Shifts in supply chains • Focus: Opportunities in COVID-19
As companies across the world make significant changes to the way they source, produce, and distribute goods, Mexico is turning out be an obvious choice in the Americas.
How will the new labor reform law impact Mexican companies?
The new reforms are actually taking the country backwards. Previously, we did not see as many human rights negotiations in areas such as gender equality and discrimination. Prior to the reforms in May 2019, you could not file a claim or a suit for sexual harassment at a work place but now you can, and that is the only advantage of the new reform. In 2012, there were other reforms that made the working system between employees and employers fairer. The new reforms are similar to the labor laws that were introduced in 1931. Such laws allow social rights organizations to put all the blame on the employer. In the past, employers had the ability to persuade employees to buy clothing and food from their own stores, for example. Nowadays, with all the technology, communications, and new systems we have, it is not necessary to make employers prove everything. There is also a new accessory law that claims that all unions have to activate or legitimize themselves. Employees have to vote for the union they want. After that, they have to ratify any deals by voting one by one. Thus, after a collective negotiation or deal is made, employees can veto it.
How would you compare the performance of the law firm in 2019 to 2018?
Our performance in 2019 was quite similar to 2018, but it was impacted by a general slowdown of the Mexican economy. We received many new clients and retained all our old clients, but the economy stayed flat. As a result, clients started to delay payments. We have a presence in all sectors, from mining to transportation, industry, and pharmaceuticals. We are also in technology and services. In 2019, we saw many collective agreements and strikes, as well as individual litigations.
One advantage is our specialization. We do not hire lawyers from other law firms. We only hire new lawyers and train them in line with our values, goals, and vision. Compared to the rest of the industry, we are one of the law firms with the lowest employee turnover at just 18%. Our other added value is our technology. All of our clients’ trials are on the cloud, which is a service that no other law firm in Mexico offers. No other labor law firm has the technology we have. Clients do not need to call use every month to learn what is happening with their case; they can access that information anytime with the click of a button, meaning our clients can access their trials on the cloud. We are developing an app that will allow them to scan a QR code for immediate access. We also have a new agreement with a company to develop an AI system that will specialize exclusively in Mexican labor law. We see AI as the future.
What do you think of the conditions of the USMCA?
The conditions are clearly aggressive toward Mexico. By forcing some companies to move back to the US, more jobs will be created in the US as opposed to Mexico. This would hurt the industry in Mexico. We have to be positive, competitive, and continue working hard to make sure we keep growing and remain fearless in the face of the US government’s policies. US politicians want to take manufacturing back to the US, especially the manufacturing of cars and auto parts, as well as steel and metallurgy. We can help these companies by negotiating with chambers of commerce so that the new reforms that would hurt these companies do not pass. If you are a new company and you want to be an entrepreneur in Mexico, you need to pay nearly 70% in taxes. If there are no new companies, the competition will die out. It is hurting the sector. ✖
Company has lowest employee turnover rate at just
“We have to be positive, competitive, and continue working hard to make sure we keep growing and remain fearless in the face of the US government’s policies.”