Barcelona e-Report 2013

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Keeping its engines running

Barcelona Report 2013

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Keeping its engines running

Barcelona has not taken its foot off the gas pedal. While market conditions may be tough, there are sectors that are proving very resilient, and lawyers are fi nding themselves somewhere between optimism and pessimism when it comes to the year ahead.

Si hemos aprendido alguna lección de esta

situación tan difícil, es que aún nadie parece haber

encontrado la fórmula mágica para reactivar una

economía tan dañada. Cataluña sigue sufriendo la crisis, la poca liquidez en el mercado y la falta

de confi anza de los inversores internacionales,

sin mencionar las tensiones políticas

surgidas por el debate de autodeterminación, crean

un entorno complejo. Pero entre la oscuridad,

se percibe un enorme deseo de esperanza.

Quizás es pronto para identifi car oportunidades reales, pero los motores de la economía catalana

empiezan a sonar con fuerza.

If any lesson has been learned from this drawn-out crisis, it is that no one has, as yet, found the right formula to revive the batt ered Spanish economy. Catalonia itself continues to suff er from the defi cit, scarce liquidity and a lack of international investor confi dence – and the region’s diffi cult political situation is not currently helping.

In amongst a continued dark economic forecast, however, while optimism may be too strong a word, there is defi nitely a scent of hope in the air. Many sectors are showing a great deal more movement than last year, proving robust and resilient in the face of the crisis, and companies are continuing to capitalise on the ‘Barcelona’ Brand. And exports, in particular, are performing well, representing around 25 percent of Spain’s total.

But while suff ering from the same symptoms as other European economies and, given the litt le scope for manoeuvre under the defi cit reduction measures, there is only one driving force to get the Catalan engine running – work, says Miguel Trías, Managing Partner of Cuatrecasas, Gonçalves Pereira in Barcelona. “And although it is not the best time to boast, the engines of the Catalan economy are slowly starting to rumble.”

Current drivers Leading the way in fuelling these engines are tourism, automotive, pharma and life sciences, exports and entertainment, while information technology is also playing a relevant role in particular in relation to mobile

business. Activities with an important innovation component, such as biotech, are picking up the pace, as are the industrial and manufacturing sectors, and the textile industry is enjoying a thriving period of growth.

“Catalan business culture has traditionally been driven by a curiosity in foreign markets and constant research and development for innovative products, services and business methods,” says Thaïs Tarragó van Wijk, Head of the Barcelona Offi ce at Lener. “It’s in our DNA.” This has made it possible for Catalan companies and entrepreneurs to get a head start in the quest for business opportunities abroad, as well as att racting foreign investment.

Barcelona is also a favourite tourist destination, according to Enrique Marinel-lo Jordan, Founding Partner of Monereo Meyer Marinel-Lo Abogados, and the Global Entrepreneurship Monitor places the city as the second preferred urban area for international tourist shopping, second only to London in shopping and retail. Foreign investment in tourism and leisure is a defi nite trend, say lawyers, as is helping to provide these sectors with fi nancial support and liquidity where domestic investors and subsidies have all but disappeared.



The Catalan export sector in particular, has been showing extremely promising results, say lawyers. “Most of our clients are also exporting products and services abroad,” says Luis Marimón, Partner at Marimón Abogados, “and showing a willingness to introduce their products and services into new markets”. And the industrial sector has recently turned to exports to continue to be competitive, and, according to statistics published by the Spanish Ministry for Economy, Catalonia is the leader in Spain in this field. The biggest consumers of Catalan exports are currently Algeria, Austria, Belgium, Brazil, China, Estonia, Germany, Japan, Russia, and Switzerland.

The city having been crowned ‘Mobile World Capital’ has meant that areas relating to mobile technologies, mobile apps, data protection issues and cloud computing trends are experiencing remarkable growth. Which is a very important step in the right direction for Barcelona, not just due to the congress but also because the city is capitalising so well on the back of it, says Fernando Rey, Partner in charge of Cataluña, Aragón and the Balearic Islands at Garrigues. “And the Government is doing well in fighting to attract companies to use Barcelona as a centre for other congresses.”

“The TMT sector is consequently evolving rapidly, and Barcelona is now a point on the world map for digital, which wasn’t the case a year ago. The question is whether we can develop this into a real industry,” says Joan Roca, Managing Partner of Roca Junyent, “and consolidate the city on the map.”

Ultimately, lawyers agree, tourism, technology and automotive are the leading sectors in Catalonia. That’s among the reasons why many multinationals, such as Nissan, Seat, Sony or HP, for example, have increased their presence in the region of recent, says Agustín Bou, Managing Partner at Jausas.

