Lots of fun this week on The Hearing Podcast with my colleague Andrew Fletcher, Director at the Thomson Reuters Labs. If you enjoy uncovering what the future (and the now) of the legal industry might look like, take a listen. We toss aside the fluff, and meet at the cross section of AI, APIs, Design Thinking, Innovation, and how it all impacts the legal industry.
Listen here:
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Originally published on the Legal Executive Institute.
By Joseph Raczynski
The bleeding edge of the legal industry is now building interfaces at the intersection of code and law through computational contracts.
These computational contracts (sometime called smart contracts), according to Stanford University, are a universal Contract Definition Language that will allow terms and conditions to be represented in machine-understandable way. As a result, computers will be able to process and reason over the contracts automatically with a guaranteed degree of accuracy. The Stanford project sees this as not only a significant reduction of legal transaction costs, but it also opens a variety of new options to create better contracts.
With these building blocks taking shape, we can finally peer into how technology will guide legal into a fundamental paradigm shift around legal contracts. This idea, among others, were discussed and debated at the recent CodeX FutureLaw 2021 conference, held virtually.
Before the legal pyrotechnics on self-executing contracts, the conference began in more of a reflective state. Thomas Kim, Chief Legal Officer and Company Secretary at Thomson Reuters, spoke about the industry transformations ahead, emphasizing the intelligent, thoughtful adoption of new technologies. In crafting his message, Kim focused his attention on the compelling need to establish industry standards around technology, where companies must create global values. Pivoting to regulation, which he believes will ramp up, Kim explained that is vitally necessary for companies and their technology to weave a fair fabric of social consciousness and awareness.
Finally, Kim described the key principles around artificial intelligence which Thomson Reuters has offered to the industry, prioritizing safety, security, privacy, and humanity.
In another session, Allen Kay, a preeminent American computer scientists and Turing Award Laureate, led an eccentric yet nuanced keynote on intellectual curiosity and bias. He purposefully quizzed the audience, asking: “With so many bright people on the Supreme Court, why do we have such different opinions?” Utilizing theatrical metaphor throughout, he unpacked a theory of human perspective, with the theater in our minds. “Humans are easily fooled, want to be fooled, pay to be fooled, fool ourselves, and we pay to fool others,” Kay said, adding that most of our mind is still operating on instinct from 200,000 years ago.
Kay’s incisive vision on the human condition laid out the inherent concerns surrounding the next era of computational power and the biases built into them. Our malleable minds can be shaped by those in power with their narrative, he surmised, and without the legal industry applying critical thought, the producer of the play will create a scene in their own vision, i.e. bias within the code for the legal industry.
The conference then shifted to the concept of computational contracts covered by two different panels, which both were in near uniform agreement that we are going to see serious disruption to the contractual components of legal agreements in the near future.
Harry Surden, Associate Professor of Law at the University of Colorado, moderated the panel and described the complexity of helping computers understand the English language, which is no easy feat. Michael Genesereth, professor in the Computer Science Department at Stanford University, then began with a premise that we need to rethink how contracts are written, stating that there’s a need to “form the law into computable contracts.”
To do so, however, first we have to create a domain ontology, which is the first vocabularies and vernacular that can be used to describe a universe of the legal discourse. In this instance, we are referring to dependencies between types of knowledge in legal reasoning. It sounds easy, right?
One surprising theme the panel offered was the interstitial nature of using AI to convert contract language to a form of computational contracts. “We are currently trying to rebuild the horse out of metal and machines rather than progressing to the car,” said Oliver Goodenough, Law Research Professor, University of Vermont. Instead, he said, we will get to a point where we need to rethink the contract itself and then code around it.
What panelists proposed was a system that used the ontology of a legal system, coupled with interdependencies and outside data to build a dynamic contract. Eventually, this would be a no-code solution that would be akin to the WYSIWYG (What you see is what you get) web pages that people build today, rather than using HTML.
The second panel focused on computational contracts by using the insurance industry as a backdrop. Michael Pieciak, Commissioner of the Vermont Department of Financial Regulation, described what computational contracts look like, noting these contracts are so rich in technology that it took a 122-page report to describe the algorithm they use for insurance underwriting.
