Increasingly Cloudy — Law Firms Continue the Flight into the Storage Heavens and What the Future Holds

Originally published on the Legal Executive Institute

By Joseph Raczynski

With the recently released ILTA Technology Survey there is little question that Cloud adoption is drifting upward at law firms. I have also seen this trend through recent conversations with law firm CIOs and CTOs. The shift is real. ILTA’s survey qualified this change to outsourced storage, rising to 62% in 2016, from 51% in 2015. This is a solid leap forward year over year.

cloud

ILTA Annual Legal Technology Survey 2016

While the majority of responding law firms lean in favor of Cloud technology, a certain subset of firms will stay the course and continue to opt-out. The primary reason given for avoiding the Cloud is client demand. That said, I have seen some cracks developing in the tough exterior of this conservative approach.

Given recent data breaches at law firms, I more frequently hear that clients tend to feel increasingly comfortable with a secured and vetted provider than allowing their law firms to continue hosting the data themselves. Security is the overarching reason. If a firm chooses a reliable Cloud provider, the likelihood of that provider having real-time monitoring, enhanced security application layers, and the most up-to-date services — especially compared to a typical law firm — is much more likely. In short, most firms would be better suited to use a top Cloud service rather than subjecting themselves to a multitude of cybersecurity issues by manning the wall alone.

Indeed, the resources and skills needed for the level of protection clients are demanding — demands that are growing more complicated daily — is normally beyond most law firms’ resources with regard to personnel and technology. The old adage is fitting in this case: “Do what you do best.” And maintaining storage may no longer fall into this space for the typical law firm.

Infinite Storage and What Comes Next

The largest Cloud providers are preparing for a meaningful change in this space over the next 10 years of growth. Clearly, storage is becoming very inexpensive as hardware prices drop. This leads us to what I have previously discussed — a time of Infinite Memory. When this happens (and we are very close now), the next significant change will be to the services model in this space. Five of the largest Cloud providers — Google, Amazon, Microsoft, SalesForce and IBM — are all preparing for it.

Artificial Intelligence as a Service (AIaaS)

More importantly, no longer will the Cloud be solely about storage. Instead, it will be more about the services — this has existed with SaaS- (Software as a Service)-based solutions for a while, but this is going to change even more in the next several years. The philosophy is that these large Cloud providers will probably start giving storage away for free. The next phase is leveraging some of the more emerging technologies in the Cloud, with Artificial Intelligence as a Service (AIaaS) being the next great jump forward.

The simple idea is that these providers will start charging for add-on services that nearly every organization will have to have in order to compete. If you do not have the latest AI, you may be out of the game quickly. These new services will compel those firms and companies still sitting on the sidelines into the game.

A bit further out, I see Cloud providers also getting into the Blockchain space. Essentially Blockchain is a decentralized database which stores encrypted information. It makes that data easily available to those who are allowed access to it. All of this information runs on services, and the Cloud will be able to handle this with aplomb.

Without a doubt, law firms’ reliance on the Cloud is growing quickly, and it is only a matter of time before it becomes more ubiquitous and accepted than our current state of 63% adoption.

ILTACON 2016 SESSION: NEW INTERNATIONAL STANDARD FOR CLOUD DUE DILIGENCE

By Joseph Raczynski

The cloud is becoming increasingly ubiquitous at law firms. In fact, a recent ABA Technology Survey stated that 46 percent of cloudless firms will be transitioning in the next 6-12 months. In the session on the “New International Standard for Cloud Due Diligence,” Gregg Brown, senior director Technical Strategy, Computer Standards at Microsoft, and Patrick Oot, partner at Shook, Hardy & Bacon, discussed the changes to the cloud over the last six years and what is coming down the road.

Small- and medium-sized firms have embraced the cloud, while the largest firms have been more reluctant, saddled with restraints placed by their clients – especially in the financial industry. That said, there now seems to be some loosening of the straps in that particular space.

Benefits of the cloud:

The duo argued multiple reasons for jumping to the cloud. First, firms can take advantage of the latest innovations, features and capabilities with updates released every month, compared to waiting years for internal upgrades to their current systems. In addition, the cloud offers greater agility – not having to retrain or rebuild as needs expand.

