As an outsourced legal function for corporate clients, our attorneys provide end-to-end support for legal analysis, representation and negotiation with counterparties, debt collection, contract termination and amendment, employment matters, real estate, dealings with financial institutions, M&A, and other corporate legal matters.
In business practice, commercial judgment and legal judgment often form a continuum. Whether to discontinue an unprofitable transaction is a business decision, but whether a contract can be terminated under a particular clause, whether contractual penalties or damages may arise, and on what terms an agreed termination should be negotiated are legal questions. Likewise, analyzing the collectability of an account receivable from a financial perspective is different from negotiating the existence of the debt, the amount payable, payment timing, or settlement terms.
SAKURA Law Office’s Legal Outsourcing service is an external corporate legal function under which attorneys directly undertake matters requiring legal analysis and representation, providing a single integrated process from fact development, legal assessment and strategy through notices, negotiations, drafting of agreements, and, where necessary, provisional remedies, litigation, and enforcement.

The Key Question in Outsourcing Corporate Legal Work Is “Who Should Be Asked to Do What?”

In recent years, a broad range of agency and consulting services have become common, including resignation agency services, debt-collection support, rent collection, leasing and tenant-vacating support, contract review, dealings with financial institutions, M&A support, and other services provided on behalf of companies or individuals. Many useful services can lawfully be provided by the relevant specialists, including management analysis, preparation of financial materials, business planning, operational improvement, enterprise valuation, and other professional services.
On the other hand, where a provider makes legal determinations concerning a specific contract or specific rights and obligations, or represents a client in exchanging legal claims and defenses with a counterparty and negotiating amounts, payment terms, contract termination, damages, or other legal conditions, careful consideration must be given to Article 72 of the Attorney Act. The key question is not whether the service is labeled “agency,” “support,” or “consulting,” but what the provider actually does in substance.
SAKURA Law Office does not take the position that consultants, other licensed professionals, property managers, M&A advisers, or other external specialists should be rejected across the board. We believe the right approach is to make full use of each professional’s expertise while clearly separating out the legal analysis and representation that should be handled by attorneys, and to have attorneys take professional responsibility for those parts where required.

Article 72 of the Attorney Act and Corporate Compliance Risk

Article 72 of the Attorney Act generally prohibits a person who is neither an attorney nor a Legal Professional Corporation from, for the purpose of obtaining compensation and as a business, handling legal services - such as giving legal opinions, acting as an agent, handling arbitration or settlements, or otherwise providing legal services - in connection with litigation or other general legal matters, or acting as an intermediary for such services. Where statutes grant specific authority to judicial scriveners, patent attorneys, certified social insurance and labor consultants, or other licensed professionals, their work is treated in accordance with the scope of that statutory authority.
Under Article 77(iii) of the Attorney Act, a violation of Article 72 is punishable by imprisonment for up to two years or a fine of up to JPY 3 million. Whether any particular act violates Article 72, however, depends on factors including the purpose of obtaining compensation, whether the activity is conducted as a business, whether the underlying matter qualifies as a legal matter, the specific conduct involved, and whether another statute grants authority to the person performing it. The legal characterization therefore should not be determined solely by the service label.
For companies, the relevant issue is not limited to the potential criminal liability of the service provider. If outsourced work becomes problematic as unauthorized legal practice, the commissioning company may also suffer loss of confidence among customers, financial institutions, investors, employees, and other stakeholders, disruption to transactions, adverse financing effects, and reputational damage. Legal outsourcing should therefore be designed not only around price and speed, but also around whether the provider can lawfully perform the actual scope of work entrusted to it.

What the Supreme Court Decision on Tenant-Vacating Negotiations Teaches

An important decision for understanding unauthorized-practice risk in corporate operations is the First Petty Bench decision of the Supreme Court dated July 20, 2010 (Keishu Vol. 64, No. 5, p. 793). According to the facts found by the Supreme Court, a company engaged in real estate transactions had acquired a building occupied by 74 business tenants, and the commissioned party, which had no attorney qualification, spent approximately ten months negotiating agreed termination of the leases and surrender of the premises.
The Supreme Court held that the work concerned a matter in which it was “almost inevitable” that legal disputes would arise over whether an agreement to vacate would be reached, when the tenants would vacate, and the amount of relocation compensation, and that those disputes would have to be resolved through negotiation. The Court treated the matter as one concerning “other general legal matters” within the meaning of Article 72 of the Attorney Act and upheld the lower court’s finding of criminal liability under that provision.
The decision shows that a matter does not become a legal matter only after negotiations have escalated into an actual dispute. Where, because of the nature of the matter, legal disputes are almost inevitable, Article 72 may become relevant from an early stage. Companies should therefore assess the legal character of the work at the point at which they outsource it, rather than only after negotiations have become contentious.

