From outsider to market-leader, in a rapidly-changing industry with perennially out-of-date regulation – and under a federal government investigation – there are many reasons why the amount of money Google is spending on lobbying has surged over the last year. But even still, Google is a relatively thrifty lobbyer, spending a mere US$2.06 million in the second quarter of 2011; Exxon Mobil assigned US$3.81 million to the cause, while Verizon Communications went all out, spending US$4.38 million across the three months.

Proponents of the US lobbying system say that the very fact that we know these amounts, and where and how they are being spent, shows that the regulation of relationships between government and companies is working, and that transparency is the norm. But the scale and >
This is understandable in a country in which powerful business interests have long had undue influence on government – particularly back when that government was less than democratic – and in which transparency is very much not the norm. Corruption remains endemic across government, with just one of the most recent scandals uncovering public servants at the Ministry of Transport with lavish but inexplicable lakeside mansions and the minister′s son with a surprisingly profitable construction company. The situation is improving – dozens of heads rolled at the Ministry, including that of the minister, showing that uncovering and punishing corruption is more of a priority now than ever before – but there is a long way to go.

So it is not surprising that most lawyers in Brasília are cautious when it comes to talking about lobbying, or about the work they are doing for clients in the field. Marta Mitico, who heads TozziniFreire Advogados′s office in the city, gives a common opinion: ′Lobbying is a dangerous word: it has negative connotations,′ she says. Like many other firms, she says some of the work they do is connected to lobbying, but within very clear delineations: ′We monitor bills as they pass through Congress and follow governmental investigations; but the influence is strictly legal, never political. The profession is not regulated and is a little stigmatised, so as lawyers we take a back-seat role.′

Marcos Joaquim Gonçalves, the head of Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados′s Brasília office, has a similar point of view. ′We are very far from lobbying, which is seen as ′dirty′,′ he says. ′But we do ′technical lobbying′; for example if the law is wrong and affecting a client, I would approach Congress to discuss the law to see if it can be fixed.′

Nonetheless this work – more comfortably called ′government relations′ – is growing, says Antenor Madruga of Barbosa Müssnich & Aragão: ′There are some lawyers who specialise in it, and the boundaries are getting more clearly defined – it is less of a dirty word,′ he says. ′There are good practices to follow, and the best way to protect yourself and your client is [with] complete transparency.′

These boundaries and their definition within a regulatory vacuum are also the subject of ongoing debate. Piquet Carneiro of Veirano Advogados was a member of the commission that drafted the current, somewhat skeleton, rules in the field, under the second Cardoso administration. ′The commission was concerned that any excessive regulation would deprive the authorities of contact with the private sector and benefit from their knowledge,′ he explains. ′Regulation should stimulate contact but apply clear safeguards – it is a shame we don′t have more ample regulation.′

There is a bill before Congress looking at just this matter, but it has been stalled for a very long time and no-one seems confident it will get going again any time soon. The cynics suggest that sufficient numbers of members of Congress like the current informality and lack of transparency enough to ensure that they are unlikely to impose more rules upon themselves in the foreseeable future. Even if one assumes that the majority of those considering the bill want clearer rules – which is arguably quite a bold assumption – there is unlikely to be clear agreement on what those rules should be, increasing the likelihood of a complex law that is hard to comply with. And most of the lawyers agree that no regulation is better than bad regulation.

′We have a very active legislative system, and if Congress asks for help drafting the technical aspects of a new law, that′s something I do regularly,′ says Carneiro. ′There′s a huge space for law firms in government relations, and if clients ask for help, then sure – but we don′t go looking for business in the field.′

The one firm taking a different stance on government relations work is Pinheiro Neto Advogados. While very aware of (and determinedly avoiding) the negative aspects of lobbying, the firm sees real opportunities in the field and has a practice under the guidance of senior associate Armando Monteiro Bisneto, selected because he comes from a political family and has a clear understanding of how government works. ′The government relations practice is building very well – we were surprised in fact about the scale of the opportunities we were missing,′ says office head Carlos Vilhena. Their biggest client last year was an association of oil and gas companies who wanted to be involved in the drafting of the new law. ′We worked alongside a lobbying firm and drafted amendments to the new law, for example.′

While in substance this might not be miles away from what some of the other firms are doing, in tone Pinheiro Neto stands alone: they openly talk about the practice as a business – and a profitable one. ′It is certainly successful; there was some discussion over how to charge for it as lobbying firms offer a six-month retainer fee, which would be unusual for law firms,′ he says. ′However, when we offered that to clients they said they wanted hourly billing.′ Perhaps over transparency concerns? ′Perhaps – but in fact I think clients′ understandable concerns in that area are actually helped by having us on board. If Pinheiro Neto approaches a politician with a lobbying issue, the honest politicians feel more comfortable and the dishonest know there will be no opportunities for them.′

