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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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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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Legal aspects of Non-Fungible Tokens

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Non-fungible tokens (NFTs) made world headlines in March 2021 when a digital artwork NFT was auctioned for nearly 70 million USD. NFTs represent a market that is growing fast: in the second quarter of 2021, NFT transactions already were worth 2.4 billion USD. So, what are Non-Fungible Tokens, and what are some of the legal issues when dealing with them?

The Wikipedia defines a non-fungible token as “a unique and non-interchangeable unit of data stored on a digital ledger (blockchain). NFTs can be used to represent easily-reproducible items such as photos, videos, audio, and other types of digital files as unique items (analogous to a certificate of authenticity) and use blockchain technology to establish a verified and public proof of ownership. Copies of the original file are not restricted to the owner of the NFT and can be copied and shared like any file. The lack of interchangeability (fungibility) distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin.”

So, key items to remember are that an NFT is a digital asset. It is a piece of software code that is entirely unique, yet transferable. That software code usually is a form of smart contract, and it is stored in a blockchain. NFTs typically have to do with digital media.

Let us use an analogy. Imagine a very famous photograph, taken back in the days before digital photography, where photos were still taken on celluloid film. Next, imagine that the original first print of the photograph or the original negative is being auctioned by the original photographer or somebody who acts on their behalf. You get an authentic piece of art, even authenticated by the artist. You can hang it in your house, or you can sell it. But that does not mean you get the copyrights on that piece of art. The original photographer still keeps the rights to reproduce, license, etc.

NFTs are something similar, but specifically created for digital media rather than physical media. The problem with digital media is that they can be infinitely copied and distributed without any loss of quality. NFTs were created as a way to make sure the original artists can benefit from their artwork. When you buy an NFT, you get an authenticated replica of a digital medium that is unique. It is a smart contract that contains certain terms and condition, e.g., to make sure that the original artists, e.g., gets a royalty when the NFT is sold. The smart contract is executed automatically each time there is a transaction that is registered in the blockchain, e.g., when an NFT is sold to a new owner. In other words, an NFT is a non-replicable digital certificate of ownership of a copy of a digital creative work.

It is worth repeating that while the NFT gives you ownership of a copy of a digital artwork, it does not transfer any intellectual property on the original digital artwork to the owner of the NFT, other than the license to own a copy of it. So, why do people by them? Because they are collector’s items that are authenticated and unique, that cannot be modified or amended, yet are transferable. As such, they can also be used as investments.

NFTs are fairly new, and legislation worldwide still has to catch up with the phenomenon. There are several legal issues that have to be considered.

Are NFTs legal? The answer to this question will vary from country to country. But, generally speaking, if there are no laws in place, they should be considered legal. Some countries have already enacted some legislation. Other are likely to follow, which may change what about NFTs is legal and what is not. But there are several caveats, discussed below.

Proof of ownership happens through the Blockchain. The combination of a public key and a private key allows the NFT to be decrypted and provide the necessary information.

Data hosting and storage: the NFT functions as a certificate of ownership of copy of a digital artwork that is stored somewhere, and typically the code of the NFT links to the stored copy. Problems can arise if the storage ends or the link to the storage changes because it is not possible to update a blockchain entry. So, the smart contract code has to explicitly allow transactions to modify the location of the digital artwork.

Smart Contracts: NFTs are smart contracts. The caveat here is that smart contracts usually only work on a specific platform. What about sales on a different platform?

Royalties: since an NFT is a smart contract, it is possible to include code that a fee is automatically paid to the original artist each time the NFT is sold. But, as mentioned above, what about sales on a different platform than the one where the smart contract originated?

Data Protection Laws: Exercising the personal rights to be erased or to modify or correct personal information appear to be incompatible with the immutable nature of the blockchain. In other words, NFTs that contain personal information may violate data protection laws. It may be wise to include non-executable code in the smart contract that clarifies that the people involved have agreed to have their personal information included as it is.

