Iberian Lawyer Magazine - Latin America Special Focus


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Iberian Lawyer Magazine - Latin America Special Focus

  1. 1. IBERIAN LAWYER July/August 2012 Going global: What the doctor ordered Preparing for the unthinkable Contemplating a Euro-exit Actions speak louder than words Law firms need decisive leadership The winners and the losers Latin America Special Focus Partnering Potential dissolving of M&A on the rise, he with China Iberian alliances with Brazil but with a twist l ua A nn www.iberianlawyer.com al ort G lob Rep
  2. 2. EDITORIAL “ Where is everybody? Not in Iberia, that´s ” where Many have been enjoying their annual August getaways, Advisory Board a holiday to recover from the stresses and strains of the past year. This year, however, while some will have been Antonio Alonso Ureba, basking in the sun at their summer homes, others will Garrigues, Madrid have been on their laptops and Blackberries, fire fighting yet another day in the life of the downturn. Everyone, José M. de Areilza Carvajal, however, will be back at their desks with a sense of Secretrary General, uncertainty, rather than just post-holiday blues. Aspen Institute España, Madrid The battle to secure financing wages on, with In-house Joaquín Calderón, Counsel noting that the crisis is causing severe problems Barclays Capital, Madrid even for the most successful of businesses. But a damaged Peter Cornell, international image, and growing legal risk, is doing Metric Capital Partners, London nothing to improve on the critical market perception of Charles Coward, both Spain and Portugal. Uría Menéndez, Barcelona In-house Counsel are also being asked to prepare for Olga García-González, the unthinkable – a Greek exit, or ‘Grexit’ as it is known, Head of Legal, ‘Spaxit’ or even worse a ‘Germaxit’. The legal implications Banco Santander, London are far more than just a headache, and Ilene Gotts, while everyone is hoping for the best, they are all Wachtell Lipton Rosen & Katz, planning for the worst. New York And everyone is being asked to do more with less, and Cristina Jiménez Savurido,Son muchos los que están work twice as hard to achieve the same results. Not reallydisfrutando de un descanso President, FIDE, Madrid the most motivating of scenarios. José Miguel Júdice,veraniego, unas vacaciones One opinion is that innovation and entrepreneurshippara recuperarse del estrés PLMJ, Lisbon are becoming crucial to compete in today’s market.y las tensiones que acarrean Another is that decisive action is seemingly the only way Ramón Mullerat,estos tiempos. Sin embargo, forward for domestic law firms if they are to exist in a Iuris Valls, Barcelonaalgunos sostienen que lo Nielson Sánchez-Stewart,peor vendrá a la vuelta, por el post-crisis landscape. In particular, dealing with partner Sánchez-Stewart Abogados,desconcierto que crea la actual numbers and underachievers is key, with most firms Málagaincertidumbre, una sensación feeling unable, or unwilling, to do so. So fearless leaders are emerging, the bold and the brave who will sail their Graham Vinter,más dura que el propiosíndrome post-vacacional. Las firms through this crisis… and onto the next challenge. General Counsel, BG Group,perspectivas de la recuperación Companies are increasingly internationalising, Londoneconómica en la Península attracted by the bright lights and big cities of economiesIbérica, no parecen convencer that are not going through one of the most acute crisesal mercado internacional e known to man. Well, to the Eurozone anyhow.incluso se plantean hipótesis, Latin America is fast taking the spotlight as a landpara muchos inimaginables, of opportunity that has a seemingly resilient economy.como la posible salida de Brazil, Mexico, Colombia and Chile come top of theEspaña del Euro. Por el class, but as we show in our Latin America Special Focus,contrario, al otro lado del investors had better beware of putting every country inAtlántico, Latinoamérica, en the same basket. No one wants to say ‘expropriation’, andsu generalidad, muestra un no one wants to say ‘protectionism’ either. But there arecrecimiento esperanzador y stirrings across the Atlantic, and not of a friendly kind.algunas economías abiertas So if Latin America doesn’t tempt, there’s an array ofa la inversión extranjera. Eneste sentido, el reportaje anual more buoyant markets out there to choose from, as weGlobal Report (p.27), expone la highlight in our Annual Global Report. Asia and Africaya fuerte internacionalización are the other top contenders, and law firm clients showde las empresas ibéricas en no signs of stopping in their attempts to capitalise on asbusca de oportunidades de many as possible.negocio en países foráneos, Law firms are therefore following close behind. Butuna tendencia que los while the debate rages as to the best way to accompanydespachos externos pueden clients on their expansion adventures, one thing is clear. Ifllegar a capitalizar. you’re not ‘going global’ then you’re not going anywhere.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 1
  3. 3. CONTENTS Editorial News 4 • Lawsuits to hit the financial sector • Variable tax may ignite wave of energy claims • New proposals could dissolveOn the cover: Faced with Iberian law firm alliances with Braziluncertainty in Europe, the trendof companies seeking newopportunities and investment in • Portugal attempting to take topmore buoyant markets shows spot in lusophone arbitrationno signs of stopping. But tosuccessfully expand their global • Preparing for the unthinkable: An exitreach, lawyers need to follow, from the Euroor anticipate, where their clientsare heading. • Concern over potential return to Argentine protectionismThe publisher and authorsare not responsible for the • Lack of financing causing major issuesresults of any actions (or lack for businesses In-Housethereof) taken on the basis ofinformation in this publication. Client View 22Readers should obtain advice On the move 15 Are law firms adapting to in-housefrom a qualified professional Who is moving where Counsels’ needs?when dealing with specific Bruno Santos de Jesus, Banifsituations. News focus 16Iberian Lawyer is published six Actions speak louder than words Client View 23times a year by Iberian Legal Going above and beyond to surviveGroup SL. Law firm profile 18 Ramón Novo Cabrera,Image set and printed by Lessons from both sides of the law Vestas MediterraneanCudipal Gestión Gráfica SL, Gonzalo Jiménez-Blanco, AshurstSpain. Banking & Finance Update 25© Iberian Legal Group SL 2012 How Spanish reforms affect Panorama 20 non-financial corporatesJuly/August 2012Copyright applies. For licensed The General Counsel as newcomer in Salvador Ruiz Bachs, Allen & Overyphotocopying, please contact the executive suite: What can go wrong?info@iberianlegalgroup.com Werner Vanderhaeghe, Morgan, Lewis & Bockius Banking & Finance Update 25 New European Rules on short sellingEditorial policy Opinion 21 and credit default swapsIberian Lawyer provides a Innovation and entrepreneurship: Sofia Thibaut Trocado and Mariana Duartewindow on the Iberian legal Factors that count, contexts that stimulate Silva, Sérvulo & Associadosprofession for domestic and Carlos Valls, Iurisvallsinternational law firms and Real Estate Update 25general counsel. The magazine Spain seeks more flexibility in theis funded by subscribers housing rental marketand advertisers, as well as Isidro del Moral and Jacobosponsoring law firms that Sánchez-Andrade, Broseta Abogadosprovide the Legal Updatesand Profiles within the Special Tax Update 25Reports. Welcome to Portugal’s new ‘golden passport’ lawLegal Deposit Pedro Pais de Almeida, Abreu AdvogadosM-5664-2009 18 Publisher Moray McLaren Design & Production T (+34) 666 418 248 Ana García-Sicilia E moray.mclaren@iberianlegalgroup.com E ana.gsicilia@iberianlegalgroup.com David Utrilla Editor Joanna Lee E david.utrilla@iberianlegalgroup.com T (+34) 666 418 249 E joanna.lee@iberianlegalgroup.com Head of Projects & Institutional Relations Editorial Assistant Paula Brienza Mari Cruz Taboada T (+34) 637 404 288 T (+34) 666 418 247 Subscription enquiries E paula.brienza@iberianlegalgroup.com E maricruz.taboada@iberianlegalgroup.com E subs@iberianlegalgroup.com Contributing Editors Iberian Lawyer Scott Appleton Finance Carlos Donaire Calle Lagasca, 138, Madrid 28006 E scott.appleton@iberianlegalgroup.com E carlos.donaire@iberianlegalgroup.com T (+34) 91 563 3691 Tony Collins F (+34) 91 563 3702 E tony.collins@iberianlegalgroup.com Printing Cudipal S.L. www.iberianlawyer.com2 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  4. 