If the Pinheiro Neto brand is serious enough to ameliorate lobbying′s reputational issues, then on the other hand, surely providing such a service is a stretch for the firm′s conservative culture? ′It was difficult to fit within the culture of the firm – we had to work hard to persuade the partnership,′ says Vilhena. ′It has to be both part of and separate from Pinheiro Neto to make it work. But the same could be said for our litigation practice. Our new litigation partner Vicente Coelho Araújo [elected to the partnership in 2011] needs to be known in his own right as well as of and for Pinheiro Neto. [Senior partner] Celso Mori is clearly a great name and very well known, but firstly he does not live in Brasília and is not here every day, and secondly we need to be sure we have the next generation ready to continue the practice.′

The tugboats

Pinheiro Neto′s generational planning in its litigation team exemplifies well the changing face of the practice, which has for decades been the foundation of the practice of law in Brasília. As the seat of the judicial branch of government – and thus home to the Superior Tribunal de Justiça (STJ), which ensures the uniformity of federal law when lower courts disagree; the Supremo Tribunal Federal (STF), the last recourse for constitutional cases; as well as top labour, tax and other specialist courts – Brasília is the last stop for the country′s most interesting and complex cases. But originally it was very rare to have top litigators based there – Pinheiro Neto, for example, is a long-term resident in the city, with an office open there since 1975; but their head of litigation, Mori, has always lived in São Paulo, and they have only just elected a litigation partner in the city.

In fact, until a few years ago, Brasília offices were staffed with what one local lawyer calls ′luxury interns′ – lawyers whose job it was to receive petitions from São Paulo or Rio and take them to the court to file them. Then, on trial day, the hotshot litigator would arrive for the duration of the case, disappearing back to civilisation at the end of it. After all, in the 1970s and 1980s, few people actually wanted to live in Brasília – a planned mass of concrete hewn out of the desert in the centre of the country, carefully delineated into neat sections and infinitely less interesting to the average Brazilian than the coastal beauty and raucousness of Rio de Janeiro, the country′s former capital. For decades after being built, Brasília was empty at weekends as politicians and government employees scattered.

All of that is changing. Not only are there people in restaurants on a Friday night these days – maybe not as many as there are on a Thursday, but nonetheless – but also Brasília offices of law firms are more than representative satellites. For example, Sergio Bermudes, arguably Brazil′s top litigator, opened an office in the city 12 years ago. ′Certainly we have senior lawyers there,′ he says. ′They are closer to the courts and can work better for clients′. (He himself is there about once a week.) There has been a natural development in the quality of the local teams – for example, Cristiane Romano has been with Machado, Meyer, Sendacz e Opice Advogados in Brasília since 1989 and now runs the office. ′My goal is not to be the person who only presents petitions, but to be part of defining the strategy,′ she says. ′I know the Justices and the system here and can contribute a great deal, working alongside the Rio and São Paulo partners.′

Of course, the cases still originate in those cities most often, so strong litigation talent outside Brasília is essential. However, increasingly, permanent talent inside the city is becoming important. One prominent local litigator describes his practice as that of a tugboat: a supertanker′s captain will guide the boat across the world, but when it arrives in port, he hands over control to local tugboat captains who know the harbour and its specific dangers well, and can ensure the supertanker reaches port safely.

The biggest driver for this development in the local practice of litigation has been the 2005/2006 fundamental reform to judicial procedure, which mandated the supreme courts to examine concepts not cases – thus similar cases are blended together to judge as one. Essential to free up the courts from a huge backlog – ′the only way the court could survive,′ says Romano – the slowly-implemented reforms are also changing how Brasília offices work. Firstly, the firms must cooperate more when their cases are merged – not something that will come easily judging by the opinions of most interviewed here – but also, as Mattos Filho′s Marcos Gonçalves notes, ′Now, Brasília offices can have a good team, as the high-level work is constant rather than in short bursts.′ Based in the city since 2003, Gonçalves can see a step-change in the quality of services on offer – and believes the fact that he was in situ before the reforms were passed has given him the edge on firms that have reacted to, rather than predated, the reform. He also exemplifies the change in Brasília′s social reputation: a Paulista, he nonetheless loves living in Brasília now, ′personally as well as professionally. The quality of life here is amazing.′