Intellectual Property Laws: as mentioned above, the buyer of an NFT by default does not acquire the intellectual property rights that are associated with the digital artwork. The buyer may not be fully aware of this or its implications. They may, e.g., not be aware that they are not allowed to make copies of the digital artwork or to use it in a publication, which may then constitute a potential intellectual property infringement liability.

Money Laundering: NFTs can be sold for exorbitant amounts of money. Add to that, that they may be sold using cryptocurrencies. There are valid concerns that the transactions of NFTs are being used to circumvent money laundering legislation.

Estate & succession: NFTs are typically linked to specific individuals. What happens to the NFT when the owner of the NFT dies? The immutable nature of the blockchain will not allow to recognize the heirs as new owners.

Unregistered securities: NFTs can be used as investments and there already are NFT marketplaces that allow several traders to take part simultaneously in the acquisition of NFTs. In other words, the new owners all get a share of the NFT. Some argue that in these circumstances, NFTs could be regarded as unregistered securities.

Taxation: the market for NFTs is worldwide. The artist may be in one country, the transaction may happen in another country, while the buyer may reside in yet another one. Transactions of NFTs may therefore be subject to double taxation.

The market of NFTs is expanding faster than anybody predicted. NFTs offer great opportunities, both for the creators of digital artwork, as well as for collectors and investors. But clearly, there still are multiple legal issues that need to be addressed.

 

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Making your law firm client-centred

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How satisfied are your clients with your services? Do you know? An important metric to measure client satisfaction is the NPS, i.e. the net promoter score. What is it? Well, you surely have encountered the mini surveys before, where they ask you to give a score from 0 to 10 on how likely you are to recommend the services or product you are using. Scores from 0 to 6 are not considered good, scores of 7 and 8 are all right, and scores 9 and 10 are what you are aiming for.

Now, most law firms do not achieve these high scores when it comes to client satisfaction. In a previous article, we already pointed out that there is a chasm between what lawyers think their clients want, and what those clients actually want. This disparity is greatest for three items: when the clients want to meet their lawyer in person, when they want to speak to their lawyer on the phone, and when it comes to balancing service with cost.

Now that the Coronavirus is forcing you to rethink the way your law firm works, why not take this as an opportunity to also make your law firm more client-centred? Not only will it give you a competitive advantage, legal consumers are also increasingly demanding it. And if they are satisfied with their experience, they are more likely to recommend you. After all, referrals still are the way most legal consumers find their lawyers. You can only benefit from making your law firm more client-centred.

So, how does one make one’s law firm more client-centred? The Lawyerist website recently published a ‘Complete Guide to Law Firm Client Experience’, and that is an excellent place to start. It explains how building a client-centred law firm requires paying attention to your client’s journey, as well as to your client’s experience. Lawyerist breaks the process down in 8 items. Here is a summary.