Oftentimes, clients require more capacity on short notice, which the cloud can easily accommodate. At a base level, the cloud is a fraction of the cost of on-premises solutions – though add-ons can sometime raise the price close to that of an in-house solution.

As more firms adopt BYOD (bring your own device), the cloud enables firms to meet workforce demands with a per-user license. But with BYOD comes another layer of security concern, which the cloud can more readily accommodate as most vendors will be up-to-date with regard to security patches.

As Brown also noted, another inherent benefit to cloud technology is access to analytics. With all of its data in the cloud, a firm can easily deploy search and analytics across all of its information/eDiscovery, compared to what one might have with an on-premises solution.

Risks in the cloud:

As firms move to the cloud, one of the most persistent risks associated with the technology is multitenancy, means that a software application may not work well as designed in the cloud with multiple users trying to gain simultaneous access to it.  And of course, with complexity tied to data transfer laws, particularly between the US and EU, firms should consider the challenges of data access and the courts, Oot noted.

New ISO Standard Impacting the cloud in 2016:

Brown also described that by the end of 2016, there will be a new “Cloud Service Level Agreement (SLA) Framework” – known as ISO/IEC 19086-1 – published, which will offer a set of considerations for cloud agreements. He noted this will be a boon for law firms as it will lay out a guidance standard verses the normal compliance standard. This should have a positive impact, although Brown cautioned that these guidance standards will raise key questions and require analysis and evaluation.

Reflecting on the session, Oot and Brown surmised that technology still has a few pessimists, but that the forecast is looking positive as more and more firms opt-in. With its waxing advantages and waning risks, it appears that greater cloud adoption is near.

As they concluded, Oot and Brown pointed out one last benefit of the cloud – terms of service from providers can now be negotiated, where previously this was not permitted.

Based on what they outlined, there is little question that fewer barriers remain to adopting the cloud.

Joseph Raczynski is manager, Technical Client Management, Thomson Reuters 

ILTACON 2016: Re-Imagining Legal Technology for the 21st Century

By Joseph Raczynski

“The story of disruption was just the first act of 21st century business, now begins the tale of total transformation.”

— Mike Walsh

NATIONAL HARBOR, Md. — So reverberated the words of Mike Walsh a Futurist/CEO of Tomorrow, across an audience of more than 3,000 legal professionals at ILTACON 2016, a four-day conference that centers on the intersection of technology and the legal industry.

Walsh gave the keynote on the opening day of the annual conference, and the lens he cast enlightened the onlookers to a futuristic view of our current world. He then bridged that technological vision to the 21st Century Legal realm and focused on several thought provoking questions.

Can you think like an 8-year-old?

The key to transformation is to be ahead of it. Through the optics of an eight-year-old we can view the direction that technology is shifting. They embrace mobile — why? Because parents have pacified their kids for years with iPads and mobile phones. Their learnings began on those platforms which became almost intuitive to them and will now dictate our future.

When will we be a truly data-driven world?

Now! The biggest social shifts are shaped by the data-driven world. Disney World offers the most advanced of data collection and use. Their MagicBands are linked to a credit card and function as a park entry pass as well as a room key. They know who you are, where you are, and increasingly know what you want — predictively. Food can be delivered to you without you ever specifying a location. All of this is using data and machine learning to better understand consumer, and thus human behavior.

disney

WeChat, an app primarily used in China, was also offered as a good example of where we are going. With this app, people in China can play games, pay for things and buy insurance — the whole time interacting with a bot that is constantly gathering data and learning. This is what we will begin to see in all businesses in the near future.

In preparation for his transition into a discussion around legal, Walsh offered another thought. The children of today will be the first generation to be raised partly by artificial intelligence (AI). If you think about the platforms that are prevalent now, kids are interacting with them increasingly — Alexa, Google and Siri. Law firms have to start thinking about how these eventual employees will work and interact with each other both inside and outside of the firm.

How will a 21st century law firm differ from a 20th century firm?

