CodeX FutureLaw 2021: Computational contracts create a Big Bang in legal

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.

codex

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.

Forming the law into computational contracts

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?

codex

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.

Understanding the lessons of the pandemic and human nature at Legal Geek

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.

Geek

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.

Geek

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.

Podcast: The Hearing – Federico Ast – Cofounder & CEO – Kleros

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) 

Podcast: The Hearing – Doug Pepe – Partner – Joseph Hage Aaronson LLC

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

Google/Android: https://podcasts.google.com/feed/aHR0cHM6Ly9wb3J0YWwtYXBpLnRoaXNpc2Rpc3RvcnRlZC5jb20veG1sL3RoZS1oZWFyaW5n/episode/aHR0cDovL2F1ZGlvLnRoaXNpc2Rpc3RvcnRlZC5jb20vcmVwb3NpdG9yeS9hdWRpby9lcGlzb2Rlcy9FcDY4X0RvdWdfUGVwZV9taXhkb3duLTE2MDgzMDQxMDgzMzgzNDc3MDctTXpFMk9UVXROelF6TVRNME16WT0ubXAz?sa=X&ved=0CAUQkfYCahcKEwjo-ObCpN_tAhUAAAAAHQAAAAAQAw

Find out more at tr.com/TheHearing

Part 4: Legal Geek’s Uncertain Decade – The future of legal technology & digital transformation

Originally published on the Legal Executive Institute.

By Joseph Raczynski

By 2030 we will see significant lawyer work being done by machines. As exponential growth of technology consumes to world, the legal industry is especially appetizing. As a result, legal services will be fundamentally different than today in terms of both job function and the way legal services are provided.

In the final of a four-part global webinar series, The Uncertain DecadeLegal Geek brought us bold concepts and vision about the future of the legal industry, bringing together two of the most respected names in the legal industry — Mark Cohen, CEO of Legal Mosaic; and Prof. Richard Susskind — to delve into the how digital transformation impacts the legal function and then peer into the future of legal technology.

The future of legal technology

Machines will dominate the industry, Susskind offered, starting the discussion of what he termed, The First 60 Years, where the legal industry was marked by a time of automation from 1960 to today. While that continues, he emphasized the pivot will be from automation to transformation in the future.

Underscoring this concept, he cited various examples of technology’s progress, including memory chips becoming cheaper yet larger in capacity, and a “huggie bot” that can read human feelings and offer a hug based on perceived emotions of sadness, joy, or comfort.

Concluding with this thought and pushed by exponential growth, Susskind suggested we will see an increasingly capable, pervasive, and connected world pushing legal to change.digital transformation

Richard Susskind’s future legal tech

While Susskind raised the concept of virtual reality in legal — something he said likely will have a significant impact in five to ten years — he also introduced a tantalizing concept called embedded law. That’s the idea of placing legal components into everything, Susskind described, drilling into this futuristic idea by discussing how at various times, the law could be baked into the process by being coded into workflow or documentation. Extrapolating out from that, Susskind predicted the legal industry could see algorithms helping to curate current legal guidance. and in turn, the possibility of decisions or recommended advice, also called augmented intelligence. (I would suggest that blockchain may play a significant role in this, especially in the area of smart contracts.)

It is really about the systems going forward not the lawyer, Susskind said, as Cohen peppered him with questions. Lawyers not close to retirement will have to re-engineer themselves, he explained, adding that at the core of this thought process “is how can lawyers deliver the outcomes that clients want.”

With his polite Scottish accent, Susskind further explained that people have been confusing “our services with how we get there and how we have always worked.” While the industry has been about automation for the past several decades, transformation is what will take hold going forward, he noted.

Indeed, law firms have been so keenly focused on the plumbing technology (e.g., accounting, computers, and connections) for the back office that they have missed the boat on technologies to deliver legal advice to their clients and identify dis-intermediaries in the business.digital transformation

Richard Susskind’s future machines

In concluding his vision of the future of legal technology, Susskind said we need to “put the fence at the top of the cliff rather than the ambulance at the bottom” — meaning, we should utilize technology to improve the customer experience by providing preventative guidance and information technology.

