LACCA's research into "Who Represents Latin America's biggest companies" reveals that an increasing number of law firms in Latin America are embracing technology to meet new client demands and thrive in today’s increasingly competitive marketplace.
Law firms in Latin America have largely operated in the same way for generations, but the old model is being challenged and increasingly sophisticated in-house teams in a fast-moving digital age are becoming more selective and demanding of their legal service providers. In turn, these new demands are forcing many local firms in the region to re-evaluate their traditional service models and provide enhanced efficiency, cost-effectiveness and improved connectivity.
“More sophisticated in-house teams bring new challenges to the table and force us to keep our quality and capabilities at the highest levels,” says Roberto Guerrero, partner at Guerrero Olivos in Chile. “Keeping up with new trends and strategic thinking is now part of our work. Greater sophistication is not a threat; most of the times it makes our lives easier, because there are faster results.”
By investing in the right technology, law firms can not only provide more efficient and innovative services to their clients, they can also simultaneously use technology to streamline processes and reduce the costs associated with running a firm, increasing their competitiveness in today’s challenging business environment.
A digital transformation
To keep up with the pace of change, many local firms in Latin America have been focusing on applying technologies that help them streamline processes and increase automation. Brazilian firm Demarest Advogados have embraced technology and implemented a cutting-edge resource management tool developed by German software multinational SAP that integrates various functions of the firm. For example, clients are automatically and regularly provided with updates regarding the status of their cases, which previously had been done manually by lawyers at the firm. In addition, the firm also has a tool that checks over documents and cross-references legal definitions. José Diaz, partner at Demarest, says this has had a positive impact on the firm’s bottom line and service offering by helping to identify several efficiency savings. “We are obsessed with improving and have increased automation in a lot of our internal procedures,” he says. “Human intervention is now one tenth of what it was in many aspects.”
While tools that help streamline processes, increase automation and manage tasks are common within multinational companies that must efficiently manage far-flung operations or supply chains across multiple jurisdictions, until recently they have been far less common among law firms. Indeed, a vast majority of local firms LACCA spoke to indicated that they had been focusing on increasing automation within their practices and have been looking at new technologies to help them. “One of our main strategies has been greater automisation,” says Andrés Godoy, managing partner of Godoy Cordoba Abogados, member of Littler Global in Colombia. “We have put together a team called CREA to lead innovation so that we can provide more efficiency and better costs, but also to be more creative in providing services that add value from many perspectives including IT and data.”
Many other firms have dedicated resources focused on developing strategies for innovation. Chilean firm Guerrero Olivos have established a team for technology matters, which also handles all data privacy issues. “We are always innovating to improve our service to clients,” says leading partner Roberto Guerrero. “We use knowledge management technology and first-class data security measures to integrate client needs with legal practices such as transfer pricing, valuation services, compliance and corporate governance advice.”
Enterprise Resource Planning (ERP) software is also increasingly popular among the region’s firms. ERP systems typically handle all back-office matters including accounting, billing, collections, marketing, strategic management and everything else essential to a business. “We’ve implemented a new ERP platform and we’ve just had a strategic partners meeting with a specialised consultant because one of our short-term goals is to go 100% digital in all areas including client services,” says Diego Pérez Ordoñez, partner at Ecuadorean firm Pérez Bustamante & Ponce. “It’s a tall order but clients are doing more and more due diligence to see how sophisticated our firm is in terms of innovation, technology, data protection and cybersecurity.”
An AI revolution
Given the rapid development of AI technology and the benefits it can provide in terms of speeding up repetitive or time-consuming tasks, many firms are turning to AI as part of their strategies to innovate. AI tools can help determine which provisions need to be included in a standard contract or can even notify lawyers with alerts in advance of critical dates in a contract—like renewals and options, to help manage agreements more effectively.
Some firms are using AI to help identify risks and problems with how contracts may be revised to avoid negative impacts for clients, to help predict the outcome of disputes or increasingly to speed up due-diligence processes. “We have software in place for DD and in-house software to better coordinate our team and increase efficiency within the firm and I expect we will continue to invest heavily in this type of technology in the coming year,” says David Gutierrez of Central American firm BLP. Godoy Cordoba have also implemented a tool to help companies audit their contractors and third parties worldwide. “The pace of change has been faster and faster and we believe technologies such as these are key to providing a more valuable service,” managing partner Godoy explains.
Ferrere are also looking to implement innovative AI technology to respond to client demands for greater efficiency by investing in AI. “We are trying to be more efficient and provide a more cost-effective service, and in doing so we are exploring technology including AI systems to apply this to some of our procedures, including due diligence and discovery in arbitration,” says partner Veronica Raffó.
In addition to speeding up processes, AI can also help eliminate manual inaccuracies and allows lawyers to focus on more strategic and value added tasks so they can foster a better relationship with their clients, according to Nicolás Piaggio at Uruguayan firm Guyer & Regules. “AI looks like it will become a massive time-saver for firms. It can handle dull, repetitive tasks and this means lawyers have to spend less of their time trawling through endless files,” he says. Instead, computer programmes can read documents, interpret them, and identify relevant results – all in a matter of minutes. “While this does replace some of a lawyer's work, it also makes legal work more interesting. With computers doing the donkey work, lawyers have more time to do the strategic analysis,” he says.
A new era
While the benefits of investing in new technology are clear, it seems a new era has dawned for law firms, one in which delivery models are changing and innovation is closely tied with success. “In-house capabilities are indeed increasing sophistication. We believe technology will have the greatest impact in the law firms’ professional and economic models as repetitive work is subject to automation. Thus, firms will no longer be able to charge for repetitive and low-value added work, but professionals will concentrate in more value-added, strategic work,” says Manuel Galicia of Galicia Abogados in Mexico.
It is becoming evident that advanced technologies have already transformed the practice of law, but whether or not that transformation will continue to bring significant opportunities and challenges will depend on how fast lawyers and their firms embrace innovation. “We understand our clients are continuously adopting new technologies to increase their own efficiency, so we need to keep up and are closely monitoring and testing everything that is available to be sure that we are culturally and technically ready for the next wave. We are aware that every industry has its own Uber and our next competitors may not be the usual suspects,” says Piaggio.
Indeed, many in the legal community are aware that meeting the needs of 21st Century clients is now a matter of survival for firms. GCs want quicker, cheaper and better results and they want them as cost efficiently as possible, and having the right technology in place can not only be a key differentiator in today’s market, it could potentially be the key to survival. “You cannot wait to react, you have to anticipate trends,” says Demrest’s Diaz. “If you are not paying attention then you may not survive.”