Key findings:

• • • • Strategic blind spots remain — Despite widespread awareness, many tax firms have yet to fully assess the operational or financial impact of the reform, highlighting the need for more proactive planning as changes approach.

      • Technology investment leads the way — Firms are prioritizing technology and now are beginning to complement these efforts with increased attention to staff training and client support, aiming for a more balanced and complete transition.

      • Client guidance is gaining momentum — While clients will be among the most affected, professionals are recognizing the urgency of providing clearer communication and tailored support to help clients navigate the reform more confidently.

Brazil’s tax, audit & accounting sector is on the verge of a historic transformation. The country’s new tax reform, approved by the National Congress, will gradually unify several existing taxes into a dual value-added tax (VAT) system. The reform aims to simplify compliance, promote transparency, and help citizens better understand how public resources are allocated.

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Brazil Tax Reform for Tax Firm Professionals 2025

So how prepared are Brazil’s tax & accounting professionals for this upcoming shift? A new report from the ³ÉÈËVRÊÓƵ Institute reveals a gap between awareness and action. While most professionals understand the reform and its implications, only a minority have moved into active preparation. Only a small group of firms have established internal teams or concrete plans; however, many others are now beginning to shift from passive monitoring to more decisive steps.

Definitions: Incipient: I am aware of the Tax Reform, but I am not keeping up with the changes. Beginner: I am following updates through the press and reports to evaluate information that fits the firm’s and customers’ profile. Preparatory: I have an internal working group and/or a developing plan. Advanced: I have allocated resources and a transition project in progress. Leader: I have the structure prepared for the transition and I am working with my team and external providers to anticipate our adaptation.

The reform is expected to impact core areas of tax, audit & accounting work — including tax calculation, pricing strategies, and advisory services. Professionals widely acknowledge these areas will be disrupted and are starting to take steps to assess and prepare for the changes. Technology investment is accelerating, with many firms upgrading systems and digital infrastructure to meet new requirements. At the same time, there is growing recognition that staff training and client education must advance in parallel to ensure a successful transition.

Many professionals have expressed a need for more resources and structured plans to help them guide clients through the reform, especially as they face changes in tax burdens, pricing structures, and compliance requirements. Encouragingly, firms are beginning to respond — developing communication strategies and training programs to better support both their teams and their clients.

You can download a full copy of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Tax Firm Professionals 2025” in Portuguese here

One major area still evolving is the financial planning around the reform. Despite the potential for significant operational changes, most organizations have yet to estimate the cost of adaptation. As new requirements take effect, understanding and preparing for these costs will be essential to avoiding unexpected disruptions.

Opinions on the reform’s complexity remain divided. Some professionals expect simplification, while others anticipate greater difficulty in tax and accounting practices. This uncertainty only reinforces the importance of ongoing monitoring and the development of flexible strategies.

While technology remains a central focus, the sector is now beginning to align its efforts — recognizing that human capabilities and client engagement are equally essential. The transition is no longer just about systems and infrastructure, but also about empowering their professionals and building trust. Firms are taking steps to ensure that their teams are prepared and their clients are supported, thereby laying the groundwork for a more complete and resilient transformation.

You can download

a full copy of the English-language version of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Tax Firm Professionals 2025” by filling out the form below:

Key findings:

• • • Law firms are preparing, but many lack a full strategy — While most legal professionals in Brazil have engaged in technical reading, nearly half of firms still have no formal plan for the 2026 tax reform changes.

    • Technology readiness is high, but talent gaps persist — Brazilian law firms are investing in digital tools, yet more than half of legal professionals admit their colleagues are not prepared to manage the regulatory changes due to insufficient training.

    • Client risks are rising, but awareness is uneven — Increased tax burdens and legislative complexity are major concerns for clients and their legal counsel, yet many clients remain underprepared.

Brazil is entering a new chapter in its fiscal history. With a sweeping tax reform regime set to begin in 2026, the country is preparing to simplify its complex tax system by introducing a dual value-added tax (VAT) model. This reform replaces multiple existing taxes with a more streamlined structure, aiming to improve transparency, reduce bureaucracy, and create a more predictable environment for businesses and citizens alike.

