André Maruch is a lawyer on the Corporate Law, Mergers and Acquisitions team at KLA Advogados, the ILN’s Brazilian member firm. In this episode, he and Lindsay chat about the current market trends in Brazil and the impact of the US and Brazil’s new government on them, the future of AI in the legal industry, and why even though being a lawyer may not be glamorous, it’s still fulfilling.
You can listen to the podcast here, or we’ve provided a transcript of the highlights below.
Lindsay: Hello and welcome to the Law Firm Intelligence Podcast. I’m your host, Lindsay Griffiths, executive director of the International Lawyers Network. Our guest this week is Andre Maruch from KLA Advogados in Sao Paulo, Brazil. Andre, we’re so happy to have you with us this week. Thank you so much for joining us. We’d love for you to tell us a little bit about yourself and your practice and your law firm.
Andre: Hey, Lindsay. First of all, thanks for the opportunity. Thanks for having me. And ILN also, it’s a pleasure to be here with you.
Lindsay: Thank you.
Andre: I’m a Brazilian attorney, Lindsay. I work at KLA, a medium-sized law firm in Brazil that is associated with ILN. We have several interactions with ILN, with the firms of ILN. Our partners are always joining meetings and events ILN has hosted in the last years, and we try the most to be active within the circle of firms and with you. We hope that we are able to accomplish our targets of being the closest we can be with ILN.
Lindsay: Oh, yes.
Andre: I’m a SUS, it means I’m an attorney at the M&A corporate practice at KLA. The firm is based in the city of Sao Paulo. We have around 120 attorneys. We are a full-service firm, so we try to be a one-stop shop for clients. Anyway, any clients that comes to Brazil or is already here, we try to offer all services that the business that they’re running, we may attend everything that they need. For example, I’m from the M&A Corporate Service area, but of course we have a very strong practice in tax and also real estate, intellectual property, and anyway, anything that you can imagine, criminal and labor. We try to have strong teams, not only certain, separate individuals with expertise in that field. needy, strong teams with contracts and everything so clients can find support in anything they need with prompt support and quality support.
As I said, I work in the corporate M&A department. I’m a senior lawyer of the firm, so I focus on transactions of mergers and acquisitions, both on the buy side and sell side on all segments of the market, from IT to industrial to services and energy, and anything. There is no specific area of practice, although we already have certain lawyers that are focused on some business, for example, education or pharmacy or energy. My team, I’m focused on all segments. Anything that we… Of course, we work closely with partner that is acquainted to certain segment. But anyway, we are able to address any area of our clients. Of course, there are not only M&A projects, which is strong in Brazil, of course in Sao Paulo, but also corporate practice and contracts and foreign investment. This is what I’m focusing on.
Lindsay: That’s great. What would you say is your biggest challenge at the moment, and for you as a lawyer, what do you think for the firm in general?
Andre: Well, I think that the biggest challenge here is to have a balance between all the practices of the firm. Because we have a very strong area of corporate M&A. Of course, it brings along tax and real estate and labor practice that are all involved in the M&A transactions, as you may know.
Our thing here is that to achieve the balance between all areas, all areas can work together. Because it’s not only important for clients that only the M&A practice, for example, in my field works correctly, but we have a flow, an adequate flow, a satisfactory flow of delivery from all areas of the firm. That’s what we try to do, to come up with solutions with innovative and also adequate solutions. Not only corporate, but in our area. For example, if there is a specific request in corporate, it’s usual that it demands involvement in different areas that affects, for example, labor aspects of the firm or labor tax aspects of the business. We try to cover it all. That’s the thing, as a full-service firm, we try to offer everything at the same time. That’s the balance we try to achieve.
Lindsay: That’s great. Can you tell us a little bit about the state of the market for your clients at the moment?
Andre: Yes. Perfect, Lindsay. In the last two years, I think that M&A practice has suffered a little bit. As you know there is the global scenario is not very good, but although there are certain indexes and parameters of the American market that kind of try to help other segments worldwide. That’s the case of Brazil, that we are directly affected by the shape of the American market.
But anyway, we had an election two years ago, almost two years ago, so the new government… There is always an impact for firms, for companies as it is not very predictable for them, like how the new government will handle some laws, some acts that will be passed. They’re kind of conservative in investing until they are shared that there will be no additional risk, unforeseen risk. I think we have already passed this, this first year of the new government and newly elected government. I think that 2024 is going to be better than 2023 for the M&A practice, but maybe not as good as 2022 and 2021. But anyway, we are trying to recover from not very good year, 2022 was not very good for any firm in Brazil. But anyway, let’s see if this second quarter and third quarter, we try to accommodate things better.