  1. The difference between client experience and client service: Your client’s experience is the sum of all his or her interactions with your law firm, from your website to the last consultation. It affects and is experienced by all your clients and determines how they feel towards you and your firm. Client Experience needs to be proactive and intuitive. Client Service on the other hand, is the subjective experience for each client when they need to interact with anyone in your firm, at any given moment when they encounter some issue or problem that needs to be resolved. Client Service is problem oriented and is reactionary by nature.
  2. Understanding your clients: to better understand your clients, their needs, desires, and expectations, it is useful to create client personas. These are descriptions of your ideal client. These profiles can be as specific as you want them to be, but should at least determine what your ideal client’s wants, needs, and expectations would be. Knowing this can also help you understand how they might be feeling when they come to you for help. It will allow you to better empathize with your client, and to you create a more personalized and attentive client experience for them, which is something all consumers of services always appreciate.
  3. Create a clear Law Firm Client Experience Journey: What is a client journey, or client experience journey? It is the entire process your client as a legal consumer with a legal issue that needs to be resolved goes through, when trying to resolve that issue through the services that your law firm offers. How do you want them to feel when they interact with your firm? How can you stay in control of the relationship and manage your clients’ expectations? Map your client’s journey, i.e. identify the different stages your client will go through: each stage should 1) represent a major milestone in the overall goal for your client during their time with your firm, and 2) have clear objectives and goals to meet. At every step, you need to communicate what you are doing with your clients to keep them in the loop. It is a good approach to visualise your clients’ journey. The article by Yolanda Cartusciello on client journey mapping (listed below) provides many useful insights. Cartusciello also refers to research that shows that companies that have transformed themselves to focus on the client journey across the organization have enjoyed a 20% improvement in client satisfaction, a 15-20% decrease in cost of serving their clients, a 20-30% increase in employee engagement, and, perhaps most convincingly, a 10-15% increase in revenue growth.
  4. Your Law Firm Client Experience begins online. In previous articles, we pointed out that most legal consumers check out the lawyers they consider hiring online first, before contacting them. This means their first impression of you is what comes up when they perform an online search on your name. The results may include your website, your reviews, and your social media profiles. You have to pay sufficient attention to all of them. We have previously published an article on online reputation management that addressed this.
  5. Create a connection with your clients. A lawyer-client relationship is built on trust. Building that trust already starts when your client finds you online. Let your personality shine on your website and social media profiles! Then, as soon as you are contacted, make it a top priority to give your client personalized attention. When you meet with your client, “ask them questions, be patient, and listen to what they have to say. Treat them with respect, and don’t be afraid to engage with them emotionally or to talk about yourself to relate to their situation. When you truly care about your clients, you’ll naturally want to do your best to help them out. People will feel this sincerity and respond in kind.” When talking about client experience and client journey, we already mentioned the importance of keeping your clients in the loop and communicating with them regularly. This, too, helps build trust and a connection with your clients. If your clients feel they do not know what the status of their case is, they will get frustrated and dissatisfied. Also, remember to always communicate securely with your clients, e.g., through your client portal.
  6. Getting everyone on your team onboard. All your clients’ interactions with your law firm contribute to how they experience their journeys with your firm. It should therefore be obvious that all this planning for your client experience only works if everyone at your firm is onboard and shares that common purpose of focusing on the client’s experience. One bad experience with anybody in your firm will lead to client dissatisfaction. Everybody should know how the client experience journey goes, what is expected of them, and what their responsibilities are. To this end, you can develop workflows, documents policies and procedures. It helps if everybody involved in a case can access previous communications, which most law firm management software typically allows.
  7. Capture feedback in real time. It is all good and well to decide to put the client’s experience central, but the ultimate test remains how the client does experience his or her journey with your firm. You need to find out what works well, and where there is room for improvement. For that you need your client’s feedback. While the case is ongoing, you can ask for direct feedback, and at the end of the case, you can ask for a review and/or testimonial.
  8. How to Measure ROI. Lastly, with the feedback of your clients, you can measure your return on investment. You need to establish some metrics for that. You can start by asking your client for relevant feedback for each stage of the client journey, and evaluate whether, and if so what, needs to be improved. “To measure the ROI of your client experience, you have to decide what you’re going to measure on the business side of things, what you’re going to measure on the client experience side, and how to correlate those two things.”

The articles listed below also give the following tips that will improve your clients’ experience:

  • Respond faster to potential clients. Research has shown that law firms easily take up to three days to get back to a potential client, if they respond at all, where that client expects an immediate response.
  • We already mentioned reputation management, but make sure to also pay specific attention to regional reputation management, as your referrals are most likely to come from other regional clients. Get involved in your community to build relationships with potential clients.
  • Demonstrate your value. Take extra care to explain how your services will save your client money and/or time.
  • Show a commitment to help. Ask your client what their greatest concern is and show your commitment to helping with that.
  • Reach out with unprompted communication: it shows involvement, and people appreciate that.
  • Offer a breadth of service: clients are looking for lawyers who can handle their needs, and not necessarily just your expertise. Be ready to help anyone who comes through your door, even if it means referring them to another lawyer.
  • Adapt to your clients’ future needs.

