Buenos Aires-based firm Negri Busso & Fariña has separated into two legal outfits, with former partners giving different views on the reasons for the split.
Federico Busso has formed Busso & Fariña Abogados alongside Carlos Fariña, Lucila Escriña, Matías Reichman, and Daniel Foglia. The firm specialises in corporate transactions, with an emphasis on shareholder conflicts, M&A, estate planning, and litigation.
Meanwhile, Juan Javier Negri has joined forces with Julio Pueyrredon, to form Negri & Pueyrredon Abogados.
Federico Busso told IFLR1000 that he thought several factors had led to the breakup of the former firm. “Attorneys leaving the firm understood that at Negri, the contributions that partners and associates made were not adequately and fairly compensated and interests were not aligned,” he claimed. “We expected things to change for some years, but when we realised that things would not change we eventually made the decision [to separate].”
In contrast, Juan Javier Negri said that in his opinion, to describe the fallout as “a mere partners' compensation dispute is misleading and partial” and that despite the disagreements he thought that “most of those issues could have been discussed and that the split should and could have been avoided.”
“We [Busso and Negri] were both absolutely convinced that the way in which partners were being compensated was unfair. I always thought, perhaps incorrectly, that we both shared the same ideas as to how the situation should have been corrected. There were major differences, some of which were raised by Federico only once he took the decision to leave, regarding the firm's profile, the steps to be taken about [feuding] associates and about the policies regarding delinquent accounts which continued to receive services in spite of the lack of payment of large amounts [which were] overdue.”
Negri also said that long-term issues had an influence citing “several wrong decisions taken [by the firm] in the past, like paying high stipends to partners who were not interested in getting new clients or a high rent for a magnificent building that proved too large for the number of lawyers the firm had.”
Argentine firms operate in a highly competitive legal market where business has been low for a number of reasons. The country’s economy remained stagnant in 2014 contracting by 0.2%. In July, the country defaulted on its debt for the second time in 13 years, after failing to pay $539 million in interest to bondholders. In light of this, both partners pointed to the nimble nature of their new operations as key to their respective strategies.
Negri described his new endeavour as “a much leaner law firm, with low overheads but well-seasoned partners able to offer a much cheaper and convenient service than larger firms with layers and layers of associates.”
“We have already felt the shock clients feel when their calls are answered by a senior partner instead of having to climb up the internal ladder of larger law firms until they can talk to a senior partner. We believe that our proximity and immediacy to the client will not be matched by our larger competitors unless they downsize as we have done.”
Describing the focus of his new firm Busso highlighted similar attributes: “We aim to provide value-added legal services. While our objective is not to compete for price, we are able to provide clients with cost-effective and tailored fee arrangements simply because of our size.”