The world is now global. The largest corporations and law firms have back office and operations support overseas. As an example, Walsh talked about something he saw in India which illustrated where we are headed. An AI machine (physical computer) is situated alongside other staff in a cubical at an office center in India. It is fully embraced and accepted as a highly efficient employee — and continues to improve rapidly with its own productivity.

Speaking of actual human employees, recruiting people will transform, Walsh noted. The next generation of hiring future lawyers, and collaborating with clients should focus on rethinking how we hire. Offer a prospect a clean sheet of paper and ask them to come up with a solution to a problem. Another idea, after a month on the job, ask what processes the newbie might change based on what they are seeing.

int-about-mike

What kind of mental software are you new hires running?

Going forward, the operating system of a 21st century lawyer is as much about the culture as it is about the code. All firms will have to be agile, and firms will have to hire people that think that way. Everything around our traditional culture and space is changing. People will increasingly be working from other locations, so this concept has to be reimagined. Walsh’s suggestion was to think about the person you are hiring — are they energized by solving problems? Additionally, environments have to be reconsidered. How do you design an office for people that do not need one?

Lastly, are you leveraging all of your data?

Law firms are rife with all sorts of data. One question that Walsh suggested was worth posing is how are firms using that data? Increased productivity can be gained by applying analytics to the whole.

In closing, Walsh pleaded for the legal space to adjust their mindsets, how we see and use data, which people are hired, and what technological processes are in place. We need to think like an eight-year-old to see how the world will change and adapt now, he explained.

The data inside law firms has to be better leveraged and analyzed with new tools. When hiring, do so by unearthing agile people and creating more social workspaces. One of the best ways to do that is by rethinking your communities, picking some high-profile projects and challenging those new teams to experiment.

In conclusion, Walsh noted: “When preparing for this new future, embrace that the future means challenging everything we know to be true.”

State of the Cloud at Law Firms: The Interstitial Phase of Law Firm Cloud Philosophy

By Joseph Raczynski

The word “Cloud” can be a divisive word at law firms. Recently uttering the term during technology meetings with East Coast-based law firms with between 50 and 3,000 attorneys elicited starkly differing responses based on firm size and practice dominance.

Most of the midsized firms with whom I have met over the last year were favorable toward its use in most cases. One CIO declared it was firm negligence not to use the Cloud for data. He cited the inability for most firms to retain the expertise necessary to safeguard data inside the firm. Typically, larger law firms with clients in the financial industry explicitly forbid embracing such services outside of their network. Indeed, these clients underline this conservative firm posture by pushing for responses to 300-part questionnaires about how the law firm handles their data and outlining privacy and security practices related to the Cloud.

Despite this push from the financial industry, I would argue that we are in an interstitial period of Cloud adoption at law firms. In the not too distant future, I believe that many of the firms today which avoid or disallow its use will accept it. Law firms are risk-adverse institutions. While Cloud technology may appear laden with hazard, it might actually be the opposite. Initially when the Cloud — a rebranded name for a decades old concept — returned, early adopters encountered data breaches.

Years of security issues were thrust into the headlines, and those goaded reputable Cloud providers toward major investment around protecting their services. Now with far tighter rein of control, Cloud providers are much better positioned to court law firms of all sizes. Unless a firm has a solid technology budget and the ability to retain top-notch security experts, an argument could be made that housing data in a secure cloud would be more prudent than inside an internal firm network.

A recent New York Law Journal article by Ted Sabley on Does Adoption of Cloud Computing Shift Cyber Liability Risk? will give some readers pause for thought on greater adoption. Sabley mentions each of the largest Cloud providers have baked in new and surprising contract terms. They’ve shifted the liability in the End User License Agreements (EULA) to the customer. That is, if there is a breach of customer data hosted on the Cloud, the user bears the responsibility. This seems to be the case with Amazon Web Services (AWS), Google, Microsoft and Apple Cloud platforms.

