Cuatrecasas raises extra €20m from partners in response to Covid-19
Leading Spanish firm gains 'peace of mind' after partners volunteer additional capital
Top Spanish law firm Cuatrecasas has raised around €20m in additional capital from its partners to help it through the financial crisis.
The measure, which was revealed by Spanish newspaper La Vanguardia, boosts the firm’s capital reserve by 25% to €70m.
The voluntary cash call was implemented shortly after Spain went into lockdown on 14 March with all 220 equity partners taking part.
Cuatrecasas chief executive Jorge Badia told the newspaper all the partners took part after a very good year for the firm in a measure that meant it had the “peace of mind” not to have to make use of its €50m credit facility.
The provision to inject partner capital into the firm was originally approved after the global financial crisis but not deployed at that time.
The Barcelona-based firm enjoyed a record year last year with revenue of more than €300m, according to La Vanguardia.
Also known to have taken a similar step in the face of the Covid-19 pandemic is Allen & Overy, which said it had raised its capital levels as part of a package of measures to deal with the crisis while last week Herbert Smith Freehills said it had increased partner capital ahead of the crisis — over the last 12-18 months — putting it in a strong financial position.
In an update to investors on 27 March listed UK firm DWF said it was negotiating additional credit on top of its £80m revolving credit facility as a prudent contingency measure to secure ‘increased headroom for working capital purposes’.
Meanwhile, the interim findings of a survey of 450 lawyers by German legal magazine JUVE found a third of the respondents reporting that partner distributions had been withheld.
And last week Paul Wyse, head of professional practice at Smith & Williamson Ireland, told the Irish Times that law firms were cutting salaries and some were seeking to participate in the Government’s temporary Covid-19 wage subsidiary scheme.
Further reading on the Covid-19 pandemic
A question of timing: the different responses of US and UK elite law firms to Covid-19 — Looming decisions over associate pay and bonuses are a factor in the timing of UK law firm Coronavirus measures
Above all, this crisis too will pass — Rob Millard foresees large law firm mergers and accelerated digitisation in the wake of Covid-19
'It is about being proactive and decisive' — Norton Rose Fulbright EMEA managing partner Peter Scott on the thinking behind the firm's flexible working scheme
General counsel braced for six-month shock to their businesses, survey finds — MoFo poll of 110 GCs finds them making unprecedented decisions as HR issues dominate
'Now is the time for law firms to deliver on their stated values' — Consultant Tony Williams advises law firm leaders to avoid knee jerk decisions and go into communication overdrive during the Covid-19 crisis
Unprecedented response to Covid-19 is 'testament to legal profession's resilience — Stewart Salwin is impressed by how quickly the Arizona courts have adapted to the coronavirus crisis
Staff welfare, supply chain and privacy: the coronavirus-related issues keeping GCs awake at night — Linklaters, Baker McKenzie and Ropes & Gray have published the most sought-after briefings, according to Lexology
'I have realised how powerful technology now is': an Italian lawyer's take on Covid-19 — The lockdown is forcing Italians to embrace digitisation - and that even includes its public officials, writes Gabriella Geatti
Coronavirus risk may be unprecedented, but the fundamental principles of crisis response still apply — Crisis PR specialist Bethaney Durkin advises law firms impacted by the coronavirus to act quickly while avoiding a kneejerk response