Lindsay: I hope that’s true. I think that was true globally too. I think 2023 was a bit of a struggle for everybody. I agree with you, I think already 2023 is a much more promising year, so hopefully that’s true for Brazil as much as anybody else.
Andre: Yes. On the other side, Lindsay, of course we have several opportunities. For example, we have prices of the assets as we have seen, although they may kind of become low. But anyway, in the VC and private equity markets, we have been used to elevate the standards from the founders, so the investors, including American investors, are trying to lower the tickets to invest. This is also an effect, that although the asset price is becoming lower, at the same time the founders are still using it to certain advantages standards from the past. We are trying to accommodate the interests of the investors with the best practice of the founders to achieve a balance here.
This is a way that we are seeing this year. Investors have already provided signals in the sense that they are no longer willing to invest with more certainty with the return of the capital. This is a normal scenario, but we are of course in the middle of it, so VC and private equity are kind of still struggling a little bit, but standard M&A practice is recovering well this year. Let’s see what happens.
Lindsay: Let’s see what happens. Can you talk to us a little bit about how you think technology has impacted your practice? Do you think it’s had any change to it?
Andre: Yes, sure. Lindsay, we have certain AI tools, for example, which are already available. I’m a big fan of these innovations. Whenever there is a tool, especially in US in English, I myself as an individual, I try to engage that technology in my daily activities. It helps me a lot. But we are talking about firms and yes, we already have tools here. For example, due diligence. We have certain tools to speed up due diligence and analysis of documents in survey of public documents. We already have certain tools that can draft the preliminary version of a certain most basic document, speeding up these things. I think that big firms are already ahead of those investment costs. Sometimes they demand not only acquiring already available services solutions in the market, but also developing their own solutions and it costs money.
I believe, Lindsay, that currently big firms are ahead in this process, and they are investing a lot of money in these solutions, it makes sense. But of course, it does not replace the intellectual work that is developed by attorneys. I think that you are more aware than me, but there are certain predictions that maybe the AI will exceed the human knowledge and capacities in five years. I don’t know if that’s true. But anyway, I think that it’s maybe it’s expected, Lindsay, that the AI may take over certain more based works and duties. I think it’s going to help us a lot, but I don’t think it’s going to replace the intellectual, the feeling that we have for business, Lindsay, what you have to do, the feeling what to prioritize, how to handle, how to interact in liaison with clients and suppliers. I don’t see how attorneys’ firms are going to be put in a second place by AI.
I think it’s going to be a great tool. I think we cannot miss this opportunity, otherwise we’re going to be behind big firms. We are going to be kind of at the same pace, maybe not at the same pace. As I said, KLA is a medium firm. But anyway, of course we have our investment, and we have our concerns about engaging in new tools. We have a very active IT staff in the firm that is aware and is investigating and is suggesting solutions for us. We are investing in that, we’re analyzing, discussing and et cetera. We see what’s best. For example, as I said, for certain firms, the drafting of documents may help. In my opinion, I don’t know if that’s a very good idea, but anyway, I may be wrong of course. But for me, the solutions could be more helpful, for example, in identifying, searching, in due diligence and et cetera. But there are several solutions. I hope that everybody’s able to come along and join this new wave that I think is going to be very helpful for us all.
Lindsay: Absolutely. I agree with you. Even when you do have the ability for AI to gain all of that human knowledge, it really does still lack the nuance that people have. I think people are still going to want that human interaction that they’re not going to get with AI. I’ve even seen some very sophisticated AI in video, and there’s just still something very inhuman about it. Especially when you’re dealing with issues where there’s a lot of risk involved and things where even if it’s not a case of the company litigation, but some of the very sophisticated deals that you’re doing and those kinds of things.
We saw this happen during Covid, where there were some things that you were doing things, like force majeure things that came up, and what clients wanted was their senior lawyers even when there were things that more junior lawyers could handle. I think when there’s an emotion that comes into it, people still want someone that they can trust, and there’s no way that AI can replace that. I could be wrong and maybe 20 years from now that’s going to be a different story, but I think that’s not going to get replaced anytime soon.
The thing that I am curious about, and I was just talking to one of our other lawyers about this, is that, when we do replace sort of the basic tasks with AI or other types of technology, how do we then train the young lawyers to be able to gain the knowledge that brings them up to the level of the more experienced lawyers that are the people that your clients want? That’s the thing I’m curious about.
