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BigLaw Push Into Mexico Slows Amid Uncertain Climate

Suevon Lee law360.com

While regulatory reforms in energy and telecommunications brought a new influx of BigLaw firms to Mexico over the last several years, experts say President Donald Trump’s election and the uncertainty of future decisions affecting trade between the neighbors has for now pumped the brakes on BigLaw expansion into the region.

Some BigLaw firms seized upon reforms in the country to enter between 2012 and 2015 while other firms have long had ties to the region dating back decades. While Dentons just announced a move into Monterrey — Mexico’s industrial center and second-largest city — solidifying its presence in the region following its establishment in Mexico City last year, there now hangs a question mark concerning activity in the region as U.S. companies and manufacturers brace for changes under the new administration.

With the future of the North American Free Trade Agreement up in the air and devaluation of the peso following the U.S. election results, some firms are holding back, waiting to see what might happen before they make any major moves to assemble in Mexico, according to industry watchers.

“We do not know with any degree of certainty what the impact of the new U.S. administration will be,” said Jeffrey Liebster of legal recruiting firm Major Lindsey & Africa. “However, it is definitely another factor that is causing many companies and their lawyers to hesitate before making any major investment in the [Mexican] market.”

In addition, there is an overarching strategy by some firms to wait and see how reforms in the country following Mexican President Enrique Peña Nieto’s election in 2012 will take shape before plunging in.

“Landmark constitutional reform, primarily in energy laws, has been the driving force for law firms considering the Mexican market in the last few years,” said Joshua Dull of Major Lindsey. “However, it takes time for a new policy to be fully implemented, and with the significant drop in oil prices, law firms and the companies they represent have been taking a wait-and-see approach.”

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