Legal news and trends for Canadian in-house counsel and c-suite executives
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PROFESSIONAL PROFILE That situation is unlikely to change any time soon given the current economic conditions. "Retail companies are being very hard hit," says Garcia. "We're evalu- ating our general and administrative spending in every area. Employees are be- ing cut." The reason for concern was evident in Office Depot's third-quarter results. The company reported a net loss of $7 million compared to earnings of $117 million in the same period last year. Total sales decreased seven per cent to $3.7 billion while operating expenses rose 2.5 per cent to 27.7 per cent of sales. Particularly hard hit was the North American retail division. Sales were $1.6 billion, down 11 per cent com- pared to the same period last year. Comparable store sales in the 1,203 stores in the U.S. and Canada open for more than one year decreased 14 per cent for the third quarter. There is no good news on the horizon. Indeed, the economic situation is expected to get worse before it gets better. Forbes. com reported retail sales were sluggish in October. Citing the ICSC-Goldman Sachs index, the business magazine noted that U.S. retailers had their weak- est October sales since 1969, with 60 per cent missing sales expectations. Stan- dard & Poor's has also said the retail market for office supply stories may be approaching the saturation level. Still, on many fronts, it is business as usual, notes Garcia. The graduate of St. John's University School of Law in New York is in the process of hiring a real es- tate lawyer, for example. "There is a business case for lawyers," she says. That case was made by Garcia's vice president domestic who demon- strated the value of hiring a lawyer over using outside counsel. Such business savvy is one of the skills in-house coun- sel need, especially if they are operating in the global marketplace. Those skills are not taught in law school, says Garcia, who has served as president of the Michigan Chapter of the Association of Corporate Counsel. "I grew up in a Wall Street firm, then I went in-house," she says. "That's when you learn business skills. That's what prepares you to look at more than legal issues." On this day, for example, Garcia is in- volved in meetings with the senior man- agement team about cross-channel pric- ing. "We were talking as a team how we can have better synergies. I was an active part of that discussion. [This goes] well beyond legal issues. The focus is on what customers want." and policy sciences from W. Averell Harriman College, State University of New York at Stony Brook. On a much more regular basis, Garcia meets with her U.S. team in Boca Raton. Attending the weekly staff meetings is the vice president international who "cas- cades our strategies" out to the company's operations and in-house counsel around the globe. Also helping in-house counsel outside U.S. borders are guidelines Office Depot has developed specifically for in- ternational counsel. International operations are certainly what prepares you to look at more than legal issues." — ELISA D. GARCIA C., OFFICE DEPOT INC. Issues such as cross-channel pricing are at the heart of retail operations and, therefore, at the heart of what concerns and engages Garcia as general counsel. While the emphasis is on business, a law degree helps with her senior man- agement role, she says. Cross-channel pricing refers to the different prices companies may have often for the same products, e.g., in a catalogue, in-store, and on the web. The challenge is hav- ing similar — if not the same — prices, but that can be difficult as overhead and shipping, for example, affect profit mar- gins. "A law degree teaches you how to think critically." There are a lot of critical thinkers on Garcia's in-house team, which came to- gether recently for its annual global busi- ness forum. "We look at 2008, our accomplish- ments and where we feel we could do better, [and] we roll out the 2009 strat- egy," says Garcia, who has a joint BA/MS in political science and management 28 DECEMBER 2008 C ANADIAN Lawyer INHOUSE then I went in-house. That's when you learn business skills. That's "I grew up in a Wall Street firm, a core part of Office Depot's business — and its bottom line. In 2000, the com- pany began contract- ing with another com- pany to distribute their products in the U.K. and subsequently ex- panded that operation to four other countries. In 2006, the company acquired a controlling interest in Best Office in South Korea and a majority stake in Asi- aEC, one of the largest suppliers of of- fice products and services in China. That same year it increased ownership interest to a majority stake in Office De- pot Israel and acquired Papirius s.r.o., one of the largest business-to-business suppliers of office products and services in Eastern Europe. At the end of 2007, the international division operated, through wholly-owned or majority-owned entities, 148 retail stores in France, Japan, Hungary, Israel, and South Korea. In addition, it partici- pates under licensing and merchandise arrangements in 92 stores in South Korea and Thailand. Such diversity presents great opportu- nities, and challenges. "One of the biggest challenges is communicating about eth- ics and compliance," says Garcia. "There are different rules and regulations [in each country]. There are different forms of business." Dealing with those issues in countries around the world is all in a day's work for Elisa D. Garcia C. IH