Spanish market not comparable to London or New York in terms of fees – law firms find it difficult to charge domestic clients the rates they charge in other jurisdictions
Competition in the Madrid legal market is intensifying with an increasing number of international firms considering opening offices in the city, says Alejandro Fernández de Araoz, partner at Araoz & Rueda.
“Madrid has a highly concentrated legal market for big-ticket corporate and M&A work,” Araoz says. He adds that the fierce competition in the market shows little sign of letting up, with a number of foreign firms having opened offices in the Spanish capital in recent times. “We are still seeing other international firms sniffing around for opportunities,” says Araoz, who adds that more firms may open in Madrid in the near future.
The intensely competitive Madrid market – which, in addition to being home to traditional Spanish firms, also includes the legal arms of the ‘Big Four’ and US and UK-headquartered global firms – means clients have an excellent range of options when choosing legal advisers. Meanwhile, the largest Spanish firms are following their clients into international markets, most notably Latin America. According to Araoz, the increasingly competitive market has a positive impact: “I believe in choice, competition keeps everybody on their toes.” However, international firms face considerable challenges, says Araoz. “The Spanish market is by no means comparable to London or New York in terms of fees – it is exceedingly difficult to charge domestic clients the rates you might charge in another market.”
“Diversity is not just healthy but absolutely necessary,” Araoz continues. However, diversity in the Spanish legal community should go beyond different types of law offices. Of equal importance is the combination of younger and older lawyers, according to Araoz. “The job of a good law firm is to offer clients the seniority and experience of older partners and combine it with the drive, energy and knowledge of new technology brought by the younger generation.”