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Morote: "With our signings, we are looking for quality and specialization, not only to increase volume”

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El Confidencial interviews José Vicente Morote after his re-election as Managing Partner of Andersen Iberia to analyse the roadmap for this new phase of the firm

In January, the partners' meeting of Andersen Iberia elected José Vicente Morote as sole managing partner of the firm in our country. After four years of collegiate management, in which Morote shared the helm with Íñigo Rodríguez-Sastre, the firm is embarking on a new stage, without relaxing its ambitious growth strategy in any way. In fact, the firm plans to reach 100 million euros in three years, which would mean doubling the results of 2023, a year in which it exceeded 50 million euros in Spain and Portugal. This roadmap anticipates that Andersen will continue to be one of the big players in the sector in terms of signings and integrations. Although, as Morote counters, "we are not only looking to gain volume with recruitments, as has been said on some occasions". In fact, he says that it is becoming more and more difficult to join Andersen, because the requirements for joining the company are getting higher and higher.

As if this were not enough to make Andersen one of the projects to follow in the coming years in the legal sector, the firm is also one of the firms that is betting on increasing its territorial presence. Contrary to the withdrawal of other large law firms in our country to Madrid, the firm is trying to gain presence in large cities outside the capital. With offices already in Barcelona, Valencia, Seville and Malaga, Morote says that, before the end of the year, they will open in Bilbao. A growth, Morote assumes, that forces them to professionalize the management of the firm and, of course, to improve the remuneration. "Our partners earn the same or more than those of other firms; the gap is in the lower categories, especially in the juniors," he admits in an interview with El Confidencial, the first after his re-election. For this reason, he reveals, this year they have once again reviewed their remuneration. "We have to pay like the best do," he says.

QUESTION: How has fiscal year 2023 been going, do you already have the results?

ANSWER. It has been a very good year, in line with our forecasts or even a little above them. For Andersen Iberia we estimated a turnover of 50 million euros and we will close around 51 million. This is a very significant growth, in line with previous years. And we have not included in this figure the turnover of Daya Abogados, which we integrated in October, because we understood that it did not offer a realistic picture. So yes, 2023 has been a very good year.

Q: To what extent have you been affected by the slowdown in the transactional market, and could you have achieved an even higher figure without the uncertainties that dominated much of the year?

A: During the first three quarters, it is true that M&A was at a standstill, and it was only in the final stretch that we noticed a certain acceleration. Our M&A team has had a good year, but there is no doubt that it would have been better if there had been more activity in the first nine months. It has been a very complicated year, with a geopolitical situation that sowed enormous uncertainties. In any case, in answer to your question, the answer is yes, we would have recorded an even better figure.

Q: With two months already passed in 2024, what do you anticipate this year to be like?

A: Our forecast is that it will be a very good year. We have a growth target of over 30% and we are confident that, despite the uncertainties, the market will support us. We are convinced that our model will continue to be able to attract the best talent and that, if some of the geopolitical or economic factors, such as the war in Ukraine, the conflict in Palestine or inflation, stabilize, 2024 will be much better than 2023.

Q: Two years ago, in our previous interview, you said that Andersen's goal was to reach 70 million in less than five years. When do you think you will reach that figure, and have you already set your sights higher?

A: It is in our DNA to continue growing. 2024 will probably be the year with the highest growth in the firm's history, which will allow us to end the year with more than 65 million euros. With this evolution, in three years we expect to reach 100 million euros in revenues. We are working with this roadmap in mind.

Q: How many professionals and partners make up Andersen today?

A: We currently have 77 partners, of which 19 are units and the rest are salary partners. Our staff is made up of 443 people, 360 of whom are lawyers. The important thing, in my opinion, is that we are managing to evolve the organization at the same time as we are growing in turnover. We have an increasingly robust structure and team of professionals with a higher profile. We are also improving in other areas that are the three vectors of our strategy: profitability, specialization and culture. These three points are key for us. 

Q: Apart from turnover and profitability, what other business indicators are you paying attention to in this period of intense growth?

A: We are watching a lot. The main one, perhaps, is sustainability. For example, in the firm we have nine practices, seven of which meet the objectives established by the firm and do so comfortably. The other two are just a little short. This gives us peace of mind because we have a good distribution of business. We also value the fact that we do not have any partner that exceeds the average turnover of all the partners by more than 25% or 30%. This indicates that we are a balanced partnership. Or, finally, that each office achieves the goals set in their respective plans. In other words, we do not depend on a single practice, partner or office, there is balance, and this guarantees the sustainability of the project and growth based on solid foundations.

Q: To grow so fast, in any case, means you are forced to be extremely vigilant of these parameters, because they can easily get out of control.

