Ecuador may have a compact, consolidated legal market, but it is also one that has seen notable change in recent years. Pérez Bustamante & Ponce Abogados leads the pack both in terms of headcount and its involvement in the country’s biggest transactions. But the market leader bid adieu to a long-held competitor recently when the entire partnership of Ferrere (Ecuador) left to launch ROBALINO. The new outfit has experience on its side, as well as a growing headcount. Having opened a fifth office (in Cuenca) in 2021, ROBALINO has not wasted time in putting down new roots.
Following the merger of Bustamante & Bustamante and Fabara & Compañía in 2021, Bustamante Fabara has also quickly found its footing in the Ecuadorian legal market. The combined firm now sits comfortably among the largest in the country. Another interesting development saw the entire teams of Flor & Hurtado, PabraLaw and Roque Bustamante’s (formerly of the aforementioned Bustamante & Bustamante) natural resources practice merge and rebrand as Flor Bustamante Pizarro & Hurtado. The tie-up has brought together Flor & Hurtado’s noted capabilities in banking and finance and energy law with Bustamante’s natural resources knowledge and PabraLaw’s services in corporate and M&A, labour and tax, among others.
Local firms also now have an international rival in the shape of Dentons, which finalised its combination 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 remain integral players in the market. Meanwhile, Spanish law firm Ecija set up shop in Ecuador in recent years, market leaders are keeping a close watch on this newcomer. International insurance-focused law firm Kennedys is also worth keeping an eye on. It expanded its presence in Latin America by entering an association agreement with Tobar ZVS in Ecuador.
Although former banker Guillermo Lasso (who was elected president in 2021) was initially seen as the right candidate to revive Ecuador’s economy post-pandemic, protests in 2022 have left him clinging to power. After almost three weeks of often-violent strikes (in response to rising living costs) that left Ecuador at a standstill, Lasso’s administration struck a deal with the country’s main Indigenous group. Midway through the protests, opposition lawmakers made an unsuccessful attempt to impeach Lasso, again demonstrating his precarious position.
Despite Lasso’s falling popularity, his agenda has attracted the attention of international investors after pledging to attain full membership of the Pacific Alliance for Ecuador (it is currently an associate member) – 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 experienced an influx of international law firms.
Lasso, in another move to boost investment, 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 former president Correa, who has since fled to Belgium to avert a prison sentence over corruption charges.
Although faith in the current administration may have diminished, Ecuador’s economic landscape is not altogether negative. The economy bounced back from the recession, growing 4.2% in 2021 and growth of 2.9% is expected for 2022. Inflation rates are also modest compared to many of its Latin American neighbours; inflation for 2022 is expected to reach 2.9%. However, Ecuador remains fiscally restricted by important levels of debt, and the government has continued to target a fiscal deficit target for the year of 2% of GDP.
Law firms have ensured their dispute offerings stand strong, as Ecuador begins to settle decade-old arbitration claims over oil and mining projects by rejoining the ICSID. The level of accountability and 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.
A recently approved data privacy bill is also 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.
All these influences are encouraging Ecuadorian firms to move towards a full-service model, one that prioritises greater practice area specialisation. 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, and when they are successful, they are often absorbed into larger firms.
Most Ecuadorian 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. The cities are vastly different both geographically and culturally but remain equally vital in economic terms. As proven by law firm separations in the past, mastering the two cities simultaneously is no easy task. Some outfits are not scared to settle in less populated parts of the country though – Robalino has offices in the agribusiness hub of Machala and the Andean city of Cuenca.