The two faces of Baker & McKenzie

The current economic
situation is presenting new
prospects for Baker &
McKenzie in Spain believe
Luis Briones and Esteban
Raventós, respectively the
Managing Partners of the
firm’s Madrid and Barcelona
offices. There is now a
window of opportunity within
which to expand its profile
among the country’s major
domestic businesses, they
say, and they are starting by
making high profile hires. The
original “global” law firm, the
start of the decade saw some
question its cohesion, but
recent years have seen
renewed focus on re-applying
the glue binding offices.

“We have a very deep penetration
among multinational businesses for who
we manage a very broad range of Spanish
legal issues. But we are still perceived by
some in the domestic market as a foreign
firm and who therefore question the type
and scale of the work we are doing – our
aim now is to alter those perceptions,” says
Briones.

Baker & McKenzie first arrived in
Madrid in 1965 two decades before any
other major international law firm. After 45
years of operation it currently counts
around 200 lawyers across its Madrid and
Barcelona offices. But despite this long
local history Briones and Raventós
recognise that the firm has perhaps
maintained a lower profile than some of
the more recent London or New York law
firm arrivals.

“We have never gone chasing headlines
or had an overt transactional focus. We
have always had a much more balanced
practice and that is why the vast majority
of our clients use us,” says Raventós.

The firm’s practice focus has therefore
always encompassed the range of
corporate, commercial, litigation and tax
issues, they say, the latter both Briones and
Raventós’ own area of specialisation.

“Being perceived as a top firm is for
some reason associated by some with
featuring in the largest M&A transactions,
but these are no longer happening in any
significant volume. In order to be close to
the client we have always felt you have to
have more than transactional expertise,”
says Raventós.

They accept that there is however now
more competition in the firm’s better
known areas of expertise, as the larger
international and domestic firms have
sought to diversify their practices. But the
current business climate is helping Baker &
McKenzie to level the legal playing field,
they believe. It is now looking to raise its
transactional profile and placing greater
emphasis on targeting Spain’s major
businesses.

“We recognise a need to make a bigger
push domestically, to play a larger role in
complex transactions, and to compete
head-on with the other major UK and
Spanish firms,” says Briones.

Notable in Madrid has been the
appointment of Briones’ predecessor Maite
Diez as Head of Corporate, after six years
leading the office, as well as the
recruitment of corporate partner Luis
Casals from Gómez-Acebo & Pombo.

Undoubtedly most high profile however
has been the appointment of Manuel
Pizarro as Principle of the Madrid office. A
former Chairman of Endesa, the Madrid
Stock Exchange and Ibercaja, recent years
have seen him in politics, as a member of
Congress for the Partido Popular.

“Manuel is interesting not merely for
having a political background but
significantly he is able to combine legal and
business expertise. He brings a very deep
market knowledge and is able to connect
with some of Spain’s leading business
leaders, it is a perfect fit with our strategic
goals,” says Briones.

Global changes

The downturn now affecting Spain has
helped play to some of Baker & McKenzie’s
existing strengths, they say. It has not
experienced major revenue falls precisely
because there was no over-reliance on
corporate activity. Labour and tax now
account for almost two-fifths of the firm’s
Madrid revenues, says Briones.

The wider global impact has however
helped prompt a re-evaluation of Baker &
McKenzie’s international strategy and
structure. The geographic spread of the
firm has helped keep global revenues
stable, but there has been recognition of the
need to change certain processes including
unifying pricing structures across offices.

“The global situation has impacted on the way we
are now working and interacting with our clients. But
a significant emphasis has also been placed on
driving internal efficiencies, to reassess our pricing
structures, and to look more strategically at how we
can leverage off clients’ current and developing
needs,” he says.

Internally, the focus may have been on better cost
control and to understand the way past deals have
been structured – you cannot accurately cost matters
if you have no previous experience – but Briones
especially believes that it is not merely cheaper legal
services that clients require. Or that lower fees can
help turn around struggling law firms’ fortunes.

“We see clients looking to reduce the number of law
firms they are using and this will inevitably impact on the
market. We are already seeing some of Spain’s ‘top tier’
firms being very aggressive on pricing but that is not a
sustainable business model. You cannot build a larger
market share on price alone.”

