PRO BONO SURVEY 2014 - BMAJ Abogados · THE ABA SECTION OF INTERNATIONAL LAW 2015 SPRING MEETING....

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THE ABA SECTION OF INTERNATIONAL LAW 2015 SPRING MEETINGbrings together over 1,200 leading international attorneys, corporate counsel, government offi cials, policy makers, academics

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ro bono work has never seemed more popular among Latin America’s leading firms, if the overwhelming response to Latin Lawyer and the Cyrus R Vance Center for International Justice’s annual survey is anything to go by. This year’s survey attracted one of the highest numbers of responses to date,

with many law firms across the region showing continued efforts to enthusiastically take part in pro bono work and institutionalise the practice. In this edition, analyse what progress has been made and discuss some of the challenges that remain. We also take a look at some of the pro bono communities across Latin America; consider the important role that clearinghouses play in promoting the practice; and wrap up with the list of this year’s Leading Lights – firms that have excelled in the field.

Elsewhere in the magazine, we take a look at the sensitive area of wealth management and ask what opportunities are opening up for corporate lawyers; especially when the family jewels include business interests. M&A lawyers also share their top tips for getting the most out of negotiations (and how to salvage deals when they look on the verge of collapse). Finally, with globalisation creating global opportunities for Latin America’s multinational companies, delegates at Latin Lawyer’s recent labour and employment conference discuss some of the risks that arise from having staff posted in far-flung corners of the globe.

LATINLAWYERVolume 13 Issue 9

LATIN LAWYERTHE BUSINESS LAW RESOURCE FOR LATIN AMERICA

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CONTENTS

COMMUNITY NEWS ............................................................................................................................................................2

THE LATIN LAWYER-VANCE CENTER PRO BONO SURVEYPro bono – everybody’s talking about it ....................................................................................................6Country by country .............................................................................................................................................10The work being done .........................................................................................................................................14Clearinghouse focus ............................................................................................................................................. 18Leading Lights ..........................................................................................................................................................24

NEGOTIATION TACTICSM&A lawyers share their secrets for negotiation success ............................................................. 27

IN THE FAMILYWealth management and family-owned businesses ......................................................................... 33

LABOUR & EMPLOYMENT CONFERENCERoadblocks to global mobility ........................................................................................................................37

DEAL DIGEST ..........................................................................................................................................................................43


COMMUNITY NEWS LATINLAWYER

2 Volume 13 • Issue 9

DLA merges with Mexican firm as partners leave for BakerAs its former Mexico City team heads to Baker & McKenzie, DLA Piper has announced it has merged with Mexican firm Gallastegui y Lozano, giving it a new partnership of six.

The merger will see DLA Piper Mexico, SC add six new partners to work alongside Manuel Rajunov and Dania Duncan, who currently split their time be-tween Mexico City and Dallas. Following the merger, the combined firm will be called DLA Piper Gallastegui y Lozano and will be effective from 1 January.

The news broke on the same day that its former team left the firm to join Baker & McKenzie’s Mexico City office. Corporate partners Carlos Valencia and Tatiana Escribano and partner Miguel de Erice, who practises real estate and infrastructure, joined with a team of four lawyers.

The development means DLA Piper’s Mexico office will be staffed by a

completely new set of partners from those it started out with in 2012 and led by new partner Eduardo Gallastegui, an M&A lawyer.

“Gallastegui y Lozano has every practice area that we were looking to have in Mexico,” says Rajunov. “We’re excited for this opportunity and could not be happier.” Alongside Eduardo Gallastegui, the new team comprises partners Gerardo Lozano, Maria Eugenia Rios, Jorge Benejam, Gabriela Alaña, Marcelo Paramo and Cecilia Azar, who between them bring experience in M&A and banking and finance work, energy, arbitration, real estate and maritime law.

Meanwhile, Baker & McKenzie is also celebrating the arrival of its new transac-tional team. National managing partner Andrés Ochoa-Bünsow says the hires were “made in heaven” for his firm, in terms of bringing a significant and long-sought after boost to its M&A and transaction

capabilities. “Carlos is very highly regarded in M&A and also brings experience in the telecoms area, which is critical at this point in time in Mexico,” he notes.

Valencia says he decided to move to Baker & McKenzie, the country’s largest firm, because “the possibility of joining a mature, proven platform was an opportuni-ty we could not pass on.” Pointing to Baker & McKenzie’s 50-year track record in the country, he says: “We immediately jumped on it because the brand spoke for itself. The length and the depth of the services they provide are a frame of reference for every law firm that tries to grow in this marketplace and we are delighted to join.”

Neither side would be drawn on the order or causation of the two developments. DLA Piper’s Rajunov says the firm began negotiations with Gallastegui’s team around March. Ochoa-Bünsow says the hiring process on Baker & McKenzie’s side took six months of “tough negotiations”.

Gómez-Pinzón’s Linares appointed Ecopetrol GC Gómez-Pinzón Zuleta Abogados co-chair Alejandro Linares has been appointed the new legal vice-president of Colombian state-owned energy company Ecopetrol.

Linares took up his new role as general counsel and chief legal officer at Ecopetrol on 1 October. He has served as managing partner at Gómez-Pinzón Zuleta for the past 14 years alongside his role as head of the M&A department, and was appointed co-chair in 2013.

Assessing international acquisitions and opportunities in non-conventionals while keeping a close eye on environmental legislation will form the backbone of the work for Linares, who joins Ecopetrol amid major upheaval at the state-owned energy company.

In his new role, Linares will take on all the normal corporate functions of a general counsel, as well as contributing his experience as a commercial lawyer to assist with the company’s aggressive business plan. He will also handle litigation work – an important role at Ecopetrol, which is

regularly involved in disputes.Linares says he was approached for the

role by the CEO of Ecopetrol, a long-term client of his former firm. “They’re hiring new people from outside, they want to get new blood at the corporate level to restructure the business group,” he says.

He cites the trade-off between the lower salary and the opportunity to run the 120-lawyer strong legal department at one of Colombia’s largest and most important companies as a key consideration. “It was a very interesting move to help one of our clients, and it was a challenging decision both from a personal and professional point of view,” he says.

Linares will be on a three-year contract at the company, which he negotiated after attempts to secure a golden parachute – where benefits are offered in the event of an early termination resulting from a merger or takeover – proved unsuccessful given its unpopularity in Colombia’s public sector. He plans to return to his clients at Gómez-Pinzón after his term is up. In

the meantime, several junior partners will handle his client affairs. “Some of my advice will perhaps be missed, but the quality and level of service will not change.”

Alejandro Linares


LATINLAWYER COMMUNITY NEWS

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Bruchou banks on mining boom with double partner hireArgentina’s Bruchou, Fernández Madero & Lombardi has hired two partners from Zaballa Carchio Abogados to jointly head a new mining practice ahead of an expected surge of investment into the sector following presidential elections scheduled for next year.

Sergio Arbeleche, 40, and Sebastián Vedoya, 45, joined the firm on 28 October from Zaballa Carchio, a local mining boutique.

They will head a new mining division, which will be incorporated into Bruchou’s energy and natural resources practice. Founding partner Enrique Bruchou says the hires position the firm to take advan-tage of an expected uptick in investment into Argentina’s mining sector following presidential elections next year. Argentina’s current President Cristina Fernández de Kirchner is unable to run for a third term

and all three prospective candidates have promised to attract greater foreign capital to the industry. “Together with oil and gas and energy, mining is included in [all] their political platforms as a strategic industry for breaking the vicious economic circle and boosting the national and provincial economies of the country,” he adds.

Arbeleche and Vedoya, who have over 16 years of experience in natural resources law, say that Bruchou Fernández Madero’s institutionalised and meritocratic structure, and its multidisciplinary platform, were important factors behind their move. Hernan Zaballa, a founding partner at Arbeleche and Vedoya’s old firm, confirmed the two lawyers’ departure and said that the boutique’s services would not be affected. Zaballa Carchio will count on three partners and 12 associates.

Transparency International elects Peru’s Ugaz as new chairJosé Ugaz, the lawyer who investigated the now-jailed former president of Peru, Alberto Fujimori, has been elected chair of the anti-corruption watchdog Transparency International.

The Peruvian lawyer, partner at Benites, Forno & Ugaz Abogados, beat the former head of the World Trade Organization, Pascal Lamy, by 75 to 49 votes at the organisation’s annual membership meeting in Berlin on 19 October.

Ugaz, 55, said that one of his priorities as chair is to provide the national chapters of Transparency International, of which there are over 100, with the necessary means to conduct anti-corruption work.

“We will have to diagnose the situation in various countries. Some of the national chapters are working in a very difficult environment, such as in Palestine. [In 2013] one of our activists was killed in Rwanda. There are chapters dealing with difficulties in Venezuela, Russia and the Ukraine.”

Ugaz also said that the governing body of the organisation needed to continue producing valuable research, such as the widely used Corruption Perception Index,

which scores various countries on how corrupt their public sector is seen to be.

Ugaz will continue to live in Lima, and will share his time between his work for Benites Forno & Ugaz and Transparency International.

PAG eyes Europe with corporate hireMiami-based boutique Private Advisory Group (PAG) has hired a new partner in a bid to up cross-border work between Europe and Latin America.

Pieter Weyts, 39, was formerly senior legal counsel at duty-free retailer Dufry Group, where fellow PAG partner Jackson Hwu was deputy general counsel until last year.

Azevedo Sette eyes real estate with new partner hireBrazilian firm Azevedo Sette Advogados has added a real estate and agribusiness partner from Vella, Pugliese, Buosi e Guidoni.

Wagner Botelha, 41, joined Azevedo Sette on 6 October after nearly two years at Vella Pugliese, where he served as partner. He will head the firm’s real estate and agri-business practices in São Paulo.

White & Case adds three LatAm partnersWhite & Case LLP has announced three new partners in its Latin American practice group as part of a global promotions round.

M&A lawyer Raúl Fernández-Briseño and litigation lawyer Enrique Espejel have made the move from local partner to full partner at White & Case SC in Mexico, while John Guzman, a corporate finance lawyer, was promoted in São Paulo.

Baker strengthens Colombian tax practiceBaker & McKenzie (Colombia) has promoted a lawyer to head its tax practice.

Jaime Girón, 41, was promoted to the partnership on 10 October. He will oversee the department’s expansion and the training of team members. Girón, who specialises in tax litigation, brings 17 years of expe-rience to the job and was behind the practice’s creation in 2009.

The firm’s managing partner, Jaime Trujillo, says Girón’s promotion is a natural step towards developing the department.

José Ugaz


COMMUNITY NEWS LATINLAWYER


Squire Patton Boggs adds partner in DRSquire Patton Boggs Peña Prieto Gamundi, the Dominican office of Squire Patton Boggs, has added a new partner to its financial services practice group.

Rhina Martinez Brea, 38, was promoted to the partnership on 1 October.

Her practice is focused on corpo-rate law, banking and securities and aviation, as well as cross-border financing.

Former Mattos Filho associate returns as partnerMattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados has rehired a former insurance associate who left to join Azevedo Sette Advogados two years ago before helping to set up a boutique.

Cassio Gama Amaral, 37, joined the firm to head up its efforts in insurance litigation on 1 October.

Amaral previously worked for Mattos Filho’s insurance, reinsurance and pension department between 2008 and 2012. He then left to join Azevedo Sette Advogados as an associate, where he remained for one year, before leaving in 2013 with another Azevedo Sette partner, Dinir Rocha, to open DR&A Advogados, an insurance and reinsurance boutique.

Covington promotes Chilean in New YorkCovington & Burling has promoted of counsel Nicole Duclos to its part-nership in New York, a year after the Chilean national joined the firm from Allen & Overy LLP.

She joined Covington in September 2013, bringing with her two former Allen & Overy associates, Erin Thomas and Thomas Odell.

Pellerano & Herrera partner leaves for new firmDominican firm Medina Garnes Abogados has become Medina Garrigó Abogados with the hire of a Pellerano & Herrera partner.

Marielle Garrigó, 40, joined her new firm as name partner on 1 September after 20 years at Pellerano & Herrera. She will chair Medina Garrigó’s business and corporate department.

Littler opens in PeruLittler Mendelson PC, the largest labour and employment firm in the US, is opening in Peru with the incorporation of labour boutique Estudio González & Asociados, becoming the third interna-tional firm to open in the Andean nation.

The Peruvian firm will become part of Littler Global, a Swiss Verein, from 1 November. It becomes the third international firm to open in Peru, after Garrigues, which brought in local talent in 2014, and Baker & McKenzie LLP in 2012.

“As our clients are increasingly operat-ing throughout the world, and conse-quently face new challenges in managing their workforces, an on-the-ground presence in key global markets has been critical to our ability to meet and anticipate their needs,” say Littler’s co-managing directors, Tom Bender and Jeremy Roth. “Estudio González & Asociados is one of the most prominent and respected labour and employment practices in Peru and gives Littler expanded capabilities in this important South American jurisdiction.”

The US firm chose Peru as its next

destination given the country is experienc-ing some of the best growth rates in the region. “This creates a need to hire and manage more people under different situations, as well as a need for companies in Peru to review their labour and employ-ment policies and procedures,” says César Gonzáles Hunt, who is senior partner at Estudio González.

The Peruvian firm, which is based in Lima and composed of two partners and four associates, reports the Finance Ministry, the National Pensions Office and Congress as clients. Gonzáles Hunt believes Estudio González has much to gain from the partnership, particularly in parts of the economy where international companies play a predominant role. He singles out mining and energy in particular.

Changes in Peru’s labour law also make the partnership an attractive option. Gonzáles Hunt says recent structural procedures that allow for the presentation of oral evidence mean Littler’s experience in the US, which has a long tradition of oral advocacy, will help the firm.

Former Goodrich partner joins BashamMexican firm Basham, Ringe y Correa has hired former Goodrich, Riquelme Asociados partner Ricardo Lan as of counsel.

Lan, 61, joined the firm last week, bringing along two associates. He will work in the M&A department as well as develop-ing the firm’s transportation practice.

Lan has experience handling corporate and regulatory matters for foreign compa-nies investing in Mexico, and has assisted with transportation and infrastructure-related projects in the country.

According to Lan his decision to move was motivated by client demand for support from other practice areas that were not available to the same extent at Goodrich Riquelme. He became interested in a potential move when discussing Basham’s expansion plans, along with making the discovery that one of his clients had turned to Basham for additional support when Goodrich was unable to serve them in a certain area.

The move entails a change in role for Lan, from partner to of counsel. Lan says this will give him the flexibility to focus on his own clients and projects under the guidance of Basham’s partners. “At this stage in my professional life it’s what I want to focus on,” he says.

Ricardo Lan


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LATIN LAWYER – VANCE CENTER PRO BONO SURVEY LATINLAWYER


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Having been the passion of a dedicated, growing group for some time, the practice of pro bono appears to be entering the mainstream of Latin America’s legal profession as stories of success find their way into everyday conversation. “Those of us who are active can’t go anywhere where people are not eager, even in the context of a business meeting, to tell us what advancement their firms are making in pro bono,” says Antonia Stolper, vice chair of the Cyrus R Vance Center for International Justice Committee and partner at Shearman & Sterling LLP. “There is an incredibly high level of consciousness about the issue and the impact law firms can bring to access to justice issues are at front and centre for leading players in these markets. That’s a fantastic development and clear sign that the efforts of those trying to scale up and institutionalise pro bono are paying off.”

From a renewed sense of vigour among Mexican lawyers to signs of greater engagement of Venezuelan firms and a high-profile conference in the Dominican Republic, there are reports from across Latin America that the profession is wholeheartedly embracing pro bono. “One of the beauties of pro bono is democracy: each firm and practically each lawyer within each firm can potentially vote to engage with issues that matter to the firm or to her. So we are seeing a surge in the diversity of matters undertaken, from classic representation of poor individuals in legal problems, to representation of NGOs, to representation of micro-

entrepreneurs, to high-impact cases challenging government to live up to its own commitments, to reform efforts seeking to enhance justice,” says Todd Crider of Simpson Thacher & Bartlett LLP and vice chair of the Vance Center Committee.

That pro bono is at the forefront of lawyers’ minds is reflected in the most recent survey conducted by Latin Lawyer and the Cyrus R Vance Center. Now in its third year, the survey seeks to measure the progress of the institutionalisation of pro bono in Latin American law firms. It is open to law firms across Latin America, more and more of which take the time to complete the survey each year. This year we received over 100 responses – 25 per cent more than last year – to what is a comprehensive, time-consuming survey, which is a strong indication of the interest law firms are paying to this practice. (See figure 1 for geography of respondents.)

The 2014 survey has the backing of BTG Pactual, Credit Suisse Securities (USA) and JP Morgan Securities and has been remodelled to allow for a better analysis of the type and volume of work law firms are doing, as well as the systems they have in place to carry out pro bono matters efficiently on a country-by-country basis. The redesign is in large part thanks to the support of clearinghouses across Latin America, which have provided feedback on the survey, assisted in its distribution and encouraged member firms to participate, as well as providing valuable insight into

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the pro bono culture in their jurisdiction. Latin Lawyer and the Vance Center would like to thank the following for their enormous contributions: the Comisión de Trabajo Pro Bono in Argentina, Brazil’s Instituto Pro Bono, Fundación Pro Bono in Chile, Fundación Pro Bono Colombia, the Dominican Republic’s Fundación Pro Bono, Fundación Barra Mexicana and Appleseed in Mexico, CIDSEP in Paraguay, the Alianza Pro Bono in Peru, and ProVene in Venezuela.

