The Brazilian Legal Profession

Volume 4 • Issue 6 • September/October 2018
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A Brief History of Brazil’s Legal Profession

Ary Oswaldo Mattos Filho

This article has been adapted from the preface of The Brazilian Legal Profession in the Age of Globalization: The Rise of the Corporate Legal Sector and Its Impact on Lawyers and Society (Cambridge University Press, 2018), edited by Luciana Gross Cunha, Daniela Monteiro Gabbay, José Garcez Ghirardi, David M. Trubek, and David B. Wilkins

From the creation of law courses in Brazil in the early 19th century to today, Brazil’s legal profession has gone through several major phases. This has occurred, as is natural, as a result of the different political and economic phases that the country has gone through since independence. To facilitate the understanding of those not familiar with the reality of Brazil, I trust it will assist the reader’s understanding to divide this history into three major phases that the legal profession and lawyers have gone through. For this analysis to make sense, we should bear in mind that, as in any country, political and economic developments tend to shape the actions of its citizens and, as such, the creation of laws and their application. Therefore, in this analysis it will be important to illustrate the historical facts that resulted in the current practice of the legal profession.

Phase one: From colony to an agricultural exporting republic

From the creation of law courses in Brazil in the early 19th century to today, Brazil’s legal profession has gone through several major phases.

The first phase commences timidly in the then-colony of Portugal with the arrival of the Portuguese court in 1808. Until then, Brazil was one of Portugal’s lethargic colonies like the innumerable ones existing in the African continent. The application of the law, if it even existed, was erratic. The center of political, economic, and cultural power was in Lisbon, where an absolutist monarchy prohibited any economic activity not in the interests of the king, and the exports of the colony had to be sent first to Lisbon before they could be traded with other countries. Until 1808, the colony was prohibited from having any equipment for the reproduction of newspapers, books, or pamphlets of any type. In addition, there could be no factories, financial institutions, universities, or any other facilities that would allow the inhabitants of the colony to develop an idea of technical, cultural, or industrial progress.

We should be grateful to Napoleon Bonaparte for the introduction of the minimum elements for the process of modern civilization amongst us, because, with the beginning of the invasion of Portugal by French troops in 1808, the Portuguese king, when fleeing from Lisbon, transferred to Brazil the seat of the Portuguese kingdom. This change forced the creation of the first bank (Banco do Brasil), the first printing presses for printing books and newspapers, and, most important, the official gazette of the Crown, as well as the creation of the first and rudimentary local industries and the first Brazilian university, which was that of medicine, in Bahia.

We should also be grateful to the English for the independence of Brazil to the extent that, with the defeat of Napoleon Bonaparte, there is the beginning of the movement toward the return of the king and the kingdom to Portugal, leaving his son as regent. At this time an incipient Brazilian legal elite that had graduated from Coimbra starts to develop separatist ideas that culminate in 1821 with the independence of the country and the severing of relations with Portugal.

Owing to this break, the country lost the possibility of having its nascent legal elite graduate in Portugal, and this led to the creation of our law courses in 1827. The creation of law schools in Brazil was due to the fact that the youth of the former colony were perceived as enemies of the Portuguese kingdom and were not allowed to continue attending the schools in Coimbra. This forced the creation of the first two universities, one in São Paulo and the other in Olinda. In this first phase, which lasted until the beginning of the 20th century, preparation in law courses was more focused on forming a ruling elite to conduct the affairs of the young, independent country than on preparing students for the exercise of the legal profession itself.

This first phase, in practice, ultimately formed personnel for the exercise of activities relating to the administration of the emerging Brazilian state.

These two law schools came to supply Brazil with almost all its political/administrative elite. Most of the deputies, senators, ministers of state, judges, and other professionals who were engaged in making and applying the law emerged from their ranks. But what was this youth supposed to learn? In the absence of a better paradigm, the new schools copied the curriculum of the law school in Coimbra, which was already outdated in dealing with the economic progress occurring at the time in Europe and the United States. If we analyze the parliamentary discussions in Brazil as to the composition of the subjects that would necessarily be taught, we will see that a good part of the discussions—if not the hottest parliamentary debate—was about the usefulness of making it compulsory to teach Roman law and canon law. Even if Roman law did not appear as one of the mandatory subjects in 1827, canon law did. However, Roman law has survived to this day in the curriculum of some good law schools.

