The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Incomes

24 Pages Posted: 14 Dec 2006  

Minoru Nakazato

University of Tokyo - Faculty of Law

J. Mark Ramseyer

Harvard Law School

Eric Bennett Rasmusen

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Date Written: October 2006

Abstract

Using micro-level data (from tax records) on attorney incomes in 2004, we reconstruct the industrial organization of the Japanese legal services industry. These data suggest a bifurcated bar. The most talented would-be lawyers (those with the highest opportunity costs) pass the bar-exam equivalent on one of their first tries or abandon the effort. If they pass, they then opt for careers in Tokyo that involve complex litigation and business transactions. The work places a premium on their talent, and from it they earn appropriately high incomes. The less talented face lower opportunity costs, and willingly spend many years studying for the exam. If they eventually pass, they tend to forego the many amenities available to professional families in Tokyo and disproportionately opt for careers in the under-lawyered provinces. There, they earn monopoly rents not available in the far more competitive Tokyo market.

Suggested Citation

Nakazato, Minoru and Ramseyer, J. Mark and Rasmusen, Eric Bennett, The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Incomes (October 2006). Harvard Law and Economics Discussion Paper No. 559. Available at SSRN: https://ssrn.com/abstract=951622 or http://dx.doi.org/10.2139/ssrn.951622

Minoru Nakazato (Contact Author)

University of Tokyo - Faculty of Law ( email )

7-3-1 Hongo Bunkyo-Ku
Tokyo, 113
Japan

J. Mark Ramseyer

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-496-4878 (Phone)
617-496-6118 (Fax)

Eric Bennett Rasmusen

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

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Bloomington, IN Enter your state here 47405
United States
812-855-9219 (Phone)
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HOME PAGE: http://rasmusen.org

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