Corporate Counsel Q&A: Jacobo Cohen Imach
Who’s Who Legal interviews Jacobo Cohen Imach, vice president general counsel for legal affairs and government relations at MercadoLibre, the largest online trading platform in Latin America. Cohen Imach discusses the requirements of his role and the legal issues he faces on a daily basis.
Name: Jacobo Cohen Imach
Position: Vice president general counsel – government relations
Platforms in: Brazil, Colombia, Costa Rica, Chile, Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, Uruguay and Venezuela
Number of employees: 1,600
Established in Argentina in 1999, MercadoLibre.com has quickly expanded and now operates in 12 countries. The site provides buyers and sellers with a place to meet and exchange goods in a secure and efficient environment, and has set many records in the e-commerce industry. MercadoLibre aims to benefit society at large by making commerce more democratic by allowing entrepreneurs and small companies to develop businesses and increase the efficiency of the economies in the countries of the region. According to Nielsen, around 130, 000 people make the majority of their income by selling through MercadoLibre and five million people listed items for sale in the platform during 2011. The company went public in 2007 and since has further strengthened its position in the market, operating as the leading e-commerce platform in South America.
The company’s future looks bright. Latin America is one of the fastest-growing markets in terms of internet penetration rates and it is estimated that internet retailing in the region will register a 17 per cent compound annual growth rate in constant value terms between 2010 and 2015. Furthermore according to comScore Networks, MercadoLibre ranks among the top 50 sites in the world in terms of site viewings. With internet usage in Latin America on the rise, MercadoLibre’s customer base looks set to surge in the coming years.
Operating in Latin America is not without its difficulties and regulatory risk is a concern for potential investors and companies already doing business. Regulation in the region presents challenges for e-commerce companies and their in-house legal teams. As Jacobo Cohen Imach explains, “One of our main objectives in the public policy field is to ensure that regulations and laws that are discussed or introduced do not hinder the creativity, innovation, development of products, services and content and foreign investment into the country.”
Cohen Imach joined the company in 1999 as its first lawyer and created the legal department he now supervises. Throughout the last 13 years he has coordinated the company’s IPO and several M&A deals. In January 2010 he took on the position of VP general counsel – government relations, and he has since been heavily involved in policy work.
Tell us about your role.
My role is to oversee the legal department, which assists the company in its business activities from a legal perspective. The department is divided into three main areas – corporate and commercial, dispute resolution and public policy. I am currently very involved in the public policy area and this involves dealing with policymakers and governmental and public bodies to discuss proposed legislation and regulations.
How big is the legal department?
There are 22 people located in three different countries – Argentina, Brazil and Venezuela. Eleven lawyers and a public policy manager are based in Brazil, five in Argentina, two in Venezuela and the remaining number are paralegals.
What do you consider to be your most important role as in-house counsel? And how is life as an in-house counsel different from that of a private practitioner?
My most important role is to provide legal advice to different business units to help the company achieve its commercial objectives, and at the same time ensuring the company is covered against legal risks.
When the company decides to run a risk, it is important that it is firstly known, and then that it is kept at a manageable size and within acceptable parameters. It is very important that an in-house counsel can make a proper evaluation of the risk and the probability of the risk occurring. It is important to anticipate situations before they might occur – always thinking one step ahead. Furthermore, I try to impress upon my team the need to see themselves as a part of the business, not an outside group.
I consider that, among the most important skills needed by an in-house counsel, there is the ability to break apart problems and situations, to try and identify the underlying cause, and to be aware of multiple consequences of events and decisions across the business and the company. It is also fundamental to look for different approaches to resolving problems, to apply common and business sense, creativity and innovation, and to understand the larger picture.
In addition, in-house counsel need to be able to communicate and be understood by different audiences and interlocutors within the organisation.
The main difference is that in-house counsel must know the business inside out and offer much more general advice, whereas external counsel are called in for their specialist knowledge of a certain area of law, and often see only a static picture. In-house lawyers have a stronger commitment to the business and this can affect how results-driven they are. Sometimes, a private practitioner may say something cannot be done, whereas in-house counsel might try harder to find a legal way.
Tell us about recent special projects keeping your team busy?
In the last 24 months we have been very proactive in the public policy field. I see this as a sign that the legal team is now up and running effectively, and that we can add value in the public policy field outside the direct business of the company.
At the moment internet regulation is scarce and there are very few laws. The areas of law under debate include privacy, e-commerce, internet service providers' responsibility for third parties and data protection. We have been working with policymakers to ensure they understand how the industry operates and the needs of the industry when legislating.
What law firms did you hire? What were the main challenges?
We work with more than 20 law firms, including Hunton & Williams LLP in the USA, Pinheiro Neto Advogados in Brazil, Garcia Magliona & Cia in Chile and Marval, O’Farrell & Mairal in Argentina.