This first phase, in practice, ultimately formed personnel for the exercise of activities relating to the administration of the emerging Brazilian state. In the early years, the most important area of legal practice involved application of the rules of family law, succession, and matters relating to property. This occurred due to the low level of business development at that time, with the country focusing on the production and export of agricultural goods, mainly coffee. This phase lasted until the beginning of the 20th century, when the second phase, with more specialized legislative production and a growing number of judges and public prosecutors, started.

Phase two: Lawyers and industrialization

The demand for the exercise of the legal profession in several areas of commercial law commences in the 1930s with the beginning of the industrialization process, which was kicked off by the growing capitalization of coffee producers who invested in industry and by the efforts of entrepreneurs, many of whom were descendants of immigrants from Europe and the Middle East. The industrialization process accelerated considerably with the Second World War, which led to increased demand from European countries and the United States. As a consequence, the demand for the provision of legal services grew in the areas of corporate law, bankruptcy, and insolvency, as well as in export and import law, and contract law became an important area of work in legal practice.

At the same time, as a result of the growth of the state’s role in the life of the country, the dictatorship of Getúlio Vargas demanded expanded legal services in the area of administrative law. Yet, while more and more lawyers were engaged in professional work, members of the profession also continued to play important roles in politics. If we research the professional background of the senators, deputies, governors, and even presidents of the Republic established after the Second World War, we will note that they mostly came from law schools, although occasionally a medical doctor, engineer, or another professional pursued a political career.

The industrialization process accelerated considerably with the Second World War, which led to increased demand from European countries and the United States.

The second phase is characterized by a greater insertion of lawyers in professional work, with an increase in tax laws, a new corporate law, and the enactment of the criminal code. But in this second phase, while the demand for legal services increased, Brazilian lawyers and lawmakers of the Republic established after the Second World War continued to look to Europe for inspiration, and the influence of French, Italian, and Iberian European law was strongly maintained. The profession was exercised by sole practitioners, and usually with the death of the founding partner, the law firm died also. The profession was exercised by individuals, never by firms of lawyers.

The greatest changes occurred after 1964 upon the removal of the president and assumption of power by the military. With the establishment of a dictatorial regime, the world of law goes into decline as power is taken over by a group of economists who sought a great change of direction, moving much closer to the U.S. model as to the management of the economy without, however, decreasing the leading role of the state.

For such purposes, the central bank, the national monetary council, the national housing bank, and a national tax code, among other state bodies, were created. Also, there was an attempt to create a securities market, and several laws on securities were passed. In 1976, still under the military regime, the Brazilian securities commission was created, as well as a new corporation law. In other words, ironically, the repressive regime created new fields of law for the lawyers, even though it had erased human rights from the rule of law.

The merger of ideas of the economic world with the legal world brought a growing area of work for lawyers in what is today called business law.

At this time, the U.S. government, through the United States Agency for International Development (USAID), along with the Ford Foundation, supported scholarships to the United States for lawyers as well as other professionals. (This writer was one of the persons selected, obtaining a scholarship to study at Harvard Law School in 1967.) This phase caused an increasing number of Brazilians to go to the United States to undertake master’s or doctorate degrees in varied professions. As such, lawyers, economists, engineers, company administrators, and others radically changed their preferences to U.S. education to the detriment of the universities of Europe—until then, absolute in the preference of graduate students.

These professionals returned to Brazil impregnated with values other than those with which they departed. This preference of lawyers and economists to do their graduate courses in U.S. universities had a profound impact on the life of the country after the 1970s and 1980s. The economists brought new paradigms for the activities of the financial market and, consequently, for Brazilian companies. The merger of ideas of the economic world with the legal world brought a growing area of work for lawyers in what is today called business law. This included new ways of financing the private sector, which generated an enormous increase in practice in the area of contracts.

Phase three: Lawyers and globalization

In the early 1990s, two other factors created an enormous and different line of work for Brazilian lawyers. On the one hand, foreigners were permitted to invest directly in Brazilian capital markets, and Brazilian companies were permitted to issue securities in foreign markets. Both overseas and here, there was the beginning of the participation of large investment funds sponsoring capitalization mechanisms for the large Brazilian private companies, as well as some Brazilian companies going overseas by means of branches. With all this, there was the beginning of a process of conglomeration of Brazilian financial institutions, creating large banks capable of generating extensive funding for the business sector.