In short, to become more client-centred, your law firm needs to focus on embracing your clients and providing them with a positive client experience. This not only helps improve the life of your clients but typically also leads to an increase in revenue growth.

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Google My Business for Law Firms

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In an online world, legal consumers need to be able to find your law firm. Google My Business (GMB) plays an essential – and often overlooked – part in that.

What is it? GMB is a free online listing in Google’s business directory. It is available for businesses and organizations to manage across Google’s services like Search and Maps. What is important is that Google uses GMB listings in the local search results it presents. A well-organized entry in GMB therefore results in a better ranking in Google’s local organic search results, making it easier for people to find your firm. (‘Organic’ search results are the ones that are not paid for).

GMB offers other benefits as well. It allows you to manage your own information: you can specify areas of expertise, address, opening hours, your website and how you can be contacted. GMB also offers you several ways to interact with your target audience (see the overview of features below). Lastly, GMB offers metrics, called insights that allow you to better understand and expand your online presence (see below).

Google My Business offers several useful features.

Messages: people can use GMB to leave you private messages that you can reply to.

Questions and Answers are similar to messages, except that they are public, so people can see them in the ‘Knowledge panel’ of your law firm. (The knowledge panel offers a summary of your GMB listing and is what is shown in the local search results).

Posts are short announcements you make that have a limited life span. You can use them, e.g., for promotions, or to wish people a happy new year, to announce days with different opening hours, to announce new staff, etc.

Bookings allow people to directly make an appointment with your law firm.

A GMB listing also offers Reviews from your clients. Google has de facto become the largest review site.

Insights is the name Google gave to the metrics it provides with regard to your GMB listing. You can discover how people found your firm (e.g. what key words they used), where they came from, how many people directly clicked on the link to your website, or on the telephone link, etc.

So, how do you start using your GMB listing? Stacey Burke describes the process in four steps: claim the listing, have Google verify it, optimize it, and keep it active.

Step 1: Claim your listing. To be eligible for a GMB listing, you must be able to meet clients in person, either at your law firm’s physical address, or at their premises. If you haven’t claimed your listing yet, perform a search on your law firm’s name and address. If a knowledge panel appears with information on your law firm, it is already listed. If there is no knowledge panel (area in the rectangle) then you will want to create a listing following these steps from Google. To claim the listing, you will need a Google account.

Step 2: Verify your listing. To make sure not just anybody claims your law firm listing, Google will have to verify it first. This step is required in order for your law firm’s listing to be eligible to appear on Maps, Search, and other Google properties. Once you’re verified, it also means Google deems your law firm a legitimate business, providing third party verification of your company’s credibility when people search for your law firm online. To verify your listing, sign into your Google My Business account where you will see a “Verify Now” option. As part of the verification process, Google will contact your business to ensure your contact information is correct and legitimate.

Step 3. Optimize your listing. Once you’ve claimed your listing, you want to optimize it for the best search engine results. First, you have to add the basic information like the name of your firm, the phone number and other contact modalities, as well as the business category and location, the service area (=geographical area your law firm mainly serves), and opening hours. Optimizing your listing is an art in itself, and these two articles will greatly assist you in the process.

 

Step 4. Keep your listing active. In its search results, Google tends to favour law firm that remain active: make posts (e.g. to announce blog posts), answer questions, make sure to get reviews and respond to them, etc. Burke recommends checking your GMB listing once or twice a week.

