As Latin America's economy grows, so does the United States' intrigue about the potential of setting up in countries like Mexico, Colombia and Brazil. But, says Bruce Lubin, law firms should exercise caution when going down this route.
Few legal practices in Latin American countries are carried out using approaches similar to those used in the United States. For law firms seeking advice on expanding into this region, it’s best to start by keeping an open mind about everything. For firms that have already committed to testing the Latin American waters, it is imperative to know the scenario you’ll be confronting. Not only should you research the broad differences that exist between America and Latin America, but also become familiar with variations from one country to the next. A sampling of these contrasts follows:
• Mindset. Perfecting this kind of change comes with time. Overall, the typical Latin American’s way of thinking puts considerable reliance on personal relationships, which often take precedence over professional capabilities. They also have a much more relaxed sense of time compared to Americans. For example, it’s far more common for them to cancel a meeting, and keep in mind that “mañana” might mean two to three days from now, versus its technical translation of “tomorrow.”
• Hiring Strategies. United States law firms opening foreign offices typically approach it in one of three ways. Either they go all-out and merge with a full-service firm from the start, opening up with a small boutique centered around one practice (generally transactional) and then adding other practices with the goal of a full service office or they open their doors with a limited dream team of two to three rainmakers with their service partners and associates. Each option offers different pros and cons.
• Culture. Latin American values and traits take on both subtle and more pronounced variations from country to country:
Mexico’s people have struggled for years to define their identity; yet, amidst the country’s political insecurity and violent drug trade, adopting a cohesive character hasn’t come easily. Some say Mexico’s identity has been highly influenced by its distinctive relationship to the United States.
Colombia has replaced its national identity with distinctive regional identities. Due to the country’s treacherous geographic landscape, it is divided into three distinct regions: the countryside, the coastal regions, and the interior. There is a lively international business community in Bogota that thrives and boasts hundreds of well-known, established companies that are committed to Colombia for the long run.
Brazil’s culture comes largely from the Portuguese; however, it’s also considered one of the world’s most diverse melting pots. In business, Brazilians tend to deal with individuals, more so than companies. Therefore, establishing a trusting relationship between these individuals is most important and building one must not be rushed. Also, make note that it’s the only Latin American country that doesn’t speak Spanish, but instead Portuguese.
Latin American economies
Overall, Latin America is showing its promise and the United States wants its slice of what could become a very large legal pie. Mexico, a rising star, has maintained this status even with its necessary focus on ridding itself of the drug cartels. The positive outlook for growth comes from witnessing the country’s obvious intention to fix the economy, one example being its recent efforts to enhance trade by building up its infrastructure. Also recent reforms, specifically in energy, telecommunications and litigation, have spurred further investment into Mexico.
Colombia has been turning investors’ heads since 2000. As one of Latin America’s leading centers for economic growth, its regulatory environment in Bogata favors new business start-ups and its workforce is highly qualified. Couple that with the oil booms it’s experiencing and one sees a very different business landscape than existed previously. Bogota has become the safe haven in case Caracas (Venezuela) implodes.
Brazil, on the other hand, a land previously known as the country of the future, is losing its status. Its economic growth is collapsing, largely due to the low rate of foreign investment. Other problems include high taxes, a low level of ease in trading across borders, an uncertain legal climate, and an extremely poor infrastructure.
It’s Worth Doing Right
Law firms capitalising on establishing offices in countries in Latin America is feasible, but it’s not without its obstacles. Firms that have succeeded tend also to have started with a vision toward the future and a three-to-five year plan. Best bet: instead of counting on overnight success, accept that up to five years may pass before seeing the payoff. Shooting for the long-term goal in Latin America is likely the way to do it right.
Bruce Lubin is a Senior Managing Director of Lippman Jungers LLC, a global legal recruiting firm. With more than 10 years’ experience as a legal recruiter, Mr. Lubin has placed groups and individual partners at top-tier law firms around the globe. He can be reached at Bruce@LippmanJungers.com