Where’s the LegalTech in Mexico?

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As a young man studying law, I was far from a techie. I knew the term “operating system”, but wasn’t aware of its applications, other than using my PC for drafting contracts and the internet for reviewing sample templates.

Mexican State Universities, such as UNISON (Universidad de Sonora, in Hermosillo) where I earned my degree, don’t introduce students in business law or corporate law, but primarily prepare you to become a trial lawyer or public official.

Another reality in the legal market in México, is the larger focus on litigation and representation with government agencies, versus the low demand for preventive or corporate services between private parties; corporate practices are not seen as a strategic input for businesses, since more than 90% of companies in México are medium or small enterprises, and can’t afford fees of a senior or junior partner that would otherwise provide consulting on incorporation, contracts with employees, suppliers, customers, and agreements between partners.

Consumption of legal services for businesses in Mexico has more to do with taxation and regulations, setting aside for example, the design of legal instruments to contribute to business performance, since lawyers find trial law more profitable than focusing on preventive services that help formalize operations within a company.

80% of the due diligence services that we’ve offered, have not found any legal instrument or contracts between private parties, only government agency documents and permits, as well as taxation documents and regulation documents and information.

In Mexico, the legal services market is in the hands of law practitioner/partners and their legal staff, and when a costumer is in need of legal “advice”, a senior lawyer welcomes the client at the legal office and charges the correspondent fees, but rarely does the client have access to a legal firm with a specialized service, which will enable the consumer to purchase a contract or legal instrument under a standardized process that covers all his needs and also works at a reasonable price.

About 2 years ago, while reading Legal Visionaries by David Galbenski, I realized two principles that would enable me to differentiate my services in the legal industry, 1) The Better / Faster / Cheaper trend and 2) the perspective of People / Process / Technology. This is how I apply #LegalTech as a business, offering costumers quick and cost standardized services, differentiating from the competition by concentrating on those services that provide added value and competitive advantages on a technology platform.

The main difference between a law office and a law firm, is that the legal firm offers specific services through methodology and technology, where the consumer would pay only for the services received; whereas in a law office the client is received by a senior or junior partner, who is a generalist in a variety of legal issues, and the consumer pays for the experience and the reputation of the lawyer and the service received.

In México, LegalTech is a revolutionary concept for the legal services industry that is still but in its infancy. To achieve any measurable adoption of LegalTech, it must first penetrate the legal firms that dominate numerous consumer (People) facing legal services, that have standardized the processes and validated the market (Process), and finally have invested in a technology platform to provide a system to their costumers (Technology).

At Procápita®, we are in the early stages of standardizing services, and delivering more value to our customers. Although we use some tech tools such as online surveys to collect data, CRM, and software for time tracking, we realize that we are well on our way to making LegalTech a meaningful part of our business. Thanks in part to LegalTech, 50% of the services that we deliver can be managed by our non-legal staff– while maintaining our high standards for quality and customer satisfaction.

About Andrés Araujo

Andrés Araujo, Corporate and IP counsel, principal at Procápita Management S.C., Procápita®, Mexican law firm in Tijuana, provides legal and management services to medium, small enterprises and startups. In his free time, Andrés enjoys reading about intellectual property and business strategy, love baseball and coffee.