Based in Vilnius, Lithuania, Jurate Kuzborska-Girce is the Head of Legal for the Baltics at Phillip Morris. Prior to joining the international tobacco company in 2013, she worked as a lawyer with Bite Lietuva for over 5 years. Before that, Kuzborska-Girce worked as a Legal Adviser for Baltics for Avon Cosmetics.
Let’s start with a few words about your career leading up to your current role at Phillip Morris.
J.KG.: Immediately after my studies I started as a legal assistant in one of the largest household retail chains in Lithuania: Senukai. Ours was a relatively large legal department, consisting of six people. Everything was quite new to me but I was excited about everything that I was doing there: business meetings, reviewing contracts, advising colleagues, and more. I acquired basic knowledge in different legal areas, such as employment law, contracts, corporate governance, and others. To further grow professionally, I decided to join Avon Cosmetics as an in-house lawyer responsible for all three Baltic countries, and later for Finland as well. This role gave me the chance to broaden my knowledge of law and to enhance my skills as a lawyer. Avon was a great place to work and to grow professionally. However, after two and a half years in this company, I felt that I was not progressing much. My next position was in Bite Lietuva, one of the leaders in the telecommunications sector – a very new sector for me. I was responsible for employment, corporate governance, financing agreements, and the management of different M&A projects, which I enjoyed the most. Working in Bite was an extremely enjoyable and rewarding experience, not only providing me with ample opportunities to learn many new ideas, but also to try out these ideas in practice. These opportunities helped me to develop my legal expertise considerably. It took me five years to master all new areas and to reach the top of my potential as a legal professional. And then came the proposal from Philip Morris, which I found to be very challenging and intriguing professionally, so I took it. I heard lots of impressive things about this company before I joined and my decision to accept the offer was an easy one. I feel now that I am living my dream.
You are responsible for the Baltic states. While many tend to cluster the countries together, how similar do you find they are in practice when it comes to your role?
J.KG.: Although the people and cultures differ in many ways – for example you would find different “average consumers” in each country – most of the legal principles are quite similar. For example, similarities exist in how competition laws or contractual relationships are viewed. Furthermore, such areas as data protection, temporary agency workers, and others are regulated in accordance with EU directives. The differences exist at the “execution stage,” as I call it. For example: Do you need to report a certain activity or not? Do you need only to register the activity or to receive a license as well? And so on. But in general, in terms of what concerns the legal environment, I really think that there are more similarities than differences.
When you need to work with external counsel, do you tend to prefer firms that are present in all jurisdictions in the region or do you prefer to cherry-pick local teams?
J.KG.: Actually, I prefer to work with people and not the firms. In other words, when I choose a certain law firm, I choose it not because of its name or presence in all three markets but because of the people working there. And that a certain law firm has a pan-Baltic network is not the key factor for me to choose them. Expertise, professionalism, efficiency, and customer focus are the deciding factors.
At the time I joined Philip Morris Baltic, they were working with many different law firms. There were some changes in this cooperation and the firms which we retained are reliable and have been a pleasure to work with. Due to the need of very specific expertise, we have also worked with some so-called “boutique” law firms, which are present only locally.
You mentioned “customer focus” when it comes to law firms. What does that translate to in practice for you?
J.KG.: Firstly, it means that the law firm lawyers are interested in and keen to further their knowledge about the business they represent, the client’s products, and the competitive environment. Such knowledge brings great value to their legal advice. I really appreciate when the law firm updates and informs me about any case or even a current public dispute which could be of relevance to our business. I especially appreciate receiving such information from Latvia and Estonia, as I cannot always find out this myself. And finally, it also means that in an emergency, you can get things done overnight.
Looking at the Russian market these days, in what ways, if any, are current events affecting your business and your work as an in-house counsel?
N.B.: When we talk about the current situation and crisis – which has affected almost all spheres of our life – I always say that I am a very lucky person because people will never stop eating [laughs]. And, for our company, all these changes have not had a massive impact. But on a more global scale – not specifically about our company – you can see a big change in demand in the Russian market caused by the downturn in our economy. All the businesses have changed their expectations and reduced their costs. Some businesses are almost dead – for instance, travel agencies.
As you know, Russia is also restricted from importing products from European countries. This has increased the percentage imported from other lands. And sometimes it helped countries to add new goods not imported before. For example there are now countries which produce seafood without any fresh water within their borders [smiles].
The Baltic region has seen a number of reshuffling of law firm alliances. How, if at all, do such changes affect you as a potential client?
J.KG.: These changes affected us a bit as well. We had to change some law firms because we followed the people we were working with. But this only required some additional administrative resources without any impact on how we work with them. I see the reshuffling of law firm alliances as a healthy practice and a very natural move in this competitive market.
Can you elaborate on that? Why do you believe they are healthy?
