Abstract
In this chapter we demonstrate that the traditional professional practice as well as the law firm in Chile responds to the supply and demand mechanism. A moderate offer of legal services determined by the entry barriers to the profession (specifically due to the small number of law schools) along with a demand from unsophisticated economic actors, determined that the dominant model of the professional practice was individual, in small family offices or in “communities under the same roof.” On the contrary, a more vigorous offer (determined by the opening of the university system as of the 80s) along with a growing sophisticated and complex demand, favored the emergence of law firms.
In this chapter, we also make a type of radiography of law firms in Chile. By mixing quantitative and qualitative indicators we examine their lawyers and clients. The main conclusion is that this is an ongoing and successful process. Law firms are a reality that is increasingly more important. However, law firms are not mature enough to turn into corporations. It is still possible to see amidst the desired corporate practices, traces of old family offices or style of lawyers trained in a different world.
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Notes
- 1.
By “communities under the same roof” we mean groups of lawyers who share a physical space and its expenditures (e.g., rent, bills, administratives, etc.) but they are not organized as a company.
- 2.
The lawyers’ offices were call estudios jurídicos.
- 3.
Carey website available at http://carey.cl/nuestro-estudio/historia/
- 4.
For example, Claro & Cía., in 1880, Cariola, Diez, Pérez-Cotapos & Cía. in 1889, Phillipi, Yrarrázabal, Pulido and Brunner in 1904, Sargent and Krahn in 1899, and Estudio Arturo Alessandri in 1893.
- 5.
It is probably a good indicator that from 1851 to 1952, 19 of the 20 democratically elected presidents of the Republic had a degree in Law. For his part, Eyzaguirre (1973: 406) refers to the great participation of lawyers in public posts and Galdames (1937: 128) points out that “The whole government was in the hands of lawyers.” Although this is an exaggeration, the truth is that their presence was hegemonic. The number of parliamentarians is probably a good indicator. Marcella (1973: 87) points out that from 1834 to 1888 there was 782 parliamentarians. The author could determine the profession of 226 of them: 186 were lawyers, 26 engineers and 14 physicians.
- 6.
Part of the description seems to be comparable to any country in the world of that time.
- 7.
National Service of Statistics and Census (1952).
- 8.
As per the web site of the School (http://www.juridicasysociales.udec.cl/?page=historia): The origin of the law degree goes back to the year 1830, when the President of the so called “Instituto Literario” in Concepción, together with other professors of the Instituto Nacional, started a course of civil law in Concepción, through public enrolment. The teaching of law continued in the same Instituto Literario, subsequently named “Liceo de Hombres de Concepción,” until the Curso Fiscal de Leyes de Concepción is created by Decree 753, dated May 5, 1865, which first classes began at the end of the same month.
- 9.
Although the School of Law of the Pontificia Universidad Católica de Valparaíso was established in 1894 as Curso de Leyes de la Congregación de los Sagrados Corazones de Valparaíso, it became part of the University just in 1947.
- 10.
As per the website of the School (http://www.derechouv.cl/portal/?page_id=51): Although the School of Law of the Universidad de Valparaíso was established in 1911 under the name “Curso de Leyes de la ciudad de Valparaíso,” the first reference may be found in the Course of Law rendered in 1878 at the Liceo de Hombres de Valparaíso, presided by Eduardo de la Barra, whose name was given to such educational institution.
- 11.
Ver http://www.cse.cl/ASP/WEB_CSEestad_resultado.asp?i4_especial. Last visited December 20, 2004.
- 12.
Data from the website of the Consejo Nacional de Educación regarding university programs which allow getting a degree on law. See http://www.eligecarrera.cl/buscadores/formularios/index.aspx#/Carreras. Last visited November 12, 2014.
- 13.
In Chile, the professional qualification to practice law is granted by the Supreme Court as established by the Código Orgánico de Tribunales, Title XV.
- 14.
According to the Report on Justice in the Americas 2006–2007 (p. 569) the relative number of lawyers in Chile was 114 in 2006.
- 15.
For Aníbal Pinto, the lawyers acted as intermediaries between foreign investors who controlled saltpeter and the state (quoted in Urzúa 1992: 173). Peña says that investors and the new businessmen of the nineteenth century contributed to consolidate the liberal characteristics of the profession in that period.
- 16.
Another important piece of information provided by the lawyer Fernando Barros in a seminar organized by El Mercurio, 27 October in Santiago, refers to the boom of litigations during the 1960s and 1970s as a result of the expropriations.
- 17.
- 18.