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Brazil Tax Reform for Law Firm Professionals 2025

For law firms, this reform represents both a challenge and an opportunity. Many legal professionals and their firms are being called upon to act as guides, helping clients navigate a new and unfamiliar legal landscape. Many professionals have already begun preparing by studying the new legislation and participating in training sessions. However, their early efforts alone won’t be enough.

However, the real test will come in how firms translate their professionals’ knowledge into action by building internal capabilities, advising clients effectively, and adapting firm strategies to meet the demands of a changing system.

The pressure is already being felt. Legal professionals are seeing shifts in their daily work, with more questions, more complexity, and more demand for guidance from their clients. As Brazil’s tax reform progresses, this demand is expected to grow, placing even greater importance on preparation and foresight. Law firms that wait too long to act may find themselves overwhelmed, while those that invest early in the right tools and talent will be in a better position to lead.

Not surprisingly, technology is playing a key role in this transition. Legal professionals are turning to digital platforms that help simulate tax scenarios, interpret new rules, and provide real-time insights. These tools are becoming essential for firms that want to stay ahead of the curve. 

You can download a full copy of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Law Firm Professionals 2025” in Portuguese here

However, technology alone isn’t enough. The human element — skilled professionals who understand both the law and the needs of their clients — remains a critical piece of this solution. Without the right talent in place, even the most advanced systems can fall short.

Clients, too, are facing uncertainty. The new tax structure introduces unfamiliar rules and potential risks, from increased tax burdens to challenges in interpreting the law. Many already are looking to their legal advisors for clarity and direction. This makes it even more important for law firms and their professionals to be proactive — not just reacting to questions, but anticipating needs, educating clients, and offering strategic guidance.

The road ahead will not be easy. The reform is complex, and its full impact will unfold over several years; but it also offers a rare opportunity to modernize Brazil’s tax system and strengthen the legal infrastructure that supports it.

Those law firms that embrace this moment — by investing in talent, adopting smart technologies, and engaging clients with intention — will not only survive the transition but emerge stronger on the other side.

You can download

a full copy of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Law Firm Professionals 2025” by filling out the form below:

Key takeaways:

• • • Technology leads the way — Companies are prioritizing system upgrades and digital tax management tools to meet new compliance demands under the 2025 reform.

    • Strategic planning is key — Early adopters are integrating reform into their business strategies, while others risk disruption by delaying action.

    • Talent development follows infrastructure — Workforce training is expected to grow as organizations solidify their systems and prepare for long-term success.

Corporate tax departments in Brazil are responding to the country’s sweeping tax reform in myriad ways, upgrading their abilities in both talent and infrastructure, according to a new report from the ³ÉÈËVRÊÓƵ Institute. This reform, approved by Brazil’s National Congress in late-2023, marks a significant departure from the country’s historically fragmented tax system and aims to simplify compliance and improve efficiency across federal, state, and local levels.

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Brazil Tax Reform for Corporate Professionals 2025

At the heart of the reform is the introduction of a dual Value-Added Tax (VAT) structure — comprising the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS) — alongside a new excise tax (IS) targeting products with health or environmental implications. These changes are expected to reshape how companies manage tax obligations, credits, and incentives, particularly as the reform phases in between 2026 and 2032.

This new report draws on survey responses from professionals in corporate tax departments across Brazil, offering a snapshot of how organizations are preparing for the transition. While some companies remain in early planning stages, others have already begun adapting their systems and strategies. The report’s findings suggest a growing awareness of the reform’s potential impact and a shift from passive observation to active preparation.

Corporate response in motion

One of the most consistent themes across the report is the prioritization of technology. As Brazilian companies prepare for new tax structures and digital compliance requirements, many are investing in system upgrades and modern tax management solutions. These efforts include refining enterprise resource planning (ERP) systems and their ensuring infrastructure can accommodate new electronic tax documentation formats. The report shows that technology is not just a support function — it’s emerging as the backbone of reform readiness.

Also, the report highlights a clear divide between organizations that are proactively preparing and those that are still waiting for greater regulatory clarity. Early movers are integrating reform considerations into their strategic planning and positioning themselves to turn regulatory change into competitive advantage. Meanwhile, companies that delay action may face higher costs, operational disruption, and even legal risks as deadlines approach.

