2023 presented significant challenges for Brazil’s legal and business landscape, following a tumultuous end to 2022 marked by a closely contested presidential election. Luiz Inácio Lula da Silva of the Workers’ Party returned to the presidency after a 13-year hiatus, narrowly defeating incumbent Jair Bolsonaro in an election that highlighted the country’s deep political divisions. The new administration faced immediate hurdles, with Lula’s inauguration marred by an attempted insurrection as Bolsonaro supporters stormed federal buildings in Brasília. This political instability, coupled with a delicate economic situation both domestically and globally, set the tone for a complex year ahead.
The Brazilian economy grappled with several headwinds, including the multibillion-dollar Americanas accounting scandal, which sent shockwaves through corporate Brazil and raised concerns about systemic risks. High interest rates and a challenging global economic climate further constrained the credit market, impacting Brazilian companies already under pressure.
Despite these obstacles, Brazil’s GDP grew by approximately 3% in 2023, surpassing analyst predictions. By the second quarter of the year, the corporate debt market showed signs of recovery, with issuances normalising after the initial disruption caused by Americanas’ default. Inflation showed signs of easing, interest rates began a gradual decline, and the Brazilian Real started to recover after years of volatility.
In the legal sector, 2023 saw reduced M&A and capital markets activity, though some industries bucked the trend. Agribusiness, banking, transport, and technology demonstrated notable upticks in transactions. The infrastructure and energy sectors – especially renewable assets – continued to drive deal flow, aligning with the new government’s environmental agenda and energy transition efforts.
However, Brazil’s environmental policies revealed notable contradictions. While deforestation in the Amazon was halved, accompanied by President Lula’s ambitious environmental protection pledges, deforestation in Cerrado — a critical agricultural region — intensified. The government moved forward with establishing a national carbon market, yet oil exploration projects in the Amazon basin remained active.
In parallel, significant progress was made on the economic front with the approval of a long-awaited tax reform aimed at simplifying Brazil’s notoriously complex tax system. The passage of a new fiscal framework balanced the government’s need for revenue with the business community’s desire for more favourable policies. The implementation of new legal frameworks, such as those governing the national carbon market and tax reform, is set to play a crucial role in shaping business transactions going forward.
Looking ahead to 2024, Brazil’s economic growth is expected to slow to 2.1%, as the country grapples with the lingering effects of restrictive monetary policies and efforts to reduce the fiscal deficit. This forecast also takes into account the impact of severe flooding in Rio Grande do Sul, coupled with a return to normal levels of agricultural output. In response, the Lula administration has committed to a gradual fiscal consolidation strategy for the 2024-2026 period, focusing on boosting revenues while carefully managing expenditures.
While cautious optimism prevails among dealmakers, significant challenges remain. Political polarisation, complex fiscal negotiations, and the need for further reforms in the legal and business sectors to adapt to changing global demands continue to present hurdles.
Positive indicators abound, suggesting that Brazil is on a path of recovery both domestically and internationally. Disinflation is progressing faster than anticipated, with the unemployment rate dropping to 7.4% by December 2023 — the lowest since 2015. At the same time, the Lula administration has reinstated key social programmes and launched initiatives to support business and household debt restructuring, which have helped stabilise the economy. On the global stage, Brazil’s recent successes — securing a seat on the UN Security Council, presiding over the G20 in 2024, and preparing to host COP30 in 2025 — signal its potential to reemerge as a major global player.
Amid this evolving landscape, Brazil’s legal market reflects the nation’s broader transformation, hosting a diverse array of firms that cater to both domestic and international clients. The market includes prominent full-service firms like BMA Advogados, Cescon Barrieu, Demarest Advogados, Lefosse Advogados, Machado Meyer Sendacz e Opice Advogados, Mattos Filho, Pinheiro Neto Advogados, TozziniFreire Advogados, and Veirano Advogados.
Despite the restrictions imposed by the Brazilian Bar Association on close collaboration between domestic and international firms, Brazil’s legal sector has seen the rise of several successful international associations. These include Trench Rossi Watanabe (associated with Baker McKenzie LLP), Tauil & Chequer Advogados (tied with Mayer Brown), Campos Mello Advogados in cooperation with DLA Piper, Vella Pugliese Buosi e Guidoni Advogados (in alliance with Dentons), and, more recently, FAS Advogados, in cooperation with CMS.
Further enriching the legal scene are strong boutique firms that specialise in key areas such as dispute resolution, intellectual property, labour law, white-collar crime, antitrust, and environmental law, among others. Notable examples include Ferro, Castro Neves, Daltro & Gomide Advogados, Bermudes Advogados, Dannemann Siemsen Advogados, Kasznar Leonardos Intellectual Property, Gusmão & Labrunie, Davi Tangerino Advogados, Iokoi, Paiva, Jonasson e Scalzaretto Advogados, Grinberg Cordovil Advogados (GCA), and Milaré Advogados.
At the same time, Brazil continues to attract the attention of international law firms, many of which maintain offices in the country to serve the growing demand for cross-border expertise. Firms such as Cleary Gottlieb Steen & Hamilton, A&O Shearman, Norton Rose Fulbright, Simpson Thacher & Bartlett LLP, Jones Day, Paul Hastings LLP, and Gunderson Dettmer LLP (see: Latin America: International firms) have established a presence, with the latest arrival being Greenberg Traurig, which opened a São Paulo office in September 2024.
The Legal 500 rankings further underscore the strength of Brazil’s legal market, particularly emphasising the dominance of national law firms with offices in São Paulo and Rio de Janeiro. These two cities remain the primary hubs of legal activity, where firms showcase expertise across a wide range of sectors and practice areas, from corporate law to dispute resolution.
Beyond these economic powerhouses, the Legal 500’s City Focus section casts a spotlight on the legal work undertaken outside the country’s main centres, highlighting the growing influence of local markets, from Manaus in the North to Porto Alegre and Curitiba in the South, and across cities like Brasília, Belo Horizonte, Recife, and Salvador. This year, the rankings were expanded to include a focus on the Fortaleza and Campinas markets. This wider assessment provides a more detailed view of Brazil’s diverse legal landscape, highlighting that while São Paulo and Rio de Janeiro continue to dominate, regional markets are increasingly emerging as key players on the national legal stage.
