Executive Summary

Adriana Ehiar Ribeiro Petry; Ana Carla Fernandes Gasques

Summary prepared by the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute focused on synthesis and writing.

The expansion scenario in the Brazilian market, despite being promising for consumer goods companies, presents significant challenges that require a strategic and adaptable approach. With a population exceeding 200 million inhabitants and the largest Gross Domestic Product in Latin America, Brazil stands out as a strategic market for growth. However, this promise is mitigated by structural obstacles. Economic and political instability, with macroeconomic fluctuations and fiscal uncertainties, creates an environment of unpredictability that hinders long-term planning and investment decisions. Legal insecurity, manifested in the lack of clarity and consistency in the application of laws, and high litigation rates, which overload the judicial system, increase operational and financial risks. Excessive bureaucracy, with slow processes and complex documentation requirements, and regulatory complexity, which imposes a tangle of norms and legislation, position the country as the seventh most complex in the world to do business, according to the TMF Group ranking (2024). This environment directly impacts companies’ ability to innovate, adapt to the market, and grow sustainably, requiring resilience and enhanced risk management.

In this context, a multinational consumer goods company, which historically based its growth on price increases in product categories with limited markets, faced the urgent need to boost sales and promote innovation. Overcoming these challenges demanded not only product improvement but also the optimization of internal processes, focusing on efficiency and cost reduction. The company’s legal department, traditionally seen as a cost center and with predominantly reactive performance, focused on litigation and management of existing conflicts, needed to be repositioned. The vision was to transform it into a strategic partner and a growth driver, capable of proactively adding value and integrated with other areas.

The reactive performance of the legal department restricted its contribution to the business, compromising the profitability and sustainability of the planned growth. Costs of materialized problem resolution were significantly higher than those of effective prevention. The absence of proactive legal support hindered the mitigation of risks that could make expansion projects unfeasible. The connection between legal and business results, such as sales volume, demand planning, product delivery, and cash flow, was not immediate and required deeper analysis for the area to become an active contributor. When legal operated under a strictly academic perspective, it tended to distance itself from the business, offering slow responses and limiting itself to the management of lawsuits and documents that served more the country’s bureaucracy than corporate challenges, potentially reinforcing them.

The diagnosis of the current situation revealed two main axes of vulnerability in the traditional legal model: operational risks and strategic risks. Operational risks manifested through labor, tax, and consumer contingencies, often associated with the absence of clear internal policies, deficiencies in process control, and slowness in legal recommendations. These failures prevented quick and assertive decision-making to mitigate risks before they materialized into litigation. Strategic risks, on the other hand, were related to the lack of effective integration between the legal department and other areas in decision-making. This disconnection hindered the anticipation of trends and the proposal of innovative solutions, leaving the company in a reactive position against the challenges of the business environment.

The internal analysis, which included a 360° survey with insights from various areas and senior leadership, identified weaknesses such as team operational overload and resource scarcity. An alarming finding was the dedication of 45% of activities to administrative demands outside the strategic scope. There were also budgetary limitations for external support and automation, and the absence of a defined mission, vision, and values for the area resulted in a lack of direction and low engagement. The lack of strategic control over litigation prevented case prioritization. Communication was excessively technical and not very accessible, hindering collaboration. Finally, the predominantly reactive approach generated a negative perception of legal support by senior management and related areas, who saw it more as an obstacle than a strategic partner.

The main causes of the legal sector’s underperformance and reactive operation were detailed, covering various dimensions. Regarding people, team overload, internal demotivation, lack of role clarity, and resistance to mindset change were identified. In processes, the absence of clear scope, lack of control over lawsuits and standardization, as well as out-of-scope demands and lack of request control, contributed to inefficiency and delays in responses. Methods and management were marked by a lack of strategic integration, absence of KPIs for performance measurement, complex communication, and reactive risk management, perpetuating high costs and reputational damage.

