Tiago Dias José is a partner at MGRA & Associados in Lisbon, Portugal, focusing on public law. In this episode, he and Lindsay discuss the legal trends in Portugal, particularly in real estate and sustainability, and why Portugal is such a favorable place to do business.
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 ILN-telligence Podcast. I’m your host Lindsay Griffiths, Executive Director of the International Lawyers Network. Our guest this week is a returning guest, we’re really happy to have him with us, Tiago Diaz Jose from MGRA in Lisbon, Portugal. Tiago, welcome. We’re really glad to have you back with us. Why don’t you take a couple minutes to introduce yourself and your firm and your practice.
Tiago: Hi Lindsay. It’s a pleasure to be back and to chat again with you. As a returning guest, I can introduce again the practice of our office. We are a boutique law firm based in Lisbon. We have a few offices around Portugal, and it is known since many years now that we have a few partnerships in Portuguese-speaking countries where we also work. As a boutique law firm, we have a few specialized divisions to cover the main issues of our clients, say, industry, of course, corporate tax and administrative law and litigation. Our corporation also has a small branch that does finance and banking with very specialized people.
We have a team for IP. Portugal has become an entry country for Europe on IP registration and development of new patents and new ideas as we became quite a hub for entrepreneurs and inventors, especially linked to new technologies. My area of practice is public law, which means that my team deals with several aspects of the relationship with the state. We have since, for many years now, a very big part of our work is relative to the public transport system in the Lisbon metropolitan area. So, it’s linked to technology and to updating technology and to public [inaudible 00:02:45] and to make all the, say the partners and the operators who work together to put the system each day in better shape for client service. But we also work with construction licensing, real estate, and what we have seen from time to time is a hype in interest, and we have seen in the last years that it has become a big concern, sustainability and energy production.
Energy production meaning license for new energy systems, relationship with the state in order to guarantee that the energy produced is welcome and distributed through the national grid system, and also that the production meets the needs, either for industry and business and new developments, and of course, for housing, but that we have sorted out for many years. It has become quite interesting to understand that the Portuguese and energy production become transformed from being quite coal based and also in need of importation in, say 10 years, to a country that produces almost all of its energy needs, and like 80% of the energy consumed is from renewable energies, which means we have seen huge investments and huge commitment from the state and from the privates that invest in these systems to put this together. And the results are serious as businesses and as bringing Portugal to be a sustainable country in terms of energy.
I think the next focus of concern and investment and development will be water production, because we are a country in the south of Europe, and we know that things are not going for the better with the rain and the lack of water and forest fires. We have seen this happening in the last 20 years, droughts and lack of supply on water. It has not been happening and it’s not a huge concern currently in Portugal, but it is, in our neighbors in Spain and Italy and so on. And we know that it’ll become a problem here, so solutions are being developed and put on the table to develop and to study what we can do and how we can get better on these. And that means new investment, new finance, new contracts, new insurance, so on and so on.
As for Portugal and as for our office, one of the areas that has also been of our interest and we have developed, we started developing in the legislative perspective, collaborating with a regulator, is that Portugal has granted a license for a spaceport in Azores, and we helped design the new space law, the Portuguese space law, of course, comparing with the US space law with China space law, and with a few EU legislation that is already in place. And I really consider, this is something we have discussed with Anacon, the regulator, and a few other interested parties on these, that these regulation, these widespread regulation should be brought together.
We should try, or it should be a concern to bring together the legislation on these issues, especially on environment safety and insurance, where there is a huge potential for new business and to develop a common platform that would prevent the operators and the developers and the companies to stick to one regulation and then try to apply that to everyone, and the legislation doesn’t comply with all the demands. And it will affect us. Once this exploration starts moving forward, it’ll affect everyone in case of an accident, or something goes wrong. And if we don’t take care of that in a regulator’s perspective, to have it in a common ground, it’ll be very hard to, them to either to find liability, but in an earlier stage, it makes it very difficult to prevent the risks.
And that, I think is… It’s an interesting area and it should be a concern.
Lindsay: Absolutely. Yes. It’s one of those things where it’s easier to start with the regulations now before something happens rather than to go back and try and legislate it once something has already,
Tiago: Once we already had a problem.
Lindsay: Right, exactly. All of that is really fascinating. And so, it sounds like Portugal is really on the cutting edge when it comes to sustainability and being very forward-thinking, especially having the benefit of what’s happening with your neighbors in Spain and Italy, as you say, with the forest fires. We’re seeing that here in the US with what’s just happened in Hawaii, which is really-
Tiago: Canada.
Lindsay: And Canada, of course.
Tiago: I’ve seen yesterday on the news, the fires in Canada are burning for nine months now.
Lindsay: Yes.
