‘Global Special Report 2014: Treasure hunt’, in this report Hugo Écija, Chairman and managing partner at ECIJA, shares his views on the internationalization of Spanish law firms.

Opportunities abound for law firms in jurisdictions around the world, but get your firm´s strategy wrong and you will run the risk of missing out.

No two law firms´ international strategies appear to be the same. While one international firm has recently taken the plunge and opened two offices in Mexico, for example, managing partners at other firms express severe doubts about the Mexican economy´s potential to supply a steady stream of profitable legal work.

One of the arguments put forward by the skeptics is that Mexico will suffer due to its over-reliance on the US economy, which is in currently contracting. Meanwhile, there is also considerable debate among lawyers about the need for offices in Latin America, with some arguing that successful Latin American practices can be run from New York or Washington D.C., for example. Yet other lawyers at Spanish firms argue that rather than focusing on Latin America, resources are put to better use expanding operations in Asian markets. That said, firms must choose their Asian markets carefully, with some managing partners having grave concerns about the Japanese market, for example, where some US firms, in their desperation to grow their practices in the jurisdiction are offering to work on deals for free.

There seems to be considerable more consensus about the most promising opportunities for Portuguese firms. Lusophone Africa – particularly Angola and Mozambique – have long offered Portuguese practices substantial growth opportunities and this is expected to continue for at least the next decade, if not longer. This is a source of considerable encouragement to managing partners in Lisbon, who are fully aware that without the opportunities offered in Africa, the downsizing of their firms would be inevitable.

Dual identity

In future, law firms will have to be smaller, will probably have to operate under two brands – one for value added work and one for commodity work – as well as having strong international capabilities, according to Broseta partner Julio Veloso. “Depending on the situation, sometimes is very hard for us to compete with global firms because of our lack of international offices,” he adds. “However, in some other cases foreign law firms look for independent firms like us and some clients prefer independent firms like us, with international experience, but with no offices abroad so they, and us, can choose the best firm for the job in each country.”
However, Araoz & Rueda partner Clifford J. Hendel says that, being a small firm without a global brand or presence outside of its base in Madrid, “claiming we sometimes have an uphill battle getting on the ´radar screen´ of potential clients”.

Hugo Écija, managing partner at Ecija, which boosted its Latin American presence by merging with Rooter Legal, a TMT boutique with an office in Santiago de Chile, says some law firms have made costly mistakes by not adequately researching international markets before committing resources there. He adds: “For a company to succeed in any international market it is important to spend time on researching that market and cultivating relationships with counterpart businesses, government agencies, and trade organisations. Many Spanish firms are thriving abroad, but they have only been able to achieve this success by having patience, cultural understanding, and perseverance.”

Lupicinio partner José María Viñals says UAE, Qatar and Bahrain present substantial opportunities for growth. He adds: “In addition, and despite the current political turmoil, Iraq’s rapid increase in oil production and infrastructural investment is particularly attractive to European and American investors which creates additional growth opportunities for law firms.”

Adarve Abogado partner Guzmán López Y Miguel highlights China as a country offering significant opportunities for law firms. He says China is a growing economy that, unlike EU countries, has not been affected by previous crises and has a significant need for legal services.

Jausas partner Agustín Bou says the most attractive markets are currently the emerging Far East economies, especially China and South Korea. He adds that this is because “there is a potential flow of investors seeking opportunities, but due to cultural reasons relationships with them has to be developed on a long term, and mutual trust, basis”.

Please read full report here: http://www.iberianlawyer.com/index.php/special-reports-global-markets/global-special-report/4395-global-special-report-2014-treasure-hunt