Shelfcos to the rescue: Solving the International Market Entry headache AI is causing law firms

At South Gate, we review LinkedIn daily and are inundated with articles, posts, metrics, opinions, and conclusions about the current impact of AI on the legal market and law firms, both in Chile and in larger jurisdictions.

It is clear that the rollout and implementation of AI in the legal services sector is compelling law firms to rethink, adapt, and restructure rapidly.

The number of junior associates will inevitably decrease as AI tools can replicate and improve their deliverables at a fraction of the cost. While this is a generalization and does not replace the in-depth analysis each case deserves when shaping teams and strategies, one thing is certain: the rise of AI is creating a challenge that must be addressed. Law firms will have fewer hands available to execute pseudo-legal work, which, for now, AI cannot manage.

Specifically, we refer to tasks and activities that fall within the realm of administrative or paralegal work, such as spending hours in line at public offices, manually completing banking forms, or resolving issues with municipal authorities over unacknowledged payments. These tasks still need to be completed, presenting a significant problem for law firms that may lack sufficient personnel or face economic inefficiencies in handling them internally.

The solution is outsourcing. Take the company formation process, for example: senior lawyers and partners are unlikely to spend hours drafting company bylaws or handling notary and banking procedures. As previously mentioned, firms may not have enough junior associates available, and even if they do, the cost-benefit analysis often does not justify assigning such tasks, as proper client billing can be challenging.

South Gate Advisory provides a solution. Our Shelf Companies allow international clients to reduce incorporation times by approximately 80%, enabling them to launch business operations almost immediately. These companies are pre-established and fully operational, with bank accounts in place, resolving common bottlenecks and the issues we just outlined for law firms. We also handle all bylaw and banking power modifications, so law firms do not need to allocate junior associates, streamlining the entire process, securing a strong margin, and ensuring client satisfaction by dramatically reducing operational timelines.

To emphasize the benefits for clients, this approach will be especially advantageous for:

• International companies seeking to enter the market rapidly and efficiently.

• International companies aiming to participate in public tenders, meet urgent registration requirements, or complete regulatory, legal, or banking procedures with strict, non-extendable deadlines.

• Foreign companies needing to meet minimum company age requirements set by third parties, financial institutions, or public authorities.

In summary, by choosing our Shelf Companies, international clients can, from the first day of incorporation:

1. • Enter into commercial agreements with local vendors or suppliers.

2. • Enter into contracts with public entities.

3. • Make payments to local and foreign vendors.

4. • Recruit and hire local employees.

5. • Process salary payments for local employees.

6. • Remit statutory deductions for local employees.

7. • Fulfill local tax obligations.

Shelfcos in Chile