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IBERIAN LAWYER

BARCELONA ANNUAL REPORT 2011 Finding a new economic formula

An abstract from Iberian Lawyer March / April 2011 For further information please contact maricruz.taboada@iberianlegalgroup.com

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January / February 2011 • IBERIAN LAWYER •


Barcelona Annual Report

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• IBERIAN LAWYER • January / February 2011

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Finding a new economic formula Barcelona is experiencing an ongoing process of change from a primarily industrial economy to one that is increasingly knowledge-led. The transformation is not however one that happens overnight, presenting the city and its law firms with challenges and opportunities.

For new arrivals to Barcelona, the short journey from El Prat international airport to the city centre tells them all they need to know about the changing economic focus and direction of the city, as well as some of the challenges facing both its business and legal communities as they move forward into the 21st Century. The airport’s landmark €5billion south terminal, designed by renowned Catalan architect Ricardo Bofill, offers an example of the changing face of Barcelona. Travelling from which, there is a proliferation of signage for telecoms and digital conferences standing in front of vacant former manufacturing plants. In the city centre, and in contrast to Madrid, the bullring is now Las Arenas, a worldclass music and entertainments venue. On arrival at the Plaça Catalunya the digital connectivity of the city is evident through the availability of free wifi. Despite such modern conveniences this is not to say however that the city’s transition from an industrial and manufacturing economy to a knowledgeled one has been easy, say the city’s lawyers. Systemic challenges faced the city long before the emergence of the global financial crisis in 2007. “As with the rest of Spain, Barcelona is feeling the downturn. We do not exist in isolation. Barcelona is however moving www.iberianlawyer.com

forward, opening to new sectors and new markets. Likewise within the law firm, we can feel the movement and clients are bringing in potential new transactions and projects for the motnhs ahead,” says Joan Roca, Managing Partner of Roca Junyent. The global crisis has negatively affected both the public and private sector in Catalonia, say others. The pressure on the Government’s finances is ongoing, while local business continues to endure the contraction in consumer demand and in financing difficulties. “Catalonia remains the most industrialised of all Spain’s Autonomous Communities, and with an unemployment rate that may be too high but is nonetheless below the Spanish No hay duda de que average. In this complicated climate, local Barcelona ha cambiado el industry remains resistant but we have rumbo de su economía y seen an acceleration of the relocation of seguirá haciéndolo en los business internationally,” says Miguel próximos años. La ciudad Trias, Managing Partner of Cuatrecasas sigue siendo uno de los Gonçalves Pereira in Barcelona. núcleos de la economía The Catalan economy has seen española, pero su poder significant restructuring over the past cada vez depende más few years, with companies engaging in de los servicios y las heavy cost cutting, including massive nuevas tecnologías y se redundancies, says Fernando Rey, aleja de su tradicional foco Managing Partner of Garrigues in industrial. Ello presenta Barcelona. “But many are now looking un reto para la región, to new markets and returning to pero también para los profitability.” despachos. January / February 2011 • IBERIAN LAWYER •

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Barcelona Annual Report

Barcelona Annual Report

Carlos Valls, Managing Partner of local firm Iuris Valls agrees: “Thanks to new technologies and good reputations geographic limitation becomes less significant. The national and international spread of our clients should be taken as an opportunity for recommending us also to their own contacts.” The economic situation and evolution of the region’s economy is therefore raising demand for new types of legal service and expertise. “Barcelona continues to enjoy a strong international reputation and we are seeing the benefit of this, investment is still coming. But clients do face challenges and many are placing more emphasis on their external lawyers to help them overcome them,” says Charles Coward, Senior Partner with Uría Menéndez in Barcelona.

Catalonia has been among the first regions in Spain to implement real cost cutting; its cajas are getting on with the reforms they need and the export sector appears to be doing relatively well. . Antoni Valverde, Freshfields Bruckhaus Deringer

A major pressure for the region’s businesses, as elsewhere, is access to finance. The Spanish financial system as a whole lacks liquidity although the savings bank (Caja) sector is now being restructured as institutions respond to Government pressure to ensure capital adequacy levels are met and maintained. “The cajas’ problems and the regional debt has undermined the reputation of the local economy. However, Catalonia has been among the first regions in Spain to implement real cost cutting; its cajas are getting on with the reforms they need and the export sector appears to be doing relatively well,” says Antoni Valverde, corporate partner with Freshfields Bruckhaus Deringer in Barcelona. Spain’s largest caja, Barcelona-based La Caixa, is one of the few in good health, having passed the Government’s recent round of stress tests and is to restructure into a new listed entity Caixabank. Smaller Catalunya Caixa has not however fared so well and is among the relative few so far to have asked for Government financial assistance. Despite the general economic situation, there are signs of a regional economic recovery, says Sergio Agüera, partner with Pérez-Llorca. “Although we are seeing some positive economic indicators thanks to improved exports by Catalan industry, growth in international and Spanish tourism and a rise in interior consumption, this is likely to be a year of transition. While we would certainly like to be optimistic we also have to be realists.” The upturn has not yet therefore translated into a clear increase in new deals in Catalonia, say lawyers. To date it is predominantly those businesses that have looked to internationalise that are seeing the most activity and the best prospects. Others note that many major Catalan businesses, while clearly affected by the downturn, have however proved more resilient. “As a result of the crisis many Spanish businesses have seen ownership changes and the relocation of significant parts of their operations. But here we still see strong performances by family-owned businesses, which have expanded across Spain as well as in to very competitive markets, like the US and Brazil,” says Esteban Raventós, Managing Partner of Baker & McKenzie in Barcelona. 3

