Gibson Dunn wants its fill of Brazil

Gibson Dunn & Crutcher is one firm that has not abandoned its global strategic goals since the downturn took hold last year.

Last week (16 June), TheLawyer. com reported that the US firm had launched an outpost in São Paulo, relocating New York-based corporate partner Lisa Alfaro to the new Brazilian office.

Gibson Dunn is starting off on a small scale with just Alfaro and one New York-based associate relocating to São Paulo. Given the pressures of the downturn, this is probably wise.

“Gibson Dunn is a very carefully run firm that’s never expanded rapidly,” says one London partner at the firm. “The São Paulo launch has been discussed for a very long time. It’s a good sign that we’re continuing with our strategy despite the downturn, but we’re doing it cautiously.”

Cautious and gradual growth characterises Gibson Dunn’s approach to international expansion. With 16 offices in total, and just seven outside the US, the firm has shunned the sprawling international network that has proved to be a hindrance for some firms during the downturn.

But with so many international firms now established on the ground in Brazil, launching in São Paulo is not as much of a slam dunk as it was once perceived.

Last year a host of US firms set up shop in the Brazilian capital, including Simpson Thacher & Bartlett, which launched with a two-partner team in June, and Skadden Arps Slate Meagher & Flom, which launched at the same time, relocating New York-based partner Jonathan Bisgaier to the new office.

“It will be very challenging for any firm launching in Brazil now,” argues a partner from a US competitor. “Gibson Dunn’s done some work down here, but it won’t be easy to compete with the likes of us, who’ve been here for a long time.”

Despite the apparent challenges Gibson Dunn is confident about the prospects for its new office. Although the firm is still awaiting formal approval from the Brazilian bar, Gibson Dunn’s New York-based Latin America head Kevin Kelley is convinced the firm will be successful.

“We’ll be covering private equity, corporate, finance, project finance and arbitration,” says Kelley. “We’ve been working with clients in the region for a long time so this is a logical step for us.”

Alfaro will be working closely with Kelley, who will continue to be based in New York. New York corporate partner William Campbell will also link the two offices, working with Alfaro from the firm’s Manhattan base.

The new office should also provide opportunities for the firm’s international arbitration practice, a crucial part of Gibson Dunn’s London and New York offerings.

As an important centre for international arbitration, making the most of being on the ground in São Paulo is logical for the US firm.
But as the new kid on the block, Gibson Dunn will have to fight hard to win clients. Project finance work in particular is on the increase. Those firms with longstanding presences are likely to have the client connections to win the deals.

“Everyone’s been saying that projects is going to be the hot practice in Brazil for about a decade,” says a rival partner on the ground. “Now it’s really happening. If you’ve been here for five minutes you’re going to struggle to get involved in that.”

It may be tough, but Gibson Dunn, particularly in recent weeks, has proved it has international ambition and the confidence to take hold of opportunities during the downturn.

As well as committing to Brazil the firm snared Clifford Chance’s Manhattan-based global head of litigation Mark Kirsch and litigation partners Joel Cohen and Christopher Joralemon earlier this month (TheLawyer.com, 10 June).

“I think our measured growth and focus is attractive to the likes of Kirsch,” says one London-based Gibson Dunn partner.

Hires in New York and international office launches show that the firm is serious about expanding during the downturn. And a measured and cautious approach to growth could well pay off.

The road to Brazil

US firms invaded the Brazilian legal market in 2008, with Chadbourne & Parke, Simpson Thacher & Bartlett and Skadden Arps Slate Meagher & Flom all launching there last year.

But it has been a turbulent year for US firms in Brazil. For Simpson Thacher, finding suitable office space was the stumbling block.
In January this year (28 January) The Lawyer reported that the New York elite firm had delayed its launch due to lease complications.

The firm scaled back the number of associates sent to the office, finally finding a home in February this year - six months after the expected start date.

Skadden suffered a blow last December when sole São Paulo partner Jonathan Bisgaier defected to Brazilian investment company Banking and Trading Group (BTG).

The office was left without a partner until Skadden plugged the gap by hiring Shearman & Sterling partner Dick Aldrich in February this
year (TheLawyer.com, 9 February).