What are the most significant cases or transactions that your legal team has recently been involved in?

In the first quarter of 2020, LATAM was financially and operationally the strongest airline group in Latin America, but the outbreak of the Covid-19 pandemic and the accompanying travel restrictions and border closures in various countries led to a 95% reduction in LATAM’s passenger routes in a matter of weeks, and a similar drop in its revenues. Unlike the air carriers in Europe and the United States, LATAM was not offered any financial support or subsidies by the governments where it operates, resulting in LATAM Airlines Group and certain of its affiliated airlines having to seek Chapter 11 protection before the United States Bankruptcy Court for the Southern District of New York. While in full quarantine (Covid mandated lock-down in Chile), the legal department of LATAM was activated with the initial urgent task of evaluating, preparing, and filing of Chapter 11 protection as a foreign company in a United States Federal Court.

Once the initial Chapter 11 filing was materialised, the Legal Department, with the assistance of external counsel, took on critical legal tasks associated with the Chapter 11 financial reorganisation process. This new reality required Legal Department of LATAM to restructure itself to manage the Chapter 11 extensive volume of work, while still supporting the day-to-day business of the airline group, as air travel slowly returned.

During the peak of the Covid pandemic and the LATAM Chapter 11 financial reorganisation process, the legal department finalised the joint venture agreement (JVA) documents between LATAM and Delta Air Lines and, with the assistance of local counsel in the different jurisdictions (United States, Brazil, Chile, Colombia, Paraguay, Peru, and Uruguay), the legal department worked diligently in preparing the documentation and obtaining the required regulatory authority for the JVA. On September 30, 2022, one of the final regulatory approvals was issued from the U.S. Department of Transportation, allowing the carriers to implement their JVA. The legal department was also critical in working with management to implement the JVA, given the scope, conditions and limitations imposed by the JVA and certain regulatory approvals. The JVA allowed the airlines to develop an unparalleled network with expanded route offerings and to connect the Americas like never before with access to more than 300 destinations.

How important is choosing to work with external lawyers who align with your company’s values? Are you likely to reconsider what firms you work with based on this?

When choosing external counsel, the legal expertise of the individual lawyers and a reasonable fee structure, are both critical issues. It has become more important than ever, however, that external counsel must embrace and identify the company’s environmental, social and governance (ESG) values and initiatives in the performance of their work for LATAM. In addition to ESG, the external law firms must adhere to the company’s ethical standards, lowering cost initiatives, work efficiency, service to clients, and transparency of their work, as well as, all company policies and compliance requirements, among others. Since 2022, the legal department has included these concepts as factors when selecting a law firm in legal bid process. The incorporation of AI will undoubtedly change the way we work today, and its correct use will be necessary, sooner rather than later, to remain competitive. Looking ahead, and with the speed that AI advancing, we are already analysing how to integrate this technology into the hiring of new law firms. Its impacts on the contracts, M&A, litigation, compliance teams, among others, will provide better analysis, speed and savings in investigation time.

Looking forward, what technological advancements do you feel will impact the role of in-house legal teams in the future the most? Which have you found most useful in your legal team?

Technology is and will continue to affect in house legal department of LATAM. Technology initiatives are of such paramount importance to LATAM’s legal department, that it is included as a requirement of the legal department’s annual strategic planning session. The LATAM legal department acquired and implemented several advance technology initiatives to achieve greater work efficiency, lowing costs and better manage the valuable time of the in-house legal team.

Two examples of those initiatives are: legal department data platforms and contract review software tool. In 2022 and 2023 LATAM’s legal department operations team developed technology platforms that consolidate relevant data and statistics in real-time, including data of the entire legal team members, important dates and history, details of pending litigations, compliance training statistics, legal department costs, among others. The legal operations team has several initiatives with the LATAM advance analytics and business intelligence team to continue strengthening and improving the information of lawyers in decision-making.

On contract review software, in December 2022, LATAM legal department invested and implemented a new technology with a contract review software tool that provides, among other benefits, the ability to measure in real time (automatically updated) the status of every contract under review by members of the legal department on a global basis. This new technological tool also provides the ability to monitor and generate the SLAs of each in-house lawyer and the ability to better evaluate and set the goals for each lawyer. More importantly, the new tool had a significant positive impact throughout the organisation by improving the service levels of the legal department by over 50%, after only six months of its implantation date.

The implementation of this technology transformed a previous limited, slow and complex contract review process to an expeditious real-time tracking efficient process that interacts with other software systems of LATAM, and all validated by compliance and internal audit. The new technology allows for a complete traceability of each document and true management of each senior leader with their respective lawyers t by more than 50%. The operation and user support are the responsibility of the legal department operations team.

What diversity, equity and inclusion initiatives have you and your legal department been championing within your company’s endeavours?

The legal department, working closely with the human resource department, has made commitment to the development of diverse legal team. The initiative has been extremely successful resulting in the LATAM legal department having the highest percentage of women and executive women in the entire organisation: 64% of women, and 62% of women in executive positions.