Latin Lawyer has long highlighted the pro bono work done by Latin American law firms, and its first annual pro bono survey was made in 2007. It also raises money for pro bono activities through its annual charity awards dinner in São Paulo. Part of this focus has been to promote the work of the Vance Center, which has helped bring about significant change in this area, not least through the Pro Bono Declaration for the Americas (PBDA) launched in 2008 and through the development of multi-jurisdictional pro bono projects to encourage collaboration among law firms in the region. In the last two years, the Vance Center has developed more than 60 pro bono projects related to the Americas, and over half of them have required local counsel in 24 countries in the region. The Vance Center has recruited over 100 law firms, 80 per cent of which come from Latin America and the Caribbean or Canada. In most of these cases, the projects have been placed through

pro bono clearinghouses active in the region and, in those countries where a clearinghouse has not been established, the Vance Center has invited to participate law firms that have signed the Pro Bono Declaration for the Americas. The PBDA counts 83 signatories in Latin America, with the number rising each year. (Around 20 firms have joined since the start of 2012.)

Over the next few pages, we highlight the progress made and the challenges that remain; take a tour of pro bono communities around the region; consider the role of clearinghouses; and, finally, profile this year’s “Leading Lights” – those firms whose pro bono efforts stand out and deserve to be celebrated.

The survey has highlighted stories of tremendous achievements, both in terms of how law firms are institutionalising the practice, and in the work they are doing to bring access to justice to Latin America’s poor and marginalised communities, but it has also identified challenges that need to be overcome before the region’s legal profession can truly say that pro bono services are provided by all of its law firms. The key now is for everyone involved to remain engaged and continue to press ahead with institutionalising the practice. Fortunately, there are countless individuals and organisations across the region and further afield who are committed to making that happen.

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the firm, the more likely it is to have an ac-tive pro bono practice,” says Todd Crider of Simpson Thacher & Bartlett LLP and vice chair of the Vance Center Committee. One aim of Latin Lawyer and the Vance Center’s survey is to track the progress of the institutionalisation process by annually recording the volume of pro bono work firms say they are doing and the systems they have implemented to do it. There are various ways of measuring how far firms have progressed with the institutionalisa-tion of a pro bono practice but a lot of the main indicators are in line with the requirements laid out in the Vance Center’s Pro Bono Declaration of the Americas, whose signatory firms commit to certain practices – as well as working towards every one of their lawyers completing around 20 hours of free legal services each year. Reaching that target requires having the correct procedures in place: among the associate ranks in particular, lawyers will be

more likely to take on pro bono work if they receive clear direction and encourage-ment from the firm, which is why it is important that law firms tie pro bono hours to lawyers’ evaluation and compensa-tion. Martin Zapiola, the president of Argentina’s Comisión de Trabajo Pro Bono, argues that for pro bono work to flourish, it needs to be incentivised. “If pro bono is not taken into account it is seen as a waste of time. Associates end up doing pro bono work after hours, so in essence it is the contribution of the individual, rather than the law firm,” he said at a recent conference on the subject in London.

Law firms are motivated to do pro bono work for many reasons – a desire to contribute to society and the professional development of their lawyers are among them. More and more firms are recognising that there is a business case. Increasingly, clients are interested in the pro bono work law firms do in the same way that they

The results

The survey measured key indicators of institutionalisation and tracks the amount and type of pro bono work being done. Here we draw out some of the main conclusions

A country’s pro bono culture will always be unique because it evolves according to that jurisdiction’s particular circumstances. The journey towards establishing a pro bono chain is often complex and must take into account societal perceptions; attitudes among communities, the legal profession and the bar association; local regulations and the country’s needs. This makes it difficult to draw region-wide conclusions from our survey, which is why we look at countries on an individual basis on page 10 (centring on those where we received a high level of responses), while including a list of key facts for easy comparison between jurisdictions.

Nevertheless, the institutionalisa-tion of the practice among law firms is fundamental to building a pro bono chain in any legal market, whatever its unique characteristics. “This is something that needs to be nurtured and sustained because institutionalisation breeds its own success,” says Antonia Stolper, partner at Shearman & Sterling and vice chair of the Cyrus R Vance Center for International Justice Committee. “You need law firms to have an institutional commitment so it is understood everyone will do pro bono work – making it a permanent part of the legal culture.”

Many Latin American lawyers have long provided free legal work to the poor, but law firms have only started to institutionalise the practice in recent years. The establishment of internal policies and procedures that encourage and facilitate the development of pro bono work help a firm realise its commitment and greatly improve the efficiency of their pro bono practice. To an extent, the professionalisation of pro bono is a natural extension of the broader institutionalisation of a law firm. “As a general proposition, the more sophisticated

Argentina

Bolivia

Brazil

CentralAmerica*

Chile

ColombiaCosta Rica

Dominican Republic

Mexico

Panama

Peru

UruguayVenezuela

Ecuador

El SalvadorGuatemala

Honduras

* one firm in Central America provided one

response for all countries




care about matters such as diversity. Paula Samper, the president of Colombia’s pro bono foundation says her firm, Gómez-Pinzón Zuleta Abogados, has been asked by two international clients this year about their pro bono efforts. By backing this survey, prominent financial institutions BTG Pactual, Credit Suisse Securities (USA) and JP Morgan Securities specifically acknowl-edge that members of the legal profession have a responsibility to provide pro bono legal services. Meanwhile, 45 per cent of firms say they communicate to clients the pro bono work they do. (Just one-third say clients ask about it.) Pro bono programmes can also assist in the recruitment and retention of young lawyers, who express greater job satisfaction if they are given the chance to do pro bono work because it gives them a greater sense of social purpose. Indeed, one-third of our respondents say they promote the pro bono work they do in order to attract talent.

So how are law firms doing? Consistently over the last three years around 55 per cent of firms say they have done more pro bono compared with the previous year, with around one-third maintaining the same level. Just like in 2012, around one-fifth said they completed more than 1,000 pro bono hours over 2013 as a firm. (The 2014 survey is based on pro bono work in 2013.) While how much work is being done is the all important test, we are not looking for a simple tally of the pro bono hours provided by a firm overall. Having one lawyer completing 1,000 hours a year is not an indication of institutionalisa-tion; it is far better to see the majority of a firm’s lawyers contributing regularly to pro bono cases. The PBDA suggests 20 hours per lawyer per year is an attainable target for Latin American firms and this year, just one-quarter of respondents said they were meeting or surpassing that benchmark. An even stronger indicator of institutionalisation is the level of partner take-up, the argument being that a pro bono culture can only become truly ingrained in a firm if there is clear leadership from

the top. Unfortunately in many countries, there is much improvement to be made at the partnership level. Only 15 per cent of the respondents were able to say that half of their partnership or more completed 20 pro bono hours in 2013, while slightly more – 20 per cent – said half of their associate ranks or more were reaching the target. Of course this drop could be down to the fact that we had a higher response rate this year, with some of the new respondents not quite at the same level of output as those that also answered last year.

A promising number of respondents – 82 per cent – say they account for pro bono hours in their evaluation of lawyers, which is up on last year, while roughly two-thirds treat pro bono hours like billable hours in terms of associate compensation and half say pro bono work affects determinations on associate salary, bonuses and advancement (both similar to last year). Meanwhile, almost 80 per cent provide recognition to partners and associates for their pro bono work. However, while the numbers look good on paper these policies might not necessarily have been put into regular practice. Some clearinghouses have said the results are at odds with the reality and believe that there is still some way to go before most law firms have a working system that really recognises pro bono efforts. Often, lawyers who are serious about pro bono find they have to do it in their free time because there is no structure that allows them to fit it in with the hours they can bill. A lawyer doing pro bono over the weekend would indicate that his or her firm has failed to institutionalise the practice effectively.

One reason for firms’ inability to make pro bono more widespread is a perceived lack of time: 70 per cent of respondents said time constraints were a major impediment to pro bono. Again, having the right policies in place can help by ensuring that lawyers are clear about when they can do it and not push it to the bottom of their to-do lists. Our survey showed positive signs with re-spect to the internal policies and structures

that exist in firms, which are largely in line with last year’s survey: three-quarters of firms have a pro bono coordinator, while half have a pro bono committee and a manual detailing the firm’s pro bono policy. As Enrique Felices of Miranda & Amado Abogados says, a good pro bono coordinator is the hidden secret behind any successful pro bono programme. Indeed, coordinators in Peru have played a key role in the success of the clearinghouse, Alianza Pro Bono. “Ideally, it should be an attorney who is not only smart, but also capable of effectively liaising with the broad range of personalities that give shape to law firm life. Brains and hard work are essential, but not sufficient: developing a real pro bono culture requires empathy and instilling among lawyers a sense of common purpose,” he says.

To conclude, the survey shows that progress has been made in some areas, particularly with respect to implementing policies internally. However, it’s clear that still more lawyers could be doing pro bono work on a regular basis, particularly at partner level.

There are several important factors to note when dissecting the results. First, there is likely a natural bias towards doing pro bono work among firms that take the time to complete a survey on the subject, which means the sample does not necessarily reflect the full reality; second, we must allow for the fact that not all law firms have systems for measuring pro bono accurately, so the hours recorded may not amount to those actually completed; and finally, having a pro bono programme on paper is not the same as having a functioning one – for example while pro bono coordinators appear to be commonplace, some will be more active than others. Because of this, we have also asked clearinghouses for their view of the pro bono culture among the firms they deal with: with a first-hand view of much of the work being done, they are useful sources of information. Their feedback is included in the country profiles that follow, while they discuss the challenges they face on page 18.




Country by country

A tour of some of the larger legal communities from which we received a healthy number of responses to our survey

Argentina

Average size of responding firm

85 lawyers (Range: 6 to 320 lawyers)

PBDA signatories 60%

Clearinghouse membership 90%

Firms with PB coordinator 80%

PB affects salary and advancement

50%

PB included in training 50%

PB work measured 70%

Total PB hours completed in 2013

40% of firms completed more than 1,000 hours

Average PB hours/lawyer in 2013

60% of firms averaged 10 to 29 pro bono hours per lawyer in 2013

Comparison of 2013 and 2012

50% of firms did more pro bono in 2013 than 2012

They say that those who have lived through or have been on the verge of difficult times are more likely to help those undergoing a similar experience. In the past 12 years, Argentina’s economic cycle of boom and bust has affected the country’s entire population in one way or another. Perhaps in light of that, Argentine law firms score comparatively highly when it comes to pro bono work.

Law firms report encouraging levels of actual pro bono work, with 40 per cent of firms saying they completed more than 1,000 hours in 2013 and almost two-thirds averaging 10 to 29 pro bono hours/lawyer. To back this up, the Comisión Pro Bono recorded 20 law firms completing a total of 1,003 hours, with lawyers each completing 15 hours on average. It also reports that its member firms are very good at paying annual fees. There are strong indications of efforts to institutionalise the practice: the majority of firms have a pro bono coordinator and half have a committee to oversee the firm’s pro bono strategy. Half have a pro bono policy that has been distributed throughout the firm. Most have a partner overseeing all cases and a formal procedure for approving pro bono, while 80 per cent say they treat pro bono as billable hours for compensation, consider it in lawyer evaluations and provide recognition to lawyers doing pro bono work. While the clearinghouse reports encouraging levels of work, it has questioned whether this proportion of firms in the country actually accounts for pro bono work in evaluations and compensation in practice, and would like to see greater participation among partners. However, it is working with law firms to establish a statement of pro bono good practice that is designed to help law firms implement such policies.

As well as working with NGOs and, in some cases, individuals,

Argentine lawyers have favoured public interest cases, helping to drive through legislative change in the area of mental health for the benefit of drug addicts in rehabilitation, for example. They have also demonstrated the benefits of collaborative pro bono work, drawing up a legal handbook for non-profit organisations, which came about under the eye of the international pro bono network. Alongside corporate matters, firms also cite education as a common source of pro bono work.

As with elsewhere in the region, it has been said that the legal community could do yet more to help society – particularly law firm partners. Our survey showed that at most firms (at least 60 per cent) less than a quarter of the partnership undertook at least 20 hours of pro bono work in 2013, compared to half saying that 25 to 50 per cent of associates reached the PBDA target.

Brazil







32%









A watershed moment for pro bono in Brazil took place in 2013, when the country’s bar association issued an injunction to lift restrictions prohibiting lawyers from providing free legal services to individuals. Under the current rules, firms in São Paulo can work with NGOs on a pro bono basis, but in most of the country they can’t even do that. The restrictions have understandably severely hampered the advancement of pro bono across Brazil, and this is reflected in our survey.

The amount of work being done is significantly lower than in other countries with sophisticated legal markets; only 11 per cent of responding firms completed more than 1,000 pro bono hours in 2013, while many more did less than 250 hours. While two firms




said that three-quarters or more of their partners completed at least 20 pro bono hours a year, the majority – 56 per cent – said less than a quarter of the partnership met that benchmark. A similarly low turnout is reported among associates. There is also less evidence of in-stitutionalising the practice within firms, despite encouragement from the clearinghouse to appoint pro bono coordinators. That’s not to say there haven’t been any advancements: half say they have a pro bono policy that has been distributed throughout the firm and treat pro bono hours like billable hours in terms of associate compensation.

There is also clear evidence of work being done on behalf of local NGOs, with lawyers providing assistance with their general cor-porate, labour, tax and litigation matters. Firms also cited education and public interest litigation as another area of focus. For example, one law firm was part of a working group that has successfully fought to see São Paulo commit to increasing the number of nursery school places in the city, where there is currently a large deficit.

The impetus to do pro bono work is visible in Brazil – seen by the firms campaigning for the bar to remove the barriers and indeed the healthy number of respondents to our survey – but until the restrictions are finally lifted it is difficult to gauge just how many firms will follow through and commit. The hope is that expected new rules will allow the practice to take off in a significant way.

Chile


70 (Range: 25 to 186 lawyers)





50%









Chile has long been leader of the pack when it comes to pro bono work and the country’s legal community continues to be an inspira-tion to the rest of the region. Two-thirds of firms said that their lawyers each did between 10 and 29 hours of pro bono in 2013 (the PBDA suggests 20 hours as an achievable target), and the numbers are rising. Firms are capable of achieving high levels because they have successfully enshrined the practice in their institutions. From day one, the importance of the pro bono practice is made clear to lawyers at most firms because it is included in training programmes, and the

vast majority include pro bono efforts in their lawyers’ evaluation. (Half say it affects salary and advancement.) Pro bono coordinators and committees are commonplace, ensuring the system is maintained with a formal procedure for approving pro bono work. Firms also keep track of what they are doing with a formal mechanism for measuring pro bono and 40 per cent have a pro bono manual available for staff. One area where even Chilean firms could improve is partner participation: half of firms said the majority of partners do not meet the PBDA requirement of 20 hours a year, although participation at associate level was more encouraging.

Crucially, they work closely with the clearinghouse, which reports a high caseload and saw an increase in members last year. Chilean firms take on a broad spread of pro bono cases, with corporate and education the dominant types of work. It’s also notable that they take on a good proportion of cases for individuals as opposed to only institutions.

Colombia







67%








87.5% of firms did more pro bono in 2013 than 2012

Within Latin America, our survey suggests that the Colombian legal market scores comparatively well in terms of firms’ efforts to engage in pro bono, with firms taking various measures to institutionalise the practice and providing regular funding to the clearinghouse. Firms report doing more work in 2013 than the previous year and they do particularly well on associate participation, with 63 per cent of firms seeing a quarter or more of their associates completing 20 hours of pro bono a year, of which two said as many as 75 to 100 per cent meet the target. In terms of partners showing leadership in the area, they are on a par with firms in other countries listed here – ie, there is room for improvement.

Only half of the Colombian respondents were able to put forward standout cases that they have worked on in 2013. This may be because a lot of the work they do is more day-to-day on behalf of NGOs, but it also suggests that some firms are more active than




others. The clearinghouse’s 2013 caseload is also lower than 2012 – when 206 projects were assigned compared with 137 last year. However, that is partly a positive development because firms have been taking on more high-impact cases, which require more hours. According to the foundation, one of their biggest challenges is that people in Colombia do not generally understand what pro bono work is. This has a knock-on effect in law firms, which do not always see the benefits of providing a service that is underappreciated. It is hoped that big Colombian groups such as Bancolombia joining the foundation will help change that. That said, some law firms are doing significant work, often in partnership with Universidad del Rosario’s law school, whose students have worked on projects with law firms. Projects include a high-impact public action to see inhabitants of Santa Cruz del Islote, one of the world’s most densely populated areas, get better sanitation and other basic rights.

Mexico







63%









In Mexico, firms show growing evidence of institutionalising the practice of pro bono. Mexican firms report a broad range of pro bono work – far beyond general corporate matters. Environmental, anti-corruption, education, labour, human rights and immigration matters are all cited as areas they work in.

Half said they completed more than 1,000 pro bono hours in 2013, but only a fifth said their lawyers averaged between 10 and 29 hours each in 2013, which implies that the practice is not evenly distributed within firms. That said, it’s notable that a good number reported an above-average level of partner participation.

A high number of respondents have coordinators, include pro bono in training and link it to salaries and career progression. While this is encouraging, it has been noted that in practice the numbers do not appear to be quite so high.

Around 70 per cent belong to one of the country’s two main clearinghouses (one being the pro bono arm of the Mexican bar

association), which both report favourably on the change in attitudes among law firms with respect to taking on pro bono work. There has been a recent surge of interest among firms that are keen to improve their approach to the practice. As with elsewhere in the region, there are still calls for Mexican firms to be more socially responsible. However, firms’ commitment stands to increase further: a bill has been submitted to make social work, and thus pro bono work, mandatory for certain professions including lawyers.

Peru







36%






18% of firms averaged 10 to 29 pro bono hours per lawyer in 2013, 18% completed 30 or more per lawyer



Pro bono in Peru has had its ups and downs over the years, but it is presently enjoying a high point with the creation of the Alianza Pro bono earlier this year. Crucially, the clearinghouse has the financial support of 17 law firms (previous attempts to keep a clearinghouse going had failed because of a lack of funding from firms) which are all committed to creating a pro bono institution.