We do not refer to the social prestige but that one within the legal profession. We do not have information about the law firms’ prestige in Chile. We need to be cautious when considering the social prestige of law firms. A study by Michael Asimow about the way how law firms are shown in the movies, quoted by Galanter (2006: 1438), states that they are shown as “The embodiment of evil.” As Asimow says:
Big firms are money machines run by greedy old men that eat their Young, are horrible places to work for halfway decent human beings. In conducing litigation, big firms always deploy their superior resources to unfairly thwart rightful claims brought by their adversaries. Big firms are always on the wrong side –generally that of the vicious corporations rather than the deserving plaintiff.
- 19.
A classic study of the individual practice of the profession and in small firms in Jerome Carlin… As regards the communities under the same roof, although it is true that some use a name that is useful for the lawyers, it is what Falcao (1988: 428) has called de facto firms; that is, groups of lawyers that are not organized as companies.
- 20.
The boutiques are firms that center their work in a specific area. For example, firms devoted to intellectual property, energy, environment, taxes or lawsuit. These are firms of highly specialized lawyers who provide a sophisticated service to their clients what is reflected in the work load and fees, generally higher than big firms or full service. Boutiques are characterized by an inverted pyramidal structure where the partner/associate ratio may be 1:1 or even 2:1.
- 21.
In the interviews, lawyers and managers frequently said that according to them, the US Law Firm model had come to stay.
- 22.
Baker & McKenzie, the biggest global firm has more than 4,200 lawyers. In the US , there are more than 20 firms with more than 1,000 lawyers and 250 firms that exceed the number of lawyers of Carey, the main Chilean firm. In Europe , the situation is not so different. The British firm Clifford Chance LLP has about 3,400 lawyers. Garrigues, the biggest Spanish and European firm exceeds 1,300 lawyers and there is an important number of firms that have more than 200 lawyers. At a regional level, Marval, O’Farrell & Mairal in Argentina has more than 250 lawyers; Machado, Meyer, Sendacz e Opice, in Brasil, has 350 lawyers; Brigad & Urrutia in Colombia has more than 150 lawyers; and Muñiz, Ramirez, Pérez-Taiman & Olaya in Peru exceeds 250 lawyers.
- 23.
El Mercurio Legal, no 6, August 2014, pp. 56–59.
- 24.
- 25.
Their functions are not described in the websites. We think that this category is not so clear as partners and associates.
- 26.
For a comparative analysis of commodification and standardization of legal services, see Engel (1977).
- 27.
It is important to point out that the table was prepared with the information published on the websites. The interviews showed that data are not as accurate as expected. So, there is no doubt that journalists are underrepresented.
- 28.
It is interesting to see that, at least the biggest firms are gradually developing the area of criminal law that historically was more restricted to the individual practice or to boutiques .
- 29.
In Law, the term “commodification” may be used in very sophisticated contexts—see, for instance Radin (1996) and Smith (2009); however, the use we make of term in this paper is unpretentious. We just mean that some legal services, which used to be considered traditional and complex, today are regarded as standard commodities which demand depends exclusively on their price.
- 30.
Rates are normally set in UF (Unidad de Fomento) for national clients and USD or Euros for international clients.
- 31.
We think (we have no hard data to support this) that the internationalization may be expressed in another manner. The expansion of some Chilean economic groups to other countries in the region, has probably led entrepreneurs to entrust Chilean lawyers the legal organization of their business abroad. However, as far as we know, the Chilean law firms have no subsidiaries abroad as US or European firms do. Nevertheless—as in the case of Philippi—some of them reached good or best friends agreements.
- 32.
One of the lawyers interviewed who work in a firm that characterizes by the high number of foreign clients, said that in the next trip to US , he would divert from the route to visit the area where the factories of one of his main clients are located. Not because he had to visit him but because he wanted to understand where the client was coming from and his business.
- 33.
Later, specifically September 9, an announcement was made on the press about the merge with a Colombian firm (Prietocarrizosa) as of January 1, 2015 and partnership with a Spanish firm (Uría). See CincoDias (http://cincodias.com/cincodias/2014/09/09/economia/1410287241_309394.html) on September 10, 2014 reported it in the following way:
“Los despachos de abogados Philippi (Chile) y Prietocarrizosa (Colombia ), dos de las firmas amigas de Uría Menéndez, han anunciado su fusión en lo que supone la primera unión de dos firmas líderes en sus países que se produce en Latinoamérica. Además, Uría Menéndez ha tomado una participación del 30% en la firma resultante. La fusión de las dos firmas latinoamericanas y la participación de Uría Menéndez convierten al nuevo despacho en la primera gran firma iberoamericana de abogados.
nueva firma empezará a operar el 1 de enero de 2015 bajo el nombre de Philippi, Prieto Carrizosa & Uría y contará con 220 abogados y oficinas propias en Santiago (Chile), Bogotá y Barranquilla (Colombia ). Además, se beneficiará de la aportación que ofrecen los 530 abogados y las sedes de Uría Menéndez en Latinoamérica, Estados Unidos, Europa y Asia. Las responsabilidades ejecutivas se delegarán en un comité de Dirección formado por seis socios, que contará con un Senior Partner y un Managing Partner.