4. CONTENTSGlobal ReportGoing global:What the doctor ordered 27Capitalising on your global network 31Jaime Folguera, Uría Menéndez Special Focus: 22 Latin AmericaPartnering with China 32Emily Wang, Zhong Lun The winners and the losers... 41A New York state of mind 32Rubén Ferrer, Gómez-Acebo & Pombo At last, Mexico opening its doors 44Spanish banks offer unique ‘gap financing’ Juan Carlos Serra, Basham Ringe & Correasolution to US market 33Fernando C. Alonso A new kind of energy 44Hunton & William 28 Mauro Penteado, Machado Meyer Sendacz &M&A on the rise, but with a new twist 34 Opice AdvogadosJavier Amantegui, Clifford ChancePortugal’s privatisations are a start, The US: A platform for Latinbut not a solution 35 American transactions 45João Vieira de Almeida, Xavier Ruiz, K&L GatesVieira de Almeida & AssociadosRealising the potential of the PALOPs 35 Capitalising on Colombia 46Nelson Raposo Bernardo, 29 Glenn Faass, Norton Rose ColombiaRaposo BernardoEnergising the Portuguese market 36 Multinational mediation 46António Vicente Marques, AVM Advogados Manuel Alvarez-Trongé, Bartolome & BrionesAngola opening its doors to investors 37Fernando Veiga GomesAbreu AdvogadosNew legislation hopes to prompt investment 38 30João RoblesF. Castelo Branco & AssociadosBalancing risk and reward 38Luis Fernando Guerra, DeloitteLocal with a global flavour 39Kiko Carrión, Eversheds NiceaIndia: A brave new world 39 Guide to Law Firms 48Karan Singh, Trilegal Transactions 55 31 46 35 32www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 3
  5. 5. NEWS BANKING & FINANCELawsuits to hit the financial sectorState prosecutions and civil actions have begun following the collapse of institutions, asattempts to recover losses and shed light on questionable decision-making beginIn the wake of the collapse of Spain’s largest domestic Banco de Valencia and CatalunyaCaixa are alsobank, Bankia, the serious business of allotting blame has facing formal investigation or civil claims for accountingstarted. Lawsuits have been launched by retail investors irregularities and mismanagement, both of which haveagainst the bank, while state prosecutors have also had to be bailed out by the Government. The legalbegun fraud investigations against 33 former executives, advisers have not yet been made public, althoughincluding the former Chairman Rodrigo Rato. Garrigues advised CatalunyaCaixa at the time of its But Bankia is one of only a number of institutions nationalisation, while leading Valencia-based penalnow facing criminal investigation or civil claims that practitioners, among them Javier Boix, are reported asare drawing in an increasing number of law firms. The having been engaged by Banco de Valencia executives.actions surrounding Bankia have seen new mandates Central to the claims surrounding Bankia is the run upfor its established adviser Uría Menéndez, which the to its July 2011 IPO – Spain’s first major listing since 2007firm would confirm, with Cuatrecasas Gonçalves Pereira – which was promoted as a means of raising new capitalamong the name of those that may be representing the and widening the bank’s investor base. The listing raisedbank’s holding company Banco Financiero y de Ahorros €3.5bn with Bankia advised by Uría Menéndez alongside(BFA) and former executives. Criminal defence firm Davis Polk & Wardwell, with Linklaters advising theOliva-Ayala Abogados is representing Rato. underwriting banks. Bankia’s problems are considered symptomatic of Less than a year later the bank collapsed. Justyears of mismanagement within the country’s cajas, weeks earlier it had reported a €328m profit but a newcoupled with reluctance on the part of regional and management team brought in after the departure of Rato,national governments and the Bank of Spain to rein in led by economist José Ignacio Goirigolzarri, subsequentlythe local politicians and businessmen that dominated the restated the accounts to show a €2.98bn loss.Boards of many, suggest lawyers. Bankia continues to face scrutiny not only because of A civil action has also now been launched by AEMEC the scale of its collapse but also because of its impact on(Spanish Association of Minority Shareholders of Listed retail investors and ties to the ruling Partido Popular (PP)Companies) on behalf of over 400,000 investors who have Government. Rato was previously Finance Minister in thelost 40 percent or more of their investment in Bankia PP Government of Prime Minister José María Aznar. Hesince its July 2011 IPO, or who were encouraged to has put much of the blame for the collapse on the formerswap their savings on deposit for preference shares. The Governor of the Bank of Spain, Miguel Ángel Fernándezaction is being co-ordinated by Madrid-based plaintiff Ordóñez, and successive Governments, claiming that Cajafirm Cremades & Calvo Sotelo, which has similarly filed Madrid was pushed into the Bankia merger and IPO.a claim against Novacaixagalicia – also the subject of a Some commentators suggested at the time thatfraud investigation. institutional investors were being strongly encouraged In the case of Novacaixagalicia, a state investigation is to support the listing despite reservations over Bankia’sunderway against five former Directors alleging unfair liquidity. A claim now supported by Rato, who has alsoadministration and the unapproved award of €7.8m in stated that a less demanding rescue plan was rejected inearly retirement compensation – benefits that were not April by the Rajoy Government.approved by either the Bank of Spain or its own Board of The collapse has hit a public nerve and there is aDirectors. Novacaixagalicia former executives are being demand for answers, says one Madrid Managing Partneradvised by teams from leading Madrid criminal law firm off the record. The coming months will therefore seeEstudio Jurídico Rodríguez Mourullo and from Gómez- serious scrutiny of Bankia and its management as well asAcebo & Pombo. the collapse of other cajas. “Outstanding performance. This firm is definitely "Excellent service from worth the money” a knowledgeable and The EMEA Legal 500 2012 very fast team" Chambers & Partners Global Guide 2011 Paseo de la Castellana, 164 - 28046 Madrid (Spain) · T: (+34) 91 319 02 33 - F: (+34) 91 319 13 50 · E-mail: info@araozyrueda.com · www.araozyrueda.com4 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  6. 