Still in the diagnosis of causes, the resources and environment dimension revealed budgetary constraints, lack of automation, and absence of investment in technology, which limited the department’s modernization capacity and perpetuated inefficiency. Materials and information were characterized by a lack of structured contract data, dispersed information, and absence of organized historical data, hindering predictive analysis and proactive obligation management. Finally, culture and leadership showed detachment from the business, lack of effective leadership support, and a reactive support culture, consolidating the low perception of the legal department’s value in the organization, reinforcing the view of a cost center.

The company had over 336 active lawsuits, with an immediate financial risk of around €1 million, although the lawsuits involved discussions of approximately €174 million, highlighting the potential exposure. The lack of control over the number of contractual requests, amounts involved, and the legal department’s response time made it unfeasible to condition business transactions on the prior signing of documents, as delays could cause the company to miss opportunities. Consequently, many deals were closed without proper legal review, exposing the company to unnecessary risks. Furthermore, the legal department’s lack of involvement in the analysis of campaigns and packaging labels resulted in judicial decisions and decisions from the National Council of Advertising Self-Regulation (CONAR) that required adjustments and product recalls, generating high costs and directly impacting sales volume and market share.

The recommended solution was the strategic repositioning of the legal department, transforming it into a business partner with preventive, strategic, and results-oriented action. This approach aimed not only at reducing litigation but also at consolidating the legal function as a growth driver, aligned with business objectives and capable of supporting innovation with legal certainty. The choice for an internal repositioning, focused on efficiency, integration, and innovation, was justified by its greater feasibility, strategic alignment, and long-term value generation potential, as assessed by the company’s leadership and board, empowering the existing team and promoting proactivity.

To ensure the success of this transformation journey, a structured action plan was adopted, organized into three sequential phases. Phase 1, named “Central Operation”, focused on improving the area’s core deliverables, optimizing judicial processes, contract requests, and the legal scope policy. This phase aimed to establish solid foundations for more efficient, controlled, and predictable operations, allowing the legal department to dedicate itself to higher strategic value activities, freeing it from repetitive and low-value tasks.

The main actions proposed in Phase 1 included the establishment of governance mechanisms to correct labor distortions, such as the formalization of policies, contractual review, and vacation control. Data-driven contentious analysis enabled the strategic renegotiation of processes with a higher probability of loss, seeking more advantageous agreements. Within the consumer scope, the legal department began to act proactively with the marketing and production areas, analyzing advertising materials and labels *before* launching campaigns, preventing risks of administrative and reputational sanctions, and protecting the company from high costs and negative impacts on its image.

Contract automation represented a milestone in operational efficiency, with the development of standard contracts for recurring operations. This innovation reduced the average contract signing time from three months to just three days, increasing commercial agility 30-fold and improving risk predictability. This simplification, when properly structured, strengthened legal certainty. The implementation of these actions was accompanied by targeted investments in specialized consulting and internal team work hours, aiming at the construction of dynamic tables and dashboards for performance monitoring and data-driven decisions.

Phase 2, “Expanded Action”, focused on risk governance and opportunity identification. This included active participation of the legal department in strategic planning forums, allowing for trend anticipation and the proposition of innovative solutions. A concrete example was the use of blockchain technology as evidence of priority in the protection of brands and new products, streamlining the process and reducing costs. Furthermore, the use of the metaverse for testing new products *before* physical launch allowed for understanding consumer perception in a virtual environment, eliminating production and logistics costs, optimizing development, and mitigating risks.

In this phase, innovation also manifested in campaigns with digital influencers, where the legal department structured clear and comprehensive guidelines for their use, ensuring compliance with advertising standards, image protection, and copyright. This proactive action contributed to the prevention of significant reputational risks and reinforced brand reliability. The legal scope policy, developed in Phase 1, served as a trigger for Phase 2 activities, guiding the department’s actions towards specific results, such as reducing campaign approval times and regulatory risks, consolidating the role of legal as a strategic facilitator.