Mechanical issuesDebt restructurings and company downsizing have replaced large M&A transactions, and the market is still working on transactions derived from the restructuring of the banking sector and financial reforms. But what is driving the demand for services are those areas most strongly affected by the crisis, including an increase in litigation and arbitration proceedings, insolvencies and refinancing, and other

key areas such as distressed assets, taxation, labour and, importantly, internationalisation.

The difficult financial situation that many companies are experiencing has led to an increase in the number of distressed M&A and debt restructurings. And while there was interest in such operations in 2012, there has since been a distinct change in investor attitude. “Last year,

distressed asset transactions were being done on a ‘take it or leave it’ basis,” says Rafael Jiménez-Gusi, Corporate Compliance Partner at Baker & McKenzie in Barcelona. “Now investors are far more willing to negotiate and adjust deals and prices. Whether they close the deal, however, is another matter.”

Lawyers are also seeing a certain amount of activity in M&A, both on domestic and international, in particular from venture capital and private equity funds, and industrial investors. According to Trías at Cuatrecasas, there was little M&A activity in 2012, but there seems to be an appetite returning in 2013, although it is too early to say if it´s a trend. “The investors that are coming, however, are not the big private equity houses but entities with a different profile. There is the general sense that prices are down in Spain and clever investors know the time to strike is soon.”

And recent Labour Reforms and the abundance of redundancy plans have seen an increase in the need for labour advice, as well as companies adjusting their working conditions and introducing new levels of flexibility.

But the main concerns of clients are now focused on the future of the Spanish market and taxation, says Mireia Blanch Olive, Managing Partner at Bufete B. Buigas, as well as their capacity to access credit. The Government’s recent tax reforms have added an increased tax pressure on businesses and individuals alike, and Catalonia has become one of the regions with the highest tax burden in Europe – currently at 56 percent.

There is only one driving force to get the Catalan engine running – work. And although it is not the best time to boast, the engines of the Catalan economy are slowly starting to rumble.Miguel Trías, Managing Partner Cuatrecasas, Gonçalves Pereira, Barcelona

“”


in the ‘smart cities’ projects, adds Xavier Muñoz, IT & Telecoms Partner at Ecija in Barcelona, which is a growing sector in Barcelona requiring bespoke legal services.

Certain practices still have room for development, both in terms of speciality and by industrial sector. Practices that deal with advising entrepreneurs are going to experience significant growth in the coming years, says Javier Menor, Co-Managing Partner at Deloitte Abogados in Catalonia, Aragón, Baleares y La Rioja. As will international corporate and tax law practices, as companies are internationalising more and more because of the crisis and forcing suppliers to go out into foreign markets.

The potential for new practice growth in advising start-ups and entrepreneurs is huge, say lawyers. In fact Barcelona is the best place for innovation and entrepreneurship in the Southern Europe and, therefore, the levels of activity are very high, says Carlos Martínez Lizán, Head of M&A-Private Equity at AGM Abogados especially in sectors like e-commerce and biotech. “And it is great to see how enthusiasm defeats general and media pessimism.”

Innovation, such as social media, is taking off, and Barcelona has an interesting pool of young companies that focus on internet and mobile technologies like social media, which is a growing practice area. As there are no precedents, lawyers have to start from scratch using legal development and concepts developed by other jurisdictions, says Jiménez-Gusi at Baker & McKenzie. And companies are increasingly using social media as an important part of their business strategies, so law firms need to prepare themselves to respond to the need of specialised advise on this area, he adds.

Finally there are signs pointing to the revitalisation of the real estate market, with lawyers seeing a growing number of international clients looking mainly at portfolios and premises in Barcelona. Even some national investors are showing interest as the market prices adjust, they say.

And companies are manoeuvring into the project finance sector, which had previously been abandoned by the banks due to harsh levels of financial regulations they suffered. “Surprisingly we believe that we might be on the edge of seeing that some services normally provided by banks now starting to

Personal income tax, as well as wealth tax, is killing the attraction and retention of talent in Barcelona, which is a serious issue that is not being taken seriously by the Government, says Jiménez-Gusi at Baker & McKenzie. “Talent is mobile, our economy is based on talent, and with our taxes we are punishing people for working here. It’s both unbearable and untenable.”

Any potential for growth in Barcelona, and there is that potential, may in the long run be affected by the brain drain, as the young and ambitious are heading abroad, says Richard Silberstein, Partner at Gómez-Acebo & Pombo in Barcelona. The prospect of better salaries and much lower tax burdens abroad are proving very tempting to juniors, say lawyers, but they are hopeful that some of that talent will return in the long-term.

Adding horsepowerA big chunk of the work that lawyers do is still related to the crisis, however, including deleveraging, refinancing and offloading of portfolios. Antonio

Herrera, Managing Partner of Uría Menéndez in Barcelona, is seeing much more M&A interest

in sectors such as ecommerce, biotech, automotive, chemical industry and

pharma – “which are some of the industries that are going to be taking us through the next 10 years”.

Lawyers say that there are market niches unique to Catalan businesses with serious potential for the development of legal practices. Examples are the automotive, distribution, logistics and transport, renewable energies and TMT sectors. Also design and new technologies, adds

Alejandro Angulo, Managing Partner at Grau & Angulo,

and some very specific areas of research. Many companies

and authorities are indeed undertaking interesting research

and development projects with the potential to really open up the sectors, say lawyers.

Health is a growing industry in Barcelona, according to Trías at

Cuatrecasas, and the city is a world player in terms of research and development in diseases

and bio tech investigations. In fact there are already a cluster of firms specialising in this, say lawyers. And there is an area of growth for specialised legal services

Any potential for growth in Barcelona, and there is that potential, may in

the long run be affected by the brain drain, as the young and ambitious

are heading abroad. . Richard Silberstein, Partner,

Gómez-Acebo & Pombo

“”



be provided by companies that used to be devoted to other support services,” says Ignacio Legido, Managing Partner at BDO Abogados. They are seeing that there is a way to work in the project finance field by offering additional services, such as lease back in industrial investments, which used to be provided by the banks.

Oil changeThere is still, therefore, a great amount of room for potential growth in rendering legal services in Barcelona, as long as the model of law firm is the right one, says Pedro Pablo Rodés, Managing Partner of KPMG in Catalonia, Baleares and Andorra. The key lies in team work, allowing veteran lawyers to make their hourly fees more rational by collaborating with junior lawyers with lower ones, and being able to invoice a better adjusted average hourly rate. “This is the model of law firm used by the Big Four, which has allowed them to continue growing profitably each year, including during these times of crisis.”

And more and more, clients are demanding senior level advice, which has prompted an important change in the structure of the law firms. “The model of a few partners and senior lawyers supported by a large number of junior staff apparently does not satisfy the market expectations,” explains José María Rojí Buqueras, Managing Partner of CMS Albiñana & Suárez de Lezo in Barcelona. Law firms are therefore having to professionalise their internal management, most importantly in the services they offer to clients, including quality of advice and fees, say lawyers.

According to Fernando Mier, Corporate Partner at Iuristax, clients want a firm with a strong knowledge of the relevant matter, while also being proactive and result orientated and having the capacity to establish medium and long-term relationships. Ultimately, they want business-minded lawyers, with specific industry knowledge who are very aware of the economic reality their clients are facing. The type of lawyer that sits in his office waiting for the clients to arrive no longer exists.

Law firms have also had to adapt in relation to the technology systems they use, how they communicate with clients (email, videoconference, intranet, SMS, for example), having to record all their time incurred with clients, better analytics in their accountancy and a

more open relationship between partners, fee-earners and junior lawyers. Firms with international clients have had to integrate all international standards of quality, responsiveness and reporting in order to keep working for those clients, who are demanding advice in a particular way. “However, I believe the biggest change is the speed at which matters have to be turned around nowadays,” says Xavier Muñoz, IT & Telecoms Partner at Ecija in Barcelona. “This has changed

dramatically and clients perceive speed as an important part of the overall quality of service they are receiving.”

For the last two years, law firms have also been involved in a price war at incredible discounts, says Ángel Valdés, Head of the Barcelona Office of Lupicinio Abogados International Attorneys. “Obviously this is a huge challenge because competition is harsher.” Unfortunately for some law firms, lowering costs while trying to improve efficiency has unfortunately been their only means of survival, say lawyers.

Different modelsSmall law firms have taken to specialising themselves into specific niche areas of practice, whereas larger law firms have chosen to take the multidisciplinary approach, say lawyers. “The hourly rate has practically disappeared, closed budgets have taken over and ‘beauty contests’ are widespread,” says Marinel-lo Jordan at Monereo Meyer Marinel-Lo Abogados, “even among those clients with a long standing relationship with the same firm.” Law firms say they have had to adapt and innovate along with their clients in order to find new business opportunities and ensure to build on those they already have.

The Barcelona law firm is no doubt still suffering the last waves of the crisis. Firms have had to adapt more than ever to client needs in terms of the fees and services provided, but they see that clients are now far more concrete in their demands and there is less space to move in terms of the types of service provided, according to Ignacio Legido, Managing Partner at BDO Abogados. Firms also strongly feel that hourly billing is beginning to be a thing of the past, and clients are increasingly demanding alternative fee arrangements.

Lawyers note the emergence of new small-sized firms, arising out of the widespread downsizing and redundancies occurring in the market. “We strongly believe that relatively small, boutique firms and market niches may be leading the way compared to larger structures,” says Anna Mestre, Managing Partner and Founder of Mestre Abogados, a shipping, international trade and insurance boutique.

Each law firm, however, sees the situation from their own vantage point. “We tend to think, for example, that in Barcelona small and medium-sized firms are in a much better position than those in Madrid,” says


We notice that Spanish and Catalan markets are seen as an opportunity among foreign venture capital and investment funds, and we expect an increase of foreign investment. José Ignacio Parellada, Head of the Barcelona office, Ramón y Cajal Abogados

“”


be corrected as it is directly impacting on the economy. While the Government is making major spending cuts, it has not been addressing the problems in the public sector, and unless there is strong pressure from society then nothing will change and the economy will not be able to move forwards at the necessary rate, say lawyers.

But compare the current situation in Barcelona to two years ago, and the city is much bett er off and there are positive signs, despite credit not fl owing. “And the last few years leave behind, in my view, bett er lawyers, that have seen ups and downs, are closer to their clients and more able to understand their needs,” says Herrera at Uría Menéndez, “and also more effi cient and resilient fi rms”.

And there has been a noticeable change in work levels from last year, says Roca at Roca Junyent. “At the moment I don’t have the time to be pessimistic or optimistic as the fi rm is too busy, and when I talk to colleagues at other law fi rms they are in similar situations.” And most lawyers agree that they fi nd themselves ‘somewhere in-between optimism and pessimism’ when it comes to the prospects of the year ahead.

The overall climate, therefore, is a very slow going road of defi cits, and a lack of liquidity and movement in the domestic market. But neither Barcelona nor its lawyers have switched off their motors. They are very much keeping their engines running on full power waiting for the moment that the economic road ahead fi nally clears.

Herrera, Uría Menéndez, “as they have signifi cant clients with strong long-term sustainable relationships.”

Others see multi-disciplinary organisations are the ones experiencing signifi cant growth, due to having a global presence, and full service and more businesslike approach. But all law fi rms are going to have to adapt to the current situation swiftly and smartly, incorporating fl exible billing, explains Menor at Deloitt e Abogados, given that client needs have gradually been evolving and their budgets and problems are substantially diff erent to those in times gone by.

Of course there are many diff erent models in town. The local home-grown fi rms – both big and not so big – have proven remarkably resilient, says Antoni Valverde, Corporate Partner at Freshfi elds Bruckhaus Deringer, and the international fi rms that were here before the crisis continue to operate at a very good level. “It’s been tough, we have seen streamlining and we have learnt to be more effi cient and sophisticated.” The overall view, say lawyers, is that Barcelona law fi rms are far bett er now than they were before the downturn.

Driving forwardAlthough the Catalan economy continues to shrink as a whole due to the eff ects of the ongoing crisis, there are some driving forces behind it that are showing positive signs of evolution, says Sergio Agüera, Corporate Partner at Pérez-Llorca in Barcelona – namely exports and tourism. And as a city, lawyers say, Barcelona is determined to show the world that its existing capacities can suit any future investors.

The private sector is much bett er than fi ve years ago and it has learned from its mistakes, adds Rojí Buqueras at CMS Albiñana & Suárez de Lezo. But the public sector remains the main challenge that urgently needs to


Currently lawyers are seeing two types of clients and companies in the region’s markets. “Those that have an international strategy and are thriving, and those that have a strong percentage of revenue in domestic companies,” says Rey at Garrigues, “and these are the ones that are suffering.” This has resulted in many having lost a great deal of market position and others having to leave the market altogether.

Internationalisation has become a key factor for the survival of many companies, and lawyers are witnessing an increase in

the number setting up abroad, as well as attracting foreign capital investment. “We notice that Spanish and Catalan markets are seen as an opportunity among foreign venture capital and investment funds,” says José Ignacio Parellada, Head of the Barcelona offi ce at Ramón y Cajal Abogados, “and we expect an increase of foreign investment”.

Multinational clients are moving to adjust to the new post crisis economics by modifying their distribution channels, getting closer to clients, increasing market share and access to markets through

acquisitions, says Silberstein at Gómez-Acebo y Pombo. “This may not be new business strategy and tactics from a bird’s eye view, but it is certainly positive and better than merely churning.”

It is no longer just curiosity or sheer natural entrepreneurship, but necessity that drives companies to target businesses, partners and investors abroad, says van Wijk at Lener. And there is a tendency amongst internationalised Catalan companies to keep their central business and management headquarters in Catalonia, rather than displacing them abroad.

International models

The hourly rate has practically disappeared, closed budgets have taken over and ‘beauty contests’ are widespread, even among those clients with a long standing relationship with

the same fi rm. .Enrique Marinel-lo Jordan, Founding Partner,

Monereo Meyer Marinel-Lo Abogados

“”


Encouraging entrepreneursBarcelona is attempting to attract investors and entrepreneurs. However, challenges remain if the region is to establish a new era of economic growth

Barcelona capitalised off the back of the 1992 Olympics, which rejuvenated the city with a period of vibrancy and growth. Twenty years later, says Joan Roca, Managing Partner of Roca Junyent, the city is hoping to undergo a similar reinvigoration.

As with the rest of Spain, Barcelona has been hit hard by the recession, although Catalonia has slowly started to stabilise, says Roca.

The region’s GDP, according to the Spanish Statistics Institute, fell by one percent in 2012 compared to the national average of 1.4 percent. The margin may sound small, he adds, but it is encouraging and the priority now is encouraging the recovery.

Roca says the goals are to promote business in the city.

“The situation in Barcelona is better than a year ago, and the city and wider Catalonian region are now looking to enter a new economic reality with fresh business ideas.”

As an indication of the entrepreneurial spirit, the Spanish Statistics Institute claims that per capita GDP in Cataluña is around 20 percent higher than the national average (€27,248 compared to €22,772).

This gap is thanks as well to high-profit industries and Roca points to sectors such as biotech, IT and technology, which have grown and even created local business hubs.

For example, the Barcelona Science Park near the University is a haven for biotech and medical innovators.

The Mediterranean Technology Park in Castelldefels, meanwhile, is a centre for high-tech and digital companies.

There is also the Zona Franca industrial district, which is where a number of manufacturing companies are, including Nissan, and these parks benefit from local Government support as well as cheap leases and strong technology infrastructure.

The downside, however, is that regional tax rates remain higher than other regions.

Personal income tax, for instance, ranges from 15 to 45 percent while there is also a personal asset tax of 15 percent on purchases.

Corporate income tax ranges from 25 percent for small and medium

enterprises and up to 30 percent for larger companies.

Other liabilities include property tax, construction tax, installation tax, building work tax and a varying value added tax (running from four to 16 percent).

“The tax pressure is much stronger in Cataluña than in other places,” Roca says.

“It can be up to five percent more than other Spanish regions and that is still a hindrance for some entrepreneurs.”

While the tax rates can be a factor for investment, the comparative strength of Barcelona combined with the tax burden is creating political tension.

There have been recent protests over things such as toll roads, personal tax contributions and the general political climate, he explains.

“While Catalonia remains a fiercely proud region, the on-going drive from regional autonomy to independence has started to gain more traction.”

Tax and political issues are, of course, nothing new in Barcelona and Roca remains optimistic for the future. Barcelona remains one of Europe’s critical ports with container traffic keeping steady and there is also the thriving automotive sector – thanks to the likes of Nissan and Seat-VW – while tourism and other traditional industries remain robust.

“Barcelona must preserve its current industrial output but the city also has an entrepreneurial character and we’re starting to see that come back,” Roca emphasises.

“There are now lots of new people looking at new business ideas, such as University spin-offs or financial restructuring firms, and that is encouraging.”

Among the recent signs were Nissan’s confirmation in February that the Barcelona plant will construct its new saloon car from next year, providing 1,000 additional jobs and Germany-based Union Investment buying the landmark Barceló Raval hotel for €37m.

As the motor and real estate industries have been among the worst hit in the recession, says Roca, both are indications that confidence is finally growing.

Barcelona está intentando atraer nuevos inversores y empresarios. Sin embargo, los retos continúan si el objetivo es establecer una nueva era de crecimiento económico, dice Joan Roca de Roca Junyent. La situación en Barcelona es mejor que hace un año, y Cataluña está buscando entrar en una nueva realidad económica con innovadoras ideas de negocios.

Joan Roca



An international DNATechnology and financing could be the key to consolidating Barcelona as an international business platform

Tecnología y financiación pueden ser la clave para

consolidar Barcelona como una plataforma de negocios internacional, según Antonio Herrera de Uría Menéndez.

Sin volver a los niveles de antes de la crisis, la

actividad está aumentando y existe potencial para usar

la ciudad como base para hacer negocios.

Antonio Herrera

While not returning to pre-crisis levels, activity is rising in Barcelona and there is a high potential for using the city as a base for doing business in Spain and beyond, says Antonio Herrera, Managing Partner at Uría Menéndez in Barcelona.