6. NEWS ENERGYVariable tax may ignite wave of energyclaimsElectricity producers await final details of a tax that has the potential to generate sectorrestructuring and a wave of claimsThe publication of major new energy reforms in Spain, systemic problems in the energy sector.including a draft law, is highly anticipated by lawyers The draft law will see the introduction of a productionand producers alike. The Government is looking to cut tax expected to raise up to €1.18bn. Traditional energythe country’s estimated €24bn electricity tariff deficit and sources such as gas and coal production, alongsidegain better control over the cost of production and the cleaner methods like nuclear and hydroelectric power,electricity distribution pool. are expected to be taxed at four percent. The tax on wind “The law will likely bring major new challenges for energy production is predicted to be 11 percent, whileenergy producers in Spain,” says Luis Pérez de Ayala, solar PV and solar thermal installations are expectedEnergy Partner with Cuatrecasas Gonçalves Pereira, to pay 19 percent and 13 percent respectively, suggest“inferring significant changes to companies’ financials lawyers.and ultimately prompting a new round of restructuring Such a levy will inevitably impact the viability of manyamong some in the sector”. production schemes, leaving them significantly short of This will see the introduction of new taxes on Spain’s the amounts the Government must actually raise to closeenergy producers, intended to better align electricity the deficit, believe some. In the current economic climate,production costs to the prices paid by consumers, there simply isn’t the will to impose a more realistic levyand better balance the Government’s finances. Such of 35 percent, which many estimate is necessary to aligndevelopments come after major amendments last year energy production and consumer cost.to the feed-in tariff (FiT) paid to renewable energy The new legislation deals a further blow to an industryproducers. already suffering a dramatic reduction in the feed-in Among the first major policy statements of the new tariff regime, say lawyers. Generous subsidies had helpedGovernment of Mariano Rajoy was a cut in public sector place Spanish solar and wind manufacturers at thedeficits to zero and the reduction of government debt in cutting edge of the sector internationally, but a lack ofthe face of a declining economy and unfavourable bond co-ordination between the regional planning authoritiesmarkets. A key element of this goal has been to tackle the that approve new schemes and the Madrid Government,country’s electricity tariff deficit – the difference between which manages the FiT regime, has meant that subsidythe price paid to producers for their electricity in the costs have spiralled out of control.national ‘production pool’, and that paid by end users. The result has been a reduction in tariff eligibility and The deficit has widened significantly in recent years of the prices paid to both wind and solar photovoltaicas a result of generous subsidies paid to renewable (PV) producers, prompting hundreds of claims againstenergy producers, limited co-ordination between central the Government as sponsors and producers rapidlyand regional governments in approving new renewable discovered that their schemes were no longer viable.schemes, and a lack of political will to raise the energy Although most claims begun by domestic entities haveprices paid by consumers, say experts. been defeated in the courts, a €2bn arbitration claim by 14 The previous Spanish Government had sought to close international solar PV investors and producers rumblesthe deficit gap through the issue of bonds via a dedicated on. Allen & Overy is acting for the plaintiffs with HerbertEnergy Deficit Fund (Fondo de Amortización de la Smith acting on behalf of the Government.Deuda Eléctrica – FADE) but struggled to raise consistent “The new law has the potential to significantly shake-investor demand. up the market,” says Pérez de Ayala, “and comes after The new Government now plans a suspension of years of talk as to how to tackle the deficit”. And a newsubsidies for all new renewable energy plants and has round of legislative amendments may yet also generate aunveiled a draft energy law addressing what it sees as wave of new claims, say lawyers.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 5
  7. 7. NEWS LAW FIRMSNew proposals could dissolve Iberian lawfirm alliances with BrazilA ruling is imminent on provisions that have the potential to close the Brazilian legalmarket’s doors to international law firmsThe Brazilian Bar Association (OAB) has issued a draft foreign law firms need to form an alliance, associationproposal for new provisions severely tightening the or partnership with a local firm.relationships between domestic and foreign law firms. The draft proposal, however, intends to takeIf approved, it will significantly restrict the activities of this a step further, and prevent, or obliterate, manyforeign firms in Brazil, potentially resulting in alliances practices that are currently being utilised by local andand associations being dissolved. international law firms alike. The proposal has not come out of nowhere. Last The OAB intends to clear up any potential foryear the Brazilian press reported on the first trial of the confusion when it comes to brand or institutionalBrazilian Bar Association (OAB), which resulted in the identity, which effectively means a very clearsuspension of two lawyers for an association between separation between local and foreign firms. TheseBrazilian and US firms. One of the first alliances in the include prohibiting the sharing of email addresses,country was also investigated, between Linklaters and phone numbers, business cards, websites, databases,Brazilian Lefosse Advogados. While this matter was client lists and HR, among many others.looked at closely by the OAB, local sources say that a Most notably, firms would not be able to use thesettlement agreement was reached and the matter is no phrases “associated with” or “in cooperation with”,longer ongoing. according to the OAB’s proposal document. Sources have also pointed towards open If approved, this could potentially mean the endinvestigations into other alliances, including Uría for some established alliances, and severely restrictMenéndez and Dias Carneiro Advogados (Brazil), international law firm activity in Brazil.and Baker & McKenzie and Trench, Rossi e Watanabe Sources have said that one driver behind this push isAdvogados (Brazil). However, the law firms are quick the recent increased presence of international law firmsto say they are respecting guidelines. since the start of the global economic crisis. As Brazil’s “Uría Menéndez has always collaborated with the economy keeps growing and its place as a destinationOAB and nowadays no investigations are open,” says of opportunities remains high (see our Latin AmericaLuis Acuña a Partner at Uría Menéndez. “Should the Special Focus page 43), so have the number of law firmsOAB dictate new provisions where we need to adapt, wishing to stamp their footprint there.we will do so accordingly.” These international alliances are perceived by many, Baker & McKenzie has had a cooperation agreement say lawyers, as having led to increasing market sharewith Trench, Rossi e Watanabe for more than 50 by previously small players in the market, and thisyears. And while the OAB recently examined this competition doesn’t sit comfortably with the top tier firms.cooperation agreement, says Claudia Prado, Managing It is no surprise, therefore, that the majority of judgesPartner at the firm, it recognised that the firm operates that decide on the processes being investigated belong toindependently, as a Brazilian law firm with only leading independent firms, they add.Brazilian lawyers. The proposal was drafted by Carlos Roberto Siqueira While not closed off entirely to international Castro, a Partner at one of Brazil’s biggest law firms,involvement, since 2010 Brazil has very strict rules as Siqueira Castro Advogados, and is currently beingto what foreign law firms may and may not do within reviewed by the OAB’s International Relations Committee.its borders. They can work as ‘foreign legal consultants’ A ruling is imminent, and if the Federal Counselproviding advice and answering questions on rules in favour of the proposal, then this may be theinternational law, but cannot advise on domestic law or end for domestic and international law firm alliances,activities, nor work within the same offices as any local with implications for the likes of DLA Piper, PLMJ andlawyers. Therefore to provide a full service in Brazil, VdA, which all have alliances with Brazilian firms. Sharing expertise. Innovating solutions. www.plmj.com “Best Portuguese Law Firm” Chambers European Excellence Awards, 2009, 2012 “5th Most Innovative Law Firm in Continental Europe” Financial Times - Innovative Lawyers Awards, 2011 www.plmjnetwork.com6 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  8. 