Differentiating Brasília

As the offices develop in quality and seniority, naturally the partners there have begun to look at new opportunities and broadening their practice. But the concept of typically Brasília work is by no means uniform across the firms, who have very different strategies about what work they should be doing in the office. Antitrust is given a greater prominence at Trench, Rossi e Watanabe Advogados, as joint competition practice heads are also joint Brasília office heads – at some other firms the competition partner is based in São Paulo. Siqueira Castro - Advogados, as befits a firm on its model and scale, is full-service in the city; Machado Meyer′s Romano, a litigator by trade, says that as the head of the Brasília office, ′I became a generalist′. As an ′accident of history′, Pinheiro Neto runs its mining practice from the city – and while the firm is the only one pursuing both this and government relations work, office head Vilhena gives short shrift to the concept of appealing to local companies native to Brasília: ′We don′t really do it – companies from Brasília are not yet to the standard where they would want or afford our work.′

But for other firms, he is missing a trick. Brasília is the third-richest city in the country and the Distrito Federal the highest GDP per person of any state (in fact, it is comparable with that of Portugal, even while the state has the population of Mongolia, according to The Economist), and BM&A′s Madruga is one who sees opportunities in that. ′There are lots of challenges in building a local corporate practice – this is not São Paulo or Rio – but in fact the demand for work surprised us,′ he says, pointing to clients in construction, services, hospitals and more. ′There are lots of local, family-owned businesses looking to professionalise, perhaps to attract international investment – we′re perfect for that.′

TozziniFreire is another firm focused on the developing local market. ′Our mission is to represent local clients – Brasília has grown substantially in the last decade and companies based here now have complex needs,′ says Marta Mitico. ′A problem is that the local companies think we are very expensive – but that is not true, we are flexible on billing and can certainly be competitive in the local market.′ For example, she says, a local law firm will request a fixed percentage for a regulatory matter, whereas Tozzini will tend to offer either a fixed fee or an hourly rate, which with their experience in the field ends up being cheaper for the client. ′Our structure also means we can offer economies of scale.′

Marcos Gonçalves agrees that the local market is growing – ′the new generation at these family-run companies have studied in the US, returned home and started to consider a more professional approach; Mattos Filho is riding this growth′ – but also identifies another corporate niche not on the radars of the other firms interviewed. He points to the large ′green belt′ in the states around the city as vital producing ground for huge agribusinesses such as Bunge; as he has focused his practice a great deal on tax matters for agribusiness, Brasília is a good base. ′Now we have wealth and power in the interior of the country,′ he says.

Of course, by edging their way into the local corporate work, the offices of the big national firms are stepping directly on the toes of local firms, for whom this business has long been their bread-and-butter. Machado Meyer′s Cristiane Romano acknowledges that the picture has changed since the national firms starting arriving in bulk in the early 2000s. ′At that time, the local firms did all the work we now do for national or international clients, so of course there is competition: we invade their area.′ She, like others, is clear to make a distinction between different types of local firms however – there are small, local full-service firms over which the national firms feel a clear sense of superiority: Mattos Filho′s Gonçalves warns, ′they are complicated, and they can be dangerous.′

Then there are boutique firms, set up by ex-Justices for example, who have specific expertise or contacts in a particular area, with whom all the national firms would happily work if the case demanded it. ′Clients want the feeling you did everything possible,′ explains Romano, while BM&A′s Madruga says it is impossible for a one-partner, five-lawyer office to know all 37 ministers plus all their teams plus all the agencies and auxiliary parts of government. ′I would turn to a local firm if it had very good connections in particular area,′ he says. Gonçalves agrees: ′At times I would partner with a local firm – but I never hire them to be the lawyer in my place.′

Not what you know, but who you know

Thus, even though the majority of the large firms in Brasília are understandably cautious about lobbying work, they are nonetheless aware that contacts are all in Brasília, and plug their governmental experience and connections as vital to their work and reputation in the city. BM&A′s Madruga, for example, worked for the government for 14 years – most recently as a federal attorney – before being hired as partner at the firm in 2007. ′Federal government contacts serve as a bridge,′ he says, citing practices like antitrust and telecoms as the most obvious, but far from the only ones that benefit from contacts with those in power. ′Closeness to the government is so important for every practice in the firm.′

Mattos Filho′s Gonçalves is also ex-public sector, having spent a year as part of the Lula administration working on tax reform. He notes his work for government as a unique aspect of a Brasília practice; for example, in the legislative branch, Mattos Filho is advising the PT, President Dilma Rousseff′s party, on tax matters among other work; Gonçalves is also assisting in an analysis of transfer pricing rules as part of an executive branch project. (In the judicial sphere, he points to the firm′s work for bank association Febraban and federal judges′ group Ajufe).

