Legal IT

Law Firms and Cryptocurrencies

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In the past, we have looked at blockchain, the technology that underlies cryptocurrencies, and at how blockchain is relevant to law firms. In this article, we have a closer look at the relationship between law firms and cryptocurrencies. We explain what they are and explore the challenges regarding law firms and cryptocurrencies. We also look at the legal services law firms can offer.

What are cryptocurrencies?

Wikipedia defines a cryptocurrency as “a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.”

Cryptocurrencies are decentralized digital currencies. They use blockchain technology to secure transactions and control the creation of new units. Unlike traditional currencies issued by governments, cryptocurrencies operate on a peer-to-peer network. This allows users to transfer ownership of cryptographic units without the need for a trusted third party, such as a bank. Transactions made with cryptocurrencies are recorded on a public ledger called the blockchain, which ensures transparency and security.

The first and most well-known cryptocurrency is Bitcoin, launched in 2009. It paved the way for thousands of alternative cryptocurrencies, known as altcoins, each with unique features and purposes. The most used cryptocurrency is Ethereum. It is popular in the legal and commercial world because it is being used in smart contracts.

Wikipedia lists six conditions to qualify as a cryptocurrency:

  1. The system does not require a central authority; its state is maintained through distributed consensus.
  2. The system keeps an overview of cryptocurrency units and their ownership.
  3. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  4. Ownership of cryptocurrency units can be proved exclusively cryptographically.
  5. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  6. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

Challenges regarding law firms and cryptocurrencies

Law firms wanting to deal with cryptocurrencies face several challenges. These may apply to the law firms themselves as well as to their clients. Let us have a closer look.

A first challenge is regulatory uncertainty.  The legal and regulatory environment surrounding cryptocurrencies is quite intricate. Law firms can advise on compliance with securities, commodities, tax, anti-money laundering, and banking laws and regulations. The challenge is that the regulations for cryptocurrencies vary widely from one jurisdiction to another. In some countries, cryptocurrencies are embraced and regulated like any other financial asset, while in others, they face severe restrictions or outright bans. (Wikipedia provides an overview of the legality of cryptocurrencies in different countries and territories). On top of that, the legal landscape is also continually evolving. Law firms must therefore stay abreast of these shifting regulatory landscapes to provide accurate advice to their clients.

A second challenge has to do with compliance with anti-money laundering requirements. Cryptocurrencies are often associated with anonymity. This has raised concerns about their potential use in illegal activities such as money laundering and terrorism financing. Law firms must assist clients in navigating anti-money laundering requirements to ensure compliance with local and international laws.

Next, there are taxation Issues. The tax treatment of cryptocurrencies can be complex and varies significantly by jurisdiction. Law firms can help clients understand and comply with tax obligations, whether it involves capital gains tax, income tax, or value-added tax (VAT) on cryptocurrency transactions.

There also are Intellectual Property (IP) rights to consider. The blockchain technology has led to the creation of numerous innovations, many of which may be subject to intellectual property protection. Law firms play a crucial role in helping clients secure and enforce IP rights in the crypto space.

Another challenging area that is of specific interest for lawyers is dispute resolution. As with any financial asset, disputes can arise in the cryptocurrency space. These can be related, e.g., to transactions, smart contracts, or initial coin offerings (ICOs). Law firms must be equipped to handle these disputes, which may involve complex issues of jurisdiction, contract law, and technology.

Finally, there are ethical considerations. Law firms must comply with the ethical requirements of their bar associations. Specific rules may apply as to what is allowed and what isn’t.

Legal services regarding cryptocurrencies

With all the challenges listed above, it should come as no surprise that there are corresponding services lawyers can offer. Let’s have a closer look.

Law firms can provide compliance and regulatory advice to ensure that cryptocurrency-related activities comply with applicable laws. This includes advising on the compliance of tokens and coins with securities laws, exchange licensing, and the creation and management of smart contracts. Firms also assist with the formation of cryptocurrency-focused funds, reviewing fund offering materials, and advising on tax implications.

An obvious service law firms can offer is dispute resolution and litigation. This includes resolving disputes between customers and cryptocurrency exchanges, as well as issues like locked accounts and frozen assets. Law firms also handle litigation and fraud cases, including recovering stolen digital assets and addressing business and investment fraud. When disputes arise in the cryptocurrency space, law firms provide representation in court or through alternative dispute resolution mechanisms such as arbitration or mediation. They can also represent clients in investigations by various government agencies and provide defence in civil disputes.

Law firms can offer advisory services for innovators and investors. This can include advice on intellectual property protection, company formation, and tax planning. As mentioned above, they can also help with compliance with regulatory and licensing obligations and security and privacy reviews. For investors, law firms can develop tax-effective ownership structures and advise on the taxation of trading gains and income from activities like staking and lending.

Another area consists of specialized services for Digital Assets and Web3. Law firms are at the forefront of advising on new digital assets, cryptocurrencies, NFTs, and blockchain-based protocols. They work with venture capital and investment funds, tech companies, exchanges, and decentralized autonomous organizations (DAOs). This includes engaging with regulatory bodies worldwide to advocate for clients in the digital asset and Web3 ecosystem.

Whether it’s an ICO, a cryptocurrency exchange, or a blockchain-based startup, law firms can help structure transactions to ensure they comply with legal requirements.

A service that is quite commonly offered these days is drafting and reviewing contracts. Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They are a cornerstone of blockchain technology. Law firms are instrumental in drafting and reviewing these contracts.

Law firms can also help facilitate technical integration. Law firms are increasingly using blockchain technology to enhance efficiency and verify transactions. The use of smart contracts is growing. Law firms can advise on their implementation and legal bindingness. Distributed ledger technologies (DLTs) offer potential cost and time savings, which makes them attractive for various legal applications.

Beyond compliance and transactions, law firms offer strategic advice to clients on how to navigate the rapidly evolving landscape of digital assets. This includes advising on risk management, investment strategies, and potential regulatory changes.

Law firms and cryptocurrencies: conclusion

Like many new technologies, cryptocurrencies come with a wide range of challenges and opportunities. Law firms that start focusing on cryptocurrencies can gain a competitive edge through specialization, thought leadership, cross-border work, and collaboration with Technology Experts.

 

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Legal IT

Has the metaverse failed?

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In November 2021, we did an article on what lawyers needed to know about the metaverse. Since then, the buzz around the metaverse has largely died. In this article, we start off with an overview of some of the predictions and expectations. Then we do a reality check. Next, we look in extenso at possible reasons why the metaverse failed. We conclude with some observations on how to move forward with a new vision of an immersive future.

Predictions and expectations

The concept of the metaverse really started drawing attention when Facebook Inc. changed its name to Meta in October 2021. The metaverse was seen as the inevitable evolution of the internet—a virtual space where the physical limitations of the real world did not apply. Proponents envisioned a realm where digital avatars would seamlessly transition between experiences, carrying their identities and assets with them. This digital utopia was expected to revolutionize how we interact with technology and each other, by offering unparalleled opportunities for connectivity and commerce.

Quite a few companies established a presence in the metaverse. Architects started designing virtual buildings, and real estate developers started developing and selling virtual real estate. There was talk of virtual cities, etc. The metaverse was predicted to be the big next thing, and its proponents urged everyone to get on board.

Reality Check

The reality of the metaverse, however, has been far less impressive. The metaverse has failed to live up to the excessive hype that built up in 2021 and early 2022, leading to a “metaverse winter” in 2023. This was mainly due to cooling interest, economic obstacles, and the immaturity of the required technologies. Despite the grand vision, the metaverse has faced significant challenges that have hindered its widespread adoption and development. We will have a closer look at those reasons below.