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A change of emphasis Barcelona undoubtedly has attractions. The city is ranked among the best in Europe in terms of quality of life and in which to set up a business. Over the past decade Catalonia as a whole has seen the continued expansion of industries such as chemicals, pharmaceuticals, packaging, agro-food, automobiles and electronics, as well as the growth of sector-led and boutique firms such as Grau & Angulo, Fornesa Prada Fernández and Rousaud Costas Duran (RCD). “An unknown is the Catalan economy’s capacity for investment in research, development and innovation which remains tremendously challenging due to difficulties in securing financing from banks and cuts in public subsidies. Nevertheless, the financial crisis is still viewed as an opportunity for entrepreneurs and those with innovative ideas,” says Enrique Marinel-lo Jordan partner at Monereo Meyer Marinel-lo Abogados (mmmm). There is no doubting the change that is being promoted in Barcelona, says Trias at Cuatrecasas. “We live in a time of change and transition. The knowledge economy and services sectors can present a way forward. There is an abundant network of research activity, medical centres and innovation-focused businesses that now allow us to foresee a situation radically different to that we have today.” The traditional industrial base of Catalonia is therefore diminishing. Industrial areas like textile www.iberianlawyer.com

manufacturing have almost disappeared while Barcelona continues to enjoy a fashion and brand-oriented companies are strong international reputation and increasing, among the region’s leading businesses Mango, Desigual and Pronovias. we are seeing the benefit of this, as The El Valles and 22@Barcelona districts are investment is still coming in. also steadily emerging as technology clusters and companies like Telefónica, Indra and SAP Charles Coward, now have large R&D centres in the city. But Uría Menéndez undoubtedly a continuing challenge is to project the “brand” Barcelona, say lawyers, and to associate the city with high value and knowledgeled businesses. Legal market Lawyers admit however that the transition from Barcelona’s legal market has likewise not proved an old economy to a new economy does not happen immune to the pressures affecting the rest of Spain. overnight, and that barriers to entry do still There is high pressure to reduce legal fees and the exist. “Catalonia, and Spain as a whole, is not challenge is to reflect the changing face of the local always an easy place in which to do business. economy, to add value and the specialisation required of Companies can find a lot of administrative this emerging new generation of businesses. burdens in their way, even when it comes to “The downturn has affected all sectors of the company formation,” says Gabriel Nadal, economy and legal services are not an exception. Our now Managing Partner of the expanding firm has been able to cope reasonably well although our office of Ecija, although previously a partner commercial department has moved from intensive M&A with local firm Jausàs. activity to refinancing and company restructuring,” says Lawyers suggest that further incentives are Mireia Blanch, Managing Partner of Barcelona mid-size also required to encourage these new types firm Bufete B Buigas. of enterprise. “We need greater emphasis Law firms cannot therefore afford to ignore their to encourage more R&D and to attract the established clients, note others. “Our main strategy has headquarters of foreign multinationals to been and will continue to be to stay as close as possible the city. Barcelona already has two of to our clients. The important number of family-owned the best business schools in the world – business in Catalonia is significant in this respect and ESADE and IESE – but the region must creates a number of day-to-day challenges, to offering still primarily focus on innovation, first class service to the companies as well as to family technology and services,” believes members,” says Rey at Garrigues. David Miranda, partner at Osborne Firms also report growing demand for international Clarke. tax planning and contractual work related to The end of 2010 did however see international acquisitions. Many Catalan companies a change in the Catalan regional have embraced globalization but the flow of investment government, which presented a vote clearly goes both ways. of confidence for the ideas of the new Some suggest however that Barcelona is not an Assembly and generated expectations easy market for non-Catalan businesses or law. Others for a resurgence of the economy, say lawyers. Regional reject such opinions outright. All firms’ local offices tribalism has given way to economic realism. are invariably staffed by Catalan lawyers, and firms’ “Over the coming years the main tasks of the international connections are increasingly important. regional Government will be to reduce unemployment “We are truly international and the Catalan market – currently around 600,000 people in February 2011 – knows that. We are one of the best Barcelona-based by creating new long-term investment opportunities, a firms at this sort of thing. We have proven experience recovery of trust in the Catalan economy internationally when it comes to acting as a deal counsel and we have and the opening up of credit lines for small and medium one of the best quality networks behind us,” says enterprises,” says Marinel-lo Jordan at mmmm. Valverde at Freshfields. But other economic issues are also important. Notably the further enhancement of the region’s transport links. Changing places “In my opinion, what is required to make the Catalan Some suggest however that there are emerging winners economy more successful is to increase the investment and losers in the Barcelona legal market, which is seeing required to compete against other European regions,” moves, mergers and new openings. says Agustin Bou, partner at prominent local firm “Undoubtedly mid-sized firms have a greater ability Jausàs. “This relates mainly to infrastructure and in to adapt. Smaller structures also mean lower cost bases, particular, the Mediterranean railway corridor; surface which again helps to better weather the crisis, and in communications and the airport.” the current situation is increasingly attractive to clients www.iberianlawyer.com

