Opinion
Growing middle class in Latin America generating
opportunities in consumer products and healthcare
Clients also demanding compliance and regulatory advice as they attempt to deal with an increase in
anti-corruption enforcement – law firms also face challenge of handling ‘tainted assets’
Maurizio Levi-Minzi
Andrew M. Levine
Latin America’s growing middle class is
generating opportunities for law firms in
a range of industry sectors, while moves
to tackle corruption in the region is also
driving demand for compliance and
regulatory advice, says Maurizio Levi-
Minzi, partner at Debevoise & Plimpton.
While the energy and infrastructure
sectors continue to generate
opportunities across Latin America, law
firms are increasingly engaged in other
sectors including consumer products,
healthcare and insurance. Growth in
such industries correlates to the changing
demographics in the region, specifically
the emergence of a sizeable middle class,
explains Levi-Minzi. Brazil, Mexico,
Colombia, Argentina and Chile continue
to attract high levels of foreign direct
investment, but local players are also
playing a leading role in the market.
“Our firm has been traditionally active in
the representation of foreign investors,
but we also have a solid track record
acting on behalf of local investors,” says
Levi-Minzi. “We have strong connections
with big family groups and their
extensive umbrella of companies.”
‘Tsunami of enforcement’
In addition to transactional expertise,
clients are increasingly demanding
compliance and regulatory services,
says fellow Debevoise & Plimpton
partner Andrew M. Levine. “One of the
trends impacting the work that we do
is the globalisation of anti-corruption
enforcement,” he says. “In the last few
years, we’ve seen a tsunami of anti-
corruption enforcement involving Brazil
– this has generated substantial work
representing companies and executives
in matters that transcend boundaries.”
Levine continues: “New legislation
in jurisdictions such as Mexico,
Argentina and Colombia, and increased
enforcement of existing laws in countries
where traditionally there hasn’t been
much local anti-corruption work, have
likewise generated greater demand for
white collar and compliance advice.”
‘Tainted assets’
A firm’s knowledge of anti-corruption
matters is key also when it comes to
handling “tainted assets,” as these are
often the subject of some of the most
complex transactions in the market. Such
20 • THE LATIN AMERICAN LAWYER • December 2018
transactions require multidisciplinary
teams which are able to investigate,
evaluate and price assets accurately. “The
ability of our M&A and litigation lawyers
to work together collaboratively is crucial
– it is mission-critical to understand
what you’re buying and what to do
with it afterwards,” says Levine. Levi-
Minzi adds: “Sometimes there are
significant gaps in valuations between
buyers and sellers because of differing
assessments of risk, and this is where
legal and financial technology, which is
well-established in New York but less so
across Latin America, can be key to the
success of a deal.”
Paying bribes
Mechanisms such as earnouts and
minimum-guaranteed returns are among
the tools that law firms apply to these
highly-sophisticated transactions, which
also pose complex challenges from
an anti-corruption perspective. “For
example, even if you have bribes possibly
paid in only one country, regulators in
multiple countries may have an interest
in investigating,” says Levine. “Law
firms can bring a sensitivity to working
in different environments and provide
different lenses through which to
analyse complex situations and generate
practical solutions,” he adds. In addition
to offering the services of lawyers,
the firm is able to convene forensic
accountants, investigative professionals
and technology experts. “What we really
do is pull together the right team to
represent the client,” says Levi-Minzi.
Maintaining an extensive network
of trusted firms is another key part
of the process, although Debevoise &
Plimpton does not have any exclusivity
arrangements, preferring instead to
select the most suitable local partner on
a case-by-case basis. “We cultivate many
friends in every country, and tend to
work with different firms case by case to
make sure that our client is represented
in the best way possible,” says Levi-
Minzi. “I’ve generally found that
knowing the individual lawyer matters
more than the firm,” he adds. In addition
to maintaining these trusted contacts,
the firm’s New York office has a team
of foreign-qualified M&A and litigation
experts from jurisdictions such as Mexico
and Brazil.
www.thelatinamericanlawyer.com