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Tuesday, 07 April 2020 02:20

Optimising resources

Multinational companies require counsel that can work across multiple jurisdictions, but which can be complicated in Latin America, where there are many legal discrepancies from market to market, according to the regional counsel at German global pharmaceutical giant Merck.

Alejandro TorrendellWorking in Latin America as a regional counsel has its challenges, given the lack of harmonisation among jurisdictions, and which can impede the optimisation of resources, according to Alejandro Torrendell (pictured), the Montevideo, Uruguay-based regional general counsel for Latin America at Merck.

A German multinational pharmaceutical, chemical and life sciences company headquartered in Darmstadt, Merck has a presence in more than 60 countries, of which 12 are in Latin America, where the company operates in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guatemala, Mexico, Paraguay, Peru, Uruguay and Venezuela.

“We hope that the level of harmonisation will increase in the future,” he tells The Latin American Lawyer, to the level of other regions, such as Europe, and which, he says, would allow his team to be more efficient.

“Another important aspect in the region is the development of technology, which is both a challenge and an opportunity, and I believe that in the medium or long term we will see trustworthy digital solutions emerge, but in the meantime we need to manoeuvre in this transition period,” he says.

Merck registered a strong year globally in 2019, posting net group sales growth of 8.1 per cent, to 4.05 billion euros to third quarter, fuelled by the group’s healthcare and life science business sectors, which contributed 5.7 per cent growth, with €213 million in revenues. in addition, in 2019 the company acquired US companies Intermolecular and Versum Materials, and in December launched a tender offer to acquire another US company, ArQule.

Torrendell’s team also uses external law firms for outsourcing operational tasks such as contract reviews, as well as more specific cases such as litigation, and intellectual property and regulatory matters, he says, and the company uses specific firms in Latin America, depending on its needs, and which include TozziniFreire in Brazil, Von Webeser y Sierra in Mexico and Carey in Chile.

'INCORPORATING EXPERTISE AND EFFICIENCY'

Despite the fact that the company has a presence across the Latin America region, the in-house legal team prefers to work with local law firms in each jurisdiction, Torrendell says.

“We usually use local law firms, whether or not they are engaged in alliances with other law firms with which we work in other countries.”

And when it comes to selecting a law firm, he says the most important considerations are a law firm’s knowledge and expertise in the matter at hand, as well as costs, especially with regards to outsourcing day-to-day operational tasks.

“Incorporating expertise and efficiency are the main benefits of us using an external law firm,” he says.

But there are also challenges and disadvantages to hiring external counsel, such as the process not resulting cost-effective, or having to engage with teams that are very large, when maintaining the focus and the follow-up can become difficult, he says.

Above all, “external law firms add value when they understand the business and the role of the inhouse team”, he says.

The company’s in-house team meanwhile is focused, in order of priority, on risk assessment, crisis management and negotiation, he says. “Obviously, we also work on other, specific themes relating to the business, and which is where we add value to the business,” Torrendell says.

And his team’s workload has increased in recent years as a result of the complexity of the business and the evolution of compliance, he says. “In themes such as compliance, corruption and anti-trust law, in Latin America we have seen more of an evolution in enforcement than in legislation, and these are challenges that obligate us to be always up to date as the company’s reputation is our greatest asset, and therefore it must be protected,” he says.