Riding the Highs and the Lows
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PROFILE Riding the highs and the lows Despite the experience of an almost overwhelming first year, and the subsequent demise of big-ticket M&A, nothing yet requires change in the Latham & Watkins business plan for Spain, says managing partner José Luis Blanco. he last few years have seen There is no denying that Latham has at considerable speculation least found initial success in Spain. surrounding likely new US “As much as I wish it wasn’t true, they corporate law firm arrivals in Spain. have clearly had an unbelievable first year,” TWith interest surrounding not only who says one senior partner at the Madrid office might arrive and the relative market of a competing Anglo-Saxon firm. demand for a new legal player, but also the Despite only officially opening in January suitability of the US law firm model in 2007, Latham & Watkins has already Spain, and the ability of any firm to recruit a featured prominently among some of credible local figure to launch their Iberia’s largest deals of the past year. operation. The firm acted for US private equity (PE) White & Case, Shearman & Sterling and giant, and established Latham client, The Orrick are often among those most Carlyle Group last July on its debut Spanish regularly suggested as potential new €1.48 billion leveraged buy-out of Applus arrivals so it was perhaps surprising that it Servicios Tecnologicos – the largest single was Latham & Watkins that opened its investment yet undertaken by a PE fund in doors in Madrid and Barcelona in January Spain. It also acted for Iberdrola, another 2007. More surprising still, say some, was established client, in the series of the firm’s ability to recruit big-ticket M&A acquisitions it undertook last year, and more partner José Luis Blanco, Head of Corporate recently for Repsol – previously one of at Cuatrecasas, to lead its Iberian entry. Blanco’s clients – in February’s $2.2bn La entrada de Latham Many in the market have since (€1.5bn) sale of a stake in its Latin American & Watkins en enero questioned Latham’s ability to make a subsidiary Repsol YPF to industrial operator de 2007 fue quizás significant local impact, and to establish a Peterson Group, by size the most significant una sorpresa para el practice capable of riding out the highs and Argentinean M&A deal in recent years. mercado jurídico lows of the Iberian economy. Eighteen “Without a doubt we had a first year that español, así como months on, however, and Blanco is happy to exceeded all of our expectations, and many también lo fue el report on the firm’s initial success, and to of these deals were planned and executed fichaje del exdirector demonstrate that predictions of Latham’s directly from our own offices,” says Blanco. de F&A de demise in Spain have been greatly Willingness Cuatrecasas, José exaggerated. Prior to taking the lead at Latham in Spain, Luís Blanco, como Project Gillespie Blanco was at both Cuatrecasas and socio director de las The business case for Latham & Watkins’ Garrigues so he is well placed to assess the oficinas de Barcelona Spanish practice was compiled over a relative merits and demands of the different y Madrid. Tras un weekend in late 2006 to the soundtrack of styles of practice. primer año Dizzy Gillespie’s classic Have Trumpet Will His position at Cuatrecasas, he admits, excepcional, José Luís Excite, reveals its author and now managing was very comfortable on both a professional confiesa que el partner, José Luis Blanco. and personal level and that he had no proyecto es todo un “Gillespie envisaged a top-tier greenfield problem rejecting early advances from reto y que consiste en legal practice with a core focus on M&A, Latham & Watkins. consolidar el private equity and acquisition finance, “When I was first approached I had been posicionamiento de la which could capitalise on the increasing recently promoted and I truly felt that I was firma, crear un sophistication of the Iberian business contributing to the success of the firm in equipo, y adaptarse a market. And that remains the position,” he conquering the very highest levels of the un entorno de negocios cambiante. says. Spanish legal market,” he says. MAY / JUNE 2008 IBERIAN LAWYER 23 PROFILE Nonetheless it was while undertaking a Since launching, in Spain, the firm has review of Cuatrecasas’ own strategic position targeted only what he regards as the key that he began to seriously consider the strategic corporate and finance issues. Ancillary potential of a start-up operation, he says. “The areas such as employment, intellectual attraction of something completely new, with property, and real estate continue to be