Member firms are taking very encouraging steps to implement a lasting pro bono framework; associates have been appointed as pro bono coordinators, while most attest to keeping track of the work they do and including pro bono in their training package and just under half have a pro bono manual. Respondents to our survey put forward a genuinely interesting range of pro bono projects they have taken on, be it defending individuals in discrimination cases, helping NGOs develop innovative enterprises to lift people out of poverty and working with children living in the rainforest.

Establishing strong foundations is particularly vital in Peru, where there is a weak institutional framework and lack of public trust as well as a lack of commitment to pro bono work among some parts of the legal profession. The key for the Peruvian legal community now is to harness the momentum they are experiencing to create a sustainable pro bono infrastructure in the country.




While there were insufficient responses from countries elsewhere in the region for us to carry out an analysis, there are still important stories to share.

In Venezuela, pro bono work has faced considerable challenges; not least the difficult political situation and the social divide between lawyers and the communities most in need, however, its future looks promising. The survey suggests that there are still incon-sistencies with respect to the level of institutionalisation of pro bono practices: only one firm provided data on pro bono hours, while there appears to be a low take up of internal procedures. While lots of lawyers in the country do pro bono work it tends not to be in a coordinated fashion. But, there are very positive reports that the country’s law firms are keen to engage more with the clearinghouse, ProVene. ProVene has been holding one-to-one meetings with law firms about how they can work together and institutionalise the practice, and says the response has been overwhelmingly positive. Now, it is working with as many as eight law firms and has also set up a casa pro bono, where a full-time lawyer provides free legal advice and it is expected that lawyers from law firms will also work there on a part-time basis. Firms firms are also working with counterparts in Colombia to help illegal Colombian immigrants in the country.

We received a very limited response to our survey from firms in Central America, but there are reports of proactivity: presidents of the five countries’ bar associations recently got together to discuss how to scale up pro bono together and signed the PBDA, as well as committing to a regional approach for Central America and the Dominican Republic. Separately, the Dominican Republic’s pro bono community has begun to engage with its counterparts across the region, inviting them to a two-day conference designed to raise awareness in the country which led to two local firms signing the PBDA. Take-up to the survey from Dominican firms was higher, and revealed that while some firms are hugely committed to pro bono, the practice could be more widespread and the number of hours being completed is low compared to other countries in Latin America. The practice does not appear to be hugely institutionalised in firms yet, although all say they acknowledge pro bono when evaluating lawyers. Work is mostly sourced from the clearinghouse or non-profit organisations.

Among the handful of Ecuadorean firms that responded to our survey, the majority have a pro bono coordinator and pro bono is considered in associate valuation. The amount of work being done varies significantly and only one firm was able to provide a recent example of a standout pro bono project. In the absence of a clearinghouse, work is sourced from universities, social organisations or from the partners and associates. In Paraguay, there is still progress to be made with respect to understanding the concept of pro bono. The good news is that there are signs that there is a growing aware-ness of the role lawyers can play in bringing access to justice to the poor, thanks in part to the clearinghouse, which has helped kick-start a discussion about pro bono among lawyers and law students. The very low level of responses from Bolivia, Panama and Uruguay made it very difficult to draw any conclusions there, although the Vance Center reports that a number of Bolivian and Uruguayan firms and one from Panama have signed the PBDA since 2012.


http://www.guyer.com.uy



How to define pro bono? When drawing up the Pro Bono Declaration of the Americas, its creators debated at length about the official definition of pro bono they should use. Ultimately, the drafting committee – composed of lawyers from across the Americas – concluded that pro bono legal services should primarily benefit poor or underprivileged individuals or communities and the organisations helping them, and should be free on the basis that those being helped do not have the means to pay for legal advice.

There is a healthy debate about where pro bono legal services should be best directed. Some clearinghouses would argue that working with big international NGOs with deep pockets or assisting a client’s non-profit foundation does not compare with providing support to a local NGO or individuals who are denied access to justice because they lack the funds to pay for legal assistance. Many on the front line in this field would say that they do not consider giving free legal advice to an art gallery or budding entrepreneurs, or friends and family, as true pro bono work. It is universally agreed that pro bono work does not include non-legal work such as painting of schools or financial donations, which many members of the public can do.

Across the region there are millions of people who suffer violations of their rights, but are powerless to do anything about it simply because they do not have the money to pay for a lawyer. The legal profes-sion – among the educated elite in Latin America – is uniquely placed to bring effective access to justice to the poor and marginalised. Here, we look at the way law firms across the region are doing just that.

Our survey showed that the vast majority of law firms’ pro bono work is on behalf of non-profit organisations (as opposed to individuals). There are numerous very good examples of law firms assisting mostly local NGOs doing valuable work for those in need in their communities. Given the profiles of the participating law firms, it is not surprising that the bulk of work tends to be corporate in nature. Most often, law firms help NGOs with their corporate structure and ensure they are getting the tax exemp-tions they are entitled to, as well as assisting in more day-to-day corporate matters. In Latin America, it is very common to see law firms acting for charities and other institutions working with people living in slum communities – for example helping the NGO draw up contracts with families for the construction or renting of houses. There are various innovative initiatives helping to lift people out of poverty.

Estudio Olaechea works with Ciudad Saludable in Peru, a non-profit association whose goal is to transform waste collection into a business operation that generates income. Legal work might also be tailored to an organisation’s specific needs, such as litigation. Jiménez Cruz Peña is currently litigating on behalf of the Guanin Foundation, which works with underprivileged children from the Dominican Republic and Haiti, to help the foundation keep the land on which it is based, for example. Morgan & Morgan is taking care of the legal work required to set up a food bank in Panama.

Lots of firms cited work for charities that help people with physical disabilities, diseases or drug addiction. Siqueira Castro Advogados provides cor-porate, labour and tax legal advice to Specialisterne, a company that employs mostly autistic people, while Von Wobeser Abogados acts for CONFE, a civil association that works with Down’s syndrome children and adults, finding them work in a bread-making facility. In Chile, Morales y Besa acts for an NGO whose aim is to rehabilitate people with drug addiction, giving corporate and real estate advice, and Dominican firm Russin Vecchi & Heredia Bonetti provides legal assistance to Heart Care Dominicana which provides medical solutions to poor Dominicans suffering cardiovascular diseases. Some firms have helped found charities that they go on to provide le-gal support to – such as the role of Pérez Bustamante & Ponce’s Fundación Fabián Ponce in setting up the Ecuadorean arm of Operation Smile, which provides free reconstructive surgery to people with cleft lip and palate and malformations of the hands and feet. In Uruguay, Nicolas Herrera of Guyer & Regules set up

Powerful reach

Our survey unveiled a remarkable range of projects undertaken by Latin American law firms on a pro bono basis; from bringing about legislative reform to helping children with serious diseases, lawyers are bringing access to justice to a tremendous number of poor and marginalised people in the region. Here, we celebrate their stories and consider the different types of pro bono projects available and the impact they have on society

PBDA definition of pro bono

Pro bono legal services are those provided without a fee, or expectation of a fee, principally to benefit poor or underprivileged persons or communities or the organisations that assist them. They may include representation of persons, communities or organisations in matters of public interest who otherwise could not obtain effective representation. In addition, pro bono legal services can also benefit civic, cultural and educational institutions serving the public interest who otherwise could not obtain effective representation.




Pro bono practice areas

Corporate law

Education

Transactional or institutional support for NGOs

Employment law

Family law

Human rights

Microfinance/small business

Disability rights

Environmental (Policy)

Real estate law

Legal reform

Intellectual property

Financing

Immigration

Health

Anti-corruption

Child custody

Domestic violence

Individual representation of indigent clients

Rights of the elderly

Indigenous or ethnic rights

Mergers & acquisitions

Securities

Environmental (litigation)

the first free, secular, privately managed high school for students in critical socio-economic contexts, which is now a pro bono client of the firm.

The case for individualsJust one-quarter of firms say they help individuals on a pro bono basis. This comparatively low proportion might be because corporate firms do not feel they are sufficiently specialised to give advice in the relevant area of law (some 75 per cent of respondents said they do not take on work outside of their usual practice areas); because it seems inefficient to focus all their resources on one person when they can assist an

entire group by acting for an NGO; or simply because they do not have the channels of communication in place to reach individuals.

It’s true that more often than not, the needs of individuals who cannot afford to pay for legal services do not fall under the umbrella of the services provided by a corporate law firm, but that shouldn’t be a deterrent. As one respondent points out, any lawyer should have a sound grasp of the basics if they have had a solid legal education, and there are various methods of acquiring the necessary knowl-edge through studying, training or asking relevant institutions (clearinghouses and NGOs included)




or specialist law firms – by simply learning the subject matter as a lawyer would in any other matter. Individuals’ legal needs can range from the seemingly mundane or straightforward, such as documenting housing issues in slums or court representation of victims of tort, to the more emotionally demanding, for example acting for a sexually assaulted adolescent or a seriously ill patient who has been denied crucial medical treatment. Cases can require representation in court, or simply be a matter of sifting through the legalities and making an administrative claim. In many cases the legal work is not complex – an individual might need someone who understands the basic legal principles and knows what legal jargon to use to make the other side sit up and take notice. Sometimes, simply having the logo of a leading law firm at the top of a strongly worded letter will make all the difference.

“For a person who is systematically denied their rights, a pro bono lawyer is like an angel who comes down to perform a miracle. In a country like Colombia, in my opinion, this work is the most needed and that which embodies the main purpose of pro bono: access to justice,” says Juliana Amaya, director of the Fundación Pro Bono in Colombia. The impact straightforward legal work can have on the lives of the person and their family cannot be exaggerated – for example, helping a child born with quadriplegia as a result of medical malpractice get the correct assistance. Such cases are typically very emotive. Take the associate at Brigard & Urrutia who helped a 14-year-old boy requiring monthly supervision to avoid a relapse having undergone treat-ment for leukaemia. The boy’s family had financial difficulties, which meant his mother left the city in search of a better job, leaving the boy to live with his grandmother. She also transferred the boy from his health-care provider to his father’s, but when the grandmother called to book an appointment she was told that the boy’s inscription was not active because he was still registered with his previous health-care provider. After two months of back and forth and no resolution, the boy was getting sick. The grandmother was in need of professional assistance, but lacked the necessary resources so she approached the Fundación Pro Bono, which enlisted Brigard & Urrutia. The firm presented a right of petition to both health-care providers, pointing out the duty of health-care providers to grant the necessary medical services to anyone that has a critical condition regardless of any administrative obstacle, especially if the patient is part of a constitutionally protected group such as minors. After receiving the petition from one of the best known law firms in Colombia, an appointment was immediately booked and a relapse was prevented.

Helping individuals can also end up having a wider impact on society. In Argentina, Marval, O’Farrell & Mairal helped a family whose daughter had Down’s syndrome initiate an injunction to ensure that the child was included on her parents’ health insurance plan. The case will now serve as a precedent for future similar claims as Argentina’s National Institute against Discrimination, Xenophobia and Racism determined that the health insurer was guilty of a discriminatory act by refusing to include the minor within her family health insurance plan. In Chile, Barros & Errázuriz Abogados helped a medical student with a congenital bone disease who was experiencing discrimination at the medical school and hospital where she practised. After several months, the law firm saw that the university should include in its student handbook a declaration regarding bullying and discrimination. Meanwhile, the programme was adapted to meet the student’s physical requirements and the hospital facilities were upgraded to include ramps, special handles and all the necessary elements to enable people with disabilities to carry out their clinical practice.

High-impact casesHigh-impact cases are favoured by both law firms and clearinghouses alike, mainly because they allow for the wider implementation of the legal right that is being fought for. They are also more likely to involve creative or complex legal work, which is attractive to law firms, and are generally more high profile. This last point can be good or bad for law firms, depending on the work; some are nervous about taking some cases that certain clients might not be in favour of. Such cases don’t come around every day, but when they do they have the capacity to make a considerable difference. Latin Lawyer has previously reported on the ongoing fight to afford basic human rights to the community of Colombia’s Santa Cruz del Islote, the most densely populated island in the world. Gómez-Pinzón Zuleta Abogados has launched a public action with the Universidad del Rosario law school to obtain an aqueduct and proper sanitation and therefore improve their living conditions. So far they have obtained precautionary measures that have seen some of their basic needs attended by the local government and has created a collective awareness of the community’s situation.

Law firms can also play a critical role in public interest cases and advocacy. For example, the city of São Paulo is in dire need of more nursery school places – around 160,000 children are waiting for places, despite the fact that they have a constitutional right to free day care and preschool. Rubens Naves




Santos Jr Advogados is part of a working group that also includes NGOs, public defenders and public prosecutors in the state of São Paulo campaigning before the state court of justice for the city to address the problem. This September, the court instructed the law firm to organise a committee charged with overseeing a plan to resolve the problem.

Lawyers can play a significant part in bring-ing about legal reform for the benefit of the marginalised. In Argentina, firms provided review and comments to a legislative bill on mental health drafted by the National Ministry of Health to make it more suitable to drug addicts in rehabilitation. Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) also worked with a student group from Universidad Austral to conduct an investigation on protective legislation for pregnant women to verify if the agencies, programmes and subsidies established by law actually existed and whether or not they were functioning.

Collaboration among firms, both locally and internationally, has a great multiplier effect. The Cyrus R Vance Center for International Justice has developed numerous multi-jurisdictional pro bono projects to encourage collaboration among law firms from different countries in the Americas. For exam-ple, the Vance Center is working with the Asociacion Interamericana para la Defensa del Ambiente (AIDA), a regional Latin American environmental NGO, as well as a large team of attorneys from 16 countries around the world on a project to improve regulatory protections for key marine reef ecosystems in Latin America and the Caribbean. The project includes the development of a detailed report on regulatory policies and practices that have proved effective in various jurisdictions around the world, which will be an important tool for AIDA to present to decision-makers in its efforts to promote needed reforms.

Firms can achieve great things if they work to-gether locally or across borders – which is one of the goals that the international pro bono network (coor-dinated by the Vance Center and Chile’s Fundación Pro Bono) strives to achieve. For example, firms in selected countries in Latin America participated in a research project that the Vance Center conducted together with the Inter-American Commission of Women of the Organization of American States (CIM), and the Equipo Latinoamericano de Justicia y Género, member of the Articulación Regional Feminista, regarding the implementation by their countries of the Convention on the Prevention, Punishment and Eradication of Violence against Women. The network has also brought together law firms to draft a handbook on the creation and opera-tion of non-for-profit organisations in the Americas.

Representation of low-income individuals

Assistance to social or non-profit organisations in institutional matters

Participation in legal clinics

Public interest litigation

Legal reform

Others

Pro bono clients and type of work

It is also common to see the local arms of international firms teaming up with their colleagues elsewhere. Ten Baker & McKenzie offices and Hewlett-Packard’s in-house team have collaborated on a pro bono project for the Nexus Institute, an independent international human rights research and policy centre that focuses on slavery and human trafficking, for example. The lawyers evaluated the effectiveness of the Palermo Protocol, the main international instrument in fighting human traf-ficking, and have been looking specifically at the strength of Latin America’s human traffic lawyers, in order for Nexus to be able to advise on legal reform. DLA Piper is particularly big on pro bono and works on various projects across Latin American through New Perimeter, its non-profit arm focusing on legal education, women’s rights, access to justice, law reform and economic development. This naturally sees the participation of its lawyers in Mexico.

This is just a snapshot of how lawyers across Latin America are making a difference. There are many more stories to tell about how pro bono is increas-ingly entering the mainstream of the region’s legal communities.




In 2013, Chile’s Fundación Pro Bono and its members provided free legal advice to 2,670 people, non-profit and social organisations and micro-entrepreneurs. The Fundación has been in existence for 14 years now and has become an exemplar of how a clearinghouse should function. As well as creating a working pro bono chain at home, it has gone on to cross borders, working with the Cyrus R Vance Center for International Justice to establish the International Pro Bono Network, which seeks to involve lawyers throughout the Americas in the defence of human rights on a pro bono basis.

Other Latin American clearinghouses and their members have also achieved significant advancements towards establishing a pro bono culture in their countries’ legal professions. Among the more notable achievements are those by Argentina’s Comisión Pro Bono, which has galvanised its members into working collaboratively on high-impact public interest projects, and the Fundación Pro Bono in Colombia, which has also made tremendous inroads towards encouraging law firms to institutionalise the practice of pro bono. “Thanks largely to the leadership of the clearinghouses in the region, pro bono has evolved over the last decade from being a new word and concept in need of defini-tion, to being enshrined as a necessary component of legal practice at all significant firms,” says Todd Crider of Simpson Thacher & Bartlett LLP and vice chair of the Vance Center Committee.

A number of Latin American countries have clearinghouses, whose main role is to act as a central-ised referral organisation serving both the law firms and their pro bono clients. (See page 21 for a profile of 10 of the main ones, across nine countries.)

“The Vance Center is a huge supporter of the clearinghouse model as it allows the firms to act

collectively, which clearly has a positive impact for technical assistance and sourcing matters,” says Antonia Stolper, vice chair of the Vance Center Committee and partner at Shearman & Sterling. It’s widely accepted that a coordinated effort allows for a greater reach, and this is evidenced in these organisations’ workloads. Argentina’s Comisión Pro Bono worked on 333 cases in 2013, while Colombia’s foundation assigned 137 cases to law firms. In Mexico, the bar association’s foundation helped 350 individuals and families thanks to the participation of 180 lawyers and the Appleseed Foundation worked on close to 120 projects, while in Brazil the Instituto Pro Bono assisted around 150 NGOs and Venezuela’s ProVene helped 440 people obtain free legal advice.

