BRAZIL LEGALBENCHMARKING

SURVEY 2019

Laurence Simons

TABLE OF CONTENTS

INTRODUCTION 3

RESEARCH CONTENT

GENDER 4

AGE / EXPERIENCE / FUNCTION 5

REGION 7

BOARD 7

TEAM 8

CRUCIAL MISSION 9

COSTS VS REVENUE / COSTS 11

TECHNOLOGY 12

CHANGING JOBS 14

SALARY SURVEY 17

LAURENCE SIMONS

A Benchmarking Survey is research performed by Laurence Simons in order to analyze, in detail, the legal departments in Brazil and Latin America.

The questions were developed with the assistance of the legal executives and professionals, who pointed out the main issues encountered while they were making decisions in and for their departments. Moreover, we approached wage issues, motivational issues, and career development issues.

The research brought us highly relevant results, which may help the professionals to take an in-depth look at not only their careers but about making strategic decisions in their departments. The research comes with a wage informative guide and the trends of our market. We thank everyone who participated in our research.

LAURENCE SIMONS

INTRODUCTION BENCHMARKING

SURVEY

INTRODUCTION

3

WHAT'S YOUR COMPANY INDUSTRY SECTOR?

WHAT IS YOUR GENDER?

8%

7%

10%

3%

17%

32%

9%

11%

3%

Techonology &Telecoms

Other

Manufacturing &Engineering

Energy &Utilities

Life Sciences & Healthcare

Chemical & Minerals

Banking& Finance

Logistics

Media, Sports& Entertain-

We can see a marked increase in the number of female lawyers who participated in the research, nearly 44% of the interviewed. Laurence Simons globally supports and defends the inclusion of women in the legal market, with emphasis on leadership positions.

RESEARCH CONTENT

44% 55%

4

GENDER

1% Prefer not to specify

WHAT'S YOUR JOB TITLE?

21%

15%

21%

26%

15%

2%

General Counsel

Legal Manager

Compliance Officer

Other

Head of Legal

Senior Lawyer

WHAT AGE CATEGORY DO YOU FALL WITHIN?We can also see strong participation

from professionals who are 30-39 ears old (37%), and 40-49 years old (44%), which is directly related to the functions of a Senior Lawyer/ Manager (30%), and Head of Legal / General Counsel (47%) respectively.

40-4944%

30-3937%

21-2912%

50-597%

AGE / EXPERIENCE / FUNCTION

5

HOW LONG HAVE YOU BEEN IN YOUR CURRENT ROLE?

7-9 years13%

10+ years12%

4-6 years25%

1-3 years38%

Less than a year12%

WHICH OF THE FOLLOWING BEST DESCRIBES YOUR LEVEL OF EXPERIENCE WITHIN THE LEGAL INDUSTRY?

Less than 1 year

1-3 years 4-6 years 7-10 years 11-14 years 15+ years

3% 4%9% 11%

16%

57%

01020304050607080

6

ARE YOU A MEMBER OF THE COMPANY BOARD?

60% No

40% Yes

WHICH REGION DOES YOUR POSITION COVER?

WHO IS YOUR DIRECT REPORT?

CEO / MD

Global GC

Regional GC

CFO / COO

39%

27%

15%

13%

Other6%

Brazil has become an important hub for the legal and compliance departments of international companies in Latin America. The data show that about 42% of these professionals work in LatAm and/or other regions.

57%Brazil

The profile of an in-house lawyer has changed. Currently, the professionals are more and more involved in the strategic issues that demand more engagement with the company and related business, besides technical training for the function. More and more of this kind of professional has been looking for MBA courses because those degrees are considered a serious advantage in the market.

It is also noted that 40% of the professionals are part of the company board, which is the reason why we see an increase in the number of professionals looking for courses focused on preparing them for participation and conflict resolution in council meetings.

34% Latin America

REGION

BOARD

7

9% Other

HOW MANY PEOPLE DO YOU HAVE ON YOUR TEAM?

0-5 6-11 12-20 More than 20

37%

28% 24%

11%

IS YOUR LEGAL BUDGET GOING TO INCREASE OR DECREASE IN 2019?

DID YOU HAVE ANY SECONDEES* FROM LAW FIRMS DURING 2018?* SECONDEES REFER TO LAWYERS THAT HAVE BEEN HIRED ON A CONTRACT OR INTERIM BASIS FROM A LAW FIRM OR LEGAL STAFFING AGENCY, BY AN IN-HOUSE LEGAL DEPARTMENT.

