April is the
cruelest Latin America month. This month has taken and is taking me to Santiago, Chile, Bogota, Colombia, and Sao Paulo, Brazil, traveling with Adam Smith, Esq.’s Director in Latin America, Antonio Leal Holguin. (Antonio splits his time between Santiago and Bogota.)
Antonio has translated Tomorrowland into Spanish, where it became Mundos del Manana, and we had book launch events in Santiago and in Bogota.
Santiago is a city of 8-million in a country of 18 million, and the only city in the country with law firms as we recognize them. The Santiago event was held at the city’s in spot for the local business and legal community, “Club 50” (its street address is 50); held over breakfast, about 40 managing partners of leading local law firms and senior in-house counsel attended.
Bogota is also a city of 8-million, but in a country of 50 million; while it’s unquestionably The Major City in Colombia, Cali, Medellin, and others are also important and have offices of Bogota firms or local firms of their own.
In Sao Paulo, I’m delivering the keynote at the Latin Lawyer Elite’s annual award ceremony and moderating a panel on diversity.
So: In a total of 10 days in those cities, meeting with leading firms, what’s the landscape?
First and foremost, local firms in Latin America, depending on their local market, are in various stages of dealing with their country’s having been “discovered” by the outside world in general and international law firms in particular. Of the three markets under discussion, Sao Paulo is the most mature by far, Bogota next, and Santiago has just begun to appear on the radar of international firms. (Coincidentally, White & Case’s exceptionally well produced “2017 Annual Review” just came across my desk and it notes that their Sao Paulo office celebrated its 20th anniversary last year.)
What does “being discovered” mean?
For the incumbent firms in a market, the litany of choices is now familiar–and we’ve witnessed this dynamic play out not just in these Latin American markets but in other regions as distinct as Central and Eastern Europe, Canada, and the Pacific Northwest of the United States. What are the home-grown firms’ choices? It depends on where you’re starting from, or what type of firm you are:
- If your firm is a true leading “national champion,” then it’s plausible and feasible and probably in your view desirable to remain independent. You have prestige, elite status, profitable and interesting work, and you’re not feeling existentially threatened by global firms entering your turf.
- If your firm is a local but frankly mid-tier firm, you can also choose to remain independent. You will be opting for lifestyle and being a comfortable and securely embedded member of the community over the promise of higher profitability and a longer-run risk of marginalization. An entirely rational choice.
- Of course, the siren song of merging with an international firm is always (well, at least at the beginning of the invasion) on the table. It can offer immediate worldwide name recognition and liberate you to focus on practicing law and not managing the firm, but you can pay a price in terms of independence, heavy managerial bureaucracy, and clients’ skepticism of patchy quality in global firms.
- Finally, you can parry by joining, or redoubling your efforts at participating in, alliance and referral networks. This provides great flexibility and can be rich in opportunities with little mandatory participation and few non-negotiable obligations. On the other hand, any voluntary, ad hoc structure can come with minimal or nonexistent follow up; and clients can be skeptical, as with global firms, of patchy quality.
Overlaying all of it are macroeconomic and sociopolitical events: The price of commodities, the changing mix of imports and exports, elections and swings from right to left and back again. But through it all, legal complexity seems to grow in only one direction. Good for the industry, perhaps, but the question is whether it will be good for your firm–or someone else’s.