In those countries where such organisations exist, firms responding to our survey said that around 37 per cent of their collective pro bono caseload is sourced from them, closely followed by non-profit organisa-tions, which provide around 27 per cent region-wide. (A closer look shows that clearinghouses in some countries provide a greater proportion of cases – for example in Chile and Colombia.) At this stage, it is important to note that some law firms succeed in doing pro bono work without the aid of a clearing-house – either by choice or because there isn’t one in their country. In this article, we only focus on those countries that have fully operating clearinghouses. We have omitted certain jurisdictions – those in Central America, Bolivia, Ecuador, Panama and Uruguay – because there is no fully functioning clearinghouse organisation. (There is a pro bono commission in Costa Rica, although it’s not clear how operational it is, while there is an effort to incorporate a clearinghouse in Bolivia.) But that’s certainly not to say that firms in

Many hands make light work

Clearinghouses provide the fuel necessary to keep the pro bono engine running. Often with very small teams of staff, they are responsible for huge advancements in pro bono in countries across the region, but they continue to face an uphill struggle as they fight to raise awareness of the importance of the practice

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those countries are not doing pro bono work – BLP in Costa Rica, Ecuador’s Pérez Bustamante & Ponce and Panama’s Morgan & Morgan even have their own pro bono foundations. Firms that efficiently source work from NGOs, contacts brought by staff, public law clin-ics and social service organisations might question why they need to align themselves to such an organisation and in our survey a very small number of respondents said they believe the clearinghouses in their country do not provide an effective service.

However, it is probably fair to say that the volume of free legal services provided in countries where there is a coordinated effort is higher than in those where it is more ad hoc. There are typically more firms doing pro bono work, and those firms tend to have a higher output thanks to clearinghouse support. Clearinghouses provide an important service to law firms by making it easier for them to do pro bono work. They carry out the considerable legwork involved in putting together a case – work that requires time and skills and experience that are not naturally found in corporate law firms – thereby allowing lawyers to focus on where they can be of best use. The tricky part of running a pro bono programme is not getting lawyers to take on cases; it’s to source them. Their services also include managing the intake of cases, screening them for eligibility, packaging them up, referring them to law firm mem-bers, as well as monitoring the case’s progression and communicating between the law firm and the client. By acting as a neutral middleman, a clearinghouse also serves to establish trust between law firms and poor or marginalised sections of society. The Vance Center has observed that in several Latin American countries, the legacy of class divisions has created a chasm between NGOs and the legal profession, meaning those in need are unlikely to come knocking on a corporate law firm’s door. A clearinghouse can act as the law firms’ representative and build those relationships on their behalf, but they do far more than matchmaking. For example, Colombia’s clearinghouse (like others) will provide advice to law firms looking to implement systems internally and they all work closely with firms’ pro bono coordinators. Some clearinghouses give awards to lawyers, pro bono staff and law firms as a motivational tool.

Marcela Fajardo of Chile’s Fundación describes a clearinghouse’s role as “providing support to law firms and legal departments in the implementation and pro-fessionalisation of pro bono programmes”. In this vein the Fundación has created a simple guide to help law firms with their internal processes – including educa-tion and the organisation, registration and recognition of pro bono work. More recently it has introduced two new tools – a survey is now carried out by an external company into the quality of services, and, at the request

of the member firms, there is a tool to measure service satisfaction. The foundation is working with each law firm’s pro bono committee to establish internal policies to meet these objectives, establishing mechanisms for measuring progress and commitments.

Beyond assisting law firms, pro bono clearinghouses from around the region also cite important legal reforms they and their members have helped bring about and hard-fought lawsuits that have changed the lives of marginalised groups. In Colombia, a law firm helped the Ministry of Education draw up draft rules for a law to reduce violence in schools, while Brazil’s Instituto Pro Bono recalls a case in which its lawyers saw to it that the federal judiciary demand that the rights of a group of patients with disabilities were met after they were forced to move hospitals. ProVene has been campaigning for marriage equality in Venezuela and a number of clearinghouses across the region have helped to launch anti-bullying programmes in schools as well as drawing up draft legislation and manuals on the subject.

Secrets of successWhile the work of clearinghouses across Latin America has an important impact on society, some have a higher output than others. It’s notable that Chile’s foundation and its members’ pro bono output is higher than some other Latin American markets, while its counterparts in Colombia and Argentina have also had an impressive impact on law firms’ approach to pro bono and the pro bono arm of the Mexican bar association reports that its members are increasingly taking steps to institutionalise the practice in their firms. But what is the secret to a clearinghouse’s success? Aside from local restrictions or societal issues, it is largely consistent support from law firms that keeps these organisations alive – both in terms of taking on pro bono and appointing someone to liaise with the clearinghouse, and with financial support.

Clearinghouses cannot exist without finance. Like any other organisation, a clearinghouse has overheads to pay and employs staff who require a salary. Chile’s Fundación has a workforce of 11, but most have far fewer on their team (in Argentina there are just two employees) and all have their work cut out for them. As well as not being able to complete their core objectives, without sufficient funding one member of staff ’s time is invariably directed towards fundraising.

Pro bono foundations are designed specifically to act on law firms’ behalf and in most cases, the assump-tion is that their member firms will provide financial support through an annual membership fee, although this is usually voluntary and often varies according to the size of the firm. This regular, predictable funding is crucial to a clearinghouse’s effectiveness and forward




planning, but it can be an uphill struggle for clearing-houses to secure financial commitments from law firms. To illustrate the point, an earlier incarnation of the Alianza Pro Bono in Peru was forced to close because firms were not supporting it financially. The good news is that it was able to relaunch in 2014 because 17 firms committed to funding.

Simply put, a lack of funding limits the amount of people a clearinghouse and its members are able to help. All 35 members of Chile’s foundation pay the annual fee, with Chilean law firms responding to our survey saying they paid between US$2,600 and US$11,000 in 2013. Firms in other countries also fare well, including the 20 member firms of Argentina’s Comisión Pro Bono, while Colombia’s clearinghouse reports that most of its members pay fees. Mexico’s Fundación de la Barra has a steady source of funding as it receives 10 per cent of the bar membership fees, while Appleseed, which has free membership, relies on donations and funding from one or two law firms. In Brazil, it is patchier – just four out of 45 members make contributions, while clearinghouses in countries such as the Dominican Republic and Paraguay and ProVene in Venezuela do not receive any financial support from law firms. (There exists another clear-inghouse in Venezuela – Venezuela sin Límites – but we were unable to obtain information from it for this article.) Some are fortunate in that they receive donations from international foundations or other sources, but these tend to be ad hoc and do not allow for financial planning.

A number of clearinghouses, including those in Argentina, Cololmbia and Chile would like more resources to expand their programme outside of their countries’ main cities. As well as funding another problem is that it’s hard to find law firms in those cities that do pro bono work. They are taking steps to rectify this – the Alianza is working out how to reach Peru’s provinces, while Colombia’s Fundación is keen to encourage more firms to participate in Medellín.

Breaking down barriersFor clearinghouses to persuade law firms to back them financially, they must first convince them of their worth, and this still proves to be difficult in some countries. Cultural realities dictate that a big part of a clearinghouse’s role is still tied up with promoting a pro bono culture and helping to change perceptions. In many parts of Latin America there is still a lack of understanding about what pro bono work actually is. This in turn means that some law firms do not see the benefits of doing pro bono work because it is seen as underappreciated. Some lawyers still assign a lower value to pro bono cases, which they see as a form of unpaid, less interesting work.

Clearinghouses across the region say that they would like to see a greater awareness and more social responsibility among law firms, but the good news is that the situation improves each year, often thanks to their efforts. In Brazil, the Instituto Pro Bono is campaigning tirelessly towards convincing the bar association to allow the country’s law firms to provide free legal services to individuals – in 2013 an injunction was obtained to lift restrictions and the hope is that this will be made permanent. “The public hearing that took place last year was a watershed in the battle against the bar association since it led to a preliminary injunction authorising pro bono for individuals. It was very important for bringing access to justice in a democratic way here in Brazil,” notes the institute’s president, Marcos Fuchs. In the meantime the institute’s legal task force works with an organisation called Novo Olhar to help the poor in São Paulo with criminal, civil and family issues. The Colombian foundation is bringing on board large national corporates such as Bancolombia in the hope that their participation will convince firms to see the practice in a new light. Chile’s Fundación and Appleseed in Mexico are also successfully focusing on engaging in-house legal teams.

Perceptions appear to be a particular challenge in the Dominican Republic, Paraguay and Venezuela, where clearinghouses have struggled to form relation-ships with law firms, but there are reports that things are getting better. The Dominican Republic’s founda-tion has just wrapped up a high-profile event designed to raise awareness, where two firms and four inde-pendent practitioners signed up to the PBDA, while ProVene also organised a conference, “Let’s Pro Bono,” with a similar aim and has been holding apparently very successful meetings with law firms about how to work more closely with them.

Since 2013, ProVene has also been in talks with several universities in Caracas in order to institutionalise the pro bono work undertaken by law schools or, if not, to encourage both students and teachers to undertake pro bono work, while clearinghouses in Peru and Chile are making inroads into universities and law schools with the “pro bono challenge”: a competition where the winning project of proposals submitted by law students will be implemented with the help of the clearinghouse’s members. Law school students are a target demographic for clearinghouses; by making an impression on them at the start of their careers, the hope is that they will take what they have learnt to the law firms that go on to employ them.

The message they want to convey is clear: with a central referral system that all law firms make use of, a legal market has the power to bring access to justice to a significantly wider proportion of society’s poor and marginalised.




Argentina Comisión Pro Bono

Established 2000

Type of organisation Commission working under the City of Buenos Aires Bar Association

Number of employees (excluding volunteers)

2

Leadership Board of directors and president Juan Pablo Vigliero

Membership 20 law firms

Economic support Annual contribution from law firm members

2013 workload 333 cases, 55 new cases assigned

BrazilInstituto Pro Bono

Established 2001

Type of organisation Institute


5

Leadership Board of directors, executive director Marcos Fuchs

Membership 45 law firms, 3 company legal departments

Economic support Donations from two foundations (from the US and the UK), funding from 4 law firms and donations from Latin Lawyer’s awards ceremony

2013 workload Around 150 NGOs received legal assistance, while 80 individuals received legal orientation

ChileFundación Pro Bono Chile

Established 2000

Type of organisation Foundation


11

Leadership A board, an advisory council and an executive

Membership 35 law firms, 6 company legal departments, 200 voluntary lawyers and 7 public notaries

Economic support All 35 law firms and legal departments provide funding as part of their membership. Donation from Tinker Foundation in 2013.

Clients Individuals, non-profit organisations, micro-entrepreneurs, social enterprises.

2013 workload 2,670 people, non-profit and social organisations and micro-entrepreneurs assisted (56% organisations and 44% individuals). Breakdown of work: corporate law advice 47%; legal advice and litigation 30%; training and participation in legislative reform 23%

ColombiaFundación Pro Bono Colombia

Established 2009



4

Leadership A members’ assembly and a board. The board has 7 members (5 firms and 2 honorary members)

Clearinghouse quick facts




Economic support Annual funding from member law firms and fundraising. In 2013, 25 of 27 eligible firms and legal departments provided funding. In 2014 by September, 20 of 28 possible firms and legal departments had given financial support

Membership 28 law firms and company legal departments, and independent practitioners

Clients Individuals, non-profit organisations, vulnerable communities, micro-businesses and entrepreneurs

2013 workload 137 cases assigned to law firms. Breakdown of work: representation of low-income individuals 82%; assistance to social or non-profit organisations in institutional matters 11%; high-impact 5%; legislative studies 1%; free legal education 1%. Some 20% of this work is carried out by members on an ongoing basis for regular pro bono clients

Dominican RepublicFundación Pro Bono República Dominicana

Established 2011



2

Leadership President Teófilo Rosario

Membership 11 law firms in 2013 alongside independent practitioners. Further members added in 2014

Economic support Donation from Latin Lawyer’s awards ceremony and from some law firms in 2014.

MexicoFundación Appleseed

Established 2003

Type of organisation Civil Association (non-profit)


3

Leadership Board of directors

Membership No-fee membership. Projects awarded on a case-by-case basis

Economic support Donations and annual funding from one or two law firms, fundraising

Clients Not-for-profit organisations or projects that are in the public interest (not individuals)

2013 workload 118 projects including consultations, collaboration, participation and promotion

Fundación Barra Mexicana

Established 2000

Type of organisation Civil association, non-profit


3

Leadership Board including president Daniel del Río

Membership Members and non-member lawyers of Mexican bar, law firms and independent practitioners

Economic support 10% of membership fees for the Mexican Bar Association are allocated to the foundation, amounting to almost 100% of its funding. Additional donations by Charity Coalition and VLex

2013 workload 350 individuals and families were helped in cases taken on in 2013 with the participation of 180 lawyers. Breakdown of work: representation of low-income individuals 80%; assistance to social or non-profit organisations in institutional matters 15%; other 5%




Paraguay Legal Volunteers – Pro Bono Advocacy programme at the Interdisciplinary Centre for Social Law and Policy Economics at the Catholic University (CIDSEP)

Established 2010

Type of organisation Centre under the Rector of the Catholic University


8

Leadership Director

Membership Not applicable

Economic support International funding

2013 workload 64 pro bono requests, (19 suspended because of missing documentation). Breakdown of work: representation of low-income individuals 80%; other 20%

PeruAlianza Pro Bono

Established 2014

Type of organisation Civil association (non-profit)


0 (Ciudadanos al Día provides the administrative platform)

Leadership 7-member board


Economic support Annual membership fees from all 17 law firms and 2014 donation from Latin Lawyer awards ceremony

Clients Individuals, non-profit organisations and social enterprises

2013 workload Alianza not yet operating, but 27 pro bono projects through CAD. Breakdown of work: representation of low-income individuals 30%; assistance to social or non-profit organisations in institutional matters 55%; other 15%

VenezuelaFundación Pro Bono Venezuela, ProVene

Established 2009



5

Leadership Board of directors, including CEO


Economic support Yes, but none from law firms

Clients Individuals, non-profit organisations, local councils, schools, community organisations, social enterprises

2013 workload 440 individuals, 3 NGOs assisted. Breakdown of work: representation of low-income individuals 85%; assistance to social or non-profit organisations in institutional matters 10%; public interest litigation 4%; legal reform 1%




Leading Lights

• Alessandri Abogados• Baker & McKenzie (Mexico)• Barros & Errázuriz Abogados• Barros Letelier & González• Basham, Ringe y Correa• Batalla Abogados• BLP• Bofill Mir & Alvarez Jana

Abogados• Bufete Aguirre Soc Civ• Bufete Rocha SC• Carey• Cavelier• Central Law Honduras-Medina,

Rosenthal & Asociados• Creel, García-Cuéllar, Aiza y

Enriquez SC• Delmar Ugarte Abogados• D’Empaire Reyna Abogados• DLA Piper• Estudio Beccar Varela• Estudio Echecopar, a member

firm of Baker & McKenzie International

• Estudio Olaechea• FerradaNehme• Ferrere (Paraguay)• García Sayán Abogados• Gómez-Pinzón Zuleta

Abogados• Grasty Quintana Majlis & Cia• Guyer & Regules• Headrick Rizik Alvarez &

Fernández• Hogan Lovells BSTL• Irurita Abogados• Jiménez Cruz Peña• Lazo, De Romaña & Gagliuffi

Abogados• Lloreda Camacho & Co

Attorneys• Machado, Meyer, Sendacz e

Opice Advogados

• Marval, O’Farrell & Mairal• Mattos Filho, Veiga Filho,

Marrey Jr e Quiroga Advogados• Mendoza, Palacios, Acedo,

Borjas, Páez Pumar y Cía• Mijares, Angoitia, Cortés y

Fuentes SC• Miranda & Amado Abogados• Morales & Besa• Morgan & Morgan• Norton Rose Fulbright

(Venezuela)• Pérez Alati, Grondona,

Benites, Arntsen & Martínez de Hoz (h)

• Pérez Bustamante & Ponce• Philippi, Yrarrázaval, Pulido &

Brunner• Pinheiro Neto Advogados• Prias Cadavid Abogados• prietocarrizosa• Romo Pailles, SC • Russin, Vecchi & Heredia

Bonetti• Sánchez Devanny• Siqueira Castro Advogados• Urenda, Rencoret, Orrego y

Dorr Abogados• Vivanco & Vivanco• Von Wobeser y Sierra SC• Zapiola Guerrico & Asociados

Here we list 55 “Leading Lights” from our survey respondents, celebrating law firms whose efforts towards pro bono during 2013 stood out. The list consists of firms that we feel deserve to be put in the spotlight thanks to their contribution to the development of a pro bono culture in Latin America.

Several factors played a role in drawing up this list. These include firms’ answers to the survey with regards to institutionalisation of the practice and examples of their recent pro bono cases. We also asked for feedback from clearinghouses, the Vance Center and other pro bono professionals where possible and considered the development of firms’ pro bono practices if they participated in last year’s survey, as well as further research.

While this is by no means an exhaustive list (for a start it only mentions firms that participated in our survey), we hope it will give readers an idea of the efforts that firms across Latin America are taking to provide free legal services to those in need.

Of course, it should be noted that simply participating in this survey demonstrates awareness among all participants of the need for pro bono and each one had interesting developments to report. We hope that all respondents will continue to advance their pro bono practices and come back to us to report their efforts in the years to come.

