While 2019 was overall a strong financial year for the Spanish market, the last few months saw a slight slowdown, resulting in increasing caution around deal making and top-end transactions. With domestic banks and investors not as active in the market as global trends suggest, the void has been filled by increasing foreign investment, particularly from funds.

The key sectors of focus for players new and old remain infrastructure, real estate and energy, with an emphasis on renewables. In these core areas of growth, more money than opportunity is decreasing value in the market. Outside these boom sectors, broader political uncertainty is the new norm for Spain and this caution-inducing state has been compounded by the knock-on effects of the US-China trade war (US customs duties) and Brexit (VAT impacts). The real estate sector is focused on student housing, logistics and shopping centres; Spanish REITS (Socimis) still dominate the local market. However, activity is quite region dependent and many of the largest deals remain based in Madrid.

The positive economic environment of the past few years has meant less focus on insolvency and more on restructuring. Preventative work is taking precedence in anticipation of a potential downturn in the next year or so, while insolvency is largely limited to small and medium-sized businesses.

Spain’s active regulators and authorities - notably in tax, competition and energy - are providing substantial litigation and compliance work across these areas. In addition, companies are now criminally liable if an employee or manager is found to have committed a crime, which, combined with the aggressive approach of the authorities, is increasing defence, private prosecution and internal investigations work in the white-collar crime field. In the wider dispute resolution arena, Spain is pushing to become an international arbitration hub, with the new international arbitration court in Madrid ready for action in 2020.

In the legal market, J&A Garrigues SLP and Cuatrecasas still dominate in terms of feet-on-the-ground across Spain’s autonomous communities, with Uría Menéndez close behind in terms of strength-in-depth but leading the way for local firms in high-end transactions and cases. Gómez-Acebo & Pombo and Pérez-Llorca remain strong local players, with the latter making some key investments over the past year. Wider international interest in Spain has naturally benefitted the large international firms, the strongest being Clifford Chance, Linklaters, Allen & Overy, Ashurst LLP and Baker McKenzie, all of which compete alongside the leading local firms across many sectors and practice areas. Of the US firms, Latham & Watkins LLP and White & Case LLP have made significant inroads in the market, both making key hires in the last few years.

Barcelona’s market returned to relative stability in the past year, following the declaration of independence and ensuing unrest, but with investors still skittish many businesses and law firms alike continue to look to strengthen their footholds outside Catalonia. RCD and Roca Junyent are standout names in the region: both continued to boost their Madrid offerings in the past year, while the latter also incorporated a Barcelona-based tax boutique in 2019. Post-research developments in the insurance market include Jesus Velez and José María Arauz parting ways with Isidoro Ugena, Alfonso de Ramos and Olivia Delagrange in March 2020.