The expertise of smaller specialist law firms can be as
important as that of the international players, argues The
Navigator Company's Antonio Neto Alves
Setúbal-based The Navigator Company is Europe's
largest paper and pulp manufacturer, producing 1.6 million tonnes
of paper annually and contributing around €2.9bn to the
Portuguese economy. The business has subsidiaries in a dozen
countries and exports to dozens more, and so a key requirement for
its external advisers is both global and local knowledge, according
to Antonio Neto Alves, the company's general counsel.
But while The Navigator Company does have long-standing
relationships with some law firms, Neto Alves says there is no
guarantee that the business will use these firms on every occasion.
Indeed, in some circumstances, the company will invite several
firms to bid for work. "Sometimes with a large project we put
out a tender and make consultations with six or seven law firms,
and we take the best offer," Neto Alves explains. However, he
points out that the final choice is not only determined by cost.
"It is not always price-oriented, because the decision is
tailored to our specific needs," he says. "Costs are not
the first consideration – we have to take into account, among
other aspects, the quality of the team, and the experience of the
Neto Alves says that this approach is demonstrated by the fact
that The Navigator Company last year instructed one particular law
firm in Portugal for the first time. He adds that the business is
always open to using different legal service providers. "It
tends to be a very democratic process," Neto Alves continues.
"Some companies have a very clearly defined idea of who they
will work with, but we don't preclude the possibility of
working with a new firm, one that we have not used before." He
adds that, while there are advantages in instructing the same law
firm for different projects – one of them being the fostering
of a sense of loyalty – there is also a positive side to
using a new firm and bringing a new perspective to a project.
"There is that element of knowledge where, if a law firm knows
your business, that can be relevant for a lot of issues," Neto
Alves says. "But sometimes that is not so important, and a
fresher view is welcome," he explains. "A project could
even be prejudiced by prior knowledge of the business, and a
fresher approach can sometimes bring different results."
The matters most commonly outsourced by the Navigator Company
include due diligence related to large M&A operations, as well
as work concerning international trade issues. And despite the fact
the company operates in multiple markets, it does not have an
international alignment with one particular law firm. "We use
a law firm if we feel it is the best for the issue in the
particular country we are dealing with," Neto Alves says. He
cites the example of a recent anti-dumping case in the US in which
the company used a small, boutique law firm that only deals with
competition issues. "We have very specialised firms that we
use for particular cases," Neto Alves says. "In the
incorporation of our subsidiary in South Carolina, for example, we
used a local law firm, because we felt that it was important for
the firm to have an office near our plant, and it is important in a
big country like the US to think regionally, because you have
federal law and state laws that change from state to
Neto Alves adds that, although in the US there are huge law
firms with a presence in various states, even some of the big firms
are not present in some states, and it is better to use a firm that
is local to a particular state. However, when choosing a firm in
another country, Neto Alves says the company tends to favour firms
that have connections with Portugal. "Sometimes we have to
find a niche law firm that is very specialised, particularly when
it comes to regulatory matters, and which is why a small firm is
often better, as we have to navigate legal issues in the countries
where we have subsidiaries across different jurisdictions, and this
is where we are exposed," he adds. "We are in a very
competitive market and we appreciate a law firm that has knowledge
of our market and our competitors."
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