For example, he said, several law firms have rethought their office lobby to make it more welcoming as a reception area, sharpening a focus on user-centered design and design-thinking enabled by technology. That will be the future, Susskind noted.

Getting practical with digital transformation

Historically, digital transformation has been under discussion in other industries for years, and now, the legal industry is catching up. Indeed, Cohen cited studies by Gartner that show this is the most important function for businesses, immediately followed by finding talent to provide outcomes for new ways of delivering services to clients.

Cohen further defined digital transformation as being “about customers, by finding new ways of gaining access, ensuring customer satisfaction, and not about the latest technology.” Technology is simply an enabler or tool, Cohen explained, adding that data, on the other hand, is monumental.

Lawyers have traditionally used their gut, which will no longer work, he noted, mentioning that findings from McKinsey & Co. show that those organizations that have performed a digital transformation are “23-times more likely to acquire customers, 6% more likely to retain customers, and 19-times more likely to be profitable.” Digital transformation also has an impact on diversity, collaboration, and the organization’s ability to culturally adapt, he said, adding that the industry needs to do a much better job of being inclusive of every group — lawyers, technologists, data analysts, and people of various backgrounds, genders, and ethnicities.

“Others out there can do what lawyers are doing right now,” Cohen said. “Lawyers must become aware of digital transformation and either adapt to it or be marginalized.” Unfortunately, again citing a Gartner survey, a very small percentage of the legal industry is ready for change, he added. The industry must be open to new paradigms around who is hired, how they’re educated, and how regulators could get involved as the industry is moved beyond self-regulation.

This is the central question for legal professionals going forward, both panelists contended. How can lawyers prepare themselves for the future of the legal industry and digital transformation? Both agreed that people need to think long and hard about what a legal career will look like in 2030, and what the reality is behind that. If you are winding down your career, you should be fine, they said, but if you are younger, you may want to rethink your role.

The legal industry’s openness to the full spectrum of people, cultures, legal and non-legal roles, and technologies will be paramount to its future sustainability, they added. And while the horizon could be fabulous for most, in practice, lawyers in the future will be working to enable legal machines, far more so than today. Fighting that concept is inevitable for some, and losing is almost certain. The winners in this legal evolution are those that find a way to adapt.

Part 3: Legal Geek’s Uncertain Decade: How does the US and the UK match-up in legal?

Originally published on the Legal Executive Institute

By Joseph Raczynski

In the next decade legal knowledge will be a skill, not a practice. The assumption is that knowledge is table stakes, and technology is now the enabler buoyed by flourishing legal tech startups.

These industrious neophytes are marshaling services previously owned by the practice of law stewards, dramatically changing the legal landscape. Another avant-garde concept — that the current legal educational system is misfiring, proving to be generally antiquated and looking for relevance in to 2020s — is also ascendant.

These sentiments and a rousing discussion of how the legal profession operates around the world were debated on a recent global webinar. In the third of a four-part global webinar series, The Uncertain DecadeLegal Geek again brought Mark Cohen, CEO of Legal Mosaic, and Prof. Richard Susskind to hash out what necessary skills and education for legal professionals will be in the 2020s. They also provided some fireworks with insights into how the legal landscape differs between the United States and United Kingdom — all as the Fourth of July approaches. (You can read about the first webinar and the second webinar here.)

Legal skills & education

The practice of law has begun to shrink, said Cohen. Focusing on both the skills and education necessary to flourish in the 2020s, he mentioned that a fundamental shift to machines is underway, along with the increase use of pseudo-legal professions. These professions do not require law degrees, but can allow professionals to perform many components of the traditional lawyer. In fact, the UK has empowered this movement by creating a formalized rulebook that outlines six types of work for legal professionals; thus, opening the door to other work outside of the six that can be done by non-legal professionals.

Deloitte observed this change, stating that 40% of all legal tasks will be automated by 2030, said Cohen. “This is not the end of lawyers, rather a call to re-tune their skills by learning more about business, technology, emotional intelligence, and collaboration all in an effort to reimagine themselves focused on the customer,” he added.

Susskind agreed that machines are going to become increasing capable, leading to a future of automation, rather than human task. He outlined two divergent paths: one where humans compete against those computers; and another where humans help design those systems. He favored the latter, but understands many will align and fight for the former.

