Editorial January/February 2011

Difficult times require strong leadership and a clear direction, but also consensus

Los despachos de la Península Ibérica están empezando el año con cautela. Hay una sensación de recuperación de la economía española pero los socios directores en Madrid y Barcelona  mantienen un enfoque pragmático. En Lisboa, donde hay aún más incertidumbre, los abogados tampoco ven motivos para dejar de ser cautelosos.
En efecto, diversos despachos líderes han emprendido un proceso de introspección. Los directores saben que una época difícil exige un liderazgo fuerte, pero el consenso también es importante.
El pragmatismo de los despachos también se está haciendo patente en sus estrategias internacionales. Al entrar en un nuevo mercado, el reto es siempre equilibrar los riesgos con los incentivos , pero parece que los despachos ya no quieren o no pueden permitirse el clavar sus banderas en nuevos territorios: ahora se trata de reforzar antiguas alianzas y crear nuevas. “Venimos en son de paz”, dicen ahora los socios directores; “nunca se  puede tener uno demasiados amigos”.

Iberia’s law firms are starting the year cautiously.
There may be a sense that the Spanish economy has begun to level out, with fears of an EU bail-out subsiding and much needed structural reform in sectors like banking finally now happening, but Managing Partners in Madrid and Barcelona are being pragmatic.
Likewise in Lisbon, where much more remains uncertain, law firm leaders see no reason to divert from their previous cautious approach.
Indeed, a number of leading Iberian firms are going through a renewed process of introspection. Some have been adjusting their management structures – through choice or necessity – adopting clearer reporting lines and re-emphasising (in some cases reapplying) the glue that keeps them together. Management knows that difficult times require strong leadership and a clear direction, but also consensus.
This pragmatism is being seen also in firms’ international strategies. The world is a big place and still full of opportunity. IBEX and Euronext Lisbon clients are increasingly less dependent on the domestic markets after all. But a number of law firms see the need to redefine what it means to be ‘international’. They are looking to reaffirm firm-wide alliances and create new ones along practice lines, while always looking to promote Iberia as a conduit through which to channel business.
Spanish and Portuguese law may not dominate global trade but in many of the most exciting emerging economies Iberian firms can offer a track record of expertise, know how and cultural awareness – all of which command a premium.
When entering a new market the challenge is always how to balance the risks with the rewards, and legal certainty and even the rule of law in a number of these same jurisdictions is questionable, say some Managing Partners.
Consequently firms no longer seem to want (or can afford) to plant their own flags in each new territory, instead it is a question of reinvigorating old ties and making new ones. “We come in peace” Managing Partners now say. “You can never have enough friends.”
And so, as the year begins there is a renewed conservatism. “More for less”, “adding value” and ”cost control” remain the market mantras.
There are now two types of law firms, say some. Those that are working at the same level as last year, and earning 20 percent less, and those that are working 20 percent more and earning the same as in 2010.