On the other hand, the process of privatization of state-owned companies began, continuing nowadays in the form of concessions of activities previously exercised by the state. These two new activities—the contact with the capital markets overseas and the arrival of foreign capital to participate in privatizations or concessions of state assets—necessarily require cooperation between Brazilian and U.S. or U.K. lawyers since normally the laws of both countries are applied. This contact between lawyers of both countries—fed by the growing number of Brazilians returning with master’s degrees in the United States—facilitated and came to influence national practices. These professional connections reach another level when many of those who finished their LLMs start to get training in U.S. law firms. Economists, who in increasing numbers started to work in financial institutions and even with governmental entities, also contributed with the adoption of new financing models that became part of the national legal world with alien names such as leasing, factoring, merger, spinoff, board, swaps, and derivatives, to name a few.

If the world of the legal profession has been transforming rapidly, the same cannot be said of the willingness or capacity of the law schools to adapt to the not-so-new role that the lawyer has come to play in Brazilian society.

It was only from the convergence of the above-mentioned factors that the services of the corporate legal profession began to be demanded on a large scale, thus creating the need for the emergence of a much larger number of full-service law firms, in addition to the very few that had existed up until then (which were dedicated almost exclusively to servicing foreign capital companies). As such, it is possible to mark in time the emergence of the large law firms at the beginning of the 1990s. At the same time there were other transformations. One was the rise in the prestige of general counsel, many of them now with an overseas LLM degree and ready to follow the changes brought by the internationalization of law. They start to dialogue with financial directors and discuss agreements overseas, and a completely new range of legal services appears, demanding a different type of professional.

But this brave new world includes only some of the lawyers. As in other countries, lawyers, for the most part, continue to provide everyday legal services. This majority has the voting power in the Bar in their hands, causing the entity that represents lawyers to act partly in defense of the greatest interests of the country and partly in defense of the interests of its members. In this latter case, sometimes, it is confronted with the dilemma between serving the interests of the majority of its members—preserving exclusive fields of work—and more generous interests, such as what occurred in the case of pro bono, which was initially outlawed by the Bar. In this area, despite initial hostility, the large law firms finally won the right to provide free legal services to nongovernmental organizations. It is to be praised that generosity won.

Major transformations occurred in the world of business law, with enormous effects on the law of obligations, which had remained static. Even criminal law started to absorb new possibilities of financial crimes, in the defense of nature, against pollution, of the capital-markets investors, and so on. This world, which increasingly and quickly globalizes, has also elevated the importance of women in the legal profession, also due to the influence of international feminist movements. Today the number of female students at law schools is greater than the number of male students.

However, if the world of the legal profession has been transforming rapidly, the same cannot be said of the willingness or capacity of the law schools to adapt to the not-so-new role that the lawyer has come to play in Brazilian society. This gap between the demands made on lawyers by Brazilian society and the training offered in most law schools exists in the choice of subjects that are taught and in other areas. Most of the law faculties continue to ignore transformations occurring all around them and fail to prepare lawyers for the demands now made on the providers of legal services.

In pro bono, despite initial hostility, the large law firms finally won the right to provide free legal services to nongovernmental organizations. It is to be praised that generosity won.

This new research—The Brazilian Legal Profession in the Age of Globalization: The Rise of the Corporate Legal Sector and Its Impact on Lawyers and Society (Cambridge University Press, 2018)—illuminates the transformations and the challenges they create. It is the first time the new reality of the Brazilian legal profession has been surveyed through extensive empirical research. As such, it is one of the most important contributions ever made for legal educators, lawyers, and representatives of professional associations in Brazil, all of whom should take ownership of the results so that we can work to meet the demands that are emerging from the worlds of entrepreneurs and society. Not only is the research important to understand what is happening in Brazil, it is part of surveys of the corporate legal profession in China and India and will also help people understand general trends for legal professions in all emerging economies in the age of globalization.

Good reading and good ideas for the practice of law in this globalized world.

 


Ary Oswaldo Mattos Filho is professor of law at Escola de Direito de São Paulo da Fundação Getulio Vargas (FGV DIREITO SP), former dean of FGV DIREITO SP, and founding partner of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados.

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The Brazilian Legal Profession Volume 4 • Issue 6 • September/October 2018

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