Brazilian law firms surge on M&A boom

As M&A deals abound, legal advisory in Brazil gain steam. This is what shows a recent survey by Thomson Reuters. Fees and talent are on the rise. Take a look.

Reuters:  Law firms had a 2.7 % rise in advisory roles to 346 deals worth $53.54 billion from the same period a year earlier, according to Thomson Reuters data. Brazil-based firms dominated the rankings, signaling their growing importance as transactions turned more complex.

Some highlights:

Deals will likely gain in size.

Competition from foreign players will prevent local firms from charging more for their services.

Firms will fight to retain specialized staff.

Hot sectors

Retail, banking, infrastructure and logistics, and biofuels are poised to become active areas for deals.

Value of deals

The value of deals fell 15.8 % from the year-earlier period because some sizable transactions in the sugar and ethanol and petrochemical industries were announced in the second quarter of 2010, bankers said this week.

Competition and fees

Global peers pursuing business in Brazil are posing stiffer competition to local players, which are deploying more resources to advise on takeovers and corporate restructuring and making use of their relationships to facilitate deals.

Revenue at Brazilian law firms is usually stable as they charge fees close to European levels. Fees are also way above the average Latin American level.

Pinheiro Neto address in São Paulo

But a 13 percent gain in Brazil’s currency, the real BRBY, in the past 12 months is limiting the firms’ ability to raise fees further, making it harder to match higher salaries and bonuses, Pinheiro Neto’s Bertoldi said.

The following is Thomson Reuters’ M&A league table for legal advisory in Brazil’s announced deals in the first half: =============================================================== LEGAL ADVISER VALUE RANK NUMBER OF MARKET OF DEALS

Pinheiro Neto $14.37 bln

Skadden $7.47 bln

Souza Cescon $5.36 bln

Barbosa Mussnich $4.84 bln

Machado Meyer S & O $4.60 bln

Reuters (By Guillermo Parra-Bernal and Sergio Spagnuolo)

(Editing by Dave Zimmerman)

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About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists. She is a member of the Brazilian Investment Analysts Association (APIMEC-Rio) where she served as Corporate Relations Director and later, on the board. Hildete advises companies doing business in Brazil.
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