Whether or not a customer shoulders the responsibility of a breach, the common practice for everyone dealing with Cloud providers should be the following:

  • Understand the Cloud contract. Who is responsible when a breach happens? What happens to the data if the Cloud provider company goes under or is acquired?
  • Realize which type of firm data is being placed into the Cloud. Is it loaded with Personally Identifiable Information (PII)? Is your client aware of where the data is being stored?
  • Purchase Cybersecurity Insurance. Years ago this was a fairly nebulous insurance process, however, now it seems to be much more defined. Seek out expertise with all of the various components and nuances in this arena.

Currently firms of all sizes find themselves in two camps when it comes to the Cloud. Midsized firms have generally flown into the Cloud, while big firms hover between land and air, in a bit of a fog-like state. With increasing pressures of expense and the challenges of retaining network and cybersecurity expertise, the future for law firms is undoubtedly in the clouds.

Law Firm of the Future – The Trinity of Forces: Infinite Processing Power, Memory, and Machine Learning

By Joseph Raczynski

In ten years, it is predicted that 40% of the Fortune 500 companies will no longer exist1. This forecast originally cited in Fast Company is from a Babson Olin School of Business study.  This notion is nearly incomprehensible, but may have a significant impact on the legal business.

Why is this happening now, and what impact might it have on the law firm?

We are at an extraordinary moment in time with the evolution of technology on three fronts.  The trinity of forces are colliding at once, propelling change with everything around us.

Gordon Moore, an Intel chip scientist, formulated a well renowned technical law.  Moore’s Law states that roughly every 18 to 24 months, the processing power of computers doubles. That is, the ability for a computer to perform calculations is increasing exponentially.  For some perspective, if you were to buy a $1,000 computer in the year 2000, it would have had the processing power of an insect brain. Buy a new computer in 2010 and you would have the processing power of a mouse brain.  Fast-forward to 2024 and the expectation is that a new computer will be as powerful as the human brain.  In 2045, a $1,000 computer purchased from Amazon.com will process as fast as all of humankind.  The implications of this are staggering.

In the second of the three forces, we couple what amounts to unlimited processing power with the advances to storage and memory for computers. In 1965, IBM built a computer with 5MB of storage.  It was as big as a bedroom and cost $120,000. In 2004, a memory chip the size of a fingernail cost $99 and held 128 MB.  Ten years later, we can purchase a 128 GB chip for $99.  This is the hockey stick picture of momentum with exponential growth accelerating rapidly up the graph for both processing power and memory.

The third and last piece of this triumvirate of significant change is programming and algorithms.  We are at a state where computers are beginning to teach themselves.  Machine learning is becoming an increasingly important part of many businesses.  Through an algorithm, a programmer builds a foundation from which the program can learn and continue to adapt and grow.  There are a plethora of examples that are starting to take hold.  IBM Watson has the most buzz right now with its cognitive computing platform.  Uber uses machine learning to price rides, location drop-offs and pickups. Amazon can couple complementary products with your purchase.  In the legal space, WestSearch®, the fundamental algorithm behind WestlawNext®, learns as people conduct research.  It surfaces up the most pertinent content and good law for the researcher.  Other legal examples include e-Discovery where many products utilize predictive analytics to help reduce the number of eyes necessary to review documents.

The blending of these three forces – processing power, memory, and algorithms – is a mixture for infinite growth and transformation at law firms.  The opportunities are immense.  Here are some possible changes afoot as the trifecta take hold over the next 10 years.

  • As predicted that 40% of the Fortune 500 companies will no longer exist because of these forces, law firms will likely mirror this as some who do not adapt and embrace these technologies will struggle to survive
  • In the next 10 years, because of unlimited storage and processing power, most document review will be completely automated and computerized.  No longer will the first years or contract attorneys be reviewing documents for 18 hours a day
  • Workflow solutions will reign over the next five years, but beyond that the trifecta of forces mentioned will push these solutions into complete automation so that drafting documents will be computer generated.  This is actually happening now with 20 percent of Web news articles written by computer
  • We are in an interstitial period with the Cloud.  Currently, security frightens many firms from taking advantage of its scale and low cost.  In the coming years, most firms will move everything they can to some type of Cloud, including private or hybrid
  • Everything will be outsourced at the firm.  Phone systems, HR systems, back office, administrative and technical support, where the portal will be hosted, office tools like Microsoft® Office, and all things technical will likely be moved away from the firm and managed by vendor experts.  This will greatly reduce costs for the firm as they tap into the three forces
  • As a result of the above, most attorneys will work remotely, and law firm office space will be dramatically smaller
  • Big firms will get bigger and the medium may get smaller.  The mediums who adapt will find their niche as a regional player, local generalist, boutique, or litigation specialist
  • The impact on speed and adaptability on new attorneys will begin in law school.  Some schools have already begun a two-year program with the third focused on technology, lawyer tools, and recalibrating how the attorney will work in the new firm

