Diego Martinez Berlanga and Luis Lavalle are partners at Martinez Berlanga Abogados, the ILN’s corporate member firm for Mexico. More importantly, they are long-time friends, which becomes clear quickly in this fun podcast episode that covers practicing law in Mexico, changing leadership and teaching methods, and why lawyers really aren’t going anywhere.
You can listen to the podcast here, or we’ve provided a transcript of the highlights below.…
Lindsay: Hello, and welcome to the Law Firm Intelligence Podcast. I’m your host, Lindsay Griffiths, Executive Director of the International Lawyers Network, and our guest this week is Luis Lavalle, with Martinez Berlanga Abogados, in Monterey. Luis, we’re so happy to have you back with us. You’re another of our returning guests, we’re really glad that you have come back to join us. So for those who have not listened to your previous podcast, why don’t you tell us a little bit about yourself and the firm, and your practice?
Luis: Sure. Hi, Lindsay. Thank you for having me. And as you said, more than glad to be back in the ILN. As always, I’ve been a big fan of ILN, I’ll always be, and it’s good to be back and to still promote it, and be taking advantage of the, not just lawyers, but the personal relationships we have built within the network. So very happy to be back.
So my name is Luis Lavalle. As Lindsay already mentioned, I’m in Mexico, specifically in Monterey, which is the northern part of Mexico, two hours away from the US border. Monterey, or Nuevo Leon, which is the state, it’s a big industrial state with a lot of companies, a lot of the corporate groups, most corporate groups in Mexico are headed there. So as Lindsay said, I’m right now with Martinez Berlanga Abogados, which is formed by Diego Martinez, who is a good friend of mine, who I’ve known him for a long, long time. We used to work together with the other law firm, Martinez Algaba, which is a litigation law firm right now. And that’s how I met Diego and we’ve built a good relationship.
So now that I joined him again, I think we’re making a very good matchup with the matters that we used to work with at our practices, and I think they’re coming very good together. As I said, Diego is in Mexico City, myself in Monterey, so we get a lot of geographical, either in the north or in the center. And that gives us a very good strength towards our clients. As I said, we do a lot of general corporate work. We specialize a lot in financial transactions, which is the work that we’ve been doing for a long, long time.
We do a lot of mergers and acquisitions, either from the buyer or the seller side, and we comprise all the stages in those kinds of transactions. Right now, it’s been one of the whole areas that we’ve working for. I don’t know why. There’s been crisis, there’s been inflation, but somehow, a lot of opportunities for entities that have money, or entities that are willing to come into Mexico, it’s been going on. And a lot of the ways that they’re coming into Mexico is through the acquisition of either Mexican companies or foreign companies that have a Mexican subsidiary, and that’s how they are trying to get more market within Mexico. And the good investment that can be made here, since Mexico, as a lot of you know, has a very good international trade agreement with a lot of countries, not just the well-known trade agreement with the US and Canada, but also with a lot of countries. So the network of trade agreements that Mexico has gives a very good site to invest in Mexico.
As always, for political reasons, there are some doubts as to coming into Mexico investor because of our government, but the truth is that, even though I might think it’s a bad government or it’s not a very beneficial government, it’s been working very well. And a lot of the world situation right now, it’s giving Mexico a good advantage in having a lot of facilities in Mexico, because of the logistics site of being close to the US, having very good ties with the US. It’s getting Mexico as a very, very hot place to invest right now, especially for foreigners.
Lindsay: That’s great. And speaking of Diego, actually, I think he’s about to join us, so we can bring him in too.
Luis: Oh, good. Please. That would be great.
Lindsay: We have a special extra guest joining us today, so here is Diego Martinez as well.
Diego: Hi, all of you.
Luis: Diego, how are you?
Diego: Hey, Luis. Hi Lindsay. How are you?
Lindsay: Hi, Diego. Good, how are you?
Diego: I was not supposed to be here, but I just wanted to jump in and say, “Hi” to all of you.
Lindsay: Hi, it’s great to see you.
Diego: Hey, Luis. How’s Monterey?
Luis: Very good, Diego. So we’re being recorded, Diego, so we’re right now in an interview, and Lindsay wanted to ask you a couple of questions.
Lindsay: Sure, absolutely. And we’re really happy to have you. And Diego, you yourself are in Mexico City, correct?
Diego: Right, yeah.
Lindsay: Great. So why don’t you tell us a little bit about your practice specifically? Luis was telling us about the benefits of doing business in Mexico at the moment, so why don’t you tell us a little bit about your practice?
Diego: Well, I think that it’s a common and regular practice here in Mexico City, very focused on M&As and all kind of transactions involving Mexican law and Mexican business participants in the market, and also some restructurings, corporate restructurings and financial restructurings, we also participate heavily on that. And as a quite new activity that we have been doing for the past years is helping family offices in their transactions and in their structure, for either high-wealth families and small ones, well, medium size wealth families in Mexico, and very much helping them in the next generation structuring of their assets and of their wealth.
