North American law firms may not be experiencing an overflow of local work, but those active in Latin America are seeing a steady increase in business, helped by growing economies, an increasing number of IPO's, M&A's and international arbitration cases.
Canadian law firms are perhaps benefiting more than their US counterparts due to Canada's recent free trade agreements with Peru and Colombia. Canada's exports levels to the region are growing faster than U.S. or European exports, according to a Latin Business Chronicle analysis. And that trend will continue.
With Peru now being Canada's third-largest trading partner in Latin America, and Colombia, its fifth-largest export market in the region, increased legal work is bound to follow. Of course, the lion's share of the work will remain in Brazil, Canada's largest trading partner south of NAFTA.
US-based law firms, especially those with large M&A groups, are getting a piece of the pie as well. With US M&A volume hitting a five-year low the first quarter of 2008, a number of US law firms have accelerated their foreign expansion programs.
The announcements of new offices in Latin America keep coming: in March, Skadden, Arps, Slate, Meagher & Flom opened it's first office in Latin America in São Paulo, headed by corporate partner Jonathan Bisgaier. In June, Proskauer Rose did the same, with Antonio Piccirillo, partner in the firm's Corporate Department, heading its new São Paulo office.
Most firms opening Latin American offices are not focused on local work. As Proskauer Rose chairman recently noted in an interview with Bruce MacEwen of Adam Smith, Esq. , the firm's corporate practice in Brazil is "almost exclusively outbound work."
The Latin draw is simply a matter of economics. While in April the World Bank revised downward its 2008 growth estimate for Latin America to 4.8% from 5.1%, it's still far better than Canada and the US, estimated at 2.4% and 1.5%, respectively, and better than the estimated average growth globally of 4.1%.
Perhaps looking south is looking up.
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