What has been the number one challenge that has impacted you over the past year?

The pension fund industry was subject to significant changes stemming from new legislation that allowed clients to withdraw funds from their retirement accounts, allegedly based on the need to relieve formal workers of the economic hardship posed by the pandemic. Taken together, the withdrawals led to a reduction in managed assets in the private pension fund system of around $28.6bn. It triggered regulatory challenges, including those related to the investment limits applicable to our existing portfolio after withdrawals. Additionally, the business had to adapt quickly and deliver on our promise to pay our customers within very tight timeframes, as well as operate our business as usual, which we did. In addition, the legal team had a remarkable opportunity to work closely with the commercial and operations teams to implement these withdrawals. In fact, something to highlight is that the withdrawal request process was 100% digital, and the payment was only made to customer accounts opened in the banking and financial system, given the significant aggregate amounts of the transactions involved. So, the withdrawals were opportunities to not only test our agility and resilience as a business, but also to promote financial inclusion, as many of our clients did not have a bank account prior to the withdrawals.

Additionally, adding global concerns about post-pandemic inflation, adverse geopolitical events, and specifically the war between Russia and Ukraine, at the national level, the year 2022 was challenging for local businesses due to political turmoil. Business confidence fell and, therefore, private investment, one of the main drivers of our GDP, was seriously affected by the permanent conflicts between the Executive (mostly left-wing) and Congress (with right-wing members in key positions). Finally, in December 2022, the political crisis triggered social protests resulting from the removal of former President Pedro Castillo from the Peruvian presidency and finally his arrest. Our mission as in-house counsel was to help the company achieve its strategic performance and budgetary objectives while navigating political and social turbulence, by mitigating legal and reputational risks and advising on opportunities in an environment of rising interest rates and market volatility.

Looking forward, what technological advancements do you feel will impact the role of in-house legal teams in the future the most?

In my opinion, being tech-savvy is paramount for lawyers. Technology has both risks and opportunities that we must understand in order to implement it within our internal legal processes efficiently. But technology is also relevant to better understand clients, the competition and the business context.

Technology is already affecting the way we manage our in-house legal processes, how we communicate and interact, and the pace at which we go about our daily tasks. For example, digital platforms that manage information related to the Board of Directors (BoD) and its committees, correspondence and contracts, also including case trackers for large litigation stocks, as well as clouds for data storage and virtual tools for corporate meetings. In Peru, for example, we have experienced positive results from virtual court hearings in our litigation practice; but the use of electronic document and evidence filing with the judiciary still has room for improvement. All these technological resources are game changers for our legal departments.

On the client side, the pandemic made it clear to us that digital is more than a trend, for that reason we got involved in the implementation of digital contracting with facial recognition and our Virtual Branch, where our clients and third parties can request and apply for most of our online services.

Technology saves us valuable time for important things like legal strategy, but we need to know and understand cybersecurity risks, business continuity risks, data privacy risks, and others that may be present along with technological advancements. We can also help close the technology gap on the Board with continuous IT education. Looking to the future, Artificial Intelligence (AI) has the potential to negatively impact the existence of administrative jobs. I believe AI jeopardises jobs of a repetitive nature, where little to no reasoning is required, however the legal profession is one in which critical thinking and problem solving of moral and ethical dilemmas is required. In addition, the legal profession involves a relationship of trust with external and internal clients and requires understanding of the facts, complex reasoning, and subjective decision making. In this sense, from my perspective, AI is unlikely to replace lawyers, at least in the short term. However, AI will be a great tool for researching and generating ideas about legal arguments that we would like to verify, especially if using citations and references to existing binding laws, regulations, precedents, memoranda or in litigation cases. Another use of AI could be to summarise large legal reports and to provide preliminary guidance on contracts models. Furthermore, I am sure that new business models will emerge from the use of AI, so we must embrace change by rethinking how we can create innovative legal services and promote changes in legislation, including intellectual property protection for services or products rendered with the use of AI.

What is a cause, business related or otherwise, that you care about, and why? 

As chief legal counsel working in the private pension fund system for many years, I truly recognise the importance of this industry in Peruvian economic development. Not only have we been custodians of the retirement savings of more than eight million people, the vast majority of whom have emptied their accounts because of the laws, but we have also been key players in the development of the capital markets since pension funds have been providers of long-term capital for local companies, local funds, for the government and infrastructure projects. Therefore, we all need to be concerned of new laws that will allow larger withdrawals and change our mindset to foster a culture of saving for the long term.

Also, I personally care about ESG practices and sustainability practices in such a way that I view them as a license to operate for the long term. Corporate governance is one of the most important pillars that we apply in the company, as well as demand from the companies in which we invest. Corporate governance is paramount in a developing country, such as Peru, where corruption has been a great threat to economic development. The next steps to follow corporate governance are social and environmental issues, which is why we publicly report on these issues annually, and why we are members of the Responsible Investment Program, which promotes ESG best practices among institutional investors. Institutional investors have great potential to drive change in ESG practices as they actively engage with companies as part of their investment risk monitoring, hence lawyers can provide guidance on these practices.