Legal IT

Mind mapping for lawyers

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In this article, we have a look at mind mapping for lawyers. Mind mapping is a commonly used and highly effective tool that assists in creative intellectual processes. Yet, somehow most lawyers seem to be unfamiliar with mind maps. So, in this article we will introduce you to mind maps. We answer questions like, “What is mind mapping?’, ‘What are the benefits of mind mapping?’, ‘How can lawyers use mind maps?’, and ‘How to create a mind map?’ We also have a cursory glance at the benefits of mind mapping software.

What is mind mapping?

A mind map is a visual diagram that is composed of concepts, texts, relations and/or pictures. These are arranged in the form of a tree structure – or hierarchy – around a central theme. It shows the relationships among the pieces of the whole. In mind maps, the major ideas are typically connected directly to the central concept, while other ideas branch out from those major ideas. One author defines a mind map as a multidimensional graphic way of generating, visually representing and organizing information and ideas. Another author describes them as a form of fluid, visual notetaking arranged around a core idea.

Mind maps are used to support creative processes and to assist in capturing and structuring ideas and information. This also makes them useful for remembering and learning.

Mind maps have the following key characteristics:

  • Mind maps usually have one central topic. All information and ideas in the mind map relate to that central topic.
  • Mind maps have an expansive tree structure. One author describes mind maps as having “one core in the center, with dendrites (lines) branching out from the core to connect different concepts. The lines may incorporate images, words, colors, numbers, and other visual representations of concepts.”
  • Mind maps are keyword focused. Mind maps consist of ideas and key words, rather than long sentences or blocks of text. This makes it easier to scan for the relevant information.

What are the benefits of mind mapping?

The major benefit of mind mapping is that it helps develop and organize ideas and information. It does this in three ways. The first is simplification. Visually working with keywords is easier to understand and memorize. A second way is that mind maps use tree structures which assist in categorization. Categories are branches and subcategories are sub-branches, etc. The tree structure makes it easy to navigate and can present complex information in a way that is easier to grasp. A third way is contextualization. The mind map maps out the relationships between the key words. So, we can see how all the pieces of information connect to one another. As a result, mind maps help distinguish the main issues from the secondary ones.

Mind maps offer several other benefits. They boost productivity. If you are using mind mapping software, it is possible to share and collaborate on mind maps. Creating the mind map helps you identify the key concepts and their relationships, which assists in storing the information more effectively in long-term memory. They make the information compact and manageable. This in turn also helps prevent information overload.

How can lawyers use mind maps?

Mind maps are useful for notetaking, writing, brainstorming and choosing ideas, planning and strategizing, problem solving and decision making, learning new information, and for collaborating with others. All of these are things that lawyers do.

In general, whether you are working on some advice, a contract, or preparing for negotiations or litigation, mind maps can assist you in focusing on the key legal issues. They contribute to intelligent information management through better analyses, structured files, and improved communication with colleagues and clients. They also are ideal tools for working out strategies.

More specifically for litigation, winning a case is about information and how it is presented. Mind maps offer the best way to collect, organize, and present information. Another benefit of mind maps is that they make it easier to present your oral arguments. With a mind map, you can go through all the relevant information in structured and exhaustive way, without having to rely on printed text with long sentences. Your mind map acts as a navigation and orientation point that allows you to present your case in a complete, comprehensible, and coherent way.

Mind maps are also ideal tools to prepare for legal tests and exams, to keep track of changes in law and jurisprudence, and for legal research in general.

How to create a mind map?

Creating mind maps is easy as it follows the natural flow of your thinking. You always start with the central theme. That can be a litigation case; it can be a specific legal subject you want to explore, a contract or a legal advice you want to prepare, etc. Then you think of items that are relevant to this theme and write them down. You can do this by yourself, or you can do it together with others in a brainstorming session. Then you start structuring the information, where you identify the main categories and sub-categories, and you organize them accordingly in the tree structure. Then, you can start formatting the mind map: add colour to topics and branches, change fonts, thickness of lines, add images, etc. If you are using an electronic mind map, you can add notes, links to other mind maps or to documents or to research, etc. At any stage, you can ask for feedback, and with electronic mind maps, you can share them and collaborate on them.