Tiago: It’s amazing. They have to take a whole city to prevent people from getting hurt. It’s really impressive. Yes, Portugal is, as you said, on a cutting-edge time, but we also… Well, it’s noticeable, also on the demand and the interest that we see at the office from tourists, of course, but also from foreigners, US citizens and companies, and some northern Europeans and some other locations like Asia and so on, either from people that discovered Portugal and understand that it’s safe place. The climate is very good. We have political stability; we have been the same country for a thousand years or 900 years. Tax-wise, we are not a paradise, but we are quite attractive, and the estate planning here makes a lot of sense. And for families, education in Portugal and the health system and so on works pretty well, and it’s not that expensive. And we have seen in the last 15 years excellent value on real estate.
We really see that the long-term value can be held or even increased, and the demand has been huge. We have had lots of new clients, lots of old clients coming back, investing in Portugal, developing not only housing, but tourism, infrastructures, dams, infrastructure to produce energy like solar plants and wind plants. A lot of interest from companies that already had the know-how from France, from Israel, even from the US. And Yes, we are seeing, the economy is developing quite well. I was reading today on the news that Portugal is one of the only three countries in the EU where the economy grew this year already in the first semester. So Yes, we are having a good time now, and we see that. We see that with new clients, with new interests, and we even had to rearrange a bit to have more people in the office to cope with the demand and to have more focused teams on real estate and on licensings and on industrial projects and so on. We noticed that.
Lindsay: So that being said then, what do you think is the biggest challenge that you’re facing at the moment?
Tiago: In Portugal or at the office?
Lindsay: Let’s say at the office.
Tiago: At the office, when times are good, the challenges are accepted with joy.
Lindsay: Of course.
Tiago: Especially because when the thing is, you have to reorganize to have bigger teams, to have more expertise, and to cope with the client’s demands, it’s easier than to think, okay, we have to do cuts or this business is not going well, so we have to change the direction, and we are not seeing that. It’s the opposite. We are seeing that we are being challenged to do more and to do better. And to do better is very important because the challenge with new clients, especially with foreign clients, is that we get people with newer perspectives and new approaches to the problems, which means that we get new ideas, we get to think about new solutions and new ideas, and it brings us better perspectives, and we develop with the clients, we develop with the new ideas, we develop with studying more, and with bringing newer people to the teams. And the challenges are, as usual.
I think we ended the last conversation on this topic. The thing is, people. So, the challenge is always to find good people and to get along with good people, and to motivate the teams to cope with the demands. That’s it.
Lindsay: Yes, that absolutely makes sense. So, what would you say then, do you think the market is going to look like and the firm is going to look like maybe in the next two years? I hate to look too far in the future because I think we really don’t know what’s going to happen, but maybe in the next couple of years.
Tiago: Well, our firm is already 20 years, 19 years now. So, we have seen ups and downs and new locations and new ideas and so on. And we know that things can be seen in short periods of, like a chart, or you can see it in a longer term, which is the perspective I like the most, because in a longer term, you see more stability than ups and downs. And you can drive the office and you can drive the teams for steadier work and to keep progressing, even though you say, okay, the next six months, whether there are elections or there’s something that doesn’t go well, or you are, okay, you have one and a half months in the summer where everyone is lying at the beach. But okay, you know that in the end of that, come September, you’ll return to the activity, you’ll have the demand again, and you have to motivate people to keep reading, studying, talking to each other, writing a few articles for the team and for the office to keep developing, even though you may not be multiplying the business every month.
But you know that when the time comes, you have everything ready for it. And the time comes, it’s just a matter of looking at the trend, seeing what the areas are, and developing it. I think that in the next two years, it is quite safe to say that real estate energy and, as usual, tax will be the major areas on development. Real estate, we already see. Tax is everywhere, so you cannot go around anywhere in the world. It is what it is. And the energy sustainability, we must focus on these, and it’s a key concern for all economies. So, it’s something that we have to keep thinking about.
And for a law firm, it means a lot of work on real estate because it depends on having ground to put the facilities in. On having huge transformations, if you are talking about hydro on dams or even on producing wind-based energy on the sea or anywhere, it means a huge transformation in the landscape, and that means also that you have to take care about environment and safety and so on. And then it’s also the part of the insurances and the connection to the state, meaning licensings and connecting to the grids and so on, and prices on energy, which come from European regulation and so on. So, there is a massive work when we talk about energy. Either, we started thinking about energy, I don’t know, in 2008 on oil and gas, and now we are only thinking about solar and electricity from water, clean energy, which is a huge transformation, but it also means huge investments.