Financially, the metaverse has seen significant investment, with over $120 billion flowing into the sector in 2022 alone. McKinsey research had suggested that the metaverse could generate up to $5 trillion in value by 2030. However, these figures contrast with the current user experience, which clearly falls short of those expectations. The costs associated with developing metaverse platforms and the technological limitations have led to a gap between the envisioned economic boom and the actual value delivered to users. The metaverse has also been criticized for being a hype-fuelled fad, appealing mainly to gamers and celebrities, rather than the public at large.

By now, “peak metaverse is firmly in our rearview mirror. According to Google Trends, Facebook’s announcement of rebranding to Meta on October 21, 2021, was the catalyst for the upward trend in metaverse. Four short months later, we hit peak metaverse.” (Brian Christner). In other words, the hype lasted for four months only. “Far from being worth trillions of dollars, the metaverse turned out to be worth absolutely bupkus. It’s not even that the platform lagged behind expectations or was slow to become popular. There wasn’t anyone visiting the metaverse at all. The sheer scale of the hype inflation came to light in May [2023]. In the same article, Insider revealed that Decentraland, arguably the largest and most relevant metaverse platform, had only 38 active daily users.” (Brian Christner). Decentraland had invested 1,3 billion US dollars in the metaverse.

Reasons why the metaverse failed

Despite significant investments and extensive hype, the metaverse has faced numerous challenges that have hindered its widespread adoption and success. One of the main issues was – and is – the lack of a unified definition or understanding of what the metaverse actually is. While some early adopters can describe it clearly, many people still struggle to grasp its concept and purpose. Moreover, the technological infrastructure required to support a fully-realized metaverse is still in its infancy. Issues such as interoperability between platforms, user privacy, and the economic model are yet to be resolved.

Let us have a closer look at the reasons why the metaverse has failed thus far. The authors of the articles listed at the end of this article mention the following reasons for the metaverse’s shortcomings.

Overhyped and unmet expectations: the initial excitement surrounding the metaverse was immense, with many envisioning a revolutionary digital landscape. The bold promises from people like Zuckerberg set a high bar that current technology and market readiness could not meet. Many initiatives fell victim to massively inflated expectations, leading to expensive failures and a general sense of disillusionment. This decline in enthusiasm has been a significant factor in the metaverse’s inability to meet expectations. The metaverse’s close association with cryptocurrencies and NFTs, which have also faced their own set of challenges, further compounded these issues.

Immature technologies and tech limitations: the development of the metaverse relies heavily on technologies such as augmented reality (AR) and virtual reality (VR). However, these technologies are still immature and have not reached the level of sophistication required for a seamless metaverse experience. The lag in VR headset adoption, for instance, has been a significant barrier to the metaverse’s growth.

Bad user experience: the abovementioned technical difficulties also resulted in a subpar user experience. Early iterations of the retail metaverse, for example, were plagued by technical glitches and clunky interfaces. These issues have made it difficult for users to fully immerse themselves in the metaverse, leading to disappointment and frustration. Add to that, that many people think Zuckerberg’s version of the metaverse is goofy, with characters that look like Nintendo Wii characters. (“You want me to wear this uncomfortable headset to be able to see myself as a badly drawn cartoon character?”)

Limited User Engagement: because of the bad user experience, user engagement has been minimal. We mentioned the example above of Decentraland, which is one of the largest and most relevant metaverse platforms, only having 38 active daily users at one point. This stark reality highlights the gap between the envisioned metaverse and the actual user adoption and engagement.

High cost of entry: the metaverse may be too expensive for some people to access. You need a VR headset, a fast computer, an up to par broadband connection, etc. Add to that, that most platforms based on blockchain — like The Sandbox and Decentraland — require the exchange of cryptocurrency for full functionality.

Privacy and safety concerns: the metaverse raises significant privacy and safety concerns that have yet to be adequately addressed. The amount and type of data created and collected through metaverse technologies result in major privacy challenges. Ensuring the safety of users, particularly children, in these virtual environments is a complex issue that requires new approaches and regulations. And then there’s the cybercrime aspect: criminals could use voice recordings from metaverse platforms against someone, or behavioural data could be mismanaged and sold to interested parties.

Economic and ROI Challenges: from an economic perspective, the metaverse has struggled to demonstrate positive returns on investment (ROI). Meta’s Reality Labs, for example, recorded a loss of $3.73 billion in one quarter alone in 2023. Retail metaverse initiatives have also largely failed to deliver truly unique, must-have shopping experiences. This makes it difficult to justify the high costs associated with developing and maintaining these platforms.

Shifting Focus to AI: finally, there is the impact of AI. Even companies that heavily invested in the metaverse are now shifting their focus to other technologies. Meta, for instance, has turned its attention away from the metaverse to AI, which is seen as the next big thing. This shift indicates a broader industry trend away from the metaverse as a primary focus.

Moving forward with a new vision of an immersive future

In summary, the metaverse’s journey has been fraught with challenges, from technical and user experience issues to economic and privacy concerns. However, by tempering expectations and adopting a more realistic and focused approach, there is still hope for the metaverse to find its place in the digital landscape. Several authors believe there still is potential for its future development. A more modest, grounded, and niche-driven approach may be the key to its next chapter. Lighter-weight, frictionless AR shopping interfaces accessible from smartphones, for example, could sidestep VR’s adoption barriers and provide more practical applications.

The journey of the metaverse probably is not over yet, and with all the investments that have been made, it is likely that it will continue to evolve. The key to its success lies in addressing the current shortcomings and aligning expectations with reality. As the technology matures and more people become familiar with the concept, the metaverse may yet find its place as a significant part of our digital lives. It will require patience, innovation, and a clear vision to bridge the gap between what was promised and what can be realistically achieved.

 

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Legal IT

The Paperless Law Firm

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Some days ago, we went to a stationery store. We wanted to buy a writing pad with letter paper, to send some letters. We couldn’t find any. When asked about it, the shop manager said that they haven’t kept it in stock for some time. “People don’t send letters anymore; they text and share.” In other words, they have gone paperless. And that seems like a good opportunity to check out the state of the paperless law firm. We look at the following questions: What is a paperless law firm? What are the benefits? What are the challenges of becoming a paperless law firm? We conclude with some tips about best practices.

What is a paperless law firm?

The paperless law firm is an implementation of the idea of a paperless office. The Wikipedia defines a paperless office (or paper-free office) as “a work environment in which the use of paper is eliminated or greatly reduced. This is done by converting documents and other papers into digital form, a process known as digitization.” It adds that “Proponents claim that “going paperless” can save money, boost productivity, save space, make documentation and information sharing easier, keep personal information more secure, and help the environment. The concept can be extended to communications outside the office as well.”

The term of a “paperless office” has been around since 1978, but the idea of a paperless world was already launched in 1964 by IBM. Now, six decades later, the concept of a paperless law firm is no longer a futuristic idea. It’s a reality that many firms are already embracing.

An important factor in this evolution is that the technologies needed for a paperless office are now widely available. All relevant digital documents can easily be stored in the cloud. Scanners and OCR are found in virtually every law firm. Even smart phones have apps to scan documents, and optionally convert to text. And the software lawyers use to manage their firm, like Cicero LawPack, too is designed to be able to work like this. Artificial intelligence and machine learning have made it easier than before to manage digital documents.

So, more and more law firms are going paperless or greatly reduce their usage of paper. This transition to a paperless environment is driven by the need for efficiency, cost reduction, and a more sustainable business model. The pandemic and the need to be able to work from anywhere certainly has been a contributing factor as well.

What are the benefits?

