What are the biggest challenges facing Paraguay’s legal market in the next 12 months?
The biggest challenges that the legal market will face in the next months are potential opportunities of investment in the infrastructure area with participation of foreign investors. Talent retention also will be a challenge.
Do you consider sustainability credentials important to your firm’s business?
Yes, they are important. As a matter of fact, there is a general consensus on this, and clients are being more and more active in having their service provides incorporate sustainability within the firm.
Have ESG considerations prompted you to re-evaluate the service you provide?
Yes, ESG considerations prompted us to re-evaluate the services we provide. As a matter of fact, we have created a regional ESG practice in 2021, to be in an optimal position to assist our clients as they increasingly turn their focus to sustainability issues and ESG-related factors. While environmental, social, and corporate governance factors have always been a part of investment and business decisions, they are now often the cornerstone or the central issue when acquiring, investing, or operating a business. Conversely, when a deal does not materialize or an investor looks to divest from a company in its portfolio, a lack of sustainability or ESG risks are often cited as contributing factors. So, these issues are no longer aspirational in nature; they are key concepts in our clients’ businesses, and therefore also in our own.
Looking forward, we expect ESG concepts to permeate every part of the business cycle, and businesses will be required, not only by the market but also by increasingly demanding legislation, to know and inform where their raw materials come from, who their suppliers are, how they relate to their employees, and how their operations impact their communities and the environment. To assist our clients in navigating this change in paradigm and adapting their business operations accordingly, our new ESG practice puts together professionals from our environmental, compliance, and labor law practices, with the specific task of understanding market demands and regulatory requirements, and their efficient and effective implementation in our clients’ business practices. Furthermore, our ESG practice has the mission of looking inward and deepening our firm’s commitment to sustainability and incorporating ESG concepts into our own operations. For us, this change in how business should be done is welcome and irreversible, and we believe change begins at home.
Where do you feel your clients need the most legal support in the next 12 months?
It is hard to pinpoint one area since Paraguay´s economy is growing constantly and attracting projects in new areas. In general corporate matters, tax, and structuring investments.
What sets your firm apart from competitors?
High specialization, horizontal structures and high coordination, combined with regional experience. We have a pool of more than 150 lawyers with expertise in different areas thus not only we have a pool a legal knowledge but also industry knowledge. As an example, if Paraguay attracts an investment in pulp mills or hydrocarbon, there is no experience locally but on of our members of Uruguay or Bolivia has on hands experience in the industry. This, combined with local lawyers, provides the client with a perfect combination of industry knowledge and local laws with cannot be matched by our competitors.
How well placed is the country, economically, if the international investment it has courted -particularly for infrastructure projects- does not materialise? Can local bank financing begin to meet the envisaged costs?
Due to governmental budget deficit caps, most infrastructure projects that could have been attractive for international investors (due to their size and complexity) are being financed with soft loans from the multilateral sector. Nonetheless, should these projects eventually require local funding, Paraguayan banks have sufficient liquidity and project financing experience to – through a syndication – cover the financing requirements.
Is the market confident in a victory for the Colorado Party in the 2023 elections or is there nervousness in light of recent “shock” election results in the region?
The market is not confident in a victory of the Partido Colorado. There are many factors that must be defined, especially who will be the Partido Colorado’s candidate. The opposition is fragmented but they still have time to get their act together, organize themselves and present a candidate that can rival the Partido Colorado.
How has the relatively recent enforcement of the competition law affected foreign companies’ outlook in terms of starting/expanding operations in the country?
As of today, the competition enforcement authority does not represent an impediment for companies doing business in Paraguay. While it is true that since the enforcement of the competition law, there are new regulations to be aware of and to comply with, most of the foreign companies doing business in Paraguay are already familiar which such requirements.
This is probably because local regulation and enforcement policy are generally consistent with international standards.
In addition, we have seen that the approach of the local enforcement authority during this first period of enforcement is focused on advocacy and collecting data relating to the different markets in Paraguay rather than intervening in the business model of the companies or imposing sanctions.
Are there specific practice areas you see as particularly thriving, which you intend to bolster in coming years? Are there any new areas of practice that have emerged recently?
