Costa Rica’s economy and population may not be one of the largest in Central America, but this has not deterred the country’s legal market – boasting a size and a level of sophistication that surpasses even those of larger Central American countries. The recently elected Rodrigo Chaves, the new president, is optimistic in his approach to strengthening the country’s economy as well as tackling corruption.
The country’s political stability, along with a robust business community (with companies often flocking here as a regional base for their Central American operations), have combined to facilitate both growth and further in-depth specialisation among law firms. Indeed, the larger firms in this chapter – BLP and Consortium – are comparable in size to those in far bigger economies.
Regionalisation remains high on the agenda for many firms across Central America, and much of this is being led from Costa Rica. A whole raft of broad service offering firms including Aguilar Castillo Love, BLP and Sfera, as well as boutique firms such as BDS Asesores, have all used San José as a base from which to expand into other Central American countries. In addition, the rebranded Arias has continued to consolidate its presence in the country, while staying strong across the rest of the region.
Expansion has gone hand-in-hand with prioritising further institutionalisation, with firms keen to ensure consistency as a key feature of their presence in multiple offices across Central America.
While many of these Central American outfits have so far expanded only to neighbouring countries, others have been looking further afield in Latin America, as well as to the US. Aguilar Castillo Love, for instance, continued its expansion in 2022, establishing a strong presence in Bolivia. Another example of this is Sfera, with a representative office in New York, as well as a counsel stationed in Washington, DC.
For international firms with regional ambitions, Costa Rica has also surfaced as the point of take-off. Following EY Law’s merger with Costa Rica-based regional player Pacheco Coto in 2018, the firm is now a serious contender in the regional legal market, and one of the largest by headcount, both locally and regionally. With access to financial muscle and an abundance of ongoing investment in technology, the firm has positioned itself well to face larger rivals on its turf.
Expansion on both a local and regional scale has largely been encouraged by Costa Rica’s real estate and tourism industries, which have been particularly busy of late with the introduction of digital nomad visas in the country. The coastal province of Guanacaste, a popular holiday and retirement destination, remains the most common place to open a second office, although it is not uncommon for firms to have a base in other coastal tourist hotspots as well.
Though many firms have embraced the trend toward regionalisation, a few still bet on the independent model. One of the country’s oldest, Facio & Cañas, celebrated its 80th birthday this year and continues to focus on its local practice. Another outfit choosing to remain engaged in the local market is found in intellectual property specialist Zürcher Odio & Raven, which is one of the market’s largest by headcount.
Costa Rican firms compete fiercely in a market where businesses place a premium on practice area specialisation and expect no less than the highest-quality service. Lawyers who have environmental law know-how, labour acumen or in-depth knowledge of complex tax planning have become a critical component of any firm’s roster, becoming even more in demand lately as a result of the country’s most recent tax reforms.
Meanwhile, firms must also be more than capable of handling cross-border M&A and banking work to hold their own in a market that has long outgrown its borders. Firms in this chapter have recently reported growth in free trade zone work and increased foreign investment, as well as a general increased flow of M&A transactions.
Costa Rica became the 38th member of the Organisation for Economic Co-operation and Development (OECD) in 2021 – the first Central American country and the fourth in Latin America after Chile, Colombia and Mexico. Membership in the group is likely to mean more reform work and alignment with OECD standards. As such, regulatory work, along with increasing compliance advice, has also occupied lawyers in this chapter of late. The country’s OECD membership may have also contributed to the country’s impressive GDP growth in the past year, reaching 3.3% in 2022.