Portugal: Call of port
5 March 2007
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9 January 2007
Portugal's legal market is showing signs of stirring. The country hit the headlines at the start of the year for hosting one of Europe's largest corporate deals - Sonae's long-running and contested E14bn (£9.39bn) bid for Portugal Telecom. And as deal flows increase yet further, so foreign firms are looking to follow the lead of Portugal's Spanish firms.
Linklaters Portugal managing partner Pedro Siza Vieira says: "I'd say Portugal's a growing jurisdiction. It's very much a friendly place for foreign investors and lenders. I think clients realise it's a good place to do business."
Spain's biggest firm Garrigues has increased its turnover in the region by a huge 183 per cent this year after making several large acquisitions.
This week the firm bolstered its Lisbon presence with the hire of administrative law specialist Luis Fabrica from the public sector.
In March last year Garrigues absorbed Lisbon IP boutique Cabral Cunha Ferreira & Associados and then raided its rival Cuatrecasas for eight lawyers for its Porto office, which specialises in tax, employment and corporate matters.
Those same Cuatrecasas lawyers helped Garrigues win a role advising Portugal Telecom on its takeover.
The Portugal Telecom deal serves as a good snapshot of the legal market at the moment: Linklaters, Uría Menéndez, Cuatrecasas and Garrigues joined top Portuguese firms PLMJ, Vieira de Almeida & Associados and Morais Leitão Galvão Teles Soares da Silva & Associados on the deal.
Garrigues and Cuatrecasas are advising Portugal Telecom along with Vieira and PLMJ.
Linklaters has bagged a role acting for financial adviser Banco Santander Central Hispano, while Portugal Telecom's largest shareholder Telefonica is using relationship firm Uría.
The deal shows a handful of foreign firms jostling with the top domestic firms for choice roles.
Foreign firms are taking advantage of cross-border activity to make ground on Portugal's domestic champions, but they still have a long way to go to reach the dominant local giants such as the 200-lawyer PLMJ.
The long-term client relationships and lack of competitive beauty parades have helped the top firms consolidate a strong position in the legal market over time.
Pedro Siza Vieira, Linklaters Portugal managing partner, says: "Portuguese clients don't have singular advisers and don't operate anything as formal as a panel. The leading corporates work with a number of firms that they have a relationship with."
As a result clients rarely change firms and long-term alliances are hard to break for new entrants.
Foreign firms have survived through a strategy of staying small and focused work, while servicing clients from their firm's wider network.
Lisbon is the centre for this activity. Vieira says: "Porto has a role to play, but not within our model. We're small and focused."
A bright outlook
As corporate and finance activity takes off, so has optimism among lawyers in the region. Francisco Sa Carneiro, finance head for Uría in Portugal, says: "Private equity has been active, but not quite as much as capital markets.
"The one thing that everyone talks about is the amount of public offers. We've never seen anything like it before in Portugal."
Other practice areas, such as tax, public law and real estate, are also ones in which the foreign firms can hope to challenge the cabal of Portuguese firms.
Duarte Garin, real estate partner at Uría in Portugal, says: "In terms of the market, retail is definitely hot at the moment. But this year or next year we should see a resurgence in the office market.
"Retail activity used to mainly be in Lisbon, but it's now quite full. Developers are moving to smaller cities now."
Opportunities abound for firms at all levels in Portugal's legal market. And an increase in business activity is bound to lead to a corresponding growth in lateral hires in what has traditionally been a quiet market compared with others in Europe.
•TOP FIRMS IN PORTUGAL
PLMJ is the biggest firm in Portugal and has built up close ties with big-name foreign clients Shell and Kohlberg Kravis Roberts, forging a strong position in the market for corporate and finance work.
Vieira de Almeida & Associados
Vieira boasts more than 100 lawyers in offices in Porto, Lisbon and Madeira and an alliance with Spanish firm Gómez-Acebo & Pombo. The firm operates a highly leveraged model and has just 14 partners.
Linklaters opened in Portugal in 2002 after taking over local firm Bleck Soares Siza Cardoso Correia & Associados. The strategy is to stay small and focused on top-end corporate and finance work. The office has five partners.
Uría opened its Portugal presence in 1997 after a merger with Vasconcelos F Sá Carneiro Fontes & Associados in 2004. The firm has built up a strong reputation for quality corporate work.
Simmons & Simmons
Rebelo de Sousa Led by the charismatic Pedro Rebelo de Sousa, Simmons has an expansive presence in Portugal with offices in Porto, Lisbon and Madeira. Simmons merged with De Sousa's firm in 2003.