The Legal 500 Latin America 2012
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Current economic uncertainty and major changes to the regulations regarding investment, foreign exchange and exports, as well as alterations to sector-specific legislation, continue to restrict the amount of transactional work available to firms in Argentina. Since this shows no sign of changing in the near future, law firms in the country have had once again to call on their renowned adaptability to survive in a changing market. Mid-to-high end banking and corporate work continues to be lucrative, but a depressed market means greater competition. Among those firms weathering the storm is local powerhouse Marval, O'Farrell & Mairal, which fields more than twice the number of lawyers of its closest rival, and has an unparalleled corporate and M&A practice. Other full-service firms such as Pérez Alati, Grondona, Benites, Arntsen & Martínez De Hoz, Jr (‘PAGBAM') and Estudio Beccar Varela have maintained their high reputations in commercial matters, and Bruchou, Fernández Madero & Lombardi continues to grow and is perhaps the only firm capable of challenging Marval's full-service dominance. As the government becomes ever more interventionist, firms have begun to place emphasis on international trade, administrative work and tax law issues, and it is in these areas that Bruchou has shown its ability to adapt quickly to Argentina's volatile economic climate. Within natural resources work, the oil and gas sector is still highly productive for those who have already established operations in the country, but new projects have been suspended due to investment restrictions and the uncertainty caused by the federal government's recent expropriation of YPF, Argentina's largest oil producer. For this reason, there is little change in the legal landscape in this area, with the traditional oil and gas leaders continuing to hold their market positions. In mining, the predicted boom in exploitation and development continues to be hampered by the economic climate, and, as a result, it remains a small, specialised area of Argentine law. Zaballa – Carchio Abogados has emerged from the traditionally strong mining department of the full service Brons & Salas, and has taken a place among the elite firms in this sector as a result of the expertise and experience of its partners. More specialised areas of law, such as environment and real estate continue to be led by boutique firms, although the major firms are devoting more attention to these areas as they become increasingly important.
The legal market in Bolivia remains relatively modest in size and is dominated by the prominent full service firms Guevara & Gutierrez S.C., Servicios Legales, CR & F Rojas Abogados, Moreno-Baldivieso, Attorneys At Law and Bufete Aguirre Soc. Civ. Abogados, with the largest fielding 36 lawyers. They all win instructions from major international companies investing in the country, even though recent measures taken by the Morales administration have markedly discouraged private foreign investment, slowed the economy and sown uncertainty in the market. The Bolivian State enacted a new Constitution in February 2009, since when the government has developed increasingly centralised public policies that are affecting many industries. In 2011 President Morales symbolically announced the repeal of Supreme Decree 21060, the promulgation of which, in 1985, had established the country's market-based, neo-liberal economic framework. He further proclaimed the revision of all current mining, banking and investment laws, with new legislation being developed in a bid to boost state control over those sectors of the economy. In line with such policies, Morales has, since his election in 2006, seized companies in various industries (including hydrocarbons, electricity, telecoms and pension funds), as well as re-nationalising a number of mining facilities. These measures have altered the type of work undertaken by lawyers – particularly those specialised in the energy and natural resources sectors, where oil and gas transactions have suffered a drastic decrease despite Bolivia's possession of the second largest natural gas reserves in South America. For the most part, law firms have retrenched to maintaining their clients' rights and interests in relation to their energy operations, while investor-state arbitration against the government (despite the administration's withdrawal from ICSID), is a new and notable bright spot for the most international outfits such as Moreno-Baldivieso, Attorneys At Law, Guevara & Gutierrez S.C., Servicios Legales and CR & F Rojas Abogados.
Despite the impact of the global recession, Brazil's steady economic growth over recent years was clearly signalled in early 2012 when it overtook the UK to become the sixth-largest economy in the world. As other regions, particularly Europe and the US, have struggled economically, an increasing number of foreign businesses have looked to Brazil for investment opportunities. The country's federal capital Brasilia is of key national importance, particularly in administrative issues, but it is Sao Paulo and Rio de Janeiro which form the key hubs for international business. Over the past decade, the arrival of many major financial institutions has helped Sao Paulo's BM&FBOVESPA to emerge as a global trading platform dealing directly with other stock exchanges in the US, Europe and Asia. Ahead of hosting the FIFA World Cup and Summer Olympics in 2014 and 2016, respectively, Brazil is making a significant drive to upgrade infrastructure and improve security, adding further impetus to both business and legal activity. Certainly the nation is set to emerge fully onto the global stage over the next five years.