Roland Scharrer, Group Chief Data & Emerging Technology Officer at AXA, described the complexity of what his company has built and how it works, adding that contract creators can get insights from data within the industry and then write the contracts. “This technology is real and being used now,” Scharrer said.
Panelists also observed that in the not too distant future, the contracts will be more complex, and users will be able to leverage external data with the contract itself. Eventually, the contract will be able to execute itself. We also will see an increase in the use of decentralization components, which is being embraced by the FinTech, eCommerce and insurance industries.
While sessions touched on automation and disruption, the binding element which connected all of the day’s debate was a focus on creating a more equitable, open, and fair legal landscape imbued with thoughtful, unbiased technology. Reflecting on the keynote, it’s fair to surmise that the opportunity is immense — yet, we must commit to critical thinking, challenging traditional norms, and re-conceptualizing how technology can enable access to justice and better legal services for all.
Originally published on the Legal Executive Institute.
By Joseph Raczynski
Welcome to the early days of where blockchain goes mainstream, and the legal industry needs to take notice.
While Non-Fungible Tokens (NFTs) have been around for several years — remember CryptoKitties or even the original NFT, called CryptoPunks? Even if you don’t, NFTs have officially exploded into popular culture, begging the question: So, what are they?
A Non-Fungible Token is a token stored on the blockchain, which itself is a secure distributed database with redundancy, immutability, and clarity into tracking data or ownership. A token proves ownership of an asset. For example, a deed to your house is a sign of ownership to that plot of land and building. In the case of the first digital token, Bitcoin, a single Bitcoin is the title of ownership to the underlying value of the Bitcoin.
The best part about a token on the blockchain is the ability to track ownership and therefore authenticity, undeniably proving ownership.
Fungible refers to an asset that is easily exchangeable. In the classic example, a dollar is very fungible — you can hand a dollar to me in exchange for some gum, and I can then re-use that dollar for a can of soda. The physical dollar maybe different because I swapped with another in my wallet, but it is easily replaceable and exchangeable, so it is fungible.
Now, it gets interesting. A non-fungible token is a unique token that is not easily exchangeable or replaceable with another. With the mania that is occurring with NFTs, the best example is with art. Recently, Mike Winkelmann, known as @Beeple, a renowned artist who has worked with Nike and Apple, sold 20 pieces of his own work on the digital marketplace Nifty Gateway for a total of $3.5 million. And in the latest eye-opener, he sold a collection of many of his works combined into a masterpiece, titled EVERYDAYS: THE FIRST 5000 DAYS at Christie’s for $69 million. These transactions occurred on Ethereum, the primary blockchain platform of record for storing value, but Winkelmann’s art itself was simply digital images.
With the NFTs, we are proving that rare and scarce representation of things can create value, and that value can be captured on the blockchain. Let your imagination run wild for a moment: What this means is that nearly anything and everything that is represented digitally could also carry provable value.
For example, Jack Dorsey, CEO of Twitter, is in the process of selling his first Tweet, the original Tweet of Twitter. It is, as of this writing, estimated at a value of $2.5 million and projected to go higher. Why might you ask? Well, it is feasible to collect royalties on that tweet once you own it; or, you could hopefully resell it in the future. Lastly — and again, I beg your imagination for this thought — in the not too distant future, with people living in virtual reality, these pieces of art will have a home inside those worlds, too. Other examples, the NBA has now gotten in on the action by leveraging NBA Top Shot, selling limited edition, finite numbers of virtual basketball cards, including a short clip of a LeBron James dunk, which recently sold for more than $200,000.
In the past, I discussed asset tokenization, which is the simple idea that nearly anything could be represented on the blockchain as having value. It this is now happening. This could be a painting, your car, a house, or even a Tweet. Essentially, if you have something original, that you can then prove is yours, that item can derive value.
Through the lens of the legal kaleidoscope, we are entering a complicated but colorful place, and there are an incredible number of areas this will touch. As technology push us to rethink what we know, NFTs shall do the same. In this nascent area, contemplation about the impact on both the practice and business of law will hit multiple fronts. Here are just a few:
NTFs are likely here to stay. They will continue to evolve, however, representing nearly every assets class going forward. Law firms, corporations, tax & accounting firms, and government agencies will need to pay attention to this space in order to account for how this new technology impacts their individual [digital] pictures of the law.
Originally published on Thomson Reuters, Legal Institute.
