Madrid annual report 2017 Madrid_2017 - Page 9

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 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. Watch at Iberian Lawyer TV May / June 2017 • IBERIAN LAWYER • 33