These investments are not, well, they are probably not so huge as oil and gas on platform rigs and so on, but they are huge. And they mean huge transformations also on environment. So, we also have to take care about that. So, I think these are the major points to be developed, and that will keep the work interesting, let’s say. And then of course, we always have the families and the estate planning and the running business on institutions that we go along with and that we have as clients for many years.
Lindsay: Absolutely. You talked a lot about sustainability from the client perspective, which I think is really important because that’s what’s going to drive what’s happening in the environment around us. But I’m curious about it from the perspective of law firms themselves. Do you think that law firms also need to be looking at their own ESG goals and being more sustainable themselves?
Tiago: Surely, I do think so. And I think the newer generations are more aware of that and are more willing to stop using paper, to use less energy, to work more from home, and not to run the car to the office and then run back and so on. I think they’re more focused on that, and it is easier to older lawyers that need the paper and need to print everything, and they want to have the files in front of them and read things, read it on paper, and so on. So, I think that first step will become the generation gap. We are seeing it happening. In my case, I almost don’t use paper, and I’m not the youngest guy at the office, of course, because I’ve been there for many years.
But what I see is that younger lawyers, the younger generations tend to do it easier. But I think that, and what we see here is that that concern comes along or is a bit enforced also on the buildings that we use and the machinery, the energy consumption. But in Portugal, that’s being also a bit enforced by the state, meaning that if you have the office or a house with a lower energy efficiency evaluation, you have higher taxes and you are not forced, but you are invited to upgrade it, to have solar panels, to use less energy, to make it more efficient, to change the windows, to have better insulation, to use less the air conditioning, or use a better performance air conditioning.
And that forces the users, and also the law firms to think about it a bit better or a bit deeper, let’s say. But I think so, Yes. Although I don’t think lawyers are, or law firms are the concern on pollution. Of course, we use paper, but not much more than that. It’s our lives. It’s the way we think about, okay, should I go to the office every day? Do I need the air conditioning from 7:00 to 7:00? Do I need to print everything? It’s more individual than, we are not using vessels and we are not burning energy to work. Well, we are, but not directly.
Lindsay: Right. Not in the same way as some of the bigger corporations are.
Tiago: Yes.
Lindsay: Yes. So, what would you say is the biggest area that’s related to either the practice of law or your industry in particular that you’re curious about at the moment?
Tiago: Real estate in Portugal has been developing in so many different ways. On energy production, on tourism, on industry, on private clients and housing. The demand is quite high. The solutions in Portugal are quite good. The regulation is quite accurate, and focused on clients, on the market, let’s say. Also, because it represents a big revenue for the state in tax, as there are many, many operations. That 2.1 area, I would say, one area that has been developing a lot and that we are quite interested in is real estate and that we have been working a lot with. Then the other areas are more things that we like to do and that… Well, the part of the work with public transports, it’s also quite important, and it’s quite interesting, because it gives us many new ideas and many new outputs of our work because we take care of public [inaudible 00:25:36], we talk with the developers of the technology, we talk with the operators of the transports, with the public authorities that organize and are the concessioners of the public transport grid.
And you have this IP of the flow and the need to bring everything together to serve a huge population for a million people, which I wouldn’t say isn’t that much of a challenge, because my team is very used to doing that. We have been doing this since 2010. But it’s really interesting, and it really motivates me. Even new lawyers that come to the team, they’re really amazed with, wow. The people that come along and say, “Okay, I enter the underground, I put the ticket in, and what’s everything behind this?” And that’s quite interesting.
Lindsay: That’s really cool. That must be fun work.
Tiago: Yes.
Lindsay: So, wrapping up, I always like to ask this question. What is something that has nothing to do with work that you’re really enjoying right now?
Tiago: Doing this in August, its reading, family, and going to the beach.
Lindsay: That’s a great answer. I was thinking about it recently, and I realized that sports teams have their off season, and I don’t see why professionals don’t get their off season too. So, I think this is the off season for legal professionals. So, I think that’s really important.
Tiago: Yes, but we noticed that a lot in Europe. August is, it’s not a dead month, but it’s very calm, a lot of people on holidays, and it’s really the time to enjoy a bit of relaxation, keep breathing, keep thinking about the subjects, write a few notes for yourself, speak to nice people, as we are doing, have good ideas, and rest a bit. Yes.
Lindsay: Right, and then September really kicks off. Yes, exactly, exactly. Do a little vacation, maybe vacation in July, but also recuperate a little bit, and then it really kicks off in September again.
Tiago: Yes.
Lindsay: Yes. Well, Tiago, thank you so much, I really appreciate you doing this and talking with us. This has been a really interesting conversation, and thank you so much to all of our listeners for tuning in. We’ll be back next week with another guest, and in the meantime, please take a moment to rate, review, and subscribe on Apple Podcasts or wherever you listen to podcasts. Thank you so much.
