We asked Marcio Alabarce, senior tax and legal counsel at CCR Group and winner of the Corporate Tax Individual of the Year award at the 2017 Global Counsel Awards, his opinion on what it takes to be a successful in-house counsel, the best way to advise senior leadership, and what winning the award meant to him.
Describe your current role (responsibilities, size of team, structure).
I am part of the legal team at the holding company of CCR Group, providing the required assistance not only at corporate level, but also – and mainly – to all business units of the group.
My main responsibilities include managing tax litigation, internal tax consultancy and tax planning. We do most of this jointly with other teams (eg, the controlling, tax and finance departments) and we can thus be more efficient and cost effective. At CCR we believe in shared management among departments, and this is clearly evident in the way we deal with taxes.
In the legal department, I am the only in-house counsel doing taxes, but I am assisted with day-to-day demands by my colleagues in the general litigation department located in our shared services centre. They keep our internal systems updated, review the provisions, draft internal reports for regulatory purposes, control payments to the law firms who work with us, keep all guarantees effective and, most importantly, keep a strict track record of all our expenses.
For tax consultancy, we do a lot of research and analysis internally. However, we are also assisted by external consultants on a case-by-case basis. We work with a few trustworthy law firms and consultants who not only know our industry very well, but also have a long-term relationship with CCR Group.
Finally, tax planning is something we try to have embedded in each transaction or project in CCR Group. It is a day-to-day activity that involves all teams of the group. Therefore, it is not the responsibility of only one department (in most cases we work jointly with the controlling department, and this has been very efficient). CCR Group is very conservative in tax matters and we diligently comply with all regulations in force in all countries where we have business..
What led you to a career in-house?
One could say that it was by chance.
I have been in-house since 2011. At that time, I was partner at a major law firm in Brazil (Machado Associados), where I worked for a decade in the consultancy and litigation teams. I was also a judge at an administrative court at the State of Sao Paulo Revenue Service – in which indirect taxes are the major concern – and was a professor at certain institutions (FGV and many others). In summary, I had a well-stablished career in the consultancy industry.
CCR Group was one of my biggest clients for several years and I had a very good relationship with its chief legal officer (to whom I now report directly). I admired and respected him personally (I still do), and when he invited me to join the team, it was a great surprise and an honour.
As it was a huge change in my projected future, it took a couple of months before I decided to leave my former career. In the end, at the age of 32 and moving to such a great place to work, I realised that it was a good opportunity.
In your current role, what is the most challenging situation that you have faced? What are the most significant challenges that in-house lawyers are likely to face over the next few years?
There have been so many challenging situations over the years that I can hardly mention one specifically. Most involved dealing with uncertainty and taking risk decisions in matters where there was a very broad grey area, asymmetric information and no clear safe harbour.
This reflects what I understand to be the most significant challenge that in-house lawyers are likely to face over the next few years: dealing with a constantly changing world in which we cannot control most things. (For the lawyers who are beginning their careers, I strongly recommend all of Nassim Taleb’s books. Read them carefully! You will understand what I mean.)
Another huge challenge is to be a good technician at law. It is “suggested” that we take accounting, finance, marketing and information technology into consideration, sometimes even before the law. However, while in-house counsel should of course be completely aligned with the results, goals and objectives of the group, they should also continue to be lawyers.
Are there particular types of legal issues that you routinely refer to outside counsel? And what kind of matters do you tend to handle in-house?
There are certain matters that we always handle in-house, such as meeting with tax authorities and audits. Tax rulings are generally handled internally.
We have handled some litigation internally, but this is an exception; we usually hire law firms to be responsible for such cases (as we appreciate having a solid and trustworthy relationship, we work with only a few of them). However, even in litigation, we do not simply hire a law firm and let them do their job freely. It is admittedly hard to work with us at CCR Group – we like to be entirely involved with every aspect of litigation, discussing strategy, reviewing and writing petitions and sometimes even attending court with our external lawyers. We need to have a very solid relationship to be able to work as we do.
We decide on consultancy matters on a case-by-case basis. It depends on the time available for the analysis, its complexity and importance and – sometimes – the available budget. Even in cases where I have personal experience and can carry out the tax consultancy directly, we consider it important to have a second – or third – independent opinion, either to confirm (or not) our internal analysis or to explore other perspectives.
We also refer externally for some projects involving tax reviews, which are beneficial to perform periodically. This sort of work is better done externally, especially using solid IT methods; we are unable to do this internally.
What do you consider to be the essential qualities for a successful in-house lawyer?
A broad and solid background in law (at least procedural, corporate, contract and tax law), finance and accounting should be a given. Having said that, communication skills are the most essential quality for a successful in-house lawyer: to be able to hear and understand others’ opinions, information, expectations and perspectives, and to communicate one’s own. Talking and writing in a clear and fluid manner, and organising and running meetings effectively, are important. The ability to deal with many variables and uncertainty, and to balance the alternatives, is also a plus.
What’s important for in-house counsel to consider when advising senior leadership?
Generally speaking, we should try to understand what is most important on a case-by-case basis. Is it a decision on taking risks? One should focus on the applicable scenarios, SWOT analysis and so forth. Does it involve any contingency? One should take actions to interrupt and, if possible, to mitigate the contingency. Most importantly, one should adapt the way of advising senior leadership to the characteristics of each individual (eg, I would never advise a senior engineer the same way I advise the chief financial officer or the chief technology officer).
How does the legal department contribute to your company’s growth?
We believe in maintaining a balance between doing business with legal certainty, avoiding contingencies, developing opportunities and taking risks responsibly and under conservative criteria. We are very aware that we are taking care of others’ assets, and we do so as professionally as we can.
With regard to your industry, are there any significant developments worth highlighting?
Brazil offers several opportunities. Considering infrastructure specifically, Brazil is a very good place to do business nowadays, despite its crazy tax system. After a period of recession, the government – as controversial as it is – is undertaking huge state reforms, which include some bids to take place in the near future (eg, new airports, subway and toll road concessions and many others projects under development).
In addition, some former industry leaders are still facing financial challenges that prevent them from continuing operations, and this has offered broad M&A opportunities for domestic and foreign players.
If not a lawyer, what would you be?
I would have liked to be a musician. But when I realised that I was not really gifted, I decided to get a decent job that could pay my bills. Fortunately, I was fortunate to choose this career.
What did winning a Global Counsel Award mean to you?
I have no words to describe how honoured I was and I am very grateful to the International Law Office and Lexology. You do such great work every year in organising this event. It was perfect and unforgettable.
I feel that the award I received should be shared with my entire team and all colleagues from CCR (in the controlling, tax, finance and other departments with taxation concerns, among so many others). It is really the work of an entire team, of which I am so pleased to be a part.
The purpose of the Global Counsel Awards is to identify those in-house counsel, both teams and individuals that excel in their specific roles. The primary aim is to reward lawyers for demonstrable achievements across the full spectrum of in-house responsibility, not simply those who have acted on high-profile transactions. To make a nomination for the 2018 awards please click here.