The law firm of 10 years from now will certainly be different from what we have today.  In this extraordinary time, with the evolution of technology and trinity of forces, firms will have to adapt rapidly.  This fundamental shift will be an opportunity for the firm to become more efficient, create new opportunity, and ultimately serve their clients better.

1 John M. Olin School of Business study

Exponential Growth—The Data Explosion and Resulting Challenges and Opportunities for Law Firms, Part 2

By Joseph Raczynski

Over the course of the next several years I predict that many law firms will begin hiring data scientist. In my previous post Exponential Growth – The Data Explosion and Resulting Challenges and Opportunities for Law Firms, Part 1 I discussed how our current data explosion threatens experts at law firms but could yield vast opportunities. Recently Robin Grosset, Distinguished Engineer and Lead Architect at IBM Watson Analytics, described the importance of having a data scientist in your business. Underlining this point, he stated that in the United States there will be three-times the positions available in this field than can be filled.

How firms turn the big data challenge into opportunity

Why should law firms invest in a data scientist? Firms sit atop of massive quantities of very important specialized and typically siloed data. Grosset mentioned that a recent Mckinsey & Company report showed a firm could increase its operating margins by 60% by using the data they have currently. With the exponential growth of data, law firms will need to decipher it into understandable bits so they can make actionable decisions and find opportunity.

How could this be accomplished? In the past we know that eDiscovery practices utilized computer learning and analytics to create efficiency for large cases. As law firms continue to utilize flat fees as they seek out business, they will increasingly need to take advantage of analytics-based tools with a layer of human interaction. The human interaction is a piece that allows you, the expert, to ask simple or insightful questions for which the tool will serve up answers. Those intuitive results rest upon the underlining data which can be drilled into for greater understanding. The core piece to this human-level interaction is Semantic Analysis. In essence it adds meaning to data. That is, it creates data clues like data type, patterns, range density, sample values, and correlations. You essentially have a massive set of rules that are bundled together and sift through the data, eventually learning on its own and creating new interpretations of what lies within the data.

Why would a law firm use this? Business development, client retention, analysis of lawyer productivity, assessing resource allocation and a myriad of other untapped areas will be explored using a data scientist. With the ability to process massive quantities of information and find the white space, real opportunity will be found by those that go down this road. In fact, the analysis that IBM Watson puts forth states that most firms estimate that they only analyze 12% of their data currently and that 88% is left on the on the dark-grained, bamboo-laden law firm floor.

Ultimately, the exponential growth of data is currently creating challenges for some law firms. What will be fascinating over the years ahead is who will seize on this evolving opportunity and how will they approach it.

The Anatomy of Successful Cyber Attacks

By Joseph Raczynski

Preparation for cyberattacks on your network requires a fundamental understanding of the complete picture of who has launched the assault.  Steve Surdu of Surdu Consulting, LLP gave the keynote address at ILTA LegalSEC Summit 2015 in Baltimore, MD describing “The Anatomy of Successful Cyber Attacks.”

Steve outlined four attacker or threat profile group types; Hacktivists, Criminals, Terrorists, and Nation States.  In the matrix below I break out each section he reviewed into a column view to better understand the who, why, where, motivations, advantages, limitations, and impacts for each group.  I removed the Terrorist group as they tend not to pose a threat to law firms.

