Latin America: Beyond Brazil

There’s more to Latin America than Brazil for ambitious law firms these days, with the Andean nations looking particularly promising

In terms of lands of opportunity everyone has been looking towards Latin America for some time, but it’s not all about Brazil anymore. Across the Andes there are opportunities in other nations too, such as Argentina, Chile, Colombia, Peru and Venezuela.

In fact, with regard to investment potential in the Andean nations, all eyes are on Peru.

The market-orientated economic policies of Peruvian governments since the millennium coupled with an abundance of natural resources have enabled steady growth, and foreign investment is booming.


Latin American mining nations such as Chile and Columbia are also performing well. Having developed sophisticated economies and infrastructure systems earlier than Peru, their present rate of growth is not as dramatic but foreign investment in natural resources, real estate and retail is strong in both countries.

“Peru is on fire,” says Shearman & Sterling’s New York-based Latin America head Antonia Stolper. At present, she adds, the firm has a couple of deals per week coming out of Peru, making countries such as Chile look comparatively flat.

Stolper has been focusing on the Latin American market for Shearman since 1991 and says the hotspots move quickly.

“At the moment the market is in Peru but I’ve also lost track of the number of deals coming out of Central America, so it doesn’t really make sense to bet on any one Latin American country,” she says.

Hub rules

Large local and international law firms have established their presence in the region over the past 20 years by building best friends networks and operating across the region from centralised head offices, either in their home countries or in strategically located Latin American capitals.

By anchoring their practices in economic hubs they avoid the complications that arise from trying to operate out of the provinces and are perpetually poised to target latest investment hotspots, which can fluctuate depending on political circumstances.

Corporate, M&A, finance, projects and disputes resolution with an increasing emphasis on arbitration to combat clunky court systems are the staples of the Latin American legal market. The M&A market remains dominated by big US, UK and Iberian firms such as Shearman, Cleary Gottlieb Steen & Hamilton, Freshfields Bruckhaus Deringer, Baker & McKenzie and Cuatrecasas Gonçalves Pereira.

Luis Carlos Rodrigo Prado, a partner at Rodrigo Elias & Medrano in Lima, says: “We are frequently pitching for new work. Every week we provide proposals to different clients – we are working with large Anglo-Saxon firms, southern Peruvian companies and large local mining companies. Typically, it starts with an M&A transaction and then we continue working with them on the project.”

In countries where investors have had their confidence knocked by political instability, larger local firms are having to diversify.

“We’re experts in all areas of law – our corporate and M&A departments are particularly important, but we also concentrate on tax and energy, which is not that common for Argentinian law firms,” says Eugenio Aramburu, a corporate partner at Argentinian law firm Perez Alati Grondona Benites Arntzen & Martinez de Hoz (Pagbam). “We can provide a different approach to accountants in tax matters, and so add value.”

Argentina’s political and economic volatility has increased the focus on tax matters and litigation. Complaints by foreign investors against governments are also a regular source of work in unstable economies such as Argentina, Venezuela and Bolivia.

Pagbam was involved with a recent win in the French courts for the Argentinian arm of French fuel company Total against NML Capital. The case centred on assets the US equity company had attached to part of its high-profile legal dispute with Argentina over a $95bn (£61bn) debt the country defaulted on in 2001.

Foreign litigation is an area in which inter-firm collaboration is particularly important. Most Latin American lawyers undergo training and secondments in Anglo-Saxon jurisdictions to familiarise themselves with the business practices and culture. They are not equipped to work without an international partner in foreign courts.

Pagbam has best friends relationships with Iberian firm Cuatrecasas and Machado Meyer in Brazil. It also collaborates with a variety of US firms such as Cleary, as well as Freshfields and Herbert Smith Freehills in the UK, on a non-exclusive basis.

Traditional transactions work has been restricted by changes to the rules regarding investment, foreign exchange and exports. Competition is intense for the limited M&A work coming in from investors that still have confidence in the Argentinian economy, such as the Brazilians and Chinese.