By Joseph Raczynski
The pandemic was “the great equalizer” for the legal industry, combining the good from before with the great from the now.
A recent half-day virtual event, Legal Geek Presents Thomson Reuters Takeover, underscored this idea and offered a glimpse into the latest legal insights on the future of the legal profession and the impact of the opportunities arising in legal technology.
Lizzy Duffy, Senior Director of Global Client Services at Thomson Reuters Acritas, gave a sharp keynote that cut to the heart of the changes we all experienced during the pandemic over the last year. She shared the vision we lived, a sense of humanity, where we peered into each other’s homes, met pets, and universally heard one of our colleagues quip, “You’re on mute!” Raising important lessons from this time, Duffy focused on the positive, examining what we can learn from the last year and how we can push away the unhealthy habits we once had.
Turning toward numbers — since Duffy specializes in data around current legal trends — she said one major lesson of the pandemic (and potential benefit) is the renewed focus on doing more with less. Over the last year, the pandemic created a surge in work for law firms and corporations, specifically around contracts and financing. Alas, legal budgets did not grow in tandem, she said. While corporate general counsel experienced an uptick in disputes, for example, the spending did not follow, Duffy said, identifying an imbalance in legal organizations desire to provide more to clients and customers, but doing without any increase in resources. The pinch of the increased need for services coupled with less resources became real in lockdown.
Law firms also have refined their drivers as a result of the pandemic, according to Duffy. The parameters now include, what is delivered, how it is delivered, and who is delivering it. First, law firms have to distinguish themselves with what is delivered, by offering highly specialized, experienced talent, while also increasing their range of services provided. Second, technology and thinking innovatively greatly influenced how it is delivered, and leveraging alternative resources were accelerated. Third, diversity, equity & inclusion (DEI) became an important standard for all parties as to who is delivering it, while trust and personal relationships — seemingly omnipresent, were even more important in a virtualized environment for clients and law firms.
The struggles highlighted during the keynote demonstrated a divide between virtual and in-person experiences. Acritas found that 15% of practitioners experienced an overall deterioration in their perspectives by being less efficient and productive, missing collaboration with colleagues and learning opportunities. Conversely, 34% said they felt they were more efficient, enjoyed leveraging technology, and felt more productive.
Duffy noted our human existence of commonalties, yet juxtaposed our differences. In the end, the path forward is a hybrid approach, where law firms and corporations acknowledge these different experiences and adapt to allow individuals the latitude of picking their own Tao-ish professional path towards balance, flexibility, and order.
In the session Now What’s Trending?, Rawia Ashraf, Senior Director of Legal Practice and Productivity, and Jim Leason, Vice President of Customer Proposition, both at Thomson Reuters, led a discussion making sense of the latest trends in legal technology. They dove into a panoply of topics including, working from home, alternative legal service providers, the Cloud, and transaction management.
Ashraf recalled a conversation she had in 2018 about Cloud adoption, where a leader in the industry mentioned that it was going to take a pivotal event to push the legal industry fully into the Cloud, thinking it was going to be a major security breech. It ended up, of course, being COVID-19.
During a participant poll in this panel, Ashraf asking attendees what percentage of law firms were not comfortable with the Cloud, based on the 2020 ILTA Technology Survey. While most respondents thought it was 28%, Ashraf informed the audience that it was only 11%. Clearly Cloud technology has grown in importance over the last handful of years, and this was greatly accelerated over 2020.
Another issue that Leason and Ashraf tackled surrounded cost. With projected real estate footprints falling, where do the unallocated savings go? Leason believes a good percentage will be invested in technology; and with a multitude of newer applications and services coming into play, it is a natural progression for efficiency and productivity in the marketplace.
Lastly, Legal Geek brought us breakout sessions around artificial intelligence, discussing ethics and contract review, which are strong themes in machine learning. The session highlighted Thomson Reuters’ recently launched AI Principles, a set of guidelines designed to ensure the organization is promoting the ethical research, development, and adoption of AI. Given the bias that can be found in various algorithms which can be greatly exacerbated by AI, it was comforting to learn the industry is conscious and actively doing something.