Mind mapping software

Mind maps can be drawn manually, or they can be created with software. Several free and paying options are available. The last article mentioned in the sources gives an overview of current popular software packages.

Using mind mapping software offers several additional benefits. 1) It simplifies mind map creation. Adding a branch is usually as simple as pressing a key and reorganizing the information typically can be done by dragging and dropping the branches in a different location. 2) Mind mapping software enables map collaboration. Typically, one can assign different permissions to different users you share the mind map with, where some can comment, while others can restructure and/or add information. 3) Mind maps created with software typically allow you to go beyond the simple tree map. One keyword in a branch can be clickable and lead to another mind map. This is very useful for legal research and for working with legal concepts. You can even integrate videos and other diagrams. 4) Software mind maps often also integrate with your other apps. 5) Finally, mind mapping software frequently offers additional tools like export, backup, version control, access management, etc.

Conclusion

Mind maps offer a useful tool to organize and present information. They are ideal for the intellectual work lawyers do. They boost productivity and keep information manageable. Unfortunately, most lawyers still are not familiar with them. But that can easily be changed. Mind mapping is easy to learn and offers fast and tangible benefits. If you are not using them yet, what are you waiting for?

 

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Legal IT

The legal technology renaissance

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In this article, we discuss the legal technology renaissance that is occurring. We look at the recent legal technology boom, at some examples, and at the benefits. We observe what is driving this renaissance and what obstacles it has to overcome. We look at the consequences for the legal market, and at how to make it work for you.

The Recent Legal Technology Boom

In recent years, we have experienced a veritable legal technology renaissance, or legal tech boom, as some call it. A multitude of factors contributed to this. We have more computing power than ever before, with cloud computers doing the heavy lifting. We have made significant breakthroughs in artificial intelligence. The legal market has been changing dramatically and the legal technology market has followed suit. Finally, the pandemic too has been a catalyst for change. Law firms were forced to reorganize the way they work and invest in technology to be able to do so. In the process, many law firms took this as an opportunity to also invest in technology to improve their service delivery model. As of June and July 2021, we witnessed the first legal technology IPOs.

This boom is expected to continue in the next few years. In fact, some say this renaissance is only starting, as the demand for legal expertise is exploding. Gartner, e.g., made the following predictions:

  1. By 2025, legal departments will increase their spend on legal technology threefold.
  2. By 2024, legal departments will replace 20% of generalist lawyers with non-lawyer staff.
  3. By 2024, legal departments will have automated 50% of legal work related to major corporate transactions.
  4. By 2025, corporate legal departments will capture only 30% of the potential benefit of their contract life cycle management investments.
  5. By 2025, at least 25% of spending on corporate legal applications will go to non-specialist technology providers.

Big law firms and legal departments have taken the lead in this legal technology renaissance. By now, mid-size law firms and small law firms are catching up and starting to reap the benefits as well.

Some examples

Let us have a look at some examples where legal technology has changed the ways law firms and legal departments operate. A first area has to do with streamlining the administrative operations of the law firm or legal department. Examples here include document automation, E-Billing, and E-Filing. A second area has to do with streamlining casework, where progress has been made with eDiscovery software and with case management software. In both areas, far more aspects of the overall process have been automated than ever before. A third area has to do with collaboration and exchange of ideas. We are seeing a steady rise in online collaboration tools, in the use of AI-enabled chatbots and virtual legal assistants, in online education, and in video conferencing, where the pandemic resulted in a sharp increase in the available tools. Finally, major progress has also been made in the availability and usage of different kinds of analytics. These provide us with new insights in how law firms and legal departments can be run more efficiently. They also offer new insights into patterns when conducting legal research. Predictive analytics, e.g., allow to predict the chances of success in specific cases.

Benefits

The benefits of this legal technology renaissance are threefold. A first benefit is greater efficiency and better service delivery. Automation reduces errors, speeds up and improves the quality of legal service delivery. It also allows for greater scalability. A second benefit is the greater insight we gain. These are the result of Machine Learning and analytics, but also of analyzing our workflows for automation so they can be optimized. Finally, the boom in legal technology is helping to bridge the Access to Justice gap.

What drives this legal technology renaissance?

