Just back from a week of meetings with law firms in Sao Paulo, and a few impressions are worth reporting.

First of all, everyone—no surprise—has the political situation in Brazil on their minds front and center. President Dilma Rousseff’s approval ratings are reportedly at 6—7%, an all-time low since polling began in the country after the downfall of the military dictatorship in the 1980’s, and as one of our friends joked, “She’s down to friends and family.” Hard to believe a democratically elected leader in the Western Hemisphere can score lower approval ratings than the US Congress, but I suppose we should count our blessings. Oh, and her four-year term has 3-1/2 years to run.

Second, this has economic consequences. The Brazilian real is at a 12-year low vis-a-vis the dollar (good for us as visitors, of course, but nothing we felt in the least celebratory about) and the country seems to be moving into recession. As one authoritative site summed it up:

March 17, 2015

Brazil’s economy is in the doldrums. GDP expanded meagerly in the third quarter of last year and more recent data suggest that prospects have worsened. The manufacturing PMI entered contractionary territory in February and the Brazilian real fell to a nearly-eleven-year low in March. On 15 March, almost a million people gathered across the country to protest against President Dilma Rousseff. President Rousseff’s approval ratings have fallen to an all-time low amid elevated inflation, a deteriorating economy and a large corruption scandal at the state-owned energy giant Petrobras. Evidence is mounting that a number of politicians, including key members of Rousseff’s coalition government, were involved in a multibillion-dollar kickback scheme. The scandal has increased opposition against Rousseff in Congress and is threatening to derail the government’s attempts at economic reform.

So, third, what does this mean for law firms there?

You may or may not realize (we’d been to Sao Paulo before so we knew) that some of the indigenous Brazilian-HQ’d firms are very sophisticated enterprises indeed. Firms such as Pinheiro Neto, Mattos Filho, Veirano Advogados, Machado Meyer, TozziniFreire, Demarest, and others each comprise hundreds of lawyers and offer a full spectrum of practice areas. Caveat (again, in case you didn’t realize): The Brazilian bar strictly prohibits outside firms from practicing Brazilian (civil) law, so US and UK-based firms with offices there can only offer New York and English law. This will ultimately have to change, but “ultimately” can be a long time.

Fourth: Is Brazil a place to invest now—bottom-feeding mode—or a place still to be avoided—catch a falling knife mode?

It depends on who you ask, shockingly, but our overall takeaway is that the energy, ambition, and sophistication of the Brazilian law firm leaders we met with, together with the sheer size of the country, argue for carefully selected investments in the country. Tellingly, no US or UK firms have pulled up stakes although some may of course have quietly downsized their personnel on the ground (we don’t know one way or the other).

Finally, if your firm isn’t in Brazil and wouldn’t be in a million years, what should you care?

You should care because it’s fascinating to learn that the strategic and leadership issues facing Brazilian-based firms are not so terribly different from those facing firms based in London, New York, Seattle, Atlanta, Toronto, or Frankfurt. Lawyers are lawyers, of a type worldwide. (You belong to a tribe—bet you didn’t know that!)

The issues include:

• Investing for the future vs. consuming today
• How to recruit, train, and professionally develop your talent
• Where to find new, valuable, clients, and how to make them love you and stay close
• Persuading autonomous, skeptical partners who want to run their own solo shops under the umbrella of your firm to get on board with the firm’s overall initiatives
• And deciding what practice areas to invest in, geographies to conquer, and conversely where to pull up stakes and disinvest.

How these dynamics work themselves out is the never-ending challenge of management, and the fight many of you fight, on the ground, every day.  The advantage we happened to have in returning to Sao Paulo after an absence of a few years was akin to meeting a young child a few years later.  The parents saw the kid growing day by day, and may have “missed” the larger picture.  When we returned after an absence, we could see vivid, clear changes in the market had taken place.

This doesn’t mean we’ll move away from New York City for a few years, just to see….  But a lesson learned.  Leadership matters.  Strategy matters.  Putting the one-firm firm first matters.  Take heed.