Lisbon Annual Report 2017: Looking Brighter
Portuguese law firms are reporting growth in revenue as transactional work increases - however, with some of the country's major assets being acquired by foreign investors, the long-term outlook for Lisbon lawyers is uncertain
Workflow has increased for law firms in Portugal partly due to increases in M&A activity driven by foreign investors targeting the country's real estate and banking sectors. The financial results of the top firms in Portugal give reasons for optimism - the three biggest firms in the country (MLGTS, PLMJ and Vieira de Almeida) all reported double-digit increases in revenue in 2016. However, there are also causes for concern among lawyers - there is a view that with significant portions of the nation's banking sector falling under foreign ownership, Lisbon firms could start losing potential instructions to international firms. Yet, some lawyers argue that this fear is unfounded and that Portuguese law firms will have no trouble in successfully competing with foreign law firms. Economic recovery The good news for law firms in Portugal is their workload is increasing, according to Duarte Athayde, managing partner at Abreu Advogados. "There has been an economic recovery, real estate is strong, particularly commercial real estate, there has been an increase in M&A, and there has also been significant private client activity," he adds. Athayde says high-net-worth individuals from Brazil have been purchasing assets, while compliance and data protection are two areas offering significant opportunities for law firms. During the period 2008 to 2015, Portugal was a bridge to other markets like Africa and Brazil, but now foreign investors are targeting opportunities in Portugal itself, according to Domingos Cruz, partner at CCA Ontier. He adds that there are opportunities to acquire distressed assets in the banking sector as well as real estate assets. "Pension funds and international funds find such assets very attractive," Cruz says. Law firms in Portugal have adapted well to changes in the economy and benefitted from new sources of work, according to Nuno Azevedo Neves, partner at DLA Piper in Lisbon. "Banks continue deleveraging assets and there are new sources of finance, such as fintech." Filipe Lowndes Marques, partner at MLGTS, rejects any suggestions that, with an increasing number of Portuguese banks becoming foreign-owned, law firms in Portugal could start losing banking work to foreign law firms. "Foreign-owned banks are here, but they are supervised by the Bank of Portugal, and law firms in Portugal are in no way inferior. Often the services they...
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