Now just over a year into his six-year term, President Andrés Manuel López Obrador – otherwise known as AMLO – has had a less-than-smooth relationship with Mexico’s business community. His cancellation of the partially completed US$13 billion New International Airport of Mexico City (NAIM) hurt investor confidence, resulting in a fall in the value of the peso. Mexico’s weak economic performance has also done little to disprove business scepticism, with recent figures showing Mexico’s economy stagnated in 2019. Economic growth forecasts for 2020 are cautious. If these predictions prove to be accurate, there is likely to be a relatively low volume of transactional work for Mexican law firms.
Lawyers continue to fear AMLO’s leadership could have an impact on areas such as the energy reforms introduced by his predecessor, which opened the sector up to private companies. AMLO has so far respected contracts that have already been awarded to private players, but has otherwise demonstrated a firm commitment to public sector management of the oil and gas sector. This has included generous spending on the indebted Pemex and plans for a multibillion-dollar oil refinery for the state-owned oil company in AMLO’s home state of Tabasco.
Lawyers will be reassured by the fact that the United States–Mexico–Canada Agreement, or USMCA, to replace NAFTA received ratification in Canada’s parliament in March 2020. USMCA was approved in Mexico in late 2019 and in the US in early 2020. While there are winners and losers under the new arrangement, business communities in all three countries will be relieved to have clarity.
In light of the uncertainty posed by events in recent years, law firms in Mexico are prepared for anything. Most have endured various stages of the economic cycle in their lifetimes and so are good at adapting. Many in the market have sound foundations, and their multidisciplinary service offer means they can provide clients with a wide range of assistance, whatever the climate.
It is not all doom and gloom. Deal flow is likely to continue thanks to the cheap peso, while funding is still needed to plug Mexico’s gaping infrastructure gap. Real estate is another thriving industry. Those investors and banks looking for opportunities in Mexico can count on a large pool of talented lawyers to assist on complex M&A and private equity deals and innovative finance transactions.
Among the leading full-service firms, there is a move towards deeper specialisation. Several of Mexico’s elite firms have taken great strides to broaden their service offerings beyond their transactional core in recent years. The fight against corruption remains a priority for the AMLO government (and there have been a few high-profile cases since he assumed office), creating opportunities for law firms capable of delivering compliance counsel.
The Mexican legal market has been shaped by the country’s more powerful neighbour in more ways than one. As well as a healthy number of US companies and financial institutions on law firms’ books, their lawyers have benefited from close relations with US law firms; many have worked in their offices as foreign associates and studied in top US law schools. As a result, Mexican law firms are well-stocked with talented, well-educated lawyers who understand international companies’ needs.
A large number of the firms listed in this chapter are now part of US law firms, which began coming to the country when NAFTA was signed. US firms have entered Mexico in a variety of ways – absorbing well-established local names, poaching teams and making lateral hires. They come in all shapes and sizes. But for the past few years, no US firms have entered Mexico. This might be a reflection of how packed this market already is, as well as the fact that global firms might see less profitable opportunities in Mexico.
But foreign firms come from elsewhere in the world too. Spanish firms consider Mexico a core component of their regional expansion strategies, which have largely centred around the Pacific Alliance countries so far. Garrigues and Cuatrecasas both have offices in Mexico City.
Meanwhile, Mexican firms are exploring opportunities beyond the US. Greater focus is being placed on Asian clients, particularly those from Japan. To an extent, this has influenced their national expansion strategies. Some firms have offices in industrial hubs such as Querétaro, alongside the more traditional bases of Mexico City and Monterrey. A smaller number of firms also have a presence in Guadalajara, Juárez, Tijuana and Guanajuato. Baker McKenzie has the widest national presence in Mexico, with five offices. Beyond Mexico, Nader, Hayaux & Goebel is unique in having a name partner based in London, a means to reach the City’s law firms and financial institutions as well as target infrastructure work from companies in the UK and Spain. In addition, Goodrich, Riquelme y Asociados has an office in Paris. IP boutique Arochi & Lindner has an established presence in Spain: its Barcelona office opened in 2011, while its Madrid office opened in 2014.
The Mexican legal market is known for the frequency with which partners switch law firms, although this has died down in recent years among local firms and has been seen most in US firms fighting for local talent. The volatility has shaped the legal community, which is home to a variety of business models, including several full-service titans and a handful of leading transactional firms with variations of the two in between.
There are also highly regarded, specialised boutiques as well as small firms led by leading names in the market, while foreign players operate under various models and work easily alongside local names. The frequent movements mean Mexico has a group of firms for which size means less with regard to reputation than it does in other countries, and a firm can move up or down the size rankings year-on-year with no discernible effect on its profile in the market. Indeed, those firms that continually land high-profile and complex deals are firmly mid-level in our size table, with no ambitions to reach the top – a marked difference from other markets.