8. NEWS ARBITRATIONPortugal attempting to take top spot inlusophone arbitrationNew centre in Lisbon reflecting rising domestic demand and a drive to attract more cross-border disputes against stiff competition from established playersThe recent launch of a new Lisbon Arbitration Centre (LIC) disputes, meaning that it may be up to five years before anycontinues to reflect the growing profile of arbitration but real success can be measured.also, many hope, cement Portugal’s position as a venue for José Miguel Júdice, Head of Arbitration at PLMJ andlusophone disputes. member of the ICC International Court of Arbitration, The Portuguese Industrial Association (AIP) and the confirms that Portugal is seeing a rise in domesticPortugal Business Association (AEP) have combined to arbitration demand – in the face of an overwhelmedlaunch the LIC. The AIP already operates the IP-focused national court system. He is confident, however, that asARBITRARE dispute forum, while the focus of the new international investment rises across the lusophone worldCentre will extend to mediation, conciliation and arbitration so will the number of disputes.encompassing commercial, administrative, finance and However, despite the added attraction of one of theenvironmental disputes. world’s most modern arbitration laws, Portugal faces This comes on the back of the already established Porto strong competition in the lusophone arena. Brazil hasand Lisbon Arbitration Courts – offshoots of the local an already well-established arbitration culture, andChambers of Commerce – and the publication in March of institutions, while much remains to be done to promotea new Portuguese Arbitration Law. This develops the 1986 arbitration in markets like Angola and Mozambique.Arbitration Act while also drawing on the 2006 version of “Just because an arbitration centre exists does not meanthe UNCITRAL Model Law, as well as best practice from people will use it,” says Júdice. “There are sadly examplescountries with an already strong tradition of arbitration of empty tribunals all around the world.”including France, Switzerland and the UK, say experts. The coming months should shed further light on Despite such investment, however, some lawyers whether this is an indication of the state of Portugal’s courtquestion whether it is more physical facilities that are system, or the failings of its current arbitration centres.needed and caution against any expectation of a rapid rise Júdice and other senior members of the Club Español dein demand for Portugal as a seat for lusophone disputes. Arbitraje in Portugal, are now embracing the opportunityCommercial lawyers must first incorporate the relevant for developing Lisbon, in addition to Madrid, as a centre forclauses into contracts, which then have to generate arbitration.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 7
  9. 9. NEWS EUROPEAN UNIONPreparing for the unthinkable: An exitfrom the EuroLawyers are being asked to contemplate impact of a Euro-exit, with far–reachingimplications for clients and law firms alikeWhile the economic crisis continues to dominate from the start, say lawyers, for precisely the reasonsthe global business landscape, in-house lawyers in the Eurozone is facing today.Spain and Portugal are being asked to consider, and But it is, of course, the risk of legal uncertaintyprepare for, the unthinkable – the legal issues arising that is top of the agenda for both in-house lawyersfrom a withdrawal of one or more countries from the and their external advisers. Keen to explain that thisEurozone. is neither a desired nor expected scenario, many are Banks worldwide, including Spain and Portugal, making contingency plans for a range of differenthave lent $167.7bn to Greece, according to the Bank scenarios.of International Settlements. Iberian businesses, “Businesses are of course hoping for the best, whilewhich are already suffering from the lack of available making plans for what they will have to do in thefinancing (see page 13) will go even further into crisis worst scenario,” says Pedro Cardigos at Cardigos inmode as a shift away from the Euro could mean huge Portugal.losses when faced with a devalued economy and a Many businesses, he explains, have been preparingnew currency. actions lists, containing, for example, legal issues to It is unusual for a sovereign state to default on its be addressed within the first 48 hours of an exit, whiledebt obligations where it has borrowed in its own also retaining law firms that will be available to assistcurrency. With control of its own currency, a state them in the danger zones.can always request that its central bank create new Members of Iberian Lawyer’s In-House Clubmoney. confirmed that they have been asked by their But no such option is available with the Euro. It businesses to prepare for the different possibleis the European Central Bank (ECB), and not the scenarios and ensure that there are effective provisionssovereign governments, that controls the printing of in place.further funds, and no one country can request such a For some, this has meant a full-scale review ofmeasure just to meet its debt obligations. Many have commercial agreements as well as loans, terms ofsaid that the currency has been destined for failure payments, among many others. CAIADO GUERREIRO INTERNATIONAL LAW FIRM Portugal Portug al Cape Verde Macau Guinea S. Tomé and Principe Timor Brazil Angola Cape Verde de Mozambique w w w.caiadog u e r re i ro.com om “The group is valued to adapt quickly to the urgent pace of our business, lead multijurisdictional ultijurisdictional ed” matters perfectly and deliver an in-depth or succinct advice as and when required”” 2011 BY CO Chambers & Partners AR R YE PO OF THE RAT “Caiado Guerreiro offers an excelent service, proper and balanced rates” E INTL RM Legal 500 FI AV W IATION LA8 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  10. 10. NEWS 7996_IberianLawyer_86x245_AF.ai 1 7/23/12 4:00 PM According to one senior in-house lawyer, the legalsituation would be so complex, and such a mess, thatthey would have to rely on new, and hopefully veryrapid, legislation at the European level. It was not Differenta situation that would be resolved at national level,they said, but at a macroeconomic EU level. Jurisdictions European leaders have, however, been quickto explain that there is no treaty mechanism for acountry, such as Greece, to exit the Euro – a lack sameof foresight that has amazed lawyers and in-housecounsel alike. EXCELlence A country can, however, leave the EU itself,which requires approval from a qualified majorityof the European Council. If approval is not granted,however, a Member State can exit unilaterallyfollowing a notice period of two years. While leaving the EU enables a departure fromthe Euro, gaining a majority decision is clearlyproblematic. And two years is a very long time towait in a debt crisis. A country could, of course, choose to cut its losses LISBON SÃO PAULOand run, walking away from the treaty and the Euroand reintroduce its currency. Given the legal and economic implications,however, say lawyers, this is very unlikely to happen. LUANDA MAPUTO An integrated approach to legal solutions in Portuguese-speaking countries. Portuguese Law Firm of the Year www.vda.pt LISBON OPORTO MADEIRA Av. Duarte Pacheco, 26 Av. da Boavista, 3433 - 8º Calçada de S. Lourenço, 3 - 2ºC 1070-110 Lisboa 4100-138 Porto 9000-061 Funchal lisboa@vda.pt porto@vda.pt madeira@vda.ptwww.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 9