There are three key concepts that are central to this legal technology renaissance. First, it Is about automation. The technological progress that has been made allows to automate far more of the legal service delivery process. The mantra has become to automate where possible to increase productivity and efficiency. If law firms want to remain competitive, automation is inevitable.

A second aspect of this boom has to do with Legal Digital Transformation. The Global Tech Council describes it as the digitizing all areas of legal expertise, including service delivery, workflow, procedures, team communication, and client interaction in the legal sector. The Internet has changed the way we live, where we spend part of our lives online, in a digital world. With some delay, the legal sector is becoming part of that digital world, too.

Finally, the legal technology renaissance is about a new legal services delivery model that is more efficiency-driven, more client-centred, and provides all stakeholders with more insight.

Issues / Obstacles

Not everybody is reaping the benefits yet of these technological breakthroughs. Lawyers are traditionally rather conservative when it comes to their adoption of new technologies. Richard Tromans points to two main issues that are obstacles to greater adoption.

A first issue is “the belief that any of the above applications that relate to automation and improved workflows are somehow an answer in and of themselves, rather than part of a much larger integrated approach to legal services delivery.”

The other challenge stems from the fact that these technologies change the way law firms operate. It isn’t as simple as plug and play. The technologies may not meet over-elevated expectations. And the implementation of new technologies needs to be part of a bigger strategy around service delivery. In essence, these changes need an engagement from not only the IT team, but from the lawyers as well, who will need a hybrid mix of skills. Tromans warns that this can lead to disillusionment and people backing away.

Consequences on the legal market

This legal technology boom is changing the legal market. We already pointed out that it changes the way law firms and legal departments operate. As mentioned above, this technology boom is introducing new legal services delivery models that focus on being more client-centred, on increased efficiency, and increased insight.

As second consequence is the introduction of new players on the legal market. There are plenty of alternative legal service providers. Some of these offer services to legal consumers. These include, e.g., legal chatbots like DoNotPay or DivorceBot. Most of them, however, offer specialized services for law firms and legal departments. These include services like eDiscovery, document automation and review, legal research assistance, analytics, etc.

A third change has to do with the hybrid skill set that is needed in this changed service delivery model. More and more bar associations are opening up to changes in the corporate structure of firms offering legal services. Law firms are allowed to have shareholders, co-owners, and directors that are not lawyers. At the same time, corporate entities are being allowed to offer certain legal services. Some bars are even considering giving accreditation to some alternative legal service providers.

How to make the legal technology renaissance work for you

Making the legal technology renaissance work for you is not a guaranteed immediate success story. Here are some considerations that may be useful.

There are four key elements to planning your digital transformation process. The first two are the selection of 1) the best legal platform, 2) and the best IT infrastructure for that platform. This includes deciding whether to host on-site or in the cloud or opting for a hybrid solution. 3) Understand that optimizing workflows involves legal engineering. And 4) If you are going to use AI-powered solutions, you will need Machine Learning support.

When choosing your best legal platform, consider that the 2021 ABA Legal Tech Survey support observed that as a rule, most solutions work out-of-the-box, and that no customization is required. Experience has also shown that directly using the solution out-of-the-box allows to reap more benefits and faster.

Experience also demonstrated that an incremental implementation strategy tends to be more successful than a once-off big-bang transformation. Such a staged approach leads to success faster and more consistently.

Digital transformation projects tend to be more successful if the firm has some product champions, i.e., users who commit to familiarizing themselves with the solutions first. They can then assist others, show them how to reap the benefits of the new technologies, and convince others to start using them, too.

While implementing a digital transformation process, focus on business outcomes rather than on features. And set realistic ROI benchmarks.

Conclusion

The legal technology boom is disrupting the legal market for the better. As implementing these new technologies changes the way we work, some growing pains are to be expected. A balanced and staged implementation approach offers the biggest chances of success. To remain competitive in a changing market, law firms and legal departments have no choice but to adapt. Some fear that all these changes will make law firms obsolete. The experts don’t agree. Tromans points out that, while technology is very important in moving today’s legal sectors forward, there will undoubtedly always be a need for a human presence and personal connection with clients.

