Law firms in Venezuela continue to face high levels of economic and political instability. In the final days of 2022, Venezuela’s opposition national assembly voted to remove ‘interim president’ Juan Guaido and created a commission to manage foreign assets.
Venezuelan law firm managing partners are working hard to maintain their business during these turbulent times. However, there is hope for law firms as the IMF predicts 5% GDP growth for Venezuela in 2023. The country’s expected economic boost is the result of an increase in oil production and a rise in domestic demand.
Despite this, inflation remains a pressing issue. In 2023, inflation reached almost 400%. For law firms, this means pay packets are routinely reassessed, and remuneration in US dollars is commonplace across the board.
Lawyer retention remains hard for firms in this chapter. There are around six million Venezuelan refugees and migrants globally who have left the country as a result of the ongoing political and economic crisis in the nation. Many lawyers are among those who have fled Venezuela or are spending as much time away as possible.
Small profit margins mean firms make tough decisions and junior lawyers have been hit hardest. The associate market at top firms is largely stagnant and the prospect of a promotion at most firms is negligible. D’Empaire bucked this trend in 2022 by promoting two associates to partner and counsel. Meanwhile, partners are sometimes forced to move on or retire early. As for structural reforms, career path institutionalisation has been put on hold at most firms. However, this means that Venezuelan firms operate with an exceptionally low partner–associate ratio (compared to other Latin American firms), partly as budgets do not allow for large departments.
Venezuelan firms have demonstrated remarkable resilience over the years, helped by the continued demand for labour, disputes and regulatory advice. White-collar and compliance assistance is a new source of work driven by recent US and European Union sanctions.
Other areas of law are still not performing well. Firms with especially strong reputations for M&A work can get work on distressed acquisitions and large cross-border deals, but these transactions are out of reach for the majority of firms in this chapter. Banking and finance practices are also underworked as very few banks are willing to lend money given the state of Venezuela’s economy, while only investors willing to accept massive risks are putting money into the country’s industries.
A glimmer of hope remains in the energy sector. State-owned oil and gas company PDVSA is responsible for 90% of Venezuela’s export revenue. The company recently resumed its operations at a refinery and plans to raise its oil production by 1.17 million barrels per day by increasing refining and exploration activities.
In recent years, global firm Dentons absorbed a local tax boutique, Vallenilla, Escalante & Asociados. Despacho de Abogados miembros de Dentons in Venezuela and Baker McKenzie are the only international firms in this chapter.
Law firms here are resilient and while lateral hires remain rare, recent years have seen a few moves. Araquereyna, Travieso Evans Arria Rengel & Paz and Baker McKenzie (Venezuela) are among those to have poached talent from other firms in this chapter of late.