Law firms: small becomes big
In Spain, 90% of the legal market consist of small and medium-sized law firms with often very small structures, but with a high degree of specialization and enormous flexibility and a closeness to clients that was about to be lost in the practice of law. These firms have also integrated new technologies, cloud computing and social networks at great speed. There are even reputable partners of large firms who have moved into these boutiques or set up one on their own.
While the market seems to be dominated by the big four firms, Garrigues, Uría Menéndez, Cuatrecasas and Gómez-Acebo & Pombo, which employ hundreds of lawyers and even figure in the global and European rankings, a large group of much smaller firms have developed, but with a high level of expertise and a growing client portfolio.
Spanish boutiques have been flexing their muscles for some time now. Ceca Magán, Olleros, Broseta, Dictum, Iure, Mijares, González Franco, Adarve, Herrero & Asociados, Blas de Lezo, Lequid, Advisoria, Medina Cuadros, Balms, Cortizo, MLA, Martínez-Echevarria, Montero-Aramburu, L&S, Abdón Pedrajas and a long etcetera have long been competing with the big firms, although in recent months they have opted for aggressive policies in price and the fight for large contracts. A policy that, perhaps, with the prolonged crisis in Spain, they will have to pay dearly for. Many of the firms have built up a clientele in their regional fiefdoms that has finally allowed them to make the leap to Madrid and thus compete in the national market with their lower prices, their individualized attention and their know-how of specialized law, based on a business structure that has grown organically so far.
With access to new, larger clients, they require the support of professionals who know how to handle these accounts, and the boutiques have become acutely aware of this. Bringing in former heads of large firms or partners forced to retire allows them to talk to large clients as well as any of the leaders in the rankings.
Their experience in the more local legal markets, where competition is fierce, has given many of these firms, whose size is tailored to the singularity of the matters they deal with, a stability and knowledge of dealing with clients and commercial skills that many law firms in the capital lack. If we add to that the fact that the structure has generally grown with solid family relationships and then with lateral incorporations, we are facing the miracle of the legal boutiques in Spain.
But it is not enough for small and medium-sized firms to conquer the national market and set their sights on Barcelona and Madrid. Many of them have embarked on the path of internationalization with their own offices in Portugal, Peru, Mexico, Chile, Brazil, or in Eastern Europe, such as Bulgaria, Romania or Poland, in the Middle East, with Turkey, Dubai, and even Asia, with offices in Indonesia, Singapore or China itself. The small ones have taught the big ones that it is possible to be in all those places and be profitable.
The lack of internationalization of the big firms, which barely reach 10% of their turnover outside Spain, has left the small and medium-sized firms many opportunities and a foothold in key markets such as Latin America, the Middle East or Eastern Europe. Many firms operate with their own brand in local offices and guarantee their Spanish clients a perfect knowledge of the international markets and a close treatment as in Spain.
The corporate structure of many small and medium-sized firms is also a key factor in the current situation, where decisions have to be taken more quickly and, above all, have to be communicated and shared with the entire staff. The business culture of Spanish boutiques, based on effort and the search for nearby talent, the basic family structure with few partners, proves its effectiveness in times of change and redefinition of the profession and the practice of law.
The quality of legal services provided by the specialized boutiques and the closer treatment and more flexible and transparent billing of the more generalist commercial law firms lead us to believe that their market share will increase in this time of crisis, which will last for many months. All fishermen win in troubled waters, and these so-called small ones know a lot about fishing.
first published in Cinco Días: