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Friends reunited

Thursday, 10 April 2014 (2 days ago) by Rosie Cresswell By opening three offices in Latin America since May, Garrigues has shown its serious about establishing a footprint in Latin America. Rosie Cresswell hears how an alumni network can help instil the Spanish firms culture into its new outposts A lot has happened for Garrigues since May last year. The Spanish firm went from being the international member of a strong Latin American law firm alliance, its own brainchild a decade before, to breaking away from the Latin American members in order to establish its own offices on the ground. Today, it is the only international firm aside from Baker & McKenzie with operations in Colombia, Mexico and Peru, as well as a foreign law consultancy in So Paulo, which opened in 2011. Already, Spains largest firm has gone the furthest among the latest wave of international full service firms that talk of establishing a Latin American footprint, and Garrigues is not stopping there; there are plans for further expansion down the line. When the firm announced it was withdrawing from Affinitas last May, managing partner Fernando Vives was clear about its next steps: The firm would progressively open a network of offices in Latin Americas most relevant countries, beginning with Colombia and then Mexico and Peru by early 2014. The firm stayed true to its word. Javier Ybez, the partner charged with co!ordinating the Latin American efforts, arrived in Bogot at the end of July last year. By Christmas, the office had grown to over 20 lawyers, the main injection of manpower coming through the absorption of a two-partner, six-associate tax boutique, not long after the firm had hired Felipe Quintero as corporate finance partner from leading local firm Brigard & Urrutia, where he was an associate, and other associates from elsewhere. The Lima and Mexico City offices are also now in operation, and while the firm is still in hiring mode, there are already key partners in place. Antonio Bulnes, resident partner in So Paulo since 2011, moved to Mexico City in early 2014 and was replaced in Brazil by Jaime Iglesias, who has relocated from Madrid. lvaro Valle also began 2014 in a new country, moving from Spain to Peru. Garrigues intends to fuel its expansion across Latin America by relocating partners from Madrid and hiring local lawyers who have previous experience with the firm or its education programme. While they come from various firms, four of the lawyers in Colombia (of which three are partners) have a shared history: they have worked for Garrigues in the past. Partner Camilo Zarama (founder of the tax boutique) was an associate at Garrigues Madrid office for six years, while Quintero, who is admitted to the bar in both Colombia and Spain, was there for nine years. Ybez of course was also in Madrid. Its likely that when the time comes to announce local hires in Mexico and Peru there will be some names with pre-existing links to the firm among them. The firm has long invested in its global alumni former employees and students alike and now it is planning to make good use of these networks when hiring in Latin America; while it is not looking to staff its offices exclusively with ex-Garrigues lawyers, it believes having a few in each will significantly help to reinforce the Garrigues culture. As any international firm knows, fostering these networks can bring enormous benefits in terms of referrals, and Garrigues is now seeking to further capitalise on the relationships it has made. Under this new scenario in which Garrigues is seriously expanding its practice in Latin America, the role of alumni networking is crucial, says partner Pablo Olbarri, who is also head of Centro de Estudios Garrigues, the academic institution owned and managed by Garrigues, but which functions independently. Former students and lawyers who have worked for many years in the firm are the natural human capital source for the new offices and practices in Latin America. We have the Garrigues culture in our genetics and that is a key value driver to build a vigorous project. The firm estimates that more than 50 legal professionals in Latin America have spent time at its offices in Spain

Javier Ybez and Pablo Olbarri

after postgraduate studies in Madrid and Barcelona. Meanwhile, 158 lawyers from 20 Latin American countries have attended the masters degree programmes at the Centro de Estudios Garrigues. While some graduates are still working in Spain, most have since returned home to work in Latin American firms. Then, there are further lawyers who have benefited from grants and summer work experience organised by Garrigues in