You can access a full copy of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Corporate Professionals 2025” in Portuguese here

While talent development is acknowledged as important, it currently trails behind technology and strategy in most organizations’ reform plans. Companies appear to be focusing first on system upgrades and compliance frameworks, suggesting workforce training is expected to follow once foundational changes are in place. However, there is growing recognition that skilled personnel will be essential for sustaining success under the new tax regime. The report suggests that nurturing in-house talent — rather than relying solely on external hires — will be key to the long-term resilience of corporate tax functions and their organizations.

Preparing for transition

Brazil’s sweeping tax reform is reshaping the priorities and operations of the country’s companies and their corporate tax departments. As organizations prepare for the transition, tax professionals across the industry are focusing on strategies that combine regulatory awareness, technological modernization, and strategic investment.

As departments seek to upgrade their tax systems, refine financial planning, and gradually expand their talent development initiatives, they are positioning themselves to navigate the reform with confidence. By aligning internal capabilities with external expertise and embracing automation, our research shows that many corporate tax teams are taking a structured, forward-looking approach that will be essential to ensure compliance, minimize disruption, and unlock long-term efficiencies in Brazil’s evolving tax landscape.

You can download

a full copy of the English-language version of the ³ÉÈËVRÊÓƵ Institute’s “Brazil Tax Reform for Corporate Professionals 2025” by filling out the form below:

Consequently, individuals and businesses may seek ways and their own AI-driven tools to help them minimize risk and fulfill their compliance obligations. Additionally, the substantial changes to tax rules because of the nation’s planned Tax Reform have generated a large amount of rapidly evolving information, making it difficult for people to stay informed about all the new developments and understand the impact on their businesses.

Numerous studies have demonstrated that technology is a cornerstone for growth, development and progress, contributing importantly to enhancing productivity and fostering innovation within different sectors of the economy. Particular to the tax industry, evidence from studies has shown that for various tax administration tasks delivers positive results in compliance, efficiency, and revenue.

Professionals in corporate tax departments will likely bet on technologies to help them transition to the new model, becoming more efficient with their time, while minimizing risks and reducing human errors.

Nonetheless, other studies have aimed to analyze within the tax industry that, in some cases, prevent the realization of technology’s full potential. The barriers include insufficient technological infrastructure and connectivity, reluctance or resistance from taxpayers and tax collectors, inadequate institutional integration, and an unsupportive regulatory environment.

The origin of some of these challenges lies within the government sphere, so tech users in the tax industry may not have the ability to address all of these concerns on their own. However, one challenge they can tackle is the lack of adoption or resistance. Specifically, in the context of the Tax Reform’s many upcoming changes, tax professionals, tax & accounting firms, and in-house corporate tax departments in Brazil may want to adopt a proactive approach towards technology to help the professionals there work better and faster.

The Brazil Tax Reform and the tech outlook

A recent report from the ³ÉÈËVRÊÓƵ Institute provides insights about corporate tax professionals’ awareness and preparedness for the Tax Reform in Brazil. According to survey findings from the Brazil Tax Reform: Insights, challenges and opportunities for corporate tax professionals report, the most cited concerns among professionals in corporate tax departments about the Reform plans are the overload of work and increased costs to learn and adapt their current tax management systems to the new rules during the transition period from the old tax model to the new one.

While technology and AI may not help professionals solve these negative impacts completely, they can help facilitate the transition substantially. In fact, the report also finds that, given the Tax Reform plans, tax professionals’ expectations around their tax management systems converged on two primary abilities: i) increased automation and accuracy in updated tax calculations, generation of ancillary obligations, and tax assessment; and ii) agility in implementing new SPEDs (Brazil’s Public System of Digital Bookkeeping) and electronic tax documents.

Indeed, professionals in corporate tax departments will likely bet on technologies to help them transition to the new model, becoming more efficient with their time, while minimizing risks and reducing human errors. Research results from the report on investment expectations in tax management solutions showed that at least 50% of respondents said they anticipate a sustained and significant growth in their departments’ investment during the first four years of the reform. Additionally, two-fifths of respondents projected that increased investment in these systems will continue beyond the first four years, extending until the end of the Tax Reform’s transition period in 2033.

At least 50% of survey respondents said they anticipate a sustained and significant growth in their tax departments’ investment during the first four years of the reform.