  11. 11. NEWS TAX Concern over potential return to Argentine protectionism Companies will face higher tax burdens as the country terminates double taxation treaty with Spain and further damages inter-country relations Three months after the expropriation of Repsol YPF, in Spain, says Máximo Luis Bomchil, Managing Argentina has dealt its former ally another blow. On Partner of M. & M. Bomchil in Argentina. “The rate of 29 June 2012, the Government unilaterally terminated withholding taxes for these items in the treaty were the double tax treaty it has with Spain, with effect substantially lower than the rates of the Income Tax from January 1st, 2013. This is also on the back of Law applicable when no tax treaty is in force.” having terminated its tax agreement with Chile a Spanish multinationals with subsidiaries month earlier. in Argentina will also need to look at the tax Until now, the Treaty had provided a tax implications for their Spanish employees working framework for cross-border business, and Spain has abroad, in particular in relation to the Argentine rules significant investments in Argentina that have so far of tax residency. relied on certain preferential tax provisions. Spain does have some internal mechanisms that In particular, reduced tax rates on dividends, may mitigate the risk of double taxation, however interest, capital gains and royalties, says Eugenia they only cover a limited number of situations. Castillon from Herbert Smith Spain’s tax department. Lawyers must now find new tax shelters and efficient, “Among them withholdings on interest benefited appropriate ways for their clients to structure new from a reduced rate of 12.5 percent and withholdings investments, to minimise their exposure to any risk of on royalties benefit from reduced rates of three double taxation and ensuing losses. percent, five percent, 10 percent and 15 percent, The motivation behind the renouncement is likely depending on the nature of the royalty.” political, say lawyers, following Argentina’s recent Companies with interests on either side of the arguments with Spain over Repsol YPF. But for a Atlantic now need to seriously revise their positions. country in such need of foreign investment (see our Among them, there will be major implications Latin America Special Focus, page 41), this latest move in the area of interest and royalty payments from has sparked concerns of a new wave of Argentine companies located in Argentina to companies located protectionism, they say. Lisbon fcb@fcblegal.com Porto porto@fcblegal.com Angola angola@fcblegal.com Faro algarve@fcblegal.com Corporate, Commercial and M&A • Public, Administrative and Environmental Law • Real Estate, Property and Construction • Energy • Tax Dispute Resolution • Intellectual Property and Advertisements • Employment, Benefits and Pensions • Banking and Capital Markets Contact: Miguel F. Castelo Branco www.fcblegal.com (+351) 21 358 7500 25th anniversary Where lawyers translate for lawyers www.translator.es info@translator.es Tel. +34 91 425 0100 abcde UNE-EN 15038:200610 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  12. 12. NEWS News in brief Brazil deal makes Abertis the world’s largest motorway operator Spanish toll road operator Abertis has announced that it has partnered with US fund Brookfield Infrastructure to buy a major stake in OHL’s Brazilian highways operation, São Paulo-listed OHL Brasil. Abertis is acquiring 51 percent of Participes en Brasil (PeB), which holds 60 percent of OHL Brasil, with Brookfield acquiring the remaining 49 percent. Abertis was advised by Freshfields (Partner Toni Valverde) and Mattos Filho, Veiga, Marrey Jr e Quiroga Advogados in Brazil. It must now, however, await a Brazilian regulatory decision on whether it has to bid for the remaining 40 percent of OHL Brasil. Abertis is paying 10 percent of its shares to OHL (increasing its stake to 15 percent), along with €10.7m and will take on €504m of OHL Brasil’s debt. The move is a major step in Abertis’ plan to diversify away from Spain, which reaching now accounts for only 27 percent of operations, while increasing to 20 percent the proportion of the group’s activities in Brazil. Ferrovial see BAA’s UK airports holdings further reduced BAA, the UK airports operator majority- owned by Spain’s Ferrovial has lost its higher. appeal against a Competition Commission (UK CC) demand that it sell London Stansted. Herbert Smith has been representing BAA throughout the three-year battle to retain control of Stansted following earlier rulings to sell London Gatwick and Edinburgh airports. The sale will leave BAA operating only four UK airports. BAA sold Gatwick to Global Infrastructure Partners in 2009 for £1.5bn (€1.9bn) – a deal that saw Allen & Overy, Slaughter and May and Freshfields Bruckhaus Deringer take lead roles. In April this year, BAA reluctantly sold Edinburgh airport to the same buyer for £807m (€1.02bn) – Scottish firm McGrigors acted for BAA opposite Slaughter and May and Shepherd and Wedderburn for GIP. The sale of Stansted is expected to raise www.abreuadvogados.com around £1bn (€1.27bn). Ferrovial itself sold a 5.8 percent stake in BAA last December, Abreu advogados|in association with : FBL Advogados and Ferreira Rocha & Associados reducing its holding to just below 50 percent – significant because it meant that pORTUGAL ANGOLA MOZAMBIQUE BAA’s £10.8bn (€13.7bn) debt no longer had to be reflected in Ferrovial’s own accounts.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 11
  13. 13. NEWS IN-HOUSELack of financing causing major issues forbusinessesIn-house Counsel say that as the crisis deepens, so does the battle to secure financing,especially if you are suffering from an international market perception problemEurope’s financial crisis is causing acute problems for I do not think it reflects the current reality. Theeven the most successful of businesses. Not only are downgrading of Portugal will take years to get backthose with existing finance experiencing problems, with and has affected everything. The need to find ways tomany struggling to renegotiate the terms of their credit source funding is the new reality.”agreements, but also new sources of investment for There was full consensus, however, on Portugal’sexpanding businesses have become scarce. damaged international image and the difficulties that The situation is made even worse in cases where a this was causing to businesses, and their In-housebusiness is reviewing and restructuring its operations or Counsel.where they are experiencing financial difficulties. Companies have therefore been exploring available Company Secretaries and In-house Counsel from some options, including restructuring their internationalof Portugal’s largest banks and businesses discussed operations into new corporate entities, thereby ring-potential approaches and solutions during a recent fencing their Portuguese assets. “This allowed usMaster Class in Lisbon. Members of Iberian Lawyer’s In- to separate our business, as much as possible, fromhouse Club had requested the meeting in order to learn perceived Portugal risk,” one participant explained,from each other’s experiences, discuss potential domestic and had meant that they could raise funds on the backsolutions and innovative international alternatives. of their non-Portuguese assets. Participants