Editorial Mar/Apr 09
El presidente del IBA, Fernando
PelÃ¡ez Pier, que participÃ³
recientemente en un desayuno
organizado por Iberian Lawyer,
sugiriÃ³ que los abogados
internacionales estaban sufriendo –
aunque la medicina necesaria para
la enfermedad de la profesiÃ³n
difiere tanto de paÃs a paÃs como de
despacho a despacho.
El centro del debate es si EspaÃ±a
y Portugal van a tener la necesidad
de reducir costes, por ejemplo, de
la misma manera que se estÃ¡n
viendo despidos por todo el mundo,
o si los socios compartirÃ¡n el dolor
y renunciarÃ¡n a sus beneficios.
La incÃ³gnita para todos reside
por supuesto en saber cuÃ¡ndo se
recuperarÃ¡ el mercado. Y cuando lo
haga, Â¿serÃ¡ diferente para siempre?
Â¿Los despachos de abogados
necesitan reorientarse hacia el
asesoramiento de alto nivel
(actualmente en gran demanda) y
dejar atrÃ¡s el ritmo frenÃ©tico de las
operaciones de los Ãºltimos aÃ±os?
IBA President, Fernando PelÃ¡ez Pier, speaking at a recent Iberian Lawyer
leadership breakfast, suggested that lawyers throughout the world are
currently suffering – although the medicine needed to cure the ills of the
profession will differ not only from country to country but also from firm
Central to the debate is whether Spain and Portugal will see the need for
major cost reductions, i.e. the redundancies seen around the world, or whether
partners will be sharing the pain with junior lawyers by forgoing their own
From a US and personal standpoint, Todd Crider, a corporate partner at
Simpson Thacher in New York, told participants that keeping profitability at
market level is a prerequisite for maintaining the reputation of a firm.
However, in Simpson Thacher's case, layoffs would be the last resort; presently
it is successfully out-placing lawyers, for example, to pro-bono projects.
Juan PicÃ³n, who leads DLA's EMEA corporate group, argued that it was
only a matter of time before Spanish firms would have to consider partner
redundancies (which is now, of course, becoming a reality). Miguel
Klingenberg, who leads Freshfields in Spain, considered that high leverage
would work against some Spanish firms – any reduction in work, however
small, reduces profitability quite dramatically at a time when the cost of last
year's pay increases is now being felt.
In Iberia, managing partners agree that cash flow remains the biggest issue.
Some clients are doubling the time they take to pay which means law firms are
having to cover the funding gap of three or four months. For some firms their
bank credit facility is already running into millions of euros.
Some are better placed – GÃ³mez-Acebo & Pombo says it has a €14m cash
reserve which, given its reported 2008 income, means three monthsÂ´ working
capital. Others are not so lucky. The Madrid office of at least one London firm
has already been turned down for a local bank loan.
The great unknown for all, of course, is when the market will recover. And
when it does, will it be changed forever? Do law firms need to reposition
themselves towards high end advisory services (currently in demand in this
crisis) and away from the transactional locomotion of recent years?
While many see the Iberian firms finding it easier going than their
international peers, some managing partners say the greatest challenge is yet
to come. Others believe it will simply be a case of turning back the clock to
Either way, strong leadership will be required. As Manuel MartÃn of
GÃ³mez-Acebo & Pombo expressed clearly, it would be dangerous to make
short-term decisions without the benefit of a longer term vision for the firm.