January / February 2011 • IBERIAN LAWYER •

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Barcelona Annual Report

Barcelona Annual Report

A pro-Director approach to liability

Barcelona’s courts have taken a strict liability albeit less dogmatic approach to directors’ liability in contrast to the view taken by Judges in Madrid Another firm that has experienced change over the past year is Vialegis Dutilh, the product of a merger between Madrid-based Dutilh and Barcelona firm Vialegis, to create a new top 20 90-lawyer firm, adding to the earlier integration by Dutilh of employment boutique Bufete Caldevilla. “The major response by firms to the crisis will be in terms of gaining efficiency. The winners will be those that are better sized and have a better cost structure. There may be further mergers but the market is already quite ‘dense’ – there is little room for more new players,” says Pablo Usandizaga, co-Managing Partner of Vialegis Dutilh.

We are in a very competitive market and size is a key element in terms of competitiveness, to access to specialised deals and new markets. . Íñigo Igartua, Managing Partner, Gómez-Acebo & Pombo Barcelona

who no longer want to pay ‘brand’ prices,” says José Antonio Soler at local firm Maniega & Soler. Nonetheless the most prominent local players include local champion Cuatrecasas, Uría Menéndez, Garrigues and Gómez-Acebo & Pombo, while Barcelona-based Roca Junyent is considered by many to be doing exceptionally well. All have benefited from their national platforms while some have continued to expand internationally over the last 18 months – Uría Menéndez has opened in China, where Garrrigues, Cuatrecasas and Roca Junyent are already wellestablished. Deloitte Abogados is among the firms expanding locally. Javier Menor, Co-Managing Partner of the firm in Catalonia, is himself a relatively recent recruit from Garrigues. “We see the downturn accelerating a ‘democratisation’ of the legal market and clear new opportunities. Clients’ internal pressures are forcing many to question the status quo when it comes to the level and quality of services they have traditionally received, and we hope to capitalise on this desire for change,” he says. Gómez-Acebo & Pombo is now consolidating its local practice following the earlier integration of leading local tax firm Padrol Munté and the local office of Rodés & Sala. “We are in a very competitive market and size is a key element in terms of competitiveness, to access specialized deals and new markets. The evident fee pressure forces law firms to optimise their management and to plan their strategies,” says Íñigo Igartua, Managing Partner at Gómez-Acebo & Pombo in the city. Other firms are also open to new opportunities. “There is a need for mid size firms to grow, more likely through mergers with other firms, in order to be able to provide the services the clients are asking for. We are already based in Madrid, and do not foresee the need to grow in other places in Spain but we are seriously considering an expansion abroad. In this case, probably Asia is the place, but nothing has been defined yet,” says Agustín Bou, partner with Jausàs. New firms are also arriving in Barcelona with a notable trend among those from Madrid to build a local presence. Last September saw leading Madrid-based IT and media-led firm Ecija integrate Legal Link, and the recruitment of partner Gabriel Nadal from Jausàs to lead the enlarged practice. 5

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Subtle change As with the change passing through the Barcelona economy the transformation of the city’s legal market is perhaps more the result of evolution than revolution. Like the city’s new airport terminal, which took a decade to complete, the adjustment of the local economy and legal market is subtle but cumulative. “Efforts to change the economic emphasis of Barcelona are channeled in the right direction but we have yet to see the scale of new investment, or new economic growth, that would be enough to compensate for the lost industries or the economic losses seen in the construction sector,” says Agüera at Pérez-Llorca. Charles Coward, a veteran of the Barcelona legal market and partner at Uría Menéndez agrees that the process is inevitably a slow one and requires administrative encouragement as much as private investment. “We have been witnessing change in the region since the 1990s, with the delocalisation of traditional heavy industries, the international expansion of family-owned companies and now the arrival of knowledge-led businesses.” But a technology cluster does not emerge overnight. The new Catalan government has made the economy its priority and has therefore taken a “carrot-and-stick” approach, which will undoubtedly increase demand for Catalan products, services and competitiveness, note others. “This is commendable. On the one hand the Administration is making the necessary cuts in spending and on the other hand offering incentives for investment and entrepreneurship,” says Ramon Mullerat, at KPMG. The technological path along which Barcelona is now travelling will be a productive one, hope lawyers. The journey believe many will not only secure the city’s place at the forefront of Europe’s knowledge economy but unlock the means by which their law firms may evolve too. Despite the contrast seen by travellers as they pass through the city Barcelona is however trying to take the shortest route possible to future success. www.iberianlawyer.com