A: But the fact is that we are not looking to add for the sake of adding, as has been said on some occasions. Our growth responds to a strategic plan, to a scheme whose main lines we are fulfilling. We had specific objectives for Seville, Malaga, Barcelona and Lisbon, which we have been meeting. And at the same time as we make the incorporations, we are controlling not only the invoicing, but also the profitability, the number of professionals, the hours invoiced, etc. It is not just a matter of adding invoicing, this growth is directed and has a meaning.

Q: What are the hallmarks you want Andersen to be known for in the market?

A: Specialization. We want to be a firm known for having high-level specialty areas. We believe that we are already achieving this in many of them, but we can still improve. It is also important that we know how to detect the evolution of society and the economy, to incorporate those others that are necessary. Examples of this are our environmental, culture, urban planning, global mobility and now corporate valuations teams. Now we are also developing an artificial intelligence team. We are a dynamic firm that knows how to adapt to the needs of the market; this is where we differ from other more traditional law firms. And, from an internal perspective, I would like us to be recognized for having a very strong partnership culture, with a very transparent, agile, upgradeable and shared company. There too we are on the right track, but there is always room for improvement.

Q: Do you think the market already recognizes you as such?

A: Not quite yet. I still meet people who ask me if we are Andersen Consulting. We have to make sure that when people say Andersen in the market, they know that they are talking about a top-level tax and legal services firm. We don't want to look like a big four, but we want our identity to be one of extreme quality in the tax and legal fields.

Q: From a management point of view, what do you have to deal with when you move away from the €20 million frontier and into the €50 million frontier?

A: The great challenge is to draft a protocol for everything. You have to create a structure that allows the organization to be manageable because, what you used to be able to carry in your head, now becomes impossible and you need instruments that allow everything to work automatically. To get the idea. When I took over the management, we were about 200 people in two offices; today we are close to 500 people in six offices. The beauty of this process is not to see how the turnover grows, but to promote the modernization of the office, with policies, IT tools, plans, protocols or teams. For example, we used to have a single finance director; now the finance team occupies half the floor. Management is becoming more complex and we have to respond to all of this.

Q: You also have to deal with more partners knocking on the door.

A: I am aware that, in addition to helping the firm grow and improve, my other main task is to ensure that my partners live as well as possible, have the best possible conditions and earn as much money as possible. Whoever is in charge must be aware that the firm does not belong to him, but to the partners as a whole. It is clear to me: I work for my partners and my professionals.

Q: What was the reason for moving from collegiate management, with Íñigo Rodríguez-Sastre, to individual management, with a single managing partner?

A: Íñigo continues to play an important role in the firm. He continues as a member of the board of directors and continues to lead the arbitration practice, two functions that allow him to continue to participate in the management of the firm. The three years that we have co-managed Andersen have been very good and we have gotten along very well. We have always made decisions in complete harmony. However, leading an area such as arbitration and, at the same time, being at the head of the firm is very tiring. So, he suggested to me, given that I was the one who had focused more on the management of the firm, that he should leave the management and that I should continue on my own. It has been a very easy process, without any friction or schism, and it is clear to me that Íñigo Rodríguez-Sastre continues to be a great asset for us.

Q: Andersen is one of the law firms that is betting on expanding its presence in the territory. They already have offices in Madrid, Barcelona, Valencia, Seville and Malaga. What is your bet in this sense, will we see new openings in the short term?

A: Our intention is to open Bilbao before the end of the year. And, as far as Spain is concerned, we do not have any other objective in our strategic plan, unless a very interesting possibility arises in another location. A presence in Bilbao would allow us to cover the northern part of the peninsula, but for that we have to find a strong team with which to establish ourselves there. We are still searching, but it must be before the end of the year at the latest.

Q: Have you finally achieved stability in Barcelona, what is the performance of the office there, because the turnover target was set at seven million?

A: The objective we had for Barcelona is halfway achieved. But more than turnover, my concern was to have a good team, something we have achieved with Juan Ignacio Alonso Dregui, who is an excellent commercial lawyer and is doing a great job. In addition, we have incorporated Juan Roda, tax partner; Marcos Mas, state lawyer, who is a very well-known professional in the local market; José Ignacio Paradella; Manel Maragall, and Rafael Ortiz. This has allowed us to form a very good team of which I am tremendously satisfied. It is true that we made some mistakes at the beginning, but I have no doubt that we are already on the right track.

Q: Esteban Ceca, managing partner of Ceca Magán, stated in an interview in El Confidencial that its presence in other cities contributed to business generation, but that profitability was in Madrid. Do you share this perception?