Andre: Yes, very, very interesting points that you brought here. Yes, the first of all, the feeling in how we handle our experience in interacting with clients and in litigation, as you said, the feeling sometimes is more important than technical issues. It’s kind of hard to take this place over, this position over, I think you are correct. But when you talk about bringing everything to the same level of knowledge and use of these tools, I think that younger lawyers, maybe it’s easier for them because they are more… In my experience as a senior attorney, I work of course in my team with associates and junior associates and paralegals and et cetera. What I’m seeing is that these younger people are more used to these solutions than us. When there is some kind of using the first time a solution, they catch up with things faster than us.
I’m 39 years old. It does not mean that we are not able to do the same. With a little bit extra effort, we can do that, because we have done that, we were in the middle of the transition of the internet bubble and et cetera. We were able to catch up on things and I think that we are going to be able to also to join this AI. Because anyway, it’s going to be a part of our life. It’s not that I don’t want to handle that. I think that’s not going to be a solution. I think that’s going to be involved in everything we do. There will be no choice maybe, for example, in three years. It’s going to be in the daily routine of us all. I think that although there is an age gap between younger and older attorneys leads, I believe that the solutions are going to bring so much impact that nobody’s going to be able to ignore these solutions.
Lindsay: I think that’s true. Can you tell me about somebody who has been a mentor to you during the course of your career?
Andre: Yes, of course I can. I have been able, Lindsay, to join medium and small and large size company firms in Brazil. I have had the opportunity to work with very good lawyers that have been very good in my professional growth. I can say that, in the first company that I worked for, I don’t know if you wanted names, but of course it’s going to be a pleasure to bring them. The first one that comes to my mind, his name is Fábio Appendino. When I used to work in Belo Horizonte, that’s another major city in Brazil. I worked in a law firm named at that time Rolim, Viotti & Leite Campos that today is known as Polim Goulart Cardoso. If I’m not wrong, they changed the name. But anyway, this Fábio Appendino with double P in Appendino, is a very good lawyer that taught me my first seven years of practice. A very good fundamentals in corporate law and I learned a lot from him.
After that I came to Sao Paulo, as the focus of M&A deals is much more concentrated in Sao Paulo instead of the other areas. Maybe in the US that’s the same thing, maybe in Delaware or in New York in comparison with other places. I think there is a large gap in M&A transactions comparing Sao Paulo to the other cities. I came to Sao Paulo to enhance my skills in this field. I came to TozziniFreire, that’s a large firm in Brazil. I had the opportunity to work with Luiz Okumura, partners of TozziniFreire that were also very helpful in my career. Then after that, with Leah Rostam, that’s another firm here.
Now I’m at KLA. We have several lawyers that are highly skilled, and it is a blessing to be there and have the opportunity to learn a lot from several colleagues there. Several partners. I can name all of them, lots of them. For example, Melissa Kanô, that is our partner that you may know her, she’s a very good person. Also, Karin Alvo, that’s another partner. Luiz Filipe Aranha and Mariana Cortez and others of course. But Henrique Lopez, you may know him, but there are several. I can name a few here, but these are the ones that come to my mind.
Lindsay: That’s wonderful. There’s so many, I love hearing that. That’s really a blessing.
Andre: Yes.
Lindsay: Can you tell me about something that people misunderstand about working in the legal field?
Andre: Well, yes, I think that’s maybe those kinds of glamour that some people believe exists. I don’t see that glamour at all. Because maybe, Lindsay, there is a misunderstanding that was led by certain TV series I think that Suits, I don’t know the wife of Harry that brings from England, I forgot her name, but I think she worked on that law, those series, I think that glamorized, I don’t know if that’s the verb, to bring glamour to the profession. Of course, this is a very rewarding profession. We have the opportunity to learn from several businesses. For example, if you run a technology company, I have to learn about that segment. It’s very rewarding to try to help clients to be satisfied with the work, and we are able to achieve a deal that is useful or fundamental to the client and that’s very good for…
But anyway, there’s no glamour I believe, there’s hardworking and inspiration. But it means we are hardworking. There is a stress involved, I’m going to say there is no. For example, in inappropriate litigations, whenever the shareholders fight against themselves or against the company. There are stressful situations, for example, in a deal that certain conditions require a stressful and maybe extreme situations, extreme scenarios. We must be prepared, for example, especially in the M&A field to address that. It’s not easy.
But anyway, after a few years in the market, for example, I graduated in 2008, so I think I have almost, I don’t know, 15 years after graduation. I think that currently I can say that I have solid basis, a solid fundament. But anyway, it demands that you be involved in several transactions on a daily basis with several clients with different profiles, with different levels of complexity. There is no secret, you learn as you go along. It is not an easy path. I’m not going to say it’s easy. But anyway, I think that after a certain time point of time, you achieve a level of experience. Or any study, of course you cannot stop studying because there are several innovations in law. You cannot achieve a certain point of life that you are safe to address any situation you may face.
