Deal focus: J-Star helps Asiro bring law online

Japanese entrepreneur Hiroto Nakayama saw his country had a problem: too many lawyers with nothing to do. Government reforms launched in 2001 had worked well enough, raising the number of private lawyers from 17,000 to 37,000 as of April 2016. But the population had mostly failed to take advantage of the abundance of attorneys, preferring to stick to traditional informal methods of conflict resolution.

With younger lawyers bearing the brunt of the job shortage, Nakayama spied an opportunity, founding the media platform Asiro as a place where independent law firms and attorneys could advertise their services. Staff writers create articles on legal issues, written for laypeople, to attract ordinary readers who can then connect with lawyers through the site.

"Generally speaking, lawyers are not salespeople. Obtaining customers may be their biggest goal, but they don't have the capability," says Gregory Hara, CEO and managing partner of J-Star, which recently bought Asiro.

J-Star saw the company as a play on one of its traditional focus areas: transition planning. While Nakayama was still in his 40s and not looking to retire from the company, he also believed that he would not be able to build the business to the scale he envisioned without outside capital. Selling to another company was not attractive since it would require him to give up too much control to the buyer, and an IPO would likely not attract much attention because the company, while solid, could hardly be considered trendy.

Bringing in a backer like J-Star - described by Hara as a "solution capital provider" that typically invests JPY1-10 billion ($9.5-95 million) per transaction - seemed the best fit. Hara pitched the firm to Nakayama as a partner that wanted to enhance Asiro's ability to succeed on its own, rather than an owner that would use the company as a means to its own ends.

"We're a shareholder with a great understanding of the business, and we have capital, but on the other hand, as a temporary shareholder, our goal is to train the company to make it strong. He liked this concept," Hara says.

J-Star's plans for Asiro include helping it to diversify its appeal. Currently the site's content is focused on traffic law, though lawyers also offer other services, such as divorce, inheritance, bankruptcy and criminal law. The GP wants the company to raise the profile of these options.

Hara is confident in Asiro's future as a part of Japan's legal scene, citing its appeal to younger customers who are comfortable with obtaining professional services online and its ability to outmatch the competition in content. "Many newcomers need to pay Google to secure a space in the search engine," he says, noting that Asiro has never had to do so. "It becomes an entry hurdle for the other players. So once Asiro captures good content in a certain area, then its position is relatively stable."

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• Topics
• North Asia
• Buyouts
• Technology
• Japan
• J-Star
• professional services
• TMT