A: In our case this is not the case. Practically all our offices meet the profitability target, which is, in percentage terms, the same as the one we set for Madrid. In all our offices we set the same goal in relation to this indicator. A good example of how offices outside Madrid can make a great contribution is Valencia, a city where we are the firm with the highest turnover, more than 12 million in the last fiscal year, with a very relevant profitability and contribution to the organization as a whole. My vision is a little different from Esteban's [Ceca], since what we think is that each office should have its own profile. In other words, the work we do in Malaga, Seville or Barcelona is different from what we do in Madrid, but we are not worried about that. I don't want us to do IPOs or large M&A transactions in Valencia or Malaga, but I prefer to have, to say something, a strong labour or real estate department. That diversity gives us the sustainability I mentioned earlier, so if Madrid falters, the other offices give us balance.

Q: In any case, the markets are very different. How is the firm structured to maintain cohesion between offices?

A: Contrary to the restructuring recently announced by Cuatrecasas, our approach is to have strong offices, with office managers with weight, responsibility and decision-making power, and not to make everything depend on the practice areas. At Andersen we have a combined structure in which we take into account the business lines and offices, because in the end it is the office managers and local partners who know the markets best, as they are the ones who are close to the ground. In that sense, we respect and support them, because they make a very important contribution to Andersen's development. This specific and growing weight of the office managers does not conflict at all with the practice managers. This gives us a double control over the evolution of the business in each department.

Therefore the head of labour, who is in Madrid, ensures that the whole area is profitable, but I will also ask the director of the Valencia office to ensure that his local labour practice is profitable. In this way we ensure that there is no one practice in a particular office that covers the losses of others, but that all of them strive to provide the required results. In short, contrary to other approaches that seem to be spreading nowadays, our commitment is that both the offices and the practice areas, as well as the practice areas of each office, should meet the profitability objectives. I don't want office managers to just go there and turn on the lights and air conditioning, I want them to be very involved in the evolution and results of their office. In addition, we do the reporting in short time frames, which allows us to make decisions and have much more control over the office as a whole.

Q: Do you have any relevant integration planned?

A: We are working on individual additions, but not on a big integration like Daya Abogados. There is nothing planned in that regard for the next three or four months, although we are always open to sit down and listen to good professionals. In any case, it is true that we are finding it increasingly difficult to find suitable partners for this project because, although Andersen is becoming more and more attractive and, therefore, there are more and more people who want to come, the truth is that the level of demand of the firm has been rising, which is limiting the number of possible incorporations to be made.

Q: However, there seems to be a clear trend in the market to look for mergers or integrations.

A: It is true that the market has been concentrating itself for some time now and I believe that this trend should continue. We receive proposals every day. But, as I said before, many of them no longer fit in with us; some do, obviously. In any case, I agree that there is movement and that there will continue to be movement in the coming years.

Q: What are the factors that make a firm or a professional a good fit for Andersen?

A: The first thing we look at, as we did with Daya Abogados, is the quality of their advice, the recognition they have in the market and their degree of specialisation. Daya, for example, was a firm with very strong tax and financial practices. In no case are the incorporations we make at Andersen simply to gain volume; if we do not have a professional or a firm that meets high quality standards, we prefer not to grow. The second thing we value is that they fit in with our culture. At Andersen we don't want lone wolves or people who don't know how to work as part of a team. We are an organisation with a very collaborative culture, where you come to join in, not to wage war on your own.

Q: In any case, nobody is exempt from making mistakes. How do you react when you detect that someone does not fit in?

A: In the first three or four months you can see whether someone is going to work or not. And it is not a question of turnover, which in some cases may take time to arrive, but of attitude. At Andersen we have an expansion committee, made up of Ignacio Aparicio, Ivo Portabales, Javier Bustillo and myself, who are in charge of conducting the interviews, in which we assess the numbers but also the candidate's personality. Sometimes we make mistakes, as is inevitable, but we have a very well-established and effective process that allows us to fine-tune with great precision whether someone is going to work or not. But, I insist, it is not a question of invoicing 100,000 or 200,000 euros more or less, because we know that the first few years can be difficult. Someone can promise to bring in a million and, if they then generate only 600,000 but you see them with the necessary attitude, it doesn't worry us. The problem occurs if you don't see a proactive attitude, if they don't make presentations to clients or if they don't integrate into the team. All of that is what tells us that this person doesn't fit in. It's true that later on the exit may take a little longer, but you see these things in the first three months.

Q: How is the construction of Andersen's global network evolving?

A: It continues at an unstoppable pace. We still have some gaps to close, but Andersen is already present in 179 countries, which allows us to offer a very, very large coverage. Overall, we are now in a second stage, which is to improve our service offering in some countries. In any case, in Spain we are very calm because our evolution is going very well. In fact, at a global meeting we held a couple of weeks ago, our CEO pointed to Andersen Iberia as one of the examples to follow in the organisation as a whole. From now on, it is up to us to help the network grow and improve in Latin America.

