With law firms in Madrid being forced to reduce fees as the city´s legal market becomes increasingly competitive, targeting mid-market companies could be an effective strategy for some firms, according to Agustín Bou, managing partner at Jausas.
“Local law firms have pursued an aggressive policy of lowering prices,” he says. However, Bou adds that firms have also been able to “cut down up to 25 per cent of their operational costs.”
In response to the challenge of falling fees, firms have taken the approach of targeting specific sectors of the market, Bou explains. “Ours is a mid-sized law firm and we focus on mid-market companies,” he says. Although the firm still handles larger and more sophisticated matters, the idea is to focus on mid-market companies due to their huge workload and limited exposure to major global law firms. “In order to reach a wider mid-market client base, we have strengthened our ‘best-friend’ network, approaching similar law firms around the world,” he says.
Changes in economic conditions in Spain have meant a shift in clients’ needs as well as their outlook, Bou says. Back in 2007, law firms were focused on M&A work, but now Bou says Jausas´ litigation, restructuring and insolvency departments bring in the bulk of the firm’s work. “You have to be a step ahead of your client,” he says. “For instance, we provided advice regarding the new Spanish Companies Act long before it was enacted – you have to anticipate the needs of your clients at all times.”
Bou believes the most significant challenge law firms face in the coming years will be “globalisation and mergers”. He adds: “It is not enough anymore to rely on a best-friend network or to have a representative office in New York, London or Shanghai, because clients are expecting their law firms to practice local law.” As a result of this new trend, Bou says the market will see more mergers among mid-market law firms in the short-term.