Almost exactly a year after millions of protestors took to the streets of Santiago in unprecedented demonstrations against social inequality, Chile voted to rewrite its constitution following a historic referendum in October 2020. Now amid the throes of the covid-19 pandemic, the country is also charged with the titanic task of overhauling its constitutional legislation. To do so, the country has voted in a 155-member constitutional convention that is unapologetically diverse in its make-up. Led by indigenous rights activist Elisa Loncon, the body is formed of socialists, lawyers, teachers, journalists and doctors who aim to represent the voices of the millions of Chileans who voted for social change. It may not be plain sailing for the new generation of constitutionalists to introduce a reform that satisfies Chile’s population of nearly 20 million, but this feat of democracy is certainly likely to generate a slew of regulatory work for lawyers in this market in the years that follow.
President Sebastián Piñera aims to boost Chile’s economy by 6% by the end of 2021. The leader’s determination to spring back from last year’s GDP contraction of 5.8% comes off the back of Chile’s impressive vaccination programme. The government’s scheme to inoculate the nation sped ahead of any other Latin American country and put it in a leading position globally for vaccine rollouts. Yet, support for Piñera has wavered since his vaccine triumph, after several resurgent covid-19 spikes flung the country back into lockdown. The leader has been accused of opening the country up too quickly and encouraging travel after pushing through the vaccine programme.
As his term nears its end, Piñera’s legacy may be coloured to an extent by patches of deathly social unrest, periods of economic downturn and the messy fallout from the covid-19 pandemic. Yet the leader’s investment ambitions for the nation offer bright spells in Chile’s forecast and these are also likely to generate an ample supply of deals for transactional lawyers in this jurisdiction.
One of those mines of investment potential is Chile’s 5G programme – through which the government is aiming to roll out high-speed mobile internet coverage throughout the country. Chile has already doled out millions of dollars’ worth of contracts in its 5G spectrum auction this year, which attracted telecoms investors from across the world – including the likes of Spain’s Telefónica and Mexican mobile service provider Claro. As one of the first Latin American countries to introduce 5G coverage, the initiative will keep non-transactional lawyers busy as the new framework is inaugurated within the country.
Chile has already hit its 2025 target to produce one-fifth of its energy from renewable sources and it was producing a quarter of its total power from wind and solar energy by early 2021. With climate change an increasing global concern, foreign entities are continuing to put money behind Chilean projects, with the country having quickly overtaken larger economies such as Mexico and Brazil as the most popular among international renewables investors.
The resource-rich nation can also be reassured by its leading presence in the mining industry. Copper demand and thus prices have soared over the past 12 months, owing to the use of the metal in popular green energy sources such as electric cars and wind turbines. Even amid the pandemic, Chile had the largest production of copper at nearly 6 million tonnes, with the resultant income allowing it to get ahead in funding its covid-19 recovery while several of its geographical neighbours sank under debt.
Long-anticipated pension reform remains a top priority on the government’s agenda. Part of the pandemic response saw Chile allowing the public to dip into 10% of their pension pots last year, triggering incoming litigation cases from foreign insurance companies as funds begin to drain. It remains to be seen how constitutional reform will address the undoing of the Pinochet-era pension system, but lawyers are likely to expect a lot of work coming their way, whether that be in the regulatory or litigation department.
Meanwhile, Chile’s 2020 tax reform has raised levies for corporations and will mean phasing out the old rebate system, through which companies used holding subsidiaries to absorb tax losses. As the need for tax expertise accelerates, law firms are seeking out legal talent in this area, while others have launched practices for the first time to ensure they have a hand in anticipated legal work.
Chile’s strong institutional framework and longstanding reputation as one of Latin America’s wealthiest and most stable nations has ensured that a large number of well-structured, full-service corporate powerhouses are the backbone of the market. The high calibre of international businesses operating in the country has given rise to an elite legal community built on historically solid corporate, finance and capital markets teams. Substantial, noteworthy transactions are commonplace in Chile and when they happen there are a healthy number of corporate law firms with the skill and headcount to handle them.
The legal market has one clear frontrunner in terms of size – Carey – and most would agree that the market is only capable of supporting one such titan in terms of headcount.
The bulk of this chapter’s most successful law firms are multidisciplinary. This full-service capability is enabling firms to serve their clients well in areas of newfound importance. The country’s major constitutional reform has incited law firms to polish up their public law offerings, while expected tax, labour and pension reforms have also inspired outfits to boost these areas too. Meanwhile, Chile is still filling in the blanks in terms of bringing its data protection protocols in line with international standards, especially those in Europe and the US. Industry-wise, Chile’s legal market contains experts in some of the country’s most important economic drivers: mining, infrastructure and energy. Environmental law is also a strong practice for many firms, given the importance of the area for companies in those industries. The demands of the covid-19 pandemic have accelerated the technology sector throughout Latin America too. Chile was no exception, and multiple law firms are now hankering for lawyers that can flow through the wave of start-up and fintech deals.
Boutiques certainly do also have a place in this market. There is a clear demand for their specialised service offering and a handful of well-regarded intellectual property, mining and environmental law firms are listed in this guide. In the past few years, several firms have lost talented partners who have moved on to create their own outlets specialising in certain areas, including litigation and antitrust. With in-house teams also taking on more responsibilities themselves, clients are increasingly turning to external counsel for more specialised legal matters, which is good news for boutique firms.
Investors’ continued attraction to the Pacific Alliance, as well as the strength and stability of the economy, is changing the face of the Chilean legal market as international law firms increasingly demonstrate interest. The arrival of newer regional behemoths such as DLA Piper and CMS is one factor contributing to greater movement in the legal market, as the new arrivals cherry-pick local staff. In 2020, Chile saw the first Argentine firm set up shop in the country when Buenos Aires-headquartered Pérez Alati, Grondona, Benites & Arntsen (PAGBAM) signed an integration agreement with Chile’s Schwencke & Cía. The latter firm broke off its partnership with Aninat Abogados in March 2020. Following Spanish law firm Cuatrecasas’ launch of its Chilean operations in 2020, it has expanded its presence through lateral hiring – poaching top talent from local and regional elites to decorate its Santiago office with knowledgeable expertise.
Chilean law firms are among Latin America’s most institutionalised, in part because many of the country’s leading lawyers have experience of working abroad. Firm management and leadership are modern and forward-thinking, putting this market on a par with some of the best region-wide. One notable weak spot concerns gender parity: on average, Chilean firms have the lowest number of female partners in all of Latin America. While partner promotions saw an unanticipated spike in the region at the end of 2020, less than a handful of large firms in Chile elevated a female lawyer to a senior position during that review period. Some local outfits have sought to rectify this gap by elevating women to senior management and department leader roles over the past year.
Santiago, or more specifically its business district of Las Condes, is very much the heart of the legal community. As more firms in this market build international ties, an increasing number work closely with offices in legal markets further afield, particularly in the Pacific Alliance, but also globally.