There are many big and medium-sized companies that are extremely focused on the international market, he says, with one in five Catalonian firms exporting, and 34 percent of total Spanish exporters based in Catalonia.

“It’s a highly open market, and the local business community is very used to selling abroad – it’s in the DNA of any Catalan business.” And law firms with the right mindset and structure can really help these clients looking to venture into new pastures, he says, expanding into Latin America or North Africa for example.

Technology-based sectors (Internet and bio-technology among them) are those with a high potential in terms of future economic growth, says Herrera,

and they revolve around individual talent. “So you have to recruit and retain the best, and Barcelona offers a great place to balance professional and personal life – it’s difficult to beat it.”

The international work carried out for these companies is diverse. For example, technology-based companies that require financing sometimes look at international private equity and venture capitalists because of a shortage of credit domestically and the ability of those funds to understand technology-based businesses, he says.

“So there is also an opportunity for Catalan law firms to help look for financing in foreign markets.”

Since advising in Privalia’s financing round in 2009, Herrera has seen a growing number of transactions involving local players and foreign equity firms. And it’s a promising area of business and something that tells you that people are trying to find a way to do business globally out of Barcelona, he says.

Most of the legal issues that arise out of companies’ use of social media are the result of naivety or ignorance, says Rafael Jiménez-Gusi, Corporate Compliance Partner with Baker & McKenzie in Barcelona.

“Particularly in Barcelona, where we see a pool of young companies focusing on internet and mobile technologies, we see businesses ‘passively’ and ‘actively’ affected by the use of tools such as Tuenti, Facebook and Twitter. Companies are having to address concerns arising out of employees’ use of social media.”

Recurring issues come from comments posted by employees releasing confidential or market-sensitive information, or negative or defamatory comments about competitors, he says. Likewise, companies often find themselves the target of copyright or other infringement proceedings having borrowed or utilised images or data taken from the Internet.

“When something is posted it goes

global, meaning it is very difficult to manage information once released. As few users read the terms and conditions of such sites, they are often surprised to learn they have little redress when something does go viral.”

Companies are taking an increasingly cautious approach to social media by limiting employees’ access, utilising best practice and channelling corporate use through a limited number of accounts.

In the US, as a reaction to employers’ practice to request access to employees’ personal accounts, some states have enacted regulations prohibiting this practice.

“From a compliance perspective, the challenge is to stay one step ahead. But few legal departments, and even fewer company managers, have the luxury of the necessary global view required to understand all the intellectual property, privacy, data protection, advertising, commercial, media and consumer rights issues involved,” says Jiménez-Gusi. “This is why we are seeing much greater demand being placed on practices such as our own.”

The likes and dislikes of social media

La mayoría de los asuntos de muchas empresas vinculados al mal uso de las redes sociales, son consecuencia del desconocimiento, dice

Rafael Jiménez-Gusi de Baker & McKenzie. Las

empresas deben responder a las necesidades de sus

empleados en relación con el buen uso de las redes

sociales.

Rafael Jiménez-Gusi



Bribery and corruption disruptionUnderstanding cross-border anti-corruption laws should be high on the corporate governance agenda

For local Spanish companies, the concept of corporate responsibility is sometimes less advanced than in other jurisdictions, says Silvia Steiner, a Partner at Osborne Clarke in Barcelona. Indeed, before the new Criminal Code came into force in December 2010, Spanish businesses could only be held civilly liable for the illicit conducts committed by their directors, officers or employees – the Code subsequently established corporate liability for criminal offences.

And while companies have been getting to grips with domestic regulations, the past years have also seen notable international legislation – especially the UK Bribery Act and the US Foreign Corrupt Practices Act (FCPA) – obliging businesses to adhere to strict anti-corruption practices wherever they operate in the world. What has escaped the notice of some organisations however, says Steiner, is that companies based in Barcelona or Madrid can be liable for breaches of UK and US law.

“It is important for Spanish companies to remember that cross-border legislation, like the Bribery Act and the FCPA, do not just affect UK and US companies,” she explains. “For example, a Spanish business that has a branch or a subsidiary in either country could be prosecuted under the FCPA or the Bribery Act for a wrong-doing that has occurred outside of the US or the UK, respectively.”

Steiner points out that the main illicit activities under the two acts are the bribing of foreign officials to obtain a business advantage and, in the case of the UK rules, also the bribing within the private sector. Put simply, a Spanish company with a UK presence that engages – either directly or through an agent of the company – in bribery with some corrupt officials in an African jurisdiction, or pays off a local supplier in a Latin American country,could be brought before the UK authorities. Additionally, a company can also be sanctioned under these two anti-corruption regulations for any deviation in the keeping of accurate books and records and adequate system of internal controls.

