Almost everyone we interviewed surveyed or researched for this issue had one of either two burning issues on their mind: the extent to which the brand of a law firm is becoming more important, or the difficulties of recruiting and retaining the best lawyers.

On branding, some feel that clients are attracted more and more by the comfort of using “big name” law firms. Although within that select group, they will make a final decision based solely on price. In this scenario the largest Madrid and Lisbon firms are constantly undercutting each other on price. Increasingly, it seems the legal market is becoming polarised with a squeeze on the mid-sized firms. This is a key issue for our Lisbon Annual Report.

This was confirmed, in part, by the in-house lawyers contributing to this issue. All spoke of the widening scope of their job and increasing scrutiny on risk and compliance issues. Who can blame them for buying the brands? Although new research we review suggests that listed Spanish companies are more likely to buy on brand-related issues while the multinationals in Iberia prioritise service.

For others we spoke to, people were their main issue. There is a lot of discussion about the departures from the Anglo-Saxon firms. But there is also a warning for Iberian law firms in Manuel Martin’s Leadership article. If they rely on high leverage to maintain profitability, they have to be careful not to demotivate people.

But Peter Cornell, global managing partner at Clifford Chance, who we interviewed for our Profile, poses the challenge: how to recruit and retain the best lawyers when you cannot offer partnership. He suggests that this requires a new social contract with young lawyers.

In his Leadership article, Hugo Ecija approaches the people issue from a different perspective. If law firms are now unable to differentiate themselves on their legal know-how, then the innovation and client service of their lawyers are the only form of competitive advantage.

But maybe branding and people issues are the same thing. Law firms are not corporations: we know that brand, what we used to call reputation, is built on the ability of individuals, not a brochure or law firm website. If this is true, a law firm’s brand is simply the external communication of their internal human relations. Good news if you are in a law firm where the lawyers are satisfied.

Moray McLaren
Managing Editor