With the significant changes brought by Brazil’s Tax Reform plans, a successful transition will demand more than just new and adapted tech systems and solutions. To fully capture the benefits of technology, organizations will need to develop an integrated and strategic plan of action.

Many tax professionals are well aware of this, as the report shows, and they also expect their organizations to increase investment in talent, training, external consultancy, and process updating during the transition period. Therefore, in addition to leveraging tech systems, organizations and their internal tax departments will need to keep up with new rules and developments, train their talent, collaborate internally with other areas such as legal, compliance, and finance, and externally with experts and advisors.

Through this approach, corporate tax professionals will be better able to lead and navigate their businesses optimally through the transformative changes that Brazil is experiencing.

You can download a copy of the ³ÉÈËVRÊÓƵ Institute’s recent Brazil Tax Reform report here.

The novel tax reform in Brazil has been designed to resolve certain matters such as high tax rates, complex tax compliance, and conflicting taxes at different levels of government. The proposed changes in the system will seek to improve the efficiency of tax collection, reduce disputes, and create a more equitable system for both businesses and individuals. As the reform will affect various sectors of the economy, it is crucial to gauge the perspectives of tax professionals in Brazil regarding these alterations.

A new report by the ³ÉÈËVRÊÓƵ Institute, , analyzes corporate tax professionals’ opinions about this transformative change. The report is based on a survey that was conducted to look at Brazilian corporate tax professionals’ perspectives, including their awareness and readiness for the tax reform, their satisfaction levels, and any ongoing actions to assess the reform’s impact in their businesses. Additionally, the report examines the level of importance of tax management systems in the transition as well as professionals’ expectations around their corporations’ investment plans and budget support.

Overall, the report provides a comprehensive insight of how corporate tax departments in Brazil may be preparing for and coping with the imminent changes — both positive and negative — that will be brought by the tax reform.

Key findings

By the time the survey was held (April-May 2024), respondents had indicated that their organizations hadn’t started to take actions yet regarding the tax reform and were still gathering information and evaluating the reform’s impact on their activities. Still, the effect of the reform will likely be high in corporate tax departments, survey results suggest.

One of the main objectives of the reform is to substitute current tax structures for a dual Value-Added Tax (VAT) composed of the Goods and Services Tax (IBS) and the Contribution on Goods and Services (CBS). Indeed, survey respondents said that the replacement of old taxes by IBS and CBS would have the greatest impact on their organizations, and they also identified ICMS tax incentives as an important development brought by the reform.

According to the report, some of the changes to the tax system are seen as beneficial, while others are perceived as obstacles. In fact, many corporate professionals said they anticipated more simplified ancillary obligations and reduced tax complexity in their work processes. However, the greatest difficulties identified by respondents were an increase in tax burdens and higher costs associated with adapting to the new rules, including system changes and the necessary learning curve. Another important concern among respondents turned out to be a potential workload increase caused by the transition between the old and new systems.

You can access the ³ÉÈËVRÊÓƵ Institute’s here.

Most respondents said they expect their organization to increase investment in talent training over the coming six months, indicating that organizations will probably focus on improving the skills and quality of personnel managing the transition. Yet, while corporate tax departments should definitely consider talent training as a key strategy for the transition, headcount expansion might also be a smart move because organizations’ team size in planning for the transition surfaced as one of the areas with lowest satisfaction among respondents.

Finally, corporate tax departments are considering leveraging technology tools and systems to optimize time and cost in the transition. Professionals highlighted the importance of tax management solutions, emphasizing the need for these tools to be continuously updated with new rules and increasing the pace of automation of their processes. As for financial planning, respondents said that investment in these solutions is projected to be the top spending priority in their departments over the next six months to two years.

Conclusion

This newly published report explores the impact that the new rules in the tax system in Brazil will have on corporate tax departments. According to many tax industry professionals, some strategies that these tax departments intend to carry out for a successful transition include staying informed of new regulation developments, leveraging technology and automation, and adjusting investment in areas like talent training and tax management systems, among others.

By designing a structured plan of action, corporate tax professionals should be able to adapt to Brazil’s new tax system and secure compliance and efficiency.