 

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Legal IT

Quantum computing for lawyers

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In this article we have a look at the essentials of quantum computing for lawyers. We explain what quantum computing is, how it is different from traditional computing, what the benefits and its uses are, and how it is relevant for lawyers.

What is quantum computing?

To explain what quantum computing is, it is probably easier to first explain what a quantum computer is. A quantum computer is a highly advanced computer that makes use of the quantum states of subatomic particles to store information (Bing). Paraphrasing the definition on the Wikipedia, we can define quantum computing as a type of computation that harnesses the collective properties of quantum states of subatomic particles, such as superposition, interference, and entanglement, to perform calculations.

Differences with traditional computing

How are quantum computers different from traditional computers? Traditional computers work with bits, which represent a value of either one or zero. Quantum computers, on the other hand, work with qubits, which are subatomic particles that store data, and which have multiple properties. In classical geometry, a dot has no dimensions. Bits are like zero-dimensional dots, they either are there (true, 1) or they are not (false, 0). Compare that to electrons around nucleus. Just to locate them you need three dimensions. So, the first major difference between classical and quantum computing lies in having three dimensions for the underlying data bits vs having just one on or off state for classical computers. This means that a qubit can store considerably more information than a bit can.

A second difference has to do with the interaction between bits. Bits have a logical value of false or true, which means their interactions are dominated by traditional Boolean logical operators: NOT, AND, and OR. Interactions between electrons are far more complex. Here you also have to take phenomena into consideration like superposition, entanglement, and interference. This implies not only that they can integrate far more information but also are capable of far more complex calculations.

The third and final major difference between classical and quantum computing has to do with their efficiency. In essence, every action a traditional computer takes consists of very fast sequences of switching an electric current on and off. This is a one-directional process that is not reversible, and it produces heat. Quantum operators on the other hand are bi-directional, which means actions can be undone, and the original state of the electron can be reinstated This implies they have more processing information per operation, which in turn translates into being able to operate faster, and without necessarily producing the heat that traditional computers generate.

What this all means is that quantum computers will be millions of times more powerful than today’s most powerful computers.

What are the benefits of quantum computing?

Needless to say, quantum computers offer many benefits. We already highlighted a first benefit, i.e., that they can process far more information simultaneously, and incredibly faster than traditional computers. As an example, in late 2019, Google’s Sycamore quantum computer managed to calculate something in 200 seconds that would take millennia on a traditional device. In other words, quantum computing can solve problems that would be virtually impossible on a traditional system.

A second series of benefits has to do with all the things quantum computers can be used for. Now, most usage scenarios that are typically predicted are not in the legal field. They include things like discovering new drugs, creating better batteries, predicting the weather, picking stocks, processing language, helping to solve the travelling salesman problem. (If a company has multiple salespeople, how can they best be deployed geographically and timewise?) Another usage benefit of quantum computers is the enhanced security they can offer. The other side of the coin of this that those who work on traditional devices will have a far weaker security that can easily be broken by quantum computers. This has serious implications for presently secure technologies like Blockchain, which no longer would be secure. Quantum computers will also revolutionize cloud computing, allowing for faster, virtually instantaneous communications.

A last series of benefits has to do with artificial intelligence, where major breakthroughs are expected. One of the substantial problems AI faces is that co-occurrence does not necessarily imply correlation, and that correlation does not necessarily imply causation. Present-day machine learning is getting better at discovering correlations. With quantum computing, AI is expected to be far better at discovering causality, rather than correlation. A second expectation is that Trusted AI will take centre stage. With quantum computers, AI is expected to learn to discover and neutralise its biases, and to explain why it came to certain conclusions.

What is the relevance of quantum computers for lawyers?

Because the computing capacity of quantum computers is so enormously greater than that of traditional computers, they carry with them some troubling potential. The first area where this manifests, is in cybersecurity. Many of the technologies that are now considered secure when used with traditional computers will no longer be secure at all. An example that was already mentioned is Blockchain, where quantum computers will be able to easily break the encryption used in Blockchain. Most of the current cybersecurity defences will be useless against quantum computers. This creates a severe imbalance between those who have access to quantum computers and those who have not.