“There’s not a lot of foreign investment but we are involved in M&A from Brazilian and Chinese investors,” says Aramburu. “They make acquisitions in retail and food production businesses, and the Chinese are involved in the oil and gas companies in particular.”

Until government intervention in the economy is reduced, he sees little scope for growth or change in Argentina.


Things are much the same in Venezuela, where the political climate has become more unsettled following the death of controversial revolutionary leader Hugo Chavez in March after 14 years as president.

DLA Piper and Norton Rose have both established local alliances in Caracas.

Glenn Faas, managing partner of Norton Rose’s Columbia office, says: “Venezuela has a lot more going on than people think but it’s not traditional investment. China, Russia, India and other states such as Iran are making investments in a big way, particularly in the petroleum and gas sectors. The political situation means the government has to pursue creative investment sources.”

Investment in natural resources along with a growing focus on cross-border dispute resolution makes Venezuela an international market.

“Arbitration is important in Venezuela,” says Faas. “International dispute resolution is a relatively interesting component of the market because foreign investors have accused the government of expropriating foreign investments: similar situations exist in Argentina and Bolivia.”

Region spark

There are considerable growth opportunities across Latin America and local firms expect international players to become more active. Indeed, on the deals front, international outfits have the lion’s share of transactional mandates and are grabbing the highest profile work.

Energy is the main focus but sectors such as retail and consumer goods are also tipped for growth, with the continuing development of the middle class across the continent. Latin America is definitely a region to watch.

Columbia and Chile

In Columbia the economy is more active and progressive. International firms such as Norton Rose generally deal with the booming local energy and natural resources sectors, including petroleum, mining, infrastructure and banking. With foreign investment comes M&A, contracting, labour and tax planning work: all core areas of Norton Rose’s practice in Columbia, according to Faas.

“Consumer and retail are not large draws right now because the population is just starting to develop greater spending power – it’s not yet at the level of, say, Brazil, where a middle class has been developing for a few years,” he says.

Although the markets are still developing Bogota is considered a sophisticated and safe location in which to set up regional headquarters as a springboard to Central America, unlike alternatives such as Mexico City, where security is a concern.

Jaime Herrara, founding partner of Colombian firm Posse Herrara Ruiz, points out: “The government in the past three years has made a lot of progress in making the country more secure and communicating this to the population as well as foreign investors, and that’s been a successful approach.”

As a result, the market is becoming more sophisticated and local firms are better equipped to handle transactions involving foreign investors.

“Chile is a huge investor in Columbia because it has a fast-growing economy where companies have liquidity, and Columbia provides a similar cultural environment for them to move to,” adds Herrara. With 14 million consumers, Columbia is a much larger economy than Chile.

Retail investments

As well as a typically strong mining and natural resources sector, Chile has seen big investments in the retail sector. Carrefour and Walmart, for example, have both invested heavily of late. And real estate is also performing well in Patagonia.

“Chile is a small country and therefore the big global firms have not yet come,” says Jaime Carey, managing partner at Carey in Santiago. “Large magic circle and US firms find the market too small and it’s already well-harvested by local firms. Baker & McKenzie has been there for 20 years, but it’s more like a local firm.”

As with other countries in the region, Chilean firms are run from centralised head offices in Santiago.

“Every three years we discuss whether we should have regional offices but always decide against it because the country is so centralised,” says Carey. “The work you see in other cities is bread and butter stuff. It’s not very profitable and you end up cannibalising yourself if you set up offices there.

“In general terms it’s not an aggressive market. We tend to have good relationships among firms and there’s enough work for everybody.”

There is no mandatory bar association in Chile so, from a regulatory perspective, it would be relatively easy for international firms to establish a presence in the country if they could overcome the local competition.

However, with the market saturated and local fees so low it makes more sense commercially for international firms to team up with a local firm to take on work in the region.