Cohen generally agreed. but with a caveat. The law is “a noble profession,” Cohen observed, adding that it has many paths, but if people expect the same passage as other generations, “it’s not going to happen.”

Law schools at a crossroads

Law schools are detached from the legal marketplace and therefore will not be the only group educating the legal industry going forward, Cohen claimed, adding that education is more a process than a place, and upskilling will be omnipresent for all parties. As lines blur among industries including data analytics, computer science, and lawyering, legal professionals must understand culture and the diversity of the legal ecosystem, by becoming more aware, embracing, and utilizing new cross-industry models. If not, lawyers will be marginalized.

This is the age of the customer, Cohen noted, and so, legal needs to be better aligned with them.

legal geek

Susskind agreed, saying that “nothing has changed in the last 30 years with most law school training.” All of this concerned him deeply, Susskind added, noting that we are not putting in place a pipeline of what we will need in the legal industry going forward.

Indeed, he surmised that if law school fail us, there will be other groups that fill the void, candidly purposing, “Why don’t we get the best person online and bottle that, compared to the our current model of sage on stage, who might just be average?”

Overall, Susskind and Cohen agreed on the education and skill tests for the future workforce, saying that both are integral to the business and they are dismayed by what they are seeing from universities at the moment.

UK v US — the legal landscape

Framing this conversation about the matchup of jurisdictions, Susskind suggested that we think about this in reference to technology and change, and ask, which side is better prepared? Susskind’s famous drivers of change include: more for less, new providers in the marketplace, technology, and the newest addition, COVID-19. Through that lens, he spoke about eight areas to determine who is better prepared, the US or UK.

  1. Leading law firms — In the 1980s and ’90s, the US was better positioned; however, in the 2020s the UK is leading the way by using better innovative technologies. There is an arms race among UK firms, which further push those firms toward advancement. UK wins.
  2. General counsel — Neither country is ahead. In fact, Susskind found that GCs are very conservative and are simply too busy to change, which is likely a result of many coming from the larger conservative law firms. Tie.
  3. Chief operating officers — These people are responsible for procurement and are typically committed to bringing about change. The theory is that they are well positioned to push law firms harder on costs and use of technology. Susskind said that the US is ahead of the UK by bringing all COOs together in better collaboration, and the US has more of them. US wins.
  4. Court rooms — This one is a challenge to compare because of jurisdictional variances. However, the UK government is bounds ahead of the US with redesigning the way disputes are resolved. UK wins.
  5. Regulators — The UK has liberalized many components of the legal system, especially compared to the US. This has brought about heavy use of alternative legal service providers (ALSPs) on a totally different landscape, including venture capital inflows in the UK. UK wins.
  6. ALSPs — In the UK, the Big 4 accounting firms are clearly ahead in utilization. That said, there is a larger presence in the US of ALSP organizations, which are probably more advanced in the US than in the UK and are used more in the US. US wins.
  7. Legal tech startups — There is an explosion in both countries, but the difference is that in the UK the emphasis is on service delivery to clients, and in the US, it is on tools for traditional lawyers. Tie.
  8. Law schools — Both countries are rather lackluster, and much more needs to be done according to Susskind. The UK is slightly less active on change, so the US is a bit better positioned. US wins.

And the Winner? It’s a draw, 3 to 3, with 2 ties.

At the end of the day, there is not a huge divide between the US and UK in the legal market, said Cohen, adding however, he is envious of the regulation in the UK, which has set up the legal industry there for success.

Both Susskind and Cohen suggested that in the coming years they anticipate a huge inflow of capital into the legal industry by private equity, which could further improve the position the UK.

Modern Law Magazine: Embarking on an Era of Abundance in the Legal Industry

Here is my latest post from Modern Law Magazine.

By Joseph Raczynski

Over the course of the next five years, the legal industry will be flush with opportunity. While much of the rote legal work will be done by automation, producing a period of interstitial angst at law firms, burgeoning areas of technology necessitating legal counsel will flourish.