 

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Marketing Essentials for Law Firms

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For most, if not all law schools, marketing is not a part of the curriculum. That shouldn’t come as a surprise. Practicing law is one of the liberal professions, and as such is ruled by its own ethics which typically limit the marketing options of their members. While there may be differences from country to country and even from bar to bar, when it comes to marketing, lawyers are not allowed to do what companies are. Still, for the things that you are allowed to do as a lawyer, there are certain basic marketing principles that always apply, even whether it’s writing blog articles or about what you put on your website.

It is beyond the scope of one blog article to give a thorough introduction to marketing. So, we will stick to some essentials. These can be summarized in five sets of questions.

The first set of questions has to do with your target audience: Who is your target audience, and what are they looking for? You must identify your target audience and learn about their needs and their interests. Are they big businesses, small business, or specific types of individuals? You have to find out where can reach your target audience: e.g., on what social media they are, etc.

The second set of questions has to with differentiating yourself from the competition: What sets you apart from the competition? Who is your competition? What are they doing? What services are they offering? What makes you different from them? This does not have to be limited to legal services, but also applies to the whole ‘customer service’ aspect of things: how client-centric are your competitors, and is your law firm?

The third set of questions has to do with the message you want to communicate to your target audience: What is your message? This applies to any communications you have with clients or potential clients, whether it’s a blog article, a video, an image, your website … Your message has to be tailored to suit your target audience.

The fourth set of questions has to do with the presentation of your message: how do you present your message? This applies to the medium you choose, to the language and the visuals (imagery and video) you use, as well as the layout, … One important aspect of the language you use, e.g., is the readability of your texts. All of these, too, should be chosen to best suit your target audience.

A fifth set of questions has to do with building customer loyalty: how do I retain clients, and create repeat business? It is a good habit to regularly do specific campaigns for your existing clients.

Once you have answered all those questions, you can proceed to the next two groups of questions. These largely fall into two separate categories: questions about the operational aspect of your marketing, and about your online presence.

With regard to the operational side of things, you must ask yourself the following questions:

  • What is my business plan?
  • Will I handle my marketing internally or do I outsource?
  • What follow-up process do I have for prospective clients?
  • How many clients can I handle, at most?
  • What are my marketing goals?
  • What does my marketing budget look like? As a rule of thumb, it is generally recommended to spend at Least 2.5% of your revenue on marketing.

The last set of recommendations focuses more specifically on your online presence (website, blog, social media, etc.). Legal consumers are online customers: more than 90% of people with a legal issue look online for solutions first. If they need to get a lawyer, they mainly find them through recommendations and through online searches. But the vast majority of people looking to hire a lawyer will check that lawyer out online first, i.e. before contacting them. So, from a marketing point of view you should:

  • Have a (well-designed) website. Does your website live up to the current best practices?
  • Optimize your website for search engines: What are the keywords your target audience will be looking for?
  • Measure and track all of your marketing efforts. In a future article, we will focus more on the relevant marketing metrics, and what you can learn from them.
  • Install Google Analytics on your website, not only to keep track of who visits your website, but also to see which pages work and which don’t.
  • Maintain a digital database of all contacts so you can follow up effectively
  • Create Google, Facebook, and LinkedIn pages, because it is more than likely that that is where your target audience will find you.
  • Get reviews, testimonials, etc. In an online world, social proof is essential.

In future articles, we will deal more in detail with some of these aspects.

 

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International Guidelines for Ethical AI

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In the last two months, i.e. in April and May 2019, both the EU Commission and the OECD published guidelines for trustworthy and ethical Artificial Intelligence (AI). In both cases, these are only guidelines and, as such, are not legally binding. Both sets of guidelines were compiled by experts in the field. Let’s have a closer look.

