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