SAKURA Law Office Legal Outsourcing

SAKURA Law Office does more than provide legal opinions. We undertake the legal work necessary to implement the client’s business decisions from the outset of the matter through final resolution. For companies with in-house legal teams, we can serve as an external execution function that complements internal capacity. For companies with limited legal headcount, we can serve as legal infrastructure through which selected matters can be outsourced.

Debt Collection and Commercial Negotiations

For unpaid trade receivables, service fees, loans, and other claims, we verify the legal basis and supporting evidence before negotiating payment amounts, payment deadlines, installment terms, security, guarantees, and settlement conditions. If voluntary negotiations do not resolve the matter, we also consider, on an integrated basis, provisional attachment, litigation, compulsory execution, and other legal procedures.

Contract Termination, Cancellation, Amendment, and Restructuring of Business Relationships

For unprofitable transactions, service agreements that have become difficult to continue, distributorships, franchise arrangements, and other continuing contracts, we analyze termination rights, non-renewal, agreed termination, damages and contractual penalties, transitional measures, and related issues, and we issue necessary notices and negotiate with counterparties. We go beyond contract review and support the client until the relationship is actually reorganized and the company is able to proceed to its next business decision.

Negotiations with Financial Institutions and Legal Support in Business Restructuring

In liquidity-improvement and business-restructuring situations, we work with financial and business advisers to analyze amendments to repayment terms, extensions, security and guarantees, debt waivers, and other legal conditions, and where appropriate, we negotiate with financial institutions on the client’s behalf. We appropriately separate financial/accounting analysis from legal negotiation while enabling the company to manage the matter as a single project.

M&A, Investment, and Business Succession Negotiations

Working alongside M&A advisers, financial advisers, certified public accountants, tax accountants, and other professionals, we handle legal due diligence and negotiations of share purchase agreements, business transfer agreements, investment agreements, and related documents, as well as legal issues involving breaches of representations and warranties, indemnification claims, purchase price adjustments, termination, and other matters. By appropriately dividing responsibility for commercial terms and legal rights and obligations, we enhance both legal soundness and execution capability across the transaction as a whole.

Employment, Resignation, and HR Disputes

In individual employment disputes involving resignation terms, dismissal, unpaid wages, harassment, damages, and related matters, we clarify the company’s legal position and, where appropriate, negotiate as counsel. We coordinate with certified social insurance and labor consultants and other professionals responsible for HR system design and labor management, while respecting each professional’s statutory authority and ensuring that the areas that should be handled by attorneys are addressed under attorney responsibility.

Real Estate, Leasing, Tenant Vacating, and Surrender of Premises

For rent revisions, rent arrears, lease termination, tenant-vacating arrangements, surrender of premises, restoration obligations, security deposits, and other leasing matters, our attorneys handle legal analysis and counterparty negotiations while coordinating with property managers, real estate companies, asset managers, and other property-management professionals. Tenant-vacating negotiations, in particular, require careful role allocation in light of the unauthorized-practice risk identified by the Supreme Court decision discussed above.

Externalize Execution Capability Without Increasing Legal Headcount

Legal Outsourcing is not simply about lowering legal fees. The total cost of corporate legal work must be assessed by taking into account not only external fees, but also internal staff time, repeated explanations and handovers among multiple providers, delays, losses caused by incorrect legal judgments, additional costs incurred after a dispute has escalated, and reputational damage.
Where a matter is likely to progress into legal negotiation, having attorneys handle it consistently from the outset reduces the need to repeatedly explain the facts and documents to different professionals and can accelerate the path from decision-making to execution. For companies that face recurring or high-volume matters of the same type, we can propose an efficient intake structure, including standardization, intake workflows, and reporting, after reviewing the matter volume, workflow, and internal organization.

We Work in Collaboration with Existing Consultants, Licensed Professionals, and Other Specialists

Corporate problems cannot be solved by law alone. Management, accounting, tax, human resources, business restructuring, real estate, M&A, and other fields require the expertise of specialists in those areas. SAKURA Law Office does not uniformly ask clients to replace existing external advisers. Instead, while respecting each professional’s lawful scope of practice, we clearly separate the legal analysis and representation that should be handled by attorneys and build the team that is most rational for the client.
We also advise companies using existing consulting or agency services that have questions such as: “How much of this work can we safely leave with this provider?”, “The provider has already begun negotiating with the counterparty - can we continue this arrangement?”, or “At what point should we transition the matter to an attorney?” Even where a matter is already underway, we can review the documents and background and take over negotiations or dispute resolution from that point.

Contact

For inquiries regarding the introduction of Legal Outsourcing (Corporate Legal Operations & Negotiation Support), the relationship between Article 72 of the Attorney Act and agency or consulting services currently being used, or legal negotiations involving debt collection, contract termination or amendment, employment, real estate, dealings with financial institutions, M&A, or other matters, please contact SAKURA Law Office.
To help us review your inquiry efficiently, please include, to the extent known, a brief outline of the matter, whether any outside provider or other professional is currently involved, whether negotiations with the counterparty have already begun, and whether any response deadline applies.

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