Luis: Transition to the next generations. And that’s a practice that we’ve called, “Family Business,” Lindsay, and I think it’s also getting very hot, at least in the last couple of years, as Diego mentioned.
Lindsay: We’ve seen that with a number of our firms, it’s a really interesting area of business.
Diego: And in Mexico, it’s been particularly interesting because of what Mexico has come from and has evolved as a country itself. Probably last century, there were wars and fights and there were not that many corporate structures in Mexico, it was all very new wealth in Mexico. But as two or three generations have come through, now the families start thinking about how they can maintain their wealth and can make this transition swiftly and evenly. And I think that’s why it’s become work and activity that the families businesses really needed.
And also, another particularity in Mexico is that almost, I would say probably 100%, except corporate America that is in Mexico, 100% of the companies, even though they are public companies, are still family companies. And that means that the families are controlling, the patriarch is controlling the company, then the patriarch nowadays they have children, they have grandchildren, all of them working in the company. And that represents a challenge in how to continue supporting the family, but also supporting the business as itself. And because of that, the legal work and the advice work as a trust advisor, not just as an expertise, has been become a very, very interesting and active activity in Mexico.
Lindsay: Absolutely. So then, what would you say is the biggest challenge that’s facing you in the legal industry at the moment, and how are you working to overcome that?
Diego: I think I would say the participants in Mexico, probably. I’m not sure that Luis will agree, but here in Mexico, as opposed to in the United States, the law firms just shattered all the time in the market. So you are dealing with sometimes not very well experienced law firms that are new law firms with very young people that just started their business out of two or three years in a formal law firm, and they think that they are ready to really come into these kind transactions, and you need to help them to really understand the deal and probably-
Luis: Educate them as well.
Diego: Exactly. I was going to say that was presumptions, but we need to educate these young people that is in front of the table, because otherwise, the business and the transaction doesn’t come through.
Luis: I agree, Diego. Why did you say I was not going to be in agreement? At the end of the day, fortunately for us, I think, we are experienced lawyers, we’ve been more than 30, 35 years in the market and we’ve gained a lot of experience, and that’s, of course, has helped us in putting us in a marketplace where we’ve been well known. And at the end of the day also, as Diego mentioned, it helps to get the business going instead of fighting with the counterparty that it’s always one of the problems or the issues in this kind of transactions. You have a counterparty that might not be well known or might not know how to handle the matter, and at the end of the day, you are directing him, guiding him in order to get the business done, which is a final purpose of clients in these kind of transactions.
Lindsay: Right, right. That’s really client service, in the end. We have this issue in the US and I know we’re trying to work through it with our law schools, but law school really trains lawyers to be good at law school and not so much training them to be good at being a lawyer. Do you find the same thing in Mexico where you’re not so much getting that on-the-job training, where your law schools are more training them to be good at law school?
Luis: Definitely. And that’s an issue that I was discussing yesterday with some clients that are coming into Mexico to set up an entity, a business. These guys are architects in specifically, and I have the same issue. The problem in law schools in Mexico is first our educational system. As you probably know, Lindsay, we don’t have college here in Mexico. You end up in high school and that’s when you have to choose a career, law school, medicine, architecture, accountant, whatever you want. And you are very young, deciding at that age, what you want to become. So that’s a tough one.
Second, the programs of most private universities are structured so that they don’t work. Students are not allowed or they don’t… It’s not that they are not allowed, because they do allow them, but they’re not… The programs are done in a way that they would not incentivize them to work. Diego and myself, for example, since we were probably in first year of law school, we started working, and that’s where you really learn. And a lot of the programs in the university are structured so that they are not incentivized to work until probably the last semesters or the last years, where they have some programs that they call, “Practices,” or [foreign language] or stuff like that.
But definitely, the law schools need to put more attention in practice, and it’s the same issue with architects, and I would guess it’s the same issue with accountants, with same issue with a lot of the professionals. Law schools or education needs to change a lot. We’re seeing it all around. It’s changing, it’s changing. And yeah, they’ve included a lot of courses, a lot of new subjects that are more oriented towards business or more oriented toward the practice, but still, we need to evolve more. What do you think, Diego?
Diego: I agree. And I agree because, as opposed in the US, the way I’ve seen it works when we were working abroad is that, when you are in law school, you really focus on law school during the semester or during the year. And then, you have a three or four months for internship in law firms in New York and these places. And then, you end up this two, three or four months of work, and then you get back to school and then you do that the same thing next year. And then, when you finish law school, you are well-prepared. At least you have an idea.