Barcelona has long had a reputation for pragmatic business rules and not many have a better understanding of this than Ariadna Cambronero, Partner and Head of Uría Menéndez in Barcelona. An example is the attitude of the city’s judges towards director liability, which has never been more pertinent than over the past few years, when Spain has experienced a dark economic period with thousands of companies falling into insolvency. Cambronero says that although the Barcelona courts apply a consistently strict approach to liability, it is one that nonetheless favours the director. “Since the late 1990s, the Regional Appeal Court of Barcelona (Audiencia Provincial de Barcelona) has developed a very consistent line of jurisprudence in relation to the responsibility of directors of public and private corporations that has consequently limited the liability of the managers for serious breaches.” The same line has significantly been

imposed in the interpretation of liability under bankruptcy proceedings that, since 2004, has been regulated by the Insolvency Act. The Regional Appeal Court of Barcelona, argues Cambronero, maintains a “restrictive application of the responsibility of directors” in insolvency situations. “By contrast, the Regional Appeal Court of Madrid (Audiencia Provincial de Madrid), has maintained much less of a strict liability stance as regards the liability Ariadna Cambronero of directors, but has nonetheless been less ‘pro-director’ than what we have seen Los tribunales applied in Barcelona,” she says. barceloneses tienen por This interpretative gap is however costumbre realizar una narrowing, believes Cambronero, with the interpretación pragmática capital’s Judges moving towards the more de las normas mercantiles, relaxed approach seen in Catalonia. especialmente respecto “The Madrid Courts are however no a la responsabilidad de more ‘director friendly’ than those in los Consejeros, afirma Barcelona, and are actually extending their Ariadna Cambronero, jurisprudence further into cases where they Socia Directora de la consider that director responsibility is an oficina de Barcelona de issue.” Uría Menéndez.

Taking a holistic view of companies’ needs It is not enough for law firms to look at companies’ issues from a purely legal standpoint, they have to take a wider view of both the cause and effect of the way they conduct their business activities, says Javier Menor, CoManaging Partner in Cataluña of Deloitte Abogados y Asesores Tributarios. “Our approach is not typical of that taken by law firms in Barcelona or elsewhere in Spain, but the goal is to take a more holistic approach to companies’ needs; to look at issues from the legal, regulatory and commercial perspective.” Indicative of this is the firm’s “Corporate Defence” programme, he says. Recent amendments to the Spanish Penal Code have, for the first time, brought the possibility of criminal sanctions against companies, which combined with the liabilities that already exist for company directors, have raised further compliance concerns as regards corporate governance. “We have learnt a lot from the way our

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peers within Deloitte look at companies’ financial or auditing needs. Especially when it comes to criminal behaviour, tackling the issue after the event is always too late. The intention must always be to offer pre-emptive advice and to address issues before they become legal problems.” This means more than implementing “tick-box” compliance programmes. “You have to understand the way in which the company operates, the checks and balances already in place, and even the business culture itself. On the face of it, little of this is pure ‘law’.” His team spent much of the past year talking to clients about the potential impact of the reforms, and now they are in place, they are exploring what the next regulatory outcomes may be. “The threat of criminal sanctions, fines and the reputational damage a conviction may bring all act as strong incentives to promote better governance and our mandate is to help make sure this happens,” concludes Menor.

Javier Menor

Los despachos ya no pueden analizar los problemas de sus clientes desde un punto de vista estrictamente legal; tienen que adoptar una perspectiva más empresarial, según Javier Menor, Socio Director de la oficina de Barcelona de Deloitte Abogados.

January / February 2011 • IBERIAN LAWYER •

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Barcelona Annual Report

Barcelona Annual Report

Overcoming the regulatory barriers to doing digital business

Maintaining a forward-looking view

Online business is inevitably international in reach but the way national regulators address issues can bring competitive advantages and disadvantages

Barcelona’s knowledge economy is increasingly more significant albeit the change is more evolution than revolution

Differences in regulation between Spain, the EU and markets such as the US are having a direct impact not only on Spanish businesses’ competitiveness but also the willingness of foreign companies to invest in the country, says Barcelonabased IT and digital business specialist Judit Barnola, a Lawyer with Osborne Clarke. “Regulatory fragmentation is one of the main obstacles to cross-border Judit Barnola transactions and US-based online companies notably see it as a barrier to entry into Europe, because of the additional cost of complying with national laws that regulate consumer or data protection rights.” When it comes to businesses such as social networking services the challenge is even greater because of the complexity of issues affecting privacy, data collection, retention and cross-border transfer, she says. Privacy has become a priority regulatory issue within the EU but which may have produced an overprotection of personal data. “Efforts have been made to bridge national regulatory differences between the EU and US through a `Safe Harbor´ framework, for example, but this has not proved sufficient for European regulators in the social networking market. The EU has declared concern about the protection of users’ data and the movement of personal information especially to the US.” The US has announced an intention to improve data regulation as a result of the growth of social networking and online services, she notes, but it remains pending. However almost all social networking sites have a Privacy Policy and the trend is towards a “best practice” for users regardless of where they are based, notes Barnola. But again such Las diferencias regulatorias entre España, practices may not meet all EU privacy standards. la UE y Estados Unidos “A very relevant issue surrounds tienen un gran impacto en younger users’ access to social networks. la competitividad de las Spanish law stipulates a minimum age empresas españolas, así como en la voluntad de las of 14, which domestic players like Tuenti adhere to, while sites such as Facebook empresas extranjeras de adopt a minimum age requirement of invertir en el país, afirma Judit Barnola, especialista 13. It means domestic operators are losing market share while the issue may en tecnologías de la be further complicated by pending EU información de Osborne regulation that will set a minimum EUClarke en Barcelona.