attended from a wide range of businesses Unfortunately, there is no magic solution tosuch as Ascendi, Banco Itaú, Banif, Barclays, Colt these issues, the moderators explained, with eachTechnology structure sharingServices, advantages as wellGalp Energia, as disadvantages.Millennium BCP, Such approachesPortugal Telecom, do unlock valueand Tabaqueira. from assets, butThey were joined they need to beby top experts from structured in ainternational law way to overcomefirms, including resistance fromNancy A. Mitchell parent lenders ifand Paul Berkovitz they don’t wantfrom leading US assets out of thefirm Greenberg corporate group.Traurig. Where a Mitchell, who In-house Counsel attending recent Master Class business is lookingleads the Business to borrow on theirReorganisation & Financial Restructuring Practice at non-domestic assets, or generate revenue by selling assets,Greenberg Traurig, moderated the discussion together they have to look carefully at the best corporate structure.with António Neto Alves, General Counsel at Portucel And attracting foreign capital would inevitably be aSoporcel Group. Summarising the gravity of the challenge until the situation with the Euro is settled.situation, Neto Alves said that the challenge for Portugal “Investors need to be able to understand the legalhas gone beyond the initial lack of finance for investing risk of a market because that allows them to price thatin growth, and businesses are often struggling just to risk into an investment,” said Mitchell at Greenbergensure working capital and managing cashflow. Traurig. “If the legal risk of a market is uncertain “And outside of Portugal, there is a perception then investors can’t price it and therefore may notproblem,” he added. “For example, US banks look at invest. While US investors have tremendous interest inPortugal and cannot make sense of what is happening Portugal, they find it difficult to quantify the legal risk.”with regards to the restructuring of a company or The Portuguese need to help the US market understandinsolvency.” that while their restructuring and insolvency systems, Opinion among participants was split on the question among others, are different, they do in fact work.of how long the current challenge would last and how Both Mitchell and her colleague, Paul Berkowitz, adeep it would go. There is a difference between the Miami-based Shareholder in Greenberg Traurig, haveinternal reality and external perception of Portugal, seen interest from their clients in Spain and Portugal,Pedro Cassiano Santos, a Partner at Vieira de Almeida from the US as well as China, with the bond market orexplained. “We haven’t defaulted on our obligations hedge funds providing some interesting options.and the country is responding to the crisis. We need to The current and most pressing need, however, iscommunicate this better externally.” to package distressed purchase deals in such a way Pedro Cardigos at Cardigos in Portugal was less as to provide legal certainty and at prices that matchoptimistic: “I would love to live in that country, but expectations on both sides.12 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  14. 14. NEWS News in brief Spanish lead on London transport cartel appeal Cuatrecasas Gonçalves Pereira has advised Metro Madrid alongside a number of other major European rail companies in their long-running claim for damages against a cartel involving carbon and graphite products used in train motors. Metro de Madrid, Deutsche Bahn, EMEF / CP (Portugal), NS (Netherlands) and Trenitalia / RETE Railway Italiana (Italy) appealed the judgment of London’s Competition Appeal Tribunal, which had originally declared their claims for damages time-barred. Cuatrecasas Partner Paul Hitchings, alongside Senior Associate José María Campos, worked with the London office of transatlantic plaintiff firm Hausfeld & Co in the appeal. UK-based Morgan Crucible, alongside Schunk, SGL, Le Carbone Lorainne and Hoffman were originally found guilty of operating a cartel by the European Commission in 2003 and collectively fined €101m. The cartel had operated for 11 years in a market worth an estimated €290m a year. Between them, the five companies controlled 93 percent of the market but had argued that it was too late for any private damages claims to be initiated. Morgan Cucible originally won immunity from EU fines by being the first to cooperate – however its former Chief Executive Officer Ian Norris was sentenced to 18 months in prison in a parallel US case. The ruling of the Appeal Tribunal now opens the door for the affected companies, including Metro Madrid, to seek private damages against all five defendant companies. FCC win major US bridge contract A consortium, including Spain’s FCC, has won the $649.5m (€540m) contract to replace the Gerald Desmond Bridge, the largest in the US, connecting Terminal Island to the Port of Long Beach. FCC alongside US group, Shimmick Construction Company, Italy’s Impregilo and Arup North America, won a competitive tender to design and build a new 610 metre bridge and approach roads. Los Angeles-based infrastructure firm Nossaman is advising The Port of Long Beach and Caltrans, who are managing the award through California’s Design-Build Demonstration Programme. FCC is represented by US law firm Hunton & Williams. The consortium presented a bid with both the highest technical score and the lowest proposal price. The contract will see the replacement of the existing span, built in 1968 and which carries 15 percent of all containerised cargo imported to the US. FCC’s bid beat two other pre-qualified groups: one comprising Dragados USA, Flatiron West and CC Myers; and a second led by Sweden’s Skanska, alongside US-based Traylor and Massman. Alongside the Port and Caltrans, funding partners for the project include the Los Angeles County Metropolitan Transportation Authority and US Department of Transportation. The total project cost is estimated at $1bn including preparation and demolition. Construction is scheduled to start in 2013 and complete by 2016. FCC is currently bidding for €9bn worth of public works contracts in the US.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 13
  15. 15. When you’re in a dispute, don’t depend on luck. Depend on KPMG In a dispute, the stakes to your reputation are high. Not to mention the costs, time and resources involved. So, why take chances? Instead, turn to a trusted adviser you can count on. You need the skills and technologies, depth of experience in dispute advisory services from an economic stand point and global resources necessary to provide you with solid, practical advice and guidance to help prevent or manage disputes. With KPMG Forensic’s systematic approach, well established methodologies and advanced technology, our highly qualified team of professionals is well equipped to help tackle complex issues and is renowned in the worldwide legal arena. For more information, please contact: Pablo Bernad on +34 91 456 3871 | Madrid Fernando Cuñado on +34 91 456 3871 | Madrid Enric Olcina on +34 93 253 2985 | Barcelona © 201 KPMG Asesores S.L., a limited liability Spanish company, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG kpmg.es International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. We Train Global Lawyers SOCIALLY SO AL Y ES ONS BLE SOCIALLY RESPONSIBLE SOCIALLY RESPONSIBLE D FFER N DIFFERENT DIFFERENT DIVERSE DIVERSE S BUSINESS ORIENTED BUSINESS ORIENTED USINE S RIENTE NE PRACTICAL ACT AL COMMUNICATING COMMUNICATING UNIC UN CAT N CHALLENGING MULTICULTURAL ALLEN NG MULTICULTURA MU T CULTURA International LLM English Executive LLM (IE- Northwestern Law) English Master en Asesoría Jurídica de Empresas (LLM) Spanish Master en Asesoría Fiscal de Empresas (LLM) Spanish Master en Asesoría Jurídica de Empresas Part-time(LLM) Spanish Masters en Abogacía/Master in Lawyering (LLM) Spanish/English IE Law School · Madrid T: +34 915 689 600 Admissions.law@ie.edu “Among top LL.M.s worldwide” www.ie.edu/law14 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  16. 