Veirano′s Piquet Carneiro held innumerable positions in government in his 20 years in the city as one of the first CADE lawyers, and on commissions looking at deregulation, ethics, bureaucracy and more, before merging his existing law firm into Veirano′s practice in 2005. ′Veirano was looking for someone with seniority, with political visibility, and that differentiates us from the other big firms here,′ he says. ′They prefer to bring their lawyers to Brasília, whereas our strategy is different: we add value by knowing how the court system works, and by being both local and national.′

The habit of flying top lawyers in when needed has a commercial impact, as well. ′Traditionally, Brasília is not seen as a money-making office – the cases tend to start in São Paulo or Rio, and then we do the final push of work,′ he says. Firms in São Paulo without a Brasília office say somewhat contemptuously that ′they never make money – we would only ever open an office that is actually profitable.′ The offices are letterhead decoration, nothing more than a desk and a computer for your antitrust partners or litigators to use when in town, say the critics – and thus a waste of time and money.

The heads of local offices deny this and insist Brasília offices are independently profitable. Carlos Vilhena of Pinheiro Neto says, ′We are profitable, certainly – not on the scale of Rio or São Paulo, it is true, but we are.′ BM&A′s Madruga notes the office is hiring, trying to add more lawyers: ′That criticism about Brasília offices was probably once true, but we have not lost money here for the last two years.′

Hiring is not an easy prospect though, as private practice is a hard sell in Brasília. Unsurprisingly, most young lawyers prefer to work for the government, which offers higher salaries for working many fewer hours, with seemingly quicker promotions, almost complete job security and great benefits, particularly pensions. Mattos Filho′s Gonçalves, for one, grimaces when asked about hiring issues in Brasília. He acknowledges that there is less chance for law firm lawyers in the city to develop their skills as practice is less fast-paced, and firm life less competitive, than in the bigger cities. Thus he only hires at estagiário – or intern – level, to mould the best lawyers; but that means finding 18 year olds who are happy to work more and earn less than their peers for the next decade or two, with the chance of earning significantly more in the far-off days of partnership. ′Life is a marathon, not the 100m sprint,′ he tells his team, consoling himself in that even though Generation Y seem more focused on short-term gains, ′If anyone wants to earn more and work less, they are not right for me here.′

Tozzini′s Mitico agrees: ′The challenge is to educate people on the interest and value of private practice – while in São Paulo graduating lawyers dream of working in Tozzini, here we have to sell the firm.′ Transferring people in from elsewhere is hard – she talks diplomatically of a ′different culture′, but in reality, Brasília – though it has developed remarkably over recent years and offers residents a good quality of life – is still a small town in comparison to the bright lights and social life of São Paulo, or the coastal beauty of Rio. Moreover, Mitico, for one, prefers locals: herself a Brasília long-termer who moved from São Paulo in 1985, she says ′the technique is to know the people here, how to speak to them, how to treat each authority.′

For Brasília may still be small on a Brazilian scale, but that plays to the city′s strengths too – which is, inevitably, about government proximity. ′Ministers and government officials are our friends, the parents of our children′s friends,′ says Machado Meyer′s Romano. ′We see the regulators in the supermarket.′ And for those that choose to be there, this is the foundation of legal practice and indeed of life: ′In Rio you see actresses in restaurants; in São Paulo, businessmen,′ says BM&A′s Madruga. ′Here we see politicians.′

Selected law firms with offices in Brasília, ordered by total number of lawyers

Firm

Year established

Lead partner
(and their practice area)

Number of lawyers

Siqueira Castro - Advogados

1997

Torquato Jardim (administrative and constitutional)

24 (including 4 partners)

Veirano Advogados

2000

João Geraldo Piquet Carneiro (administrative and litigation)

20 (11 partners)

Pinheiro Neto Advogados

1975

Carlos Vilhena (mining)

19 (4 partners)

TozziniFreire Advogados

1998

Marta Mitico (administrative and corporate)

14 (2 partners)

Machado, Meyer, Sendacz e Opice Advogados

1994

Cristiane Romano Farhat Ferraz (litigation)

12 (1 partner)

Trench, Rossi e Watanabe Advogados

1989

Tulio Freitas do Egito Coelho and Francisco Ribeiro Todorov (competition)

11 (2 partners)

Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados

1992

Marcos Joaquim Gonçalves Alves (tax)

7 (1 partner)

Barbosa Müssnich & Aragão

2002

Antenor Madruga (compliance and litigation)

6 (1 partner)

(Latin Lawyer 19.09.2011)

(Notícia na Íntegra)