Madrid annual report
Improving Spanish economy and more stable
government boosting M&A and real estate activity
Foreign investors’ growing interest in acquiring Spanish assets could lead to more foreign law firms
opening offices in Madrid
An improvement in the economic climate
and greater political stability in Spain have
boosted activity in the areas of M&A and
real estate, according to EY Abogados head
of legal Félix Plasencia.
According to Plasencia, optimism among
law firms in Madrid has been boosted due
to growing interest from foreign investors
in acquiring assets in the Spanish market.
There is particularly significant appetite
from investors from around Europe, as well
as Asian countries including China.
Plasencia argues that this positive
outlook will encourage foreign law firms
to continue investing in the Spanish
market, and he expects that, in the next
twelve months, a number of international
firms will open offices in Spain. He adds:
“Smaller Spanish law firms, in turn, could
benefit from integration into international
structures which enable access to a wider
market.”
Despite the improvement in economic
conditions, law firms still face many
challenges, according to Plasencia. These
include attracting the best talent and
catering to an increasingly demanding
client base. Clients do not just require
legal expertise, but “seek advisors who
understand their business and can
respond to their specific needs quickly
and efficiently, without a learning curve”,
says Plasencia. Clients also demand
flexible billing practices as hourly rates
are in decline. In terms of talent attraction
and retention, law firms have to adapt
to the expectations that the ‘millennial’
generation bring to the workplace. This
entails the implementation of flexible
working practices, as well as offering “first-
class working environments”, according
to Plasencia. He adds that EY Abogados’
recent move to new premises in Madrid´s
Torre Azca was one of the ways in which
the firm has responded to this issue.
Plasencia adds that new technologies
have a key role to play in the Madrid
legal market, and that in response, EY
recently opened an ‘Artificial Intelligence
Innovation Centre’ in Madrid, which aims
to help clients use client data to improve
their offering.
Félix Plasencia
M&A on the rise, but law firms still face challenges
of increasing profitability and attracting new talent
While an uptick in M&A activity has
created new opportunities for law
firms, the dual challenges of increasing
profitability and attracting new talent
still need to be addressed, says Carlos
Blanco, managing partner of Roca
Junyent’s Madrid office.
“The Spanish economy and legal
market began to recover with real estate
work,” Blanco notes. However, law
firms have experienced an increase in
M&A activity too, largely fuelled by
private equity houses, he adds.
Indeed, Blanco believes the biggest
opportunities for law firms this year
will be in corporate and M&A. He adds:
“Surprisingly, we’re starting to look
again at auction processes – there is high
competition between law firms to get
decent mandates and charge good fees.”
One major challenge facing law
firms is maintaining and increasing
profitability, says Blanco. He adds that
“managing and attracting” new talent
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is another issue for firms as the new
generation of lawyers have different
values.
Increasing efficiency is one way of
addressing such issues as it enables
firms to “offer young professionals more
interesting work”, says Blanco.
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May / June 2017 • IBERIAN LAWYER • 33