16. ON THE MOVE Who Where from Where to What area Alonso Hurtado LexTIC Ecija Compliance Álvaro Sánchez López-Chicheri Garayar Asociados Lener Corporate and M&A Carmen Núñez-Lagos Bernardo Cremades y Asociados Hogan Lovells International Arbitration Francisco Guijarro Squire Sanders Hammonds Olleros Abogados Tax Gerard Marata Cuatrecasas, Gonçalves Pereira Ventura Garcés & López-Ibor Tax Gonzalo Aranzabal KPMG Abogados Watson, Farley & Williams Commercial João Maricoto Monteiro PLMJ Pares Advogados Tax José Manuel García-Quílez García-Quílez Abogados Montero Aramburu Criminal José María Goerlich Universidad de Valencia Broseta Abogados Labour Luis Bazán Gómez-Acebo & Pombo CMS Albiñana & Suárez de Lezo Criminal Miguel Gordillo Garrigues Olleros Abogados Corporate Rodrigo de Campos Vieira Ferrous Resources TozziniFreire Capital Markets and Banking Sonia Cortés Cuatrecasas, Gonçalves Pereira Abdón Pedrajas & Molero International Labour Senior Level Promotions Morais Leitão, Galvão Teles, Soares da Silva & Associados: Miguel Nogueira de Brito, Nuno Peres Alves (Partner); Broseta Abogados: Carmen March Ortí (Partner); CMS Albiñana y Suárez de Lezo: Fernando Bazán (Partner).Cementing a London isMadrid presence calling Jausas, one of Barcelona’s Miranda Correia Amendoeira independent firms, has & Associados has recently set recently taken over A & S up a London office, one of Sampere Abogados, hoping the first Portuguese firm to to finally cement their do so. The firm is principally presence in Madrid. known for being a prominent Prominent in life player in Africa through the sciences, IP, litigation Miranda Alliance, with a very and restructuring and successful lusophone strategy, refinancing, Jausas has so led by Rui Amendoeira, Agustín Bou far concentrated on growing Managing Partner. Rui Amendoeira its specific sector expertise The office will be headedand base in Barcelona. But Agustín Bou, Managing by Nuno Antunes, current Of Counsel at the firm, andPartner of the firm, has always had the very clear the intention is to support its clients in sectors such as oilgoal of consolidating and expanding his firm’s and gas, banking and finance, real estate, constructionpractice and profile in the Spanish capital. and infrastructure and TMT. However, this has not always been as easy as While the firm has many UK and European clients,they had hoped. The tie up with A & S Sampere this surprising move is intended merely to better assistAbogados could finally see this goal become a existing and new clients, and prospective investors, thatreality. The 14-lawyer firm specialises in labour wish to do business in Miranda Alliance jurisdictions.law, and is known as a boutique leader in its field. No doubt with the current economic climate in Portugal,Founding Partner Ignacio Sampere will join Jausas this could help to open doors to potential inboundas a Partner. investment opportunities. Having so far not been able to really make their Judging by its previous success in penetrating newpresence felt in Madrid, this merger may just be markets, it will be interesting to see what direction thewhat sets Jausas on its way. Miranda Alliance will take next.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 15
  17. 17. NEWS FOCUS Actions speak louder than words The economic crisis is reassess a firm’s size and shape. Every firm fast becoming business has to have the leverage that is right for their business model, says Manuel Martín, Managing as usual, and domestic Partner at Gómez-Acebo Pombo. “This requires law firms urgently need management of the balance between partners and associates, and it is no surprise that in these to take action if they are climate adjustments need to be made. We are to exist in a post-crisis working on this, which does not mean throwing landscape. They need to away valuable associates and Partners.” make tough decisions, say Difficult decisions lawyers, and, most importantly, While every domestic law firm has been affected by the crisis, some lawyers agree that it they need to be doing it now. is those near to the top of the leader board that are most in need of decisive action. While for For too long, many Spanish law firms have others it’s the big firms that are more resilient. been hoping for the crisis to pass. It seems as However, following years of growth, many if some Partners are paralysed, unable to take have been struggling through the crisis with any proactive action. Others, however, have partner numbers that don’t correspond with the seen the current crisis as a real opportunity to changes in the market. turn things around and take action. While some have been forthcoming about Iberia has always favoured ‘bigger their decisions, transparency is still a huge issue is better’, and firms have grown at for Iberia’s law firms, many choosing denial unprecedented, and some say unnecessary, instead. This ‘behind closed doors’ approach to rates. Many believe that those higher up the the evaluation of a firm’s Partners and partner food chain have now reached a tipping point, structure does nothing to stop the whispers with sizes, and Partner numbers, that are too of redundancies and office closings echoing large to maintain in the crisis and beyond. throughout the market and the media. Comparing Spain to the rest of Europe, While many view Garrigues’ recent move to there aren’t other countries that have such full equity as a step in the right direction, more huge domestic players. The traditional action is to come. A quiet but steady reduction Spanish model of growth from the boom in numbers is said to be going on within the years is now subject to a ‘stress-test’, says Juan firm, say sources, with more of a focus on Picón, Senior Partner of DLA Piper Spain, profitability than size. This clearly shows that and DLA Piper’s Managing Director Groups the firm is hitting the problem head on, albeit La crisis económica & Sectors. “This might mean that they need discreetly. Although the firm told Iberian que golpea a España y to right size their business to make it more Lawyer that numbers mentioned in recent Portugal desde el 2008 aligned with the market reality, both in terms media reports were incorrect. ha visto deteriorarse los of volume of work and fees per fee-earner, Dealing with underachieving partners is índices macroeconómicos and also compensation”. key, and most firms feel unable, or unwilling de ambos países, Uría Menéndez is seen by many as having to address it. In a ‘true’ partnership, where integrándose y afectando managed to preserve their leading position, everyone is equal, some question the extent a los mayores actores client base and unique footprint in the face of to which one can evaluate the performance of corporativos domésticos, the crisis. However, as one Managing Partner the other. But in firms where management is los cuales progresivamente told Iberian Lawyer off the record, this is less stronger, evaluation goes without saying. se han adaptado a la nueva to do with taking positive action and more to “We´re having to introduce much tighter realidad económico-social. do perhaps with a “preservation” strategy. and more professional management, which is Paralelamente las firmas de Four years into the crisis, bold decisions partly, but not only, a focus on financial targets. abogados, han tenido que are being taken. A move from a two-tier Already I can see that we are a less friendly and tomar medidas urgentes partnership to a full equity structure is not supportive firm,” one