Madrid Annual Report
“
Lawyers are no longer
operating in a crisis market. If
you work in an area where there
is investment, you can do well,
there´s a lot of volume and a lot
of deals to be done.
Pedro Pérez-Llorca, Pérez-Llorca
”
staff or revenues – the Madrid legal market is very open,
we need to offer good services at competitive prices,” De
Carlos says. “But the crisis has shown that the Spanish legal
market has performed quite well.” Roca Junyent partner
Isidro del Saz Cordero says Madrid is well placed to meet
the needs of both traditional investors (such as the US,
Germany, France, and the UK) and new actors (such as
China, Russia, and the Middle East). “Above all, Madrid
is in a good position to serve as liaison or bridge to Latin
America for Spanish investors,” he says.
Osborne Clarke´s Madrid managing partner, Rafael
Montejo, says his firm is resisting any temptation to cut
fees. “Despite the strong pressure on the market to lower
fees, we have decided to focus on top level advice and offer
a high quality specialised service rather than a low price,”
he says. “This has had a good acceptance in the market.”
International firms have advantage
Diego Lozano, co-head of the corporate and commercial
department at Ramón Y Cajal, says lawyers have fared well
compared to many businesses. “None of us have suffered
like our clients,” he adds. “There´s a lot of M&A work that
is internationally driven and, in this sense, the international
law firms in Madrid have an advantage over Spanish firms.”
Lozano adds that he does not expect that legal fees will go up.
Meanwhile, Lozano says the legal market in Madrid has
been stable for some considerable time and he does not expect
much to change in the medium term. “Nothing has happened
for the last five years, and nothing will happen in the next five
years,” he says. However, he adds that he expects a “push
from the audit firms” into the market.
José María Alonso, managing partner of Baker & McKenzie
in Madrid, says the audit-related firms have an increasingly
strong position in the market. “They [the audit firms] are now
able to attract strong lawyers than in the past. There used to
be strong opposition to the audit-related firms from the bar
association, but now there is no reaction.” One partner says
that audit firms are able to attract good lawyers because they
are able to offer them more money than law firms.
However, Martín says there is now uncertainty in the
sector largely due to European Parliament and Council
requirements regarding statutory audit of public-interest
entities. “This may affect the position in the market of the Big
Four’s legal and tax departments,” he adds.
One partner says this EU legislation casts doubt on
auditors´ role as both legal advisers and auditors. “We´re not
sure how the EU legislation will affect them,” he says, adding
that while legal fees are “not in their best position”, auditors´
fees are even lower.
Iñigo Berricano, managing partner of Linklaters´ Madrid
office says it is important that law firms adopt some of
26 • IBERIAN LAWYER • May / June 2014
the methods of the large auditing firms. “We
have to learn from our competitors such as the
accounting firms,” he says. “We do not have
the same processes as these competitors have –
for example, how many meetings, and people
attending them, do you really need to have?”
Francisco Pérez-Crespo, managing partner
of Cuatrecasas, Gonçalves Pereira´s Madrid
office, says legal fees are decreasing and “we
are all fighting” for a share of the market. “The
new investors in the market acquiring debts or
assets are coming from the UK and the US, so
the British firms have more opportunities.”
In a similar vein, Lupicinio Abogados managing partner
Lupicinio Rodríguez says the appointment of Freshfields
Bruckhaus Deringer by Repsol, Clifford Chance by Sareb
and Weil, Gotshal & Manges by Ono demonstrates that the
“trend in the legal profession is leaning towards the magic
circle firms”.
However, Alonso says: “I don´t see the US and UK firms
having an advantage within the Spanish market where there
are well established Spanish firms – the main advantage the US
and UK firms have is when Spanish companies invest abroad
because US and UK firms have a presence in many countries
where Spanish firms don´t.”
Downward pressure on fees
Allen & Overy partner Andrew Clark has noticed a
“positive mood” in the Madrid market. “There are more
transactions around and more activity in M&A – there are
a lot of instructions from clients outside of Spain, there
is a lot of high yield activity and more bonds work,” he
says. However, in contrast, Javier Fernández-Samaniego,
managing partner of Bird & Bird´s Madrid office, is “less
optimistic” about the prospects for the Iberian market.
“There was a slowdown in growth during the second part
of 2013, and despite the first half of 2014 being very good,
I have doubts, I think growth – or at least double-digit
growth – will be difficult to sustain” That said, FernándezSamaniego acknowledges that foreign investors are
showing considerable interest in Spain. He also says 20
percent of the firm´s Madrid office revenues are coming
from Latin American-related work, that is, Spanish
investors investing in Latin America.
Lozano notes that clients continue to exert downward
press