The advent of generative AI technology is prompting law firms and in-house legal departments to rethink how to deliver legal services – and Latin America is no exception. Given the hype around AI, it was no surprise that the final day of the IBA’s Latin America regional forum in Lima devoted two panel sessions to AI and legaltech, looking at it from both a law firm and general counsel perspective.

The discussions highlighted that the AI experience in Latin America is mirroring what is happening elsewhere in the world – there is a lot of exploration and experimentation, but there is still a long way to go until generative AI becomes widely adopted by lawyers in the region.

“We are still at the early stage of adoption of AI technology in Latin America, and so because of that, it is really difficult to have objective data that allows us to measure the impact of this technology,” said Jose Antonio Delmar, a partner at Dentons in Lima. “There’s a lot of buzz around what’s going on with AI, and there’s a lot of firms and individuals that say there is intensive adoption, but from what I see and from what we research, this is not exactly the case.”

For most firms, this adoption so far is mainly in the context of pilot projects, or in some cases still at the proof of concept stage, rather than at a point where generative AI tools are being rolled out firm-wide.

“People are still testing the products, and this is not really a surprise – lawyers have never been early adopters of technology,” Delmar said. “Part of this is because the technology is moving so fast, why invest in something now and in six months, it becomes too expensive to execute. So all of this makes the decision process of deploying AI solutions a little bit harder.”

Firms in the region also face other challenges when adopting generative AI. For example, there are questions about the impact on talent and concerns among lawyers that they will be pushed out of their jobs. However, those concerns are likely overdone given that human judgement will still be critical, suggests Joanna Si, an associate at McKinsey. Instead, this is more about how firms can use the technology effectively to augment and improve how they deliver services to clients, she said.

“Those who start to embrace this around how do I change and improve what it is I’m doing, versus how does generative AI replace what it is that I’m doing,” are the ones that are going to get the most out of AI, said Si.

There is also a question around training and the need to upskill lawyers to use generative AI tools, said Si, though this will gradually fade as demographics change.

“For everyone who’s coming up in the pipeline and who’s growing up with generative AI, that need for coaching will eventually go away,” she said. “I have seen law firms start to build it as part of their summer associate training. At McKinsey we do coaching classes for all of our associates, so all of that is happening right now, but I do think the need for that goes away over time.”

Other challenges firms are grappling with include the ethical issues that using AI can raise. Steven Richman, a member at Clark Hill and chair of the IBA Bar Issues Commission, says there are seven main ethical issues related to AI use. Those are competence when working with the technology; confidentiality, client secrecy and ensuring client information isn’t inadvertently shared with an AI platform; client disclosure around AI use; a lawyer’s duty of candour that what they present in court is true and free from AI ‘hallucinations’; supervision around AI use; client fees and ensuring a fair price when work has been completed with AI; and issues around bias and non-discrimination.

While the pace of adoption at law firms remains slow in Latin America, Richman says one of the practical applications his firm has been using it for in the US is summarising transcripts in arbitration cases.

“It’s not a substitute for pouring through the document itself, but it does help focus you a bit,” he said.

In-house teams in Latin America are also starting to embrace AI, for example to help automate time-consuming manual tasks, something that the Peruvian unit of Spanish bank BBVA is seeking to accomplish.

“We have a lot of processes inside the bank, and there are a lot of them that are basically processes from the last century,” said Anabeli Gonzalez, general counsel at BBVA in Lima.

To help modernise those processes, Gonzalez is fostering a culture of innovation to encourage her legal team to come up with solutions to the problems they need to solve.

“If people don’t think that the innovation is going to be good for them, then they are not going to try because they are going to think it’s just for show,” Gonzalez said.

In-house teams are also using AI to automate and streamline contract review work.

“In Globant, 30% of our business intake from the legal business department is related to NDAs,” said Karen Kamelman, global managing director for the Legal AI Studio at Globant.

While most clauses could be accepted, some would be dealbreakers and need negotiating. By training an AI agent to identify which ones would need following up on, Globant was able to cut NDA review time by 30%, Kamelman added.

Similarly, online Latin America marketplace Mercado Libre is also using AI as part of its anti-money laundering operations in its fintech business.

“We have to monitor operations of almost 100 million users, and those operations that happen in our platform sometimes generate alerts of suspected money laundering activities,” said Gabriela Colombo, chief risk officer at Mercado Libre. “So we are using artificial intelligence and machine learning to disregard false alerts.”

While firms are still trying to figure out how to get the most out of AI tech, Kamelman says there is a potential business opportunity for firms to change the way they deliver legal services through agentic AI tools.

“If you are not thinking of developing your own AI agents… you might want to think if you’re leaving money on the table,” she said.

The Global Legal Post has been reporting from The Road to 2030 in Latin America conference. Click here for further coverage.

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