Best of Friends International Firms Have Been Building Strong Ties to Local Players in Latin America—And the Connections Are Paying Dividends with Clients
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LATINAMERICA SPRING 2014 BEST of FRIENDS International firms have been building strong ties to local players in Latin America—and the connections are paying dividends with clients. BY CHRIS JOHNSON LEGAL BUSINESS IS ALL ABOUT RELATION- finance cochair at Mayer Brown. “Any ships. Nowhere is this more true than in firm looking to do business here needs to Latin America. understand that you have to put the time With legal markets in the United in to build and maintain those personal States and Europe broadly flat, leading relationships. This isn’t a market you can international firms have been increas- just do on your Blackberry.” ingly eager to tap into the region’s vi- One of the main tools international brant and growing economy. But gaining law firms have used in developing re- access to these dynamic markets is not lationships with local firms—and indi- so simple. rectly with clients—is foreign associate More than two dozen international programs. These initiatives see associ- firms have bases in Brazil and a growing ates seconded from independent firms, number are also present in Mexico, but usually for a period of between three most Latin American economies are in- and 12 months. During this time, the dividually too small to justify a global law attorneys become full employees of the firm having a permanent base. international law firm, which provides For firms, that fact puts the empha- them with training, support and experi- sis on developing and maintaining close ence. The idea is that they then return relationships with local counterparts. home with a favorable impression of the These domestic law firms still hold the host firm, which subsequently results in cards when it comes to market knowl- referrals. Many of the partners at lead- edge, client contacts and, in the case of ing Latin American law firms and the Brazil, the ability to practice local law. general counsel of some corporations “In Latin America, more so than in are alumni of international firm foreign the United States or Europe, personal associate programs. relationships are crucial,” says Douglas “Latin American law firms put a lot of Doetsch, Latin America head and global value on these visiting lawyer programs,” ILLUSTRation BY DAVE WINK and Cabanellas teamed up to advise the underwriters on the $300 million New York Stock Exchange offering of Banco Mac- ro—at the time the first Argentine institution to list internation- ally for almost a decade. (See ‘Coming Together’ for examples of other M&A deals where international firms teamed up with local counsel in Latin America.) Cleary Gottlieb Steen & Hamilton says that more than 220 alumni of its half-century-old foreign associate program are current- ly working at law firms and as in-house counsel in Latin America. “The legal communities in these countries are quite small, so relationships can be very viral,” says Antonia Stolper, Latin America group head at Shearman & Sterling, which has almost 30 partners active in the region. “You can do a deal for a com- pany and someone on that board knows somebody on the board of the next company that is thinking of doing a deal. I’ve had a whole series of deals where the reason I got hired all traced back to one initial relationship.” THE MOVEMENT OF LAWYERS BETWEEN LOCAL AND INTERNATIONAL firms is not entirely one way. Some firms, such as Spain’s Uría Menéndez, also regularly send associates on secondment to local practices. Uría’s international strategy primarily revolves around a network of so-called “best friends”—an alliance of leading in- says Sergio Galvis, head of the Latin America practice at Sullivan dependent firms that also includes Wachtell, Lipton, Rosen & & Cromwell. “They’ve been a real positive in the development of Katz and London-based Slaughter and May. Latin American firms. They’ve become so much more sophisti- Uría has an active foreign associate program that Latin Amer- cated and international in their perspective.” ica practice head Eduardo Rodríguez-Rovira says has more than Sullivan & Cromwell’s visiting lawyers program has been in 250 alumni, of which approximately 40 are now working at cur- place for more than six decades, and the firm says it receives rent or potential clients of the firm. But unlike most interna- several hundred applications for the eight-or-so spots it offers tional firms, Uría has for more than 15 years also systematically each year. Of the nine foreign associates currently practicing at placed senior associates with its Latin American best friends— the firm, three are from Latin America. (One is from Pinheiro Dias Carneiro Advogados in Brazil; Mexico’s Galicia Abogados; Neto Advogados in Brazil, one from Mexico’s Von Wobeser y Si- top Argentinian firm Marval, O’Farrell & Mairal; Philippi, Yrar- erra, another from Aninat Schwencke & Cia in Chile.) The firm rázaval, Pulido & Brunner in Chile; Peruvian outfit Payet, Rey, says that