Customarily, albeit not religiously, we share with readers a “Letter From ________” when we return from a plausibly serious trip to another major metropolitan. Herewith our first from Bogota, Colombia.

For orientation purposes, Bogota is a 5—6 hour flight due south from New York: most of the year no time change, at most one hour. Bogota is also a city of 8-million (on a par with New York) in a country of 50-million (on a par with the UK, France, and Germany). Its elevation is 8500 feet—point of reference, as it didn’t seem to present any perceptible difference to us. It’s the largest metropolitan area in Colombia by far, although Medellin and Cali are also important.

Antonio Leal Holguin, our new Director based there, was utterly instrumental in helping set up our meetings and accompanied us throughout the trip.  His demonstrable sophistication, expertise, and quietly sound judgment served to redouble our enthusiasm at having him on our team.

We were there for four days, comprising three full days of meetings with law firms and the “Chamber of Legal Services,” and here’s our overall impression.

Colombia has been discovered.

That is to say, foreign/international law firms have arrived in force and the market disruption they’ve caused have posed questions about the path forward for incumbent local firms which might be characterized roughly as follows:

Position Pros Cons
National champion
  • Prestige: elite status
  • Best local deals, best local clients
  • Profitable & interesting work
  • Intensely competitive
  • Must reward top talent suitably
  • Tied to national economy
Local/national mid-tier
  • Lifestyle
  • Comfortably embedded in the community
  • Limited profitability
  • Almost impossible to move upmarket
  • Potential irrelevance?
Merge with global-international player
  • Instant worldwide brand recognition
  • Free to focus on practice of law
  • Increased flow of sophisticated deals
  • Forfeit independence
  • Managerial bureaucracy
  • Reputational risk if the mother ship’s quality varies across offices
Alliance and referral networks
  • Enormously flexible
  • Potentially rich in opportunities
  • Low in obligations
  • Ad hoc and voluntary structure can invite little follow-through
  • Clients often skeptical of quality and prefer to select “best of breed”

While the influx of non-indigenous firms poses challenges to the incumbents, in our conversations we found realistic and purposeful, dare we say “commercial,” attitudes prevailed. No one would dream of erecting barriers and indeed, Colombia has long had an open market for law firms. This is refreshing.

The landscape of firms spans what would be by North American or UK/EU standards a very wide range indeed. Actually, I need to refine that statement: The landscape of commercial, business-oriented firms spans a wider range. In Law Land across the globe, you find very small, even solo, firms in their first generation next to large, full-service, and organizationally rather mature firms. The difference in Colombia is that the very small and young firms cater to sophisticated corporate clients alongside their older and larger competitors—not the case at any meaningful scale in the North American and European markets.

This makes for fascinating contrasts. We met with firms ranging from “co-ops of lawyers,” where every partner is more or less his/her own profit center and independent business sharing some fixed expenses and overhead, to established firms with highly professional business-side management employing balanced scorecards, pricing and KM experts, and client feedback disciplines.

But not to overanalyze and, misleadingly, dwell on the differences in the market. As has been our experience across many other countries and venues around the world, the challenges law firms face share far more in common than drawing tidy distinctions would lead you to believe. The core set of strengths/weaknesses and opportunities/threats are all close family members in the end:

  • Clients tend to select law firms they already know, or know best;
  • Subject matter expertise and experience is clients’ #1 criterion;
  • Responsive and trust (or rather the lack thereof) can kill you in a heartbeat;
  • Price sensitivity depends; it depends on the consequences and visibility of the matter, and rather often good enough is good enough; and perhaps most important,
  • Structural developments and changes in the market are only getting started.

Without doubt, we shall find ourselves in Bogota again in the near future.

PortafolioBackCover2

Back Cover of “Portafolio,” 14 March 2017. Portafolio is the most widely read business publication in Colombia.

 

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