Wednesday, May 10, 2017

The Japanese government, through both political leaders and bureaucrats, has consistently encouraged channeling disputes away from litigation and toward informal bureaucratic
mediation settings
insuring the bureaucracy's retention of power through bureaucratic mediation of disputes

incorporate the kind of practical legal training emphasized in U.S. law

Schumann, G. (2006). Beyond Litigation: Legal Education Reform in Japan and What Japan's New Lawyers Will Do. University of Miami International and Comparative Law Review, 13, 475-525.

Ronald Gilson wrote a seminal article analyzing how lawyers- particularly business lawyers - add
value to transactions.  Rather than viewing lawyers as presenting an inevitable, and perhaps regrettable, transaction cost in themselves, Gilson proposed that lawyers are in fact "transaction cost engineers" who manage the costs and risks that are present whenever two or more parties who wish to deal do not share the same information and expectations relevant to that deal.
Gilson observed that reducing information asymmetries between parties represents a primary transaction cost of any deal: using due diligence and negotiation skills, lawyers can both facilitate the transfer of information between parties and minimize the cost of acquiring new information, including avoiding duplication.
By structuring agreements and drafting contracts that provide the best deal not only for their particular client, but for the deal as a whole, a lawyer's involvement can allow deals to go forward that otherwise might not ever have occurred."' Furthermore, lawyers act as third-party information
producers whose particular legal analytical skills add a unique value to many business transactions

Risk management is a second type of transaction cost that lawyers can engineer. When a party might be reluctant to deal because of the risks involved, a lawyer's due diligence can manage those risks,
not only providing the parties with a comforting assurance that the deal can safely go forward, but also increasing the price a party is willing to pay to go through with a deal. Lawyers thus aid economic efficiency by providing a better idea of the underlying value of a good or

Ronald J. Gilson, Value Creation by Business Lawyers: Legal Skills and Asset Pricing, 94 YALE L. J. 239 (1984).

"Lawyers function as transaction cost engineers, devising efficient mechanisms which bridge the gap between capital asset pricing theory's hypothetical world of perfect markets and the less-than-perfect reality of effecting transactions in this world." Id. at 255.

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