Portugal > Legal market overview
Times have been extremely tough for Portugal, and the legal sector has been strongly impacted by the prevailing financial climate, political turmoil and the wider Eurozone crisis. A troika comprising the International Monetary Fund, the European Central Bank and the European Commission provided a €78bn bailout package to the country in May 2011, imposing austerity measures in the Memorandum of Understanding (MoU). The new Social Democrat government elected in June 2011 is helping the country to adhere to these conditions, but the impact is hitting Portugal hard. All citizens have faced tax rises, and the state is beginning to sell off assets. A series of privatisations has begun, with the state planning to sell shares in energy players EDP, REN, and Galp Energia. More privatisations are expected, including that of TAP, the national carrier airline. Domestic M&A was also very fragile due to instability and lack of financing.
In other developments, PPP projects remained suspended, with no immediate plans for a return; the MoU dictated significant change in employment, including an overhaul of existing regulations on working time and dismissals; and new tax legislation passed in July 2011 now allows lawyers to practise tax arbitration.
Lawyers have had to create new responses to the crisis: fee structures are now more negotiable, and several firms are joining international networks or forming alliances with firms overseas. ABBC – Azevedo Neves, Benjamim Mendes, Carvalho & Associados – Sociedade de Advogados now has an association with DLA Piper LLP, and Rui Pena, Arnaut & Associados, Sociedade de Advogados, RL became part of the CMS network in January 2012 under the new name of
Indeed, Lusophone countries – particularly Brazil and Angola – remain hot topics, and many Portuguese-owned SMEs are in the process of setting up abroad in pursuit of more robust markets, and therefore require legal assistance to do so.