Actually, lately, what I’ve seen in large law firms in New York is that they have programs where paralegals, they start working for probably a couple of years in a very structured program before going to law school. So then, they go to law school, but they really know how a law firm works and what they are going to be facing in the future. So that makes a lot of sense.And I have very close family members that are doing that in New York, and I think that works, and I think that could work very well in Mexico.
But on the other hand, if the school allows because of the times and schedules of classes, to work in the morning and go to school at night, it’s very tough. It’s very, very difficult life because it’s five years of law school in Mexico and with very little pay out of that. But that also works, and that was Luis’ and my case, that we started at the beginning with very low pays, but working hard every single day, and then going to school and then starting at night. But that pays off.
Lindsay: No, and it is, as you say, very challenging. On the flip side, you’ve got the young lawyers, but then you also have on the other end, the great leaders. And what would you say that that great leaders have in common?
Lindsay: I know it’s a tough question.
Diego: That’s a tough one.
Luis: Great leaders, what they’ve done in the past and what they’ve built is a career where, at the end, they are known for being a trusted advisor. Not just a lawyer, it’s a trusted advisor to businesses. And we’re talking just in the areas where Diego and myself are practicing. They are well known in law, they know the law, they know how to apply it, but they’re also well known in other matters that comprises the business of a specific client, and they’ve come into being trusted advisors. That’s something that it’s not easy to accomplish or become, and I think those are the leaders or those are the lawyers that you turn around and see and you would like to be part of your advisory team. And that’s an evolution. It’s not something that it’s done from one day to another. It’s not something you learn in law school, and you’re not going to learn it in any school. That’s something that you will get a lot by knowing people, a lot by treating people, a lot by experience. And that’s it, I think.
Diego: I totally agree. And also, I think that a great leader, and that a difference that makes stable law firms in Mexico for the long run, is that the partners of the law firm are committed to develop people, are committed to create learning institutions and not just trying to get their work done and go home and forget about anything else of the firm. And when law firms and partners in large law firms do that, I think that they really make a difference, in the law firm’s industry in Mexico, and in the services that we provide for corporations and for families.
And as Luis was saying, that’s totally true. Some lawyers use this the term that they become not an expert lawyer but a, “Consigliere.” So being in Mexico, this kind of family businesses that I was mentioning, at the end of the day, the families, they have a problem internally, and their first thought is, “Let’s talk to Luis because he will tell us not about what the law says, they will understand the family, they will understand the business, they understand the marketplace, they understand globally the whole thing, and they will give us a good advice.” And that’s what really makes a leader comes through a really well and good services provision.
Lindsay: And Diego, you really alluded to my next question, which is helping to create that next generation and really helping to mentor people. What do you think is the importance of mentorship?
Diego: I think that also what Luis and I lived in the past, trust your partner. Trust them, have patience, because it’s very easy in the process that someone gets either from another firm or for a in-house lawyer, to offer you a position with a little better fees and with a little better salary. Because they offer you a car or because they offer you whatever, and then you go there immediately. And you need to have patience for not doing that, and to understand that this is a long run process and you need to have a mentor, a good partner, that will tell you, “Hold on. Hold your horses. Don’t run.” That would be the difference. And we had the fortune of having this kind of partners since, partners that, even still there in our old firm, and that became mentors, and that became very good friends of the both of us.
Luis: And I think reinforcing what Diego says and as he mentioned, we lived it. We lived it personally. I remember, Diego and myself were associates at Martínez, Algaba, and we had two or three persons that were partners that we work with, we were their associates. And we really learn a lot from them. And that also teaches us on how to proceed with our associates now. Now, Diego and myself as partners, we need to create that relationship. We need to teach what we’ve been taught on practicing law, on contracts, on clauses or on certain situations, and we need to pass it along to our associates. Sometimes, it’s very complicated process because you are with the pressure of getting the work out. Sometimes you have deadlines, but you also have the associates that are helping assisting and might not have the expertise, so you really need to have the time to review the work, to teach them. And that’s not something that is easy to balance when the pressure is on.
So it’s something that, at least what I’ve seen, as I said, I joined Diego several months ago, and the associates we have in our law firm are great. They’ve been taught by Diego very well, and they are loyal, at the end of the day. That’s what they are getting, to be loyal, also, with Diego. ‘Cause they are seeing the advantages. And how do they see them? They go to meetings with clients and they see their peers, compared to them, and how they handle matters, how they know the matters. And you instantly see a difference on the way they’re handling and the knowledge they already have, compared to other ones that have not had the fortune or having somebody that is teaching them or that is mentoring them.
Diego: There are two things that I would like to add here. First, we are trying and we are committed to show to these young lawyers the whole business. When we were young, probably that was something different. They would tell us, “Okay, prepare this promissory note. Prepare this clause of this agreement. Prepare this small piece of the transaction.” But we really didn’t understand what everything was about. And with this, since we are a small law firm, and with this commitment, we bring along the associate and we tell them and explain the whole transaction, the whole rationale of the transaction. And that makes a difference from us, as a small medium law firm, from a large law firms with non-committed associates that are also training the clerks. So that makes a difference.
