IFLR 1000
The Guide to the World's Leading Financial Law Firms

With Brazil's relentless economic expansion and an explosion of foreign investment in the country, a presence in São Paulo is fast becoming a must-have for international firms with a serious focus on Latin America. Over the past few years, a swarm of mega-firms - including seven of the eight largest in the Global 100 - have opened offices in Brazil. Since many have long had Latin America practices operating from offices in other countries, a physical presence in Brazil is the next logical move.

This year, the IFLR1000 has dedicated a special section to some of the most promising ventures into one of the world's most exciting emerging markets. As well as international firms which already have operations in Brazil or associations with local firms, we have included news of leading firms which have announced plans to open up branches in the country.

As two of the world's top financial centres, New York and São Paulo have always had strong ties. With many Latin American deals involving listings on the New York Stock Exchange, top firms from the Big Apple have historically based their Latin American practices in New York, often franchising work out to a network of Brazilian practitioners. Unsurprisingly, São Paulo is the top choice for international firms seeking to open up their first office in Brazil, or form alliances with their domestic counterparts.

However, traditional relationships between domestic and foreign firms have, in some cases, begun to shift. "The Brazilian firms are starting to feel some competition," says one attorney. "Historically, the [international] firms with head offices there have mainly focused on striking trans-national work which really wasn't competing with the Brazilian market – but now they are."

The permissibility of international firms operating in Brazil is a complex matter which has been the subject of widespread debate. In order to be granted the permanent right to practice by the Brazilian Bar Association (OAB), those with a law degree from a Brazilian or international law school must pass the OAB bar examination and fulfil all of the organisation's other requirements.

Another option is to obtain a license as a foreign law consultant, which is valid for three years and is renewable, subject to the approval of the OAB. Requirements to obtain the license include holding a permanent visa, being licensed to practice law by a bar association or the equivalent abroad, providing evidence of good character and conduct and having a clean slate in terms of criminal convictions and disciplinary violations. Foreign law consultants are only permitted to provide legal advice on the law of the country they are licensed to practice in.

In an effort to keep their operations above-board, many foreign firms have formed alliances with local firms. However, in 2010, the São Paulo bar association published an advisory decision which found that such formal alliances are against its rules. "Because of the increasing interest in international law firms, a lot of the law firms in the Brazilian market didn't feel happy and called upon the bar to take measures," says another lawyer. However, he is philosophical about the recent invasion by foreign firms. "The market is big enough for everyone," he adds. "We shouldn't be afraid of international law firms - it shows that the market has come of age. It's not what it was 10 or 15 years ago."

Chadbourne & Parke opened an office in São Paulo in July 2010. The office is headed by finance partner Charles Johnson, a former counsel at the São Paulo office of Clifford Chance. The firm's Brazilian practice focuses on trade and bank finance, in which it represents both lenders and borrowers on transactions throughout Latin America.

In Brazil, the firm has particular expertise in structured trade financing. The São Paulo finance team includes professionals who are admitted to practice both New York and English law, and are fluent in Portuguese and Spanish.

The firm represented Brazilian petrochemical company Braskem in connection with a US$350 million revolving credit facility. The loan was arranged by Credit Agricole, HSBC, Banco Santander, Banco do Brasil and Socété Generale. The deal, which closed in September 2010, helped Braskem to improve its liquidity and achieve investment grade status.

Other recent highlights include acting for engineering and construction company Grupo ACS in the largest non-sovereign issuance in Peru to date, for the first waste-water treatment facility to be constructed in Lima. The transaction closed in March 2010 and involved the securitisation of approximately NS900 million ($300 million) of receivables, funded by the issuance of Rule144A/Reg S notes. These were generated under a concession agreement related to the construction of a water treatment plant in Lima, Peru.

After decades of serving the Latin American market from its offices elsewhere, Cleary Gottlieb Steen & Hamilton announced plans to open a São Paulo branch in 2011. The firm's Latin America practice began 50 years ago and includes over 100 lawyers, with over 20 focusing on transactions in Brazil. While the São Paulo branch will offer services in a range of practice areas, it will have a significant focus on financial and corporate transactions.