Chile has one of South America's strongest and most open economies and a sophisticated legal market that is increasingly specialised and competitive. The country's dynamism attracts a large number of international investors and allows a growing number of new and modern firms to win a respectable market share. The oldest and largest outfits have consequently had to make a special commitment to innovation and creativity to retain their dominant position in the legal field. Carey leads the way in terms of specialisation and institutionalisation and is the largest player on the market with over 120 lawyers; it competes at the summit with Claro y Cia, Philippi, Yrarrázaval, Pulido & Brunner, Cariola Diez Perez-Cotapos y Cia and Barros & Errázuriz, the latter being the only latecomer among the most prominent firms. A well-established group of full service firms sit just outside the top-five league and offer a quality alternative to the biggest firms. They often have a key strength in a particular area of practice such as mining and energy, corporate, banking or litigation; Prieto y Cia, Guerrero, Olivos, Novoa y Errazuriz, Morales & Besa and Bofill Mir & Alvarez Jana Abogados all fit this description. A number of highly specialised outfits further stiffen the competition together with boutique firms; all of them challenging the predominance of full-service firms in the litigation, energy, insurance, IP and environmental sectors.
Colombia’s legal market finds itself in a very dynamic environment. The reduction and resolution of many of the socio-political problems that have plagued the country for decades has opened the gates to overdue economic development and a wave of infrastructure and energy projects (including ports, pipelines, railways and roads), legislative reforms (such as in the tax sector and new consumer legislation), and economic consolidation in industries ranging from finance to retail. While problems remain – the mining sector, for example, remains a promise largely deferred (it awaits the full and effective establishment of a new regulatory and administrative body) – the enactment this year of a long-mooted Free Trade Agreement (FTA) with the United States (May 2012), is both a milestone indicating how far the country has come since the turn of the millennium and a symbol reflecting the new optimism born of a real GDP growth rate of 5.9% and over $15bn in foreign direct investment during 2011.
Costa Rica is not only the largest country in Central America but also the most socio-politically stable: as such it has perhaps the most developed legal market in the region and frequently acts as a gateway for businesses entering the region. This role has ensured many firms a consistent flow of legal work across a variety of practice areas. Nevertheless, the country is closely tied to the US economy (and hence the global economic crisis), and a lack of foreign investment has resulted in a depressed real estate market (particularly in the tourism sub-sector) and an M&A market in which mid-size deals predominate. The tax sector remains a busy area, not least with regard to on-going tax reforms.
The Dominican Republic has a selection of quality full-service firms, with particularly strong experience in corporate and real estate advice, as well as dispute resolution. The country's sizeable tourist industry has ensured that its real estate lawyers have enjoyed a strong workflow. Many are now experienced in environmental issues as well, since the government is increasing the restrictions on major tourist developments near the coast.
The Ecuadorian legal market continues to evolve in line with the country's economic development. Large, full-service firms Pérez Bustamante & Ponce and Bustamante & Bustamante retain their market dominance and both firms represent major international clients. There are also a number of mid-sized firms, including Corral & Rosales and Paz Horowitz Robalino Garcés, Abogados, which are also very active and represent both international and domestic clients across a range of practice areas. These full-service firms often use a multi-disciplinary approach in order to provide a degree of flexibility, enabling them to respond to the ever-developing Ecuadorian legislation and business market. An example of this is the move many firms are now making towards developing an antitrust and competition practice capability since the enactment of new legislation in October 2011. The market also includes a number of prominent boutique firms; including IP specialists Bermeo & Bermeo Law Firm and tax firm RP&C Abogados. A majority of the market's full-service firms are based in the administrative and political capital, Quito, but Guayaquil, the country's main port and second city, is the base for a number of firms with particular strength in dispute resolution, such as Coronel & Pérez and Consulegis Abogados. Both have their principal offices in Guayaquil and secondary offices in Quito.
As the smallest country in the Central America region and with a young legal market, El Salvador is continuing to develop its potential and to generate international interest and investment. The country hosts several offices of the largest regional law firms, notably Arias & Muñoz and Consortium – Centro América Abogados. Guandique Segovia Quintanilla is the largest local law firm, and there are also a number of full-service and boutique players.
As the largest country in Central America, contributing over one-third of the region's GDP, Guatemala's financial and corporate sectors appear to be entering a period of quiet evolution. In November 2011, Otto Pérez was elected as the country's new President. Although still early in his term, it appears that new regulatory measures will be put in place in order to build on the country's relatively stable economy through his administration's commitment to the promotion of foreign investment, attempting to open Guatemala up to trade and capital from Asia and Europe, while still maintaining its traditionally close trade ties to the United States and strengthening its relationship with its regional neighbours.
