Madrid annual report 2017 Madrid_2017 - Page 5

Madrid annual report firms in Spain have doubts that US firms will actually take such a step. One says: “It’s hard for me to see opportunities for more US firms in Spain, it’s not a high-fee jurisdiction, I’m sceptical about what the business case is.” Franco says that the legal arms of the ‘Big Four’ are making an impact on the Spanish legal market. “They [the Big Four] have determined growth strategies and are investing a lot in technology,” he adds. However, another partner remarks that there has been an “independence issue” affecting the ´Big Four’, though this has “been diluted” in recent years. Berricano argues that the ´Big Four’ could change the way law firms work in the sense that “clients are splitting up the work [they give to lawyers]”. Meanwhile, Ruiz- Cámara predicts that there will be more consolidation among mid- sized law firms in Spain in future. According to one managing partner, “it’s bad news for law firms” that the ‘Big Four’ are winning a lot of due diligence work. He adds that the more profitable work for law firms is due diligence work for vendors. Another partner remarks that losing due diligence work to the ´Big Four’ should be a concern for law firms because doing due diligence is “wonderful training” for young lawyers. He adds that more traditional law firms have to be careful because when it comes to fees, they are getting “smashed” by the ‘Big Four’. Bernad observes that, in Spain, the ‘Big Four’ have taken a share of big-ticket corporate tax work. He adds: “In addition to corporate, there are big areas of high value added in relation to tax, transfer pricing – which is way to enter into more strategic work – as well as private client, financial products or litigation.” The ‘Big Four’ should not be dismissed and are serious competitors, according to one managing partner. “They are now seen on big deals, they’re hiring talented people from investment banks – due diligence work done by the ‘Big Four’ can open the door for them to demonstrate to clients that they can do other work in a more profitable way.” Another partner remarks that the ‘Big Four’ are well-funded and consequently they have an opportunity to “get What are the biggest management challenges law firms currently face? “In addition to technology, globalisation and talent management. On globalisation, each firm needs its own model suited to its specifics, such as UK or US law capabilities or other cultural and legal models. In our case, Iberoamerica is key. In relation to talent management, the key issue is being able to integrate women into the partnership so that it reflects the percentage of women lawyers they currently hire.” Fernando Bernad, Madrid managing partner, Cuatrecasas “Brexit, and election results in other countries. The need to deal with changes brought about by digitalisation, the use of artificial intelligence and information technology. In this context, new risks are emerging, such as cybersecurity.” Pilar Menor, Spain managing partner, DLA Piper “Adaptability. The more a law firm adapts to its clients’ needs, the more successful it is likely to be. There are a lot of expectations based on how technology will improve the delivery of legal services, but if technology is not able to meet the needs and requirements of clients, it is unlikely to succeed. The environment changes very quickly and adaptation to new scenarios is critical. Law firms will need to train their professionals in a more competitive way, so that they are provided with attributes such as a global and strategic mindset. It is not only about being technically skilled – which is taken for granted – but also being able to perform well in global environments and overcome cultural gaps. Internal policies to support this will be key.” Adolf Rousaud, managing partner, RCD – Rousaud Costas Duran “The crisis has taken a toll on all sectors and fees have been directly affected. Lawyers find themselves obliged to develop new strategies to remain competitive. Moreover, law firms have to deal with risks that new technologies pose, especially due to the huge amount of data they handle. So, for example, law firms have to update and control all IT systems in order to prevent any potential attack that affects their clients.” Jesús Vélez, managing partner, Kennedys Abogados “Competition on pricing is a big challenge law firms face. Clients want efficiency, value and lower costs. In the end, clients can demand these things because law firms need the business. Thanks to mobility and other disruptive technologies, legal professionals are working from home without going to the office. There are more and more lawyers who are doing this and doing quite well. This might be another management challenge for a law firm.” Javier Cremades, founding partner, Cremades & Calvo Sotelo “The biggest challenges are related primarily to compliance. Law firm managers must make sure law firms act within the law, particularly in relation to money laundering, data protection and confidentiality.” Fernando A. Martín Martín, partner, Loyra Abogados “Increasing competition on fees, charging accurate fees, and getting paid.” Francisco G. Prol, partner, Prol y Asociados May / June 2017 • IBERIAN LAWYER • 29 >>