Se trata de la primera fase de un proyecto que responde al interés de las empresas de Europa, Asia y Norteamérica en los países que conforman la Alianza del Pacífico (Chile, Colombia , México y Perú). El auge de dicha alianza, que se configura ya como la octava economía del mundo, pone de manifiesto el potencial de crecimiento de los países que la conforman, que aúnan sus esfuerzos desde hace algunos años en beneficio de una integración económica. Estos cambios promueven a su vez la oportunidad de que las firmas de abogados ofrezcan sus servicios en ese marco transnacional. Por ello, la vocación futura es la de crecer hacia otros mercados, como Perú y México, y caminar hacia una integración plena con Uría Menéndez.”
- 34.
- 35.
See http://www.ecija.com/oficinas/santiago-de-chile/. Last visited November 4, 2014.
- 36.
The three of us are professors at the School of Law of Universidad Diego Portales and one is the Dean of the same. In 2014, we had a course and invited different partners of the main Law Firms and, one of the topics of interest was to know how they selected the lawyers.
- 37.
It is important to clarify that this comment is significant for the firms where lawyers can really work their way up. As we said, this is more the case in big firms. Therefore, our impression is that this comment is only applicable to them, as long as the career is institutionalized.
- 38.
It is worth pointing out that all websites differentiate between partners and associates.
- 39.
Another reason argued was that it is not uncommon that women accompany their couples to postgraduate courses they take abroad, after which it is difficult for them to resume their duties at the workplace.
- 40.
One of the anecdotes we were told is that of a football team who during the 1980s met with one of the most important Chilean lawyers to discuss an issue regarding image rights. After the meeting and hiring the services of the lawyer, someone asked them how much the lawyer had charged. The answer was that they didn’t dare to ask.
- 41.
On lawyer’s independence see Gordon (1988).
- 42.
When the interviewees were asked to estimate the percentage of legal entities and natural persons they took care of, the percentage of legal entities was usually 90%.
- 43.
Probably some precautions should be taken regarding the boutiques which demand is more plural.
- 44.
Or as one of the interviewee put it: “the US model is here to stay.”
- 45.
We do not have specific data from big firms but the general income level of all the lawyers of the country is known. According to the data base of the Ministry of Education of Chile (www.mifuturo.cl), the average monthly income of a Law graduate after five years was CLP 1,726,665 in 2010 (equivalent to USD 41,440 a year at the exchange rate of that year), and CLP 1,709,343 in 2014 (equivalents to USD 34,187 a year at the exchange rate of September 2014).
- 46.
The alternative was to set up the boutique law firms that work for a delimited professional niche, highly specialized, where the name of the lawyers is the most relevant aspect. The boutique firms, although smaller, can be highly profitable for the owners (typical of criminal cases). It is foreseeable that in the future, the greatest news will come mainly from the law firms established in this segment, and not from the structured ones.
- 47.
There are no innovative initiatives in Chile as online legal offices or legal software.
