Legal market overview
Despite recent media reports suggesting that the Brazilian economy has gone from boom to bust, the reality is much less dramatic. Although growth has indeed decelerated since the dazzling 7.5% hike recorded in 2010, in 2013 it actually picked up pace: Brazil saw its economy expand by 2.3% that year, up from 0.9% in 2012. That said, the IMF has lowered its forecast for 2014 and currently projects growth of around 1.8%.
Significantly, that sentiment has been echoed across Brazil’s legal market as lawyers anticipate a sluggish upcoming year for businesses; the country’s hosting of the 2014 FIFA World Cup is expected to herald infrastructure headaches and potential civil unrest, which could be further exacerbated by the political uncertainty in the run-up to national elections in October.
Against that backdrop, Brazil’s dynamic legal market is a startling contrast to the perceived inertia of its economy. The country has long provided fertile ground for new start-ups and spin-off firms and the past twelve months has proved no exception.
In March 2013, Galdino Carneiro Advogados was established by Bernardo Carneiro and Flavio Galdino, former partners of the now defunct Xavier Bragança Advogados partners. In early 2014, the firm rebranded as Galdino, Coelho, Mendes, Carneiro Advogados (GCMC) following the arrivals of Sergio Coelho, who joined from Coelho Ancelmo Advogados, and João Mendes de Oliveira Castro, who was formerly an in-house counsel at Opportunity. The new firm will have a strong litigation and insolvency focus.
In 2013, new tax boutique BRATAX – Brazuna, Ruschmann, Piovesan e Soriano Sociedade de Advogados set up shop. The firm was founded by José Luis Ribeiro Brazuna and Cristiano Frederico Ruschmann, both formerly of Dias Carneiro, Arystóbulo, Flores, Sanches e Thomaz Bastos Advogados, as well as Ciro César Soriano de Oliveira, who joined from his own firm Soriano & Woiler, and Fábio Piovesan Bozza, who was previously a partner at Mariz De Oliveira e Siqueira Campos Advogados.
In another notable boutique launch, two highly-rated associates from Veirano Advogados’ top-ranked international trade practice split off to form a new international trade and WTO firm: Claudia Marques Ciavolih and Rodrigo Pupo opened the doors of MPA Trade Law in 2014.
Restructuring and insolvency stalwart Felsberg Advogados has undergone a significant restructuring exercise of its own over the past year. In December 2013 the firm announced an association with Rio de Janeiro-based Vitor Costa Advogados, which will become a full merger in mid-2014. Prior to the combination, the firm has seen a string of high-profile exits and some strategic new hires as it looks to overhaul its business offering.
Among the other market developments in 2013: Stocche Forbes launched a competition practice through the hire of Camila Castanho Girardi from Franceschini e Miranda, Advogados; Koury Lopes Advogados (KLA) absorbed antitrust boutique Gianni Nunes de Araújo Sociedade de Advogados; and energy specialist MMA Lawyers boosted its global reach by entering into a cooperation agreement with US firm Haynes and Boone, L.L.P..
Leading full-service firms Barbosa, Müssnich & Aragão, Machado, Meyer, Sendacz e Opice – Advogados, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, Pinheiro Neto Advogados and TozziniFreire Advogados continue to stand out as the market benchmark. However, Brazil houses a strong band of boutique firms that excel in certain niche areas and provide viable alternatives to the market monoliths.
The Brazilian Bar Association restricts close collaboration with foreign firms but some international associations do exist, namely Campos Mello Advogados, which enjoys a cooperation with transatlantic giant DLA Piper LLP, Tauil & Chequer Advogados in association with Mayer Brown LLP and Trench, Rossi e Watanabe Advogados, associated with Baker & McKenzie.
In terms of general practice trends, the increasing value being seen in the Brazilian market is driving private equity deals as investors move in to snap up competitively-priced assets. On the other hand, M&A deal numbers during 2013 remained below 2010 levels and the equity capital markets remain quiet.
On the competition side, Brazil’s competition authority CADE (Conselho Administrativo de Defesa Econômica) continues to hit the headlines for baring its teeth. As a result, antitrust has become an increasingly important area for law firms and departments are scrambling to beef up their expertise.
Real estate practices have also developed significantly over the past year as sophisticated financial instruments become more commonplace in the market.