Legal market overview
Following President Rafael Correa’s election to a third term, Ecuador’s economy has remained strong – growing at an annual rate of 4.9% (one of the highest rates in the region). Inequality has also decreased to a Gini coefficient of 48.5% in 2013, compared 54% in 2006. These conditions may be the result of the implementation of a new model of development derived from the “Good Life” National Plan 2009-2013. The main goal of which has been the reinforcement of the role of the State in steering the economy and strengthening the provision of public goods and services, mainly in the areas of infrastructure, health, and education.
In spite of some ever present difficulties, Ecuador is generally considered to offer a relatively stable and flexible legal framework. Prospects of more attractive scenario for foreign investment and business is also highlighted by the resumption of FTA negotiations with the EU earlier this year; previous talks were suspended in 2009.
Legal novelties include an amendment to the 2009 Mining Law which it is hoped will stimulate the mining sector by simplifying investment conditions. On the telecommunications front, a new media law was passed in June 2013; highly controversial, it creates a state-controlled regulator that will oversee newspaper and television content, and as such, increase the government’s direct involvement in the media sector.
After the enactment of the Organic Law for the Regulation and Control of Market Power in 2011, the activity for law firms in the area of competition and antitrust has increased. The country witnessed the effects of such legislation when a court in Guayaquil suspended a multimillion-dollar fine issued by the newly established antitrust authority in the telecommunications sector.
The market remains dominated by full-service firms such as Pérez Bustamante & Ponce and Bustamante & Bustamante, which are usually involved in the largest transactions and preferred by international clients. A second group of slightly smaller firms are also very active; Corral Rosales Carmigniani Pérez with presence in both Quito and Guayaquil; and Paz Horowitz Robalino Garcés, Abogados, increasingly expanding its market presence in several areas.
There is also demand for boutique firms specialising in IP, labour and tax where Bermeo & Bermeo Law Firm, Jaramillo Dávila Abogados and Tax & Legal Advisors respectively, are at the top of the market.
Regional alliances have also made headlines. Central American firm Aguilar Castillo Love has formed an alliance with Pólit & Pólit Abogados, marking its first step into the South American market, and continuing an integrationist trend that began with Noboa, Peña, Larrea & Torres Abogados, the Ecuadorian arm of Peru’s largest firm Muñiz, Ramírez, Pérez-Taiman & Olaya Abogados and the more recent association between Corral Rosales Carmigniani Pérez and Colombian firm Mauricio Velandia Abogados in the competition and antitrust area. Also in the offing is the opening of an Ecuadorian office by Uruguayan firm Ferrere, which has previously established itself firmly in both the Paraguayan and Bolivian markets.