There is no doubting the economic challenges facing Spain and Barcelona, but the region is looking towards a new future, says Joan Roca, Managing Partner of Barcelona-based Roca Junyent. “It is not possible to avoid the changes that have impacted on Catalonia over the past decade. Barcelona was already feeling the impact of globalisation, manufacturing has relocated away from the region, and the real estate markets have suffered. But new business sectors are emerging.” There is a tangible entrepreneurial spirit to the city but the transformation into a knowledge economy will not happen overnight. However new matters are arising and sectors emerging. Over the next decade the focus of the Barcelona economy will change, he believes. “Innovative industries are emerging and Barcelona remains very attractive internationally, new business is coming to the city. We may not see consistently large

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based social network user age at 16.” So long as there is a discord between US and EU legislation, European companies will be at a distinct competitive disadvantage when competing with US based social networking sites, she believes. “However more fundamental differences also impact on the competitiveness of Spanish businesses: minor progress has been made in relation to the incorporation of online companies but Spain lags a long way behind the one or two days required to set up a new entity in the US. And any benefits do not generally apply if the company has an international component or a more complex structure,” says Barnola She increasingly splits her time between the firm’s offices Barcelona and in Palo Alto in the heart of California’s Silicon Valley. The duplication of legal controls or incomprehensible requirements before local authorities – such as the Spanish requirement to present a foreign director’s tax ID at a police station – are also difficult to explain to a foreign company willing to invest and create jobs in cities like Barcelona. Other handicaps relate to access to financial support. “In the US, venture capital has existed for decades but remains relatively new in Spain and is not usually available for start-ups. Unfortunately, many Spanish technology entrepreneurs share the idea that they must go to Silicon Valley to find investors with the ability to understand their business models and pledge their support.” With no harmonised international way of operating, online businesses also create atypical legal challenges, she says. For example, in determining jurisdiction or which law applies to global networking sites. “Moreover, it has to take into account that businesses selling products online will not avoid rules regarding national consumers whatever parties’ choice of law – in particular, obligations related to consumer guarantees, unfair terms and distance selling contracts. Although we may think that even in the EU such obligations are more or less homogeneous this is still not so,” concludes Barnola.

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investment by companies of the type seen in previous decades, but the companies now choosing Barcelona will have a transformative effect. A cluster mentality will develop and ‘start-ups’ will emerge.” The impact of the consumer slowdown has been felt, and the global financial crisis has had an impact on the banking, finance and private equity sectors. These are significant areas of local activity but not on the same scale as in Madrid, he says. Indicative of his optimism in the city’s economic potential over the medium-term, Roca Junyent has taken leases on two additional floors in its Barcelona building. “Barcelona is fortunate to have a very diversified economy and there remains consistent interest in the city as a base for R&D. Fewer companies may make goods here but technology, chemical and pharmaceuticals businesses are locating their headquarters. The Barcelona brand remains hugely significant,” says Roca.

Joan Roca

Barcelona se enfrenta sin duda a dificultades económicas, pero la ciudad ya está mirando hacia el futuro, opina Joan Roca, Socio Director de Roca Junyent.

Understanding the context of financial mis-selling claims

One of the most difficult aspects of the banking collapse has been unpicking the complex financial products “mis-sold” to customers, says Enric Olcina, a Partner with KPMG Forensic in Barcelona. “We are explaining these products to judges, the balance of rights and duties, and the economic situation when the products were sold, and are now seeing movement away from judges favouring customers over the banks.” This could be, he says, due to a better understanding of the economic context in which the products were sold. Year-onyear interest rate rises may seem a long way off, but the financial crash appears to have given many people short memories. “A large number of claims relate to the interest rates crash in 2008, prior to which Spain had average interest rates of fourfive percent. The expectation was that this would increase and customers wanted to hedge against it but then interest rates fell dramatically, below one percent.” Very quickly, customers stopped receiving compensation and started to

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receive charges on the difference between the new rate and those they had hedged against. Throughout 2010 this prompted claims from customers who argued that they had not been properly informed of the risks and charges they incurred. “It is now easy to argue that these products should be treated as complex structures, but we believe many were not and, in fact, they presented a relatively easy way to hedge against interest rates which both customers and the banks expected.” He is now advising in claims where judges were initially reluctant to accept the institutions’ position. “Now we are seeing a more reasoned understanding of the background of cases and the sense the financial products made, which is good news for banks.” This seems likely to prompt a shift in the trend of dispute resolution, believes Olcina. “Possibly because judges now have a better understanding of the prevailing economics, and more examples and information demonstrating the unpredictability of this downturn in rates.”

