Legal market overview in Chile

Leading the world for copper production, Chile has experienced enviable economic progress in recent decades, but in 2019 the country suffered its poorest performance in a decade, growing by just 1.1% percent – largely the result of major social unrest in the latter part of the year. By early 2020, with the situation normalised and the National Congress promising a national referendum over the creation of a new constitution – Chileans voted on 25 October 2020 to replace their legacy constitution from Pinochet’s military dictatorship – the economy was forecast to achieve growth of 1.2% by the end of 2020 and 2.5% by December 2021. Nonetheless, Chile remains in need of bold structural reforms to boost growth and reduce excessive inequality levels, and the Covid-19 pandemic and strict lockdown measures further exposed longstanding economic vulnerabilities. Robust Covid-19-related government interventions helped the economy rebound, leaving GDP unchanged year-on-year in the fourth quarter of 2020, notably improving from the third quarter’s 9.0% decline; by March 2021, the Chilean economy had recovered quicker than previously expected, thanks partly to the country’s successful vaccination programme. However, it was not sufficient to prevent new quarantine measures being imposed on a large percentage of the population as infection rates again surged, leaving a Constitutional Convention election planned for April (to select the body members that will draft the new constitution) pushed back to mid-May to avoid mass gatherings and further contagion. Notwithstanding the pandemic, Chile’s lawyers remained active in traditional areas such as corporate law, finance, energy, mining and projects, along with environmental matters, labour law, dispute resolution and tax (including advice on tax measures to provide pandemic-related relief), among many others. In recognition of the ongoing development of Chile’s contentious legal areas, The Legal 500 has this year divided dispute resolution work into three distinct chapters: litigation; arbitration; and white-collar crime. In addition to the 2020 tax reform, which introduced changes to marginal income-tax rates and a new tax for individual taxpayers who own real estate property in Chile, other major legislation requiring top-level legal advice includes amendment of the country’s Consumer Protection Act to increase the authority’s powers, the size of potential fines that can be imposed on suppliers and to regulate voluntary collective procedures. The internet and ongoing technological development -along with the worldwide recognition of data privacy- have compelled Chile to adapt its data privacy regulations. In 2017, a bill on data privacy was submitted to Congress, and in 2018 the right to data protection was given a constitutional basis, becoming part of the constitutional rights contemplated in Article 19 of Chile’s constitution. Making slow progress before 2020, a combination of the Covid-19 pandemic, e-commerce expansion, online education, telemedicine and digital transformation led Chile’s President Sebastián Piñera to order (on 15 December 2020), that the bill receive urgent attention; it is now expected to be approved by the end of 2021. Other legislative changes requiring clients to seek out top-flight legal assistance include the Financial Market Commission (CMF)’s December 2020 regulations on information security management and cybersecurity, which will apply to banks, banking subsidiaries, and issuers and operators of payment cards; and in 2021, similar regulations are expected for insurance companies, and pension and unemployment fund administrators. The Covid-19 pandemic forced the country’s legal market to adapt abruptly from office environments to remote home-working. Since March 2020, Chilean legal offices have implemented remote work systems, which require more intensive usage of tools and technology, including world-class document management systems; new interaction dynamics (both internally and externally) also necessitated the implementation of new collaboration tools to improve internal communication and co-working, as well as encrypted secure private cloud platforms. Consequently, firms have been able to maintain direct contact with clients (and other colleagues); assist before arbitral tribunals and courts; and generally continue with business as usual – albeit in a distinct mode. The Chilean legal market notably lacks diversity, with both minorities and women disproportionately absent in leadership roles, and a shortage of environments where individuals of any race, colour, ethnicity, culture, sexual orientation, gender identity/expression, religion, nationality, age, disability, or marital/parental status may succeed professionally. Times are changing, however; in addition to several firms in Chile participating within the Chilean branch of the Women in the Profession (WIP) programme of the Vance Center for International Justice, many practices are taking significant steps towards overturning the status quo. Several leading firms are edging towards 40% – or higher – female/male parity among their workforces, and have implemented gender policies that allow for flexibility for employees with young children. The Chilean legal market remains as fluid as ever. Headline news includes leading Iberian law firm Cuatrecasas making a strong splash in the Chilean market when it launched its Santiago office in April 2020, completing its presence in the Pacific Alliance countries (Chile, Colombia, Mexico and Peru), with impressive hires from Philippi Prietocarrizosa Ferrero DU & Uría, including highly rated litigation team heads Cristián Conejero Roos and Gianfranco  Lotito; further growth subsequently transpired on the transactional side through the hirings of M&A partner Roberto Guerrero V from Guerrero Olivos in January 2021, along with Macarena Ravinet, Josefina Yávar and Tomás Kubick, who are all also active in M&A. Another recent addition is Alfonso Ugarte C, who was hired from Baraona Fischer Spiess (which recently split), while capital markets and M&A expert Gerard Correig plans to relocate to Santiago from the firm’s Barcelona office. Likewise attracting the market’s attention is tri-national firm (Chile-Colombia-Peru) Philippi Prietocarrizosa Ferrero DU & Uría, which in May 2021 merged with Chilean law firm Carcelén, Desmadryl, Guzmán & Tapia, adding 32 lawyers to the firm’s overall bench, including partners Jerónimo Carcelén, a mining law expert, water law specialist Matías Desmadryl, and fishing and aquaculture law expert Mario Tapia. Additional new market entrants include boutique law firm Villarino e Ilharreborde, launched in early 2020 by former Prieto Abogados‘ lawyers Cristóbal Villarino (M&A and corporate advisory) and Juan Andres Ilharreborde (local and international M&A); the former Schwencke & Cía (the result of the early 2020 dissolution of Aninat Schwencke) is now known as PAGBAM Schwencke Chile following its November 2020 tie-up with leading Argentine law firm Pérez Alati, Grondona, Benites & Arntsen. Elsewhere, DLA Piper Chile‘s former partners Paulo Larrain and José Pablo Dulanto, along with former counsel Manola Quiroz, departed the firm in February 2021 to relaunch NLD Abogados; Jara del Favero Abogados and Ried Fabres also both reverted to independent status, following the unwinding of their 2018 merger in early 2020. Meanwhile, further to the January 2021 split of Baraona Fischer & Cía, Raúl Marshall became name partner at Baraona Marshall & Cía; and at the revamped Fischer y Cía, managing partner and corporate head Cristóbal Herrera was retained, as was the bulk of the tax practice (which includes name partner Alex Fischer); and Gerardo Cruzat (banking and finance, M&A and corporate law), was hired from Prieto Abogados to lead the transactional practice. In further news, Coz & Jofré was launched in early 2020 by José Coz and Álvaro Jofré (both formerly of Oddo & Cía), only to rebrand as Coz Jofré & Blavi Abogados, following the August 2020 incorporation of a third partner, Francisco Blavi, from Pellegrini & Cía (now known as Pellegrini & Rencoret Abogados); technology-focused firm Bitlaw was established in February 2021 by Paulina Silva and Javiera Sepúlveda, both previously at Carey, where Silva was director of the data protection and technology group, and Sepúlveda was senior associate; and the dissolution of Frias, Lagos, Maira & Vial Abogados spawned the launch of Esteban Maira and Rodrigo Vial‘s real estate and corporate law boutique Maira Vial Abogados, as well as dispute resolution firm Frías & Lagos Abogados, set up by Nicolas Frías and José Tomás Lagos.