LegalSEC: Cybersecurity, Rooted in 500 Years of History

By Joseph Raczynski

Learning from colonial piracy about the war on cybersecurity 

“It is a small world.  It’s a fragile world.  No one is safe until everyone is safe.”  These are the cautionary words of Rod Beckstrom of The Rod Beckstrom Group, the keynote speaker at the cybersecurity LegalSEC Summit last week in Baltimore.  With over 350 legal technology professionals leaning into his every word, he set the stage for where cybersecurity is headed with an advisory tale from history now repeating itself on the Internet.  His intent, to arm the guardians overseeing 80-90% of the country’s IP information all sitting in the same room at that moment in time.

History of Pirates

In 1491, the “Erdapfel” of Martin Beheim was created.  It is the oldest surviving terrestrial globe – excluding the Americas.  This sphere was cutting edge technology of the day.  Like any technology its uses can be for the betterment of humanity or its decline.  Not surprisingly, around the release of the globe, piracy began to flourish.  Seafaring scoundrels viewed the world anew with this technology and seized upon its bounty.

These salty scofflaws took four unique forms in their day.  One group of pirates were sponsored by the Dutch, Spanish, and British empires respectively.  Another group realized they could band together using their private ships to attack on the high seas for gems and precious metals.  The third formed a coalition around pirating for a cause.  The last group were one-off ships that would attack others for jewels or money.  These four pirating entities have a present day adaptation.  They translate to State Actors (e.g. China, Iran, North Korea), Organized Crime (e.g. in Russia or Estonia), Hacktivist (e.g. Anonymous) and Lone Hackers (e.g. anyone and everyone).  One new addition, in the Cyber Age there is also the internal threat to organizations known as “Insider Joe” attacks which are very prevalent.

keynote

Present and Future

As Beckstrom described in this presentation, the wars over the years require time for forces to align.  During the Nuclear era, once the major powers acquired these arms, everyone realized it was in the best interest of each country not to use them, i.e. mutually assured destruction.  This is ongoing right now with Cyberwar.  He said that China or Russia could hobble the infrastructure of the United States tomorrow, but they realize that if they did that, the US would do the same to them, therefore no one conducts this sort of cyber-attack.

Law firms are not a sovereign territory so all aforementioned groups are threats and in turn are seeking them out.  These groups have tools which are sold on the Dark Web as out of the box solutions and can wreak havoc for firms in very little time.  In the graphic below Beckstrom outlines an ecosystem where various parties work together but in isolation to earn money or take down a company.  The scripts are created by people and sold to criminals.  While another sets of criminals have harvested millions of credentials.  In conjunction the Criminal Operator uses both to target a law firm or corporation.  Those proceeds or goods are then routed through Mules.  These are everyday people who simply accept packages and send them along to someone else which keeps the money flowing. In most of the law firm attacks, mules are not used, instead data is either released or held at random by the Criminal Operator.

rod1

The only way to combat this said Beckstrom will be a new world of robots fighting robots (computer bots), which is now occurring.  This next era defense is sifting through huge amounts of data and applying cognitive computing and artificial intelligence with a layer of deep learning on top.  In this light he underscored the importance of preparedness.  One of the world’s largest banks, JPMorgan, has decided to pledge a half billion dollars toward the fight on cybersecurity.

Beckstrom closed with the warning to each firm CIO that the time is now to invest heavily in cybersecurity.  Every one of the attacker profiles mentioned are attempting to break in and get access to law firm and corporate information.  Prepare now because time is short – we are not safe until everyone is safe – by taking the responsibility to invest.

Building Our Blockchain Future (Part 3) – Beyond Bitcoin – Blockchain and the Legal Impact

By Joseph Raczynski

This is the third and final post in a series about blockchain, an online public ledgering system, and how it will soon significantly impact many aspects of the legal industry. In the first post, I demonstrated the potential and the pitfalls of Bitcoin and its underlining blockchain technology; and in the second post, I described what full global adoption of a cryptocurrency would entail. In this installment, I will explain the potential legal implications of blockchain technology.