As a brief preface, I will bypass the normal discussion surrounding how tools are making lawyers more productive and law firms more profitable. That is a given. These tools are plentiful; including research services that coalesce information intuitively tools that comb through millions of documents seeking relevant words; or, artificial intelligence (AI) enabled applications reviewing 10,000 contracts in hours compared to months required when done manually. While these applications constantly improve, they are becoming commonplace for law firms. This article’s focus is preparing for the next legal transformation for law firms—prompted by technological advances.

A near trite concept at this juncture, technology is advancing at an exponential pace which is creating incredible possibilities in many industries—especially within the legal industry. One example which typifies this acceleration is a recent creation at MIT Labs with ‘AlterEgo’.

The white device below wraps around the ear, hugs the lower jawline, and rests below the lips. It contains four sensors that can hear your internal thoughts. Yes, AlterEgo can read your mind. Practically, without verbalizing a word one can communicate with Internet connected devices, like a TV, a computer, or a car. A conversation with another person wearing AlterEgo could occur without verbalising a word. This is a single example, of a possible myriad, which exemplifies our current era of swift technological change.

alterego

AlterEgo, MIT Labs http://news.mit.edu/2018/computer-system-transcribes-words-users-speak-silently-0404

With this sort of mind boggling technology available, it raises the question, what will the legal landscape look like in the future and how can lawyers and law firms adjust to this sort of rapid change?

Algorithms

Specific instructional processes (if/then statements), known as algorithms, have existed in computer language for decades. Over the last five years algorithms have matured, but perhaps more importantly so has the flood of data—widely considered the new oil. The synthesis of the advanced algorithms and the ability to process that data has ushered in new industries.

One such industry is driverless cars. These vehicles are already being used around the world, and algorithms are a main operational feature in the car’s computer driving programme. This area of technology, alone, will be a significant boon to the legal industry. The implications of rules, regulations, laws, and ethics in this space are immense. Lawyers will need to be trained, or at the very least be far more familiar with how various algorithms work. Who decides culpability when driverless cars go awry? How do we navigate the legal ethical dilemmas of onboard computers deciding between hitting a child or an elderly person crossing the street?

autocar

Politico Europe https://www.politico.eu/article/should-a-driverless-car-kill-the-kid-or-the-retiree-future-of-driving/

 

Algorithms are a platform and will permeate most applications, propagating throughout most of our lives. Lawyers will likely need to understand their uses and implications, in the near future, in order to provide adequate representation to their clients.

Biotech

Over the last decade, engineers have deciphered how to modify the immune systems of bacteria to edit genes in other living organisms, like algae, small mammals—and now humans too. Over the last month, Chinese doctors claimed to have created the first designer baby by enabling one to be born which is resistant to HIV, by genetically alerting the embryo. CRISPR, pronounced “crisper”, allows scientists to easily manipulate genes far faster and cheaper than ever before. Soon there will be significant work for law firms in this space. The implications are vast beyond how an IP lawyer would practice. A multitude of various specialised practice areas will now join the IP lawyer. When new genetically modified humans arrive, smarter or with greater athletic ability, opportunities will bloom for many other practice areas. This will also impact the insurance industry, as two classes of humans will evolve creating different playing fields. Will genetically modified humans receive better insurance rates, because they are less susceptible to disease? There are countless other legal impacts with CRISPR and gene alteration impacting multiple areas of law and business.

Internet of Things (IoT)

With as many as 50 billion devices connected to the internet over the next ten years, we need lawyers able to understand the legal ramifications of this rapidly expanding technological reach. The depth and breadth of these interconnected gadgets cannot be underestimated, including devices connected to our brain, such as AlterEgo, to every appliance in a kitchen, car, phone—which will soon be a MR (Mixed Reality) headset. Within this scope, countless questions of data ownership, privacy, regulation, and intellectual property will arise. Education of how these devices work and what information is being gathered, perhaps surreptitiously, will all need to be understood by lawyers.

Deep Fakes

One of the more distressing developments of the last few years has been the creation of videos known as the Deep Fakes. The Deep Fakes are very realistic videos of someone famous, but are made by superimposing a computer-generated face on the real video and swapping out the audio with something nefarious. (Example: https://www.youtube.com/watch?v=gLoI9hAX9dw ) Lawyers will need education and access to tools to help verify what is real and what is not for litigation purposes as well as transactional, as people increasingly make claims using video attestation. We will soon get to a point where we cannot trust video documentation and lawyers will have to contend with these issues.

