GCs, limber up: be ready for anything in a crisis
Counterfeit health products, hitches in supply chains and keeping productivity high while employees work remotely – these are all issues many Latin American in-house counsel have to handle during this covid-19 pandemic. When a crisis hits, GCs must tackle new problems effectively and urgently to mitigate their impact on business.
Latin America was hit by the covid-19 pandemic later than other areas of the globe, and its countries have taken different approaches to implement lockdowns and provide support to companies struggling as a result of the crisis. But what has been consistent is the quick response of GCs. They have had to tackle issues arising from the pandemic with crisis management measures to enable their legal teams and companies to face these unprecedented times head-on and protect their business.
GCs’ action plans to help their companies stay afloat in such a time of crisis can vary greatly. Some companies, advised by their legal departments, are asking their most vulnerable employees – sometimes whole workforces – to work remotely; others have restructured their in-house legal teams to meet spiking demand in areas such as supply chain contracts or regulatory compliance; others have met with regulators to discuss the best measures needed to help industries survive. “We’re constantly catching up with the crisis, trying to understand how it might affect us and how we can support the company,” says Robert Urbina, GC at fintech company Todoticket in Venezuela.
E-commerce: fighting fakes
High on the list of responsibilities of any GC is to figure out how their company – and more widely their sector – can come out the other side of this pandemic. Stories about sectors struggling have inundated the news – tourism is a notable example. Curfews, travel restrictions and lockdowns in almost every country mean the industry, which usually thrives at this time of year, has an estimated global loss of US$2.1 trillion, along with 75 million jobs.
Some industries, however, like e-commerce, are doing better. The lockdowns and social distancing rules that have come alongside the covid-19 outbreak are thought to have sped up the shift from physical to online retail – for example, statistics company Statista revealed that Brazilians on average bought 40% more products online in the first two weeks of March compared to the same period in 2019. But commercial growth during a pandemic comes with its own issues for legal teams.
Retailer MercadoLibre – the biggest e-commerce platform in Latin America – paints a picture of some of the unique challenges faced by the sector throughout the covid-19 pandemic. The company has seen a sharp spike in people taking advantage of the situation, selling counterfeit testing kits, fake home disinfection services and hand sanitisers, among other things. The legal department had to act fast when the pandemic hit to work with regulators on how exactly they could fight against the threat of – potentially dangerous – knockoffs to keep consumers safe, avoid involvement in trademark infringement cases, and protect their business’ bottom line. “We had to be proactive and reach out to regulators first to say we were here to help and collaborate – we made it clear we wouldn’t tolerate anyone abusing the situation,” says Jacobo Imach, senior VP and GC for legal and public affairs at MercadoLibre in Argentina.
When the pandemic first broke in Latin America, Imach made sure the legal and government relations departments met once a day to tackle the topic of counterfeit goods and help enforce government regulations. In countries like Argentina and Uruguay, which set maximum prices for health products to try and counteract the sudden rise in counterfeit goods during the pandemic, the company made sure to monitor the site – which works as an online marketplace for independent sellers – and enforce them. In other countries that do not have enforced prices, the legal team agreed on them internally instead. In even more serious cases, where retailers were selling false covid-19 vaccines, the legal team was charged with taking them down from the website and reporting fraudulent sellers to the authorities. “From the government relations side we’ve been very proactive, reaching out to health and consumer authorities to work together. We also use our platform to market messages related to health,” says Imach.
What is urgent v what can wait
Some GCs have had to reorganise their teams to meet new and increasing workloads. When news of the disease first started emerging around the world at the beginning of 2020, many Latin American GCs, alongside their c-suite executives, formed covid-19 crisis committees. These are interdisciplinary teams whose primary focus is to form a company strategy on how to tackle the effects of covid-19 on the business and disseminate messages regarding the pandemic across the company.
One Central American energy company formed a team made up of doctors – brought in externally to advise the company on medical matters – and members of the procurement, supply chain, finance and legal departments to meet every other day. The team has implemented protocols centred around data privacy and health and safety matters for workers who might become infected with covid-19. “We put these messages and protocols together and then issue that in each country we operate in,” explains one in-house counsel at the company. “We have put together a database full of new national legislation and company protocols for employees to access.”
Some legal teams have shifted their structures to bulk up the person power dealing with the most pressing issues. They want to be more efficient in the way they handle their changing workloads.
With many factories shut down and companies unable to ship in their products internationally, supply -chain management has been at the top of the to-do list for many GCs. Inevitably, the covid-19 crisis will give rise to situations where suppliers are unable to keep to their contractual terms – they might be unable to deliver on time, or at all, and customers might no longer wish to purchase goods at the agreed price. A force majeure – a contractual clause that essentially frees both parties from liability when an extraordinary event beyond their control takes place – might come into play in such cases, but whether or not it is used, a lot of legal teams are having to focus their capabilities on reviewing contracts. “We have to support the supply chain, coordinate with China (where a lot of our products are manufactured), communicate with providers, and renegotiate current agreements,” says one corporate VP and international GC at a healthcare company.
In terms of prioritising tasks, some teams have pushed back projects that require them to meet with public bodies – due to lockdown measures – and brought forward projects that would have been essential in 2021 to make an early start on them. “We’ve mapped what our typical day-to-day is, and identified which projects and processes are moving more slowly and can be moved to the end of 2020. We have identified which team members can help others with their workloads,” a Central American GC explains.
Putting non-essential projects on hold might mean that some in-house counsel feel like they are left with less work to do than usual. The answer? Time management and training, says the in-house counsel in Central America. “For some that have less to do, we have suggested they take virtual courses – though not expensive ones, as we are looking to save costs – to use their time well to reach our training goals for January 2021,” she says.
Handling workloads during lockdown and company closures would not be possible without technology. One immediate crisis management measure that has been seen, not just in Latin America but worldwide, has been remote working. This has been key to maintaining corporate operations and protecting the health and safety of employees by keeping them at home.
Reinforcing the presence of existing software in a company and making the most of it has been essential for companies moving to remote working. Technology platforms such as Microsoft Teams, Zoom and Dropbox have been immensely useful for enhancing legal teams’ functionality. “The usage of digital tools has increased greatly, and I believe we will continue to use these resources once we return to the office,” says Todoticket’s Urbina. “It shows they we can be more efficient and keep track of work properly, even without face-to-face meetings.”
Technology has also been helpful for staying in close contact with colleagues and disseminating messages – not only about work, but about any new legislation passed that might affect the company and its employees. MercardoLibre’s Imach decided to hold open Q&A sessions via videoconferencing tools like Zoom and Teams every week, which he originally did with the company’s senior leadership team. He then realised that his legal department – in which he oversees more than 100 people – should benefit, too. “People were concerned, so instead of only having meetings with the senior leadership team to discuss the ramifications of covid-19, I decided to make it more collaborative to share the short and medium-term concerns for the company with the entire legal team,” he explains.
Whether it’s tackling issues relating to fake products, supply chain management, or remote working, one thing is certain: GCs have had their hands full safeguarding their companies against the immediate effects of the covid-19 pandemic. But by optimising their usage of existing technology, communicating effectively, and working closely with regulators, a smooth transition into this new way of working is possible. “When a crisis comes, we don’t have time to think – you just have to roll out the best plan,” says Imach. “There is no time to complain, you have to meet things head-on.”