PROBONO LEADING LIGHT 2014RECOGNISED BY LATIN LAWYER AND THE VANCE CENTER




Argentina• Allende & Brea Abogados• Baker & McKenzie (Argentina)• Bruchou, Fernández Madero &

Lombardi• Estudio Beccar Varela• Fontán Balestra & Asociados• Marval, O’Farrell & Mairal• Pérez Alati, Grondona, Benites,

Arntsen & Martínez de Hoz (h)• Tanoira Cassagne Abogados• Zang, Bergel & Viñes Abogados• Zapiola Guerrico & Asociados

Bolivia• Bufete Aguirre Soc Civ

Brazil• Azevedo Sette Advogados• Barretto Ferreira e Brancher• Demarest Advogados• Indaiá Griebeler Pacheco• KLA-Koury Lopes Advogados• Levy & Salomão Advogados• Lobo & de Rizzo Advogados• Lowry Abogados• Machado, Meyer, Sendacz e Opice

Advogados• Mallet Advogados Associados• Mattos Filho, Veiga Filho, Marrey Jr e

Quiroga Advogados• NeoLaw• Pinheiro Neto Advogados• Queiroz & Meirelles Sociedade de

Advogados• Rogério Frota Advogado• Rubens Naves Santos Jr Advogados• Siqueira Castro Advogados• Soares Bumachar Chagas Barros

Advogados• Trench, Rossi e Watanabe Advogados

(associated with Baker & McKenzie)

Chile• Alessandri Abogados• Barros & Errázuriz Abogados• Barros Letelier & González• Bofill Mir & Alvarez Jana Abogados• Carey• FerradaNehme• Grasty Quintana Majlis & Cia• Morales & Besa

• Philippi, Yrarrázaval, Pulido & Brunner• Urenda, Rencoret, Orrego y Dorr

Abogados

Colombia• Baker & McKenzie (Colombia)• Brigard & Urrutia Abogados• Cavelier Abogados• Gómez-Pinzón Zuleta Abogados• Lloreda Camacho & Co Attorneys• Parra Rodríguez Sanín• Prias Cadavid Abogados• prietocarrizosa

Costa Rica• Batalla Abogados• BLP

Dominican Republic• DMK Abogados, Central Law• Headrick Rizik Alvarez & Fernández• Jiménez Cruz Peña• Pellerano & Herrera• Russin, Vecchi & Heredia Bonetti

Ecuador• Consulegis Abogados• Paz Horowitz Robalino Garcés• Pérez Bustamante & Ponce• Romero Arteta Ponce Abogados• Vivanco & Vivanco

El Salvador• Central Law – Rusconi, Medina &

Asociados

Guatemala• Central Law Diaz Duran & Asociados

Honduras • Central Law Honduras-Medina,

Rosenthal & Asociados

Mexico• Baker & McKenzie (Mexico)• Basham, Ringe y Correa• Bufete Robles Miaja SC• Bufete Rocha SC• Chadbourne & Parke

• Creel, García-Cuéllar, Aiza y Enriquez SC

• Cuesta Campos Abogados• DLA Piper• Hogan Lovells BSTL• Irurita Abogados• Mijares, Angoitia, Cortés y Fuentes SC• Romo Pailles, SC• Sánchez Devanny• Von Wobeser y Sierra SC• White & Case SC

Nicaragua• Central Law – Molina & Asociados

Panama• Alemán, Cordero, Galindo & Lee• Morgan & Morgan

Paraguay• Ferrere (Paraguay)

Peru• Delmar Ugarte Abogados• Estudio Echecopar, a member firm of

Baker & McKenzie International• Estudio Olaechea• Fernandez Heraud & Sanchez

Abogados• Ferrero Abogados• García Sayán Abogados• Lazo, De Romaña & Gagliuffi

Abogados• Miranda & Amado Abogados• Osterling Abogados• Rodrigo, Elías & Medrano Abogados• Rubio Leguía Normand• Yataco Arias Abogados

Uruguay• Guyer & Regules• Posadas, Posadas & Vecino

Venezuela• Baker & McKenzie (Venezuela)• Benson, Pérez Matos, Antakly & Watts• D’Empaire Reyna Abogados• Mendoza, Palacios, Acedo, Borjas,

Páez Pumar y Cía• Norton Rose Fulbright (Venezuela)

Latin Lawyer and the Vance Center would like to thank all of the firms that took the time to complete the survey. We list all of the participants below with the exception of a small number of firms that requested their participation to remain anonymous.


The Vance Center advances global justice by engaging lawyers across borders to support civil society and an ethically active legal profession. A unique collaboration of practicing international lawyers catalyzing public interest innovation, we are organized as a non‐profit program of the New York City Bar Association.Promoting Pro Bono Practice

The Vance Center builds the capacity of the legal profession to pursue pro bono practice, ethics, and diversity, through our Program on Strengthening the Legal Profession. In this context, we have partnered with Latin Lawyer for the third time this year to survey pro bono practice, including its level of institutionalization, by law firms in Latin America.Our partner clearinghouses in the Americas have provided invaluable feedback and support for this year's survey, and we wish to extend our thanks to them for their generous contributions:

• Alianza Pro Bono Perú • Appleseed (Mexico)• Centro Interdisciplinario de Derecho Social y Economía Política (CIDSEP UC) (Paraguay)• Comisión de Trabajo Pro Bono e Interés Público del Colegio de Abogados de la Ciudad de Buenos Aires (Argentina)

• Fundación Barra Mexicana • Fundación Pro Bono Chile • Fundación Pro Bono Colombia • Fundación Pro Bono de Venezuela • Instituto Pro Bono Brasil • Pro Bono República Dominicana

Supporting Civil Society

The Vance Center also provides legal representation to civil society organizations, as well as international human rights bodies, around the world, with frequent collaboration by leadinglaw firms on a pro bono basis. In the last two years, we have undertaken more than 60 pro bono projects, and worked with 76 law firms in 25 countries, in Latin America and the Caribbean.

Argentina: (6 )

Bolivia: (4)

Cayman Islands: (1)

Costa Rica: (2)

Ecuador: (3)

Guyana: (1)

Honduras: (1)

Nicaragua: (3)

Paraguay: (1)

Uruguay: (2)

Bahamas: (1)

Brazil: (5)

Chile: (6)

Dominican Rep.: (6)

El Salvador: (3)

Haiti: (2)

Jamaica: (1)

Panama: (3)

Peru: (6)

Venezuela: (2)

Barbados ( 1)

Colombia: (7)

Guatemala: (2)

Mexico: (7)

Trinidad & Tobago: (1)

Please see www.vancecenter.org for more information.



The heady rush of sealing a deal after heated negotiations for the first time is something few lawyers will ever forget. Rachel Hall lays out 10 pieces of advice from some of Latin America’s most seasoned dealmakers on how to be successful in M&A negotiations

Talking tacticsWhether reaching a settlement in a contentious court case or sealing a multibillion-dollar deal, negotiation skills are central to the legal profession. Nowhere is this more true than among M&A lawyers. Taking the lead on some of Latin America’s highest-profile deals, the region’s transactional lawyers regularly have to walk a fine line between winning the best deal for their clients and recognising that opposing counsel are under similar pressures to achieve their objectives, thereby remaining flexible enough to prevent negotiations grinding to a halt. Knowing the deal inside out, learning everything about the parties involved and preparing for every eventuality can take a lawyer so far, but often the ability to reach a successful conclusion can come down to the quick-thinking and creative suggestions of individual negotiators.“It’s amazing how some people are not good at actually negotiating deals, and that’s why you get paid what you get paid, because people know you’re going to add value, and help them get the deal,” says Norton Rose Fulbright’s Head of Latin America, Elisabeth Eljuri.

Natural talent may be a prerequisite for any success-ful negotiator, but the best practitioners are often those who continually hone their skills and learn from their experiences, both positive and negative. “There are skills you are born with, like sympathy, team-playing, generos-ity, being very fast thinking and understanding the arguments of the other side, but that doesn’t mean you can’t sharpen them up,” says Barbosa Müssnich & Aragão partner Francisco Müssnich. “There is always a way to learn more and better understand your own abilities.”

Here, some of Latin America’s most seasoned dealmakers offer their top tips on how best to approach M&A negotiations, and share tricks of the trade for pulling a successful conclusion out of the bag when all seems lost.

Learn from the client...It may be tempting for a lawyer to take the lead from the beginning, but Rodrigo, Elías & Medrano Abogados partner Jean Paul Chabaneix says the chance of reaching a successful settlement can be greatly increased by recognising your client may be your greatest asset. Before providing any advice, he says the first step of any successful negotiator is to listen and learn as much as they can. “Usually the client knows much more about their business than we do, but we certainly bring value on the table to let them know what their limits may be, especially in terms of negotiation and avoiding the risk that a deal will fall through,” he says. This can involve working out what the main critical issues are for the client, namely the deal-breakers, along with basic preferences on which they are willing to compromise, enabling the lawyer to know when to insist on certain points, and when to concede.

With all transactions starting off with a briefing between client and lawyer, Skadden, Arps, Slate, Meagher & Flom LLP partner Paul Schnell says good dealmakers take the time to listen hard and understand a client’s objectives and priorities. Crucially, this process must continue throughout the entire course of the negotiations, to ensure the objectives of the client and

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LATINLAWYER NEGOTIATION TACTICS


NEGOTIATION TACTICS LATINLAWYER


counsel are fully aligned and potential issues can be anticipated early on in the negotiations. “Like in many other pursuits, the more preparation you can do with your client, the better the result,” he adds.

Brigard & Urrutia Abogados partner Sergio Michelsen says he is always surprised how often he encounters lawyers who may know every intricacy of a particular transaction, but lack the first idea of why the client is doing it. “When understanding the real interest of the client, you will make sure that you help him accomplish his objectives,” he adds.

…but be prepared to take the leadClient knowledge may be an important weapon in the negotiator’s armoury, but dealmakers must also have the confidence to take charge and turn down client requests that may be unrealistic. This is particularly important at the start of the transaction when there is often a temptation from both external counsel and the client to present everything as important.

Entering negotiations with a clear understanding between lawyer and client of the non-negotiable “bottom line issues” can substantially increase the chance of reaching a successful conclusion further down the line. On occasion, this may require the lawyer to speak to multiple individuals within a client’s company, or organisation, to ensure everyone’s end goal is the same. Together with avoiding an embarrass-ing volte-face in the midst of the negotiations (which can severely weaken a bargaining position), Schnell argues that putting the key “go/no go” issues on the table early on can often help the client prevail on these points. For him, the beginning of negotiations is when you will have the most credibility in convincing the other side that these are “must have” points.

For Müssnich, knowing the deal-breaking issues inside out, and having control of the draft transaction documents, can also be used to strategic advantage, by allowing the lawyer to pad their demands with non-essential points that create room to negotiate: “Normally you put a lot of fat [into the first draft] so that during the negotiations you lose a lot of calories, but are still in a good shape to run the marathon,” he says.

Create a lasting impressionFollowing numerous meetings to isolate the client’s bottom line issues, and after meticulous preparation of the transaction documents to maximise wiggle room, dealmakers on both sides must now begin the delicate task of reaching a mutually acceptable agreement. From the very first handshake, it is essential that negotiators on both sides quickly establish trust and create the conditions for an open and frank discussion to take place. Often, creating a good first impression

can make the difference between a successful negotia-tion that leaves both parties satisfied and on friendly terms, and one defined by a lack of trust and mutual suspicion.

Reflecting on a long career that has seen him practise all over the world, Schnell says a defining feature of doing business in Latin America is the willingness to establish a personal connection within negotiations, which helps build trust. “In negotiations, people really want to get to know you on a personal level, and not infrequently they end up becoming your friends,” he says.

Chabaneix, too, is a firm believer in the importance of meeting face-to-face. As well as being an important feature of Latin American business culture, he thinks it also enables the parties to discuss where they are com-ing from and why they are seeking certain provisions. “I think meetings in person with your client and the other party, and his or her counsel, are usually the ones that help move the transaction forward, at least in a more direct fashion,” he says.

Within the boardroom, Chabaneix says it’s important to be perceptive about who you’re dealing with on the other side. “Often the other party may not be as sophisticated as you may find in other scenarios, and you have to take that into account in order to try and move the transaction forward,” he says.

Maintain your integrityTo prevent negotiations turning into a zero-sum game, it is essential that negotiators are open and honest about their intentions. Eljuri explains that even an action as simple as indicating clearly what your dealbreaker issues are, and sticking to them, can help remove suspicion and boost the chances of a successful conclusion: “I always try to preserve my credibility. I wouldn’t say ‘we will never accept’, then two hours later accept,” she says.

By contrast, losing trust that has been carefully established between the parties can often spell the end of negotiations or, at the very least, require significant additional effort to get the talks back on track. Schnell recalls one transaction where he was involved in a joint venture negotiation, and the other party did not disclose that their European lawyer spoke fluent Portuguese. That led to a situation where his client discussed its negotiating strategy (“perhaps a little na-ively”) in Portuguese in front of the other side’s lawyer. When the opposite party’s language skills emerged by chance, Schnell’s client confronted the other side. “It ended up really backfiring in terms of the loss of credibility of the other party, which was particularly damaging in that we were negotiating a joint venture where the two parties were supposed to work together in a trustful relationship long into the future,” he says.

“It’s amazing how some people are not good at actually negotiating deals, and that’s why you get paid what you get paid, because people know you’re going to add value”

– Elisabeth Eljuri, Norton Rose Fulbright




A joint venture agreement was ultimately signed, but only after the opposite party made numerous concessions to convince its partner of its reliability.

Make a show of flexibilityFlexibility may help dealmakers reach an agreement in the final throes of negotiations, but it is often equally important early on for setting the tone that makes a final agreement more likely. For Müssnich, conceding a few minor points early in the talks can encourage the other to follow suit or, at the very least, indicate that your strategy may need to change. “There is always the buyers’ position, the sellers’ position, and the position that will allow the business to happen, and these three are completely different,” he says. “If you [show flexibility] and there is no answer on the other side, then your tactic must be changed.”

One approach that is guaranteed to make reaching an agree-ment less likely is intransigence from one of the parties. This was made particularly clear to Müssnich when he was in discussions with a lawyer whose default answer to any request was “no”. He decided to ask the lawyer the opposite of what he wanted, confi-dent that he would continue to say “no”, and secured the points that he was looking for. “For me a good lawyer is one that says ‘yes’, and ‘how’,” he surmises.

Intransigent negotiating positions are often the result of inexpe-rience, or caused by dealmakers losing perspective during difficult or tense negotiations. In such a scenario, Creel, García-Cuéllar, Aiza y Enriquez SC partner Jean Michel Enriquez recommends asking the opposing party to take a step back, and refocus on the

issues that really matter to the deal. “The only proper dealbreakers are business aspects and price,” he says.

Encourage creativityWhen it comes to problem-solving, good M&A lawyers should be proactive in their approach, and comfortable looking for creative ways around them. On occasion, this can mean removing yourself from the negotiations (both literally and figuratively) to explore options that may not have been previously discussed, or considered. “One option is to step outside [the negotiating room] with the counterparty’s lawyer and say, ‘we have both been around, so let’s try to really start discussion in the middle ground’,” says Enriquez. “Legal practitioners can be pragmatic and stop posturing. Sometimes, you can’t stop it in front of the client, as the client might have asked you to posture, but stepping out tends to work.”

Similarly, Chabaneix says it is not unusual to reach a crossroads in negotiations, in which multiple solutions are possible. One example of this is tax issues in M&A transactions, which can often be solved in various ways. “Being able to provide alternatives to somehow try to satisfy what each party in the deal is trying to reach, and the best way to protect each of their positions in that respect, is a useful tool for moving forward in a transaction,” he says.

Be culturally awareMeeting rooms may be similar the world over, but business cultures are rarely the same between countries. Any M&A lawyer worth his or her salt will invest substantial time and energy learning every detail about a particular transaction, but the most successful

top, l-rSergio Michelsen, Paul Schnell and Jean Michel Enriquez

bottom, l-rFrancisco Müssnich, Elisabeth Eljuri and Jean Paul Chabaneix


NEGOTIATION TACTICS LATINLAWYER


dealmakers will also set aside time to research the business and cultural context in which the negotiations will take place. In the initial stages, cultural awareness can make it easier to build rapport with the opposing party, or client, but in the longer term it can also save the negotiators time by helping them avoid costly pitfalls. “Perhaps the most striking lesson in my career as an M&A lawyer is that, in many instances, the parties are often not in disagreement, but rather, they do not communicate effectively, and in particular they do not listen to each other,” says Michelsen. “One of the most valuable contributions that we can give to our clients is making sure that the parties are really communicating and understand each other’s respective interests, not just positions, in order to reach an agreement.”

Being well-versed in the business and legal context of the target company’s jurisdiction can also make it easier for dealmakers to distinguish which issues are up for negotiation. Michelsen says certain particulari-ties within Colombia’s legal context (such as M&A agreements being largely untested in courts, or lack of clarity within certain regulations) can often mean certain provisions or safeguards are demanded during negotiations. “Knowing the culture you are negotiating in is very relevant to get a deal closed,” he says.

This can also extend to how clients from certain jurisdictions view risk. Schnell says from his experi-ence, Latin American buyers are often comfortable taking more risk in negotiating a transaction. For instance, Latin American buyers are often willing to buy a minority stake in a company without a clear path to control, unlike US buyers who would view the lack of control as too risky. Equally, clients from Latin America are often prepared to take more risk as to a target’s liabilities, in tax, labour, environmental and other areas, whereas multinationals typically look for more protection through representations and indem-nification. This greater risk tolerance can prove to be a real competitive advantage for a Latin American bidder in an auction process.

Aside from business, knowing the particular passions of the country you’re working in can also pay dividends. Schnell recounts one example of a US client who became aware of the importance of a particular football game for the other party and agreed to take the afternoon off; even sporting a Brazilian football shirt in support. Both parties later completed a successful deal. By contrast, another US client insisted on negotiating a deal with their Brazilian counter party during a World Cup game in which the national team was playing. This not only led to a lack of focus during the meeting, but ultimately led to a deal not being signed as it was more difficult for the two sides to build a personal connection.

Use your EQWith legal counsel on both sides placed under (often significant) pressure from their clients to achieve a satisfactory outcome, it is unsurprising nerves will occasionally become frayed. When the negotiations are on the verge of collapsing, the most successful dealmakers must not only keep a cool head, but also make an active effort to build empathy between the two parties. “When tensions get too flared, a lot of deals collapse because people are not framing the issue in the context of the larger transaction,” says Enriquez. “If a particular issue has been blown out of proportion, and this tends not to be on price, but for risk alloca-tion or indemnities, it is useful to step outside and frame the issues.”