Blockchain

The ’trustless’ nature of a distributed ledger will undoubtedly have an impact on the legal industry, since transactions will be put on a blockchain. Increasingly there are whispers of a legal blockchain controlled by law firms in a consortium. This will impact most areas of legal practice.

In the transactional practice, self-executing ‘Smart Contracts’ will be something everyone working in the legal profession will need to understand. Ethereum, the first blockchain platform to popularize the idea of the Smart Contract allows for people to code ‘if/then’ statements onto the blockchain or database with ease. Here is a scenario that uses a smart contract on the blockchain in the legal transactions.

A lawyer writes a will for their client. The will stipulates that upon the parent’s death—their two kids must be married, respectively, in order for them to receive a share of the estate. If one kid is married and the other kid is not, the kid that is married receives all assets. For simplicity the assets are all liquid in this example.

The will is written and saved to a blockchain. It is in an immutable state, and the only people that have access to this document is the lawyers that drafted the will and her client. Once it is on the blockchain in a codified state, the smart contract starts checking every day through a trusted source, called an oracle (affirmed public record), to see if both parents are alive. One day the computer identifies that the parents have both died. The computer jumps to the next task to determine if both kids are married. Through another computer call to that oracle, it determines that one kid is married and the other kid is not, and subsequently sends 100 percent of the liquid assets to the kid that is married. This is a self-executing smart contract on a blockchain as shown below.

smartcontract

JoeTechnologist.com https://joetechnologist.com/2018/11/15/forum-magazine-blockchains-promise-verifying-value-one-block-at-a-time/

Drones

A drone superhighway is coming. These are roadways in the sky where drones will be able to operate, away from the likes of Gatwick airport and other important safe zones. The ’droneification’ of our delivery systems will alter city landscapes. Lawyers will be called upon to interpret zoning laws, environmental conditions, insurance issues, labour law, privacy matters, liability issues, and construction law—as more people build landing pads off their flats. The age of drones will create a beehive of activity for law firms.

Cybersecurity

By nearly all accounts Cybersecurity is the top concern for corporations and law firms outside of profitability. Data leakage and hacks are rampant the world over. Ransomware will likely continue for the next several years at least. According to one government official I recently met in the US, the world is simply waiting until the first significant cyber event which takes down a country’s infrastructure—such as the electrical grid, banks, or water systems. Law firms have rightly responded to the rapid increase of cybersecurity considerations over the last eight years. Increasingly lawyers will need to better understand the dynamics of cyber-breaches for their own operation as well as client needs. The opportunity for law firms is immense in this space from litigation to advisement of mitigation measures for cybersecurity.

How Law Firms Can Thrive

A renaissance in the legal industry is ahead, after a bit of discomfort based on some traditional legal work fading. As some of the rote work legal work dissipates in the coming years, an abundance of legal activity will commence in the emerging landscape driven by technology innovation. What I have discussed with law firms around the world is how they plan to prepare for the changes ahead.

  • Firms are beginning to create highly customizable technology education plans for their lawyers. They are inviting specialist from the newest industries: AI, blockchain, automotive, cybersecurity, IoT, and biotech. At a minimum, these required firmwide classes promote a basic understanding of each technology. The goal is for lawyers to be conversant in the technology when speaking to prospective clients. The plan creates a pathway for deeper levels of education if their practice necessitates it, which will be likely for many.
  • We are also seeing the early stages of more technical lawyers emerging. Traditionally, an IP lawyer carries this torch, but this is changing. Recently a blockchain consortium disclosed that lawyers make daily inquiries about how they can code blockchain enable technologies. Certainly not all lawyers will need to code, but those that have a proclivity for it will be better positioned for success.
  • Law schools around the world are pivoting. They still hold fast to the core curriculum, but quickly programming around emerging technologies is taking root. Law schools are connecting with startups—creating a synergy between the nascent legal minds and innovation. Universities are also partnering with some of the traditional legal sector vendors to aid students in understanding various technologies, processes, and applications for more efficient work with the business and practice of law. Advanced institutions are pushing students to understand algorithms, code, and become further enmeshed in technology.
  • Law firms are also sponsoring hackathons. The goal here to figure out better ways to improve process, which does not always have to be technical. Legal tech incubators have also started to proliferate by vendors, but also among some law firms.
  • When gaps in technology exist within a law firm, tighter partnerships with companies who can assist on the legal technical aspects surrounding the mentioned fields will start. Boutique firms will arise with a focus on these technologies to help their clients, but also serve as consultants to the larger mid-sized firms without expertise.
  • There is little question that litigation will thrive going forward in each of these disciplines. Lawyers that become more technologically savvy will have a decided advantage in obtaining business.