The move towards a paperless law firm offers numerous advantages. The articles listed below mention:

  • Reduced costs: eliminating the need for printing, posting, and storing physical files can significantly cut costs. You hardly need any filing cabinets if your documents are stored in the cloud.
  • Improved organization: digital storage provides a centralized platform for all files, emails, and documents, enhancing organization and accessibility. This also means that the data become more accessible. Another benefit of this, is that you have a single source of truth.
  • Increased productivity: a DMS that is properly indexed and has a good search facility makes it far easier to have quick access to all the relevant information.
  • Enhanced collaboration: a paperless environment facilitates collaboration among team members and with clients.
  • Enhanced security and improved confidentiality: digital files can be more secure than physical ones, reducing the risk of loss or unauthorized access. Printed documents can be read by anybody with physical access, whereas the permission management of digitized documents can be very explicit in who has what access rights.
  • Guaranteed business continuity: digital systems ensure that business operations can continue uninterrupted in case of disasters.
  • Environmental benefits: going paperless contributes to environmental sustainability by reducing paper waste. It typically also results in a reduced carbon footprint.
  • Working with digitized documents also offers you greater control over compliance and deadlines because you can work with (intelligent) apps.

The challenges of becoming a paperless law firm

The transition to a paperless law firm does come with its own set of challenges. These are the most cited ones.

  • Initial time commitment: going paperless means converting documents that are only available in paper form into digital documents. This means thousands of documents must be digitized, which can be time consuming. Alternatively, you could temporarily hire extra people or outsource the process.
  • Difficulties digitizing existing paperwork: not all relevant paperwork comes in a standard paper size, which can bring its own challenges. Some law firms will also prefer to have both a scan as an image as well as a text version. While AI-driven OCR has made tremendous progress, it still means that all documents will have to be checked.
  • Transition costs and disruptions: the two challenges mentioned above make it clear that transitioning to a paperless office not only causes extra costs, but disruptions in the way the law firm is run. These initial costs and operational disruptions can be mitigated with careful planning and budgeting.
  • Security risks: in an era where cybercrime is on the rise and lawyers are a prime target, implementing robust cybersecurity measures against digital threats is imperative.
  • Compliance with regulations: ensuring that digital practices comply with legal industry standards and regulations is also crucial.

Best practices

These are some of the best practices to implement your transition to a paperless law firm.

First, identify and compare the necessary tools and technologies, like document management systems, e-signature solutions, and case management software.

Next, design your implementation strategies by planning the different steps of your paperless transition. Use a phased implementation. Recommended steps include digitizing existing documents, setting up central repositories for documents, and setting up digital workflows. Implement an electronic signature solution. Establish new processes for when you do use paper. Incentivize your paperless office strategy. Also pay attention to your client relations and notify them of the transition. Finally, staff training is also of the utmost importance.

While designing your implementation strategy, focus on security and compliance. Ensure your data security and client confidentiality in a paperless environment. Make a checklist to make sure you comply with legal and regulatory requirements (e.g., GDPR).

All of these will help make your transition smoother.

 

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Legal IT

Two free Microsoft apps to increase your productivity

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In this article, we look at two free Microsoft apps to increase your productivity, the Microsoft Forms and the Bookings apps. We answer the following questions: What is the Forms app? What are the benefits of the Forms app? What is the Bookings app? And what are the benefits of the Bookings app? (Note: this article was written upon request).

Increase your productivity with the Forms app

The first app we have a look at is the forms app, which officially is called Microsoft Forms.

What is the Forms app?

The Wikipedia gives the following definition: “Microsoft Forms (formerly Office 365 Forms) is an online survey creator, part of Office 365. Released by Microsoft in June 2016, Forms allows users to create surveys and quizzes with automatic marking. The data can be exported to Microsoft Excel and viewed live using the Present feature.”

Microsoft itself describes it as “a simple and powerful app that lets you easily create surveys, quizzes, and polls. With its intuitive interface, you can quickly design and share your forms with others, track responses in real-time and make data-driven decisions. Whether you’re conducting market research, gathering customer feedback, or testing student progress, Microsoft Forms makes it easy to get the insights you need to make informed decisions.”

Microsoft Forms provides a range of features to create interactive forms. Users can customize the background image, add pictures to questions, create sections, and use branching logic. It also offers real-time analytics to evaluate responses and integrates with other Microsoft 365 applications like Excel, SharePoint, and Teams. The app provides free templates and exclusive themes. It allows you to sync the results of your surveys and analyse the responses seamlessly in Excel.

Microsoft Forms is generally available to Office 365 Education customers, Microsoft 365 Apps for business customers, and users with a Microsoft account (Hotmail, Live, or Outlook.com). It is an optional and free app. Forms exists in an app version, which can be downloaded through the Microsoft Store, as well as in an online version, which can be found at https://forms.office.com. In essence, it is Microsoft’s competitor for Google Forms and Jotform.

As a lawyer, you could use the app, e.g., to do surveys among your clients, but also for things like client intake.

What are the benefits of the Forms app?

Microsoft Forms is a powerful tool that simplifies data collection and feedback gathering, with many benefits.

Integration with Microsoft 365: Microsoft Forms can be seamlessly integrated with other Microsoft 365 products. Users can insert quizzes, surveys, polls, and other types of forms into applications like OneNote, Excel, SharePoint, and Teams. This is probably the most important benefit, as it means that it integrates with the products and services your clients use and are familiar with.

Customization: Microsoft Forms offers customization options to create visually appealing forms. Users can choose from professionally designed templates or create their own themes. It also supports multilingual forms and provides powerful data visualization tools. Add themes, images, and videos to align forms with your law firm’s identity.

Real-time Responses: Visualize data as responses come in, with automatic charts and graphs.

Collaboration and Sharing: Share forms via links, embed them on websites, and collaborate with others.

Security and Privacy: Forms adheres to strict standards, allowing control over form access and anonymous responses.

Simple Creation Interface: You can create forms without any coding or design skills. Choose from templates or start from scratch.

Variety of Question Types: Forms supports multiple-choice, text entry, ratings, and more.

Logic and Branching: Customize the survey experience by directing respondents based on their previous answers.

Increase your productivity with the Bookings app

The second app we have a look at is the Bookings app.

What is the Bookings app?

The Wikipedia describes the Microsoft Bookings app as “a scheduling tool and is part of the Microsoft Office family of products. Released by Microsoft in March 2017, Bookings allows customers of small businesses and companies to book appointments with the company.”

In other words, Microsoft’s Bookings app is a scheduling tool that allows organizations to manage appointments and bookings with their customers. It is integrated with Microsoft Teams.

You can have one or more booking calendars. Scheduling bookings is easy and flexible. Attendees can join a booking, with or without a Teams account.

To add the Bookings app to Teams, users can go to the Apps section and search for Bookings. Once added, users can set up their booking calendar and customize the app according to their business needs.

Bookings is available with various subscriptions, including Office 365 and Microsoft 365 plans. It is not available as a standalone app and requires Outlook Web App or Outlook on the web to be enabled. All users of the Bookings app and staff participating in meetings must have a license that supports Teams meeting scheduling.

What are the benefits of the Bookings app?

The Bookings app offers the following benefits.

Integration with Microsoft Teams and Microsoft 365: The virtual appointments scheduled through the Bookings app are held via Microsoft Teams Meetings. This integration allows for seamless communication and collaboration during appointments. Appointments that are registered in Teams can automatically be added to your Outlook Calendar. Most importantly, because of this integration, it also integrates with the products and services your clients use and are familiar with. In other words, your clients can set up a meeting with you through an interface that they are familiar with.

Flexible and customizable: Bookings can be customized to fit the needs of your law firm. It offers built-in flexibility and the ability to customize appointment details, booking requirements, and service providers. This allows you to tailor the app to your specific requirements.

Features and functionality: Bookings simplifies the process of scheduling and managing appointments. It includes a web-based booking calendar that syncs with Outlook to optimize availability. The app also supports automated notification emails and reminders to reduce no-shows and enhance customer satisfaction. Additionally, Bookings integrates with Microsoft Teams to support virtual appointments via online meetings.

Conclusion

Forms and bookings are two free apps that function as add-ons to Microsoft Teams and Microsoft 365. They are easy to use and make doing things like taking surveys and booking appointments easy. An additional benefit is that these are both Microsoft apps, which means your clients do not have to familiarize themselves with yet another platform. Instead, they can interact with you in a familiar environment.