line with agreements with other firms. The firm keeps track of its alumni with an updated database that tracks their careers and develop!ments in the region, while the Centro publishes a magazine Asocia which regularly includes articles written by Latin American alumni on relevant topics in their jurisdiction, with a particular focus on investment opportunities between Iberia and Latin America. The centre has a number of agreements with top-tier universities in Latin America in order to increase the number of students from the region that attend the Spanish institution. Now, the firm is planning technological developments to strengthen alumni relationships and is organising a number of events in the region. The firm is aware of the value in strengthening this network in Latin America, where relationships mean everything. We have to take advantage of the enthusiasm that this new expansion of Garrigues is bringing about. When we think that this could be the first real global Iberian law firm, were in front of a powerful idea, says Olbarri. A single firm Garrigues said that it withdrew from Affinitas because, while an alliance is a good starting point and a very good tool to have clients being advised in a law you dont practice, it was not sufficient to build the Latin American practice the firm desires. In recent years, we have found we need to be here in Latin America leading the practice in order to have our own culture, quality criteria and policies [and] conflict of interest checking those are things that are difficult to achieve in an alliance, says Ybez. Of course, Spanish firms have first-hand experience of seeing foreign firms open up in a market and compete head to head with the locals UK firms did that in the country some years ago and Garrigues is keen to follow that model."Ybez says the firm wants to open offices in the way top international firms would. We feel there is no one using that model in the region, he adds. Garrigues aspires to be a single firm in Latin America, and part of achieving that ambition requires extending its culture to its new offices. The idea is to have a Spanish partner managing an office of local lawyers in the beginning, with leadership passed to the local team once the office is established and its channels to Madrid and elsewhere are up and running. (Norton Rose Fulbright has just done this in Colombia; Canadian Glenn Faass moved to Bogot to open the office three years ago and has now moved on to set up the firms operation in Rio de Janeiro, leaving the Colombian partners in charge.) At 20 or so lawyers, the Colombian office is now at a size Garrigues is comfortable with. We dont want to be the largest Colombian law firm, says Ybez. We want to be a size that allows us to practise our core practices in Spain. Garrigues lists these as corporate and M&A law, finance, tax, labour, disputes, public law and infrastructure, and it is looking to offer these services in Latin America. For example, in the case of infrastructure,

Felipe Quintero, Camilo Zarama and Carlos Loaiza

There are many projects to be done in Latin America, says Ybez. We think that the Spanish model can be used here in the concession model and financing of these huge projects. In Bogot, 60 per cent of the work comes from Madrid or Garrigues other offices, and the rest is locally sourced. The firm is doing mostly M&A, tax and infrastructure work. We would be happy if we increased the percentage of local clients here, but when we deal with a Spanish client it usually becomes a local client, he adds. Quintero and Zarama explain that even though they are Colombian lawyers they have a deep know!ledge of the Spanish legal system and strong ties with Garrigues professionals around the world, which have helped them instil the firms values regarding client service, quality, and ethical conduct in to the Bogot office. In short, the goal of all of the firms members must not only be to achieve professional excellence, with all that this implies, but also, above all, client satis!faction in terms of clients opinion and perception of our professional services, says Quintero. The Bogot office has access to all of Garrigues resources and systems, including its knowledge management, IT systems, financial procedures, manuals and internal control mechanisms, and uses the same systems. In practical terms any professional of the Bogot office has the same resources of a professional in Madrid, Barcelona, Lisbon or Shanghai to ensure the highest standard of quality in its services, Zarama explains. Garrigues is keen to build strong relations between the Latin American offices themselves and with Garrigues offices in Europe and elsewhere in the world like China, for example. We want to work very closely with those, for instance, in Colombia or Peru to profit from the experience we have in Europe and for them to work well within themselves, says Ybez."Already, Zarama says, We have worked in cross-border deals where several Garrigues offices around the world have been involved, adding that the opportunity to interact with the different countries and professionals gives a richer and greater perspective. The firm is also making the most of its alumni network across the region, in countries where it does not yet (or does not necessarily plann to) have offices. One such lawyer is Carlos Loaiza Keel, partner of Sanguinetti Fodere in Uruguay, who is also a former Garrigues associate and now a global alumni leader. The network makes it possible to be in touch with top professionals with whom I studied and worked for years, and with whom we share a common culture, a culture that has left a mark on all of us, he says. Now that Garrigues has undertaken a serious expansion project in the region, a strong network of human capital, which shares its DNA, becomes a real boon and has a lot of positive externalities for a Latin American professional practice. I believe great synergy can arise from a genuine regional project. Moving on The split from Affinitas was a friendly one. The alliance was founded with a no ceiling philosophy, but when Garrigues was ready for full integration, the Latin American members all leading firms in their own right chose to remain independent and keep their own names, and they maintain the alliance to this day. Had a full-blown merger taken place, it would have been the first large-scale cross-border merger of law firms in