Enric Olcina

Tras el colapso de la banca se incrementaron los litigios por venta “engañosa” de productos financieros a particulares. Sin embargo, Enric Olcina, de KPMG Forensic en Barcelona, afirma que ha habido un giro en la tendencia favorable a los bancos por parte de los jueces, que antes solían dar la razón a los particulares.

January / February 2011 • IBERIAN LAWYER •

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Barcelona Annual Report

Barcelona Annual Report

Reflecting the changing IP face of Barcelona

Removing the barriers to new business growth

Evidence of Barcelona’s reinvention as a city of modern industry and technology can be found in the changes evident in the city’s own law firms

Alejandro Angulo

Jorge Grau

New investment opportunities are emerging in Barcelona and entrepreneurial creativity continues to overcome bureaucratic barriers

Barcelona intellectual property (IP) European Union.” litigation boutique Grau & Angulo Only 20 percent of the firm’s clients counts a wide range of multinational are Spanish, they say. The strategic focus companies across the high technology, is towards IP litigation and advice rather fashion, pharma, mass consumer and than filing work with the Spanish Patent automotive industries as clients. It could and Trademark Office. Grau & Angulo be held up as an example of the industrial has grown significantly since it was and entrepreneurial spirit that Barcelona founded in 2003 and now counts around attracts and fosters in the people who 26 lawyers and seven partners. The firm is work there. also now building a dedicated Knowledge But this only tells half the story, say Management department for clients. the firm’s lawyers. Grau & Angulo has One reason why boutique firms also capitalised on a fairly recent shift continue to find success in the economic in the legal market in which boutiques downturn is because of the ever shrinking have thrived. Their success, they say, is budgets of in-house legal teams, they say. no more down to the Barcelona economy “A consequence of being specialised is than that of Belize. that while charging the same hourly rates, “It isn’t very important in which part of one can get the job done more efficiently Spain we are located,” says Co-Founding so fewer hours are needed,” says Angulo. Partner Alejandro Angulo. “We always “We have seen companies, such us deal with our foreign clients’ company those in the fashion industry, trying headquarters abroad.” to optimise their strategies so they can And here lies the paradox for Western maintain the same levels of enforcement European cities. while maintaining With almost the same budget. We have seen companies, such all traditional This can only be us those in the fashion industry, manufacturing achieved with a having relocated high degree of trying to optimise their strategies so to the East, be it specialisation.” they can maintain the same levels of Europe or Asia, With such modern industries optimism, the enforcement while maintaining the like IT, life sciences firm is therefore same budget. This can only be achieved relatively relaxed and design are as attractive to law about the outlook with a high degree of specialisation. firms as sectors for the years such as the textiles, automotive and steel ahead but nonetheless remains careful not production they increasingly replace. to over-extend itself. But, say Angulo and his Co-Founding “We will hire two or three more lawyers Partner Jorge Grau, Spanish IP law is during 2011, but growth is not our primary not centred in any particular location. goal. We are a potent but manageable size Instead, its reach is both nationwide and right now. But who knows, the increasing international, reflecting the geography of demands of our clients could force us to “big brand” clients and the nature of the expand further,” says Grau. cases they engage in. Interestingly, Barcelona can claim some It is a theme that reveals the macro ownership of its IP lawyers. The city has a challenge faced by Western European thriving Court of Appeal and Judges with cities, including Barcelona, that compete deep commercial awareness, probably for industries that now operate in a global with the highest degree of specialisation market. in the country. “Our cases are not only presented “This is one of the reasons why, before the courts of Barcelona because the traditionally, Barcelona always attracted competent court depends on the domicile good lawyers,” explains Angulo. of the defendant,” says Grau. “We Although with the specialisation of regularly also present cases in Madrid other courts such as Alicante, Barcelona (where we have an office), Valencia and is no longer the only one in terms of IP Alicante – specifically because of its specialisation, he adds. Perhaps not, but community trademark and design court, it cannot do the city any harm to have whose judgments impact across the historic roots in an expanding market.

La transformación de Barcelona como ciudad de nuevas tecnologías se hace notar en los despachos, que ahora tienen una variedad de clientes en los sectores de la moda, el automóvil o la tecnología punta. Para Alejandro Angulo y Jorge Grau, de Grau & Angulo, ello plantea retos sobretodo en PI claves para la competitividad internacional de las empresas. 9

