by associate editor Caroline Hill

Francisco Urrutia_ALTAAs Colombian law firms face increased competition from a slew of international entrants, local independent magic circle firm Posse Herrera Ruiz is undertaking a complete overhaul of its IT systems including looking at SAP or an “equivalent” enterprise resource planning (ERP) tool.

The full service firm has already migrated over to Cisco’s Voice over IP phone network and is working alongside Janders Dean founder and director Justin North in selecting an ERP provider, with a decision expected shortly. The integrated system will be rolled out next year to coincide with the circa 100-lawyer firm’s adoption of new international accounting standards.

Posse Herrera’s Harvard-educated co-head of natural resources and energy Francisco Urrutia (pictured) said: “The industry is changing and law firms are having to evolve driven by several factors. We need to be able to do the same work more efficiently so we can still be profitable.”

One of the major factors is the arrival of law firms including Uria Menéndez, which in September acquired a 30% stake in Colombia’s Prietocarrizosa as part of a three-way merger with Chile’s Philippi. In October 2013, Garrigues extended its presence in Colombia via a merger with Zarama y Asociados, while UK firms DAC Beachcroft and Kennedys also entered the market last year via a merger with De La Torre & Monroy Abogados Asociados and Botero Salazar Tobón & Abogados respectively. Other international law firms are rumored to be in talks to secure a foothold in Latin America’s fastest growing major economy.

Posse Hererra says it is not currently considering a merger and Urrutia added: “Then, to compete you have to be at the cutting edge of international firms and that includes being at the cutting edge in technology.”

Responsiveness is increasingly becoming a differentiator between law firms and at Baker & McKenzie, which has been active in the region for over thirty years and in December rolls out SAP in replace of Elite 3E, rated Bogota corporate partner Jaime Trujillo Caicedo observed: “The need to stay connected is so great now that you simply cannot afford to be off the network for more than a few hours. Responsiveness is one of the key factors that clients are interested in.”

Clients are also increasingly demanding when it comes to fees and Posse Herrera, for one, now conducts around 40% of its work under an alternative fee arrangement, necessitating further efficiencies and analysis of where profit is really coming from.

The IT overhaul comes after the hire of general manager Juan David Taboada, who joined from EY in August. Urrutia said; “He’s now the one responsible for moving IT forward. IT is just one of the legs of the stool, just a tool that is part of a bigger view of the way the business has to go.”