Managing Partner told para poder sobrevivir straightforward, one that was taken first by Iberian Lawyer. “I am fast becoming the least estos años y permanecer Garrigues and then by Cuatrecasas, Gonçalves popular person in the building!” rentables en la era “post- Pereira. This was an important development crisis”. Por ello, son muchos for Partners’ careers, says Rafael Fontana, The dead weight despachos los que han Chief Executive at Cuatrecasas, fomenting a The good years of picking up the phone to tenido que tomar decisiones sense of belonging and unity within the firm. ongoing client work are now a thing of the difíciles y a veces drásticas “It was necessary to take that step to be able past. Partners must now go out and find new de forma inmediata, ya que to tackle future challenges and achieve our clients, new work and bring in the profits. de otro modo quizás para objectives.” And there is a clear divide between those cuando reaccionen sea But there is also a clear need for many that wish to run a law firm as a business, demasiado tarde. to balance out partnership disparities and and those wishing to retain the collegial16 • IBERIAN LAWYER • July / August 2012 www.iberianlawyer.com
  18. 18. NEWS FOCUSvalues of a traditional partnership. UK and US firms in therefore promoting loyalty and fostering unity within theIberia are clear about which side they are on – just look firm is crucial.at the rounds of redundancies and increasingly tough As is transparency, both internally and externally,evaluations they have been doing. especially if you want to be taken seriously in the market both When the crisis hit, they took much more decisive and by clients and peers. Clients are reducing numbers and beingtimely action. And they were transparent about it. “In 2009, open about it, therefore it makes no sense for law firms towe undertook a change in structure, with the consensus hide the fact, says one Managing Partner off the record. Whenof all the partners, to reduce their numbers to adapt to the many of your lawyers are being taken on by competitors orcrisis market,” says Ignacio Ojanguren, Managing Partner clearly flooding the market, clients and the market alike canof Clifford Chance Spain. “We also put a much greater focus put two and two together and see redundancies.on having challenging annual partner evaluations, which isa necessity for any firm with lockstep and something that all Leadership, as well as managementfirms should be doing.” Taking decisive action, however, does not just come in the Whether other domestic firms will take such action, form of tackling problems with internal structure, workforceremains to be seen. In fact, some say that they have already or leverage. It also comes from having the courage to takemissed the boat. The largest of firms expanded without risks when others are holding back, and to be aware that atproper analysis and, now that the crisis has struck, reducing some point life will begin again, and you need to be ready andlawyer numbers has become that much more difficult. raring to go when it does. For those domestic firms refusing to embrace ‘the now’, Accountancy firms, for example, have made clear strategicsomeone needs to take the decision, and take it quick. decisions aimed at taking advantage of this situation, KPMG and Deloitte in particular. In the last year alone, KPMG hasModern leadership merged with Laboral Cusán Abogados, Valencia firm Ubi LexAnd while many competitors would point to firms such as and Castro Sueiro & Varela Abogados. Meanwhile, DeloitteCuatrecasas and Garrigues as being ‘well managed’ with have picked up lawyers moving on from the largest of firms,the many systems and supports in place, you would expect including Garrigues and Uría Menéndez.to see in any modern law firm, one thing is becoming very By seeing the crisis as a strategic opportunity, some sayclear; good and solid management is not always the same as that they are displaying the strategic vision and effectiveleadership. Reviewing the market position and opportunities, leadership currently required by the law firms. They havedeveloping a consensus for change, agreeing the strategic been picking up respected lawyers with longstanding anddirection and getting the buy-in required to get the firm there, profitable clients, integrating them and using this to managethose are the signs of a good firm. out those under-performers, a great opportunity for the older However tight your ship, you still need a captain. And generation of Founding Partners, seeking an elegant exit fromthere is a clear breed of leader emerging that many believe the law at such a difficult time.will be the only one to navigate a law firm through the testing Some mid-size firms are, however, seeing the crisis as anyears to come. opportunity to grow, in a wave of mergers, office openings If you read the newspapers everyday, says Martín at and team hirings. Dutilh merged in Barcelona becomingGómez-Acebo & Pombo, you may become paralysed and not Vialegis Dutilh and Salans are recruiting new practice areatake any decisions. “You have to be able to see beyond the Partners in Madrid. Jausas, for example, have just taken overprinted page and analyse the information with the big picture Madrid firm A & S Sampere Abogados. Others, however,in mind.” are bolstering their capital city bases with Partners from Modern leaders need to be open to the world and what considerably bigger firms. Marimón Abogados’s new Madridis happening, embracing new objectives, which most likely office, for example, will be led, among others by Partnerswill be outside of their comfort zone, says Picón at DLA Piper from CMS Albiñana, Ventura Garcés & López-Ibor have justSpain. “In these challenging times, people sometimes feel lost acquired a Cuatrecasas Partner, and, most notably, MLAand they need guidance, with vision and direction, the caring Associates, have been systematically sourcing talent fromabout these ‘soft values’ of your most valuable asset - your Cuatrecasas, Clifford Chance and Garrigues, among others.people – is, in my view, one attribute that will be more and The midmarket is grabbing the opportunity, with leadersmore sought after.” taking considerable risks with growth at a time where most At Cuatrecasas, Rafael Fontana is praised by some of his are reducing or consolidating. Whether those lawyers left ofPartners as an able manager, who benefits from the political their own free will or were asked to leave, the smaller firmsawareness of Executive Chairman Emilio Cuatrecasas when are catching the talent falling from the top of the market tree.required. While over at Garrigues, Miguel Gordillo and So now more than ever, many are suggesting that Iberia’sJosé María Alonso were recognised by their competitors law firms require more than simple management, theyas skilfully sailing the firm through the hurricane of the require leadership. This may come, either in the form of aAndersen collapse, regaining independence and persuading single individual with the skills, legitimacy and credibilitypartners to refinance the firm. required, or likewise from a leadership team that can handle One very important characteristic, say lawyers, is to never the softer issues, people and office politics, building aassume anything; always make sure. Ensure that every single consensus for change and the initial challenges that brings.partner is aware of the situation of the market, and the firm, Those in a state of paralysis and denial, may be runningand ensure that they are tuned into the concerns of each out of time to catch up. And if they don’t act, they are unlikelyand every partner. To be a leader you need followers, and to have a place on the starting line.www.iberianlawyer.com July / August 2012 • IBERIAN LAWYER • 17