Phase 3, “Transformative Deliverables”, focused on the strategic use of litigation to generate direct financial and competitive value. This included the divestment of tax benefit reserves, by releasing resources retained in fiscal provisions and reserves. This action enabled a greater remittance of dividends abroad, reinforcing shareholder returns and increasing the company’s market value. In the same scope, a competition defense action was conducted regarding Chinese imports of colored pencils. Following an investigation and presentation of evidence of dumping, the legal department’s performance was crucial for the application of anti-dumping duties, protecting the local industry from unfair competition and ensuring the sustainability of jobs and investments.

In the lighters segment, the strategy aimed to elevate the safety standard, seeking the reclassification of the hazard level of lighters from level 1 to level 3, framing the product within the highest risk tier, which required more stringent safety requirements. As a consequence, efforts were made to reduce the entry of unsafe lighters into the country through increased control, inspection, and demand for conformity certification. This proactive and regulatory action resulted in the significant seizure of irregular lighters in Brazil, with 1,715,877 units seized in 2022 and 1,224,755 in 2023, and projections of 1,734,369 in 2024 and 1,501,668 in 2025. These data quantify the success of the legal intervention in protecting public safety and combating unfair competition from low-quality products.

The investments and relevant costs for repositioning were one-off and focused, demonstrating an efficient approach. The strategy did not require massive expansion of the internal structure, opting for flexibility. The investment pillars were: outsourcing for specific and non-core tasks, process automation to optimize repetitive tasks, and training of the existing team to enhance skills in project management, data analysis, and strategic communication. A practical example was the outsourcing of the construction of dynamic tables and dashboards for managing judicial processes and contracts, allowing the presentation of a complete plan to the board in just 15 days. This approach optimized the use of existing resources and accelerated implementation.

The impacts observed with the implementation of the repositioning were significant and measurable. In the labor sphere, a reduction of 12% in judicial liabilities was verified in one year, generating a positive impact of €150 thousand on the company’s results through the strategic renegotiation of cases with a higher probability of loss. Contract automation resulted in the reduction of the average contract signing time from three months to just three days, evidencing a 30-fold increase in business formalization agility. This acceleration had profound implications, allowing new partnerships to be established and sales to be closed with unprecedented speed, conferring a competitive advantage to the company.

Phase 1 evaluation, focused on optimizing the litigation portfolio, demonstrated a 42% reduction in volume and 22% in the value of lawsuits, either through prevention generated by the legal department’s strategic action or by identifying cases recommended for settlement. In Phase 2, there were no new entries of consumer lawsuits or regulatory issues arising from the launch of new products, indicating the effectiveness of the legal department’s preventive action. The settlement strategy in HR cases also generated a positive impact of €150,000 on the company’s results, reinforcing the perception of the legal department as a strategic partner in people management.

The managerial contribution of this repositioning is multifaceted. The legal department ceased to be a cost center and became an indispensable strategic partner, capable of supporting decision-making and strengthening organizational performance through integrated and results-oriented action. The change strengthened and sustained the company’s expansion plan, governance, and competitiveness, in addition to driving the implementation of strategic planning. The legal area began to occupy a prominent position as an axis of governance and innovation, anticipating risks and proposing innovative solutions that add value to the business. Tangible benefits achieved include a 22% reduction in the number of lawsuits, business formalization 30 times faster (96.7% efficiency), and a positive financial impact of €150,000 through the resolution of lawsuits by conciliation, in addition to higher dividend payouts to shareholders, increasing the company’s market value. Intangible benefits include the mitigation of regulatory risks, greater operational efficiency, the strengthening of governance, and the positioning of the legal department as a partner for innovation and growth, transforming it into a real business driver.

Bibliographic References:

TMF Group. 2024. “The 10 most complex jurisdictions for doing business in 2024”. Disponível em https://www.tmf-group.com/en/news-insights/articles/global-business-complexity/gbci-2024-most-complex-jurisdictions/. Acesso 09, agosto, 2025.

Executive summary from the Final Course Work of the Specialization in Executive Leadership and Management of the MBA USP/Esalq

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