Q: What percentage of Andersen Iberia's turnover is sent to you via the network?

A: Our idiosyncrasy is not to be a firm that receives work and clients from abroad, but rather our partners have national clients and a great capacity to generate. It is true that the network is evolving and more and more and better cases are coming to us. And it will have to go further, because we have yet to develop the American, English and German markets. When our projects mature there, that will give us an important boost in terms of international business. But the truth is that, at the moment, what the network is allowing us to do is to accompany our clients abroad and not so much to receive work. In any case, I am not worried, because it gives us a certain organisational, cultural and business independence. The fact that our partners have their own portfolio of clients allows us to have a significant degree of peace of mind with regard to Andersen's progress in Spain, although, as I said, I believe that the contribution of the network will grow in the short term.

Q:  A few days ago we learned of Garrigues' move to Torres Colón. Do they plan to move from 110 Velázquez Street?

A: We are starting to look, yes. We already occupy the whole building here, but growth is in our DNA, so it won't be long before we don't have enough. We are already looking for locations for a change that, while not urgent, will have to be addressed in the next year or year and a half.

Q: How have you handled the pressure to raise salaries in recent years? I understand that the process of wanting to be a firm that plays in a higher league also forces you to pay lawyers better.

A: I am pleased to see that the remuneration our partners receive is in line with or above what they could earn in other firms. Andersen's partners earn a very good living, both equity and non-equity. However, where we have been working in recent years is in the lower categories, where the market is moving very fast. This year, for the second time, we have approved a considerable increase in these professional categories, which is where we have a significant gap with our competitors, especially with regard to juniors. It is true that, as we have a pay scale with very large increases every year, once they become directors, our people are on a par with any other firm. In any case, we know that we still have to make an effort with juniors because young talent is increasingly better paid and we have to be there, among the best firms.

Q: Although inflation has eased, it is still relatively high. To what extent are your finances strained by the current situation?

A: The biggest impact of inflation is that it slows down some operations, which are not carried out because of the cost of financing. This obviously limits us.

Q: Will fees have to be raised this year?

A: Not necessarily. It is true that fees are updated in line with inflation, but, in general, the cost of a transaction or a lawsuit is negotiated on a case-by-case basis with each client. So, from the management point of view, we do not give a general order to raise the fees by 5% or 10%, but we leave it to each partner to establish and negotiate the amount of their bill. We have to keep updating the fees because prices have gone up and we pay more rent, better salaries, but our line is always to do it in a measured way and in dialogue with the clients.

Q: What role do you envisage generative artificial intelligence playing in the delivery of legal services, and what is your approach to this new technology?

A. We think this is an area where we need to be very vigilant. In fact, it has been one of the key issues that we have addressed in some of our recent internal meetings. At Andersen we are already working on some artificial intelligence tools and this technology is part of the advice we give to some of the companies we work with. What I don't think makes sense, however, is for each firm to launch its own tool, because these are solutions that are only going to be of temporary use. What do I mean by that? I mean that, in the long run, two or three applications will be imposed, which will be the ones we all contract, as happened with the databases. Developing your own tool may serve as training, so that you are not new to artificial intelligence, but the future is that we will all work with a few providers. In any case, in the firm we are already working on training programmes so that our professionals know how to handle this technology.

Q: You and Pedro Pérez-Llorca were the first managing partners of large firms to recognise that fewer juniors will be hired because of generative artificial intelligence.

A: It's just that with the capabilities of these tools we're going to need fewer hands. But not in two or three years' time, tomorrow. In fact, in interviews we are already asking for skills in relation to artificial intelligence. Knowing how to handle existing solutions already makes your job a lot easier if you have to draft a contract or prepare a lawsuit.

Q: The recruitment of fewer juniors is just one element of others that can be disrupted within firms, such as career plans, the pyramid structure itself or the presence of equity partners. Have you stopped to address these issues?

A: It is advisable to stay ahead of events so as not to be left out of the loop. Although it is true that it is perhaps a little premature to start thinking today about how professionals who are just starting their careers will reach the partnership. What is clear is that, in the coming years, junior lawyers will become more expensive. I don't know if we will reach London's level, but they are going to be less and less productive and they are going to be able to tell us: "I'm worth it and I want it", and we are going to have to pay them for it. In Spain, the poor pay of professionals in many sectors is related to the fact that there are so many of them. However, as a higher and higher level of training is increasingly demanded of them, we are going to find that there are going to be very few suitable people. And then they will be able to ask for a lot of money. That is why I anticipate that in our country we will see pay levels approaching those of other markets.

You can read the interview at El Confidencial.

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