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Few U.S. law firms have sallied forth into the Spanish legal market, but Latham & Watkins is changing that. Promising that the firm isn’t tilting at windmills, Latham announced Monday that it will open offices in Madrid and Barcelona on Jan. 1. “Spain is actually a very strong economy in Europe and has been extremely active in the private equity markets,” said Latham Chairman and Managing Partner Robert Dell. “There aren’t a lot of U.S. firms with offices there now, but I expect that will change over time.” Focusing on mergers and acquisitions and private equity deals, Dell said, he hopes to have six to eight lawyers in the new offices in the first year. While European financial and legal capitals such as London and Paris have long served as outposts for U.S. firms, Madrid is starting to get some attention, experts say. U.S. firms with large international presences like Jones Day and Davis Polk & Wardwell have expanded there in recent years. DLA Piper and Baker & McKenzie also have offices there. “For a long time it has been somewhat neglected, but I think that’s changing fast,” said Friedrich Blase, a legal consultant with Kerma Partners. “I wouldn’t be surprised to see more U.S. firms going into Spain.” A changing of the corporate guard, a strong economy and more cross-border M&A activity have helped open the insular market, Blase said. Still, it’s not an easy beach to storm because of “a greater cultural difference” for foreign firms. “There’s an entirely different legal tradition with how law firms are run and how the powers are divided in a law firm,” Blase said. “There is a clearer understanding of seniority than we would see in U.S. and U.K. firms.” One way to get over the cultural barriers is to do what Latham did: start up an office with one well-known lawyer instead of acquiring a small firm. “It will inhibit growth, but at the same time you don’t have the same kind of problems you have trying to integrate a law firm that is so culturally different,” Blase said. Blanco, who will serve as Latham’s office managing partner for Spain, has represented a number of large companies in M&A transactions. This year, he represented the Yell Group, the British Yellow Pages company, in its multibillion-euro acquisition of a Spanish yellow pages provider.On the private equity side, he has represented the Carlyle Group in both acquisitions and dispositions in Spain. He also regularly represents Repsol, the largest Spanish oil and gas company. “For us, it was about finding the right person,” Dell said. “[Blanco] is a highly regarded M&A partner at Cuatrecasas and has got a great deal of respect in the market.” Other firms see Spain’s potential, but aren’t making the move. Orrick, Herrington & Sutcliffe Chairman Ralph Baxter Jr. said his firm, which has expanded to mainland China and Moscow in recent years, has no plan to open in Spain. “As we’ve thought about the world and the places we need to be, Spain is certainly the kind of economy with the kind of demands of law practice that a global law firm would consider seriously,” Baxter said. “At Orrick, we are fully engaged in what we already have opened in the past few years.” Shearman & Sterling’s Bay Area managing partner John Wilson said his firm serves its Spanish clients effectively from its nearby Paris office and has no immediate plans to open an office there. “We have limited our international offices to the major financial centers,” said Wilson, who spent time practicing in the firm’s European offices. “In Europe, we’re in London, Paris and Rome and some cities in Germany.” Wilson added that overseas expansions are driven by a number of factors, including clients and lawyers inside the firm. For firms that do want to make the jump to Spain, law firm consultant Blase said there’s still plenty of room. “There are four or five American firms there now,” he said. “That doesn’t show yet the potential of the Spanish economy.”

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