UPDATE: 3/1/13, 10:30 a.m. EDT. Uria Menendez has released its financials for 2012, which show the Spanish firm’s revenues slipping 4.5 percent to $234.1 million, according to British publication The Lawyer.
In a year unlike most others for their country’s battered economy, at least two top Spanish law firms—Cuatrecasas, Goncalves Pereiras and Gomez-Acebo & Pombo—managed to essentially hold the line in gross revenue terms for 2012.
With the country’s unemployment rate among the young at 55 percent and Spanish banks carrying bad debts totaling $233 million, the question now is whether those firms can continue to weather the nation’s ongoing recession, which worsened in the fourth quarter of last year.
As The American Lawyer reported last September, the nation’s largest firms have been forced to reshape their practice areas amid a bleak economic landscape defined by a banking system verging on insolvency, a once-thriving real estate market that has cratered almost completely, a sharp drop-off in transactional work, and the government’s imposition of strict austerity measures.
In one sign of just how tough times have gotten, Iberian legal giant Cuatrecasas—formed via a 2003 merger between a pair of firms in Spain and Portugal—won a beauty contest by agreeing to charge a mere 1 euro for its services advising on a $45 billion emergency fund created to alleviate the debt belonging to Spain’s regional governments. (Click here for a video of Cuatrecasas partners Rafael Minguez and Fernando Navarro in Madrid discussing their role on one of the largest financial transactions in Spanish history.)
Though that assignment obviously did not contribute to the firm’s topline performance, Cuatrecasas announced earlier this month that its gross revenue had risen 1.2 percent to $330.3 million in 2012, up from $326.3 million in 2011. Cuatrecasas, which states it has 1,012 lawyers and 500 staffers, is Spain’s second-largest firm after Garrigues. Many of the country’s top firms reported flat revenue figures as a result of the country’s economic crisis, according to a story last year by local legal publication Iberian Lawyer. (All dollar figures have been converted using the current exchange rate of 1 euro = $1.34.)
Corporate and commercial work accounted for 34 percent of Cuatrecasas’s business in 2012, tax matters accounted for 32 percent, litigation accounted for 23 percent, and labor and employment–related work composed the remaining 11 percent. Firm chairman Emilio Cuatrecasas—who had tax-fraud charges against him dismissed last year by a Barcelona judge—cited his firm’s forging of a nonexclusive strategic alliance last year with France’s Gide Loyrette Nouel, Germany’s Gleiss Lutz, and Italy’s Chiomenti as helping Cuatrecasas expand its presence internationally.
As noted by The American Lawyer, Cuatrecasas has joined Garrigues and other top Spanish firms in moving to an all-equity partnership model, which increases pressure on underperforming salaried lawyers to either bring in new work or face being forced out of the firm.
In September, Cuatrecasas reshuffled its leadership by separating the roles of CEO and chairman. Emilio Cuatrecasas—whose grandfather Emilio Cuatrecasas Buquet founded the firm that bears the family name in 1917—remained in the role of chairman, while Rafael Fontana was named CEO.
Meanwhile, Spain’s fourth-largest firm, Gomez-Acebo & Pombo, announced at its first general partners’ meeting this month that revenue for 2012 had slipped to $83.3 million, about a 1.4 percent decrease from 2011. The results followed another 8 percent drop in revenue for Gomez-Acebo & Pombo in 2011, a year that saw the firm’s two founding partners pass away, according to U.K. publication Legal Week.
Gomez-Acebo & Pombo, which was founded in 1971 and opened an office in Manhattan last year, reduced the bleeding in 2012 while shedding roughly 10 percent of its 330 lawyers, according to our previous reports. Gomez-Acebo & Pombo also disclosed at its general partners’ meeting that it cut expenses by 4.46 percent in 2012 and boosted partners’ equity by 7 percent as a result of increases in billable hours, average value of cases, and overall productivity. Manuel Martin, head of the firm’s corporate and commercial practice, was also reelected as managing director.
As for the 2,000-lawyer Garrigues, the closure of the firm’s fiscal year in August 31 means it just misses the deadline for inclusion on The American Lawyer‘s Global 100 ranking of the world’s top-grossing law firms, which is published in September. Last year, Garrigues reported a 5 percent decline in revenue to $454.1 million, a number that would have put it in the bottom quarter of the Global 100 in 2012.
The economic doom and gloom surrounding Spain has masked important changes to the both country’s bankruptcy code—as recently reported in The American Lawyer‘s recent Focus Europe supplement— and its labor laws. At the same time, Spain’s dire economic straits have provided some opportunities for corporate work for the country’s largest firms.
Gomez-Acebo & Pombo, Cuatrecasas, and leading Spanish firm Uria Menendez advised on a nearly $270 million debt refinancing for building manufacturer Uralita last November, according to U.K. publication The Lawyer. Spanish banking giant Banco Santander, a longtime Uria Menendez client, is using the firm as it absorbs ailing banking units Banesto and Banif in order to save $684 million over the next three years.
Cuatrecasas, meanwhile, is advising the country’s fourth-largest airline, Barcelona-based Spanair, on a restructuring process after it abruptly collapsed last year. The firm was also hired to work on the proposed partial privatization of a company that provides water to the country’s capital of Madrid, according to reports last year by Bloomberg and the Financial Times.