Lisbon's law firms demonstrated impressive resilience during the crisis, but while the economic outlook is considerably brighter, managing partners must now guide their firms through unchartered waters
The general feeling among lawyers in Portugal is that Lisbon law firms weathered the storm that was the global economic crisis pretty well. Indeed, the crisis created significant opportunities for lawyers, to the extent that some firms are of the view that the "crisis years" were their best yet. After all, it is economic activity, rather than economic prosperity, that is the lifeblood of law firms. Even in troubled times, when companies are struggling, or worse, going out of business, work related to insolvencies or restructurings can keep law firms extremely busy.
However, there are no signs of complacency among law firm leaders in Portugal. They are shrewd enough to realise that an economy in slow recovery could, in fact, be tantamount to a "worst case" scenario for law firms. Why? It's feasible that Portuguese lawyers could find themselves in a situation where insolvency and restructuring work starts to decrease dramatically as companies gradually begin to experience more prosperous times, but at the same time the economic growth could be insufficient to kick-start a significant increase in M&A work, for example.
So, managing partners in Lisbon still face significant challenges. These include the need to make better use of technology, and the battle to attract and retain the best talent in an age when prospective new recruits may be more demanding when it comes to the terms and conditions of their employment. And this is before we even mention the prospect of multidisciplinary practices being permitted to operate in the Portuguese legal market. But, for the time being, we can forgive Lisbon lawyers if they are breathing a little easier at this juncture - firms are growing and the indications are that, in some areas at least, legal fees could be increasing.
Lawyers identify two major current concerns for law firms - the challenges of profitability and efficiency, and it is these issues that have led to some consolidation in the market. There is a feeling - among some lawyers, at least - that law firms will continue to be extremely competitive on fees, while the issue of multidisciplinary practices is also causing some concern. Nuno da Cunha Barnabé, partner at PLMJ, believes the potential entry of multidisciplinary professional services into the Portuguese market will "put pressure on law firms to restructure the careers of lawyers".
Vieira de Almeida managing partner João Vieira de Almeida says that, in general, law firms have done well since the beginning of the global economic crisis in 2008. "The crisis gave rise to lots of opportunities," he says. He adds that he believes there will be more consolidation in the Lisbon legal market.
One of the problems for law firms will be managing growth, according to Caiado Guerreiro managing partner João Caiado Guerreiro. He adds: "A big challenge is how do you integrate technology - this is an issue that is driving consolidation among law firms, profitability will also be a challenge." Caiado also warns that "in times of expansion, you have to ensure you don't make mistakes, we don't do lateral hires and we don't do mergers, we prefer organic growth". He says profitability will also be a challenge for all law firms.
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