Part 3: Beyond Bitcoin — Blockchain and the Legal Impact

While Bitcoin may disappear in a few years — doubtful, but possible — the underlining technology is by far the most important development going forward. Blockchain is a public ledger. It can be applied to almost anything that you would normally save to a database or spreadsheet.

In the Bitcoin example, the blockchain shows the exchange of all the money that has ever changed hands in Bitcoin transactions. It does not list who owns the coins per se, just that they exist or that they changed hands. It is controlled by no single person but by all parties connected to the exchange. This public, but encrypted spreadsheet in the sky is in theory more secure and open than our current system of money exchange. The network maintains a collective history of all of the transactions that have ever occurred on the network. You can view all of the Bitcoins changing hands every moment of the day at Blockchain.info.


I have little doubt that blockchain technology will revolutionize the legal industry in the coming years… there is almost no doubt that this technology will be a significant disrupter to the legal profession and the overall market on many fronts.


And as you see the transactions scroll up, you soon identify several important legal implications. For one, none of this money has been passed through a bank or other financial institution, nor has it be screened by any government agency. That is, if you have a major transaction of $10,000 or more coming or going from the US — one that is normally required to be reported — it is not being reported via Bitcoin today. As you might surmise, many positives with this technology exist, but significant challenges, mostly concerning government regulators and current US laws, are also present.

While Bitcoin created the first blockchain, many other such chains have been created since. For example, there are other cryptocurrencies that use the technology. However, where this becomes most interesting is how related businesses could use a ledger-based blockchain platform. Fundamentally it is a program from which to build a system of accounting or process. One network called Ethereum, which has been described as a “decentralized virtual machine that can execute peer-to-peer contracts” is leading the charge with smart contracts and the law.

Here is how I see blockchain affecting the legal industry.

Blockchain and the Law

Creation of Contracts: The blockchain could alter the landscape of contract attorneys. Part of what makes the blockchain so special is that not only does it keep records which are immutable, it also creates a process around that. For example, I could create a contract which stipulates that when my patent was approved by the Patent and Trademark Office (PTO), my four partners would receive a 10% share in my company. How would that work? The contract on the blockchain would check to see if the patent was approved, then trigger a process releasing the shares to the partners. All of this would be automated and fall outside of human legal action. Indeed, you could go one step further and tie-in a payment system so that when that patent was granted, bonus funds could be dispersed automatically into the accounts of said partners.

Intellectual Property: If blockchain is ripe for anything it is IP. This technology creates a publically accessible, indisputable ledger of each filing which could be held not solely by jurisdiction but on a global scale benefiting everyone. This information would offer clean and clear rights of use for all parties. You could even submit your trademark through the system. Leveraging an algorithm identifying any likeness to the trademark, the system could then grant or dismiss it. All of which would become part of the public ledger for anyone to review.

Land Registry: Some Latin American countries are beginning to use blockchain as a means to keep track of who owns which land deeds. Wealth is created through ownership, and one of the most challenging aspects of developing countries is determining who owns a piece of land. Disputes often occur because of corrupt governments or individuals taking advantage of the under-educated. Having a public blockchain ledger would allow for everyone to be aware of who owns which parcel of land; and it would make the exchange of those plots much easier and more equitable.

If a family were to buy a plot of land that could be registered on the legal blockchain, it would be much more verifiable than even perhaps government records. All parties would be able to authenticate this as compared to one entity (the government) holding onto all the records. This process would even create a better base for the government to fairly tax individuals and businesses.

Establishing Records: In some African countries they are looking at using blockchain technology to keep census information. Voter records could also be added to this process as a means to have a central repository of eligible citizens. In this area, currently under development, blockchain seems primed for tremendous growth.

Financial Service Industry: The banking industry also is jumping into this arena. The theory is that our stock exchanges will become blockchain enabled. The idea is simply that every stock bought or sold would be on the ledger. You could trace back your own ownership of that equity and even tie that to your estate-planning documents. Extrapolating this out, those documents also could be housed on a blockchain with respective triggers for when you eventually die. Ultimately that information is then released to your beneficiaries based on that event (Date of Death) recording by the Social Security Administration (SSA).