In summary the table offers an insight into the full anatomy of the threat for law firms.  To mitigate the aforementioned threats, he outlined five key strategies:

  • Awareness: An absolute must is providing education of all parties surrounding the law firm. This includes teaching employees, management, suppliers, and even your clients on the threats that exist, the tactics of the hackers, and the various outcomes from unsafe computing.
  • Visibility: Never assume that you will know everything that is happening on your network. Keep an inventory of assets, logs and all alerts which when gathered together creates actionable intelligence.
  • Focus: Law firms must think how the hackers attack, so avoid misplaced faith in compliance alone.
  • Operational Expediency: Firms should make reasonable operational and security trade-offs. That is, do not spend all of your time on areas with little benefit, like patches for little used systems.  Prioritize on the biggest impact items first.
  • Priorities: The most valuable time spent on cybersecurity is spent on people and process over technology.

Wrapping up his discussion, he touched on cybersecurity in three areas pertinent to law firms; mobile, Cloud, and eDiscovery.

Mobile Technology:

At this juncture, mobile devices do not pose a significant attack vector for large law firms.  The real risk is one-offs including physical loss of the device, or exposure to data stored on the unit.  Firms should remain vigilant by using encryption, password protection, and provide remote wiping on demand.  Lastly he mentioned that Android remains a target.

Cloud:

The Cloud is intriguing from a security perspective.  It provides familiar components to on-prem issues, but is outsourced.  What that means is that the same predicaments arise but since a different operator is in the equation, it can be more complex.  Surdu recommends to counter this threat by vetting your Cloud vendor carefully to manage your risk.

eDiscovery:

Similar to the Cloud, eDiscovery invokes the same issues that it does externally as it would internally.  When you use hosted services those services have to be vetted for controlled access, general integrity, encryption were necessary and to assure that privacy laws are being followed.  He recommends that firms use familiar and consistent platforms when possible.

In his parting thoughts, he focused on several salient points.  While difficult, attempt to retain key players for your firm security.  A revolving door in the Information Security department is ripe for attacks.  Create a process to track key information and assets.  By having these procedures in place the firm will know the who, what, where and when of deflecting cyber-attacks.  Work to cultivate and maintain senior management to establish a sense of normalcy.  Often hackers go after newer management because they are less likely to know systems and process.  He also stressed that your best adversaries understand that details matter.  “You should focus on the little things, because if you cannot get that right you will not get the bigger things.”  Lastly he ended with a push for firms to concentrate on finishing security projects because that is much more important than simply starting them.

Unlocking the Power of the Cloud

By Joseph Raczynski

Pressures are increasing for legal IT professionals to increase productivity and reduce costs.  Couple that with the demand for anytime and anywhere access to law firm data and the result is a multi-front push for cloud based solutions.  At the forefront of this struggle are core functions of a firm like content management, collaboration, search, eDiscovery and records management.  At ILTA 2014 HP Autonomy explored with a holistic approach the fundamental factors for unlocking the power of the Cloud.

The three primary factors that drive Cloud have a genesis with the new portrait of today’s attorney.  Neil Araujo of HP mentioned that fully 50% of practicing attorneys in middle to large law firms are 35 years of age and younger currently.  That ushers in a new attorney mindset bent on technology.  These individuals are mobile and connected; and so the panel identified “The New Attorney” as the first driver for Cloud adoption.  The second factor illustrated dealt with “The New Economy”.  Cloud can assist with finding new ways to deliver efficiency and cost savings.  The last factor mentioned was “The New Client”.  Clients are now expecting more for less and desire data in more rapid, easy, and secure platform.

Shawn Misquitta of HP Autonomy cited several major product bets across the industry going forward.   Shawn said, “A consistent, intuitive user experience is of the utmost importance.”  This will lead to clean, clear user interfaces that will display and function well on any device.  The Cloud will be a Hybrid Cloud consisting of both On-Prem and Private Cloud.  This delivers a secure accessible platform that allows for firm governance of data and processes more easily.

Ultimately the panel stated that while there is no simple Cloud solution, there is no question Cloud is here to stay.  The economies of scale, flexibility, scalability, and mobility all make it a rich solution, provided it is implemented and planned carefully.