in Japan, and how it would differ perhaps from other markets and the challenges that an international law firm might face here in Japan? |
| K : |
Well, I mean, the real challenge of - there is many challenges of being a law firm in Japan. Probably the main difference from other markets is that this is a talent-driven market as opposed to a client-driven market.
There is - in most markets in the world there is tons of talent, in the US there's tons of fabulous lawyers, there is a limited group of clients that want to hire them.
In Japan there is a very limited number of excellent lawyers and there is tons of clients. Probably the greatest single concentration of great corporate clients in the world is right here in Tokyo, because you basically have New York and Chicago and San Francisco, and it is all right here in the second largest economy, so there is a huge number of decision-makers here.
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| K : |
But, very few lawyers. You know, there's only 500 to 1000 lawyers coming out of the Japanese law schools every year. So there are limited Japanese lawyers, and there is a limited group of US lawyers who want to practice outside the United States and are interested in it and want to spend the time to develop the skills and the relationships...
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| R : |
But a lot of global deals will originate from Tokyo. |
| K : |
Yes. So the key issue is attracting and retaining talent in the market and making it exciting for people and making it as good a professional environment here as they would have in a US firm, or better, in the United States.
And so getting great Japanese attorneys to join, getting great US attorneys and English attorneys to come over and work here, that's probably the biggest single challenge in the market, I think.
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| R : |
Over the last few years, there's been a lot of US style M&A activity with Japanese companies buying into other Japanese companies and with US companies taking over Japanese companies and it's been some controversy over the laws related to this, do you have an opinion on that? |
| K : |
Well, you know, there is a lot to say about that topic generally. I think, first of all, I think, the large variety of things, the transactions that's happened in the market just indicate a market that is in transition from a relatively illiquid, very conservatively-governed market to a much more liquid market with many more market participants coming in from offshore, and they are looking at doing things that traditionally have not been done.
Some of those things are very good, investing in publicly-listed companies, breaking up cross shareholding where you're just seeing more appropriate shareholder demand coming into the market, and you are probably going to see Japanese companies be much more responsive to their shareholders overtime as a result.
Some of the things that have happened are obviously not appropriate, that have caused all kinds of negative publicity about M&A and have caused in some cases securities claims and other significant concerns about how the markets are run here and that's kind of - it's an unfortunate thing, it is the same thing that happened in the United States in the 70's and 80's when it was in the same period of growth in terms of capital markets activities.
So I think there has been this period of time when there has been a little bit of uncertainty in the market created by that. I think it will continue for another year or two but I think as a result of that there are very positive developments coming in, where, I think there is more certainly around investment, more certainty around how rules will be applied to new investors coming in, there are new defensive measures, poison pills coming online that give companies appropriate protection from, you know, unintended M&A, aggressive M&A without removing all shareholder value from the investors.
So, I think the bottom-line on that stuff is that generally the regulatory trends are very positive, create more certainty in the marketplace, make it much more of a global style market...
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| R : |
And the turmoil that we have seen has led to people having to crystallize... |
| R : |
Laws and regulations and interpretations of laws and regulations vis-à-vis the markets here... |
| K : |
Because the old administrative guidance style that was used where there was just informal guidance and everybody just played by what were the kind of general rules that were identified for people that worked as long as it was a very relative illiquid market and it was all Japanese investors in it.
Once you globalize that market that system didn't work as well, and so now there is new tender offer rules, all kinds of new structuring rules, new rules on tender offers and on poison pills. So all that will make it much more transparent, much more predictable and easier to do deals...
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| R : |
So the turmoil we are seeing will lead to an...eventual positive result. |
| K : |
A better world, yes, but it will take a couple more years probably. |
Vivian Baines
Former Managing Director
NCR Japan K.K.
Vol.10 : Paul Riley (Oxford University Press Japan)
May 2, 2007
E-money soars as retailers, railways climb on board
Abe, Bush reaffirm Japan-U.S. Ties
Citigroup bags Nikko Cordial
Nissan's profit sags amid stale offerings
Expanded coverage: Pet's stress level shows in color of new patch
wholly-owned：完全所有の
monograph：特定研究分野の論文
K through 12：幼稚園から高校３年生まで
support ancillaries：補助的付属品
（ P: Paul, R: Russell ）
| R : |
Well, you are the head of Oxford University Press in Japan and obviously that's a company with a great - well, a company - that's one of the questions we'll come to. That's an organization with a great brand name, but what does Oxford University Press actually do and specifically what does it do in Japan? |
| P : |
Okay, Oxford University Press is a department of the University of Oxford, and our mission is to further the University's goals of education and research and culture world wide through our publishing.
We also have a very strong commercial side in that we provide the university with a lot of the money that funds their various investments and a lot of their - the good works the university does. Unlike many American universities, in particular Oxford actually has a rather poor endowment, but they do have the press which gives them, you know; a handsome contribution every year.
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| R : |
So the press is a profit center for the university. |
| P : |
We do - we are self-funding. In other words, we publish about 5,000 titles yearly and the money that we generate from our publishing funds our continued research and new publishing as well as any surplus we give to the university to fund their various projects, but we are a wholly owned department of the University of Oxford.
In Japan, we are mainly a sales and marketing branch. We import books that are produced either, primarily in Oxford or in New York which is our American Publishing Center.
We - and then we - we pick the books that we want to sell and we think are appropriate for the market. And then we produce promotional pieces and different material to make them more appropriate for Japan, and then we sell them mainly through wholesalers and directly to the large book retailers, the Maruzen's and Kinokuniya's, etcetera.