And the second point here is that you have the time, being a small firm, to take them to social things that they can come and see your clients, get involved. And the clients also start having a professional relationship with these young associates, and it’s better for all of the stakeholders of the process, I would say.
Lindsay: Absolutely. I think those are huge benefits because the associates get to understand the whole process and why everything matters, instead of feeling like just a cog in an overall machine. They understand why everything that they do matters as part of a transaction or a deal, so I absolutely see the benefit of that.
Diego: And I’m sure how Luis will laugh here, but we have a lot of experience training lawyers because I, myself, I have a lot of experience since I was 13 years old, training horses. And I train my lawyers exactly the same way I train my horses back at that time. And I do the same with my children. I train them like horses, that’s it. A lot of confidence, a lot of passion for what they do. And again, that works, at the end of the day,
Luis: I don’t laugh, that’s truth.
Lindsay: I believe you. I believe you. It makes me think, and this can be a medium size firm question, is about work-life balance, and whether or not that’s even a reality, and whether or not that’s more possible for a firm of your size versus some of these mega firms. But is that something that you think is possible, and what does that even mean?
Diego: Absolutely. That’s important because, again, Mexico where the social life gets very mixed with the professional life. Let me give you an example. One of my associate, he has been with me for eight years, and he’s a very good golfer. And now, he’s playing golf with one of our clients, and they meet every Sunday in the golf course because it happened to be that they were in the same go club, and that that’s very, very important.
But also, what I’ve always said to my people is, it starts making a lot of difference in the process. First, I tell them, “We are not your priority. You are going to work here just a few hours a day and I want you, first, your priority is your school. Your second priority is you have to have fun in your life and your sport and your train, whatever there. And your third priority is the firm. But that start changing when you finish your law school. Then, you need to party and you need to have fun and you need to be passionate in what you do. But then, there’s a time, like at our age, that everything is work, everything is your law firm, and then again you start changing it.” But that’s the way we try to tell them how to balance their life, because otherwise, you’re going to burn them out.
Luis: And also, Lindsay, I think the pandemic give us a big, big punch on the face to all of us, and it changed, I think, for good, the way we need to see things in terms of life besides work. And of course, it’s been a lot of studies around new generations, these how they call the, “Baby boomers” or the new generations.
Diego: Why generational that-
Luis: They have other priorities, and we know the priorities is not work. Their priorities is to have fun, to travel, to get to know other places, if they have family, of course, the priority is the family and then work, et cetera. So it’s changed, I think, for good. And even for us. Probably in the past, Diego and I would spend I don’t know how many hours, a lot of hours, in the law firm. Right now, you need to see that there’s life after law firms. And we’re trying to get that balance as well.
Lindsay: I agree. It’s so very important. So to wrap up, what would you say the future of the legal market looks like, and how do we get there?
Luis: Diego? I have my opinions, but I think Diego also asks.
Diego: Go ahead, go ahead.
Luis: Well, there’s a lot of things right now, and if you see some of the studies regarding artificial intelligence and which professions are going to be gone, some of them, they say it’s lawyers. To be honest, at least right now, I don’t see it that way. I see lawyers, as Diego mentioned, like personal advice or personal [foreign language], and that’s not something artificial intelligence is going to give you. Yeah, artificial intelligence might give you a very good contract with a lot of clauses that you might not be able to draft. Probably yes, because at the end of the day, that’s how it started.
But the relationship, I would say, even… I don’t know. In a negotiation, in a meeting, the way you look at people, the way you read their faces, the way you negotiate or you try to get a point in your favor or argument, that’s not something artificial intelligence is going to give you. So I see our profession just evolving a lot on these new programs, this new artificial intelligence. But at the end of the day, as we mentioned, programs in law schools might change, and might adapt, but being a lawyer, being a person, is not going to change. And the person, that’s, I think, the basis. It’s the basis for our profession. Relationships, persons.
Diego: I would put it this way. Those are only instruments for the lawyers, not substitutions.
Diego: Substitutes for the lawyers.
Luis: See how we compliment ourselves, Lindsay?
Lindsay: That’s great. It’s good that you work so well together. And I couldn’t agree more. Like anything else, Diego, you put it perfectly, they’re instruments. And I think it will make some of your jobs easier, and then it’ll free you up to do to be that advisor, which is the things, hopefully, that you really enjoy doing. So thank you both so much for being here today and for participating in this really interesting conversation. I really appreciate it, and we look forward to being back next week with another guest. And for all of our listeners, thank you for being here too. Please take a moment to rate, review, and subscribe on Apple Podcasts or wherever you listen to podcasts. And thank you both.
Luis: Thank you, Lindsay.
Diego: Thank you very much. Bye, all.