26 October 2009 | By Luke McLeod-Roberts
1 September 2008
26 October 2009
5 January 2009
18 November 2009
1 March 2004
Many of the self-proclaimed Iberian firms are casting their nets wider than ever before and finding that history is on their side. By Luke McLeod-Roberts
As The Lawyer reports, Madrid-based Gómez-Acebo Pombo will open in Lisbon in January, following on from its close relationship with Lisbon’s well-respected Vieira de Almeida. As such it will join Spanish-headquartered rivals, including Cuatrecasas Gonçalves Pereira, Garrigues and Uría Menéndez, that already have bases in the Portuguese capital.
But much of this group see themselves as Iberian rather than Spanish entities.
“We look at ourselves not as a Spanish law firm, but as an Iberian law firm,” says Cuatrecasas M&A partner Javier Villasante. “This is because, since 1995, we’ve been in an exclusive alliance with Gonçalves Pereira Castelo Branco in Portugal. Since then we’ve progressively integrated until we merged in 2003. Our Portuguese colleagues have good representation in all management bodies of the firm - one of our managing partners is Portuguese.”
Gómez-Acebo managing partner Manuel Martín makes the business case for a Lisbon branch, saying that it is an indivisible part of having a credible practice in the peninsula.
“It’s important because of the Iberian business structure,” he explains. “A lot of multinationals treat Iberia as a single market. Our three main competitors [Garrigues, Cuatrecasas and Uría] are all there.”
The bigger picture
But with the global crisis having hit the Iberian peninsula particularly hard, combined Portuguese and Spanish acumen is as much about driving forth the international as the domestic strategy.
Word on the grapevine has it that some US firms have been particularly disadvantaged in their attempts to secure work in the Middle East because they are tarnished with the brush of unpopular policies carried out by their government in the region. But the troubled history of Iberian colonialism does not seem to have disadvantaged Lisbon- and Madrid-based firms in their efforts to score mandates in their former empire.
Of course, the obvious response would be that Iberian imperialism is just that little bit further in the past. And just as linguistic and cultural ties may have assisted UK firms in their bids to win Indian work, the same could be said for Iberian firms seeking mandates in Latin America and sub-Saharan Africa. There is also the plain fact that Spanish and Portuguese companies have dominated the investment agenda in many of these countries. Following extensive privatisations and auctions of assets in Argentina and Brazil from the late 1990s, it has been Iberian entities such as Telefonica and Repsol and that have been first to pick up telecoms, energy and infrastructure deals. Iberian firms have followed in tow.
Historically it has been Brazil and the so-called ‘Southern Cone’ countries (Argentina, Chile and Uruguay) where links have been greatest. This is partly because this group has closer commercial ties with Europe than is the case with Mexico and Central America, which have looked more to the neighbour to the north.
Within the vast region Cuatrecasas targeted Argentina and Brazil first. It formed an exclusive alliance in 1998 with Argentina’s Pérez Alati Grondona Benites Arntsen & Martínez de Hoz and Brazilian magic circle equivalent Machado Meyer Sendacz e Opice. Gómez-Acebo also singled out these two jurisdictions for a best friends arrangement, but is “not thinking of opening any new offices”, according to Martín. Lisbon-headquartered AM Pereira Sáragga Leal Oliveira Martins Júdice (PLMJ) has a relationship with Brazil’s Tozzini Freire.
“We’ve seen an increased interest in Brazil - it’s clearly a sign Brazil is no longer the country of the future but the country of the present,” comments Uría partner Jaime Folguera in an allusion to the oft-repeated declaration of successive Brazilian governments. “The investments envisaged by the Brazilian authorities surrounding the [2016 Rio de Janeiro] Olympics and the 2014 World Cup are around €12bn [£10.95bn]. It implies a number of opportunities not only for construction, but for companies providing services for everything from air control to transport.”
Uría has an associate office in São Paulo with local firm Dias Carneiro Advogados. This is one of five associated offices in the region (it also has lawyers in Buenos Aires, Lima, Mexico City and Santiago de Chile), but São Paulo’s economic dominance makes it something of a hub for the region.
Access all areas
Perhaps less expectedly, for Iberian firms Latin America is also a springboard into mature markets such as the US. It is through its South American exclusive arrangement that Cuatrecasas has gone into New York City. “As a result of [our Latin America] practice we opened a New York office in 2000. We have a triangle made up of Iberia-New York City-Latin America,” confirms Villasante.
Gómez-Acebo has a moderate expansion agenda. But Martín still sees the downturn as an opportunity to realise new ventures. The connection between North and South America is also one he wishes the firm to tap into.
“The only thing [we’re considering] is to have our own presence in New York or Miami,” he says. “New York [would be] a representative office much like London - it’s one of the two financial centres of the world. Miami is a centre of investment into the southern parts of the US and into Latin America.”