 

The era of abundance in the business and practice of law is on the horizon. The technological shifts that are occurring all over the world are setting up law firms, who are prepared, for bold new opportunities. One of the most important changes in the legal industry will be a need for lawyers to be educated on new technologies. As AI and blockchain become mainstream, those platform technologies will impact nearly every industry—meaning nearly every practice area lawyer will have to understand the basics of those technologies. The firms that embrace these changes afoot, will be best positioned to thrive.

 

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Beyond Cryptocurrency: 5 Questions about the Future of Blockchain for Thomson Reuters Technologist Joe Raczynski

Written by Gina Scialabba and originally published by the Legal Executive Institute

Blockchain — we’ve all heard about it, and also heard that it will certainly disrupt the financial, legal and public sector worlds near you.

The real questions surrounding the future of blockchain, however, relates to the evolution of its virtual ledger technology and the ways it will change the way we do business — regionally, nationally and globally.

Financial professionals wonder how this digital ledger will impact their day-to-day activities such as regulatory compliance or combating money laundering. Legal professionals are asking how blockchain will revolutionize their practices. Public sector employees want to know how to incorporate blockchain to improve security and efficiencies.

However, the overarching question pertaining to blockchain, no matter what industry you work, is whether or not we trust the technology.

For answers, Legal Executive Institute spoke to Thomson Reuters Technologist and Futurist, Joseph Raczynski, who recently was a featured panelist at the three-city, 2018 Thomson Reuters Public-Private Partnership Forums (P3) which held its first event in New York City on March 7.

Raczynski also recently interviewed Judith Alison Lee, a partner in the Washington, D.C. office of Gibson Dunn & Crutcher and Co-Chair of the firm’s International Trade Practice Group, about the nuts and bolts of blockchain and cryptocurrencies. (You can hear Part 1 and Part 2 of that interview here.)

Legal Executive Institute: In the financial services industry, blockchain is now touted as the future infrastructure of the industry. Clearly, this could be disruptive to traditional banking operations, but also may also enhance the way anti-money laundering (AML) professionals and regulators do their job. How do you see blockchain changing the way financial institutions reduce losses from economic crimes?

Joe Raczynski: There is tremendous promise with this technology in the banking industry. Its core strength is to create permanent, immutable, redundant ledgers, which are auditable. This is the Holy Grail of an accountant or anyone who wants to see a chain of events or track money.


If you’re riveted by blockchain and want to know more, you can catch Raczynski at further P3 events on April 24 in Charlotte, N.C. and on April 26 in Washington, D.C. (You can also follow Raczynski on Twitter at @joerazz.)


There are some significant challenges. Currently, virtual currencies or cryptocurrencies like Bitcoin are unregulated, there is not a central authority that can dictate or control this, as by its very nature, it is decentralized. So, I could send $1 million in cryptocurrency to someone in Iran or North Korea in about 20 minutes, and that could pose problems for some governments. Another major issue that lies ahead are the anonymous virtual coins or tokens that are becoming more popular.

With these, any bad actor could use this to store or launder money without traceability. For the AML world this is probably its biggest challenge in the near term with blockchain technology.

Legal Executive Institute: Financial institutions spend tens of millions of dollars complying with regulations related to Know Your Customer (KYC) rules, as well as due diligence. What impact will blockchain have on KYC or other due diligence procedures?

Joe Raczynski: Fortunately blockchain has the possibility to create structured, yet decentralized data on people and businesses. These stores of information will be permanent ledgers of information. They will be another tool in the ongoing saga to identify people that investigators should be able to rely on.

