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Legal market overview in Puerto Rico

After a series of down years, 2021 was seen by some as a chance for a new beginning for Puerto Rico.The coronavirus is but the latest calamity to have hit the island in recent years. In 2014, the country’s sovereign debt was rated non-investment grade, and two years later the state declared bankruptcy. Hurricane Maria rampaged in 2017, heavily damaging the infrastructure and provoking a humanitarian crisis that is still visible today, while the 2020 Ponce earthquakes struck the southwestern part of the island.In spite of a difficult winter for public health, the vaccination campaign appeared to be on a solid trajectory, with 25% of the population having received the first jab in March 2021. What has been noted by some commentators as the successful management of the Covid crisis also enables Puerto Rico to start cultivating economic hopes, as multiple positive factors began to emerge.The Biden administration has granted a reinvigorated flow of stimulus checks to recover from the hurricane leftover damage, still particularly noticeable in the unreliable condition of the power grid. While the local government has been busy anticipating and planning federal funds assigned to the country, Puerto Rico is now looking to attract global investment, in times of virus-fuelled accumulated liquidity.Government incentives paired with the interest of foreign equity funds (encouraged by the local Tax Incentives Law) seem to have breathed some new life not only into the energy sector, but also into the so-far sluggish construction and real estate markets, especially in the mid to high-end segment. Robust anti-money laundering regulations have also proved successful at persuading some investors to move their capital from other countries, including Panama.The impact of Covid-19 was felt in particular in the area of litigation. There has been a reluctance to hold hearings in person, so video conferencing has been used instead. Local courts had already implemented e-filing systems, effectively diminishing costs for clients, who now can save on lawyers’ billed hours and travel costs, though litigation has been fairly stagnant, in particular in administrative settings.Nevertheless, large and mid-sized law firms mostly report a positive year. This is no surprise, since they are traditionally more focused on corporate advisory work, while litigation is often handled by single practitioners, who have the largest share of that legal market. In particular, O'Neill & Borges and McConnell Valdés LLC confirmed themselves among the largest and most active law firms operating in Puerto Rico.