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Legal IT

An introduction to AI computers for lawyers

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AI Computers are being called the biggest development in the PC industry in 25 years. Experts believe they could also trigger a refresh cycle in the PC-industry. In this article, we will answer the following questions. What are AI computers? What are the benefits of AI computers, and what are the benefits for lawyers? Do you, as a lawyer need to get yourself one? What are the challenges and limitations for legal work?

What are AI computers?

So, what are AI computers? The term was launched by Intel. They describe it as follows: an AI PC has a CPU, a GPU and an NPU, each with specific AI acceleration capabilities. An NPU, or neural processing unit, is a specialized accelerator that handles artificial intelligence (AI) and machine learning (ML) tasks right on your PC instead of sending data to be processed in the cloud. The GPU and CPU can also process these workloads, but the NPU is especially good at low-power AI calculations. The AI PC represents a fundamental shift in how our computers operate. It is not a solution for a problem that didn’t exist before. Instead, it promises to be a huge improvement for everyday PC usages.

In other words, AI PCs are regular personal computers that are supercharged with specialized hardware and software. These are specifically designed to handle tasks involving artificial intelligence and machine learning. When it comes to the hardware, what stands out is the presence of an NPU, i.e., a Neural Processing Unit. Its job is to accelerate AI workloads, particularly those that require real-time processing, like voice recognition, image processing, and deep learning applications.

AI PCs also run specialized software stacks, frameworks, and libraries tailored for Artificial intelligence and Machine Learning workloads. “The distinction between AI software and ‘normal’ software lies in how each type of application processes the work you ask it to do. A conventional application just provides pre-defined tools not unlike the specialty tools in a toolbox: you must learn the best way to use those tools, and you need personal experience in using them to be effective on the project at hand. It’s all up to you, every step of the way. In contrast, AI software can learn, make decisions, and tackle complex creative tasks in the same way a human might. That learning capability gives you a new kind of tool that can simply do the job for you at your request, because it has been trained to do so. This fundamental difference enables AI software to automate complex tasks, offer personalized experiences, and process vast amounts of data efficiently, transforming how we interact with our computers.”

Benefits of AI computers

Why were AI computers created in the first place? Generative AI has become extremely popular. But it puts high workloads on the cloud servers AI is using. The idea is to share that workload with the PCs of the users. And for that, you need to have powerful PCs with the necessary hardware and software. In short, AI computers are beneficial for the users, as well as for the manufacturers and AI service providers.

Benefits for users

Experts have identified many potential benefits for the users. AI PCs can boost productivity, enhance creativity, and improve user experience. Below are some of the key advantages the literature mentions, in random order.

Enhanced and accelerated performance for AI Tasks: AI PCs are equipped with hardware specifically designed to tackle demanding AI applications. This translates to faster processing of complex calculations and data analysis, crucial for tasks like video editing, scientific simulations, and training AI models. This acceleration can significantly speed up the training and inference of deep learning models. And other applications like video conferencing, e.g., can also greatly benefit from this enhanced performance.

Improved efficiency and automation: AI features can automate repetitive tasks, freeing you up for more strategic work. Imagine software that automatically categorizes your files or optimizes battery life based on usage patterns.

Improved power efficiency: AI accelerators like TPUs are designed to be power-efficient, consuming less energy while delivering high performance. Laptop batteries, e.g., will last longer before needing recharging. AI PCs can lead to lower operating costs and a smaller environmental footprint.

Personalized User Experience: AI can learn your preferences and adjust settings accordingly. Brightness, keyboard responsiveness, and even video call framing could adapt to your needs, creating a more comfortable and efficient work environment.

Boosted Creativity: some AI PCs come with built-in creative tools that can generate ideas, translate languages, or even write different creative text formats based on your prompts. This can be a game-changer for designers, writers, and anyone looking for a spark of inspiration.

Enhanced Security: AI-powered security features can constantly monitor for threats and potential breaches, offering an extra layer of protection for your data.

Benefits for chip manufacturers and for service providers

The new AI computers do not only benefit the users. As mentioned before, having part of the workload done on the users’ side, also considerably reduces the workload on the servers of the AI service providers. One expert even estimates that, “By end of 2025, 75% of enterprise-managed data will be processed outside the data centre.” So, service provides will have to invest less in infrastructure.

At the same time, AI PCs can be useful in the data centre, too. Two important benefits they offer are scalability and a faster time-to-market. Many AI PCs support multiple AI accelerators, allowing for scaling up the computational power by adding more accelerators as needed. This scalability enables handling larger and more complex AI models and workloads. The accelerated performance of AI PCs can also significantly reduce the time required for training AI models, enabling faster iteration and deployment cycles for AI applications and solutions.

The introduction of a new type of personal computers is of course also good news for the manufacturers, as it creates a new – and booming – market. It should not come as a surprise then, that all major chip manufacturers like Intel, Nvidia, AMD, and Qualcomm have started making NPU chips. Apple, too, has announced new chips that are AI optimized. It is safe to assume that soon all new PCs, laptops, and tablets will be AI computers.

Benefits for lawyers

All of this then begs the questions, do you, as a lawyer, need one? Well, apart from the abovementioned benefits, AI computers can offer lawyers specific benefits, too. They can, e.g., significantly enhance the efficiency of legal practices by automating routine tasks such as document review, legal research, eDiscovery, and contract analysis. Experts anticipate the following benefits.

Improved Legal Research: AI can analyse vast amounts of legal documents, regulations, precedents, and case law, helping lawyers identify relevant precedents and arguments much faster. This can save significant time and effort compared to traditional research methods.

Contract analysis and enhanced due diligence: AI can sift through contracts and financial records, highlighting potential risks and areas requiring closer scrutiny during due diligence processes. This typically can be a time-consuming task for lawyers, where AI can do it very fast. Add to that that it can improve the accuracy and efficiency of legal reviews.

Legal document analysis, review, and drafting assistance: AI-powered tools can help lawyers draft legal documents by suggesting language, identifying inconsistencies, and ensuring compliance with regulations. AI models can also be trained to analyse and extract relevant information from large volumes of legal documents, contracts, and case files. The computational power of AI PCs can speed up this process significantly.

Predictive analytics: with the help of AI PCs, lawyers can develop predictive models to analyse the potential outcomes of legal cases based on historical data and various factors.

Natural language processing (NLP): AI PCs can be used to train and deploy NLP models for tasks like legal document summarization, information extraction, and sentiment analysis.

Challenges and limitations for legal work

At present, however, AI computers are still facing some challenges and limitations when it comes to legal work. While AI PCs can provide computational advantages, many legal applications may not require the full power of these specialized systems. For routine legal work, such as drafting documents or conducting basic research, regular desktop or laptop computers might suffice.

AI computers still have limited judgment and creativity. The core tasks of lawyers often involve legal reasoning, strategy, and creative problem-solving, areas where AI is still not very advanced. AI PCs can’t replace a lawyer’s ability to analyse complex situations, develop persuasive arguments, or adapt to unexpected circumstances in court.

There also is the issue of data dependence and accuracy: the effectiveness of AI tools heavily relies on the quality and completeness of the data they’re trained on. Legal data can be complex and nuanced, and errors in the data can lead to inaccurate or misleading results.

The benefits may not justify the higher costs. AI PCs can be significantly more expensive than traditional PCs. For lawyers who don’t handle a high volume of complex legal matters that heavily rely on AI-powered research or due diligence, the cost may therefore not be justified.

CONCLUSION

AI PCs can be a valuable tool for lawyers, especially for tasks like legal research and due diligence. However, they shouldn’t be seen as a replacement for human lawyers. AI is best used to augment a lawyer’s skills and expertise, not replace them. And at present, AI computers may be overkill when it comes to day-to-day legal work, where existing computers can handle the workload and the extra cost of an AI pc is not justified.