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| R : |
I see. And in Japan the books that you sell are mostly English language teaching related and academic books, is that correct? How does that break down? |
| P : |
Oxford University Press has five divisions. We have a journals division. We have a, what we call academic books, which are the monographs, mainly academic higher education material, science, chemistry, medicine. We have Oxford Education, which is UK Schools' publishing and they are making, you know, K through 12 and children's trade books for the - primarily for the UK public schools.
We have the international division, which are the publishing centers that are in the larger branches. So we have - we, for example, publish in Chinese out of our Hong Kong office. In Hindu, out of our Indian office, and we publish schools books for Australia and South Africa and Canada.
And then in Japan, our primary business would be ELT, which is English Language Teaching. So they are the five divisions and this office represents all of those divisions, although for Japan probably about 80% of our business would be English Language Teaching as opposed to the academic monographs or the books that are primarily for native speakers.
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| R : |
And the market here is an imported book market. The books that you are selling are primarily books that were published in New York or in Oxford and then resold here in Japan. |
| R : |
Is that correct? You don't create Japanese language publications? |
| P : |
We do very little of that. We do create what we call support ancillaries. These might be materials that allow our books to be more accessible to the Japanese market, maybe a teacher's guide in Japanese or, you know, a test package or something that is specific to the Japanese market, but for the most part, yeah, the core materials are published overseas and sold and we import and sell them here and typically they will be sold in other markets as well. |
markup：利幅
transparency：透明性
high-priced market：価格設定が高いマーケット
（ P: Paul, R: Russell ）
| R : |
How would you describe the market - publishing market in Japan... |
| R : |
...and Oxford's place in it? |
| P : |
So, the publishing market in Japan, again it tends to be a very good market, again it's high prices, and Japan has a book culture. The interesting thing is that maybe people who aren't involved with the book market don't realize is that western books and Japanese books actually work on a different system.
Every book - on the back of every book you have an ISBN, which is a unique number for that book, and that's how you trace books and that there is a bar code that matches that ISBN, and anywhere you go in the world that would be...
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| P : |
...the same except for Japan. Japanese books have their own ISBN or JSBN. ISBN is International Standard Book Number. Japan has their own version of that. That's why when you typically go into a large bookstore in Japan, the foreign books are on the sixth floor, back in the corner, because the bar coding system is actually different for all - from all of the other books in the bookshop.
So, our place in the Japanese book world is first of all defined by the fact that we have an ISBN rather than a Japanese SBN And, therefore, we are segregated into that segment and so are all of the other foreign books. Within that world, you break that roughly, I would say, into trade books- and these are the Harry Potters and the, you know, the novels.
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| R : |
How would you like to see the market for publishers develop - foreign publishers develop in Japan, not just educational publishers like Oxford, but for any kind or any foreign publisher who is interested in Japan as a market? How do you see it developing, how would you like to see it develop? |
| P : |
Well, I think the ISBN issue and the whole fact that segregated the market and segregated the distribution channels, has made it somewhat more difficult to compete. I wouldn't say its necessarily discriminatory, but it just - it's made - because it's a separate system that's worth a proportionally much smaller share of what's available, a lot of the big companies, you know, find dealing with foreign books is a bit of a nuisance.
I mean, why - you know, ‘we better put a sticker over the bar code so that it reads on our system or we have to think of a markup, okay, it sells for $10 in the US, therefore, we need to price it at 1,500 (sen-gohyaku) yen here in Japan...', and it just, you know, that would be very nice if we could do away with some of those issues.
I think a second thing that would certainly help our business is if people would have more babies, you know, to make it blunt. In education publishing what you've got is, you know, population or birth rates that peaked in about 1973-74 and have been declining 2%-3% year on year to about, I think they bottomed out a couple of years ago.
But, you know, in university it's pretty well known now that anyone who wants to go to university can. It's just if you have enough money to pay, you can go. What that's done is made schools much more competitive and it's lowered academic standards.
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| R : |
So, more babies is the answer. |
| P : |
To me, yeah, more babies would be fantastic. |
| R : |
Well, I'll see what I can do... |
| R : |
What about the Internet? Is that something that's affected publishing in Japan or do you see affecting publishing in Japan? |
| P : |
It has very much so, but in maybe an indirect way or in ways that are different from what might be imagined. I think probably one of the biggest effects it's had is on the distribution and transparency.
When I say transparency, Japan was a very high-priced market and for many years much, you know, double, triple the price maybe of Korea or Thailand or other markets in Asia and that transparency could be - you couldn't see that those prices were different unless you were really looking. Now, it's very easy to see that a book that costs, you know, ¥2000 here actually only costs about a ¥1000 elsewhere.
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| R : |
One last question though is, are you a reader of "The Nikkei Weekly?" |
| P : |
I do read The Nikkei Weekly. I guess I was first introduced to it - it was at the Japan Economic Journal... |
| R : |
Japan Economic Journal? |
| P : |
...when I was at Isuzu Motors years ago, and what I like about The Nikkei is it gives me a good roundup of news. Unfortunately, although I speak Japanese pretty well, my reading and writing is not great. I know what it is, it's about the fourth grade level, because I have a son, who just entered junior high school, and I found it very difficult... |
| P : |
...to keep up with him and I could help him with his homework till about the fourth grade and so that's where I fossilized, to use an industry term - my language is at the fourth grade level. |
| R : |
So, The Nikkei Weekly helps out there. |
| P : |
It does, it does. It will give it to - give you all the summary of what you need to know in English and I think it's a must-read for any executive, who wants to do business in Japan. |
Ken Siegel / Managing Partner
Morrison & Foerster LLP
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