Co-ordination

What clients are looking for is experience, expertise and
greater flexibility, believe Briones and Raventós. Their
firm’s four decades in the Spanish market means that its
lawyers are truly plugged into both the domestic legal
and business reality but are also uniquely placed to help
those businesses now looking to expand internationally.

“The past two years have shown us that we have to
adjust to clients’ changing needs and demands. We have
to be more flexible in the way we work and part of this is
communicating how clients can better work with us.”

The firm is increasingly being asked by Heads of Legal
to suggest ways in which their own departments can
function more efficiently and to better align internal and
external legal provision, they say.

“Legal departments are service providers and well
aware of what does and does not constitute value. But it
is important to know when and to whom to ask the right
questions. We have to work in partnership and for a firm
like ours it can help a great deal if the client also has a
well-organised structure,” adds Raventós.

Co-ordination is also an important element of how
Baker & McKenzie itself works. There is no single Spain
Managing Partner and the Madrid and Barcelona offices
remain two separate entities. But this reflects the firm’s
founding principles, says Briones.

“Baker & McKenzie is not colonial. There is no New
York or London headquarters telling us what to do. The
growth and success of the firm is instead the direct result
of recognising and understanding local differences.”
Collaborative working goes to the heart of what the
firm does on both a domestic and international level. It
clearly helps however that more emphasis is now being
placed on communication between the offices, and that
Raventós and Briones get on well on both a professional
and personal level.

“Baker & McKenzie is not necessarily organised along
geographic lines. Local Managing Partners are more akin
to facilitators and instead there is greater emphasis on
practice level co-operation. In any event, we want to be
very close to our clients and to do that in Spain you need
to have both a Catalan and Castellano face.”

Curious democracy

Baker & McKenzie is a curious democracy, says Briones.
Despite having 700 partners and 3,900 lawyers worldwide
emphasis is constantly placed on building a consensus. “Democracy is not necessarily easy but it is the way in
which we work.”

Post-Enron the firm changed
its structure to a Swiss
Verein, giving greater local
autonomy while at the same time focusing on greater
practice integration. This intention may have also been to
counter the perception of the firm as a franchise, say
others. Nonetheless Baker & McKenzie’s Managing
Partners now meet more regularly and while costs may be
measured locally there is a central profit pool.

“There is a constant demand on partners to vote on
proposals and some pretty complex calculations to
determine the firm’s financial well-being. But the aim
always is to ensure that the glue that binds the offices
remains strong,” says Briones.

An advantage of being a truly global firm and the
emphasis placed on practice area co-ordination is that
teams can take advantage of both geography and time
zones. Likewise Baker & McKenzie can use its economies
of scale to drive further efficiencies.

“Clients use us internationally because we can handle
their needs wherever they may be. We are truly able to
flow matters and issues between offices. But this also
means we are able to take a very broad look at how we
work, what support we need, and how and where this can
best be delivered,” says Raventós.

The firm’s Manila-based Global Services centre came as
a surprise, admits Briones, when he first joined Baker &
McKenzie in 2002 but it is an integral part of the firm’s
infrastructure. A Philippines office was first established in
1963 but the country is also now utilised as a global IT,
marketing, business research and document management
facility, with similar support centres also now functioning
in Mexico and China.

“There has been a lot of coverage recently about legal
process outsourcing and how best to manage ‘back office’
functions but we have been doing this for almost a decade
already,” he says.

Likewise, Baker & McKenzie is placing growing
emphasis on regional Steering Committees to cover
practice across the US, Asia and Latin America – with
which the Spanish offices inevitably have a strong
interaction, emphasises Briones.

He may prefer not to take on the Madrid Managing
Partner role full-time, half of his time is still spent with his
tax practice – “Day-to-day the running of the firm is
largely done by the support and professional staff, they do
not need me to tell them what to do” – but he recognises
the importance of focusing on the continued reshaping of
Baker & McKenzie’s focus.

“My role, and that of Esteban, is to help develop the
strategy of the office and implement this within the
demands of the larger network. The next Chair of Baker &
McKenzie will be a Brazilian lawyer, in Spain as elsewhere
in the world we see new and expanding possibilities.”