J.KG.: I see great opportunities in any change. Change is a life-force enabling us to learn new things and develop further. As for the law firms, reshuffling can encourage them to look at the same legal issues from a different angle and to come up with new ideas and possibilities. It can also bring new possibilities in client relationship. Recently, the partner of one law firm which went through this reshuffling told me that they would be able to provide even more qualitative services to the client. The future will show if that materializes, but at least it looks auspicious.
According to a Philip Morris press release recently, “the scale of the illegal trade in cigarettes remains sizable in the European Union, with a total of 56.6 billion illegal cigarettes consumed in 2014, representing 10.4% of total consumption.” What does your team do to meet this challenge?
J.KG.: All the three Baltic States are among the highest illicit cigarette trade countries in the EU, and this is mainly due to their geographical location. In fact, the Baltics suffer not only from illegal cigarette trade, but also from illegal transit to other EU countries. Therefore, we should consider the impact of extreme regulation not only in Lithuania but across Europe that could inadvertently lead to an increase in the illicit trade, as the market for cheaper, branded, or fake cigarettes becomes more profitable for criminal gangs.
Therefore, this is a big issue and one of the focal points of our organization. As the Legal Department, we support our colleagues working on different projects to tackle the illicit trade issue. For example, several years in a row we have initiated anti-illicit campaigns to address the problem of illicit trade in cigarettes and the Legal Department contributed to this as well. We also help to identify the gaps in legislation which, when improved, could also contribute to the reduction of the illicit trade in the Baltic States.
Advertising requirements in the tobacco industry are particularly challenging to maneuver, and any slip stands to cost the company a great deal. What kind of systems have you set up internally to coordinate with your other business functions in order to mitigate these types of risks?
J.KG.: We believe in the value of reasonable regulation and support this idea in various ways. For example, we think that warning smokers and non-smokers about the serious adverse health effects of smoking is a fundamental objective of tobacco regulation and we support it. We do not, however, support excessive or unreasonable regulations.
When it comes to advertising itself, as in most of the EU countries, we do not have absolute freedom of advertising of our product and we have very limited possibilities to inform adult consumers about any changes we have made to the product (i.e., to provide factual information). Any such an attempt might be challenged by the authorities. Therefore, each item, article, job advert, or other material distributed internally or externally is reviewed by the legal department. While such a control often creates huge workload for our department, this nonetheless pays off, leading to a decrease in the risk of legal disputes with controlling institutions.
From a regulatory standpoint, what do you believe is the biggest challenge for you and your team in the Baltics?
J.KG.: Currently the biggest challenge for our industry is timely transposition of the new Tobacco Products Directive (“TPD”) into local laws. While a little progress has been made to transpose the TPD in Lithuania, the process of TPD transposition has been significantly delayed in Latvia and Estonia. Having in mind the necessary lead times and the deadline of May 20, 2016 for the transposition, our industry has already incurred some investment and running costs in order to start the preparation of the manufacturing process. Furthermore, the lack of clarity on several critical elements makes it difficult for us to ensure timely compliance with the new requirements of TPD.
Apart from the above, we have been faced with similar challenges as, I think, any other regulated industry would face, such as – for example – ambiguous regulations, and their uncertain interpretations by regulators.
In many CEE jurisdictions, General Counsel and Head of Legal commonly complain about the accelerated rate of regulatory changes making it difficult to stay apprised of all developments. Do you find that to be the case in your markets?
J.KG.: This is true in fiscal and social area regulations, as these are very political topics. You can expect changes in these areas with every new government or with any turbulence in the budget. There were some noticeable changes in labor law in Latvia; there are also current discussions on the new Labor code in Lithuania. However, apart from that, I would say that the situation is quite stable and manageable.
What tools do you tend to use to keep apprised of regulatory changes and which do you find to be the most effective? Do you tend to follow the official gazette, consult with external counsel regularly, work directly with regulators, etc?
J.KG.: In Lithuania, I try to follow the official gazette, as I think this is the most efficient tool to inform myself of any regulatory changes. However, due to the language barrier, I cannot do the same in Latvia and Estonia. In these countries, I rely on the law firms a lot. Some of them, on their own initiative, inform me of any significant developments in the laws or case law related to our industry. Regular updates from law firms on different legal matters are quite helpful as well. In any case, as concerns important and sensitive areas (e.g. labor law), I regularly update myself by asking the law firms if a certain provision is still valid or applicable in our context.
On the lighter side, if you were to start all over and pick a different profession, what would it be?
J.KG.: When I was a child, I dreamt of being an actor and winning an Oscar. This however remained only at the stage of a nice childhood dream. When I look back, I think that my choice to become a lawyer was wise, and, if I had to choose again, I would undoubtedly choose to be a lawyer again. I like my job enormously and appreciate being able to contribute to the company by providing my extensive knowledge and experience in business problem solving, the interpretation of sometimes complex legal matters, and the explanation of them into an everyday language, or as I say, “the human language.”
This Article was originally published in Issue 2.3. of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.