We analyze for Confilegal the impact of international directories on the Spanish legal market

Our partner Patricio Espinoza participates in this report of Confilegal, analyzing the impact of legal directories in Spain and the latest decisions of Chambers and Partners for this market, together with Ana Armijo, Director of Business Development, Marketing and Communication at Ashurst, Marina Gómez, Head of Communication, Marketing and Business Development at Marimón Abogados and Ángela Barco, Director of Marketing and Communication at Araoz & Rueda Abogados.

Directories, a thermometer of the Spanish legal market?

Recognition by legal directories such as Chambers and Partners and The Legal 500 is one of the great challenges for law firms today. The fact that the firm or its partners are classified in the rankings is valued as one of the best showcases.

The results of the British directory Chambers and Partners -the most prestigious among the firms operating in Spain- provide highly valuable information to future clients when hiring firms.

This directory has gradually increased its level of specialization in the different markets, something that in the Spanish case has materialized, for example, in the recent segmentation between “Corporate High-end” and “Corporate mid-market”.

A segmentation that the directory has taken a step further by deciding to separate Barcelona from the rest of the Spanish market.What differences are there between the firms classified as “High-end” and “Mid-market”?

Is the differentiation between Spain and Barcelona methodologically necessary? What do professionals think of the latest decisions of the prestigious British directory?The heads of Communications, Marketing and Business Development of three law firms and a consulting firm in the legal sector share their thoughts on the impact of the legal directories and the latest decisions of Chambers and Partners for the Spanish market.

Patricio Espinoza, lead partner of international directories at Gericó Associates, was until 2022 researcher and research associate at Chambers and Partners for Europe and Latin America. On the recent changes in “High-end” and “Mid-market” he points out that “more than a change in the methodology, it is a broadening of the universe of potential lawyers and firms to be classified”.

In this sense, he adds, “instead of making a certain table bigger and inorganic (as would be the case of Corporate in Spain), what is done is to create a new ranking for the practice area to recognize those firms that are strongly supported by their clients, but do not work at the same level of sophistication”.”Now, how accurate this division is in comparison to what actually happens in the market is subject to debate. As far as my expertise in international directories is concerned, it seems to me that divisions like this help the legal services market by rewarding practices that would otherwise have no place,” he says.

Marina Gómez, head of Communication, Marketing and Business Development at Marimón Abogados, points out that “the segmentation of some of these areas in some cases is not representative of the legal sector and encourages division by both firm size and client profile. Therefore, it is important to have a deep knowledge of the sector in each of the jurisdictions”.

Ángela Barco, Director of Marketing and Communications at Araoz & Rueda Abogados, believes that “it clearly gives the option of ranking high quality law firms, but which are not involved in multi-million dollar transactions or media issues”.

In the opinion of Ana Armijo, director of Business Development, Marketing and Communication at Ashurst, “from the outset it seemed like a good idea, but in practice I think the higher bands 1 and 2 of ‘mid-market’ give rise to confusion. From what I have seen, especially in social networks, but also in some media, firms congratulate themselves on having obtained these bands 1 and 2 without specifying that they are ‘mid-market’ and, obviously, it is not the same to be in band 1 in high-end operations as in ‘mid-market'”.

BARCELONA, A SEPARATE JURISDICTION FROM SPANISH JURISDICTION IN CHAMBERS

On the decision of Chambers and Partners to make Barcelona a separate jurisdiction from Spain, Patricio Espinoza states that “without a doubt, this decision is controversial”.

“In my opinion, as a former researcher of this directory, the conditions are not in place to make such a sharp separation between what is a lawyer practicing in Barcelona and in the rest of the country. A lawyer who is ‘ranked’ in Barcelona can perfectly well have enough versatility to provide a good service for clients in the region or in the rest of the country”.

In this case, he stresses, “I am taking a gamble in considering that this decision methodologically lacks a solid justification, considering that the legal services market is complex and increasingly recognizes fewer physical borders. I think it would have left things as they were, with lawyers who could perfectly well be ‘ranked’ in Barcelona and in Spain”, adds Espinoza.In this sense, Ana Armijo also says, “I do not understand the reason, and considering that Barcelona is part of Spain, its lawyers should also be compared with the rest of the lawyers in our country”.

