Lisbon annual report 2018 IBL80-LisbonAnnualReport | Page 2

Lisbon annual report Riding the wave The biggest law firms in Portugal are experiencing substantial growth, but managing partners are well aware that a downturn in the economy may not be too far away Given that Portugal’s leading law firms reported substantial increases in revenue in the last year – up to 15 per cent in some cases – there is considerable optimism in the sector. Foreign investors, including venture capital funds, are pumping money into the country as they sense an opportunity to get some healthy returns on investment. The real estate sector is proving particularly attractive – greenfield investments are on the rise, with hotel and residential developments proving particularly popular. Meanwhile, in the financial sector, sales of non-performing loans are generating substantial work for law firms. However, there are some clouds on the horizon. Firms may be receiving plenty of instructions now, but law firm leaders know that an economic downturn may hit the country in the next two or three years. It’s not something managing partners want to think about too much, because, as some privately acknowledge, their firms are simply not yet ready to deal with any contraction in the economy. For some firms, the future looks very uncertain indeed, and it’s anticipated that there will be mergers among some of the smaller firms in the market as they try to reach a scale that will enable them to adequately compete. Artificial intelligence (AI) could potentially give some firms the impetus they need by enabling them to increase efficiency and provide a more streamlined service to clients. However, managing partners face the problem of having to decide which type of AI to invest in and when to make such an investment. www.iberianlawyer.com Lawyers in demand, but smaller firms may need to merge The legal services market in Portugal is growing, but for some law firms, keeping up with the market leaders will be a struggle, so mergers between smaller players are sure to follow Event: Iberian Lawyer Global Roundtable Host: CCA Ontier Demand for legal services has been on the rise in Portugal for the last two or three years, participants in the Iberian Lawyer Lisbon Roundtable said. Indeed, this assertion is backed up by data that shows the three biggest firms in Portugal – MLGTS, Vieira de Almeida and PLMJ – all experienced double-digit growth last year. The country’s real estate sector has been a key driver of growth, while tax, antitrust, labour and finance are other practice areas that are generating an increasing amount of work for law firms. However, law firms still face the challenge of having to attract the best talent in a very competitive market, while the issue of artificial intelligence is also creating a great deal of uncertainty, with firms often unsure about what type of technology to invest in. There has been substantial activity in the Portuguese real estate sector, while there has also been an increase in litigation, said CCA Ontier managing partner Domingos Cruz. He added that venture capital funds are showing September / October 2018 • IBERIAN LAWYER • 31