Technology in the legal sector has had a great impact in recent years, since it has rethought business models, forms of delivery and, above all, the relationship with clients, so that the profile of the current lawyer and his or her training needs to face the day to day must go hand in hand with technology. LegalTech is understood as technology that serves to better manage business models that offer legal services.
The industrialization of the legal profession is based on the generation of automatic processes, on the use of data to generate patterns and finally on the ability to be predictive. These new models are born from the innovation brought hand in hand with technology in what has been called LegalTech, which is a more profound change than digital transformation because it impacts the model and nature of providing legal services. LegalTech is a key element in the competitiveness of any model because it is directly linked to efficiency and the provision of a better service to clients.
In this industrialized legal profession, we are seeing the emergence of models that give away legal documents or offer them at a low price, that file claims in an automated way, that assist from cell phones or that advise on whether or not you should sign a confidentiality clause in seconds. Surprising? Well, we are only at the beginning of this revolution that will be marked by virtual assistants and the empowerment of buyers of legal services. Now more than ever, the client is king. And this is the focus for survival: putting the client at the center, understanding them and improving their accessibility to legal services.
We are fully entering the era of recommendation and if international legal directories such as Chambers or Legal 500 are a benchmark in this regard, we are already seeing models of lawyer recommendation based on the analysis of judgments, i.e., on statistical data of results. Searching for a lawyer is becoming easier and easier through digital search platforms, which at the same time offer two or more quotes quickly and easily. The legal sector is in full effervescence.
Technology is impacting the sector in five areas, knowledge management, processes, service delivery, communication with clients and of course, new areas of law generating a self-consumption of models that can be standardized, an empowerment of the buyer, new forms of communication based on the digital environment, predictive capacity and lower costs.
However, the traditional legal profession will continue to have its market based on sector specialization, optimization and efficiency with the use of LegalTech in the aforementioned areas, but it will be reserved for complex and unique problems. Industrialized law is creating new users of legal services which implies a greater legal culture in society, a greater wealth and variety of models and an evolution.
Lic. Génesis Moyeda Salazar.
Gloria Ponce de León & Hernández
Money laundering is a serious problem, not only in Mexico but throughout the world. According to data from the United Nations, “money laundering reaches up to 2.7 percent of the world’s gross domestic product each year.” The weaker the State, the greater the percentage of GDP that is laundered.
Money laundering is the process through which the origin of funds generated through the exercise of some illegal activities is concealed (the most common being drug or narcotics trafficking, arms smuggling, corruption, fraud, human trafficking, prostitution, extortion, piracy, tax evasion and terrorism). The objective of the operation, which is generally carried out at various levels, is to make the funds or assets obtained through illicit activities appear as the result of legitimate activities and circulate smoothly in the financial system.
Due to the aforementioned, in the month of August, the call for the certification in prevention with resources of illicit origin was published in the Official Gazette of the Federation (DOF), aimed at individuals who carry out one of the 16 vulnerable activities , as well as those responsible for compliance of these organizations.
With the aim of contributing to the prevention of crimes with resources of illicit origin, as well as strengthening compliance with the regime of crimes related to money laundering, and compliance with the recommendations of the Financial Action Task Force (FATF) of according to what the FIU mentions.
To guide this process, the general rules of the general law for the Prevention and Identification of Operations with Resources of Illicit Origin had to be modified so that in this way the nearly 100,000 obliged subjects dedicated to one of the 16 vulnerable activities, also have to comply with the law.
Gloria Ponce de León & Hernández
The year 2019 was not characterized by important transactions of Functions and Acquisitions (M&A). This was influenced by the uncertainty within the country and beyond our borders. However, the value of transactions increased 40% to US$15,386 million, compared to 2018, a year that had a relevant drop due to the change of government. This sober recovery is still far from the results of 2015, when the total value of transactions reached $25,252 million, according to Bloomberg data.
One of the key factors affecting the state of investors is undoubtedly the U.S.-Canada trade agreement (T.MEC). Although the amending protocol was signed last December, it has yet to be approved by the Canadian Senate. There are up to 25 billion dollars waiting at the border for this ratification.
Another important aspect is the economic slowdown expected in the United States this year or in 2021. Its macroeconomic data looks good, but the market perception is that it could cool down. Now, what happens in political matters, specifically in the presidential elections, will keep the markets on edge, as well as the trade war with China. We should not underestimate the importance of what is happening in the rest of the region: Chile, one of the countries that seemed to be more stable, is now a question mark.
As for Mexico, sectors such as energy, which in 2019 had 26 transactions with a value of 4,871 million dollars, have seen investments slow down, especially in renewable energies, after regulatory changes. In others, such as pharmaceuticals, suppliers have suffered convulsive initial bidding processes. There is also a latent fear of the opening of this industry to the Chinese and Indian markets, which could have repercussions in terms of quality.
It is a fact that the Mexican and Brazilian markets are very attractive to domestic and foreign players, and it is clear that investors are looking to consolidate their participation with smaller companies or by acquiring brands from foreign players. Another aspect that plays in favor of the domestic market is the demographic base that we have very clear from now until the year 2050. In this context, the retail and consumer industry had 17 transactions with a value of US$672 million.
The financial sector is another that continues to seek profitability and will continue to focus on its core business. This industry registered 19 transactions with a value of US$3.68 billion.
Traditionally, the United States has played a predominant role in M&A transactions due to its maturity as an investor. But there are also some European countries, such as Germany, Spain and France, which are gaining some relevance. For larger Mexican investors, the U.S. market is always attractive, as are Asian markets. On the other hand, smaller companies tend to see growth opportunities in Latin American countries.
Because of Mexico’s exposure to external factors, coupled with a domestic economy that we do not yet know how it will develop. However, the foundations must be laid to continue to grow and generate investment opportunities. A much more open competition market must be created, with clear rules, in order to be more transparent and reduce corruption levels. But, above all, education levels must be increased. If this transformation is achieved, the key to success will have been found.
Génesis Moyeda Salazar.
Gloria Ponce de León & Hernández