The Legal Geek event really brought home that 2020 has been a time to reflect, learn, adapt, and adopt. While we all have commonalities in our goal of serving a client, we may do it differently. Leveraging technology, what we have learned about ourselves, and tapping into our own basic nature will make the path forward easier and better for everyone. That will be especially true if we can embrace the flexibility we have recently enjoyed and combine it with the good of the old, thereby creating a healthier ecosystem that’s well enabled by technology.
From the producer: Here at The Hearing HQ we’ve really missed travelling. So being whisked (virtually) to Buenos Aires for this week’s episode was a real treat!
Meet Joe’s guest, Federico Ast, the CEO and founder of Kleros. He’s deeply intelligent, thoughtful and one hell of an aggravator in the world of justice. Federico has a philosophy-centered approach to improving judicial systems around the world, and talks to Joe about how deliberative democracy can fast-track access to justice.
Kleros is an online dispute resolution system based on blockchain, crowdsourcing and game theory. We hear how Federico has used his experience of the Argentinian economic collapse of the 90s to problem-solve dispute resolution for the internet age.
Listen Here:
Apple: The Hearing – A Legal Podcast – EP. 73 – Federico Ast (Kleros)
Google: The Hearing – A Legal Podcast – EP. 73 – Federico Ast (Kleros)
From the producer: On The Hearing, we’ve talked to people at the top of their game about their experiences of lockdown. We’ve gained advice from experts on how businesses can best weather these unprecedented times. And this week Joe chats to Karim Sabbidine, an associate at Thompson Hine, about what COVID-19 means when you’re at the legal coalface.
Pre-pandemic, life as a New York litigator was a heady mix of high pressure and excitement – tiring yet fun. But for Karim it quickly transitioned to being cramped in a small apartment with two equally busy flatmates, while trying to navigate a virtual trial.
Karim has an international and multicultural background, and has an enviable résumé of on-the-job training. He talks to Joe about the realities of being a litigator, the benefits of writing every day, and why it’s important to always dress the part.
Apple:
Published on Lifewire
Written by Michelai Graham – Interview with Joseph Raczynski
Facebook is scaling back its ambitious plans to move into the cryptocurrency sector while users on the platform aren’t showing much confidence in the site’s new addition.
The media giant will likely launch its smaller scale Libra cryptocurrency project as soon as January. Libra was originally supposed to be a new currency backed by fiat money (a currency established as money by the government) and securities (tradable financial assets). Libra will now work as a stable coin, meaning it won’t fluctuate in value as it’s pegged to something like the US dollar or a basket of currencies.
“It was only a matter of time before a private company went down the road of their own cryptocurrency,” Joseph Raczynski, a technologist and futurist for Thomas Reuters told Lifewire in an email. “I was very excited to hear this was going to happen last summer, but skeptical to see how it would transpire.”
Cryptocurrency is the private industry’s brand new way to exchange value over the internet, Raczynski said, and Facebook wants to take advantage of that.
Raczynski has been working with cryptocurrency since the creation of Bitcoin in 2011 and has even created his own cryptocurrencies before. He said the most appealing aspect of cryptocurrency is the security and ease of use. Unfortunately, cryptocurrency is still just an idea of the future for some people, which may be a struggle for Facebook as it plans to launch soon.
“At its most basic, cryptocurrency is the representation of value on the Internet,” Raczynski explained. “The first stage that people should be cognizant of is that a cryptocurrency will be similar to a digital dollar.”
“It was only a matter of time before a private company went down the road of their own cryptocurrency.”
Facebook plans to launch a single dollar-backed coin, and eventually a wallet called Novi, to send and receive Libra currencies. Digital wallets are encrypted, Raczynski explained, so only the user would have access to it. With Novi, Facebook users can manage their digital coins within Facebook’s apps, including Messenger, WhatsApp, browsers, and other connected apps. With the use of a single currency, Raczynski thinks it will make the barrier to do things much easier to manage.
“Anyone using Facebook around the world could exchange their local currency for the Facebook currency,” he said. “Anything you want to buy, services rendered, or simply exchanging money could happen across the world with a unified Facebook currency.”
With all of the changes to Facebook’s cryptocurrency plans, users may be skeptical of its efficacy, yet the appeal of being able to easily send and receive money digitally may (eventually) trump those doubts. The social media giant is no stranger to discussing privacy, so it better be prepared to talk about its plans to track cryptocurrency usage on its site.