“Why do we need guidelines for trustworthy, ethical AI?” you may ask. Over the last years, there have been multiple calls, from experts, researchers, lawmakers and the judiciary to develop some kind of legal framework or guidelines for ethical AI.  Several cases have been in the news where the ethics of AI systems came into question. One of the problem areas is bias with regard to gender or race, etc. There was, e.g., the case of COMPAS, which is risk assessment software that is used to predict the likelihood of somebody being repeat offender. It turned out the system had a double racial bias, one in favour of white defendants, and one against black defendants. More recently, Amazon shelved its AI HR assistant because it systematically favoured male applicants. Another problem area is privacy, where there are concerns about deep learning / machine learning, and with technologies like, e.g., facial recognition.

In the case of the EU guidelines, another factor is at play as well. Both the US and China have a substantial lead over the EU when it comes to AI technologies. The EU saw its niche in trustworthy and ethical AI.

EU Guidelines

The EU guidelines were published by the EU Commission on 8 April 2019. (Before that, in December 2018, the European Parliament had already published a report in which it asked for a legal framework or guidelines for AI. The EU Parliament suggested AI systems should be broadly designed in accordance with The Three Laws of Robotics). The Commission stated that trustworthy AI should be:

  • lawful, i.e. respecting all applicable laws and regulations,
  • ethical, i.e. respecting ethical principles and values, and
  • robust, both from a technical perspective while taking into account its social environment.

To that end, the guidelines put forward a set of 7 key requirements:

  • Human agency and oversight: AI systems should empower human beings, allowing them to make informed decisions and fostering their fundamental rights. At the same time, proper oversight mechanisms need to be ensured, which can be achieved through human-in-the-loop, human-on-the-loop, and human-in-command approaches
  • Technical Robustness and safety: AI systems need to be resilient and secure. They need to be safe, ensuring a fall-back plan in case something goes wrong, as well as being accurate, reliable and reproducible. That is the only way to ensure that also unintentional harm can be minimized and prevented.
  • Privacy and data governance: besides ensuring full respect for privacy and data protection, adequate data governance mechanisms must also be ensured, taking into account the quality and integrity of the data, and ensuring legitimised access to data.
  • Transparency: the data, system and AI business models should be transparent. Traceability mechanisms can help achieving this. Moreover, AI systems and their decisions should be explained in a manner adapted to the stakeholder concerned. Humans need to be aware that they are interacting with an AI system, and must be informed of the system’s capabilities and limitations.
  • Diversity, non-discrimination and fairness: Unfair bias must be avoided, as it could have multiple negative implications, from the marginalization of vulnerable groups, to the exacerbation of prejudice and discrimination. Fostering diversity, AI systems should be accessible to all, regardless of any disability, and involve relevant stakeholders throughout their entire life circle.
  • Societal and environmental well-being: AI systems should benefit all human beings, including future generations. It must hence be ensured that they are sustainable and environmentally friendly. Moreover, they should consider the environment, including other living beings, and their social and societal impact should be carefully considered.
  • Accountability: Mechanisms should be put in place to ensure responsibility and accountability for AI systems and their outcomes. Auditability, which enables the assessment of algorithms, data and design processes plays a key role therein, especially in critical applications. Moreover, adequate an accessible redress should be ensured.

A pilot project will be launched later this year, involving the main stakeholders. It will review the proposal more thoroughly and provide feedback, upon which the guidelines can be finetuned. The EU also invites interested business to join the European AI Alliance.

OECD

The OECD consists of 36 members, approximately half of which are EU members. Non-EU members include the US, Japan, Australia, New Zealand, South-Korea, Mexico and others. On 22 May 2019, the OECD Member Countries adopted the OECD Council Recommendation on Artificial Intelligence. As is the case with the EU guidelines, these are recommendations that are not legally binding.

The OECD Recommendation identifies five complementary values-based principles for the responsible stewardship of trustworthy AI:

  1. AI should benefit people and the planet by driving inclusive growth, sustainable development and well-being.
  2. AI systems should be designed in a way that respects the rule of law, human rights, democratic values and diversity, and they should include appropriate safeguards – for example, enabling human intervention where necessary – to ensure a fair and just society.
  3. There should be transparency and responsible disclosure around AI systems to ensure that people understand AI-based outcomes and can challenge them.
  4. AI systems must function in a robust, secure and safe way throughout their life cycles and potential risks should be continually assessed and managed.
  5. Organisations and individuals developing, deploying or operating AI systems should be held accountable for their proper functioning in line with the above principles.

