Ecuador may have a compact, consolidated legal market, but it is also one that has seen significant change in recent years. Pérez Bustamante & Ponce Abogados leads the pack size-wise, invariably winning work on the country’s biggest transactions. But the market-leader bid adieu to a long-held competitor last year when the entire partnership of Ferrere (Ecuador) left to launch Robalino Law. The new outfit has experience on its side, as well as a growing headcount. Having opened a fourth office in 2020, it hasn’t wasted time in putting down new roots. Robalino has caught the eye of smaller firms looking to boost their ranking though, with the competition seeking to nab former Ferrere (Ecuador) talent through the period of market disruption.
Local firms also now have a more worldly rival in the shape of Dentons, which finalised its partnership with Ecuadorean law firm Paz Horowitz in 2021, making it the first non-Latin American law firm to launch an office in the country. After a split several years ago, Corral Rosales and Carmigniani Pérez sit either side of Dentons in terms of size but are no less integral players on the market. Meanwhile, Ecuador was one of four Latin American jurisdictions that Spanish law firm Ecija set up shop in over the past 18 months too, market leaders are keeping a close watch on this newcomer.
International influence refreshes this chapter of well-structured, multidisciplinary offerings, but the solid reputation that local firms have with foreign and local companies will hold them in good stead when it comes to battling for a place on the top transactions.
Former banker Guillermo Lasso’s surprise win in 2021’s election has renewed optimism for reviving Ecuador’s economy post-pandemic. Lasso has promised to shave down Ecuador’s debt pile of nearly US$65 billion, and has also vowed to create two million new jobs and increase investment in oil, telecoms and infrastructure assets. Lasso beat the odds when he triumphed against left-wing frontrunner Andrés Arauz, though time will tell whether the former economist can keep his word on ambitious plans such as balancing Ecuador’s budget within four years – a mighty task after the economy shrank by 7% in 2020. Nonetheless, the newly sworn-in president has already attracted the attention of international investors after pledging to bring Ecuador into the Pacific Alliance agreement – a move that is expected to boost foreign trade. The alliance currently includes Chile, Colombia, Mexico and Peru. If the move goes ahead, its impact will no doubt be felt in the legal market, as Pacific Alliance countries have seen more international law firms enter the market than any other in the region of late. With two international players already staking a place in the country recently, this could be a significant trend for Ecuador in the next few years.
However, 65% of Ecuador’s GDP continues to be made up of debt, with the country having restructured US$17 billion worth of sovereign foreign debt in 2020. While the Andean country was successful in delaying repayments of that amount in a bond exchange, the country must now find a way to balance the remaining two-thirds of its financial burden. That is no easy feat in a period of economic recession notably more pronounced than when Ecuador took out the loans. That fact hasn’t stopped the country from earning global praise for its handling of the restructuring though. By honouring its obligations to bondholders even during the covid-19 crisis, Ecuador earned respect from creditors, while the US$17 billion reorganisation was another success story for the use of collective action clauses in Latin American debt deals (Argentina made a similar move in 2020). The pragmatic handling of its debt is most likely one of the key factors attributable to Ecuador’s receipt of a US$6.5 billion loan from the IMF.
Lasso also led Ecuador’s return to the International Centre for Settlement of Investment Disputes (ICSID) arbitration treaty in the months following his election, reinstating hopes for increased investment in Ecuador’s private sector. Ecuador had formerly denounced the ICSID convention under ex-president Correa, who has since fled to Belgium to avert a prison sentence over corruption charges.
Law firms have ensured their disputes offerings stand strong, as Ecuador begins to settle decade-old arbitration claims over oil and mining projects through its renewed ICSID membership. The level of accountability and professionalism it applies when facing up to these complex cases will determine how well Ecuador curries favour with foreign countries in years to come, which could boost private-sector investment.
As the government continues down a path of regulatory oversight, well-seasoned lawyers in this chapter are up to the job of addressing new legal challenges as they emerge. A recently approved data privacy bill is the latest overhaul and is likely to generate opportunities for lawyers in this field. Big-ticket M&A deals are now subject to antitrust approval, while labour and environmental laws continue to tighten. Law firms have duly increased their offerings in these areas too.
Some Ecuadorean law firms bolstered their existing anti-corruption and compliance practices ahead of the arrival of foreign players. Meanwhile, others are looking at ways to launch those services for the first time as no Latin American jurisdiction can today be immune from sprawling corruption scandals in the region.
All these influences are encouraging Ecuadorian firms towards greater practice area specialisation and a widening of their service offer in response to clients’ changing demands. Along with data protection, lawyers are branching out into other disciplines such as natural resources, fishing and renewable energy following recent government initiatives. Boutiques are not common in Ecuador, but the disbandment of larger firms has given some specialised lawyers from those outfits a window in time to seize opportunities there.
Geographically, Ecuador remains largely a tale of two cities. Most firms now have offices in both the capital Quito (where most of the firms in this list are based) and the port city of Guayaquil, which is undeniably the primary business centre of Ecuador. As proven by law firm separations in the past, mastering the two cities simultaneously is no easy task. Some outfits are not scared to put down roots in less populated parts of the country though – with Robalino having opened an office in the agribusiness hub of Machala, also known as the banana capital of the world.