How do the election results in Colombia affect the legal sector?

Andrés Vanegas: “With or without substantive structural changes in Colombia, lawyers will have a lot of work there”

Colombia has a new president-elect, Gustavo Petro, who offers a radical change in the economic and political direction of the country. The prestigious media Law.com has asked our partner Andrés Vanegas about how these electoral results in Colombia affect the legal sector.

The country’s legal community fears that the administration will radically revise the economic model of one of the largest economies in Latin America, following statements by the new president that he will increase taxes on those with higher incomes and abandon oil exploration and minority.

Law firms anticipate that the demand for tax, labor and regulatory advice will increase in the country due to the changes proposed during Petro’s electoral campaign. Some even warn that there will be a slowdown in M&A activity due to investor unease.

Vanegas explains that he hopes that “the current discouraging global economic scenario will inspire Petro to play his cards carefully“. He is optimistic that, “with or without substantive structural changes in Colombia, lawyers will have plenty of work there”.

“A scenario marked by the promise of change brings significant activity for law firms“, adds Vanegas, who further notes the strong demand lawyers experienced even during the worst pandemic days. He adds that “the legal services industry has proven to be resilient, necessary and resistant to major changes both in the world and in Colombia“.

Law.com has also reached out to some managing partners of large firms operating in the Latin American country to learn about their expectations for work under the new administration.

“There is a fear in the international community that Petro coming to power will discourage foreign direct investment“, says Ruti Smithline, co-chair of Morrison & Foerster‘s Latin America practice and co-chair of the firm’s white collar criminal investigations and defense group.

For his part, the chair of Akerman‘s Latin America practice group, Pedro Freyre, explains that “it is perfectly rational to take your money and mitigate your risk when facing a government that is committed to radical change in the economic arena.”

Juan Camilo Rodriguez, managing partner of CMS Rodriguez-Azuero in Bogota, says that “the legal and business sectors should give the new government the benefit of the doubt as it settles in. We trust that private property and the constitutional framework will be respected”.

Thomas Sines, New York-based partner in Paul Hastings‘ infrastructure, energy and Latin America practice, calls for calm: “There is a certain element of political and structural stability in Colombia that is providing some reassurance. Given that Petro’s party does not have a majority in Congress, some of the more extreme policies he wishes to implement are likely to be difficult to put in place.”

It will not be until August 7 when Petro takes office.

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