Michelsen says emotions tend to run particularly high when dealing with families that have owned their companies for generations and may never have had to enter into M&A negotiations before. “The metaphor of a parent giving away his or her daughter to get mar-ried is a common one in these scenarios,” he says. “The management of the target may be under a lot of stress and emotions in the boardroom can rise to significant levels. In order to successfully close a transaction you must learn to manage these emotions in order to avoid them trumping a good deal.”

Over the course of her career, Eljuri says the least successful negotiators have not struggled because they were not bright lawyers, but because they either lacked emotional intelligence, or failed to apply it. “I think situations where lawyers have done poorly are because they don’t manage to get along with their clients or counterparts, and understand the role the clients want the lawyer to play in the negotiation,” she says.

For Eljuri, this is an area in which female lawyers perform particularly well. Although she admits that on occasion she has encountered senior Latin American clients who are initially apprehensive about the lead negotiator being a woman, she believes that the different female negotiating style can add value. “One is your capacity to be representative of a broader group, and another is that your style, in terms of emotional intelligence, is quite different and often helpful to clos-ing the deal,” she says. She also adds that female lawyers often “don’t always approach the issues in the same way” as male lawyers, preferring to be less aggressive with the other side and draw on other perspectives to make their points more sensitively.

Know your placeIn the heat of negotiations, and with the adrenaline pumping, it can be tempting for negotiators to let their egos get the better of them. At this point, the most successful dealmakers will not deviate from the role they have been asked to play, or forget for whom they

“Aggressive, bad guy, good guy, you probably become what suits you best”

– Francisco Müssnich, Barbosa Müssnich & Aragão




are negotiating the deal. “Understand where you stand in the transaction itself, what your client’s characteristics are, what their position is, and the same for the other parties,” advises Chabaneix.

Paradoxically, this may mean recognising when not to negotiate at all. Chabaneix says successful negotiations can generally be divided into two types: those where the client sets out the commercial terms and comes knocking on external counsel to document the relevant agreements; and those where lawyers take centre stage. Few tactics are as certain to collapse a deal and damage trust than ag-gressively pursuing a contractual point at a delicate point in the negotiations when the client has asked you take a back seat. “I think that the best strategy is to always start by understanding what your client is ready for, what their aims are and how far he or she is ready to go in terms of getting the deal and under what limits,” he notes.

Find your own styleOf all the advice negotiators have received during their careers, perhaps the most important has been for them to develop their own style. Few approaches will make it harder to build trust between the parties, or achieve a successful outcome at the end of negotiations, than dealmakers adopting strategies they do not feel comfort-able with.

For Schnell, it was two particular books – Anatomy of

a Merger and Smart Negotiating by retired Skadden partner Jim Freund – that gave him the foundations to develop his negotiating style. He says the best advice he received from Freund is “be true to yourself ” in developing your style of negotiating. “There are many different, effective negotiating styles and it is good to spend time working with and watching senior lawyers who have different ways of negotiating and develop which one works for you,” he adds.

Müssnich adds there are several different approaches, and although lawyers will find themselves suited to some more than others, they also have to be aware that in any given transaction, they may have several roles to play. “Aggressive, bad guy, good guy, you probably become what suits you best,” he says. He also recommends that M&A lawyers draw on their previous professional experi-ence, be it in tax or litigation or labour, to deepen their offering and broaden their skill set. “It’s the addition of all these experiences that make you what you are,” he says.

While Chabaneix says there is much to be learned from guidebooks, which can help lawyers identify the main issues they are likely to encounter, ultimately only experience will be the true formative influence. “Reality is much richer in terms of what you end up finding, and there’s not only the matter of legal discussions, there’s the matter of additional elements like behaviour and psychol-ogy,” he says.

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LATINLAWYER WEALTH MANAGEMENT


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Latin America’s economies may be facing a slowdown, but it seems its people are only getting wealthier. According to a report by Julius Bär, a private bank, the region

has one of the highest expected growth rates of wealthy people in the world, with the number of individuals with investable assets of more than US$20 million – known as ultra-high net worth individuals (UHNWIs) – expected to grow by 42 per cent by 2023.

Lower down the rich list, Latin American high net worth individuals (HNWIs) have far deeper pockets on average than those in other regions – US$13.5 million compared with US$3.3 million for European HNWIs, for instance. Unsurprisingly, Brazil has the lion’s share of the region’s wealthy, with more than a third of HNWIs, while Mexico’s Carlos Slim and family, with a net worth approach-ing US$80 billion, lead the pack. It’s hardly slim pickings for the rest though. Thanks to mining, Chile’s Fontbona family and Mexico’s Larrea family, for example, have accumulated a combined net worth of more than US$30 billion – a touch higher than Paraguay’s GDP.

If it was bricks and mortar that led the world into the 2008 financial crisis, it is the BRICs and

MINTs that emerged from the ensuing chaos in the best shape. The rise and rise of the Latin American contingent of the Goldman Sachs-coined acronyms has been well documented – land sales, the commodity boom, private equity interest and a slew of IPOs have driven their growth, and that of the region as a whole. This has fattened Latin Americans’ wallets – the number of HNWIs (those with at least US$1 million to invest) has increased by over 100,000 over the last five years, while the UHNW population has nearly doubled since 2003.

One reason Latin America is home to so many wealthy people is that the region’s companies have stayed in the hands of individuals and families for far longer than in other parts of the world – mean-ing they have benefited directly from the region’s economic growth. Pension funds, insurance companies and big corporate investors started to invest in the region’s businesses later on, and now the families selling off stakes are pocketing millions, if not more. But Latin America’s newly minted millionaires are often at a loss about how to manage their fortunes. As Carlos Fernando Siqueira Castro of Siqueira Castro Advogados puts it, “these people who received 100 million in shares overnight just didn’t know what to do with it.”

Sustained economic growth and unprecedented levels of foreign investment into Latin America have created vast fortunes for the families behind many of the region’s leading companies. To manage their newly made wealth and navigate tough new rules on taxation and offshore banking, the region’s rich are increasingly turning to outside counsel for help. Vincent Manancourt investigates

KEEPING IT IN THE FAMILY

KEEPING IT IN THE FAMILY


WEALTH MANAGEMENT LATINLAWYER


Wealth of opportunityAs Latin America’s companies continue to grow and draw the attention of foreign investors, their increasingly wealthy owners (by now often the third or fourth generation of the founding families) are increasingly turning to law firms to manage their wealth and family estates. A rising number of the region’s leading corporate firms are devoting time and energy to developing teams to provide wealth and estate planning advice, drawing on lawyers from their tax, finance, corporate and real estate law departments. “At the moment it is not that common for law firms to have wealth management practice areas but more and more law firms are gathering partners and associates from different departments to have a special interest group dedicated to wealth management,” says Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados partner Marcelo Paolini. Some firms have taken a more aggressive approach to developing the area. Earlier this year, Brazil’s Trench, Rossi e Watanabe Advogados hired tax associate Elisabeth Libertuci to develop its wealth manage-ment practice, while last July Veirano Advogados hired Christiane Sultani, a former head of legal at Itaú Unibanco, to add banking expertise to wealth management work the tax team had been doing. In Mexico, Sánchez Devanny also recently made several strategic hires in a bid to develop its wealth manage-ment practice.

In the past, this was more the domain of private banks and wealth managers. While in recent years law firms have been catching up fast, the two are not competitors, but instead complement each other through the different services they offer. “Traditional wealth managers are experts and very good advisers in terms of the financial products that they have, in terms of the investment alternatives that they offer to the clients or the jurisdictions they know are the best for structuring those financial products,” says Juan Guillermo Ruiz of Colombia’s Posse Herrera Ruiz, who advises HNWIs on tax issues. “Law firms advise individuals on how to construct these investments from the point of view of the specific tax rulings and regulations applicable to the residency of the inves-tors or the real beneficiary of those investments.” In other words, the advice of wealth planners is general and financial, whereas the advice offered by lawyers is specific and geared towards making the client and their family fully tax-compliant.

Up close and personalThose firms diversifying into wealth management will soon find that its highly personalised nature means the relationship that develops between a lawyer and client can be vastly different to the

dynamic a corporate lawyer might be used to. With effective wealth management dependent on clients opening both their business and personal accounts to scrutiny, Siqueira Castro explains that an intimate relationship between lawyer and client is both the outcome and a prerequisite of a good level of service. “The important thing is that you are dealing with something which is sacred and secret to the business person – he is opening all his intimacies and showing all the assets he has because in order to give sound legal advice you need the full scenario,” he says. There are other differences to the lawyer–client relationship. “A lawyer that deals with HNWIs should be someone who likes to deal with people and individuals. If there is trust between an HNWI and his lawyer, they can forge a relationship which lasts generations,” says Paolini.

Law firms contemplating expanding their service offering into wealth management services must ensure sufficient safeguards are in place to protect them from the legal and ethical challenges they may encounter. With the potential for client relationships to become deeply personalised and span many generations, one of the greatest challenges is ensuring lawyers maintain sufficient distance to avoid running into conflicts of interest or ethical issues.

To an extent, firms have seen the growth in their wealth management practice develop organically as a result of their corporate offerings. As Siquiera Castro explains, a wealth management practice can follow on naturally from advising high-level executives on their companies’ corporate matters, as the professional trust placed by CEOs and CFOs in the firm will translate into personal trust. With many of Latin America’s leading companies remaining under the strict control of the founder, or their relatives, issues of business management and a family’s finance are often closely intertwined. In this context, the well-being of the business can often be highly dependent on the well-being of the family. Divorces, family breakdown and the death of the founding father can all have the potential to scupper a business if owner-ship and personal liability are not clearly agreed. (One lawyer who advises HNWIs in Latin America says this can even go as far as asking whether a new client has a mistress, due to the increased risk this implies of family breakdown or costly divorce proceedings.)

Given family-owned companies often lack clear rules on ownership, an owner’s decision to sell up, or cash out, can cause disputes to bubble to the surface as family members compete for a stake in the proceeds. Two years ago Japanese beverage company Kirin experienced this first hand, when its attempt to acquire family-owned brewery, Schincariol, in Brazil

Divorces, family breakdown and the death of the founding father can all have the potential to scupper a business if ownership and personal liability are not clearly agreed


LATINLAWYER WEALTH MANAGEMENT


sparked a protracted and bitter legal battle between relatives of the company’s founder that threatened to derail the multibillion-dollar acquisition.

Indeed, one reason wealth management is taking off as a practice of law is that business owners are growing more mindful of the need to establish sound corporate governance structures and plan appropriately for succession. There are various areas in which lawyers must be well versed in order to anticipate what impact this will have on HNWIs and their family-owned enterprises, and “forced heirship” is one example of legislation that can prove problematic. Despite variations in the rules between jurisdictions in Latin America, it typically means that a certain percentage of an individual’s assets must go to his or her heir when they die. This becomes complicated when the family estate includes business interests. Maples and Calder Cayman partner Simon Firth explains that if succession is not planned for and handled carefully, forced heirship legislation can have a “severely detrimental effect” on a family’s company. “Ownership can become fragmented among family members who may have competing interests or different visions for the business,” he says. “Similarly, children who inherit an interest in the family business may have no idea how to run it,

while others may have no interest in participating in its running.”

In the longer-term, the death of the family member in charge can also remove entrepreneurial and managerial skills that are essential for the running of the business. “The next generation don’t neces-sarily have the same skills that their mother or father had in terms of making money,” says Colin Maltby, director of Berkeley LatAm. Problems such as these can be avoided by implementing structures that limit heirs’ interference in the running of the business, but give them access to the company’s profits.

However, in some cases a change in leadership can inject entrepreneurial verve or make the family business more outward-looking, as the new owners introduce knowledge and skills gained studying or working abroad. Often, this makes them more likely to open their companies to outside advisers (including lawyers), as they seek to professionalise or expand the business. “The profile of many of our Latin American clients is someone who was raised up to a certain age in their own country, educated in the best universities in the world and trained in some of the best professional service firms. In many cases they have returned to their home countries with a whole new perspective and some will take the family

top, l-rAndrew Miller, Colin Maltby, Juan Guillermo Ruiz and Miguel Jáuregui Rojas

bottom, l-rMarcelo Paolini, Enrique Martin and Simon Firth


WEALTH MANAGEMENT LATINLAWYER


business to another level. The relationship with outside counsel like us has become a bit different – these are very sophisticated consumers of legal services with very high expectations and standards of quality and service while the new ownership is thinking about and pursues possibilities outside of their home markets,” says Enrique Martin, a partner at Jones Day.

Taxing workIn addition to local legislation, there are often multiple jurisdic-tions for lawyers to navigate their clients through. The assets of Latin America’s wealthy families – like others across the world – are becoming increasingly globalised, which law firms must take into account when ensuring their clients’ families are tax-compliant. “Law firms must do global analysis in order to make sure their clients are tax compliant not only in one jurisdiction but in a good number of jurisdictions as a result of how the family is integrated,” says Ruiz.

Many HNWIs like to park their assets offshore and Latin America’s are no different. In 2013, Mexican HNWIs held 22.2 per cent of their wealth outside their home country and the Boston Consulting Group expects that around half a trillion dol-lars of offshore wealth will come from Latin American investors over the next five years. Offshore centres in the Caribbean, such as the Cayman and British Virgin Islands, will benefit most from new offshore wealth created in Latin America.

Increased scrutiny of offshore assets is only driving up the demand for legal and compliance expertise. One driver is the OECD’s plan to fight tax evasion, defined more accurately as base erosion and profit sharing (BEPS). With BEPS, the OECD is hoping to achieve global transparency in terms of defining clearly the real beneficiary of assets, which is seen as one of the biggest factors in the drive for compliance.

There is an important effect of that. “The first thing is that not only financial institutions but also clients or rich families in Latin America know now that it is not acceptable, nor convenient, to keep assets disconnected from the residency as they had before. It was common that families have certain assets – basically financial assets – disconnected with their residency,” says Ruiz.

HNWIs are increasingly realising that properly structured wealth planning has never been more important. “A common form of wealth planning in some parts of the world has been not to take advice and keep a low profile in the hope that there won’t be problems – that is now changing with tax authorities seeking to enforce taxes more stringently than they historically have due to mounting domestic spending and clients looking to protect themselves better with robust structures,” says Maltby.

But perhaps contrary to expectations, the crackdown on tax evasion has not resulted in Latin Americans moving assets away from offshore locations. “There is a belief that a move towards greater transparency will in some way be to the disadvantage of international financial centres. This couldn’t be further from the truth – the likes of the Cayman Islands, which, for example, has effectively been removed from Mexico’s blacklist as a result of entering into a tax information exchange agreement, are

becoming increasingly appealing to Latin American advisers seeking sophisticated international wealth structuring solutions,” argues Andrew Miller, a partner in Walkers’ Cayman Islands office.

Instead, Latin America’s wealthy are now being forced to analyse how they currently hold their assets offshore and are looking to move away from certain offshore jurisdictions that are considered to be less reputable. “In essence, [the global focus on tax evasion] is causing legitimate business owners to attempt to distinguish themselves by restructuring to more regulated and more transparent internationally acceptable structures,” says Firth.

As a consequence, tax advisers and wealth managers will have to become much more sophisticated in handling offshore assets. “Before it was very simple – now the challenge is to have the same advantages of having assets offshore, but that at the same time are considered fully compliant with the regulations of each jurisdiction,” says Ruiz.

What is clear is that as the world becomes increasingly interconnected and the ranks of wealthy Latin Americans swell, the demand for law firms and lawyers will not let up any time soon – as Miguel Jáuregui Rojas, a partner at Mexico’s Jáuregui y Del Valle, says: “In the last 10 years I would say that the legal profession has taken centre stage in the planning and mainte-nance of wealth. People realise the world is getting smaller and smaller and so their need for outside help is growing.”


http://www.law.berkeley.edu/llmjsd.htm

Posting staff around the world is a necessity for many multinational companies, but it can be a high-risk endeavour. Although globalisation has made mobility inevitable, the problems employers encounter from overlapping, contrasting or simply unclear labour legislation can be daunting. At Latin Lawyer’s First Annual Labour and Employment Conference, lawyers considered some of the common stumbling blocks that can arise from sending employees abroad. A panel steered by Isabel Rivera, corporate counsel of construction equipment manufacturer Caterpillar, saw panellists Alejandra Flah, director and associate general counsel for Latin America at Citibank, Carey’s Oscar Aitken from Chile, Costa Rica’s Marco Durante of BDS Asesores

(a member firm of Littler Global) and Juan Carlos Pró-Rísquez, of Norton Rose Fulbright in Venezuela offer solutions to three familiar scenarios that often pose problems for multinationals in Latin America when moving staff around the region.

Ultimately, says Rivera, companies facing these situations must be careful not to cause themselves a “self-inflicted wound”, whereby their response has long-term detrimental and unintended results.

Notwithstanding the problems that global mobility can throw labour lawyers’ way, the practice remains more beneficial than it is detrimental, particularly as a means of entering new markets. As Latin America’s multilatinas continue to gain ground it is something lawyers will have to continue to get their heads around.

Dealing with global mobility


LABOUR CONFERENCE LATINLAWYER


The solutionGetting rid of John without making a hefty payment is easier said than done and Acme and its lawyers will need to take various issues into account, territoriality and the matter of John’s right to privacy.

Acme will want to pursue John for gross misconduct uncovered in the initial investigation into his actions, but its lawyers should alert the company to the fact that any informa-tion collected by delving into private communications would be unusable in most Latin American jurisdictions because it would be a violation of John’s constitutional right to privacy. Instead, the company would need to use publicly available evidence of misconduct to support its case.