DO YOU HAVE PLANS TO HAVE ANY SECONDEES* FROM LAW FIRMS DURING 2019?

52%52%

48% 48%

YES

NO

In comparison with the research we performed in 2013 - where we had an average of 11 lawyers per team – we found out that the legal departments were affected by the economic and political crisis that has impacted our country over the last few years.

There was a reduction in the headcount, where more than 60% of the legal departments currently holding a maximum of 11 lawyers on their teams.

The tendency to improve in the national scene can be seen optimistically in regard to the future of the economy over the next 12 months for almost 77% of the professionals, as detailed next.

Stay the sameIncreaseDecrease

44%26% 30%

TEAM

8

WHICH AREAS OF LAW WERE MISSION CRITICAL IN 2018?

10%

9%

12%44%

40%

31%

48%

23%

40%

39%

13%

6%

3%

14%

Capital Markets

IntellectualProperty

Insurance &Reisurance

Insolvency &Restructuring

Company & Commercial

Tax

Dispute Resolution

Labour & Employee Benefits

Competition / Anti-Trust

Bribery / Corruption / Compliance

Regulatory

Real Estate & Environmental

IT &E-commerce

Other

DO YOU ENVISAGE THE MISSION CRITICAL AREAS CHANGING IN 2019?

37% Yes

63% No

In the research performed in 2013, only 24% of the participants classified the labor area as crucial. This percentage has doubled over the last five years, considering that a little less than 48% of the professionals see the labor area as one of the more crucial aspects in 2018. We believe that this is due to the complexity of the labor legislation, besides the layoffs resulting from the crisis mentioned before.

CRUCIAL MISSION

9

WHICH AREAS OF LAW DO YOU COVER INTERNALLY? AND WHICH AREAS DO YOU OUTSOURCE TO LAW FIRMS?

Capital Markets

IntellectualProperty

Insurance &Reisurance

Insolvency &Restructuring

Company & Commercial

Tax

Labour &Employy Benefits

DisputeResolution

Banking & Finance

Competition / Anti-Trust

Bribery / Corruption / Compliance

Regulatory

Real Estate & Environmental

IT &E-commerce

Other

Cover Internally Outsource

16% 84%

62% 38%

32% 68%

30% 70%

57% 43%

53% 47%

77%

37%

48%

70%

71%

36%

62%

19%81%

6%94% 23%

63%

52%

30%

29%

64%

38%

WHEN DID YOU LAST RECRUIT EXTERNALLY?

Q42018

Before2018

Q22018

Q12018

Q32018

34% 34%

12%

10%

14%

10

WHAT’S THE COST OF YOUR LEGAL DEPARTMENT RELATED TO THE TOTAL REVENUE OF YOUR COMPANY?

WHAT’S THE RATIO BETWEEN INTERNAL (RETAINED ORGANIZATION) AND EXTERNAL COST (OUTSOURCED SERVICES) OF YOUR LEGAL DEPARTMENT?

HOW DO YOU INTEND TO DECREASE THE COST OF THE DEPARTMENT?

Less than 0,20%

More than 0,40%0,20% – 0,30%

0,30 – 0,40%

Increase use of technology

Increase use workforce to decrease outsourced projects

High control of operational costs like trips

Other

47%

13%

28%

12%

COSTS VS REVENUE / COSTS REDUCTION

55%

22%

9%

14%

33%

20

80

18%

30

70

17%

50

50

32%

40

60

Controlling operational costs of the legal departments in Brazil is a trendingissue and is being discussed among the professionals in that area, as it hasbeen deemed “too expensive” in comparison with other countries.Despite that, over 55% of the Legal Executives affirm they have a cost lower than 0,20% of the company’s revenue, and almost 47% believe that the investment in new technologies can be a way to reduce cost.

11

DO YOU PLAN TO INVEST OR INCREASE YOUR INVESTMENT ON ARTIFICIAL INTELLIGENCE DURING THE NEXT 12 MONTHS?

DO YOU BELIEVE YOU ARE GOING TO LOSE HEADCOUNTS DUE TO TECHNOLOGY?

WHICH AREAS OF LAW DO YOU BELIEVE ARE GOING TO BE MORE AFFECTED BY AI?