• IBERIAN LAWYER • January / February 2011

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In the face of the global downturn and challenges facing Spain as a whole, new investment is still arriving although companies face more administrative barriers than ever, says continuing challenges, says Gabriel Nadal, Managing Partner of the recently enlarged Barcelona office of Écija. “If you look at the figures from last year, foreign direct investment (FDI) picked up around 50 percent on 2009 and Barcelona remains a very attractive location to do business. However, the legislative trend of recent years has done very little to help this. It is increasingly more difficult to set up a company or to relocate an international business here.” By teaming up with local technology-led boutique Legal Link late last year, Madridbased Écija has now strengthened its ties to the Barcelona market having already established itself as one of Spain’s leading law firms in the intellectual property (IP), information technology (IT) and media sectors; the firm’s innovative approach matched by its client focus. Legal Link’s team of eight lawyers slotted neatly into Écija, says Nadal himself a new recruit, having been a founding partner at prominent local firm Jausàs. “The Legal Link team had significant expertise in the areas where we already had plans, such as in telecoms and IT law, and itself had seen an evident rise in client activity both in Barcelona and across Spain,” he says. Écija’s growth – the firm now has around 90 lawyers – has been helped by its entrepreneurial approach, which includes “off-the-shelf” and standardised legal products. Such creativity is not only beneficial but necessary, says Nadal, who is a fierce critic of the legislative situation in Spain which he believes threatens to slow the country’s return to prosperity. A lawyer dealing with foreign clients for 25 years, the bureaucratic constraints now facing many are more than ever before, he says. “It’s unbelievable, foreign companies are increasingly surprised by, and impatient with, Spanish legislation.” When it comes to setting up a company and complying with directors’ liability requirements, filing tax returns or registering for VAT, Spain presents unnecessarily burdens, he believes. The recent “heavy handed” introduction into Spanish Law of the EU Anti-Money www.iberianlawyer.com

Laundering provisions requiring the identification of company shareholders is yet another example of “over-zealous “ legislation facing new businesses. “We have gone back years, both from a legal perspective and from creating an FDIfriendly country,” he says. “For start-ups and small companies, this is an added cost and ultimately a possible deterrent to doing business here.” But despite the bureaucracy, Nadal Gabriel Nadal reports a rise in the number of new businesses emerging out of the downturn, and in quite unexpected sectors. “We have seen a renewed increase in e-commerce operations in Barcelona and an expansion of their legal requirements. This is a sector that was booming at the start of the last decade but inevitably suffered with the bursting of the dot-com bubble. But now, once again, we see start-ups or more consolidated offerings from big retail banks. This commercial creativity is in spite of the regulatory hurdles they often face.” Likewise, he reports an increasing number of M&A operations many involving foreign investment, not only in IT but also in other sectors. International investors remain interested the right types of opportunities and Barcelona continues to have wide appeal. Perhaps the biggest surprise has come in the property market, he says. After a catastrophic crash and three years of unpredictable, but mostly falling, property prices, it appears there is now movement among cash-rich investors for premium real estate and commercial property. This is where Barcelona, over other cities in Spain and across Western Europe, comes into its own, believes Nadal. “We have seen quite a lot of activity in the prime residential property market. High net worth individuals are again looking at the European property market En España nos and choosing to acquire prime real estate enfrentamos a trámites in Barcelona and Catalonia ahead of other innecesarios en cuanto investment destinations.” a registro de empresas, As with the re-invigoration of the city’s cumplimiento normativo high-tech businesses, such a trend reflects o fiscalidad; pero según a mix of established and new sources of Gabriel Nadal, Socio finance and interest – notably from Eastern Director de Écija en European and the Middle East. Barcelona, sigue habiendo “We are seeing things happen that are oportunidades de very different to matters we were working inversión y la creatividad on only two years ago. For those with a empresarial sigue wider perspective, the trend towards new superando los obstáculos opportunities seems to be increasing.” burocráticos. January / February 2011 • IBERIAN LAWYER • 10


Barcelona Annual Report

Barcelona Annual Report

GUIDE TO LEADING LAW FIRMS

GUIDE TO LEADING LAW FIRMS

Baker & McKenzie, Avenida Diagonal 652, Building D, 08034 Barcelona

Iuris Valls Abogados, Avenida Diagonal 407, 1-2, 08008 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Esteban Raventós +34 93 206 08 20 Fax: +34 93 205 49 59 esteban.raventos@bakermckenzie.com Web: www.bakermckenzie.com M&A, Tax, Employment, Litigation/Corporate Crime & Insolvency, IP/IT, Public Law, Pharma, Compliance, B&F, Restructuring, Real Estate, Environmental Law, Antitrust, Wealth Management and Energy

Bufete B. Buigas, Iradier, 21, 08017 Barcelona Contact: Tel: Email: Main practice areas:

Carlos Valls +34 93 368 04 20 Fax: +34 237 55 55 carlos.valls@iurisvalls.com Web: www.iurisvalls.com IP & General Commercial Litigation, International Transactions and Real Estate

Jausàs, Passeig de Gràcia 103, 08008 Barcelona

Ignacio López-Balcells +34 93 200 12 77 Fax: ilb@buigas.com Web: Corporate, M&A, Finance and Banking Law

Contact: Tel: Email: Main practice areas:

+34 93 200 24 34 www.buigas.com

Agustín Bou +34 93 415 00 88 Fax: +34 93 415 20 51 abou@jausaslegal.com Web: www.jausaslegal.com Litigation, Insolvency & Restructuring, Finance, Tax, Distribution & Franchising, Life Sciences, IP, Labour, Aviation and Tourism Law