The main challenge we encounter is trying to find ways of making external counsel feel committed to the business and understand the business specifics, so that things get done in a short time frame but at a high quality. We have found these characteristics in particular law firms, and it has resulted in an excellent level of service. In addition, working with law firms in different countries can be complicated, and it is important to find a partner in those law firms that can be trusted.
What skills do you require in external counsel to address these challenges?
Commitment, knowledge and a high-quality service. I try to find lawyers with common and business sense; it is important that you receive practical advice that can be implemented.
Do you always tend to work with the same firms?
I began working with several law firms 13 years ago and we maintain relationships with those firms now. In the last few years we have tried to incorporate some new firms. We believe this is not only cost-effective but also healthy for the business, as it brings in new approaches and new lawyers who are eager to work with the company. We aim to continually improve the level of service we receive.
When dealing outside your home jurisdiction, how do you find counsel?
When we need to find counsel in another country where the company has no prior links, we rely upon recommendations from colleagues and law firms. I then check with legal publications to see if the recommended lawyers are ranked and to read comments on them from other in-house counsel.
Do you see yourself hiring the firm primarily, or the individual?
Individual skill and knowledge is very important. While the law firm is important, it is made up by individuals. Therefore we aim to find the right person in the right law firm – a conjunction of the two – but we give more value to an individual’s expertise than their law firm’s reputation.
What measures do you use to control or monitor fees?
We use billing by the hour but cap this with a project estimation fee, which we ask law firms to provide before starting. We sometimes use a fixed fee for more important projects or certain areas of practice. We have set retainers for legal advice which we revise every six months.
Is the role of the in-house lawyer changing?
Yes, today in-house counsel must be more business-oriented and provide practical legal advice across all of the company’s activities. They are required to be dynamic and flexible so that they can adapt to constant market changes. It is more important now than ever that in-house counsel stay valuable to the company and follow the business’ needs.
I believe the role will evolve further in the future and continue to be reinvented. Integrating legal services into a company is a continual challenge with moving targets.
What is the most pressing issue – practical, legal or political – in e-commerce law today? How do you expect these challenges to be overcome?
I consider that the challenges are mainly regulatory and judicial. Internet and e-commerce regulation in most of the countries where we operate is limited, therefore several legal issues related to the industry are uncertain because many of the laws were adopted before the internet was available and therefore were not created nor thought to address the matters and situations brought by this industry.
Judges face the challenge of issuing rulings on certain cases by applying an analogy between laws designed for another reality or situation. The result is that often different judges or courts decide very similar claims in different ways creating some legal challenges for the companies of this industry in the region.
On the other hand, we are at a tipping point, a special moment where legislators are aware of the popularity and expanded use of the internet and other online services, and are beginning to discuss new laws and regulations addressing different issues like online commerce, internet service providers’ responsibility for third-party content hosted in their servers, user privacy, freedom of expression and other issues.
It is very important before drafting or passing a new law that legislators understand how the industry and online services operate, and involve all stakeholders – the industry, users and consumers and others – in order to create legislation that brings clear rules and incentivises the creation of content, innovation and services; fosters investment and development of the sector; and, at the same time, brings legal certainty to both consumers and companies. Internet and e-commerce is very important in the development of the economies of our countries and it creates important benefits to our societies, bridging the digital, economic and social differences and creating jobs.
I am confident that governments and legislators are taking the issues at hand seriously and understand the impact that new regulations may have in the future development of this industry in their countries. Nowadays Brazil, Colombia, Chile, Mexico and Argentina are very active in discussing legal frameworks for some of the areas discussed above. Brazil, for example, is discussing a civil legal framework for the internet, which will be the first complete set of legislation addressing several issues related to the internet according to local judicial and constitutional tradition. The government has opened the project for discussion inviting anybody to give their opinions. This shows how open and democratic the process can be and we are very excited about the opportunity of taking part in the discussions and think that the rest of the region may take this legal framework as a model and benchmark for the future.
Things to Do and See in Argentina
Best place to visit: Iguazú Falls
Recently declared as one of the seven winners of the New Seven Wonders of Nature by the New Seven Wonders of the World Foundation, the Iguazú Falls is one of the most spectacular sights in Argentina. It consists of more than 275 waterfalls along the border of Argentina and Brazil.
Best place to eat: La Cabrera, one of my favourite parillas in town, it is located in J A Cabrera 5127, Palermo Viejo, Buenos Aires. This is one of the best places to eat Argentine famous meat, I suggest ordering provoleta de queso de cabra (grilled goat cheese) or the mollejas (sweetbreads) as starters. All the entrees are great and they come with many complimentary side dishes.