For many of these firms, offices in mature economies such as the UK function more as small service offices than huge magnets of work. Indeed, London forms a largely representative function for Cuatrecasas.
“It’s the same as New York,” says Villasante. “We tried to gain visibility and exposure in these major legal markets to facilitate contact with firms, companies and financial institutions globally.”
Like its English best friend Slaughter and May, Uría has always taken a conservative approach to new launches. It may have been in London since the early 1980s, recently moving into swish offices around the corner from the Bank of England, but it still only has around 10 lawyers there. This is partly because it only practises EU, Spanish and Portuguese law and much of the time finds itself advising multinationals and financial institutions on their positions on Iberian matters. Nevertheless, its European reach does extend out to Brussels and, more recently, Warsaw, from where it is able to access Eastern Europe.
Brussels in most cases is hardly seen as an international office and much more of an extension of the domestic practice from which firms advise Iberian clients on EU and competition matters.
For Portuguese firms in particular, Lusophone Africa (Angola, Cape Verde, Guinea-Bissau, Mozambique and São Tomé and Príncipe - the so-called ‘Palop’ countries, according to the Portuguese acronym) is also an important destination.
PLMJ co-managing partner Manuel Santos Vitor says that, far from generating a retrenchment, the global crisis has led to increased instructions stemming from these and other markets.
“The recent years have witnessed a clear development of our international practice, not only in other European jurisdictions, but most particularly in jurisdictions of Portuguese[-speaking] countries,” he reveals. “We’ve particularly worked in Angola, Brazil and Mozambique in these cases in association with local firms.
“In the recent past [instructions] have increased considerably, particularly when compared with European jurisdictions, since the worldwide crisis set in. We believe this not only a short-term trend. We believe that, going forward, these markets will represent a significant part of our practice and our turnover.”
For Abreu Advogados, international work is very important, bringing in between 35 and 40 per cent of turnover. The Portuguese firm even has an associate office in Angola with FBSL Advogados, and Portuguese-speaking countries are key growth areas. But managing partner Miguel Teixeira de Abreu argues that the crisis has inevitably created a varied picture.
“Abreu works directly in the Portuguese and Angolan markets and has clients from Portugal, Palops, the EU, Asia, the US and Angola,” he says. “During the crisis the tendency’s been towards a decrease in external work, in particular in the areas of M&A and financing. But insolvency, corporate restructurings, tax, labour, contentious and arbitration have been the areas of growth in 2009.”
The former colonies of Latin America and sub-Saharan Africa aside, what about in other emerging markets, where Iberian firms have less historical dominance? Are they still the first among equals?
“We’re fairly active in North Africa,” comments Villasante at Cuatrecasas. “The large Spanish companies are fairly active there. We practise Moroccan law in Casablanca, although we can’t go to the courts - it’s more of a legal consultancy role. Our clients are very active in roads, waste and water treatment in Libya and the Mediterranean, but competition is fierce. We compete with French and Anglo-Saxon firms in places like Algeria and Tunisia - we see Gide [Loyrette Nouel] and Norton Rose there.”
For UK and US firms outside the (relatively saturated) Gulf region, the jurisdictions eliciting the greatest interest are China and India. Do these markets have the same pull for Iberian firms? Alongside Brazil, China, where it is due to open imminently, is a major priority for Uría.
“We’ve seen an increased interest in China - we’re the first Iberian law firm in Beijing,” claims Folguera. “It supports investment into Spain and Latin America. We’ve seen less flow of investment from India into Iberia, but of course we have relationships with firms there and have our eyes on that market.”
Cuatrecasas also has a Chinese base in Shanghai. “We opened in 2007,” indicates Villasante, “so we’re newcomers. We’re getting acquainted with this market. There are a lot of Spanish firms doing business in China.”
For Portuguese firms, connections with the former colony of Macau may serve as a vantage point for accessing the Chinese market, but India is less relevant.
The focus of global expansion for Iberian firms on the whole is slightly further to the west and south than their for their counterparts from the US and UK. But even outside what the field of International Relations terms their traditional “spheres of influence” they continue to compete with the great and the good.
Arguably the combination of economic factors and their global footprints to date could even put them at an advantage. Since they do not have such extensive networks of offices as their Anglo-Saxon peers, they are not as burdened by massive overheads. But at the same time the problems in their domestic market are propelling their clients abroad in a search for new opportunities.
“The downturn is a great opportunity for financially sound, client-orientated firms with international experience,” comments Garrigues’ recently elected co-managing partner Fernando Vives.
Certain international practices may have to be resized. The advantage of Iberian firms in this regard is that they haven’t made major investments to date that would need to be written down.
“I believe Iberian firms will continue their international expansion, focusing on those markets with which they have the closest cultural ties and which are more necessary for their clients.”