Honduras' very recent past has been characterised by political crisis and a sharp economic downturn having endured a withdrawal of foreign investment and a close to complete halt in the development of real estate projects, following the 2009 constitutional crisis that saw the ousting of President Zelaya. However, it seems that the country is turning a corner, with the government aggressively promoting a new economic programme, in the hope of attracting foreign investment (through regaining and building investor confidence) and strengthening public finances. The programme brings with it a number of new laws including the 2010 Public Private Partnership Law and the 2011 Law for the Promotion and Protection of Investment (which includes certain tax incentives, property right guarantees, and assurances of arbitration as a forum to settle disputes).
International Firms: International Arbitration
With global bank lending hindered by the ongoing global financial crisis and economic downturn, the banking and finance arena in Latin America could certainly be more active. Nevertheless, the region as a whole is one of the fastest growing developing economies and with jurisdictions such as Brazil poised to become a global economic superpower, there is still intense demand for financing to continue this growth trajectory. Most of the leading firms in this sector are headquartered in New York or have a substantial presence in the financial centre.
Mexico's legal market has, in the past been characterised by high-profile ‘spin-offs, splits and movements' among firms. 2011 (and into 2012) followed a similar pattern, whether it be a spin-off, partner change, or the entering into the market of another international firm. There is no doubt that Mexico has strong legal expertise spread across its firms, from the international to the dominant domestic firms, and specialised boutiques, with leading individuals being found not only at top tier firms, but also in the mid-market.
Nicaragua continues to see reforms in its judicial system and administrative procedures in an attempt to make the country more attractive to foreign investors. However, allegations of corruption and a lack of government transparency continue to affect confidence and hinder the implementation of policies aimed at strengthening the private sector.
The past decade has seen Panama emerge as one of the Western Hemisphere's fastest growing economies, and, since 2007, its GDP growth has averaged 8%. The boom in recent years has been built upon construction, tourism, shipping, offshore banking, and of course the canal, which has helped underpin the financing for many of the country's ambitious state-backed infrastructure projects. The country is also establishing itself as a hub for the region, with many multinational corporations establishing their Central America headquarters there. This has been a boon to the country's commercial legal market, particularly among the largest full service firms, many of which are well stocked with US-trained lawyers. Of these, Aleman, Cordero, Galindo & Lee, Arias, Fábrega & Fábrega, Galindo, Arias & Lopez and Morgan & Morgan can be regularly found in or near the top tier for most categories. Unlike many jurisdictions, over the past few years, most of the major firms have been relatively stable, with little partner movement between them.
If the approach of Presidential elections in 2013 had generally frozen the advance of both legislative proposals and major business projects, the recent impeachment of President Lugo has added an additional degree of uncertainty to the immediate political and economic outlook in Paraguay. Its regional neighbours have taken diverse positions regarding Lugo's ouster (seven states recalled their ambassadors for consultations) and it is unclear whether the country will remain suspended from Mercosur. Limited opposition from Brazil will probably, however, ensure minimum disruption, especially since the Paraguayan electoral authorities have confirmed that the April 2013 elections will proceed as originally planned.
The initial caution from businesses and law firms alike following the electoral victory of Ollanta Humala proved to be, for the most part, unnecessary with the new president continuing a pro-business economic strategy. That said, it has not been plain sailing under the new government and the increase in mining projects has continued to raise a number of environmental issues, particularly for local communities.
The current picture of Uruguay is a world apart from that of the late 1990s and early 2000s, when the country lost its investment grade status. It has, however, emerged more robust from the region's financial crisis, and is increasingly viewed as a safe investment destination. 2011 saw the largest single foreign direct investment into the country in its history, in the form of joint-venture company Montes del Plata, which is building a 1.3m tonnes per year pulp mill that will begin operations in 2013. The beginnings of an energy sector have been evidenced in two bidding rounds for Uruguay's offshore exploration blocks (co-ordinated by state owned energy company Ancap), the first of which began in 2008. Despite the sustainability of an energy sector being uncertain, there is little doubt that firms (especially in the short term) will benefit from these developments. Commentators note that an infrastructure strong enough to support the operations and investment coming in to the country is lacking. Developments on this front are more uncertain, although there are legislative proposals for the introduction of a public-private partnership finance models to be employed in areas such as transport, social, and tourism-related infrastructure.
With the nationalisation of Venezuela's key industries, it is President Hugo Chávez's government that drives the country's economy. Consequently, and unaided by strict currency controls, Venezuela's economic environment and foreign investment levels remain challenged. Furthermore, Chávez is seeking re-election in October 2012.