It is also important to consider that the technology used in AI computers is a new and evolving tech. AI PCs are a relatively new concept, and the functionalities are still under development. The “killer application” that justifies the potentially higher cost might not be here yet. Add to that, that to fully benefit from AI features, you’ll need compatible software that can leverage the AI capabilities of your PC.

The decision to invest in AI PCs for legal work would depend on factors such as the specific use cases, the volume of data or workload, the complexity of the AI models required, and the potential return on investment. Law firms or legal departments with a significant focus on AI-driven legal technologies may find AI PCs more beneficial than those with more traditional workflows. But for many lawyers, a traditional PC with good legal research software might still be the most practical solution.

 

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The EU AI Act

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In previous articles, we discussed the dangers of AI and the need for AI regulations. On 13 March 2024, the European Parliament approved the “Proposal for a Regulation of the European Parliament and of the Council laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) and amending certain Union legislative acts.” The act was a proposal by the EU Commission of 21 April 2021. The act is usually referred to by its short name of the Artificial Intelligence Act, or the EU AI Act. In this article we look at the following questions: what is the EU AI Act? What is the philosophy of the EU AI Act? We discuss the limited risk applications and the high-risk applications. Finally, we also look at the EU AI Act’s entry into force and the penalties.

What is the EU AI Act?

As the full title suggests, it is a regulation that lays down harmonised rules on artificial intelligence across the EU. Rather than focusing on specific applications, it deals with the risks that applications pose, and categorizes them accordingly. The Act imposes stringent requirements for high-risk categories to ensure safety and fundamental rights are upheld. The Act’s recent endorsement follows a political agreement reached in December 2023, reflecting the EU’s commitment to a balanced approach that fosters innovation while addressing ethical concerns.

Philosophy of the EU AI Act

The AI Act aims to provide AI developers and deployers with clear requirements and obligations regarding specific uses of AI. At the same time, the regulation seeks to reduce administrative and financial burdens for business, in particular for small and medium-sized enterprises (SMEs). The aim of the new rules is to foster trustworthy AI in Europe and beyond, by ensuring that AI systems respect fundamental rights, safety, and ethical principles and by addressing risks of very powerful and impactful AI models.

The AI Act ensures that Europeans can trust what AI has to offer. Because AI applications and frameworks can change rapidly, the EU chose to address the risks that applications pose. While most AI systems pose limited to no risk and can contribute to solving many societal challenges, certain AI systems create risks that must be addressed to avoid undesirable outcomes. The Act distinguishes four levels of risk:

  • Unacceptable risk: applications with unacceptable risk are never allowed. All AI systems considered a clear threat to the safety, livelihoods and rights of people will be banned, from social scoring by governments to toys using voice assistance that encourages dangerous behaviour.
  • High risk: to be allowed high risk applications must meet stringent requirements to ensure safety and fundamental rights are upheld. We have a look at those below.
  • Limited risk: applications are considered to pose limited risk when they lack transparency, and the users of the application may not know what their data are used for or what that usage implies. Limited risk applications can be allowed if they comply with specific transparency obligations.
  • Minimal or no risk: The AI Act allows the free use of minimal-risk and no risk AI. This includes applications such as AI-enabled video games or spam filters. The vast majority of AI systems currently used in the EU fall into this category.

Let us have a closer look at the limited and high-risk applications.

Limited Risk Applications

As mentioned, limited risk refers to the risks associated with a lack of transparency. The AI Act introduces specific obligations to ensure that humans are sufficiently informed when necessary. E.g., when using AI systems such as chatbots, humans should be made aware that they are interacting with a machine so they can make an informed decision to continue or step back. Providers will also have to ensure that AI-generated content is identifiable. Besides, AI-generated text published with the purpose to inform the public on matters of public interest must be labelled as artificially generated. This also applies to audio and video content constituting deep fakes.

High Risk Applications

Under the EU AI Act, high-risk AI systems are subject to strict regulatory obligations due to their potential impact on safety and fundamental rights.

What are high risk applications?

As mentioned, all AI systems considered a clear threat to the safety, livelihoods and rights of people are considered high-risk. These systems are classified into three main categories: a) those covered by EU harmonisation legislation, b) those that are safety components of certain products, and c) those listed as involving high-risk uses. Specifically, high-risk AI includes applications in critical infrastructure, such as traffic control and utilities management, biometric and emotion recognition systems. It also applies to AI used in education and employment for decision-making processes.

What are the requirements for high-risk applications?

High-risk AI systems under the EU AI Act are subject to a comprehensive set of requirements designed to ensure their safety, transparency, and compliance with EU standards. These systems must have a risk management system in place to assess and mitigate potential risks throughout the AI system’s lifecycle. Data governance and management practices are crucial to ensure the quality and integrity of the data used by the AI, including provisions for data protection and privacy. Providers must also create detailed technical documentation that covers all aspects of the AI system, from its design to deployment and maintenance.

Furthermore, high-risk AI systems require robust record-keeping mechanisms to trace the AI’s decision-making process. This is essential for accountability and auditing purposes. Transparency is another key requirement, necessitating clear and accessible information to be provided to users and ensuring they understand the AI system’s capabilities and limitations. Human oversight is mandated to ensure that AI systems do not operate autonomously without human intervention, particularly in critical decision-making processes. Lastly, these systems must demonstrate a high level of accuracy, robustness, and cybersecurity to prevent errors and protect against threats.

The EU AI Act’s entry into force

The act will enter into force two years after it was approved, i.e., on 13 March 2026. This gives member states the opportunity to implement compliant legislation. It also gives providers a two-year window to adapt to the regulation.

The European AI Office, established in February 2024 within the Commission, will oversee the AI Act’s enforcement and implementation with the member states.

Penalties

The EU AI Act enforces a tiered penalty system to ensure compliance with its regulations. For the most severe violations, particularly those involving prohibited AI systems, fines can reach up to €35 million or 7% of the company’s worldwide annual turnover, whichever is higher. Lesser offenses, such as providing incorrect, incomplete, or misleading information to authorities, may result in penalties up to €7.5 million or 1% of the total worldwide annual turnover. These fines are designed to be proportionate to the nature of the infringement and the size of the entity, reflecting the seriousness of non-compliance within the AI sector.

Conclusion

The EU AI Act represents a significant step in the regulation of artificial intelligence within the EU. It sets a precedent as the first comprehensive legal framework on AI worldwide. The Act mandates a high level of diligence, including risk assessment, data quality, transparency, human oversight, and accuracy for high-risk systems. Providers and deployers must also adhere to strict requirements regarding registration, quality management, monitoring, record-keeping, and incident reporting. This framework aims to ensure that AI systems operate safely, ethically, and transparently within the EU. Through these efforts, the European AI Office strives to position Europe as a leader in the ethical and sustainable development of AI technologies.

 

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Legal IT

The dangers of social media

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In this article, we look at the dangers of social media for mental health, at the legal and criminal dangers of social media, and at the risks posed by misinformation, disinformation, and propaganda.

People love social media. They allow us to stay in touch with family, friends, and acquaintances. They also allow us to interact with suppliers and customers. Lawyers, too, can use social media professionally. (See our past articles on social media for lawyers, on why they matter for lawyers, on how they can be great marketing tools, and on how they can be used for legal research). And let’s admit it, social media can be fun. It is no surprise then that a “typical” internet user spends almost 2½ hours each day using social media platforms. This equates to more than one-third of our total online time. But there also is an often-overlooked dark side to social media, and that is what this article is about.

The dangers of social media for mental health

We all have encountered stories of people taking their lives after being bullied on social media. This is one of the main dangers of social media: it can trigger or worsen mental health problems, such as anxiety, stress, depression, and loneliness. Studies have shown that excessive social media use can also increase feelings of emotional exhaustion, envy, low self-esteem, and dissatisfaction with life: the constant exposure to carefully curated, idealized versions of people’s lives, e.g., can lead to feelings of inadequacy and low self-esteem. People can get addicted to social media. They can expose users to harmful content. Cyberbullying and online harassment are also common on social media platforms. All the above can have severe psychological effects.

