Dominant in their home markets, law firms from Spain and Portugal have weathered the tempest by heading for far-flung locations
Last year, Spain endured a period of political turbulence. In the space of 12 months, it blundered through two elections and the fear of not being able to produce a budget for 2017, narrowly avoiding EU sanctions for overshooting its deficit target. Despite this unease, the economy has now seen two consecutive years of 3% growth, fuelled by an accelerated industrial output. As a result, Spain has become one of Europe’s fastest-growing economies and unemployment is at its lowest level since 2009.
Benefiting from this new-found optimism is Garrigues, which tops the Euro Elite again this year. With over 1,400 lawyers spread across 32 offices worldwide, Garrigues’ revenues matched the domestic economy, rising 3% from €339m to €349.4m. Despite a strong focus on international growth – particularly in Latin America – in recent years, more than half of its offices are in Spain and Garrigues did 30% more domestic work in January this year than in 2016. According to executive chair Fernando Vives, this is due to the new-found viability of the Spanish market.
‘For foreign investors, the main point is not only the situation in Spain, but also the competition between Italy or France or the Netherlands. The foreign investor thinks that the political stability and economic situation here is better today than in other European countries.’
Garrigues shares the Spanish market with its two main competitors, Cuatrecasas, Gonçalves Pereira and Uría Menéndez, who all make up the top three of the Euro Elite. Cuatrecasas’ corporate co-ordinator Javier Villasante describes the Spanish market as ‘more stable and predictable’, and estimates that 90% of the firm’s revenues come from the Iberian region. However, he contends that success for Iberian law firms comes from following clients around the world: ‘If you look at our clients, for BBVA, Mexico is more important than Spain. For Santander, Brazil is more important than Spain. Generally, most large corporate players in Spain are more active abroad.’
Uría managing partner Luis de Carlos estimates that 75% of the firm’s revenue comes from Spain. He is bullish about the prosperity of his home market: ‘I joined the firm in 1983 and we had about 15 lawyers. Today we have nearly 600. It’s clear proof that the Spanish economy has grown and Spanish law firms have grown as well.’
Revenues at Uría have expanded 6% to €222.2m, and the firm joined Garrigues, Pérez-Llorca and Cuatrecasas in advising Coca-Cola European Partners on its €16.9bn listing on multiple stock exchanges in May 2016. A further indication of the firm’s strength comes from its client list, which includes Banco Santander, Goldman Sachs and Lone Star Funds.
But despite promising growth at home, Spanish firms still procure a significant amount of income from their Latin American ventures. Garrigues, which possesses five offices across Latin America, expects to generate €30m from the region in 2017. Cuatrecasas has three Latin American offices, while Uría’s 30% stake in Philippi Prietocarrizosa Ferrero DU & Uría gives the firm access to a network of 353 lawyers spanning Chile, Colombia and Peru. De Carlos estimates that just over 10% of the firm’s revenue comes from Latin America.
‘The foreign investor thinks that the political stability and economic situation here is better today than in other European countries.’
Fernando Vives, Garrigues
Fortunes for Spain’s mid-tier players are not as positive, with Gómez-Acebo & Pombo posting a 6% slump in revenue to €56.8m. The 279-lawyer firm had previously reversed a three-year fall in revenue in 2016. However, managing partner Carlos Rueda Gómez-Calcerrada cites finance, insurance and real estate as sectors that will see increased activity in 2017. The past year has seen the firm advising foreign investors on the acquisition of key Spanish assets, such as Oman Oil in buying a €106m stake in Spain’s largest natural gas distributer, SAGGAS.
In Portugal the political and economic climate has been just as testing for law firms. The country’s socialist government, led by prime minister António Costa, has eased austerity at the risk of inviting reprimands from Brussels over loan repayments.
However, as with its Spanish neighbours, the Portuguese economy is also showing signs of repair. The overall economic growth rate in 2016 was at its second-highest level in six years, aided by consecutive years of increasing investment rates and a steadily climbing GDP. PLMJ, one of Portugal’s largest law firms with 284 lawyers, took advantage of one such opportunity in August 2016, advising private investment fund Ardian Infrastructure on its €600m joint venture with Ascendi.
Difficult times have led to large devaluations of companies and other assets, mainly in real estate. Foreign investment has not taken long to materialise, leading to a resurgence of corporate and real estate transactions that have been carried out in recent years. An example of this increased appetite for M&A came in September 2016 when Spain’s Caixabank launched a €880m bid for the 55% of Banco BPI it does not already own.
PLMJ managing partner Luís Miguel Pais Antunes comments: ‘I would not say we have a bright future guaranteed, but good conditions will continue to develop. There are some signs of new investors interested in entering the Portuguese market, and we want to be part of that.’
The future is certainly bright for Vieira de Almeida & Associados (VdA), which was named International Firm of the Year at this year’s Legal Business Awards after posting a 21% increase in revenues in 2016 and hiring a 28-strong team from local rivals Miranda. The move gave VdA access to previously-untapped African markets such as Angola, Congo, Mozambique and São Tomé and Príncipe, boosting international turnover from 3% of the firm’s revenues to just under 20% in 2016.
Essentially there is some difference between the international approach of the firms in the two Iberian countries. In Portugal the market is less dominated by two or three large domestic firms or a handful of global players. Therefore, while there is a potential for mid-market Spanish firms to dedicate themselves to their domestic market in the quest for a strategic hedge and leave the globalising to the big three, from a Portuguese perspective a cramped market with a sluggish economy necessitates the wider search abroad for work. LB
tom.baker@legalease.co.uk
| Firm | Country | Total lawyers | Total partners | No. of offices |
| Garrigues | Spain | 1,408 | 297 | 32 |
| Cuatrecasas, Gonçalves Pereira | Spain | 861 | 210 | 26 |
| Uría Menéndez | Spain | 576 | 132 | 17 |
| PLMJ | Portugal | 284 | 55 | 8 |
| Gómez-Acebo & Pombo | Spain | 279 | 59 | 9 |
| Vieira de Almeida & Associados | Portugal | 213 | 37 | 3 |
| Abreu Advogados | Portugal | 204 | 28 | 9 |
| Morais Leitão, Galvão Teles, Soares da Silva & Associados | Portugal | 199 | 55 | 3 |
| Pérez-Llorca | Spain | 160 | 33 | 4 |