A lot can change in 10 years. I was seconded to a leading Madrid law firm in 1991 as part of what was the firm’s “best friend” policy in Europe. At that time, there was a handful of close-knit elitist firms, including Garrigues, Uria & MenÉndez, Armero and Melchor de las Heras. The market was entirely static. Movement between firms was non-existent at assistant level and unthinkable at partner level. Recruitment was therefore from the traditional source, the universities, with organic growth and the odd joiner from the administration. Family firms were not uncommon.
This scenario, while good for the founders of these firms, was not so good for the associates, the non-founding partners and, ultimately, the longevity of the firms. Where could dissatisfied or ambitious partners and assistants go? Options were limited: in-house, a market dominated by the prestigious corps of state lawyers “abogados del estado” at the upper echelons of industry; or to set up as a sole practitioner, or with friends.
The latter was invariably the most realistic option, which spawned a number of other small firms (some of which have, in turn, fragmented), and sole practitioners. This in a country with the highest percentage of qualified lawyers per capita of population of any country in Europe.
What is striking is how much the legal scene has changed, even if the recruitment methods and opportunities are taking longer to change. Of the elite club of domestic firms of the 1980s, only Uria & MenÉndez remains at the head of the market. Garrigues has merged with Arthur Andersen to create a different profile of firm. The middle tier of firms of the late 1980s has almost disappeared as a result of fragmentation, merger or stagnation. The limited number of firms in the market led Linklaters & Alliance to opt for a strategy of lateral hires that has attracted lawyers from Cuatrecasas, Freshfields, Garrigues & Andersen and Uria & MenÉndez.
This change has come about not only as a result of the opportunities facing lawyers in the market, but also due to the inflexibilities of the traditional firms, which leads to limited opportunities for the lawyers. The rigidities of the market have allowed new entrants to prosper. Cuatrecasas, the leading Barcelona firm, has moved into Madrid and is now the biggest independent law firm in Spain and one of the biggest in Madrid. The firms linked to the international firms of accountants are now among the biggest in Spain.
The other feature of the market has been the entry of the international law firms. All of the magic circle firms now have offices in Madrid apart from Slaughter and May, which continues to pursue a best friends policy eschewed by the rest. The Wall Street firms have yet to show an interest.
Interestingly, the new entrants have established themselves primarily through organic growth, with the occasional absorption of other firms. There’s been little lateral movement between firms at assistant level, and it’s rarer still at partner level. But there are signs that this is changing. Finance partner Fernando Bautista joined Freshfields as a partner from Garrigues & Andersen a few years ago and, more recently, Antonio Sanchez-Pedreno, head of the Madrid corporate department of Cuatrecasas, joined Linklaters.
Spain has a huge pool of talented lawyers. But few have the experience of a modern firm. As the war for talent in Europe reaches Spain, the most attractive source for firms with growth ambitions continues to be to target professionals who are used to a modern practice. In the context of the undeniable globalisation of our clients and our profession, it is inevitable that we will see further movement between firms in the Spanish m
The challenge facing domestic firms is not dissimilar to that faced by London firms due to the entry of US firms into the London market. Time will tell how well placed firms are in both markets to withstand market forces.
Miles Curley, managing partner of the Linklaters & Alliance Madrid office.