For some years now, the has been diligently adapting their ESG policies in accordance with the changing demands of the markets and investors. In 2020, for example, CVM that aimed to make voluntary ESG-integrated reporting more comparable and transparent among companies by forcing them to adopt a consistent framework. The following year, CVM initiated a public consultation to discuss changes to its — a document that publicly traded companies in Brazil must submit every year and keep updated with very specific information — to make it shorter and include ESG reporting. CVM then adopted the comply or explain concept under which companies were required to disclose ESG information or provide an explanation if they chose not to disclose it.

Later on, after the release of the International Sustainability Standards Board’s (ISSB’s) first two International Financial Reporting Standards () in mid-2023 and following the recommendation of the , CVM became the first securities commission in the world to make such ESG reporting mandatory for publicly traded companies from 2026 onwards.

Despite the fundamental correlation with a company’s financial statement and the fact that assurances from independent auditors are required in Brazil, companies should not regard this change in regulation as a new accounting rule, says , a legal professional with extensive experience in capital markets and ESG matters. Antunes explains that this is a reporting rule, which includes disclosure about governance, strategy, risks, and opportunities related to the company’s sustainable performance, and demonstrates the impact of ESG matters on a company’s cashflows, access to finance, and cost of capital. Complying with this new regulation will require collaboration between a company’s legal, accounting, sustainability, and investor relations teams to be successful.

Key actions for compliance

Among other professionals involved, the role of lawyers will be critical to guide companies through CVM’s new structure. According to Antunes, the following actions will be key for lawyers to ensure a successful compliance process:

Connect information and disclosure criteria among already disclosed reports — An advantage for law firms will be the ability to connect information already gathered from the company. Publicly traded companies in Brazil disclose financial reports and annual reports (formulário de referência), and most of them already disclose some type of sustainability data. Lawyers need to ensure that the information and data presented among these reports and other materials, including press release and policy statements, is consistent. It also is important to highlight that many companies are already following certain methodologies for their sustainability reports, a practice that could make the adaptation of the new ISSB requirements easier.

Understand the client’s business and industry — Lawyers also need to understand the unique needs and relevant factors for each client, based on their specific business and industry. By assisting clients in recognizing what is material under the definition used by ISSB and effectively presenting this information to investors, lawyers can improve the quality of disclosure and, consequently, enhance the safety and reliability of the management’s responsibilities and liabilities.

Additionally, lawyers will also need to go beyond their legal expertise and discuss with the management team the negative or positive impact of any ESG activities on the company’s operations, financial situation, and strategy. In this sense, law firms will need to leverage their legal expertise to ensure that clients consider, address, and disclose every premise and methodology, based upon their particular situation. A solid disclosure, based on appropriate sustainability metrics, well-assessed risks, and fully mapped opportunities, will not only protect a company from greenwashing claims, but assist management’s decision-making process and ultimately positively impact investor perception.

Brazil, with its significant economic influence, rich biodiversity, and natural resources, is now at the forefront of this transcendent change.

Improve targets and corporate governance — Previously, ESG reporting was mostly used as a marketing strategy for many companies. With the new mandatory reporting, however, responsibility, exposure, and risk also increase. Businesses will have to perform a careful assessment to set targets, identify premises, collect data, and backup their methodologies for disclosure. Moreover, future lawsuits may question the basis of how and why a company’s previously established targets were changed or not met. Therefore, setting the disclosed targets correctly is imperative for companies to be able to defend themselves in legal challenges ahead and avoid any reputational crises that could occur. Indeed, firms and their clients need to understand that this forward-looking information is becoming more and more sensitive in investors’ decision-making process.

In addition, as ESG activities continue to become increasingly important for investors, there is a growing responsibility for companies to enhance their governance structures. Law firms may need to advise companies to create new policies or committees, such as a sustainability committee that reports directly to the board of directors, which can also improve the company’s ESG rankings. Legal professionals will be an effective instrument of education, guidance, and consultation for senior management in relation to sustainable business governance, bringing the importance of ESG aspects to bear on management’s critical roles: fulfillment of their fiduciary duties and the creation of long-term value for companies.