“It is easy for Spanish companies to look at the rules and assume it does not apply to them but that is not the case,” Steiner says. “For example, out of the top 10 cases involving the US Government’s enforcement of FCPA, only two have been American companies. Spanish companies

need to know that having a presence in the US or even a secondary listing, such as a 144A offering, means they need to be aware of expectations.”

In 2012, these include Germany-based Allianz, which paid over $12.3m to the US Securities and Exchange Commission (SEC) to settle the charges over “violating the books and records and internal controls provisions of the FCPA for improper payments to Government Officials in Indonesia”.

Swiss outfit Tyco International paid $26m after subsidiaries arranged illicit payments to foreign officials in more than a dozen countries, while Pfizer was charged over illegal payments made by its subsidiaries to foreign officials in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia to obtain regulatory approvals, sales, and increased prescriptions for its products. UK-based Smith & Nephew paid more than $22m over its US and German subsidiaries bribing of public doctors in Greece to win business.

Systems in place The crucial thing is for Spanish companies to improve their internal corporate governance processes with the assistance of legal counsel, says Steiner. Indeed, the US and UK legislation requires businesses to implement a clear internal structure for reporting, which can require extensive staff training and strategic plans to comply.

Steiner recommends that Spanish organisations look to implement, with the help of a specialised group of lawyers, a uniform set of standards that are in line with local and international requirements.

“Programmes and protocols have to be put in place, but businesses need to establish a single set of standards that comply with the highest and strictest level of regulation, today the Bribery Act and FCPA requirements,” says Steiner. “They need to ask what their businesses are and identify the risks. Each company is different, of course, so we tailor each solution accordingly.”

Failure to undertake such a review could be devastating, she concludes. As seen with the FCPA, pursuit by the SEC can result in expensive payments and, in theory, companies could be faced with bans from public tendering, closure or even prison sentences for individual officers. Her message is to think local but act global.

Para las compañías españolas el concepto de responsabilidad corporativa está a menudo menos desarrollado que en otras jurisdicciones, dice Silvia Steiner de Osborne Clarke. Pero entender las fronteras de la normativa anticorrupción debe ser una prioridad de la dirección de cada empresa. El mensaje es pensar localmente pero actuar de manera global.

Silvia Steiner



GUIDE TO LEADING LAW FIRMS

Baker & McKenzie, Avenida Diagonal 652, Building D, 08034 Barcelona

Contact: Jorge Adell Tel: +34 93 206 08 20 Fax: +34 93 205 49 59 Email: [email protected] Web: www.bakermckenzie.comMain practice areas: Corporate & M&A, Tax, Employment, IP&IT, Competition, Litigation & Arbitration, Corporate Crime, Public, Restructuring & Insolvency, Compliance, Banking & Finance, Environment, Real Estate and Wealth Management

BDO Abogados, San Elias, 29-35, 5, Esc B, 08006 Barcelona

Contact: Ignacio Legido Tel: +34 93 209 88 02 Fax: +34 93 414 15 75 Email: [email protected] Web: www.bdo.es/abogadosMain practice areas: Corporate, M&A, Tax, Dispute Resolution, Insolvency & Restructuring, Employment, Public Law, IP&IT, Maritime & Transport and Real Estate

Bufete B. Buigas, Iradier 21, 08017 Barcelona / Paseo de la Castellana 164, 5, 28046 Madrid

Contact: Mireia Blanch Olivé Tel: +34 93 200 12 77 / 91 343 17 80 Fax: +34 93 200 24 34 / 91 345 80 18Email: [email protected] Web: www.buigas.comMain practice areas: Corporate & Businesses, M&A, Banking & Finance and Restructuring

Cuatrecasas, Gonçalves Pereira, Paseo de Gracia 111, Barcelona 08008

Contact: Miguel Trías Sagnier Tel: +34 93 312 95 30 Fax: +34 93 290 54 90 Email: [email protected] Web: www.cuatrecasas.comMain practice areas: Corporate, M&A, Finance, Capital Markets, International Taxation, Litigation and Employment Law

Deloitte Abogados, Avenida Diagonal 654, 08034 Barcelona

Contact: Javier Menor Tel: + 34 93 280 40 40 Fax: + 34 93 280 28 10Email: [email protected] Web: www.deloitteabogados.es Main practice areas: Mergers, Antitrust, State Aid and M&A

Garrigues, Avinguda Diagonal 654, 08034 Barcelona

Contact: Fernando Rey Tel: +34 93 253 37 00 Fax: +34 93 253 37 50 Email: [email protected] Web: www.garrigues.comMain practice areas: Full Service Law Firm