Let us have a closer look at some of these in more detail.

One of the most serious dangers of social media is cyberbullying and the accompanying harassment. Cyberbullying can include sending mean messages, posting embarrassing photos or videos, or spreading rumours online. Harassment can range from mean comments to threats and doxing (revealing personal information).

Social media platforms are designed to be addictive. The endless scroll and notifications trigger dopamine releases in the brain, making it easy for users to become addicted and spend excessive amounts of time on these platforms. People who are addicted to social media spend hours each day checking their feeds, and they may experience withdrawal symptoms when they are unable to use social media. This social media addiction affects real-life relationships, work, school, and other responsibilities. Social media addiction is a growing problem.

Social media can also expose users to harmful content, such as violence, hate speech, and sexual content. This content can be particularly damaging to children and adolescents, who may be more vulnerable to its effects.

Social media encourages people to compare their lives, achievements, and appearances to others, leading to a phenomenon known as “comparative stress.” This can negatively impact self-esteem and mental well-being.

Excessive use of social media can lead to reduced face-to-face interactions. These face-to-face interactions are essential for building and maintaining meaningful relationships. A lack of these interactions can contribute to feelings of isolation and loneliness.

Social media also have an impact on youth development. Children and adolescents are particularly vulnerable to the dangers of social media. Several of the items mentioned above can affect their self-esteem, body image, and overall development. It can also expose them to age-inappropriate content and online predators.

Legal and criminal dangers of social media

There are several legal, even criminal, issues as well when it comes to social media. Think of privacy concerns or cybercrime (e.g., identity theft, phishing, and hacking). Let us have a look at the most relevant legal dangers social media can pose.

A first group of concerns has to do with privacy and the protection of personal data. Many social media platforms collect vast amounts of user data. These can then be used for targeted advertising (see below) but may also leave users vulnerable to data breaches (see below). Users often share personal information without fully understanding the implications: when you share information on social media, it is accessible to anyone who can view your profile. This typically includes your personal information, such as your address, phone number, and email address, as well as your photos and videos. Even location-sharing features can compromise user privacy. All this information can be used by scammers, identity thieves, and other malicious actors. Clearly, social media platforms are not doing enough to obtain clear and informed consent from users regarding data collection and usage.

Identity theft is another danger of social media. Identity thieves use the information you share online to steal your identity and commit fraud in your name. They may also use your information to create fake social media profiles or send phishing emails. In these phishing attacks, cybercriminals trick users into revealing personal information, which then can lead to (more) identity theft. There also is a risk involved in using third-party apps: users often grant access to these applications without fully understanding the risks.

Social media platforms can also leave us vulnerable to cyberattacks and hacking attempts. The EU faces a surge in cyber-attacks, targeting critical infrastructure, institutions, and businesses. Most of these are ransomware attacks, i.e., demanding ransoms for stolen data. But cyberattacks and hacking attempts can also be used to disrupt the functioning of democratic institutions, political campaigns, and even electoral systems. Such attacks can have serious consequences for the integrity of elections and democratic processes. (See below).

Finally, there are the anonymity challenges which undermine accountability and legal liability. The anonymity and lack of transparency on social media often make it difficult to hold those who engage in criminal, harmful or unethical behaviour accountable.

The risks posed by misinformation, disinformation, and propaganda

Lawyers have been called the guardians of the rule of law and of democracy. We have reached a point where the amounts of misinformation, disinformation and propaganda that are being spread on social media even poses a risk to the rule of law, of democracy and the political process.

Let us start with the spread of misinformation, disinformation (=deliberate), and misleading information. Social media are a powerful tool for the rapid spread of misinformation, fake news, and conspiracy theories. There are many examples of how false or misleading information can go viral quickly, and of how it can be difficult to distinguish between fact and fiction. And the false information often spreads faster than fact-checking can keep up. Given the circumstances, this can lead to real-world consequences, such as public health crises or political instability. The rapid spread of false and misleading information can also distort public understanding of critical issues, including elections. (See below).

Because of the algorithms that they use, social media can lead to filter bubbles and echo chambers. Social media algorithms are designed to show users content that aligns with their existing beliefs and preferences. This creates so-called echo chambers, where people are exposed only to information that reinforces their views. This can result in polarization, intolerance, and a lack of understanding between different groups. It also can hinder productive political discourse.

It should come as no surprise then that social media have been used as a tool for political manipulation. This can be done by individuals, organizations, or by foreign actors to influence public opinion. Tactics include fake accounts, bots, and coordinated disinformation campaigns. All of these can be used to amplify certain narratives and divisive political rhetoric, sway public sentiment, and undermine the integrity of democratic processes, including elections. There are plenty of documented examples where social media have been used to influence voter behaviour by exposing individuals to biased or misleading information. (Cf., e.g., the NYT article in the sources).

Social media platforms allow for highly targeted advertising. This can be used to influence specific demographic groups with tailored messages. While this can be a legitimate advertising practice, it can also be exploited to spread political propaganda and manipulate voter behaviour.

All the above contributes to an ongoing political polarization. Social media intensify political polarization by amplifying extreme viewpoints and creating an environment where moderate or compromise positions are less visible and less appealing to users. Such polarization makes it harder for democracies to function.

As a result of all of this, social media can erode public trust in traditional media, institutions, and even the democratic process itself. When people lose trust in credible sources of information, they may become more susceptible to manipulation. They also become less likely to participate in democratic activities like voting.

Conclusion

Social media are great but pose some serious risks as well. Considering all the above, there is a growing demand for regulation and for a legal framework. But that comes with its own legal challenges. Many countries guarantee a constitutional right of free speech. So, any regulation attempts will have to find a balance between freedom of speech and its limitations. And there is the ongoing debate whether the social media service providers are publishers or merely ITC platform providers. The social media service providers argue that the users are the publishers and that they, i.e. the service providers, only offer a platform.

 

 

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Legal IT

How lawyers communicate with clients

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In this article we look at how lawyers communicate with clients. We start off with how lawyers communicate with clients using traditional means like phone, mail, and fax. Then we look at more modern electronic ways of communicating like email, client portals, and document sharing.

How lawyers communicate with clients using traditional means

In the past, lawyers mainly communicated with clients using phone, fax, and traditional mail. These days, they still do, but the traditional means have clearly taken a backseat. Interestingly, there are hardly any recent statistics available on how many lawyers still use phone, fax, and traditional mail. Of the three, phone calls still appear the most popular.

Phone

Lawyers still call their clients, and they call each other. One thing that does stand out is that their clients clearly would prefer to get more phone calls. One of the few available statistics is that clients greatly prefer human-to-human interactions like phone calls (62%) when dealing with issues. Instead, what they receive are largely automated emails.

And there is something to be said about relying on phone calls more often. It is usually much easier to talk about complicated matters over the phone than it is through email. It’s also a better way to build rapport with your clients. And often, it’s just easier to have a casual conversation on the phone than through email.

Traditional mail

For a long time, regular mail was the traditional way of sending and receiving documents, letters, and notices. It is still used by some lawyers and clients who prefer a physical copy of their correspondence or who need to comply with certain legal requirements.

But regular mail has clearly lost much of its appeal. This largely has to do with some of its inherent disadvantages. It is slow and unreliable compared to other methods. It can be lost, damaged, or intercepted by unauthorized parties. There typically also are additional costs for postage and printing. And, finally, it can create clutter and wastepaper.

According to a survey conducted by the American Bar Association in 2020, only 9% of lawyers reported using regular mail as their primary method of communication with their clients, while 75% reported using email as their primary method.

Fax

Fax is another traditional way of transmitting documents electronically. It, too, has lost much of its popularity because if its limitations. It requires a fax machine or service that may not be always available or accessible. It can be expensive due to phone charges or subscription fees. Faxes can be low-quality or illegible due to poor resolution or transmission errors. They can be insecure or untraceable due to lack of encryption or confirmation.