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Appendices
Appendix 1
Firms included in the study
Law firm | Number of lawyers |
|---|---|
1 Acuña & Cía. | 8 |
2 Albagli Zaliasnik | 31 |
3 Alcaíno Abogados | 20 |
4 Alessandri & Cía. | 39 |
5 Aninat Schwencke & Cía. | 34 |
6 Arteaga & Goziglia Cía. | 16 |
7 Arthur, Humeres, Mejías &Toloza | 0 |
8 Avendaño Merino Abogados | 19 |
9 Baraona Abogados | 16 |
10 Barros yErrázurizAsoCíados | 90 |
11 Barros, Letelier y Gonzalez | 22 |
12 Beuchat, Barros & Pfenninger Abogados | 9 |
13 Boffil Mir & Alvarez Ltda. | 76 |
14 Bulnes Urrutia & Bustamante | 6 |
15 Carcelén, Desmadryl, Guzmán, Schaeffer &Tapia | 12 |
16 Carey &Allende | 28 |
17 Carey y Cía. | 194 |
18 Cariola Diez Perez-Cotapo Ltda. | 94 |
19 Clarke, Modet& Cía. | 4 |
20 Claro y Cía. | 108 |
21 Correa Gubbins | 25 |
22 Covarrubias & Silva | 3 |
23 Cruzat, Ortuzar & Macenna (Backer & Mc Kenzie) | 43 |
24 Cubillos Evans | 20 |
25 D y P Abogados, Estudio Juan Agustín Figueroa | 18 |
26 DAC Beachcroft Chile (NO INFO] | 5 |
27 Dalgalarrando Romero y Cía. | 11 |
28 De Irurrizaga, Arnaiz & Cía. | 9 |
29 Del Rio Izquierdo | 9 |
30 EPT Tax Advisors | 5 |
31 Estudio Carvallo | 16 |
32 Estudio Villaseca | 13 |
33 Etcheverry, GarCía, Bragado y Cía. | 6 |
34 Eyzaguirre y Cía. | 24 |
35 Fernandois & Cía. | 8 |
36 Ferrada Nehme | 36 |
37 Garay Guerrero | 7 |
38 García Magliona & Cía. | 12 |
39 Grasty Quintana Majlis & Cía. | 24 |
40 Grupo Vial Abogados | 13 |
41 Guerrero Olivos | 64 |
42 Hárasic & Lopez | 8 |
43 Honorato, Russi & Eguiguren Ltda. | 10 |
44 Jara, Del Favero & Cía. Ltda. | 27 |
45 Johansson &Langlois | 4 |
46 Larrain Rencoret & Urzua | 17 |
47 Larraín y As oCíados Ltda. | 37 |
48 Luis Lizama Portal Abogados & Cía. | 10 |
49 Molina Rios Abogados | 11 |
50 Morales y Besa | 66 |
51 Noguera Larrain & Dulanto | 20 |
52 Nuñez Muñoz & Verdugo | 10 |
53 Ovalle Ugarte & Letelier | 6 |
54 Palma Abogados | 20 |
55 Pellegrini & Cía. | 5 |
56 Philippi, Yrarrazával, Pulido & Burner | 112 |
57 Porzio, Rios &Asociados | 12 |
58 Prieto y Cía. | 56 |
59 PugaMir | 2 |
60 Puga Ortiz | 38 |
61 Reymond & Fleischmann | 14 |
62 Rodríguez, Vergaray Cía Abogados. | 5 |
63 Sargent & Krahn | 14 |
64Silva&Cía. | 12 |
65 Urenda, Rencorret, Orrego, Dörr | 20 |
66 Uribe, Hubner & Canales | 29 |
67 Urrutia&Cía. | 26 |
68 Vergara & Cía. | 10 |
69 Vergara Galindo Correa Abogados | 19 |
70 Vergara, Labarca & Cía. | 7 |
71 Yrarrazaval, Ruiz-Tagle, Goldenberg, Lagos & Silva | 20 |
Appendix 2
Persons interviewed
Law firm | Interviewed |
|---|---|
Albagli Zaliasnik | Rodrigo Albagli [partner] |
Aninat Schwencke & Cía. | Luis Alberto Aninat [partner] |
Arteaga Gorziglia & Cía. | Ignacio Arteaga [partner] |
Avendaño Merino Abogados | Luis Felipe Merino [partner] |
Barros & Errázuriz | Fernando Barros y Cristián Barros (partners] |
Carcelén, Desmadryl, Guzmán, Schaeffer & Tapia | Jerónimo Carcelén [partner] |
Carey y Cia | Jaime Carey (partner] |
Cariola, Diez, Pérez-Cotapo & Cía. | José Luis Letelier [partner] |
Claro & Cía | José María Eyzaguirre (partner] |
Correa Gubbins | Juan Ignacio Correa [partner] |
Cubillos & Evans | Gonzalo Cubillos [partner] |
Del Rio Izquierdo | Humberto Del Rio [partner] |
Guerrero Olivos | Roberto Guerrero del Río (partner] |
Harasic & López | Iván Harasic [partner] |
Morales & Besa | Eugenio Besa (partner] |
Nuñez Muñoz Verdugo | PatriCía Nuñez (partner] |
Philippi, Yrarrázaval, Pulido & Burner | Camilo Jiménez [CEO] |
Prieto & Cía. | Alberto González (partner] |
Urrutia & Cía. | Alejandra Pérez [partner] |
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de la Maza Gazmuri, I., Nieto, R.M., Viancos, J.E.V. (2018). Big Law in Chile: A Glance at the Law Firms. In: Gómez, M., Pérez-Perdomo, R. (eds) Big Law in Latin America and Spain. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-65403-4_4
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