‘Price is not necessarily the key consideration when choosing legal advisers’

Argentina’s Banco Macro selects law firms based on a range of criteria including level of expertise, experience and responsiveness, says head of legal María José Van Morlegan

Although costs do play a role in the selection of external law firms, and ensuring value for money is a key consideration, price is not necessarily the guiding principle when it comes to choosing one firm over another, says María José Van Morlegan, head of legal at Argentina’s Banco Macro. “There are many more factors to take into account in addition to financial considerations,” she explains. Van Morlegan adds that, as a result, Banco Macro has not placed any budgetary restrictions on the hiring of external legal counsel.
Headquartered in Buenos Aires, Banco Macro is the largest private bank in Argentina, with a network of 454 offices and 8,915 employees. As well as providing banking services to more than 3.6 million retail customers, the bank has more than 90,360 corporate clients, frequently providing finance for cross-border M&A deals. Banco Macro reported net income of 3.1 billion Argentina pesos in the second quarter of 2018, a 40 per cent increase on the same period of 2017. Banco Macro reported a 40-per cent growth in net income year-on-year during the second quarter of this year, and the bank has one of the lowest non-performing loan ratios in Argentina.

Need for ‘added value’
The bank employs a large team of in-house legal counsel, which numbers more than 70 lawyers in total. Van Morlegan says a large proportion of the legal issues faced by the company can be resolved in-house, without resorting to external counsel. “Our in-house lawyers are very involved in the day-to-day running of the company, and they are able to resolve many legal questions,” she says. Van Morlegan adds that the preference is to handle most matters internally – the company will only consider outsourcing issues when there is a belief that an external advisor can provide ‘added value’, or in instances where Banco Macro is working alongside other partners and using the same legal counsel will help to streamline the process. For example, external counsel will be used when the work relates to project finance or private-public partnerships.
“Since I´ve been part of Banco Macro, we have improved the capacity of the legal area, which has involved the ongoing training of our team,” Van Morlegan explains. “After two years of managing this area, I have also decided to handle a lot of projects internally because I have access to a very large and very capable team of in-house counsel,” she says.

Pool of advisers
Van Morlegan says Banco Macro has a well-established pool of external advisers, which includes Bruchou, Fernández Madero & Lombardi, which are frequently instructed in relation to banking and finance matters in Argentina. Since 2006, Banco Macro has been listed on the New York Stock Exchange and consequently it has the need for legal advice from major international firms – to this end, the firm instructs Linklaters and Davis Polk.

Law firm selection
The selection process for external counsel involves inviting at least three different law firms to bid for a particular project, explains Van Morlegan. The final decision is based on criteria ranging from the level of expertise and specific experience in similar projects, to responsiveness and involvement senior partner involvement. “Expeditiousness is a key requirement for us, as is responsiveness,” Van Morlegan says. “We also expect senior partners to take on an active role and be available for us.”

Good track record require
A law firm’s track record and experience in similar transactions is a key consideration, as is its ability to provide added value and work in close collaboration with the bank’s in-house legal team. “I have a very large team of in-house experts, so if I choose to outsource a particular matter it’s not due to a lack of resources, but rather because an external advisor will bring added value,” Van Morlegan says, adding that, in many cases, the external firm will be required to work alongside in-house counsel. A good cultural match therefore becomes essential, as is a detailed understanding of the bank’s business, Van Morlegan says. She adds: “All our external legal advisors have to demonstrate in-depth knowledge of our business”.