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Legal globalization in Latin America, by Rafael Suárez de Lezo

Article published by Asuntos legales (La República), 10/8/16

The Spanish legal market has grown enormously since the early 1990's with the arrival of international firms, a process which is now beginning to replicate across Latin America. The foreign firms' 25-year experience in Spain has entailed consequences which, dare we say it, shall also be observed in Latin America.

Historically, foreign firms have entered the Spanish market under one of two models: some decided to create their own firms, recruiting leading Spanish lawyers from local firms, whereas others preferred to join up with Spanish firms already in existence. Our initial belief that the British firms new to the Spanish market would not be able to provide the level of service on offer from local firms - due to our history and experience - was quickly dispelled. In fact, the foreign firms wasted no time in proving that they were more than able to compete without clients even noticing a difference. Thus, the Spanish firms were left surprised at how our former British peers and colleagues - who previously referred cases to us - had become genuine competitors in our market.

Following more than two decades from the arrival of foreign firms in Spain, experience has taught us two lessons which the Latin American firms must not ignore: firms are able to compete more effectively being part of a global organisation, and in international firms, decision making is executed at international level.

The maturity of Latin American markets continues to attract more and more foreign firms. Within this process, the same shall occur as with Spain: some firms will recruit leading local lawyers to establish their Latin American offices, whilst others will absorb already existing firms. In many cases, the international firms present in Latin America will be more competitive than the local firms, and key decision making will be shifted from Santiago, Bogota, Lima or Buenos Aires to London, Madrid or New York. It is likely that international firms will capture more multinational clients than local firms, as occurred in Spain when the British firms from the City advising international clients who also had a presence in Spain began to gain the confidence of such clients and ultimately provided advice thereto through their Spanish office. Thus, the traditional Spanish firms observed how on many occasions the multinational enterprises would leave local law firms behind and begin to work with international firms which had started to operate in Spain.

CMS, a global firm with 60 offices in 34 countries, has launched its expansion strategy to enter into Latin America with a different focus to other firms. CMS is not a British, North American, Spanish, German or French firm, but an EEIG (European Economic Interest Group, similar to a Swiss verein structure, which jointly owns the CMS brand but retains it local identity and uniqueness within each jurisdiction. Belonging to CMS combines the advantages of being an international firm with the autonomy to make decisions at local level. Naturally, some issues are resolved by the CMS Executive Committee. However, local matters - including the naming of partners - are managed independently by each firm without any involvement from the other international partners. A presence in Latin America will no doubt strengthen CMS's global strategy, and the firms which decide to join us will be able to rely upon an influential global organisation whilst retaining a significant amount of independence.  

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La globalización legal en Lationamérica (Asuntos Legales, 10-8-16)
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Portrait ofRafael Suárez de Lezo
Rafael Suárez de Lezo
Chairman Partner
Madrid