Collaborate with different practice areas — The mandatory sustainability reporting will require lawyers with experience in different practices to work together to best achieve integrated solutions. While capital markets or corporate lawyers may be the most experienced with disclosure and governance, cooperation with environmental professionals will be pivotal to understand the complexity around many aspects of ISSB’s standards, such as the category system. Further, collaborating with the litigation team will allow the lawyers working on ESG reporting to anticipate litigation trends and avoid potential dispute risks.

Adopt a proactive approach towards the rapidly evolving needs of the markets — Brazil’s ESG disclosure regulation is not expected to remain static. Upcoming developments include the implementation of future IFRS S3 and IFRS S4 rules, which involve discussions around nature and biodiversity to expand environmental aspects beyond the realm of climate change. Even if the term ESG changes or is replaced for another term in the future because of political controversies, the momentum behind these initiatives is expected to increase, especially in Brazil. As a result, lawyers who keep up with the evolving demands of the markets and remain prepared will be ahead of the game.

Act now: experience and practice will be critical — Many companies, especially the largest ones in Brazil, may not wait until 2026 to start disclosing their ESG reports. Indeed, incentives (often in the form of reliefs) will nudge them to start earlier, even during the voluntary phase. Because this is an unprecedented regulation and the new ISSB reporting standards are not done on a check-the-box type of form, legal professionals’ experience and expertise from different practice areas will be a key aspect to mitigate risks and achieve success. Lawyers who begin ESG discussions with their clients now — especially around how to structure the disclosure report by evaluating potential governance and disclosure improvements, for example — will be at an advantage over their competitors for upcoming business transactions involving the company and for future implementation of new reporting rules.

Brazil, with its significant economic influence, rich biodiversity, and natural resources, is now at the forefront of this transcendent change. And with the South American powerhouse leading this transition, other countries are expected to follow, each with their own agendas but sharing a common goal. Meanwhile, increasing occurrences of natural climate disasters in the region — such as the recent — will continue to underscore the importance of governments and corporations to start taking meaningful action in this area.

Despite a radically more difficult economic environment and declining valuations for tech companies, smart money continues to find its way into Legal Tech. However, the growth and impact of the sector seems to be lagging in Latin America, especially when comparing it to more mature markets in the United States and Europe.

Data is notably scarce and unreliable in the Latin American region, but various attempts at mapping the Legal Tech sphere do give us a sense of where the market is right now. (Some of these attempts include efforts by ; ; ; ; and .)

The first elephant in the room is Brazil. The country and its legal market play in a league of their own, and Brazil’s Legal Tech market is no different. But as a rather insular economy, with particular regulatory and linguistic barriers, it operates in a separate sphere and does not form part of a broader regional ecosystem that many observers see emerging in the rest of (mostly Spanish-speaking) Latin America.

Based on our own research and when looking into the above-mentioned market research, we estimate there are currently between 200 and 250 Legal Tech initiatives across Latin America (outside of Brazil), of which 70% are located either in Mexico, Argentina, or Colombia. We should add here that because of the relatively high turnover rate, this number is a fast-moving target because publicly available data doesn’t allow us to put any figures on the current size of the market.

When categorizing the various Legal Tech projects, both from the private start-up sector, captive initiatives within law firms, and Legal Tech initiatives promoted by the judiciary or other government institutions (estimated at 15% of all initiatives we were able to identify), we see that about one-third of these initiatives are centered around document management and contract automation, e-signatures solutions, and practice management software.

Analysis of the size, maturity, and health of the various Legal Tech ecosystems in Latin America reveal four key factors that directly affect the potential growth and success of these Legal Tech initiatives:

1. 1. 1. Regulatory framework and quality of the judicial systems;
      2. Availability of digitized of public records;
      3. Market conditions (size and maturity of the legal market); and
      4. Access to funding.

One major obstacle that seems to be holding back the coming of age for Legal Tech in Latin America is the lack of a unified legal system across the region. Latin America is made up of numerous countries, each with their own legal systems, institutions, and regulations. Some regionalization attempts in the main trading blocs such as , of the Southern Common Market) and have not yielded the level of legislative harmonization required for easy regional expansion. This can make it difficult for Legal Tech companies to develop products and services that are transferrable across borders, in turn hampering the scalability of their solutions.

This is especially complicated in the Caribbean, where common law legal systems prevail in the English-speaking countries, contrasting with the civil law systems in Spanish-speaking jurisdictions.