Foreign investment, environmental, and M&A are particularly thriving. Nonregulated market of carbon bonds is developing fast and attracting foreign attention. Competition is emerging due to M&A activity in the region and the world. The same with Technology regarding mining and crypto. Paraguay has become attractive to miners due to the huge surplus of energy that comes from the Itaipu dam.
How active are members of your team in terms of thought leadership?
They are very active. Several of our members are leaders in their respective fields of practice, are sought for that and normally participate in activities to further develop their leadership inside the firm and outside.
What are your firm’s policies on diversity and inclusion? Does your firm have any specific diversity initiatives?
For many years FERRERE has embraced the best practices for avoiding bias and favoring D&I in all the firm’s areas and jurisdictions. This commitment was made clear in a regional plan, leading by a D&I committee, whose chief objectives are equality of opportunities, social awareness on gender matters and creation of a better workplace for everyone.
The plan has specific programs, which are geared to inclusion, advancement and visibility of all our professionals. Some examples are:
– “Maternity Mentors”: to provide women with support on all matters related to work-life balance.
– “Cross Mentoring Program”: organizes mentoring sessions between senior men and mentees (women) within the firm.
– “High Profile Women Attorneys”: FERRERE explicitly and firmly fosters high profiles and involvement of its practitioners – men and women alike – in institutions, organizations and business networks, as well as participation and speaking at conferences leading to professional growth and making a contribution to society that goes far beyond their work with the firm. In the case of women, they have also become models for female junior attorneys.
As a result of these, we can affirm that FERRERE is a benchmark firm in the region in terms of D&I, while leading indicators of women professionals. Currently, 61% of associates, 57% of counsels, and 30% of partners of FERRERE are women.
What does innovation mean to you? Can you tell us about any specific innovation initiatives at your firm?
At FERRERE we understand innovation as a way of thinking and acting. This means that we deeply understanding the needs and requirements of our clients and other stakeholders, to ever be one step ahead, and also, we generate proposals and solutions that are as creative as they are efficient.
In fact, innovation has been key since the very conception of the firm. It was then that Daniel Ferrere got back to Uruguay from Harvard with the conviction, contrary to the reality and the consensus at the time, that it was possible to create a highly specialized US-style law firm focusing on meritocracy, and where client service and a focus on practical solutions would be the aim. In 1994 FERRERE added a family hiring exclusion to its partnership agreement, and in 1996 it had its first woman partner.
More recently, FERRERE has innovated in terms of the practice areas and the services it offers. For example, in the past year it stepped up and officialized two practice areas that reflect the dynamics of the business and the firm’s concern to offer highly specialized service: Fintech and ESG.
What technological changes have you implemented at your firm to improve the legal services you provide to your clients?
For several years now, at FERRERE we have been working on updating all our IT systems. This has allowed us not only to be a pioneer firm in terms of information security, but also to be a step ahead of unforeseen events or contingencies.
From well before the COVID-19 pandemic’s arrival, FERRERE was investing in technology and working to foster telecommuting, so that when the virus hit the region it did not pose a major issue in that connection. FERRERE has stepped up those processes and today can respond to any request, beyond the restrictions on movement in each country, and has been able to go from an in-person to a remote working arrangement.
Today, FERRERE is a full-licensed Office 365 firm, and also works with Microsoft Azure for cloud computing services. For desktop telephony, from day one of remote work the firm was able to provide access from the cellphones and laptops of each of its practitioners.
In turn, we incorporated tools that make it possible to share information with clients, avoiding sending it by email, thereby obtaining greater information control and security.
Some tools such as Teams, Yammer and Avaya Workplace were resources that were used to the maximum of their potential to guarantee the best interaction between the different teams and the firm’s clients.
We also work with iManage Work10, a business document management software. In turn, we work with Easy Doc, an online platform that makes it possible to access templates for standard documents, such as employment contracts, admonishments and suspensions, among others.
Another example of this is that we have begun using Artificial Intelligence for attorneys – programs that interpret texts and extract contract clauses, to cite one example. For large numbers of documents, this makes it possible to see points in common, find the most relevant aspects, etc.
Finally, FERRERE is one of the few firms that submits to external data security audits to certify its information systems.