Litigation Contracts Corporate Other

35% Yes38% No

65% No62% Yes

49% 41%

8%2%

TECHNOLOGY

Despite the tendency to reduce cost, a little more than 61% of the participantsaffirm they will invest in technology and artificial intelligence during 2019, and they believe that litigation areas (49%), and contracts (41%) will be the areas most impacted by this technological advance.

Regardless of the improvement in software designed for the legal industry, almost 65% of the professionals do not believe that artificial intelligence will reduce the headcount inside the company.

12

WHAT ARE THE MOST IMPORTANT KPIS THAT YOU USE TO MEASURE YOUR TEAM PERFORMANCE?

WHICH PROFESSIONAL CHALLENGES ARE THE MOST IMPORTANT FOR YOU DURING 2019

Revisonsof contracts

Completionof projects

Closingof proceedings

Completionof

agreementsOther Expenses

6%

10%

16%

4% 3%

All ofthem

49%

11%

To do more with less budget anor staff

Keeping up with increasing / chaging regulation / standards

Career mobility and job satisfaction

Ensuting an ethical corporate culture

Corporate governance iniciatives / standards

Estabilishing effective compliance and reporting programs

Outside counsel retention and management

Protection of intellectual Porpety or related disputes

Corporate records / e-mail management

Other

56%

35%

35%

28%

28%

26%

Coordinating global compliance / operations 17%

Information Privacy 30%

Data breaches and protection 29%

13%

8%

Whistleblower issues 9%

7%

5%

Technology devolopments 25%

Safeguarding the company's reputation / brands 20%

Containing legal costs

Human Relations & employment issues

33%

30%

13

DO YOU ANTICIPATE CHANGING JOBS IN THE NEXT 12 MONTHS?

Yes, I will actively be looking for a new role

No, I will not actively be looking for a new role

Maybe, if the right opportunity presents itself

16%

52%

32%

WHAT HAVE YOU FOUND TO BE THE MOST COMMON REASON FOR PEOPLE LEAVING THE BUSINESS?

Salary

Join Competitor

Retirement

Other

Career progression

15%

5%

9%

1%

Contrary to what many think, salary is not a guarantee of retention for a qualifiedand capable professional. Most of the professionals (70%) believe that careerdevelopment is the main reason why people quit. Seeking new challenges, theincrease in professional scope, time development, and management are some of the main reasons for these changes.

In spite of it, it is important to note that a little more than 64% of the professionals affirm that they are considering leaving their job if they do not have an increase in their salary within the next 12 months.

IF YOU WERE CONSIDERING A NEW ROLE, WHAT WOULD BE AN ACCEPTABLE INCREASE IN BASIC SALARY THAT WOULD MOTIVATE YOU TO MOVE?

0-4% 5-10% 11-15% 16-20% 21-25% 26-30% 32-50%More

than 50%

4%5%

6%

11%12%

25%21%

17%

70%

Because of the tendency towards improvement in the national economic scenario in 2019 after many years of crisis, a “warmer” market is expected. Only 16% of the professionals do not foresee new opportunities, which promises a very busy year for legal recruiting.

CHANGING JOBS

14

DID YOU RECEIVE A PAY RISE IN THE LAST 12 MONTHS?

57% Yes

43% No

IF YOU DO NOT RECEIVE A PAY RISE IN THE NEXT 12 MONTHS, WILL YOU CONSIDER LEAVING YOUR ROLE?

64% Yes

35% No

15

ON AVERAGE, HOW MANY HOURS A WEEK DO YOU WORK?

A PERCENTAGE OF YOUR DEPARTMENT, HOW MANY EMPLOYEES HAVE LEFT IN THE LAST 12 MONTHS?

HOW ARE YOU FEELING ABOUT THE FUTURE OF THE ECONOMY OVER THE NEXT 12 MONTHS?

0%

1-10%

11-20%

21-30%

31-40%

41+%

15%

11%

5%

1%

30%

38%

Extremely optimistic

Optimistic

Indifferent

Pessimistic

Extremely pessimistic

7%

7%

2%

7%

77%

1% 3%

34%15%

5%

23%19%

16

30or less 31-40

More than 6541-45 46-50 51-55 55-65

The amount mentioned above refer to the monthly remuneration, excluding Bonus payment.The bonus payment can changed according to the size and segment of the company, varying between 15% and 30% of the annual cash and can reach up to 12 wages for special positions.

17

SALARY SURVEY

MEDIUM-SIZE LARGE SIZE