Building the foundation for Legal Tech

Apart from these regulatory differences, there are still many countries in Latin America that simply lack specific regulation that is required to have a solid foundation on which Legal Tech solutions can be built. There are notable gaps in terms of privacy and data protection regulation, electronic signatures, e-commerce, and access to public records and information. These laws have been drafted in some countries, but are non-existent in others, and the levels of implementation vary greatly.

For example, the difference between Ecuador, which has drafted and implemented a highly praised data protection law, and other Central American countries, such as Guatemala and El Salvador, that still are waiting to have such laws approved by their congresses. Similar marked differences exist across the other areas of legislation noted previously. And on top of this institutional weaknesses, many countries also lack a culture of legality in social and business relationships.

Finally, the stability (or lack thereof) of the regulatory framework also affects the viability of Legal Tech initiatives. Colombia, for example, is undergoing yet another tax reform process, the 21^st reform the country has had since 1990. Any Legal Tech initiatives focused on that sector need to factor in the volatility that comes with increased politization and political instability that still constrains the region.

Although 70% of Latin American countries have a formal digital transformation and innovation agenda for the public sector, the digitization of the government and judicial institutions lags behind in most countries. Indeed, less than 30% of government procedures can be carried out entirely online in Latin America, and only 7% of citizens performed their last transaction with their government in an online format, according to a study published by the Inter-American Development Bank. And while there is no shortage of plans, a lack of substantial investment and institutional capabilities hamper the execution of this digital agenda.

Understanding the local legal market

These conditions are further exacerbated by an underdeveloped legal market that is still largely dominated by traditional small-scale legal service providers. In the larger economies, international law firms have clearly gained a foothold in the local market, but these firms mostly serve international financial institutions and multinational companies. The lack of strong domestic private sector development, and limited penetration of broadband internet and mobile phone use in Latin America also limits the total addressable market of Legal Tech companies. So even though a market in appearance can be substantial, the actual potential end users of Legal Tech solutions are still limited. Adding to these factors are also cultural barriers. Many people in the region are still hesitant about the use of technology, not only for legal services but for services in general, preferring instead to work with service providers in person.

Finally, another difficulty is the lack of funding for Legal Tech initiatives in the region. Many Legal Tech start-ups in Latin America struggle to find the investment needed to develop and scale their products and services. We have found that most of the appetite of venture capital has gone to financial tech (FinTech) initiatives, often referred to as the big brother of Legal Tech. What is clear is that FinTech is perceived as a better business and has absorbed a lot of the risk capital that ballooned in the region over the last five years. The deluge of investment that poured into late-stage Latin American tech companies in recent years has now dried up, however, and it is likely that access to funding for Legal Tech will suffer as a result.

Still, there are initiatives in the region such as the Global Legal Tech Venture Day held in Bogota and the Magno Foro LegalTech event in Mexico in 2022, that are geared toward the exposure of Legal Tech initiatives to funding. And there is a growing track record of substantial venture capital investment in Legal Tech, such as the headline investment in Chilean company LemonTech by the U.S. investment firm Accel-KKR based out of Silicon Valley.

Indeed, we’ve seen a Cambrian explosion of Legal Tech initiatives in Latin America, but the local context has so far proven much less fertile for these initiatives to flourish and scale up. As of right now, the macroeconomic conditions will likely complicate the access to funding in the short term, and without rapid improvement in the quality of regulatory frameworks, institutional set-up, and market conditions, domestic Legal Tech companies will have a hard time competing with larger consolidated players from outside the region that will be looking to expand their business and tap into new markets.

On the other hand, the democratization of artificial intelligence-based solutions such as ChatGPT, and other tools that make Legal Tech more user friendly and accessible, are going to expand the user base and open the door to applications and solutions not yet seen in the region.

So, despite some of the restraints described above, there is still a great opportunity to spearhead the development of Legal Tech solutions in the virtually untapped Latin American market. And those companies that can successfully time the market and navigate its particular conditions will still benefit from a first-mover advantage — the opportunity is there.

Rose Ors: Brazil has more law school programs than any country in the world. How many academic institutions offer a law program, and do they teach their students what they need to practice law today?