“Facebook is a lightning rod for controversy,” Raczynski said. “What they do or don’t do with users’ personal data and tracking user habits is a constant in the news and most people’s minds. It really is a broadening of what Facebook can do to trace and track habits and data patterns.”
Facebook users are probably already using digital wallets like PayPal and Venmo, and Facebook’s Novi will work similarly to those. What they all have in common is the fact that the platforms own and manage users’ digital wallets.
In the “real” cryptocurrency world, users have full ownership of their digital wallets, which are protected by private keys—a public address to share with anyone to make transactions with and a private one that shouldn’t be shared and essentially makes the wallet yours. So, while your money would still be yours via Facebook’s digital wallet, you don’t “own” the system it runs on.
Another important aspect to note is that while Libra is slightly more decentralized than a country’s own monetary system, like the US dollar, it’s still centralized around a number of companies serving as validators. While it might be a better system to use, according to Raczynski, it’s still susceptible to hacks because there are relatively small sets of attack points.
This new currency Facebook is creating won’t rely on the government, and will instead be backed by an extensive portfolio of companies, including those in the Libra Association.
“They have developed a governance where mega companies run computer nodes/servers that verify transactions between people or companies,” Raczynski said. “Now, in concept, this is similar to what Bitcoin established 11 years ago, only Facebook is run by upwards of 100 companies and their servers, rather than tens of thousands of computers which are not influenced by those private companies.”
In the not-too-distant future, Raczynski said, every asset people have will be represented by a cryptocurrency, from cars to real estate and beyond. This reach could also help people around the world who don’t have access to physical banks.
“Anything you want to buy, services rendered, or simply exchanging money could happen across the world with a unified Facebook currency.”
“There are few things that will be as technologically transformative in the world as cryptocurrency over the next ten years,” said Raczynski. “I am most excited about how it has the potential to help the unbanked, and [help] people living in developing countries rise up and take ownership of their own assets and build wealth.”
Despite Raczynski’s confidence in the growth trajectory of cryptocurrency over the next decade, people will have to learn more about crypto to believe using it on Facebook is a real thing, just as online shopping prompted much skepticism across the world when it first became reality. That, however, is on Facebook to prove.
From the producer: You may have watched as Mark Zuckerberg explained the internet to Congress in a way that felt a bit unnecessary. Well, this episode is sort of the opposite of that. Joe Raczynski is joined by legal and mathematical macroeconomics genius Doug Pepe, to take us through blockchain, tokens and cryptocurrency in a way that’s genuinely enlightening.
The legal industry is sometimes accused of not keeping up, but we know that’s not true. Lawyers are occupying this space now. Their clients are very active and they have a crucial role to play in the serious policy issues being debated.
Doug, a partner at Joseph Hage Aaronson, started his blockchain journey by building gaming computers with his young children, and then teaching them how to mine bitcoin. Fast forward and Doug is now an expert on blockchain privacy, smart contracts and digital identity.
Apple: https://podcasts.apple.com/us/podcast/ep-68-doug-pepe-jha/id1389813956?i=1000503066806
Find out more at tr.com/TheHearing
It’s out! In a year unlike any of the 30 previous annual surveys, the 2020 International Legal Technology Association’s (ILTA’s) Annual Survey breaks down the technology transformation afoot resulting from the ongoing pandemic. With insightful data-driven industry trends, this year’s ILTA survey highlights the rapid pivots, swerves, and shifts happening in the legal technology marketplace.
All of us are intimately familiar with the chaos that impacted law firms, employees, clients, and the courts that followed the initial shutdowns in March. What has resulted is a robust renewed interest in tech tools that enable work to continue to flow and ultimately solve client needs. So, which trends floated to the top of legal tech?
Zooming to its zenith, the video conferencing tool Zoom made huge waves. It was the clear favorite for law firms that sought to bring internal and external people together immediately and without much ado. While Zoom struggled with capacity issues and some serious security concerns initially, those fears were allayed over time.
What will be fascinating, of course, is next year’s statistics. Zoom could be a bridge to the video conferencing world, where Microsoft is king. The interoperability suite that Microsoft provides would seem to indicate that Zoom has indeed hit their peak in the legal marketplace. Couple that with industry leaders creating a secure legal ecosystem with the courts that integrates video, calendaring, docketing, and case information all under a strict security blanket, and Zoom might have challenges in the legal marketplace going forward.