Although the expansion into São Paulo is subject to approval of Brazilian authorities, the firm has already announced that it will be relocating partners Juan Giráldez from New York and Francisco Cestero from Rome to run the operation. The São Paulo office is initially expected to include ten lawyers and will be integrated with the firm's Latin America practice.

The firm has advised clients in over $100 billion in closed M&A transactions involving Latin American companies since 2006, and in more than $270 billion in capital markets offerings by Latin American issuers since 2002. It has also advised on over 30 completed IPOs for Latin American companies since 2006 and represented more than 20 Latin American foreign private issuers on SEC reporting obligations.

In February 2011, Davis Polk & Wardwell announced it will establish a new office in São Paulo, subject to approval by the Brazilian authorities. At the time, the firm indicated that partners Manuel Garciadiaz and Maurice Blanco will lead the office once it opens. Garciadiaz has worked on over 150 capital markets deals in Latin America, including some of the largest and most complex in Brazil.

The firm has also lured two banking and finance partners from Mayer Brown to help launch the new venture, which is likely to be staffed by eight to ten lawyers. James Vickers will join as the firm as counsel, and Stephen Hood, the head of Mayer Brown's São Paulo base, will come on board as a partner.

The firm's offices around the world regularly advise on transactions in Brazil. These include representing the initial purchasers in a $4.9 billion follow-on offering of common shares by Banco do Brasil, the largest bank in Latin America by total assets. The offering was completed in July 2010 under Rule144A/Reg S, and was the first Brazilian deal to do a parallel rights offering. The firm advised Banco do Brasil Securities, Merrill Lynch, Pierce, Fenner & Smith, BTG Pactual US Capital, Citigroup Global Markets and JPMorgan Securities.

Davis Polk is also advising Cosan Indústria e Comércio, the largest grower and processor of sugarcane in the world and the largest ethanol producer in Brazil, on a $12 billion joint venture in Brazil with Shell. The project will produce ethanol, sugar and power, and supply and distribute fuel. The deal was announced in February 2010.

Gibson Dunn & Crutcher has had a physical presence in Brazil since 2009, when the firm opened its São Paulo branch. The office is led by partner Lisa Alfaro, who relocated from New York. The office delivers a range of corporate and financial services, with particular focus on energy and infrastructure project finance. It also represents government institutions and has assisted with the renegotiation of sovereign debt.

The firm is advising Companhia Nacional De Açúcar E Álcool in what is now more than a $500 million joint venture to develop a sugar and ethanol production facility in Brazil. Other organisations involved in the ongoing project include the Santa Elisa Group of Brazil, Riverstone Holdings, Goldman Sachs and Global Foods.

Other recent highlights include counselling energy industry investor First Reserve's First Reserve Fund XII on a $500 million equity investment in Barra Energia Petróleo e Gás, a Brazilian oil and gas exploration and production company.

São Paulo-based Lefosse has been operating in cooperation with magic circle firm Linklaters since July 2001. The firm was founded in Brazil in 1987 and was previously known as Goulart Penteado Iervolino & Lefosse.

In July 2010, the firm recruited partners Rodrigo Junqueira and Carlos Mello to its capital markets group. Partner Jose Eduardo Manassero left its banking practice the same month.

Lefosse advised on a merger of two of the largest ethanol Greenfield companies in a $3.8 billion merger which closed in April 2010. Lefosse represented ETH Bioenergia, a subsidiary of the Odebrecht Group, which was merging with Brenco. The deal closed in April 2010.

The firm also represented MMX Mineração e Metálicos in a R$3.5 billion ($2.1 billion) deal which closed a voluntary exchange tender offer that gives the mining group a majority stake in a Brazilian port operator. The transaction, which closed in May 2011, is the final stage in a three part deal with South Korea's SK Networks. The tender offer was unusual because it involved the exchange of PortX shares for newly created variable-income royalty based securities. It also involved complex regulatory and structural issues.

Tauil & Chequer is a leading full-service firm which formed an association with US-based Mayer Brown in 2009. The firm's clients include major players such as Banco Espírito Santo, Bank of America Merill Lynch, 2b Capital, Dell Financial and JPMorgan.

Recent highlights of the firm's work include assisting Camargo Correa Oleo e Gas in drafting and negotiating of an agreement with PMCC Soluções Logísticas de Etanol for the construction of the world's first pipeline system for transporting ethanol. The project, valued at R$5.7 billion ($3.5 billion), is ongoing.