the brand recognition of Latham, was clearly outsourced as required. appealing. But nonetheless I still told them ‘I Blanco is keen to emphasise also that am not your man.’” Latham has not opened off of the strength of But the idea stuck and when Blanco was one or two major clients, such as Carlyle, and again approached he was asked to draw up an that it is looking to build a practice advising ideal law firm entry scenario. It was a meeting top-tier local clients also. and an outcome that was to eventually lead “The top end of the market clearly has him to formulate his Gillespie plan. barriers to entry, but success is based to a large “I was unexpectedly struck by the degree on individual lawyers with a solid track willingness I found in Latham to be prepared to record of deals. In addition, internationally- come into the market without any pre-defined minded clients now want a law firm with a ideals, and to be ready to listen to outside global reach and strong US law capabilities.” opinions,” he says. The firm’s entry in Spain, say some, was Target greatly facilitated by the work of former Banco Latham’s evolution from a Los Angeles-based Santander Head of Legal for Latin America firm, and subsequent national and international and formerly London based Counsel Juan expansion, has instilled within it a flexibility Manuel de Remedios – who suggest some, laid and ability to adapt to circumstances, believes the ground work for the firm’s entry and Blanco. helped target its current team. The firm officially has no headquarters. Latham in Spain now counts two partners Latham’s Managing Partner, Robert M Dell, is (Blanco and Antonio Morales) and around 20 based in San Francisco, the Chief Operating other lawyers, most located in Madrid. What Partner, Mark Newell, is located in Washington was important for Blanco however was the DC, and Leeam Black the firm’s Chief ability to do deals from the outset and to prove Operating Officer is resident in New York. the firm’s place in the market. “Our own clients and those of Latham clearly took a gamble but Without a doubt we had a first year that exceeded all it gave us the chance to show that we were “ capable of doing what was required.” of our expectations. Latham in Spain is looking to succeed only ” on prestige and reputation, he says. “We will But despite the West Coast origins he insists grow to the size that we feel is necessary for that there is certainly no laid-back California the type of work we want to do and the type of air. “Latham is not a law firm in which the clients we wish to serve. We’re not looking to partners can sit back and wait for work. bring in teams of lawyers.” Internal reporting is measured not along Latham has however made no secret that it geographic or even practice lines but on is willing to compete on salary and to offer individual performance.” remuneration packages at the top end of the Only two partners are released of any client market. For a law firm with reported 2007 work targets, Bob Dell and Mark Newell. The profits per equity partner of $2.2 (€1.4m) Spain remainder must aim for around 1,800 client remains a relatively inexpensive market for hours per year. junior lawyers, particularly when compared to “We have a very strong work ethos,” says the UK or Germany. Blanco. “That helps to support a very flat “The Latham & Watkins brand is management structure. There are very few undoubtedly an attractive one. We offer layers. If there is an issue you are almost defined career paths and have made it clear to immediately talking with the Managing our junior lawyers that we are not going to Partner.” bring in lots of lateral hires and limit their professional development,” says Blanco. Strategy Nonetheless some suggest that Latham is The firm’s willingness to adopt a very narrow still missing important pieces of the practice practice emphasis in Spain is what has helped jigsaw, notably credible tax, finance and Latham attain the recognition it has achieved so competition expertise. Since launching the only quickly, believes Blanco. senior hires have been of energy partner “It was key for the rest of the network that Antonio Morales from Lovells, and corporate we offered credibility. It would not be in the Of Counsel Lorena Vázquez from Clifford firm’s interest to be unable to offer a first-tier Chance. local practice, and to do that we had to be The lack of specific tax and finance focused.” capability is something that Blanco accepts. He states however that such expertise has always The top end of the market clearly has barriers to been a requirement of the Latham plan and that entry,“ but success is based to a large degree on the firm is already out looking for talent.