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A clean slate for law firms.
Faced with the crisis, large law firms will look for new ways of pricing their fees. In this financial year, the areas with more potential will be penal, financial, fiscal, procedural, bankruptcy, labour and mergers and acquisitions.
In a time when a great number of sectors must find new avenues, big law firms are no exception. The message is clear: major law firms are to optimise their processes, reduce their costs to the maximum and reorganise their teams.
This is the general strategy, but then comes the small print. They must practice austerity, stimulate talent and strengthen their improved efficiency processes and systems. Furthermore, it is also essential to safeguard the rights of defence and independence of lawyers and define accessibility to the profession. All of which without ignoring other basic aspects, such as flexibility in fees and taking advantage of opportunities in new markets.
Booming specialities
Strictly on the business side, there will continue to be a large volume of work in procedural, bankruptcy and refinancing law. Such companies as Uría & Menéndez and Garrigues, which are very strong in these areas, could benefit from this. But these are not the only areas that will growth.
Branches like international taxation, which includes the financial, the public and the labour sectors also have a promising future ahead. Law firms, such as Landwell-PwC and Gómez-Acebo & Pombo Abogados (which, incidentally, are growing very fast in the Portuguese market), lead these areas of law.
Other law firms that will play an active role are those specialising in mergers & acquisitions. Clifford Chance and Freshfields are the references in this speciality.
And to round off, a tendency initiated in 2009 which will intensify this year: the merger of companies in the Spanish legal sector. Without forgetting that the new general rules for lawyers, Estatuto de la Abogacía, is to be approved this year.
Tax rises
On the fiscal side, the tendencies bring bad news. The general VAT rate will increase by two points, from 16% to 18%, as of July 1st, and so will the reduced rate from 7% to 8%.
Capital gains tax will also go up. The rate applied to earnings on shares, funds, real estate, interest on accounts, deposits or fixed income will increase in two segments. The first 6,000 Euros will be taxed at 19%, one point higher than prior to the reform, and the rest at 21%.
Corporate tax will go down from 25% to 20% for small and medium-sized companies with less than 25 employees. And it appears that Investment Companies with Variable Capital (in Spain known by the acronym “Sicav”) will continue as they are (with a corporate tax rate of 1%).
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Published in Finances and Services by Miguel Ángel García Vega on 25/07/2010
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