Erik Wolkart: In Brazil, students interested in law enter a five-year undergraduate program offered by more than 1,700 academic institutions. Today, more than 1 million students are enrolled in these law programs. It is by far the most popular undergraduate program in the country. Sadly, most of these institutions provide the same curriculum they offered in the 1960s — courses focused on teaching students what they need to know to pass the Brazilian national bar exam.

There are a few notable exceptions. Fundação Getulio Vargas (FGV), a private school founded in 2002, has always been forward-thinking. FGV offers its law students a rigorous and multidisciplinary curriculum that includes business courses such as accounting and finance. It also offers classes on negotiation, leadership, and teamwork; and it provides an introductory programming course for lawyers and entrepreneurs that covers data science and data analytics principles.

Insper is another school that has revamped its legal curriculum. The school’s law program, slated to launch later this year, will offer classes that pair law professors with professors from other disciplines like economics and engineering. Its stated goal is to give its law students different approaches to solving real-world problems by using data science, economics, and statistics. Insper also prides itself in teaching all its students the skills they need to be critical thinkers and leaders.

Rose Ors: Insper and FGV teach undergraduate law students how to think in ways outside of the traditional “think like a lawyer” model. Are there executive education programs that offer similar programs for lawyers and other legal professionals?

Erik Wolkart: Several executive education programs have come in to fill the knowledge gap between what traditional law programs offer and what students and practitioners need to succeed. These programs — many offered online — provide a broad range of training modules, including in leadership, strategy, project management, design thinking, technology, data analytics, statistical analysis, and business marketing.

The importance of these skills in meeting clients’ needs and the needs of a law practice cannot be overstated.

Rose Ors: You are the Academic Director of Instituto New Law, an online and on-demand legal education platform. What sparked your interested in this area?

Erik Wolkart: I became interested in legal education while studying law and economics at Harvard University. While at the university, I attended a lecture by Prof. Richard Susskind where he discussed the outdated curriculum of law schools, including at Harvard Law. His comment piqued my interest and got me to focus on the study of law through the lens of technology. My new focus led me to work on developing what is now the Instituto New Law.

The actual idea for the Institute was born during a 2018 conference on the future of law that I helped organize at Harvard Law School. During the event, my Brazilian colleagues and I reached two conclusions: First, the global and tech-fueled economy required a new type of lawyer with new skills and mindsets; and second, the traditional law school teaching model was outdated both in the content it presents and how that content is delivered to students.

By the end of the conference, my colleagues and I decided to reimagine legal education in Brazil by asking two questions: First, what skills do law students need to learn to be successful in today’s marketplace? And second, how can these skills best be delivered?

Rose Ors: How does the Institute reimagine legal education?

Erik Wolkart: Our post-graduate courses are delivered via an online, on-demand digital platform. Each class is designed with a multidisciplinary approach to law and a focus on teaching the soft skills necessary for lawyers to succeed. Each course is taught by respected academics and practitioners in law, economics, engineering, and computer science.

Lawyers can choose from several tracks, including Digital Law; Law & Technology; and Civil Procedure: Negotiation & Arbitration. We also plan immersive learning experiences outside of Brazil, along with specialized full-day events.

Rose Ors: You also recently announced the launch of the . What does the Academy offer?

Erik Wolkart: The Academy is our free online education portal where law students and lawyers can learn a host of business and practical skills that are organized along learning tracks. For example, the management track covers a broad range of topics, including governance, talent management, and leadership. The marketing track covers the do’s and don’ts of legal marketing in Brazil, including content creation and distribution. The legal trends track covers topics ranging from the digitization of law to legal design to advocacy.

Rose Ors: What do you hope will be the impact of offering law students and lawyers in Brazil a 21st-century suite of undergraduate and executive education training?

Erik Wolkart: The training of law students and practicing lawyers in a manner that reflects modern-day business and societal realities is essential — not just for Brazil’s legal industry, but it is critically important for our country and its citizens.

Law affects every member of society, and as such, it carries with it a social responsibility. Those organizations entrusted with educating members of the legal community have an obligation to rethink how they do their job.

I hope that the work being done to revamp legal education by FGV, Inpser, the Institute, JusBrasil, and others, will motivate and inspire long-standing institutions to change for the better.