An early hurdle the company will encounter is that of territoriality, which remains a largely grey and complex area because the principle “is having trouble adapting to the global village of the modern world,” says Aitken. Territoriality refers to the application of jurisdiction, which can be difficult to ascertain when parties are drawn from different countries – opening the door for various different and possibly contradictory sets of laws to apply. Whichever jurisdiction prevails will determine the course of the case.

Employees sent on assignments abroad tend to stay on their original employment contract if the assignment is short-term, but John’s five-year stint represents a more long-term arrange-ment, which is why his contract is under Mexican law. If John’s actions were to take place in a jurisdiction where they were not grounds for dismissal, it would be vital that Acme establish a link between John and Brazil, where his behaviour does constitute gross misconduct. The good news is that although the Brazilian agreement was suspended for the duration of his time abroad, there is still scope for Acme to show that his behaviour breached that contract too. Acme can argue that although John was not

performing services for his Brazilian employers (and therefore was not being paid by them), certain parts of the employment contract remained intact. In most Latin American countries, an implied obligation exists in employment contracts concerning loyalty and good faith between the employee and employer. For example, Acme’s commitment towards anti-corruption still has to apply even while John is in Mexico; in other words, the Brazilian employment contract contains elements besides payment for services that were not suspended, which means there is room for Acme to dismiss John in both Mexico and Brazil.

To side-step issues of jurisdiction, companies can opt for the “one employment contract” principle, which is based on the idea that there is only one contract since all employees report to the same company headquarters regardless of where they are based. That approach can backfire, however, as it gives employees a way of making claims for expensive labour benefits in line with legal requirements in the jurisdiction of the company’s HQ and demanding a share of profits outside of the jurisdiction in which they are based. “I would only use the one employment rule if that was the only way we could get this employee out,” says Flah.

A better option, she says, would be to argue that the em-ployee has breached Acme’s global employment policies, which are in line with national and international rules on fraud and corruption. The risk is that parts of the global policy may breach local legislation, which could result in litigation between John and Acme. However, even though there is a good chance the company could lose the lawsuit, Flah still believes that outcome would be preferable to settling with John. “We need to show that there is no culture of impunity and that type of behaviour cannot be allowed to happen – we don’t want John to get anything under the expatriate policy and show that due to his gross misconduct he is not eligible for stock or cash,” says Flah.

The scenarioJohn Smith works for Acme, a company headquartered in Brazil. Based on his good performance record, Acme decides to send John to Mexico on a five-year assignment. While there, his Brazilian employment contract is suspended and he is contracted under Mexican law. Once in Mexico, John befriends Peter Supply, who starts winning a suspicious number of goods supply and service contract bids held by Acme. The company hires a private investigator and discovers that John manipulated

the bids in return for a new car. By accepting Peter’s bids, which were less competitive than others on offer, John caused Acme to lose out on US$5 million. Understandably, Acme wants to terminate John’s employment contract, but under its expatriate severance policy he is entitled to receive US$1 million in cash and stock as compensation if he is terminated for cause. Acme wants to avoid making a pay out at all costs, not least to deter similar situations with other employees.

Punishing bad behaviour abroad


LATINLAWYER LABOUR CONFERENCE



LABOUR CONFERENCE LATINLAWYER


The solutionAcme can choose either to hire independent contractors or to outsource. Regulation of out-sourcing remains largely unclear in Latin America, but that has not stopped the practice from being tightly sanctioned. For that reason, Acme would do better to pursue an independent contractor for its Costa Rican endeavours; however, that route also poses its own risks and the company would need to avoid slipping into the regular labour and employment model. Companies which choose this option often either purposely or inadvertently end up converting the relationship into a tradi-tional labour and employment contract, meaning that what starts as an independent contractor is eventually subordinated. At the end of the day, the multinational is left with a contractor that has the same legal contingencies, such as severance payments and social security contributions, as a regular employee. “My first suggestion would be to keep an eye on their activity, making sure the

minimum rights of employees are covered by them because otherwise you will be considered jointly responsible,” warns Durante. If Acme is desperate not to end up liable for its independent contractors, there are several ways it can steer clear of subordination, nearly all of which revolve around making sure its relationship with its contractor is not exclusive, which in practice means rotating personnel, keeping them outside of company property and not supplying them with company equipment.

The test of whether a contractor is being subordinated is difficult to define but the general consensus is that, unfortunately for Acme, if a contractor wants to find evidence of subordina-tion it will likely be able to, largely because the law governing the practice remains so unclear. Because it is not as heavily sanctioned as out-sourcing can be, it is a marginally better option, but a potentially tricky one nonetheless.

The scenarioIn smaller economies it is not always viable for multinationals to open offices and hire personnel. For example, Acme does not have a presence in Costa Rica, but would like to provide services under an alternative to the traditional labour and employment model.

The solutionAccording to Venezuela’s constitution, Jane would only be entitled to receive a salary and benefits from the jurisdiction that offers her the most favourable deal, not both. Nevertheless, it is still important that companies avoid Acme’s mistake of not accounting for the gap in payment structure between the Venezuelan and Peruvian companies and draft two clearly defined employment contracts, which would have prevented Jane from making her claim.

Under Venezuelan law, foreigners working in the country need a work permit listing a local entity as their employer, which is why Jane is employed by Acme Venezuela rather than Peru. In contrast to the rest of the continent Venezuela’s constitution enshrines the idea that in cases such as Jane’s, the employee is eligible to receive compensation from whichever jurisdiction (either Venezuela or the employee’s home country) offers the employee the most favourable package. “If you can prove in court that the benefits she got from Peru were better than a local employee would get, then courts would dismiss the case,” says Pró-Rísquez. The rule is a deterrent against “double dipping”, where employees attempt to secure the best of both worlds by obtaining whatever benefits they can from their host country, as well as their

home state. The challenge arises, however, when it comes to comparing compensation packages from different countries, which will likely have differing benefits schemes and are measured in different currencies – in Venezuela in particular, where the currency exchange rate is so variable depend-ing on which rate you use, this is made extra complicated. There is no cut and dry rule of what constitutes a salary and whether benefits, which can include health-care provisions, school tuition for the employee’s children, housing etc, should be included or discarded from the final figure.

Flah says Citibank has encountered the prob-lem numerous times and thinks one of the most difficult parts of a comparison of salary benefits across jurisdictions is that cases need to take into account the three different legal systems at play: that of the host country, in this case Venezuela, the employee’s home, here Peru, and the expatriate agreement, which is governed under law in the US in this example. At any rate, Venezuela’s approach to award the most favourable package is in line with Citigroup’s line of thinking, and is often the way things turn out in other countries after prolonged legal wrangling anyhow: “We recognise that the most favourable system will probably end up applying as we will be sued for it anyway.”

Double dipping

At arm’s length

The scenarioJane Smith used to work for Acme in Peru, but has since been relocated for a five-year assignment in Venezuela, where the company has a subsidiary. After a couple of years in Venezuela, Jane develops a gambling habit and falls heavily in debt. Since her labour and employment contract is with Acme’s Venezuelan subsidiary and she has so far only been paid from Peru, she sees a window of opportunity to repay her debts by suing Acme Venezuela for lost earnings.


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to have advised Deutsche Bank’s London branch, which acted as security trustee for the transaction.

The loan was backed by French credit insurer Compagnie Française d’Assurance pour le Commerce Extérieur. It will be used to help finance sulphur processing and fuel gas treatment works at a refinery owned by Axion in Campana, near Buenos Aires.

Counsel to Axion• In-house counsel – Cesar Gimenez Villamil and Manuela de

Zuviria• Linklaters Partner Conrado Tenaglia and associate Nilo Barredo in New

York and associate Rosanna Philips in London• Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) Partner Alan Arntsen and counsels José Martínez de Hoz (n)

and Jimena Vega Olmos in Buenos Aires

Counsel to Deutsche Bank and Crédit Agricole• Allende & Brea Abogados Partner Jorge Mayora and associates Cecilia Victoria and Marcos

Patron Costas in Buenos Aires

BRAZILLefosse, Davis Polk, Mattos Filho and White & Case land first IPO of 2014

Brazil’s Lefosse Advogados and Davis Polk & Wardwell LLP’s New York and São Paulo offices have helped Brazilian animal pharma-ceuticals company Ouro Fino raise US$147 million, in the first IPO to come out of Brazil this year.

Ouro Fino’s shares were floated on the BM&F Bovespa on 17 October. Brazilian firm Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados and the Miami and São Paulo offices of White & Case LLP advised the underwriters.

The shares priced at the top of their expected range at approxi-mately US$11 per share. The strong showing was helped by US private equity firm General Atlantic, which paid US$81 million for a 14 per cent stake in the newly listed company. Two Brazilian funds are also said to be among the initial investors.

The IPO represents roughly 45 per cent of Ouro Fino’s total

ARGENTINAPluspetrol acquires Apco OilArgentine energy company Pluspetrol has turned to the New York and Washington, DC offices of Cleary Gottlieb Steen & Hamilton LLP to acquire Apco, an oil and gas company with operations in Argentina and Colombia, in an all-share deal worth US$427 million.

Apco’s controlling shareholder, US oil and gas company WPX Energy, received advice from four Weil, Gotshal & Manges LLP US offices and Argentina’s Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) for the deal, which was carried out over the NASDAQ stock exchange. The transaction brought in US$294 million for WPX, which held a 69 per cent stake. Apco’s minor-ity shareholders obtained US$14.50 per share – an 18 per cent premium over the company’s closing price on the NASDAQ prior to the deal.

Pluspetrol picks up Apco’s nine concessions and two explora-tion permits in Argentina as well as three exploration contracts in Colombia as a result of the deal, which was signed on 2 October.

Counsel to Pluspetrol• In-house counsel – Diego Roizen• Cleary Gottlieb Steen & Hamilton LLP Partners Jeff Lewis, Neil Whoriskey, Jason Factor and Arthur

Kohn, counsel Daniel Ilan, associates Kimberly Spoerri, Gloria Ho, Daniel Winnick, Olga Sanders, Lisa Connolly and Ian Polonsky, and attorneys Jim Corsiglia and Andrea Basham in New York, and counsels Rick Bidstrup and Steven Kaiser, and associate Beau Sterling in Washington, DC

Counsel to WPX Energy• Weil, Gotshal & Manges LLP Partners Glenn West and Jared Rusman, and associates Ryan

Gorsche, Kumar Dilen, Yuefan Wang and Mark Dundon in Dallas, partner James Griffin in Silicon Valley, partner Annemargaret Connolly and associate Thomas Goslin in Washington, DC, and partner Paul Wessel and associate Adam Mendelowitzin New York

• Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) Partners José Martínez de Hoz (Jr), Eugenio Aramburu and Luis

Barry and special counsel Maximiliano Batista in Buenos Aires

Linklaters, Pérez Alati and Allende & Brea guide inaugural energy loanThe New York office of Linklaters and Argentina’s Pérez Alati, Grondona, Benites, Arntsen & Martínez de Hoz (h) have advised crude oil refinery Axion Energy Argentina on a US$73 million loan agreement, its first international financing.

The lenders, the Parisian branch of Deutsche Bank and Crédit Agricole, were advised by Argentine firm Allende & Brea Abogados – they are also understood to have received counsel from UK firm Watson, Farley & Williams. Norton Rose Fulbright is believed

Carlos Mello Gustavo Haddad


DEAL DIGEST LATINLAWYER


higher premium being paid because there were more participants,” he says. Telefônica, a unit of Spain’s Telefónica which trades as Vivo, paid the minimum price for its lot (US$796 million), while Claro, of Mexico’s América Móvil, and TIM, owned by Telecom Italia, paid a little more, handing over US$804 million each.

Indebted telecoms provider Oi, a fourth major player in Brazil’s telecoms market, which participated in the 2012 auction, announced it wouldn’t be taking part in the auction towards the end of September. Its decision to pull out has been viewed by some as a precursor to a merger with one of the other three bidders.

Oi’s shareholders approved the company’s merger with Portugal Telecom (PT) following protracted negotiations and a US$3.7 billion share offering by Oi in April. The company, which is around US$19 billion in debt, first announced it was merging with PT last year, forming a new company called CorpCo based in Rio de Janeiro. Although the merger was sought to help Oi compete with its Brazilian competitors, the result has been the opposite: the merger saw it take on some of PT’s debt, adding to its own, which helped contribute to its decision not to partake in the 4G auction. The company is now reportedly considering selling the Portuguese assets it acquired from the PT merger to Luxembourg telecoms company Altice, in an effort to reduce debt load.

Counsel to Telefônica Brasil• Pereira Neto Macedo Advogados Partner Caio Mario da Silva Pereira Neto and Joaquim Moraes

and associate Mateus Adami• Rolim, Viotti & Leite Campos Advogados Partner Rodrigo Azevedo Greco

Counsel to Claro• Azevedo Sette Advogados Partner Frederico Bopp Dieterich and associates Lucas Martins

Magalhães da Rocha, Alexandre Costeira Frazão and Lucas Martins Magalhães da Rocha

Counsel to TIM• Mundie e Advogados Partner Ana Claudia Beppu and associates Beatriz França and

Luiza Martorano

BM&A, Lefosse, Lobo & de Rizzo and Cleary in US$1.3 billion fashion mergerBarbosa Müssnich & Aragão is helping Brazilian women’s clothing manufacturer Restoque Comércio e Confecções de Roupas merge with private equity-backed online fashion retailer Dudalina, creating a combined company worth some 3 billion reais (US$1.3 billion).

Dudalina was advised by Lefosse Advogados for the merger and sought additional counsel from Lobo & de Rizzo Advogados for internal discussions between shareholders. Lefosse also advised Dudalina’s two majority shareholders, private equity firms Advent International and Warburg Pincus. The latter fund received interna-tional counsel from the São Paulo office of Cleary Gottlieb Steen & Hamilton LLP.

stock and was completed through a primary offering of 1.9 million shares and a secondary offering of 11.5 million. Strong investor interest has been linked to Brazil’s large agricultural market, which is a major consumer of veterinary pharmaceuticals.

The Brazilian stock exchange has not had an IPO since December 2013 when Latin America’s largest travel agency, CVC, raised a lacklustre US$225 million, also with help from Lefosse and Davis Polk.

Counsel to Ouro Fino Saúde Animal Participações and selling shareholders• In-house counsel – Fernando Fabretti• Lefosse Advogados Partners Carlos Mello, Rodrigo Junqueira and Gustavo Haddad,

and associates João Paulo Minetto, Joana Liu, Gustavo Paes, Elisa Fachin, César Fischer, Jessica Winge and Douglas Ogata in São Paulo

• Davis Polk & Wardwell LLP Partner Manuel Garciadiaz in New York and São Paulo, partner

Michael Farber, associates Meghan Maloney, Brian Harris, and foreign associates Bruno Bercito and Mariana Grimaldi in New York and associate Debora Ayoub in São Paulo

Counsel to the underwriters• Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados Partners Sergio Spinelli Silva, Jean Marcel Arakawa and Vanessa

Fiusa, and associates Mariana Pollini and Marina Roriz in São Paulo

• White & Case LLP Partner Donald Baker and associate Lucy Haley in São Paulo

and associate Karen Katri in Miami

Azevedo Sette, Pereira Neto, Rolim Viotti and Mundie guide 4G auction winnersBrazilian firms Mundie e Advogados, Azevedo Sette Advogados, Pereira Neto Macedo Advogados and Rolim, Viotti & Leite Campos Advogados have advised the winning bidders in a fourth-generation (4G) broadband spectrum auction that saw the bidders pay 8.5 billion reais (US$3.5 billion) in total for their lots.

Claro, Telefônica Brasil and TIM paid almost US$1 billion each for portions of the bandwidth, which they will use to provide nationwide 4G mobile services. Claro and TIM were advised by Azevedo Sette and Mundie e Advogados respectively, while Telefônica received counsel from both Pereira Neto and Rolim Viotti.

The auction generated no interest from international providers not already operating in the country, despite the fact that Brazil’s minister of communications, Paulo Bernardo, and Joao Rezende, president of telecoms regulator Anatel tried to drum up interest by publicising the sale in both Europe and the US earlier this year. Given the lack of foreign interest Pereira Neto partner Caio Mario da Silva Pereira Neto, who advised Telefônica on preparing docu-mentation for the auction, says that a lower premium was paid than in the first-ever 4G auction held in 2012. “Values were closer to the minimum value than in the previous auction, where there was a




Lupatech restructuring “breaks ground”

Brazilian oil and gas services company Lupatech has completed a landmark debt-for-equity restructuring plan with the help of Felsberg Advogados, Machado, Meyer, Sendacz e Opice Advogados and Shearman & Sterling LLP, which saw the manufacturer successfully renegotiate its debt despite not having approval from all its creditors.

The restructuring culminated in a 1 billion reais (US$417 mil-lion) share capital increase. It was completed on 9 October when the holders of US$300 million worth of Lupatech bonds received new notes and American depository receipts (ADRs) in exchange for their debt. The capital increase, in which some bondholders received shares in the company, closed on 3 October.

The prepack plan saw Lupatech, which manufactures industrial valves for the oil sector, issue new notes to bondholders worth 15 per cent of the outstanding debt, as well as new shares represent-ing 85 per cent of the bonds’ value, as part of a debt-for-equity conversion. The transaction is thought to be one of the first extrajudicial restructurings to take place in Brazil that solely concerns bonds issued abroad. A court approved the plan back in June after Lupatech filed a pre-pack plan requesting the restructure of US$300 million worth of debt.

The bondholders were advised by Pinheiro Guimarães – Advogados in Brazil and Bingham McCutchen LLP in New York, while Brazil’s Lobo & Ibeas and Jones Day’s Cleveland and São Paulo offices advised legal administration services provider the Garden City Group. Bank of New York Mellon, acting as trustee, was advised by Tauil & Chequer Advogados in association with Mayer Brown, while financial adviser Bank of America Merrill Lynch received counsel from Clifford Chance LLP.

