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When the Financial Times first started ranking lawyers by innovation in Europe in 2006, some critics said that, by their very nature, lawyers were not innovative. Over the years, this view has receded in Europe and is not often espoused in North America. But when we started the FT ranking in the Asia-Pacific region last year, some Asian lawyers — including the chairman of a Japanese law firm — said to us that lawyers could be creative but not innovative.

This year’s Asia-Pacific report proves this view to be outmoded. Two Japanese firms make the rankings. One, Mori Hamada & Matsumoto, scores a standout entry for its work on the Cyberdyne listing on the Tokyo Stock Exchange in the corporate and commercial rankings for Asia-Pacific headquartered firms.

The confusion in the legal sector about whether lawyers can innovate lies in a misunderstanding about the term itself. Too often, lawyers confuse innovation with invention. They feel that to innovate they have to create the legal version of the iPod. For many, innovation still feels as if it is in conflict with their professional training, which emphasises analytical, detail-oriented thinking that looks for the flaws in ideas rather than being the fount of them.

In this 10-year series of FT reports, legal innovation is looked for in the solutions that lawyers devise for their clients’ challenges and in the way they run themselves, whether firms or in-house legal departments. In the 2015 Asia-Pacific report, there is no dearth of lawyer-inspired ideas in either category.

Admittedly, many of the innovations that lawyers in the region have come up with have been used elsewhere. But the mix of emerging and emerged markets in this part of the world requires lawyers to innovate to make structures fit for purpose and sensitive to local culture.

The Cyberdyne listing is a case in point. Mori Hamada needed to ensure that its client, the company’s founder, retained control of the technology he had invented. To do so, the firm adapted a dual-share structure, common for technology companies listing in the US, to the regulations of Tokyo’s stock exchange.

With trans-Pacific trade equalling and beginning to surpass north Atlantic trade, the need to bridge cultural differences is a driver for many of the lawyers’ innovations. For example, when White & Case brought its legal seminars to Japan, it had to deal with the fact that the airing of business concerns in an open forum — normal in London or New York — is less accepted in Asia. The firm had to adapt the ubiquitous legal seminar to a new culture and in doing so created better, interactive content and made full use of technologies that allowed private voting and opinion-sharing.

Many forward-thinking Asian firms are already breaking the mould of mainstream law firms in Europe or North America. ZICOlaw, which has a network across members of the Association of Southeast Asian Nations, listed its holding business last year, while India’s Nishith Desai Associates continues to develop its combined legal research and advisory services in the three market segments in which it operates. Listed firms and focused, multidisciplinary firms are still relatively unusual in the more sophisticated London and New York markets.

The fluidity of Asia-Pacific legal markets is underscored by a look at the overall FT Law 25 lists for international firms and firms headquartered in the region. In the international FT Law 25, Latham & Watkins takes the top slot, a move up from fifth place last year. In 2014, UK law firms occupied the first three places but have been replaced by US-origin firms this year, revealing the intense competition for market share in the Asia-Pacific region. Latham & Watkins showed legal innovation across the region through transformative deals in China, Japan, Australia and Thailand. Clients commented that, without the firm, these deals would not have happened.

The FT Law 25 for firms headquartered in the Asia-Pacific region shows less movement. King & Wood Mallesons, the result of the first merger between a Chinese and Australian firm, remains in pole position. Its success is a vindication of its proposition that global businesses would welcome the ability to instruct a law firm with joint Asian, Australian and European legal capacity. However, this formula was bound to generate competitors. Next year, King & Wood Mallesons will have to contend with the combinations of Dentons with Dacheng, and Baker & McKenzie with FenXun Partners.

Baker & McKenzie, which took second place on the international list, also has a strong claim to be in the FT 25 for firms with headquarters in the region. One of the first in the world to internationalise, in 1949, the law firm has had a strong presence in Asia for 40 years.

What the two partnerships that are challenging King & Wood Mallesons have in common is their use of innovation to drive and inform their business and their strategies. We can expect to see more firms across the region following their example in the coming year.

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