Law firm compensation, benefits and billing report 2024/2025 - Japan (Tokyo) CONTENTS PREVIEW

Insights TOKYO Law firm compensation, benefits and billing report 2023/2024 Private and Confidential Researched in July to October 2023 by Lexology Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 A Contents Foreword 1 Methodology 2 Key to tables and charts 3 Compensation trends 10 Tables and charts Base compensation (fee-earners) UK law firms Table 1 Annual base compensation (fee-earners) 12 US law firms Table 2 Annual base compensation (fee-earners) 13 All law firms (total sample) Table 3 Annual base compensation (fee-earners) 14 Chart 3(i) Annual base compensation (bengoshi fee-earners) – median, 25th and 75th percentile 15 Chart 3(ii) Annual base compensation (foreign qualified fee-earners) – median, 25th and 75th percentile 16 Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 B Base compensation (business services) All law firms (total sample) Table 4a Annual base compensation (business management/facilities/finance) 17 Table 4b Annual base compensation (information technology/marketing/human resources/secretaries) 18 Bonuses All law firms (total sample) Table 5a Bonus eligibility 19 Table 5b Prevalence of bonuses among firms that awarded bonuses during past year 20 Benefits and allowances All law firms (total sample) Table 6a Benefits and allowances (housing and cost of living/education) 21 Table 6b Benefits and allowances (health and lifestyle/social) 22 Table 6c Benefits and allowances (equipment/travel and transport/food) 23 Table 6d Benefits and allowances (overtime/hours/holiday and leave) 24 Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 C Staff ratios and demographics All law firms (total sample) Table 7a Average personnel ratios 25 Table 7b Average female/male demographic ratios 26 Table 7c Average size of sample offices 26 Table 7d Headcount growth 26 Billing rates All law firms (total sample) Table 8 Standard billing rates 27 Chart 8(i) Standard billing rates (bengoshi fee-earners) – median, 25th and 75th percentile firms and average billing band range values 28 Chart 8(ii) Standard billing rates (foreign qualified fee-earners) – median, 25th and 75th percentile firms and average billing band range values 29 About Lexology PRO Insights 30 Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 1 RETURN TO CONTENTS Foreword This is the 16th edition of the Lexology PRO Insights Japan (Tokyo) law firm compensation, benefits and billing report. It was prepared on the basis of in-depth research carried out during July to October 2023. The results are based on data supplied by participating law firms. The report was researched by Gwilym Davies of Lexology PRO Insights. We intend to repeat this exercise annually, addressing any fluctuations in the market, along with new areas as suggested by respondents. For this reason, we remain eager for feedback on the usefulness of the findings and on how the report’s format and relevance can be improved. Profile of participating law firms We would like to express our appreciation to all of the law firms that provided their time and cooperation in the preparation of this report. Their identity is confidential. All of the law firms surveyed for this report are experienced in advising international and domestic clients across a range of corporate, financial and general business areas. The sample of participating firms breaks down as follows: • All law firms (total sample for data analysis) – 17 • International law firms of UK origin – 7 • International law firms of US origin – 9 • Domestic law firms – 1 With many law firms now truly international entities, the terms ‘US firm’ and ‘UK firm’ above are used to refer to the major originating component of a law firm. Mean size of the firms surveyed (Tokyo operations): • All personnel – 58 • Fee-earners – 38 • Support staff – 21 No data analysis was undertaken for groups whose sample size was considered too small. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 2 RETURN TO CONTENTS Methodology In gathering the information for this report, we spoke to senior decision makers at law firms and obtained details of compensation, benefits and billing rates. The following information is presented in such a way as to conceal the identity of the firms that provided the information, while still providing meaningful comparative data on compensation, benefits and billing rates. Readers may notice isolated statistical anomalies in certain figures given in the tables and charts. These typically result from occasional variations in the level of response from participants or limited data samples for categories not applicable to all firms, both of which can give rise to isolated distortions. In these instances, please refer to the charts for an indication of the general trend. In some cases, interpolation has been used to ensure cohesive data for associate pay and billing rate grids from respondents with limited data sets. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 3 RETURN TO CONTENTS Key to tables and charts The following key clarifies what is meant by each job title, given that some are not universally applied by respondent firms: Fee-earners Note: Certain positions may be omitted from the results tables if the sample size is deemed insufficient (ie, if fewer than three law firms have submitted data for a given position). • Equity partner: A stakeholder in the firm. • Salaried/local partner: A local or junior partner who has not been fully admitted into the firm’s core equity. • Counsel/of counsel: Typically a pre-partner position or sometimes a consultant/academic/elder statesman retained by the firm on a full- or part-time basis. • Level n (typically n to [n+1] PQE/[n+1] year) associate (bengoshi): Japan-qualified lawyer at level n of a law firm’s bengoshi associate seniority pay scale, typically with n to [n+1] years’ recognised post-qualification experience (PQE) since achieving bengoshi qualification. • Level n (typically n to [n+1] PQE/[n+1] year) associate (FQ): Foreign-qualified (typically US) lawyer at level n of wa law firm’s international associate seniority pay scale, typically with n to [n+1] years’ recognised international post-qualification experience (PQE) since achieving US qualification or equivalent level. NQ at level 0 denotes newly qualified. May also possess Japan Bar qualification. • Paralegal – level n: Provides clerking duties, file management and skilled support. Usually possesses some form of legal training or qualification. • Translator: Provides translation services. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 4 RETURN TO CONTENTS Business services Note: Certain positions may be omitted from the results tables if the sample size is deemed insufficient (ie, if fewer than three law firms have submitted data for a given position). General work title categories General work title category Description Common role titles Typical personnel supervision duties (direct or indirect) Chief officer/regional head [level 6] Regional or global head Chief officer, global head, regional head, group head, etc Entire regional divisions (typically 50+ personnel) Director/head of department [level 5] Directors/heads of department/highly senior managers Director, head of department, senior manager, office head, etc Entire departments, often across multiple offices (typically 20+ personnel) Senior manager [level 4] Mid-level to senior managers Senior manager, manager, etc Team or department (typically 5-20 personnel) Manager/senior coordinator [level 3] Junior to mid-level managers/skilled or specialist administration Manager, assistant manager, senior coordinator, specialist, adviser, analyst, executive, etc Small team or department (typically 1-10 personnel) Coordinator [level 2] Senior administration Coordinator, specialist, adviser, analyst, executive, engineer (IT) etc Usually none - perhaps supervising small team (typically 1-5 personnel) Assistant [level 1] Junior administration Assistant, administrator, secretary, clerk, technician etc Usually none Departmental and work function categories Business and office management • Business administration (general): Roles relating to the firm or office’s general business operations, sometimes overseeing multiple work functions (HR/finance/business development, etc). • Project/change: Project-based roles within the firm or office’s general business operations, sometimes assigned to various departments. Risk, compliance and general counsel • Compliance: Roles relating to ensuring that the firm or office is fully compliant with local regulatory, compliance and risk issues. • Compliance lawyer: Qualified in-house lawyers specialising in risk, compliance and regulatory issues. • Company secretarial/office of GC: Roles relating to the firm or office’s internal legal affairs. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 5 RETURN TO CONTENTS • Public relations officer (PRO): Roles relating to procuring local visas and ensuring staff compliance with local employment regulations. Facilities and office services • Facilities/office services: Roles relating to office services, facilities, and health and safety. • Reception: Roles relating to reception and front of house. • Guest services/client host: Roles relating to guest services and hosting of clients. • Travel: Roles relating to organising travel arrangements for employees. • Driver/courier: Roles relating to driving and courier services. • Security: Roles relating to facilities security. • Catering: Roles relating to in-house catering and serving. Finance • Financial operations (general): Roles relating to general financial operations and management. • Accountant: Qualified or in-training accountants. • Billing, accounts receivable and collections: Roles relating to billing, credit control, invoicing and collections. • Accounts payable: Roles relating to accounts payable by the firm or office. • Financial systems and reporting: Roles relating to specialised financial systems, analysis and reporting. • Pricing and fee arrangements: Roles relating to pricing, fee arrangements, and working with practice groups to maximise utilisation and profit margins. • Payroll: Roles relating to firm and office payroll. • Taxation: Roles relating to internal firm or office taxation issues. Information technology • IT (general): Roles relating to general information technology management and strategy within the firm or office. • Infrastructure and software: Roles relating to designing, developing and building software and hardware for the office, firm or clients. • IT support and training: Roles relating to technology support and software training. Marketing and business development • Marketing/BD: Roles relating to firm or office business development and marketing including work pitches. • Events/PR/communications: Roles relating to firm or office public relations, events, general brand marketing and awareness. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 6 RETURN TO CONTENTS Human resources • HR (general): Roles relating to general human resources management and strategy. • Learning and development: Roles relating to hard and soft training and the continued professional development of staff and fee-earners. • Recruitment: Roles relating to firm or office recruitment and retention, including graduate recruitment. • Diversity and inclusion: Roles relating to firm or office diversity and inclusion policies. • Compensation and benefits: Roles relating to reward, compensation and benefits for staff and fee-earners. Knowledge and data management • Knowledge management/library: Roles relating to the firm’s internal library and knowledge systems. • Research services: Roles relating to internal research projects supporting practice groups and senior management. • Data/CRM: Roles relating to managing and maintaining internal data and customer relationship management systems. Practice services and operations (professional support) • Legal project management: Non-fee-earning roles providing strategic support to legal practice groups on specific projects. • Transaction support: Non-fee-earning roles providing direct support to transactional practice groups. • Professional support lawyer: Non-fee-earning qualified lawyers providing additional support for practice groups. • Document production: Roles relating to design, drafting and production of client documents, marketing copy and other outbound materials. • File clerk: Roles providing file clerking duties. • Court clerk: Roles providing court clerking duties. Secretarial services • Secretarial services: Roles relating to the management of secretarial teams. • Executive assistant: Experienced personal assistants to partners and senior management. • Legal secretary – senior: Experienced secretaries or assistants usually with some legal knowledge and enhanced administrative duties, often working with partners or senior lawyers. • Legal secretary – junior: Junior secretaries with limited legal knowledge and administrative responsibilities, typically working with associates. • Evening secretary: Afterhours secretaries. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 7 RETURN TO CONTENTS The following tables and charts illustrate the ranges of compensation and billing rates for the report sample. Due to the nature of the report, there are variations in the level of detail provided by respondents. Every attempt has been made to record the data in a common format in order to provide comparative statistics. For each of the previously detailed positions, each table gives the following data: • weighted mean; • median (50th percentile); • arithmetic mean; • Insights average; • first/third quartile (25th/75th percentile firms); • average salary/billing band range; • fifth/95th percentile firms; • number of people in sample; and • number of firms in sample. The weighted mean is calculated using average salary and billing values and employee numbers provided by participating law firms for a given job position. Therefore, firms with a greater number of employees will be given more weight in calculating this figure. The median (50th percentile) is the second quartile and the middle value of all average salary and billing values given by participating firms for a given job position. The arithmetic mean is calculated using average salary and billing values provided by participating firms for a given job position, with no weighting taken into account. Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 8 RETURN TO CONTENTS The Insights average is a ‘mean of means’, calculated by taking the mean of the weighted mean, median and arithmetic mean. This guidance figure may help to eliminate statistical anomalies which can arise in calculating these various averages. First quartile values represent average salary and billing figures for firms in the 25th percentile of the sample group (typically lower-tier firms). Third quartile values represent average salary and billing figures for firms in the 75th percentile of the sample group (typically upper-tier firms). The average salary/billing band range figure is the mean difference between the highest and lowest salary/ billing values for a given job position at each participating firm. The fifth and 95th percentile values represent average salary and billing figures at the extreme ends of the sample (typically firms near the very bottom and top of the sample group). The number of people in the sample is the total number of people in the sample for a given job position. The number of firms in the sample is the number of participating law firms with relevant personnel in a given job position. Certain data may be omitted in certain employment categories or firm groups due to insufficient sample sizes. Annual compensation figures for Japan (Tokyo) are in yen (JPY). They are gross, full-time equivalent (FTE 1.0), inclusive of any guaranteed 13th/14th-month bonus, but exclusive of performance-related bonuses. They are inclusive of any housing allowance but exclude any other major allowances such as cost-of-living or flight allowances. Billing rates are hourly and in yen (JPY). Where figures were provided in currencies other than those on display, the following exchange rates were used: Lexology PRO Insights – Tokyo law firm compensation, benefits and billing report 2023/2024 © Law Business Research 2023 9 RETURN TO CONTENTS USD1 = JPY148 (+2.8% on the exchange rate of JPY144 used in last year’s research) Readers will notice isolated anomalies in the average figures for compensation and billing. These are the result of occasional variations in the levels of response, giving rise to some distortions. In these instances, please refer to the charts for a better indication of the overall trend in that particular sector.