In Brazil, indebted companies can opt to file for bankruptcy, choose judicial restructuring or, as Lupatech did, undergo a voluntary out-of-court reorganisation process, known as recuperação extrajudicial, which requires the support of two-thirds of creditors.

The route taken by Lupatech provides a solution to the problems companies and countries can face when bonds lack a col-lective action clause, says Shearman & Sterling LLP partners Robert Ellison. “It’s the Argentine problem – the bonds did not have that clause, which meant any restructuring required the support of 100 per cent of bondholders,” he explains, referencing Argentina’s ongoing battle with holdout creditors. However, with a Brazilian

The merger was signed on 1 October but is awaiting antitrust approval before it can close. It will see Restoque, a publicly listed company that owns fashion brands Le Lis Blanc and Rosa Chá, absorb all of Dudalina’s shares, making Dudalina a wholly owned subsidiary. Dudalina’s current shareholders will receive shares representing 50 per cent of Restoque’s capital stock after the merger, says BM&A partner Roberto Dias Carneiro. Restoque does not currently have a controlling shareholder (its biggest stakeholder is renewables company Waterford Holdings); however, the merger offers a step-in for either Advent or Warburg to increase their stakes at a later date. Both private equity companies reportedly pushed for the deal to go through.

Rodrigo Guerra of Lobo & de Rizzo says his firm is largely focused on discussions between Dudalina’s minority shareholders. “We had to make them understand the consequences and benefits of the transaction, mainly that they would become shareholders of a much larger company that is a publicly traded entity,” he explains.

Restoque and Dudalina are expected to hold a shareholders’ meeting to discuss the merger on 21 October; however, Lefosse’s Carlos Mello says shareholder reaction so far has been positive, in part due to the overlap between the companies (which means Restoque will be able to use Dudalina’s factories). This is further evidenced by the market response, which saw Restoque’s share price rise by 10 per cent in the week after the deal was announced.

Counsel to Restoque Comércio e Confecções de Roupas• Barbosa Müssnich & Aragão Partners Paulo Cezar Aragão, Roberto Dias Carneiro and José

Otávio Faloppa, and associates Hélio Alvarez, Carlo Rocha and Daniel Loria

Counsel to Dudalina, Advent International and Warburg Pincus• Lefosse Advogados Partners Carlos Barbosa Mello and Ricardo Bolan, and associ-

ates Laura Affonso, Christiano Rehder, Juan Mendez and Jessica Winge

• Lobo & de Rizzo Advogados Partners Rodrigo Guerra and Luciana Lorenzo

Counsel to Warburg Pincus• Cleary Gottlieb Steen & Hamilton LLP Partner Juan Giráldez and associate Priscila McCalley in São

Paulo

Eliana Helena de Gregório Ambrósio Chimenti Robert Ellison

Ricardo Bolan Rodrigo Guerra




and the claims under those bonds, which impacts upon the com-pany much less and allows it keep more value,” explains Felsberg Advogados partner Paulo Fernando Campana Filho. Machado, Meyer, Sendacz e Opice Advogados partner Eliana Helena de Gregório Ambrósio Chimenti agrees: “Since the beginning all of us were convinced this would be the best solution considering Lupatech’s situation.” A judicial reorganisation would have involved all of Lupatech’s debt in bankruptcy proceedings and would have included all labour claims and secured credit – the company instead chose to deal with that debt through private restructuring agreements. “It was a successful plan to restructure both the capital structure of the company and its debt and I believe it is an example to be followed by others in the market,” adds Chimenti.

Counsel to Lupatech• Felsberg Advogados Partners Thomas Benes Felsberg and Paulo Fernando Campana

Filho, and associates Clara Moreira Azzoni, Eduardo Luiz Kawakami, Ligia Espolaor Veronese and Tatiana Brenand Bauer in São Paulo

• Machado, Meyer, Sendacz e Opice Advogados Partners Eliana Helena de Gregório Ambrósio Chimenti,

Eduardo Avila de Castro, Tiago Espellet Dockhorn and Ricardo Maitto da Silveira and associates Alessandra de Souza Pinto and Karina Cardozo de Oliveira in São Paulo

• Shearman & Sterling LLP Partners Robert Ellison and Douglas Bartner, and associates

Robert Britton and Zach Shub-Essig in New York, and associ-ate Jennifer Lau in São Paulo

Counsel to Garden City Group• Lobo & Ibeas Partners Luis Eugênio Müller and Guilherme Leporace in São

Paulo• Jones Day Partner Sanjiv Kapur in Cleveland and São Paulo, and associate

Virginia Tomotani Uelze in São Paulo

Counsel to the Bank of New York Mellon• Tauil & Chequer Advogados in association with Mayer Brown Partners Leonardo Morato and Adriana Dias and associate José

Guilherme Botelho in São Paulo

Counsel to the bondholders• Bingham McCutchen LLP Partner Timothy DeSieno in New York• Pinheiro Guimarães – Advogados Partner Eduardo Augusto Mattar and associates Laura Meyer

and Renata Schiffer in São Paulo

Counsel to Bank of America Merrill Lynch• Clifford Chance LLP Partners Alex Camacho and counsel Per Chilstrom in New

York, and partner Anand Saha and associate Anja Pfleger Andrade in New York and São Paulo

court agreeing to have jurisdiction over the New York governed bonds, Brazil’s extrajudicial process could apply, paving the way for a smooth restructuring. In May, as it was preparing its restructuring plan, Lupatech filed for bankruptcy protection under chapter 15 of the US bankruptcy code in New York, meaning creditors cannot file lawsuits against it in US courts.

When the plan received court approval in June around 85 per cent of creditors immediately agreed to it – this figure later rose by a further 5 per cent after a Brazilian court issued another order inviting creditors to adhere to the plan. In accordance with Brazilian law, the results of the restructuring were applied uni-formly, whether bondholders agreed to it or not. “That was a very interesting aspect, because even those bondholders who refused the plan or did not respond at all had the right to choose whether they received ADRs or shares or notes,” says Luiz Eugênio Müller of Lobo & Ibeas.

Because shareholders in Brazil must be registered with the country’s Central Bank, most bondholders that accepted the pre-pack chose to receive ADRs instead. “Many of them didn’t want to be subject to Brazilian jurisdiction,” admits Lobo & Ibeas partner Guilherme Leporace, who says capitalising the bonds was not an easy process, in part because of Brazil’s strict currency exchange system, which meant bonds had to be brought to Brazil before the ADRs could be issued.

One of the most difficult and immediate hurdles facing the restructuring was getting approvals from bondholders, which were scattered across the world and were virtually untraceable. “There is no official record of who the bondholders are, and all we knew was the identity of the bondholders’ nominee banks,” explains Ellison. Once those approvals had been obtained, Lupatech submitted the consents to the court. It was the first example in Brazil of a company obtaining consents from creditors offshore and using them as proof of approval for a reorganisation. “We do not have a consent solicitation process in Brazil and although Lupatech had a legal opinion attesting the validity and fairness of the process, there was a risk that the court could not accept such type of consent,” explains Adriana Dias of Tauil & Chequer Advogados. From a regulatory aspect the ADRs that were issued had to also comply with Brazilian law, which affects how they can be traded.

The restructuring has been heralded as a creative example for other similarly burdened companies in how to handle foreign debt. “This sends a clear and positive message to the market that despite the fact that Brazil’s economic situation is not exactly favourable at the moment, restructuring the foreign debts of Brazilian companies is doable,” says Lobo & Ibeas’s Müller. The case is also a testament to Brazil’s relatively new bankruptcy law, which was passed in 2005, he says. With the restructuring completed, other companies facing similar problems are expected to look to Lupatech’s example. “Brazil has had two quarters of recession and there are a number of companies that have debt issued abroad that are hurting and need to restructure,” says Jones Day partner Sanjiv Kapur, who adds that his firm has already been contacted by a number of companies interested in the process now that it is clear how the law can be applied.

It chose the pre-pack, out-of-court reorganisation process to avoid the lengthy judicial reorganisations that companies such as Celpa have had to endure. “The pre-pack has a much more specific scope and allowed Lupatech to restructure just a group of creditors




CHILELundin strikes US$1.8bn copper mine dealCanada’s Lundin Mining has bought a US$1.8 billion majority stake in Chile’s Candelaria copper mine from US counterpart Freeport-McMoRan, with help from Paul, Weiss, Rifkind, Wharton & Garrison in New York, Cassels Brock & Blackwell LLP in Toronto and Chile’s Bofill Mir & Alvarez Jana Abogados.

Freeport, the largest listed copper producer in the world, turned to Davis Polk & Wardwell LLP and Chile’s Claro & Cía for the transaction, which was signed on 6 October and is expected to close later this year.

Lundin will gain an 80 per cent stake in Candelaria with existing stakeholder Japan’s Sumitomo Metal Mining, which turned to Sullivan & Cromwell LLP, in possession of the remainder. The 54 square kilometre mining complex located near the city of Copiapó in northern Chile churned out 168 million tonnes of copper last year, making it one of the country’s largest mines.

Freeport is said to have offloaded its stake in Candelaria to reduce its debt profile, which remains highly leveraged after recent acquisitions. Meanwhile, Lundin says the purchase will help diversify its portfolio, although the acquisition has been seen as risky given that lower growth rates in China and Europe have reduced the price of copper in recent months.

Counsel to Lundin Mining• Paul, Weiss, Rifkind, Wharton & Garrison Partners Adam Givertz, Dale Sarro and David Sicular, counsel

Stephen Centa, Didier Malaquin, Reuven Falik, William O’Brien, Diane Meyers and associate Ian Hazlett in New York

• Cassels Brock & Blackwell LLP Partners Mark Bennett, Cathy Mercer, Alex Iliopoulos, Chad

Accursi, Nancy Choi, David Budd, Charles Newman and Chris Hersh in Toronto

• Bofill Mir & Alvarez Jana Abogados Partners Pablo Mir and Jorge Lembeye, and associates Heleny

Caratazos, Alina Bendersky, Heleny Caratazos, Joaquin Pérez, Rodrigo Saffirio and Felipe Davanzo in Santiago

Counsel to Freeport-McMoRan• In-house counsel – Richards McMillan• Davis Polk & Wardwell LLP Partners Paul Kingsley, Marc Williams, Kathleen Ferrell,

Edmond FitzGerald, Lawrence Wieman, counsel Stephen Pepper and Hayden Baker and associates Gillian Moldowan, Kristen Haase and John Weinstein in New York

• Claro & Cía Partners Hernán Felipe Valdés, Jorge Carraha and Nicolás

Eyzaguirre, and associates Andrea Sougarret, Alejandra Mejía and José Domingo Ilharreborde in Santiago

Counsel to Sumitomo Metal Mining• Sullivan & Cromwell LLP Partner Sergio Galvis and associates Jaime Ramirez and Jared

Roscoe in New York

Atento in US$149 million IPOKirkland & Ellis LLP in New York and Brazil’s Souza, Cescon, Barrieu e Flesch – Advogados has helped Bain Capital-owned call centre Atento raise approximately US$149 million in its IPO in the US, two years after it was acquired by the private equity fund.

Simpson Thacher & Bartlett LLP in New York, Brazil’s Lefosse Advogados and Elvinger, Hoss & Prussen in Luxembourg coun-selled the underwriters for the transaction. It is thought that Arendt & Medernach in Luxembourg advised Atento, but this could not be confirmed prior to publication.

US private equity platform Bain, also with advice from Kirkland & Ellis and Souza Cescon, first acquired Atento from Spain’s Telefónica in October 2012 for US$1.3 billion. The call centre is the largest in the world and reported six-month revenues worth US$1.6 billion in June of this year. The IPO dilutes Bain Capital’s stake in Atento from 98 per cent to approximately 75 per cent.

Rumours of an IPO first surfaced at the start of the year, but were not confirmed until May when Bain registered a filing with the US Securities and Exchange Commission. The private equity platform had hoped to raise US$322 million from the transaction, but the initial offering price was lowered from an optimal US$22 per share to US$15 per share. As a result, gross proceeds from the transaction will be only US$72 million for Atento and US$78 mil-lion for a selling shareholder affiliated with Bain. A portion of the proceeds is earmarked for Telefónica to pay for a loan it provided as part of the initial acquisition.

Counsel to Atento• Kirkland & Ellis LLP Partners Joshua Korff and Christopher Kitchen in New York• Souza, Cescon, Barrieu e Flesch – Advogados Partner Ronald Herscovici and associates Daniel Laudisio,

Mariana Borges and Luis Braz in São Paulo

Counsel to Morgan Stanley & Co, Credit Suisse Securities (USA), and Itaú BBA USA Securities• Simpson Thacher & Bartlett LLP Partner Jaime Mercado, Juan Francisco Mendez and Robert

Holo, and associates Juan Naveira, Paula Querol Jodi Sackel and Andrew Pagliughi, and international associate Thais Garcez Lima de Mendonca in New York

• Elvinger, Hoss & Prussen Partners Toinon Hoss and Philippe Prussen in Luxembourg• Lefosse Advogados Partners Rodrigo Junqueira and Ricardo Bolan, and associates

Aloizio Lima, Paulo Eduardo Guimarães, Danilo Allegrini, Ana Carolina Cabral and Bruno Malfatti in São Paulo




DOMINICAN REPUBLICGerdau-Metaldom set to be DR’s first international steel companyFour firms have helped a joint-venture steel combination composed of the Dominican Republic’s Industrias Nacionales and Brazil’s Gerdau merge with Dominican steelmaker Metaldom to form Gerdau-Metaldom – creating one of the largest manufacturers of the metal alloy in Central America and the Caribbean.

Industrias Nacionales and Gerdau, which established a local 51/49 joint venture in 2007, turned to Simpson Thacher & Bartlett LLP in New York for counsel, while Metaldom received assistance from the Miami, New York and Tampa offices of Foley & Lardner LLP and the Dominican Republic’s OMG. Spain’s Cuatrecasas, Gonçalves Pereira in São Paulo advised Industrias Nacionales’ cur-rent executive vice president and shareholder, Carlos Valiente, who is tipped by local media to become the new combination’s CEO.

OMG’s Leonel Melo says the merger was unconventional and achieved through a series of intermediate steps designed to prepare the company for international expansion, restructure certain assets and allow for the exit of minority shareholders. Non-core assets were spun off to a British Virgin Islands company, while majority stakeholders exchanged their shares for account receivables that were then transferred to a newly created holding company jointly controlled by Metaldom’s majority shareholders, Gerdau and Valiente. The minority shareholders sold their interest for cash. The core assets of Metaldom and the Industrias Nacionales-Gerdau joint venture were then combined into a single entity: Gerdau-Metaldom.

The tie-up creates one of the largest steel producers in the Caribbean and Central America with a combined output capacity of over a million tones of steel per year and puts Gerdau-Metaldom in a better position to expand internationally.

Counsel to Industrias Nacionales and Gerdau• In-house counsel to Industrias Nacionales – Edgar Fuentes• In-house counsel to Gerdau – Marcos Martins• Simpson Thacher & Bartlett LLP Partner Jaime Mercado and associates Borja Marcos and Luis

Pellerano in New York

Counsel to Carlos Valiente• Cuatrecasas, Gonçalves Pereira Partner Andoni Hernández in São Paulo

Counsel to Complejo Metalúrgico Dominicano• Foley & Lardner LLP Partner Francisco Cerezo in Miami and New York, special

counsel Marina Choundas in New York and Tampa and foreign legal consultant Melisande Brodeur-Frohman in Miami

• OMG Partners Leonel Melo, Esperanza Cabral and Luis Franco,

and associates Laura Piantini, Amelia Taveras, Ana Taveras and Adewilxe Castillos in Santo Domingo

Gas Natural takes over CGE with Claro & Cía and Guerrero Olivos

Claro & Cía is advising Gas Natural Fenosa on its US$3.3 billion takeover of Chilean energy company Compañía General de Electricidad (CGE), giving the Spanish company a 40 per cent share of Chile’s electricity market through the largest tender offer ever to take place in the country.

The Chilean gas and electricity distribution company is being advised by regular counsel Guerrero Olivos for the deal, which saw the Spanish

company agree to acquire 54 per cent of CGE from a group of controlling shareholders on Saturday. A tender offer to acquire the remaining shares was launched the following day.

CGE does not have a single controlling shareholder, so Gas Natural signed agreements with its three main stakeholders, the Marín, Pérez Cruz and Almería families. CGE tasked Guerrero Olivos with advising all three on the terms of the sale agreement. “Part of the high profile of this transaction, in addition to its value, is that CGE was the last big power company entirely in the hands of Chilean shareholders,” explains Roberto Guerrero of Guerrero Olivos.

Those involved in the deal were acutely aware of Chile’s tax reform, which was submitted to Congress in April and which pro-posed an increase in the corporate tax rate, a compulsory accrual-based shareholder tax system and anti-deferral rules for dividends earned by foreign corporations. “The sale process started before the tax reform was discussed,” says Guerrero. “Big transactions like this contain a number of protections for the purchaser in case significant changes occur to the context in which the market operates. No one wants the buyer to have a way out because of regulatory changes, so it was a critical challenge for everybody,” he explains. The bill was eventually watered down following negotiations between Chile’s political parties to make it friendlier towards foreign investors.

Counsel to Gas Natural Fenosa• In-house counsel – Manuel Cobaleda• Claro & Cía Partner Matías de Marchena

Counsel to CGE• In-house counsel Rafael Salas and Pablo Silva• Guerrero Olivos Partners Hernán Felipe Errázuriz, Roberto Guerrero and

Cristián Fabres, and associates Jaime Barahona, Josefina Yávar, Rodolfo Guerrero and Jaime Hirschberg

Roberto Guerrero



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PRO BONO SURVEY 2014 - BMAJ Abogados · THE ABA SECTION OF INTERNATIONAL LAW 2015 SPRING MEETING....

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