‘We don’t want to be reliant on only one lawyer’

Stadler Rail Valencia’s Rafael Montesinos Llovet says clients should carefully consider how much they involve external lawyers to avoid legal fees ´skyrocketing’

Though size is not the only consideration when selecting an external law firm, it is important that the client does not have to rely solely on one lawyer, says Rafael Montesinos Llovet, legal director at Stadler Rail Valencia, the Spanish affiliate of the Swiss locomotive and rolling stock manufacturer. He adds that firms need to be able to offer alternative lawyers in the event of the partner involved in the case not being able to continue due to extraordinary circumstances. “It’s like a life insurance policy,” he adds. “Size also matters because we handle large volumes of documentation and are always working against the clock, so we need a law firm to accompany us all the way.”
Stadler Rail entered Spain in 2016 with the reported €48 million acquisition of a Valencia-based rail vehicle business from Vossloh Group. The remit of the company’s legal team in Spain includes the division’s operations in Portugal, France, Sub-Saharan Africa and Latin America.
“We like to see external law firms as part of our team, people who we can use as if they were a member of our own legal team,” Montesinos Llovet says. “We want somebody who, in the event of myself not being able to attend a meeting, would be able to be there to represent the company’s interests,” he adds. “We also want a law firm to advise us on not just the legal aspects, but also the business aspects, and also on which risks the company would be able to accept and which risks it would not.”

The ‘local angle’
Montesinos Llovet adds that, for Stadler Rail Valencia, local knowledge is key requirement when instructing local law firms. “We always seek a firm capable of giving us not only a legal interpretation of the laws, but also a local angle, in order to find out how things are done.”
While it is vital for an external law firm to understand the company’s business, the company must be careful to “balance the level of involvement of external lawyers in order to avoid legal fees skyrocketing”, Montesinos Llovet argues. He adds that the company always seeks firms that are multidisciplinary, and which can provide answers to all questions that could arise when it comes to operating or selling in a foreign market, whether they relate to tax issues or labour laws, for example.
“A supply contract may include maintenance and services, for example, and therefore it may then involve setting up a local company in order to be able to provide that service,” Montesinos Llovet explains. While this is relatively easy within the European Union (EU) “where many laws tend to converge”, in countries outside the EU it involves a whole series of operations and can be much more complex. This is especially the case if there is a need to hire local people, send employees from Europe, and consider visa requirements, which can be a very complicated process in some markets.

Consulting directories
In Spain, Stadler has a two-lawyer in-house legal team that uses external law firms for cases involving issues where particular expertise is required such as intellectual property or major litigation. Montesinos Llovet says: “We need to involve foreign law firms when participating in tenders in other countries, and also for reviews of contracts in other countries. We also need law firms to advise us on markets with which we are unfamiliar and where the legal framework is very different to that in Spain – they can inform us of a client’s legal responsibilities within that jurisdiction.” Montesinos Llovet sums up the company’s philosophy in this way: “We need a law firm in other countries to give us the local flavour.”
When it comes to choosing a law firm, Montesinos Llovet says he contacts former colleagues, uses personal recommendations and consults legal directories to find a lawyer with the appropriate background and experience in the relevant sector. However, he adds: “Even if a law firm has experience in the rail sector, we also need to see who they have represented. If they have only represented the financing side, for example, their interpretation of risk will be different to ours. Similarly, if they have only represented clients and not manufacturers, they will have a different perspective on the case to us.”

Rafael Montesinos Llovet, legal director and secretary of the board at Stadler Rail Valencia