Consistent with these value-based principles, the OECD also provides five recommendations to governments:

  1. Facilitate public and private investment in research & development to spur innovation in trustworthy AI.
  2. Foster accessible AI ecosystems with digital infrastructure and technologies and mechanisms to share data and knowledge.
  3. Ensure a policy environment that will open the way to deployment of trustworthy AI systems.
  4. Empower people with the skills for AI and support workers for a fair transition.
  5. Co-operate across borders and sectors to progress on responsible stewardship of trustworthy AI.

As you can see, many of the fundamental principles are similar in both sets of guidelines. And, as mentioned before, these EU and OECD guidelines are merely recommendations that are not legally binding. As far as the EU is concerned, at some point in the future, it may push through actual legislation that is based on these principles. The US has already announced it will adhere to the OECD recommendations.

 

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Online Reputation Management

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Do you, as a lawyer, pay much attention to your online reputation? You should. Because, in 2018, legal consumers are online consumers, as the following statistics clearly show:

  • 96% of people with a legal issue use the Internet first to find answers with regard to their problem.
  • 38% of people looking to hire a lawyer turn to the Internet first. (29% ask a friend or relative, 10% go directly to the local bar association, 4% rely on business directories like the Yellow Pages).
  • Once legal consumers have narrowed down their search to one or more potential lawyers, 74% of all legal consumers will visit that lawyer’s or law firms’ websites first, before taking action.
  • 74% of all legal consumers end up contacting a lawyer they found on the Internet, and of those 74%, 87% end up hiring that lawyer.
  • 70% of law firms have generated new cases through their website in the last year.

In these circumstances, Online Reputation Management (ORM) is more than highly recommended.

But how do you start managing your online reputation? After all, as the team of Blue Ocean points out: “Reputation, by its very definition is a nebulous, intangible and complex concept. Trust, along with an excellent reputation as a legal resource, cannot be directly measured like income and expenses.”

The Wikipedia describes Online Reputation Management as “the practice of attempting to shape public perception of a person or organization by influencing information about that entity, primarily online. (…) Specifically, reputation management involves the monitoring of the reputation of an individual or a brand on the internet, addressing content which is potentially damaging to it, and using customer feedback to try to solve problems before they damage the individual’s or brand’s reputation.”

In other words, ORM is about influencing how you are perceived on the Internet. You can affect this perception through multiple channels:

  • Your website often will be responsible for a potential client’s first impression of you.
  • Make sure to use testimonials.
  • You can publish a blog to help establish you as an authority in your field.
  • You can engage people via social media and discussion groups, by answering questions and offering free advice.
  • Online consumers typically also look for reviews on third party websites. It is recommended to respond to those reviews. (More on that below).
  • There are search results in search engines.
  • Not to be forgotten are your profiles in business directories.

Practically speaking, the first step is finding out what is being said about you and your firm. So you can start by doing an online search about your firm. Make sure, too, to find out what is being said on online review sites, as online consumers are eager to know what the experiences are of others who have used your services. You want to augment positive reviews, and to address negative reviews.

Addressing negative reviews can be tricky, especially since there are ethical considerations. You must make sure you never reveal any confidential information! As a rule, the best response to a negative review is to not respond with specific details, but to issue an apology instead, and to ask for personal feedback and to be contacted privately to address the matter.

In 2018, addressing fake news is also a concern. Make sure you do not give out false information about yourself (or your clients), and make sure to address any false information about you or your firm that might be available online.