Latin America. Garrigues would have hit the ground running with well-sized, top-tier firms in five of the regions large economies (excluding Brazil: former member Barbosa Mssnich & Arago chose to leave the network, deeming it too narrow for an effective international strategy). The logistical challenges of such a merger would have been colossal, however. From agreeing partner compensation and checking for conflicts of interest to unifying different cultures and egos, bringing five firms under one umbrella would have been a daunting task to say the least. Instead, Garrigues is building from scratch, which has its own, different challenges. The firm anticipates its offices in Lima and Mexico City will grow to a similar size as to the Bogot office. Garrigues is looking to follow a similar path in Mexico to the one it took in Colombia making individual hires and absorbing a tax boutique. Office head Bulnes is an M&A lawyer and it was decided that his skills could be put to good use in Mexico City, whereas the relocation to Brazil of Iglesias made sense given he is an arbitration lawyer. Brazil as you know is not easy for foreign firms. We think we can use Antonio more in Mexico than in Brazil. Jaime as an arbitration lawyer is an easier fit for Brazil, where it permits us to strengthen our international arbitration practice, says Ybez. Garrigues has been slower to staff these offices than in Colombia. Ybez says talks are already underway with key lawyers in Mexico, while the firm is still working out its strategy for Lima. In Peru I think the market is different and may require us to follow a different path, taking into account its singularities, says"Ybez. He says Garrigues is not in favour of merging with or buying a firm as it wouldnt allow it to build its own culture and systems, but it would cherry-pick teams from various firms. For any firm looking to establish an office in a new jurisdiction, finding the right talent is the most important, and sometimes most difficult, task. By narrowing its focus on alumni, albeit not exclusively, Garrigues is giving itself a smaller talent pool to choose from. Garrigues has said that its presence in the region will not be limited to the Affinitas countries Argentina, Chile, Colombia, Mexico and Peru but for now the firm is focusing on phase one before considering the next stage. We have not even decided on locations. The first phase is ambitious by itself,"Ybez rightly says. The firm announced its strategy for Latin America in May 2013, when unemployment in Spain was dangerously high at around 25 per cent. The country was experiencing a severe recession, having been hit hard by the global economic crisis, and is still clawing its way towards recovery."While business at home dried up, it was natural for Spanish law firms and companies that invested in Latin America in the 1990s to look to the region as a valuable lifeline. Garrigues has always played down the link between Spains suffering economy and its decision to invest so heavily in Latin America. We want to grow and our presence in Spain and Portugal is strong enough. These are markets where we could still grow, but it makes little sense to think that Garrigues could still grow in Spain with figures we have. Spain is not a huge market like the UK or the US, so we think that Latin America is natural way for us to expand, says Ybez. The reason is not the crisis in Spain the crisis in Spain is a fact. We hope that its coming to an end and there are indicators that activity in the Spanish legal market is increasing day by day, but this is something different to our Latin American presence. We think we have many things to offer clients and potential clients by being here. Thats something that will not change the way we do business in Europe. Whether Garrigues was pushed or pulled, Latin America is nevertheless a natural destination for an Iberian law firm looking to expand beyond its borders given their shared history, language and cultures. The strategy of establishing a regional presence is one that has grown in popularity, with several other international firms voicing their interest in such expansion. Garrigues has got off to an earlier start that some, and how successful it is in this first phase of expansion will help determine whether or not this Iberian firm has what it takes to build a truly regional law firm. Copyright 2014 Law Business Research Ltd. All rights reserved. | 87 Lancaster Road, London, W11 1QQ, UK | Tel: +44 (0) 207 908 1188 / Fax: +44 207 229 6910

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