Lindsay: You mentioned studying and staying updated. How do lawyers stay updated on the changes in the law and legal precedents? You’re spending a lot of your time practicing law and dealing with your clients and also trying to network and teaching younger lawyers the practice of law and helping them come up in their careers. How are you also staying updated on everything that’s changing in the law, as well as learning new technology and doing everything? It really is a very hard, as you say, there’s not a lot of glamour.
Andre: Yes, a very good question, Lindsay. I think that the best way of studying depends on each attorney. I’m going to say what works for me. For example, we will use it in the past to study through the books. But today, I don’t know, I’m not sure if that’s the most adequate way of learning. Because of course when you are in law school and any school of graduation, of course there are books available for you to study for the tests. But I think today the knowledge is created more on the internet, not in books. So, I think books have the fundamentals, but if you want to stay updated about anything that’s not in the books, that’s for example in online events. For example, ILN may host an event, you must, if you are not able to attend that in local, you could join that online to know what’s going on about discussions. That’s one way.
Another way, we have the news here, not only major newspapers, but we have specialized law websites that come, they bring to us the most important decisions, case law, as you said, so we try to follow this. For example, there are 30 or 40 news articles on a day about certain courts that he should render a decision in an important case, so you become aware of the decision. There are those specialized websites, legal websites focused on Brazilian law. Without prejudice of course, for the example, the major newspapers, New York Times in US, but we have our websites here, major newspapers that bring the news on the economy and et cetera, and politics that we must be aware of. Of course, I said for example, events and articles on the internet.
I must say, I also follow up the news that is created by competing law firms because I try to see what they are focused on. So, what I do is, I read their news for the main big firms and medium firms I follow up. But the most important here Lindsay, is that we cannot restrain our limit, our analysis to our field of [inaudible 00:29:14]. Because I think that today everything’s connected. For example, if I only study about my field, M&A corporate for investment contracts is where we narrow down everything. I think it’s kind of prejudicial to the learning. What I try to be aware of is, for example, environmental law and real estate law, because everything is connected.
For example, if I’m conducting due diligence, let’s say I have to coordinate all teams of different, for example, environmental, real estate, tax, labor and IP, and all teams I have to coordinate and I must understand what are the red flags of the due diligence and discuss and be able to discuss. If a client comes with a question, I must be able to clarify, understand, and clarify that issue. A corporate lawyer today must understand, of course, at a certain degree, a certain level, all kinds, all fields of law. I must read everything to understand what’s going on in text, in labor and et cetera, to be able to address that in the reports to help clients. Today we must be aware of everything that’s going on.
Lindsay: That really sounds like it’s a lot. You must really love the law in order to want to be a lawyer and serve your clients well.
Andre: You try to get to grab a pattern between everything. Once you grab a pattern and you acknowledge a certain level of information on each field, you are able to grasp what’s going on and be able to discuss. That’s interesting.
Lindsay: One final question before we wrap up. I always like to ask our guests, what is one thing you’re enjoying that has nothing to do with your practice or work?
Andre: Okay. Do you mean a hobby for example?
Lindsay: Yes.
Andre: Okay. I used, Lindsay, to be a sports guy, running and et cetera. But once I had my kid two years ago, Victor is his name, so I’m blaming him for stopping exercising. But anyway, today my interest is outside work and literature. I like a lot of literature. I have also American authors that you may know Paul Auster for example, that I read several books on them. I think that literature today, each opportunity I can read something out of that, I think that helps with imagination. Literature helps with our grammar and vocabulary and everything. I think that for a lawyer, for example, when I was a kid, I was also very fascinated with literature, and I believe that helped a lot in this profession. Anyway, there’s some advice that will work for me kind of involuntarily, is reading. I know that reading for a lawyer is very helpful. It’s a pleasure and also it becomes a tool in the profession.
Lindsay: Absolutely. I love reading, so I also always recommend it. It’s one of my favorite things to do.
Andre: Very good.
Lindsay: Well, thank you so much. I really appreciate your time. Thank you so much to all of our listeners. Please take a moment to rate, review and subscribe to our podcasts on Apple Podcasts, wherever you listen to podcasts. When you do leave us a review or rate us, hopefully five stars, it does help other people who love podcasts to find our podcasts. Thank you very much.
Andre: Thank you, Lindsay. Thank you for having me. Bye-Bye.