Madrid annual report
Making your mind up
The issue of technology will
mould the future of law firms
as many struggle to innovate
– indeed, some will look for
mergers as a way of effectively
adapting to the digitalisation of
the economy
It’s decision time for law firm
managing partners. The issue of what
technology law firms should invest
in is proving to be a perplexing one
for many in the legal sector. While
it is widely acknowledged by law
firm leaders that artificial intelligence
(AI) does offer some benefits, many
admit they are sceptical about it.
Some say initial AI trials have been
disappointing, while others – though
saying they have faith in such
technology – admit progress with
AI products has been slower than
anticipated.
Partners say law firms struggle
with innovation and this is a worry
as the economy is becoming ever
more digitalised. Some managing
partners believe firms’ difficulties
implementing new technology could
drive consolidation in the sector in
an effort to increase efficiency. One
partner at a leading firm in Madrid
predicts more mergers involving the
biggest law firms in the world – some
of whom have operations in Spain –
in the near future.
Diversity is another issue
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managing partners have to urgently
address. Clients are increasingly
asking for evidence of law firms’
diversity policies before making
decisions about who will be
receiving their business.
Calls for
lawyers to be
‘ambassadors’,
while AI doubts
grow
Spain’s strong economic growth
boosting law firms, but managing
partners predict more legal market
consolidation as firms struggle to be
innovative
Event: Iberian Lawyer Madrid
Roundtable
Host: Allen & Overy
With foreign investors looking to
acquire assets in Spain, lawyers
can play an important role in
giving them the confidence that
potential deals will be successful,
attendees at the Iberian Lawyer
Madrid Roundtable heard. With
some regulators in Spain making
investors nervous, lawyers can
play an ‘ambassadorial’ role and
help to give them assurance.
Meanwhile, there is doubt among
managing partners about the
effectiveness of using artificial
intelligence in law firms.
International investors have
a large appetite for transactions
in Spain, according to Allen &
Overy co-managing partner
Antonio Vázquez-Guillen.
He added that renewable
energy sector disputes are
currently generating significant
opportunities for law firms,
while capital markets work is
also increasing. Vázquez-Guillen
said law firms have an important
role to play in attracting
investors to Spain by acting as
guarantors for the success of
deals. “One of the challenges
for Spain is winning the trust of
investors, the way some industries
are regulated means there are risks,”
he explained. Vázquez-Guillen
added that law firms in Spain are
able to attract the best talent who
can act as the “best ambassadors”
for the country.
International players are
targeting assets in the Spanish
infrastructure, energy and finance
sectors, according to Clifford
Chance Spain managing partner
Jaime Velázquez. “There is more
confidence in the Spanish market,
a few years ago most investment
was opportunistic,” he added. With
regard to law firms’ investment
in technology, Velázquez added
that there is a distinction between
software that makes firms more
efficient and other technology that
can “add value” for clients. “For
example, there are safe platforms
that allow you to work with clients
and add value,” he explained.
The strength of the Spanish
economy is creating many
opportunities for law firms, said
Baker McKenzie Madrid managing
partner Rodrigo Ogea. “Spain has
had the strongest growth in the
Eurozone for the last three years,”
he added. Ogea also said there
were significant opportunities for
law firms in relation to private
equity deals, fintech, blockchain
and the General Data Protection
Regulation (GDPR). He added that
one of the major challenges and
opportunities for many industries
is “digital transformation”. From a
macroeconomic standpoint, Ogea
said that rising oil prices and the
“expected end of quantitative easing
and recent political developments
were creating uncertainty”.
There will be mergers among
law firms, according to Ogea, who
added that most law firms “still
struggle to be truly innovative”. He
continued: “Law firms’ positioning
on digital transformation is key,
clients don’t want to deal with
reactive law firms any more – they
expect innovative legal advisors
with the ability to anticipate legal
threats and opportunities resulting
from disruptive technology.”
Given that in the past five years,
Spanish companies have managed
to adequately refinance, there
May / June 2018 • IBERIAN LAWYER • 41
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