According to the same survey by the American Bar Association in 2020, only 4% of lawyers reported using fax as their primary method of communication with their clients.

 

Electronic Communications

Email

These days, email is king. It is the most common way of communicating with clients. It is fast, convenient, and cost-effective. It allows lawyers to send and receive documents, attachments, and messages at any time and from any device. It also enables lawyers to keep a record of their communication history and to organize their inbox using folders and labels.

As mentioned above, in 2020, it was the preferred way of communication of 75% of lawyers. The same survey revealed that 92% of lawyers reported that they had sent confidential or privileged communications/documents via email. Additionally, nearly half of those lawyers (49%) shared that they did so at least once every day. Also worth noting is that 25% of clients prefer emails as the initial method of outreach.

However, email has its own drawbacks. It can be hacked, spoofed, or infected by malware or viruses. It can be misinterpreted or misunderstood due to lack of tone or context. It can be ignored or overlooked due to spam filters or information overload. It can create legal risks if not used properly or securely. It is why that American Bar Association recommended using client portals and/or sharing of documents instead, as they are more secure.

Client portals

Client portals are secure online platforms that allow lawyers and clients to communicate and collaborate on their cases. They offer several benefits over email and fax. They provide a centralized and organized place for storing and accessing documents, messages, calendars, tasks, invoices, and payments. They allow real-time updates and notifications on the status and progress of the case. They enable interactive features such as chat rooms, forums, polls, surveys, or feedback forms. They often allow to generate documents automatically, collecting the necessary data that are available in the portal. They enhance security and privacy by using encryption, authentication, and authorization.

Client portals may have compatibility issues with other software or systems that lawyers or clients use. There may also be legal implications such as ownership, liability, or jurisdiction. Lawyers are therefore recommended to choose a reliable and reputable client portal provider that meets their needs and expectations. They should also educate and train their clients on how to use the portal effectively and efficiently.

Document Sharing

Client portals typically allow document sharing within the portals. But it is also possible to share document without the need for a dedicated legal client portal. These days, cloud technologies allow for the safe sharing of documents. It involves using online tools such as Google Docs, Microsoft SharePoint, or Dropbox Paper that allow multiple users to view, edit, or comment on the same document simultaneously or asynchronously. In a previous article, we explained how Syntex offers exciting new opportunities. So, it is yet another way of communicating and collaborating with clients.

Like client portals, document sharing allows real-time or near-real-time feedback and revisions on the document. It eliminates the need for sending multiple versions or attachments of the document. It preserves the history and track changes of the document. It facilitates teamwork and brainstorming on the document. It is a secure and reliable way to share information between lawyers and their clients. And for those reasons alone already, it is to be preferred over email.

To reap the greatest benefits of document sharing, lawyers should follow some guidelines when sharing documents with comments. They should use clear and constructive comments that are relevant and respectful. Use different colours or symbols to distinguish between different types of comments, such as questions, suggestions, corrections, or approvals. Make sure to acknowledge or address comments. Use lock or protect functions to prevent unauthorized or accidental changes to the document. Finally, use share or invite functions to control who can access or edit the document.

Conclusion

The ways lawyers communicate with their clients has changed dramatically over the last decades. Electronic ways of communicating have clearly taken over. And email has become the predominant way of communicating. But because of its inherent insecurity, client portals and document sharing should be given preference.

 

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The 2024 law firm

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Usually, at the beginning of a new year, we look back at the trends in legal technology of the last year. Unfortunately, the reports that are needed to do that are not available yet. So, instead, with Lamiroy Consulting turning 30 in February 2024, we will have a look at the 2024 law firm, and at how law firms have evolved over the last decades. We will discuss a range of topics concerning technology and automation in the 2024 law firm, including artificial intelligence, communications. We will see how the cloud, remote work, and virtual law offices have changed law firms, etc.

Technology and automation in the 2024 law firm

Let us go back in time. The early 80s saw the introduction of the first personal computers and home computers. Word Processors had been around since a few years before that. They were found in only a very small minority of law firms at the time. The Internet as we know it, did not exist yet. By the time 1994 came, things had started to change, and a legal technology revolution was on the horizon. Fast forward to 2024. Law firms that don’t use computers or equivalent mobile devices are an endangered – if not extinct – species. Many operational processes in the law firm have been automated.

So, it is safe to say that over the past decades, technology and automation have transformed the legal industry in many ways. According to a report by The Law Society, some of the factors that have contributed to this transformation include increasing workloads and complexity of work, changing demographic mix of lawyers, and greater client pressure on costs and speed.

Two of the most significant changes has been the introduction of the internet with its cloud technologies and of Artificial Intelligence (AI). Most of the evolutions described below have been made possible by the Internet.

Artificial Intelligence

The introduction of Artificial Intelligence (AI) has been one of the main factors driving a substantial transformation of the legal industry. One of its main benefits has been that it notably improved attorney efficiency. AI plays a key role in tasks such as sophisticated writing, research, and document drafting, significantly expediting processes that traditionally could take weeks.

Communications

Law firms have moved from traditional methods of communication such as snail mail to more modern methods. These include email, client portals, and cloud-based communications, like Teams and SharePoint. They allow people to share documents with different levels of permissions, ranging from reading and commenting to editing.

Client portals have become increasingly popular in recent years, allowing clients to access their legal documents and communicate with their attorneys in real-time. This has made it easier for clients to stay informed about their cases and has improved the efficiency of law firms.

Cloud, Remote work, and Virtual Law Office

The legal industry has experienced a notable surge in remote work and virtual law offices. Much of this has been particularly accelerated by the COVID-19 pandemic. Virtual law offices, facilitated by cloud-based practice management software, offer attorneys the flexibility to work from anywhere, leading to increased flexibility and reduced overhead costs for law firms. The cloud has played a crucial role in this shift. It allows virtual lawyers to run fully functional law firms on any device with significantly lower costs compared to on-premise solutions.

Digital Marketing and Online Presence

The legal industry has also witnessed major changes in its marketing practices over the past decades, adapting to the internet era. Recent studies indicates that one-third of potential clients initiate their search for an attorney online. This emphasizes the importance of a strong online presence for law firms to stay competitive. Law firms now prioritize digital marketing through channels like social media, email, SEO, and websites. Whether marketing the entire firm or individual lawyers, a robust digital strategy is essential for establishing credibility and connecting with potential clients. Personal branding is crucial for individual lawyers, highlighting achievements and values, while law firms should focus on building trust through a comprehensive digital marketing strategy.

Billing and Financial Changes in the 2024 Law Firm

Another area where the legal industry has undergone significant changes is in billing and financial practices. In the past, law firms relied on traditional billing methods such as paper invoices and checks. However, with the advent of technology, law firms have shifted to digital billing methods such as electronic invoices and online payment systems. This has made the billing process more efficient and streamlined. In addition to digital billing methods, law firms have also adopted new financial practices such as trust accounting. Trust accounting is a method of accounting that is used to manage funds that are held in trust for clients. This is particularly important for law firms that handle client funds, such as personal injury or real estate law firms.

Over the last decades, alternative fee arrangements (AFAs) have also significantly impacted the legal industry. They did so by offering pricing models distinct from traditional hourly billing. AFAs, including fixed fees, contingency fees, and blended rates, have gained popularity as clients seek greater transparency and predictability in legal fees. A recent study identified 22 law firms excelling in integrating AFAs into their service delivery, earning praise from clients for improved pricing and value. The study underscores a client preference for firms providing enhanced pricing and value. This emphasizes how AFAs not only contribute to better relationships between law firms and clients but also demonstrate the firms’ commitment, fostering trust and credibility.