Cuatrecasas, Gonçalves Pereira, Passeig de Gràcia 111, 08008 Barcelona

Monereo Meyer Marinel-lo Abogados, Passeig de Gràcia 98, 4t, 08008 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Miguel Trias Sagnier +34 93 312 95 30 Fax: +34 93 260 54 90 miguel.trias@cuatrecasas.com Web: www.cuatrecasas.com Corporate, M&A, Finance, Banking Law, International Taxation, Litigation and Employment Law

Enrique Marinel-lo Jordan +34 93 487 58 94 Fax: +34 93 487 38 44 emarinel-lo@mmmm.es Web: www.mmmm.es M&A, Insolvency & Restructuring, Litigation, Tax, Employment, Real Estate, Renewable Energies, Regulatory, Competition/Antitrust, Commercial, IT and IP

Deloitte Abogados y Asesores Tributarios, Avenida Diagonal 654, 8034 Barcelona

Osborne Clarke, Avenida Diagonal 477, Planta 20, 08036 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Javier Menor + 34 93 280 40 40 jmenor@deloitte.es Mergers, Antitrust, State Aid and M&A

Fax: Web:

+34 93 280 28 10 www.deloittelegal.com

David Miranda +34 93 419 18 18 Fax: +34 93 410 25 13 david.miranda@osborneclarke.es Web: www.osborneclarke.es Corporate, M&A, Technology & Data Protection, Tax, Employment, Litigation, Insolvency, Real State, Antitrust and Regulatory

Ecija, Avenida Diagonal 458, planta 8º, 08006 Barcelona

Pérez-Llorca, Diputació 260, 4º, 08007 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Gabriel Nadal +34 93 380 82 55 Fax: +34 93 380 82 54 gnadal@ecija.com Web: www.ecija.com Corporate & Business Law, Distribution & Franchising, Mergers and Acquisitions, Insolvency & Restructuring, Litigation and Arbitration

Garrigues, Avenida Diagonal, 654, 08034 Barcelona Contact:

Fernando Rey

Tel: Email: Main practice areas:

+34 93 253 37 00 fernando.rey@garrigues.com M&A and International Taxation

Sergio Agüera +34 93 481 30 75 Fax: +34 93 481 30 76 saguera@perezllorca.com Web: www.perezllorca.com Corporate & M&A, Arbitration, Litigation, Capital Markets, Projects & Real Estate, Tax, Finance & Restructuring, Anti-trust & Regulatory and Employment

Roca Junyent, Aribau 198, 08036 Barcelona Fax: Web:

Contact: Tel: Email: Main practice areas:

+34 93 253 37 50 www.garrigues.com

Joan Roca Sagarra +34 93 241 92 00 Fax: +34 93 414 50 30 j.roca@rocajunyent.com Web: www.rocajunyent.com Corporate, Intellectual Property, Public Law, Tax Law, Labour Restructuring, Litigation, Real Estate and Criminal Law

Gómez-Acebo & Pombo, Avenida Diagonal 640, 08017 Barcelona

Uría Menéndez, Avenida Diagonal 514, 08006 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Íñigo Igartua +34 93 415 74 00 Fax: +34 93 415 84 00 iigartua@gomezacebo-pombo.com Web: www.gomezacebo-pombo.com Competition, Distribution, e-Commerce, Intellectual Property and Administrative Law

Ariadna Cambronero +34 93 416 51 00 Fax: +34 93 416 51 11 acg@uria.com Web: www.uria.com Corporate, M&A, Commercial, Tax, Real Estate, Urban Planning, Environmental, Litigation & Arbitration, EU & Competition, Energy, Restructuring and Insolvency

Grau y Angulo Abogados, Josep Irla i Bosch 5-7, 08034 Barcelona

Vialegis Dutilh Abogados , Avenida Diagonal 652. Ed. A, 08034 Barcelona

Contact: Tel: Email: Main practice areas:

Contact: Tel: Email: Main practice areas:

Jorge Grau +34 93 202 34 56 Fax: +34 93 240 53 83 j.grau@gba-ip.com Web: www.gba-ip.com Intellectual Property: Litigation in Patents, Trademarks, Copyright, Designs, Domain Names, Licensing and Unfair Competition Sponsored section: A selection of law firms recommended within the internationally recognised directories and / or by clients.

11 • IBERIAN LAWYER • January / February 2011

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Pablo Usandizaga +34 93 280 11 44

Fax:

vialegisdutilh.abogados@vialegisdutilh.com Web:

+34 93 280 25 96 www.vialegisdutilh.com

Administrative & Environment, Competence & European Law, Bankruptcy, Finance & Insurance, Tax, Real Estate, Labour, Corporate, New Technology, Economic & Company, Criminal Law, Litigation & Arbitration, Industrial & Intellectual Property and Urban Planning Sponsored section: A selection of law firms recommended within the internationally recognised directories and / or by clients.

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January / February 2011 • IBERIAN LAWYER • 12


IBERIAN LAWYER

An abstract from Iberian Lawyer March / April 2011 For further information please contact maricruz.taboada@iberianlegalgroup.com

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• IBERIAN LAWYER • January / February 2011

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Barcelona Annual e-Report 2011