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Overview of the legal recruitment market in Brazil

Posted by: Laurence Simons 17/04/13

Overall, the Brazilian economy performed extremely well in 2012 in comparison to Europe and the US. Due to the continuous flow of foreign investment into the country, there has been a strong shift in the legal recruitment market, especially in-house, as legal departments in Brazil have become more strategically positioned. Implementing strategies whereby legal departments outsource less to law firms and handle more work using their own in-house teams has benefitted multinationals not only from a cost cutting perspective but also due to the fact that their attorneys know their business much better than any external firm would.

During 2012, 49% of Brazilian legal departments experienced an increase in headcount and a similar proportion (46%) expect a comparable level of growth in 2013, with most anticipating hiring between one and five lawyers. Due to this growth, there has been a noticeable increase in the number of multinationals looking to secure experienced general counsel and/ or legal managers to head up their internal legal departments.

Compliance remains a key focus across Brazil with 50% incorporating the compliance function as part of their legal division and 35% stating it is a standalone role within the business. 75% confirmed that they prefer to source their compliance staff from a legal background although only 61% currently had a compliance professional with legal experience.

Despite the increased reliance on in-house legal departments, the private practice market also performed well during the course of 2012. Areas such as insurance and reinsurance, project finance, M&A, tax and competition law flourished, while law firms showed less interest in developing the capital markets space. There was a notable increase in the number of law firms hiring tax professionals as well as those with strong backgrounds in M&A transactions and corporate law.

The competition for talent has created a ruthless culture when it comes to remuneration, with many firms, particularly foreign organisations with strong global financial backing, offering exaggerated salaries to secure talent. This has resulted in many local firms having to meet, if not exceed, these salary levels to compete. Naturally this has had a knock-on effect on in-house salaries. For those considering a new role in 2013, 19% of lawyers will be expecting an increase in salary of over 31%.

As a result of the inflated salary levels, there has been an increase in the number of legal professionals willing to relocate to Brazil. However, this is not always an easy move to make due to the regulations enforced and the strong need for business level fluency in Portuguese, coupled with the requirement for knowledge of the Brazilian legal market and Brazilian culture.

The outlook for 2013 remains promising with 65% feeling optimistic about the future of the economy in Brazil; this is a dramatic contrast to the 32% globally who feel the same way. In preparation for the 2014 Football World Cup and the 2016 Olympic Games, the legal market should continue to experience high levels of activity. In both the private practice and in-house legal markets, the competition for talent will remain fierce and remuneration levels are likely to continue to rise due to the market being candidate driven. Industries such as pharmaceutical, construction, IT and energy are anticipated to see significant growth during the course of the year.

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