Legal Research and Analytics

Legal research and analytics have also been revolutionised over the last decades, making the process more efficient and accessible. We have seen primary and secondary legal research publications become available online. Facilitated by information and communication technologies, this has replaced traditional storage methods like compact discs or print media. This shift has not only increased accessibility but also allowed legal professionals to conduct more comprehensive and accurate research. Furthermore, the emergence of legal analytics has empowered professionals to enhance legal strategy, resource management, and matter forecasting by identifying patterns and trends in legal data.

Client Expectations

Another notable change is that clients’ expectations of lawyers have evolved significantly. A recent survey highlights that 79% of legal clients consider efficiency and productivity crucial, indicating a demand for more effective legal services. Additionally, clients now expect increased accessibility and responsiveness from their lawyers, prompting law firms to integrate new technologies such as client portals and online communication tools. Transparency in fees and billing practices is also a priority for clients, leading to the growing adoption of alternative fee arrangements by law firms. (Cf. above).

Globalization

Finally, globalization has significantly impacted the legal industry. It forced law firms to adapt to a changing global landscape and heightened demand for legal services across borders. Many European law firms, these days, are members of some international legal network, with branches in many EU countries. And a recent study highlights the emergence of a new corporate legal ecosystem in emerging economies like India, Brazil, and China. This presents opportunities for law firms to expand globally. In response to the globalization of business law and the increasing demand from transnational companies, law firms are transforming their practices. They do so by merging across borders and creating mega practices with professionals spanning multiple countries. This shift has prompted the adoption of new managerial practices and strategies to effectively manage global operations within these law firms.

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Microsoft CoPilot for Lawyers

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Microsoft has started integrating generative AI in its products and services. In our previous article, we talked about SharePoint Syntex. In this article, we have a look at its much talked about CoPilot. What is CoPilot? What can it do? What are the benefits of CoPilot? And what are the benefits of Microsoft CoPilot for lawyers? Finally, we look at the availability of CoPilot.

What is CoPilot?

Microsoft Copilot is a new AI assistant that can help you with various tasks across Windows, Microsoft 365, Bing, and Edge. It is an AI-powered productivity tool that uses large language models (LLMs) and integrates your data, e.g., with the Microsoft Graph and Microsoft 365 apps and services. It can answer your questions, generate content, suggest actions, and more. Copilot provides real-time intelligent assistance, enabling users to enhance their creativity, productivity, and skills.

CoPilot is not just one product or service, and that has led to some confusion. Microsoft has made different versions of CoPilot available, depending on your needs and preferences. At present, there are three versions that are most relevant.

First, there is CoPilot in Windows. This is the basic version of CoPilot that comes with Windows 11. You can launch it by clicking on its icon on the taskbar or by pressing the Windows logo key + C. CoPilot in Windows can help you with common tasks such as searching the web, organizing your windows, and adjusting your PC settings. You can also ask CoPilot questions and get relevant answers fast. For example, you can ask “What is the capital of South Africa?” and CoPilot will show you the answer along with a map and a link to learn more. CoPilot in Windows is being rolled out gradually and will be available in both Windows 10 and 11.

Next, there is the Microsoft 365 CoPilot. Let me first point out that there is some inconsistency in the use of the name. If you have Microsoft 365, a version of CoPilot will work alongside popular Microsoft 365 apps such as Word, Excel, PowerPoint, Outlook, Teams, and more. But the name is typically used more specifically for the CoPilot version for enterprise users of Microsoft 365. This is the premium version of CoPilot that requires a license for Microsoft 365 E3 or Microsoft 365 E5, and a separate license for Microsoft 365 CoPilot. (Read: you will have to pay extra). You can use the Microsoft 365 CoPilot setup guide in the Microsoft 365 admin centre to assign the required licenses to users. You can use Microsoft 365 CoPilot, e.g., to generate summaries of long documents in Word, create charts from data in Excel, design slides from keywords in PowerPoint, schedule meetings from emails in Outlook, and collaborate with teammates from chats in Teams.

Finally, there is Bing Chat (which was just also renamed to CoPilot): This is an online version of CoPilot that uses Bing as the search engine. You can access Bing Chat by going to bing.com/chat or by clicking on the chat icon on the Bing homepage. “Bing Chat puts the power of AI into your online search”, is how Microsoft puts it.

What can it do?

You can use Bing Chat for various purposes such as travel planning, community organizing, comparison shopping, or anything you search for on the web. You can use Bing Chat, e.g., to find the best deals on flights and hotels, get recommendations for local attractions and restaurants, join or create groups for common interests or causes, compare prices and features of different products or services, or explore any topic you are curious about.

Microsoft 365 Copilot can assist you in creating, editing, and improving your documents, emails, presentations, and more. It can help you write faster, better, and more confidently by generating text, suggesting edits, providing feedback, and offering insights. You can use it to create documents, emails, presentations, reports, blogs, and more. It can suggest content, format, style, and grammar based on your data, the Microsoft Graph, the Microsoft 365 apps, and the web. It can even catch up on email threads by getting a summary of the conversation. It can also answer your questions and provide relevant information from trusted sources.

The latter also applies to Bing Chat and the version of CoPilot that comes with Windows. It is a wide purpose generative AI tool that can answer questions, write texts, program code, etc. It can transcribe meetings and summarize the discussion using simple language. It can generate text and images based on your prompts and topics. It can turn documents into presentations or vice versa.

What are the benefits of CoPilot?

Microsoft identifies several benefits CoPilot offers. It can help you save time and effort by automating tedious tasks and generating content faster. It can assist you in learning new skills and improve your writing by providing feedback and suggestions. It also helps you unleash your creativity and explore new possibilities by offering diverse and relevant ideas.

What are the benefits of Microsoft CoPilot for Lawyers?

More specifically for lawyers, Copilot offers the following benefits. It helps to research legal topics and find relevant information from reliable sources. It assists in drafting contracts, agreements, and other legal documents with accuracy and clarity. And it can help you communicate effectively with clients, colleagues, and judges by using appropriate tone and language.

Availability of CoPilot

There is a lot of uncertainty about the availability of the different versions of CoPilot.

According to Microsoft, Copilot is currently available in the US, the UK, and select countries in Asia and South America. However, due to Europe’s privacy protection laws, Copilot is currently unavailable there. Microsoft aims to expand its availability beyond the initial regions, and is in negotiations with the EU.

Let us first have a look at the availability of CoPilot outside of the EU.

Since Microsoft Copilot will be integrated among different Microsoft products, the release dates differ.

  • Copilot started rolling out on Windows 11 on September 26 through a Windows 11 update.
  • Copilot began rolling out to Bing and Edge about two months ago.
  • Microsoft 365 Copilot began rolling out for enterprise customers on November 1 and will roll out to non-enterprise users at a later date. The enterprise version supports several languages, including English, Spanish, Japanese, French, German, Portuguese, Italian, and Chinese Simplified. More languages are planned to be supported over the first half of 2024.

Within the EU

Officially Microsoft 365 CoPilot for enterprise users is not yet available within the EU. However, several enterprise users who have their information hosted on Microsoft Azure servers within Europe have reported that Microsoft 365 CoPilot for enterprise users is available to them.

Copilot in Windows is in limited preview available in Europe, meaning that it is not fully functional and may have some bugs or errors. Copilot for Sales is also available in preview, meaning that it is still under development and may change over time.

Microsoft has stated that it will comply with both the EU and the UK data protection laws and will ensure that its customers can continue to use its services without disruption. Microsoft has also announced that it will offer a new option for its customers in the EU: the EU Data Boundary. This option will allow customers to choose to have their core customer data stored and processed within the EU only by the end of 2022. This option will cover Microsoft 365 CoPilot as well as other online services.

If you are interested in trying out Copilot in Europe, you may be able to bypass the regional restriction by running `microsoft-edge://?ux=copilot&tcp=1&source=taskbar` in the Run Command box. However, this may not work for all users and may violate the Digital Markets Act that disallows market monopoly. And you do so at your own risk.

 

 

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