Focus on…Chile
Guillermo Morales is senior partner at Chilean firm Morales & Besa. Established in 1992, it initially focused on corporate finance before expanding to full-service. Morales is proud his firm “started, was built upon, and is widely recognised as driven by, a list of core values such as professionalism, meritocracy, and inclusion.” He speaks to Claire Rason, founder of Client Talk.
Q. Guillermo, you are the senior partner at Morales & Besa. Could you tell us a little bit about the clients your firm works with?
A. We were initially focused on international clients, but we have gradually moved to an equilibrium. Our international client base continues to be strong and mostly concentrated in the financial industry. Our domestic client base is concentrated in a fewer number of very important entities, including all the banks operating in Chile, major listed corporations and the Republic of Chile as a sovereign issuer in the capital markets.
Q. Could you tell me a little bit about how Chilean firms go about business development?
A. We are not doing anything out of the ordinary. Although we have a very active and skilled marketing group composed of two professionals, we still rely very much on (a) our reputation (something that works more easily in a small country and when you have a leading practice as we have in corporate finance and capital markets); (b) relationships with global law firms (they constitute a stable source of referrals and direct work, especially when you are a truly independent local firm), and (c) referrals from our clients (for example, we cater to practically all the investment banking community and they are an important source of referrals).
Q. You are a transactional law firm, does that impact on the way that you do business development?
A. Yes. The high-end transactional work will normally come our way via traditional sources: referrals from (a) smaller/less specialised domestic law firms; (b) global law firms without a local presence or associated Chilean law firm, and (c) our clients and former counterparts.
Q. Relationships are key to doing business in Chile. Give us a flavour of how they influence business?
A. Our law firm, unlike most other Chilean law firms, has been built around the idea of selling outstanding performance. We believe, rightly or wrongly, this performance sells itself, whereas most other law firms in our country still view personal relationships as key in their efforts to bring clients their way. You see it in the lawyers they recruit. Often their qualifications may not be outstanding, but they have significant family, social, political or other relationships. Or it can be seen in the fact they spend significant time on social activities with clients or in trade associations. This approach still works in Chile, although we think less so over time as companies and their owners professionalise and meritocracy becomes a guiding principle in governance and operation.
Q. Recently there has been a wave of international law firms coming into Chile. How has that impacted the way you market your business?
A. We undeniably face a competitive disadvantage in the wake of many international law firms coming into the country. These firms have budgets for marketing that we cannot possibly compete with and, in all honesty, we have not yet devised a clever strategy to overcome this.
Q. I understand many Chilean firms take part in the legal directories. How important is that for you to attract work?
A. It is not a key factor, but it is important insofar as the listing and rankings are weighted by decision makers when making referrals. No matter how much a client or a law firm may wish to refer work to a particular firm or individual, if they are not highly ranked in the directories, that will be the end of the intended referral.
“Everyone I know in the industry talks about empathy and emotional intelligence and how important a skill it is for professional development.”
Q. How do you build relationships with foreign investors?
A. The difficulty is starting a relationship with a foreign client. There are no natural ties with foreign investors. They reach out to our firm following research by their general counsel and/or a recommendation from the law firm that they work with back home. Once a relationship starts it takes on a life of its own. Foreign clients tend to be much more loyal, appreciative and to some extent dependent upon the relationship with their Chilean law firm.
Q. I know that you work a lot with firms in the US and also the UK. What do you think are the similarities in the way we do business? What are the key differences?
A. It is difficult to generalise. Over time, I think, differences among Magic Circle firms and Wall Street firms have tended to be less apparent. UK firms still look as if they are much more cost driven and keener on spending time and resources in relationship driven marketing efforts. US law firms are far more cost conscious than in the past but less systematic and price competitive than UK firms. US law firms seem to have a different approach to marketing. Mass (somewhat indiscriminate) emailing, large (increasingly impersonal) gatherings (e.g., IBA, ABA, etc), alumni networks.
A similarity I have witnessed over time is how large US and UK firms increasingly dominate international work. In the past we used to receive a relatively important amount of work from regional and medium-sized law firms helping their clients make inroads into a foreign country like Chile. Today, those clients mostly come from a handful of global law firms.
Q. What has the impact of Covid-19 been on your business?
A. I have to say that the impact of Covid has been positive in some ways. We are getting a substantial amount of work on the one side, probably as a result of our leading corporate finance practice which is in high demand. We are very busy. On the other, we had invested for and were prepared to go into remote work mode due to the social crisis that preceded the pandemic here in Chile. Also, remote work has brought important cost efficiencies. Whilst we are perhaps not as close to our clients as we used to be, but I guess no one else is.
The real negative impact has been on our people. Fortunately, no one has lost their job in our firm and we have not reduced salaries (we even paid a bonus!). But the work is spread much more unevenly. All lawyers are overworked and the single ones lonely. Some are wondering what the future might bring.
Q. The topic for this issue is empathy and emotional intelligence. Both of these concepts are starting to be recognised as key skills for professional development in the UK. How do you think this compares in Chile?
A. Everyone I know in the industry talks about empathy and emotional intelligence and how important a skill it is for professional development. However, only few firms are taking steps to seriously study and do things about it. In this country we still have a long way to go from talking to actually implementing changes. Things to be tackled include how to identify and assess empathy and emotional intelligence amongst our recruits and lawyers, and how to appropriately value it and adopt it as a key component that we seek in our people.