While Latin America’s largest economies have attracted the attention of international law firms for more than two decades, the region’s Pacific Rim is the newest prize, owing to growth and stability in Colombia, Peru and Chile.

Global firms rooted in the U.S. and Spain are looking to outcompete established local players, and they’re eager to find the right partners to help them do so.

Those firms are aided in that pursuit by the fact that many local firms across Latin America trail behind their international counterparts’ more structured businesses, according to Jaime Fernandez Moreno, a consultant who previously founded Bruchou, Fernández Madero & Lombardi, one of Argentina’s top firms.

“Latin American firms are in the process of becoming more organized, more professional and more institutional,” he says. “While they are doing that, international firms can take advantage of that lag and become more aggressive in these markets.”

The latest examples include Dentons’ recent announcement of a combination with Chilean firm Larrain Rencoret Urzua, approved by its partners in September; DLA Piper’s move into Argentina in August, after earlier tie-ups with firms in Colombia, Peru and Chile; Iberian powerhouse Cuatrecasas’ 2016 alliance with Colombia’s Posse Herrera Ruiz; and Spanish firm Garrigues’ 2015 merger with Colombia’s DLP. There’s also the merger of a Chilean and a Colombian firm with two Peruvian firms into Philippi Prietocarrizosa Ferrero DU & Uríawhich, thanks to an ownership stake from Spain’s Uría Menéndez, now bills itself as the first major “Ibero-American” firm.

The peace agreement in Colombia after 50 years of civil war is driving interest in the country. Another spur is its membership alongside Chile, Peru and Mexico in the Pacific Alliance free trade block. Taken together, the zone is one of the 10 largest economies in the world. All this attention is leading to tough decisions for established domestic firms, which must contend with the new reality of internationalization.

“The top players have had to decide whether to stay independent, pursue a regional model via alliances and mergers, or seek a full-blown merger with an international firm,” says Antonio Holguin, a Colombian lawyer and director with Adam Smith Esq.  

The dynamics are slightly different in the two largest economies in the region: Brazil and Mexico. While a number of top international firms have offices in Sao Paulo, there are sturdy regulatory limitations to what foreign lawyers and firms can do in Brazil, owing to a legal market that consolidated faster and earlier than others, creating a set of large firms that succeeded in pushing for regulations, according to Moreno.

“That will go away at some time,” he says.

In Mexico, meanwhile, consolidation has yet to occur, and small firms are predominant—at least for now. But two firms, Creel and Galicia, are modernizing the way they are structured, and others will likely soon get on board.

“In the next few years it’s going to change a lot, and the international presence will also grow,” Moreno says. “It has to happen due to the size of the market and the fact they are across the border from the U.S.”

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