Wednesday, 19 June 2019 13:14

At the crossroads

SRS Advogados is set to review its strategic plan, and despite ending an alliance with Simmons & Simmons ten years ago, another merger has not been ruled out – managing partner Pedro Rebelo de Sousa says ‘significant change’ is inevitable
 

What next for SRS Advogados? It’s a question that many Portuguese legal market observers are asking and it’s a question that the firm is posing itself. Rumours suggesting that SRS has been in talks about a possible merger with an international firm have been doing the rounds in Lisbon, but it appears that any imminent link-up with a foreign player has been ruled out. But that’s not to say it couldn´t happen at some time in the future. All options are on the table, but first the firm wants to step back and perform an assessment of its current strategy. With its current 2015-20 strategic plan expiring next year, the firm is ready for a shake-up that could involve a substantial change in direction. The firm’s managing partner Pedro Rebelo de Sousa is well aware that, when conducting a strategic review, it can be beneficial to get an external perspective on an organisation’s current position. To this end, the firm will shortly be appointing a new chief operating officer (COO), who is a former banker. The appointment of COOs is an emerging trend among leading law firms in Portugal – in April this year, PLMJ appointed the former managing director of the Portuguese Automobile Club, João Mendes Dias, as its COO. The appointment of SRS’ new COO – who will have an instrumental role in developing the firm’s new strategy – is evidence of an acknowledgement within the firm that it needs the input of “business-minded professionals”. The firm’s leadership recognises that lawyers can have a tendency to focus on issues within clearly defined parameters, with the result that they may sometimes miss the ‘bigger picture’. De Sousa says: “Lawyers are very specific, but we need to have someone [from outside the profession], as we are a service provider.” 

MAGIC NUMBER

So what changes could the firm potentially undergo? It is highly unlikely that the firm will suddenly look to substantially grow its number of fee earners. In the past, the firm had almost 200 lawyers, but there is a feeling that it was too high a number and that the ‘magic number’, as De Sousa, puts it, is around 100 lawyers. At present the firm has 27 partners and 110 fee-earners in Portugal. Like many Portuguese law firms, SRS does not reveal information about its revenue, but the firm is believed to generate around €15 million in income each year. With regard to the firm’s future potential strategy, De Sousa says that size is not important. “Dimension is not the driver, the driver is profitability,” he explains. During the period 2001-2009, the firm was in an alliance with Simmons & Simmons, but though the firm benefited greatly from the link-up, ultimately the two parties decided to go their separate ways. De Sousa served two terms on the board of Simmons & Simmons. “It was extremely educational particularly with regard to the issues facing partnerships,” he says. “Our bet was to be one of the first internationally-minded law firms, all our partners were trained internationally.” Simmons & Simmons was also instrumental in helping SRS to get a clear understanding of the concept of sectorspecialisation and also helped the firm understand and interpret the relevant metrics of each sector, an experience that has improved extremely valuable for the firm. SRS also managed to significantly improve its administrative functions as a result of its link-up with Simmons & Simmons – indeed, it has been a lasting legacy, with some market observers arguing that the benefits accrued as result of the alliance means that SRS remains today one of Iberia’s most sophisticated law firms in terms of its use of metrics and its approach to aspects of law firm management.

CRACKS APPEAR

But once the firm had ´grown up’ in a manner of speaking, cracks in its relationship with Simmons & Simmons started to appear. “When we got to maturity, all the leading firms in Portugal wanted to be ahead of the curve in Portuguese-speaking countries in Africa,” according to De Sousa. However, as De Sousa, acknowledges, ventures into countries such as Angola and Mozambique were seen as a “risky exercise” by firms based in London. In De Sousa’s view Simmons & Simmons had a different approach to international expansion compared to some of its competitors and, as a result, was not prepared to “fully embrace” the ideas of local offices in foreign jurisdictions in the way some of its rivals have. Despite the break-up with Simmons & Simmons, SRS still has a very amicable relationship with its former partner, according to De Sousa. However, he adds that the split also resulted in significant benefits for SRS, namely that Simmons & Simmons’ rivals were suddenly more willing to refer work to the Portuguese firm. “We are now a top choice of their [Simmons & Simmons’] competitors and they represent a sizeable part of our business,” he says. “We have been very happy being independent.”

To read the article in full please download issue N.85 here

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Iberian Lawyer
N.86 • July 02, 2019

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