Apart from addressing any factors that might damage your reputation, you can also more proactively start building a positive reputation through the channels mentioned above: your website, testimonials, blog articles, engagement with potential clients via social media and discussion groups, professional profiles in business directories, etc. Here, too, however, it is important to remain aware of ethical considerations, which may be specific to the bar association you belong to. Most bar associations do not allow lawyers to directly solicit clients. Some bar associations do not even allow lawyers to actively ask for reviews or testimonials.

 

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Digital Marketing for Lawyers, part 2

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This is a follow-up article to an article we published three months ago, which also dealt with digital marketing for lawyers. In it, we explained why digital marketing is important for lawyers and we also focused on some of the tools lawyers have at their disposal: websites, blogging, SEO, social media, reputation management and reviews.

Marketing often is something that lawyers see as a necessary evil. To make matters worse, online marketing is substantially different from traditional marketing. Some of this was discussed in our ‘Why Social Media Matter‘ article. In it, we explained that “the old ways of turning visitors into customers are not the most effective in an online paradigm. In the new online marketplace, everybody offering products or services must realise that they also are publishers, and that potential customers are content consumers. The way to turn website visitors into customers is to turn them into regular content consumers first.”

In this new marketplace, lawyers must publish websites and blogs, and engage with potential customers on social media. They must take things into account like user experience and website design; mobile functionality and local search presence. They have to focus on online intake of new clients, on customer service and client experience, as well as on reviews, reputation and authority. And most importantly, they have to work on how to turn website and blog visitors into regular content consumers, before they can be converted to clients.

So, practically speaking, where does one start? The first step is to know your audience and competitors. One of the advantages of the online marketplace is that we can have better access to all the pertinent data. We can learn who visits our website or blog, as well as who we are connected with on social media. This allows us to create visitor profiles, which then in turn allows us to better accommodate their wishes and expectations. It is important to keep the focus on potential customers, when determining what content to provide. At the same time, it is also important to keep track of what the competition is doing, so we can a) differentiate ourselves sufficiently, and b) remain competitive.

The next step is to then define an engagement strategy. The adage that content is king still applies. Know where your potential customers are on social media, and offer them relevant content. What has changed in 2017 is that the content people are looking for is no longer limited to quality text content. They also want visual content: infographics, e.g., are more popular than ever before, as is video content. So, make sure you use those. (In a future article, we’ll deal more in depth with content marketing specifically).

The way to further finetune your strategies and to find out what works for your law firm is, again, to diligently keep track of the relevant metrics. Find out what pages on your website and blog are popular. Discover how people found them. Learn what posts on social media led to visitors of your website and blog.

If you are familiar with some of the more traditional marketing techniques, then Teresa Matich’s article on “How to Take Your Old School Marketing Techniques Online” on the Wishpond blog can be useful. She illustrates how online marketing uses different tools, and that we have to move:

  • from business cards to websites: 96% of people with a legal issue turn to the Internet first, and nearly 40% of people needing a lawyer look on the Internet first to find one.
  • from public speaking to blogging: you build a reputation by publishing high quality articles on the Internet.
  • from the phone book to online ratings directories: people no longer just want to find a lawyer, they want to know whether he or she is any good, and they will look for online reviews.
  • from bus stop ads to Facebook ads: people looking for a lawyer spend just over a quarter of their time doing so on social media, so it makes sense to advertise on them.

 

Alex Barthet, a Miami based lawyer, gives some additional useful advice, based on his personal experiences with online marketing.

  • Claim your online profiles: online services like Google, Yelp, and Avvo let you create profiles. Often these are among the first places potential clients go looking.
  • Also claim your social profiles on sites like LinkedIn, Twitter, Facebook, and Instagram.
  • Be careful with paid profiles: they usually offer very little extra value.
  • Use pay-per-click (PPC) advertising carefully, and make sure to determine a maximum budget that cannot be exceeded.
  • Don’t fall for sales pitches from marketing companies that want to lock you into long-term contracts.

 

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