Another trend brought up in the ILTA survey — one which is cited year after year but was accelerated in 2020 — was cloud adoption. If you have ever been in or seen a server room, you will know its brrrrr affect. Not only do they have a cacophonic hum of a dozen beehives, but they are more frigid than a Minneapolis January morning. If a firm can jettison a good percentage of that infrastructure in favor of an arguably more secure cloud environment, which doesn’t require thermals, it’s a win. To that end, cloud embracing extends to nearly every part of the business, including MS Office, email, VoIP (hosted phones), DMS, case management, eDiscovery, etc.
Turning toward specifics of the work from home phenomenon and its impact on the survey, there are several interesting points to raise. Antidotally, I knew several firms that during the height of the pandemic still had their support staff in their office, while others adopted technology. One area of adoption that boomed was Remote Online Notarization (RON); and having recently used RON myself, I was thoroughly impressed. The hoops I jumped through to prove my identity was far greater than the in-person model. To that end, it seems many firms leapt through the rings as well with DocVerify and E-Notary leading the market. Fully 21% of law firms were using these tools, an impressive embrace of tech over in personal interaction.
Another tech tool getting a pandemic push was mobile. Steadily increasing over the years, people embraced their iPad and mobile device much more this year, unsurprisingly. With a broader push by content producers, application developers, and kids, the world is rapidly moving to mobile first. Meaning that at some point, the expectation will be that most work could or should be done via a mobile device.
The next iteration of this will be to jettison laptops and grab ahold of a plug to connect mobile devices to larger screens. Samsung is experimenting with this now via DEX. This could see your mobile device becoming your computer, one-in-the-same. Short of that, you see legal tech applications increasingly built and optimized for mobile devices. This trend will likely continue.
Another interesting trend spotted this year was the drop of “security” from the top concerns cited by law firms. While security has long stood atop that list of concerns, it was replaced this year by two doggedly difficult ones: “Change: Users’ acceptance of change” followed by “Change: Managing expectations (users and management)”. That seems to boil down to communication, action plans, stakeholder buy-in, and disseminating information in order to get people on board. An easy task, right?
In the coming years, here are three areas that I might expect the ILTA survey to cover in greater detail:
Legal platforms — We are on the cusp of a major movement across the legal landscape in which thousands of legal startups and their well-established brethren have hit critical mass. How can these disparate apps and services be integrated along with appropriate data controls? The hope is to have these applications meet their users on an agnostic legal platform, open to all parties and integrated across both the business and practice of law.
Office impact — With people working remotely for the better part of 18 months, does it make sense to still have an office, and if so, how big? Do satellite offices come into vogue now, and, if so, how does that look technologically?
Virtual reality – What seemed laughable five years ago will be thrust into the spotlight soon. While little discussed, Apple will likely have a VR headset called “Apple Glass” in the next 12 to 18 months. As the bellwether of mobile technology, this will create new avenues to digest, interact with, and expand on legal applications. Imagine Zooming away through an Apple Glass headset and interacting with your avatar clients as if they were in the room, or leading a jury through a crime scene via 360-degree recorded video. This is right around the corner, and my expectation is that you will see this listed on an upcoming ILTA survey soon.
Clearly this has been a year of transformation. Faster than in any of the last few decades, we saw law firms confronted with an existential threat turning quickly toward technology. With this pivot, I would surmise that the future of technology is LED bright within the legal industry, and it will continue to become more invaluable.
In this special US election installment of the Hearing Podcast, Sanaz Asgharzadeh, former big law firm attorney now heading her own practice, Atlas Law Firm, speak with me about the election.
With the caveat that at the time of recording a victor had not yet been chosen, and with the votes continuing to be counted in several swing states, Sanaz describes the current mood of the US as it waits to find out who will emerge victorious. Sanaz talks about her background as an Iranian immigrant in the US and how it shaped her interests in the law and political process. She takes us on a deep dive of the US electoral college system and discusses the potential for post-election litigation and what impact it could have on the outcome.
Sanaz also takes us through hypothetical scenarios involving the incumbent that might once have seemed unlikely, but in these unprecedented times are worthy of consideration. Finally, she discusses the importance of counting all of the ballots and the need for transparency in these efforts.
Listen now on SoundCloud
