“Honesty with their capabilities, and flexibility in fees”

Marisol González, Latin America general counsel at L’Oréal, says law firms should not over commit themselves “just for the sake of keeping us as clients”

Law firms in Latin America should be honest with themselves and with their clients regarding their true capabilities, says González, who is the general counsel for Mexico and Latin America for cosmetics giant L’Oréal. “I´d prefer my external counsel to tell me that they can´t handle a matter because of lack of technical expertise or experience, than to try and take it on just to keep us as a client.” It is quite critical that law firms know their limitations, she adds.
González joined L’Oréal in 2015 as general counsel for the Hispanic American Zone from Ford. In 2016, her responsibilities expanded to cover Brazil and in 2017 she was also appointed General Counsel for Mexico. González now runs an 18-strong legal team overseeing the company´s legal operations for the whole Latin American region from Mexico City. Nevertheless, she says that Brazil is home to the biggest team, because of the number of legal challenges arising in that jurisdiction, with Mexico not too far behind.
Her role, González says, includes coordinating the legal work across the region and liaising with the company´s headquarters in Europe, as well as with the office of the general counsel for the Americas in New York. With such different geographies and regulatory demands, the role has its challenges, admits González, particularly in the setting of L’Oréal, the world´s largest cosmetics company.

Privacy at the core
González explains that while some countries in Latin America, like Argentina and Uruguay, have strict data privacy regulation in place; one of the most pressing tasks for her team at the moment is to implement the set of rules spelled out by the new European Union General Data Protection Regulation (GDPR) across the region. This does not only involve implementing the new laws but also making changes to internal policies, training staff, and educating employees as well as customers. “You have to start working with people to increase awareness first and then make the changes in the regulation,” she adds.  
Implementing the new rules is also an opportunity for the legal team to show its value to the business. “You have to roll up your sleeves and work as a business partner, understanding the company from the production plant to the distribution points, providing support for the organisation” she says.

Working with external partners
In Latin America, the in-house team at L’Oréal handles most of the corporate legal work, day-to-day commercial matters and M&A. It tends to outsource major, cross border work, highly complex litigation and IP matters, González says. The company calls upon law firms with a global or regional footprint for larger transactions and holds long-standing relationships with some of the world’s largest law firms. In one example, the 2017 sale of The Body Shop to Brazilian cosmetics giant Natura, a deal valued at over $1 billion, L’Oréal enlisted Baker McKenzie, Davis Polk & Wardwell and Linklaters.
For more niche work, such as IP litigation and labour, the in-house team calls upon smaller law firms and boutiques in the countries where that expertise is needed. Also, when the case is localised to one country, the company goes for the local law firm first.
González says it is always handy to have a roster of law firms they have engaged previously and that can be instructed at a moment’s notice if required. However, the company is bound to instruct new law firms as needed. She adds that alternative fee arrangements are a strong preference and has noticed more law firms in Latin America taking this flexible approach to billing. In countries such as Colombia, where the company does not have a legal team on the ground, González works out a flat rate with the external law firm to do all the corporate work. In other instances, she will negotiate so the law firm bills per matter, not hourly.

Adding value
On the one hand, González is keen on showcasing the high value of the legal team to the business, while, on the other, gaining cost savings and efficiencies. In-house lawyers need to shed the label of the ´NO department´ and engage in technology and systems which make tasks simpler with more time to focus on the more intellectual side of the work, she says. “As true business partners we have to work on viable and legal alternatives to contribute to the company’s growth” she concludes.