Jausas, Passeig de Gràcia 103, 08008 Barcelona

Contact: Agustín BouTel: + 34 93 415 00 88 Fax: + 34 93 415 20 51Email: [email protected] Web: www.jausaslegal.com Main practice areas: Litigation, Insolvency & Restructuring, Securities Litigation, Tax, Distribution & Franchising, Life Sciences, IP, Labour, Aviation and Tourism Law

Gómez-Acebo & Pombo, Avenida Diagonal 640, 08017 Barcelona

Contact: Daniel Marin Moreno Tel: +34 93 415 74 00 Fax: +34 93 415 84 00 Email: [email protected] Web: www.gomezacebo-pombo.comMain practice areas: M&A, Corporate Structures, Foreign Investment and Corporate Law

Sponsored section: A selection of law firms recommended within the internationally recognised directories and / or by clients.



GUIDE TO LEADING LAW FIRMS

Sponsored section: A selection of law fi rms recommended within the internationally recognised directories and / or by clients.

Marimón Abogados, P. de Gracia 118, 5, Barcelona 08008 / José Ortega y Gasset 7, 2, (Edf. Serrano 49), 28006 Madrid

Contact: Luis Marimón Tel: +34 93 415 75 75 / 91 310 04 56 Fax: +34 93 415 83 11 / 91 702 36 36Email: [email protected] Web: www.marimon-abogados.comMain practice areas: Corporate, Tax, Litigation, Labour, Public Law, M&A, Real Estate, Energy, Technology and Bankruptcy

Monereo Meyer Marinel-lo Abogados, Passeig de Gràcia 98, 3R, 08008 Barcelona

Contact: Enrique Marinel-lo JordanTel: +34 93 487 58 94 Fax: +34 93 487 38 44 Email: [email protected] Web: www.mmmm.esMain practice areas: M&A, Corporate, Insolvency & Restructuring, International Dispute Resolution, Tax, Employment, Real Estate, Administrative, Regulatories Affairs and Technology & International Property

Osborne Clarke, Avenida Diagonal 477, 20, 08036 Barcelona

Contact: Tomás DagáTel: + 34 93 419 18 18 Fax: + 34 93 410 25 13Email: [email protected] Web: www.osborneclarke.com Main practice areas: M&A, Corporate, Financial Services, Digital Business, Litigation, Taxation, Energy, Regulatory and Health Care

Ramón y Cajal Abogados, Caravel•la La Niña 12, 5, 08017 Barcelona

Contact: Jose Ignacio ParelladaTel: +34 93 494 74 82 Fax: +34 93 419 62 90 Email: [email protected] Web: www.ramonycajalabogados.comMain practice areas: Corporate & Commercial, Contracts and M&A

Rousaud Costas Duran, Escoles Pies 102, 08017 Barcelona

Contact: Ignasi CostasTel: +34 93 503 48 68 Fax: +34 93 503 48 69Email: [email protected] Web: www.rcdslp.comMain practice areas: Intellectual Property, Life Sciences, Technology, e-Commerce and M&A

Uría Menéndez, Avenida Diagonal 514, 08006 Barcelona

Contact: Antonio Herrera Tel: +34 93 416 51 85 Fax: +34 93 416 51 60 Email: [email protected] Web: www.uria.comMain practice areas: Arbitration & Litigation, Commercial, Corporate Finance, Energy, Environmental EU Law, M&A, IP, Labour, Real Estate, Restructuring & Insolvency, Tax Planning

Roca Junyent, Aribau 198, 08036 Barcelona

Contact: Joan Roca SagarraTel: +34 93 241 92 00 Fax: +34 93 414 50 30 Email: [email protected] Web: www.rocajunyent.comMain practice areas: Banking & Finance, Corporate, Infrastructure, M&A, Private Equity, Project Finance, Refi nancing and PPP


Lener, Avenida Diagonal 418, 2, 08037 Barcelona

Contact: Thaïs Tarragó van Wijk Tel: +34 93 342 62 89 Fax: +34 93 301 50 50 Email: [email protected] Web: www.lener.esMain practice areas: Corporate & Commercial, M&A & Private Equity, Insolvency & Restructuring, Banking & Finance, Tax, Public, Regulatory, Environmental & Competition, Employment, Dispute Resolution & Litigation, Real Estate and IT&IP


IBERIAN LAWYER

Forty2013

Rewarding the achievement of the new generation of lawyers helping to shape

the future of the legal profession

Spain and Portugal’s 40 top lawyers under forty years of age.

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Banking & FinanCE REpoRt

IBERIAN LAWYER

An abstract from Iberian LawyerMarch / April 2013

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Documents

Barcelona e-Report 2013