The firm also advised SK Energy on the $2.4 billion sale of its Brazilian assets to Mærsk Olie Og Gas. The deal closed in December 2010.

Establishing a Brazilian presence was a logical move for Shearman & Sterling, which has had an office in São Paulo since 2004. The firm has long been known for its expertise on cases with Latin American components - its achievements include the first registered IPO of a Brazilian company with the US SEC, and over the years it has advised on the privatisations of state-owned companies such as Embraer, Companhia Vale do Rio Doce and Usiminas.

The firm was ahead of the pack when it came to identifying the country's opportunities, opening its São Paulo office in 2004. It is headed by partner Robert Ellison.

In the largest-ever share issue in history, Shearman & Sterling represented underwriters on the $67 billion offering of Petrobras, an energy company which is partially owned by the Brazilian Government. Petrobras will use $42 billion of the proceeds to pay the Brazilian government for the right to extract up to five billion barrels of offshore oil. The firm advised Bank of America Merrill Lynch, Bradesco BBI, Citi, Itau BBA, Morgan Stanley, and Santander. The mammoth deal closed in September 2010.

The firm also recently represented Banco Itaú in its $3.3 billion purchase of Bank of America's operations in Brazil, Chile and Uruguay.

Skadden Arps Slate Meagher & Flom has had a dedicated Latin America Group since 1990 and opened an office in São Paulo in 2008. The firm has served as the lead international counsel in more than 40 international financings for Brazilian issuers. Its attroneys regularly advise leading private equity firms, including Brazil-based Pátria Investimentos, BTG Investimentos, Capital International, Tarpon Investments and Vision Brazil Investments.

In one of the most significant private equity transactions of 2010, the firm represented funds advised by private equity and buyout firm Apax Partners in a two-part acquisition. The Apax funds acquired a 54% stake in TIVIT (Brazil), an information technology outsourcing company, before making a mandatory tender offer to buy the remaining shares. The two transactions value the company at approximately $1 billion, and the latter closed in June 2010.

In another blockbuster deal, the firm advised Bank of America Merrill Lynch as solicitation agent for $1.7 billion of notes guaranteed by Votorantim Participações. The transaction closed in September 2010.

Trench Rossi e Watanabe is a Brazilian firm affiliated with global giant Baker & McKenzie. While many of its competitors are based solely in São Paulo, Trench, Rossi e Watanabe also has offices in Brasília, Rio de Janeiro and Porto Alegre.

In a $785 million deal which closed in January 2010, the firm advised CPFL Comercialização Brasil in its 100% acquisition of the quotas of Jantus, which owns wind farms across Brazil through SIIF Énergies do Brasil and SIIF Desenvolvimento de Projetos de Energia Eólica.

The firm also represented HSBC Brasil in a $42 million financing granted by state development bank BNDES to fund a bus transit project in Johannesburg, South Africa, for the 2010 FIFA World Cup. The complex transaction closed in January 2011 and was the first financing granted by BNDES to a South African entity for more than a decade.

With a staff of over 700 and offices in Rio de Janeiro, São Paulo, Porto Alegre and Brasilia, Veirano is one of Brazil's largest law firms and has an association with Canadian firm Macleod Dixon.

Over the past year, the firm has expanded its capacity with the addition of several new partners. Carlos Alexandre Lobo, a former partner of Pinheiro Neto, and Lior Pinsky, a former senior associate there, joined Veirano as partners in January 2011 and October 2010 respectively. Project finance lawyer Ana Carolina Barretto, who coordinates the firm's infrastructure and natural resources practice group, was promoted to partner in January 2011.

In a large and complex deal, the firm advised Norwegian aluminum producer Norsk Hydro in the acquisition of the aluminum business of Brazilian mining giant Vale for $4.9 billion. The deal closed in February 2011.

The firm also acted as sole outside counsel to Brazilian construction companies in the negotiation of the R$13.8 billion ($8.4 billion) construction contract for the Belo Monte hydroelectric dam, the largest civil construction project in Brazil. The firm advised Andrade Gutierrez, Camargo Correa, Norberto Odebrecht, OAS, Queiroz Galvão, Contern, Galvão Engenharia, Serveng-Civilsan, Cetenco and J Malucelli.