Personally I have little doubt that blockchain technology will revolutionize the legal industry in the coming years. The question is if it will be more like HTML — a behind the scenes technology — or if it will be a more obvious, almost tangible technology that we will all reference by name. There is almost no doubt that this technology will be a significant disrupter to the legal profession and the overall market on many fronts. The biggest industries — government, banking, legal, healthcare and others will either use it or be significantly impacted by it.

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

Twitter Unlocking Courtroom Doors?

By Joseph Raczynski

For a seemingly innocuous 140 characters, Twitter continues to rouse evocative legal discourse.
The newest twist for Twitter consists of judges grappling with the question of what place, if any, Twitter has in the courtroom.  According to a recent article in Time, the United States Supreme Court has yet to rule on Twitter’s use in the courtroom.  The lower courts are divided about its role; some tolerate tweets by attorneys during criminal proceedings, while others forbid such activity altogether.

Helping to further spark the discussion, recently there was much hubbub about the comedian Steve Martin (@STEVEMARTINTOGO) who, while on jury duty, was tweeting about his experiences.  He quipped multiple times, tweeting:

REPORT FROM JURY DUTY: Lunch break. Discussing case with news media gives me chance to promote my book.

REPORT FROM JURY DUDY [sic]: Defendant running for exit. Not to escape, but out of disgust. Judge wearing NOTHING under his robes. We are adjourned until tomorrow.

FINAL REPORT FROM JURY DUTY: Defendant sentenced to death. Feeling bad. Wait…call from REAL JURORS OF BEVERLY HILLS. WORTH IT!

Technology, like Twitter use in the courtroom, poses an interesting dilemma.  It is a debate as aged as the legal system itself, which is directed at openness, fairness, and access to the justice system.  How unrestricted do we want our legal system to be?  What information is appropriate to be disclosed to the mass public?  Looking at the Founding Fathers for guidance on the breadth of access to public information, perhaps we have a glimpse in to their intent.  The hallowed Independence Hall in Philadelphia originally had been built on the belief that there must be open trials, and as such, no doors were placed on the courtroom.  Therefore, is it not plausible to argue that the use of Twitter in courts is consistent with the free flow of information our forefathers had intended in our “open” court system?

Project Management’s Last Frontier: Law Firms

What would the father of project management Henry Gantt say today?  Having increased its scope to nearly every industry, from civil engineering to defense and software development; project management has rarely delivered at law firms, until now.  The landscape and technology has transformed enough such that project management can and will thrive at law firms.

The practice is creeping, yet some scoff.  While recently visiting a mega firm in Washington, DC they admitted to being in the midst of a five year plan to fully adopt and integrate project management within the organization.  They say it is an iterative process, but they are very encouraged thus far.  This direction is due to the demand by clients for alternative fee arrangements.  Now their office is abuzz with terms like scope creep, Agile, and Gantt charts.  This is intriguing because multiple conversations with third to seventh year associates at various large firms confirms one thing, we are still in the evolving phase of understanding.  There is a temporary disconnect between some attorneys and what is just ahead.  Nearly every associate balked at the idea that a project manager utilizing technology tools like Microsoft Project will be a part of their existence.  However, that said, increasingly I see management paring out positions for project managers and instilling the processes.   These two will align soon.

As a project manager for full life cycle development for many years and consulting to law firms in technology now, these processes making sense in medium and large law firms for the following reasons:

  • With the increase in alternative fee arrangements, project management will allow for greater predictability of costs, revenue and in turn ROI. Compared to the last few years budgets and partner profits will be far more consistent and stable.
  • Cases can be divvied into tasks, thus freeing attorneys to actually lawyer, other areas can be outsourced to the proper resources. Why have partners responsible for so much administrative work like hourly allotment?
  • Technology allows metrics to be introduced which can be used to constantly better the process, e.g. matter management software, client tracking software, i.e. LookUp Precision, OneLog . Project management toolsets are currently being implemented at firms. Additionally model honing will increasingly better predictability. Firms will use technology to determine the profitability of a particular case, assisting them in deciding whether to take it.

 

The simple premise behind project management is that it is a temporary endeavor, having a defined beginning and end to meet objectives, usually to bring about beneficial change or added value.  Now that the law landscape has evolved, project management has finally its place in the ever elusive law firm.