about half of the foreign associates become partners Cauvi, Pérez, Mur; Brigard & Urrutia and Prieto & Carrizosa at their home firms after completing the program, with half of in Colombia; and D’Empaire Reyna Bermúdez Abogados and those ultimately moving into management roles at those firms. Araquereyna in Venezuela. Uría recently worked alongside Dias Around 20 percent of its alumni go on to take senior positions as Carneiro in advising China’s Shandong Luneng Taishan Football in-house counsel. Club on its acquisition of a training center in Sao Paulo—the “THE LEGAL COMMUNITIES IN THESE COUNTRIES ARE QUITE SMALL, SO RELATIONSHIPS CAN BE VERY VIRAL,” SAYS SHEARMAN’S STOLPER. That was the case for one of the Latin American alumni of first investment by a Chinese football club in Latin America. Linklaters’ foreign associate program, Bruno Ferla, who spent Uría initially sent its associates to Latin America for up to eight months with the firm from March 1997. Ferla went on to three years at a time to establish the firm within the region, but become general counsel at Brazilian conglomerate Camargo as its relationships with local firms and clients have deepened, Correa S.A. and is now a partner at Brazilian firm Veirano. In that has dropped to two years in Mexico and one year every- 2008, Linklaters was appointed as project counsel on the $1.85 where else. Uría typically has between six and eight associates on billion Mphanda Nkuwa hydroelectric power plant in Mozam- secondment in Latin America at any one time—a relatively sig- bique, which was developed by Camargo Correa. nificant investment for a firm of just 120 partners. While away, its Similarly, Marcelo Etchebarne, a member of Simpson lawyers generally become employees of their host firms, who pay Thacher & Bartlett’s foreign associate program between 1996 the lawyers’ salaries—and collect their billings. (The disparity in and 1998, is now a name partner at Argentine firm Cabanellas, associate salaries between the United States and Latin Ameri- Etchebarne, Kelly & Dell’Oro Maini. In 2006, Simpson Thacher can countries means the practice is less common among U.S. SOWING THE SEEDS: PROMINENT LATIN AMERICAN ALUMNI OF FOREIGN ASSOCIATE PROGRAMS AT INTERNATIONAL FIRMS Name Foreign Associate Program Dates Jaime Robledo Allen & Overy September 2002 - January 2004 Manuel Echave Pintado Allen & Overy June 2001 - July 2002 Pilar Duarte Allen & Overy June 2001 - August 2001 Juan Pablo Schwencke Cleary Gottlieb Steen & Hamilton 1997 - 1998 Daniel Muñoz Díaz Cleary Gottlieb Steen & Hamilton 2002 - 2003 Daniela Anversa Sampaio Doria Cleary Gottlieb Steen & Hamilton 2003 - 2004 Fabiane Pereira Ortiz Cleary Gottlieb Steen & Hamilton 2011 - 2012 Maria Luisa Petricioli Castellón Cleary Gottlieb Steen & Hamilton 2004 - 2005 Nicolas Piaggio Linklaters September 1997 - November 1998 Bruno Ferla Linklaters August 1997 - March 1998 Marina Bericua Linklaters September 1998 - July 1999 Roberto Guerrero Simpson Thacher & Bartlett 1994 - 1995 Rodrigo Hinzpeter Simpson Thacher & Bartlett 2000 - 2001 Ricardo Coelho Simpson Thacher & Bartlett 1996 Santiago Gutierrez Simpson Thacher & Bartlett 1996 - 1997 Pablo Iacobelli Simpson Thacher & Bartlett 1998 Marcelo Etchebarne Simpson Thacher & Bartlett 1996 - 1998 Clara María Bozzo Mayer Brown 1997 - 1997 Roberto Paes Mayer Brown 2001 - 2003 firms, although Simpson Thacher will shortly send an incoming more than 50 lawyers from its best friend firms, including repre- first-year associate on a secondment to Mexican firm Mijares, sentatives from nine Latin American firms. Angoitia, Cortés y Fuentes.) One exception is Argentina, where Uría has its own branch office. If the firm plans to send a lawyer to Argentina for more than a year, the attorney will remain with MOST INTERNATIONAL FIRMS PREFER TO RETAIN NONEXCLUSIVE the firm and work from its base in Buenos Aires. (Uría always has relationships with a selection of firms in each jurisdiction in at least one associate based in the office full time.) For shorter Latin America. Doing so allows them to gain access to a greater stints, the lawyer will be seconded at Marval. number of potential referrals; provide existing clients with in- “Law is something where local knowledge—knowing the lo- troductions to lawyers with the right expertise and experience cal practices and the right people in the right places—is very im- for any given mandate; and to more effectively manage conflicts. portant,” says Rodríguez-Rovira. “Latin America isn’t something This, however, is not true of all firms. In 2002, Spanish firm that we assign to a specific partner or practice group—it’s a core Garrigues founded the ‘Affinitas’ alliance, bringing together Ar- part of our business. We have relationships with [the local firms] gentina’s Bruchou, Fernandez Madero & Lombardi; Barros & we consider to be the best in each location—doing that on our Errázuriz in Chile; Colombian firm Gomex Pinzon Zuleta; Mex- own by establishing local offices and starting from scratch would ico’s Mijares, Angoitia, Cortés y Fuentes; and Miranda & Amado be too much effort.” in Peru.