Legal Executive Institute: Let’s turn to law firms for a moment. As blockchain technology matures, it seems likely we will continue to see applications impacting the legal profession. What role will blockchain play in contract form and estate planning? Should legal professionals be worried their jobs may become obsolete due to smart contracts or self-executing contracts?

Joe Raczynski: Lawyers should not be worried about their jobs becoming obsolete in the near future. However, in time, when smart contracts begin to truly take shape, it will make the drafting and execution of these documents more automated. In the majority of situations, you will have web forms that ask questions, anyone can fill out the answers, and then the document is drafted. Once the document is completed, it is stored on a blockchain. If there are contingencies — for example, sell all shares of a stock upon the death of Person A — the contract will do this. A “Smart Contract” is essentially a few pieces of code that executes or does something based on some perimeter. It is essentially an “if/then” statement.

blockchain

Thomson Reuters’ Joe Raczynski

Legal Executive Institute: Blockchain has a lot of potential to change the way government agencies work, both in the immediate future and with a long look ahead. How do you see blockchain changing the way public records are kept and maintained, such as census data or even birth and death records? Could you see these impacting day-to-day functions such as land conveyances and tile registries?

Joe Raczynski: The State of Illinois is already producing birth certificates on a blockchain. Delaware is moving all corporate records to a blockchain. This is happening now. Dubai plans on having all government records on a blockchain by 2020. In time, all public records will be on a blockchain, which should make it easier to track and interact with the files.

It will also provide higher levels of security and transparency and should be more efficient. As people start to use tokens for all assets that they own, tracking this via a blockchain will become even more important.

Legal Executive Institute: Will blockchain or cryptocurrencies change the way government works with the private sector?

Joe Raczynski: It is possible that some of the traditional models of records keeping which were once maintained by the government will become more open and not run through those traditional central authorizations but will be exchanged through private hands. The safeguard is that these transactions would be auditable as the chain of title will be transparent on the blockchain. It is feasible that you will not have government agencies involved in the oversight of this as they have in the past, instead, a nebulous network that all parties have insight into will evolve.

State of the eDiscovery Software & Service Market

By Joseph Raczynski

eDiscovery has matured into a petulant toddler.  At least, that is the sentiment of a panel discussing the “State of the eDiscovery Software & Service Market” at LegalTech.  Since its inception in December 2006 as an amendment to the Federal Rules of Civil Procedure (FRCP), electronic discovery, has grown exponentially; however, the means to harness and extract pertinent discovery has not evolved inline.  This is rapidly transforming.

 

Technology will nurture eDiscovery into maturity.  According to the panel, law firms and corporate counsel will better utilize technology with all forms of eDiscovery.  These types of eDiscovery data, including voice, video, and real-time streaming coupled with the sheer volume and the speed of accessibility is simply too overwhelming for human consumption.  Technology is the answer, but how?

 

The answer lies in what trends we will see in 2013:

  • A rapid increase in corporate migration of unstructured ESI to SharePoint and cloud repositories;
  • Steady increase in SaaS;
  • Predictive coding competition heats up;
  • How to collect new forms of ESI like social media and mobile device content;
  • More focus on Information Governance (IG) activities like defensible deletion, while IG initiatives will seize on opportunities to clean up expired and or redundant information;
  • Legal departments will struggle with application of selective preservation; and
  • Requests for social media will increase, but gathering information will still remain challenging.

 

What do law firms plan on initiating in the next year:

  • 26% Big Data governance;
  • 36% Cloud Computing;
  • 39% Social Media Governance;
  • 52% Shared Drive cleanup; and
  • 38% Formulized Legal Hold.

 

Ultimately, the panel suggests that law firms will be replacing a large portion of internal litigation support services, i.e. processing, hosting, and support with managed services partners.

 

Final anecdote:  Howrey, one of the largest law firms to collapse a few years ago, always has been cited for accounting issues as the basis of its demise.  However, one person noted that a little known major contributing factor was that they were “eDiscovery inept.”  Essentially, vendors had better eDiscovery solutions, and Howrey spent too much on human resources instead of technology for its discovery needs.