WHAT IS THE STATE OF THE MID-MARKET?

“In recent years, the mid-market has proven to be dynamic and competitive – especially after the pandemic and the global recession that is affecting all economies and jurisdictions – and that is why firms operating in it must be prepared for the opportunities and challenges that come our way,” says Marina Gómez. Ángela Barco is also optimistic in this regard.

“Despite the current uncertain macroeconomic environment and the handicap of sellers’ price expectations, we believe that the M&A [mergers and acquisitions] market is optimistic about the reactivation of operations, especially in the middle market, in the second half of the year, so we expect a greater dynamism in this type of operations”.

For her part, Ana Armijo points out that “it is a market, in general, of smaller firms, which have less sophisticated operations or more recently created firms. I think it is a boiling market, where many new firms have been joining.”

“This distinction between “mid-market” and “high-end” is becoming increasingly blurred and will depend on the firms’ ability to adapt and how they can introduce greater value to their services through an innovative offering or cover legal needs that were not done before,” says Patricio Espinoza.

He adds that “the distinction between ‘mid-market’ and ‘high-end’ firms, in itself, is just a methodological disquisition that Chambers has introduced and is not necessarily connected to the reality of the legal services delivery market.”

LEGAL DIRECTORIES, A STRATEGIC DECISION FOR LAW FIRMS

Marina Gómez, head of Communication, Marketing and Business Development at Marimón Abogados, explains that “legal directories play a key role in that they represent recognition of our excellence and provide guidance, references and recommendations to clients. In general terms, legal directories should be assets that promote transparency and trust in the legal sector”.

In this regard, Ángela Barco, Director of Marketing and Communications at Araoz & Rueda Abogados, indicates that for her firm “it is important to be ranked in the directories of reference in terms of experience, international reputation and research quality, which for us are clearly Chambers and Partners and Legal 500.

Although, obviously, legal directories are not used as the sole selection criteria, they do serve as an external qualifier of the reputation and quality of a firm, as well as a tool used by law firms to support their decisions in hiring lawyers”.In the opinion of Ana Armijo, Director of Business Development, Marketing and Communication at Ashurst, “the main legal directories are like a thermometer that shows the recognition and positioning of a firm in the market. However, they are not always all who are, nor are they all who are in the directories, so their importance must be relativized”.

“I think that in mature legal markets like ours, word of mouth is probably much more important than what the directories dictate. On the other hand, my impression is that in the Anglo-Saxon market, directories are given more importance and there are certain clients, less and less, who by policy can only work with firms positioned in the higher bands.”

Patricio Espinoza points out that “participation in rankings should be part of the general marketing and positioning strategy, independent of the growth strategy. In this sense, a boutique firm that does not have ambitious growth plans should, in order to maintain or obtain leading positions in the market, have a strategy of legal directories. Nowadays, it is indissoluble to participate in legal directories and the general marketing strategy of the firm”.

Regarding the expectations of firms when they apply for a legal directory, Marina Gómez indicates that what Marimón Abogados expects is that “the subsequent evaluation and classification is carried out by researchers who have in-depth knowledge of the legal sector in Spain, the quality and experience of the firm and/or the lawyers involved is objectively validated, the added value and differentiation within the market is taken into consideration and it is recognized that the size of the firms does not always result in a better quality of services”.For Ana Armijo, the goal is to “always try to improve our recognition as a firm in as many practice areas as possible”.

For her part, Ángela Barco points to expectations of a “long-distance race”. “We invest time and effort in each research process to reflect the high degree of sophistication of the matters we handle, although it may not always seem so in terms of value”.

Patricio Espinoza states that “one of the main problems I saw during my years as a researcher at Chambers and Partners was that the firms, with few exceptions, lacked a strategic approach to the applications and tended to present themselves either with unrealistic expectations (for example, to move up bands in consecutive years, to have partners who are not active ranked or to assume that being present in a couple of important deals guarantees them a ranking) or with no expectations at all. In both cases the result was usually disappointing.”

“My advice is that, at the beginning of each research period, teams should set a strategy and focus their efforts on achieving it. For example, Chambers has been known to rank partners first before departments. In that case, instead of distributing referee capital among all partners, the ideal is to set priorities for the year and see which lawyers are most likely to be ranked or improve their rankings,” he concludes.