Ismael Noya, Partner, Estudio Echecopar, a member firm of Baker & McKenzie International, on Peru’s evolving business environment

In the early 1990s Peru changed its overall economic model, transitioning from a state-run, closed, over-regulated and nationalistic economy to an open, investment-friendly free market. From then on, the growth and development of the country started to depend more on private sector performance and less on what the state could or would do.

The legal framework changed drastically to adapt to the new economic model, to the point that none of the laws I studied during law school remain in force. Notwithstanding such an appealing change, it took a while for Peru to be noticed internationally as a place of business opportunities and for it to gain credibility through the permanence of the changes introduced. At least 10 years would go by until Peru was able to place a sovereign bond issue, the first coming after 74 years of being absent in the voluntary markets. And it was not until five years ago that Peru was rated as an investment grade country.

For the past 12 years, the country’s economic performance has been notable, with foreign direct investment as well as local investment constantly increasing. Business has prospered and become more sophisticated. Peruvian companies have grown locally and some others are already growing into other markets, including both regional markets and those that are further abroad.

Peru’s commercial relationships have evolved, and a new matrix can now be seen, with more presence from the Asia-Pacific region countries, which has turned China into Peru’s number one commercial partner. The possibility of Peru becoming an important hub in South America is now beginning to emerge, making it look less like merely an aspiration and more like a real possibility.

All of these improvements in our economy and prosperity in business have had a direct impact on corporate local law firms. With all the effervescence derived from growth, new business matters turned into transactions that had never been made before in the Peruvian market and, among those, some not even contemplated by local laws or regulations.

These unprecedented matters have constantly challenged local law firms that have had to work closely with their clients and local authorities to find the right ways to adapt to new times of business expansion. Our economy is connecting more and more to different parts of the world through various trade and financial circuits, as well as inbound and outbound investments.

With all these changes currently going on, how lawyers will adapt is a very valid question.

It is by working for and with our clients that we lawyers develop our knowledge, gain experience and build our reputation. As the global chairman of Baker & McKenzie, Eduardo Leite, rightly points out when referring to the effect that clients have on us, “We work with them. We advise them. We help them. But, more importantly, their needs shape us.”

Therefore, in order to be prepared to meet client needs, it is no longer enough to merely know what local laws say. Clients constantly face multi-jurisdictional issues when trading, financing their activities and making or receiving investments, and they need the support of their lawyers to walk them through the problems they face and make their business happen, and to make it happen quickly.

That is why it is now indispensable for Peruvian law firms to be able to reach anywhere around the world, to provide expert advice concerning any matter, and to do so swiftly and cost-efficiently.

And for this, we must have international reach, constantly invest in the most modern technology, have and manage access to updated expert knowledge, as well as be able to attract, recruit and retain the best talent. Those are all advantages sought after by global law firms.

Why is this? Because this thought has always been crystal clear in our minds: as our clients progress and get better, we lawyers need to do the same.