A second area where quantum computers pose a threat is the protection of privacy and personal data. Big tech companies like Google and Facebook already have a tremendous amount of information on people. Imagine what information they could gather if they were using quantum computers. Or think of government agencies with quantum computers that could easily access any traditional device whenever they want to. One author rightfully points out that this would effectively jeopardize all legitimate whistleblowers as their anonymity could no longer be guaranteed.

There are of course many areas where quantum computers can be beneficial. A first such area where they will be a useful tool is language processing. Quantum computers will be far better at text analysis. This includes legal texts, where they are expected to be able to better understand context. They will also improve the quality of translations.

Quantum computers will also dramatically change the way lawyers work, as they will revolutionize the optimization of the processes and workflows involved. This will not only apply to the way law firms are run, but also to the legal services lawyers offer. Quantum computers will be able to streamline legal research as well as paperwork more effectively.

A related area where quantum computers are expected to modify how legal services are offered is through automated legal advice and automated legal service delivery. Quantum computers will effectively become smarter than even the smartest lawyers. This will give rise to tremendous progress in the field of computational law, which, where possible, automates legal reasoning. (For more information on how this is already being done, read our article on productizing legal services).

Quantum computers will also allow machine learning to become far more effective. This will result in predictive analytics that will project the chances of success for different strategies in a given situation. One author called this prescient investigation.

A final area where quantum computers will be beneficial to lawyers is collaboration, where data can be shared in a more effective way. This will also facilitate cooperation over great distances.

Conclusion

So, should your law firm start looking into quantum computers already? Several IT experts advise to start doing so now, but companies like Deloitte and Gardner are more cautious. They recognize the great potential but point out that not enough of that potential is realized. Their advice is to remain informed about progress that is being made, but that it is too early to make any investments yet.

Shannon Flynn, in Legal Technology Today, predicts that when quantum computers break through, there will be a “short-term pain for lawyers and aspiring lawyers, but the benefits for the average citizen will be clear. Among the benefits will be better representation, lower cost, and greater efficiency. For society, the change will be a net positive.”

 

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Legal IT

Managed Legal Services

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In this article, we look at managed legal services. We explain what they are, and what the benefits are. We also look at how they work and at how they are priced. We end with some tips and considerations.

The legal market has changed dramatically over the last few decades. Initially, there were only two options. Larger companies would have in-house legal departments, who mainly offered first-line legal services. The other option were law firms, who offered first and second line (i.e., litigation) services. Over the last decades, that market has changed with several new players who are all offering managed legal services.

What are managed legal services (MLS)?

Let us start with managed services, and then expand into managed legal services. The Wikipedia defines managed services as “the practice of outsourcing on a proactive basis, certain processes and functions intended to improve operations and cut expenses.” It is something that is very common in the IT world. Companies who do not have a dedicated IT department may rely on a third party for their IT needs. Or companies may only outsource certain IT aspects, like e.g., security or hardware support to a third party with expertise in the field.

When the services that are being outsourced are legal services, then we are talking about managed legal services. Managed legal services could be described as a solution to a legal problem in the form of a predefined bundle of – mainly legal – services for a transparent price. It is a model that puts the client first and does so by introducing transparency, efficiency, and technology at scale. Managed legal services often are used as a solution to high-volume work that is time critical, cost sensitive, and carries a risk if not performed accurately. Examples include contracts and contract review, articles of incorporation, document review, compliance with specific legislation, debt collection, standard court appearances, etc.

These managed legal services are typically provided either by law firms or by alternative legal service provides who specialize in specific services. As we already dedicated a previous article to alternative legal service providers, the focus of this article will mainly be on law firms offering managed legal services.

What are the benefits of offering managed legal services?

Why would your law firm consider offering managed legal services? There are benefits both for your law firm and your clients. We talked in the past about productizing legal services, and managed legal services fall perfectly in this approach. By standardizing and automating as much as possible of the process, law firms can reduce the cost and improve efficiency. This leads to increased quality, timeliness, and transparency on the side of your law Firm. In turn it also results in greater transparency and cost-efficiency for the client, and typically also in reduced service times.

With managed legal services, clients typically know exactly in advance what they will be paying and what they will be getting. They may pay either a fixed fee for each service rendered (e.g., a customized contract that is generated), or they pay a fixed subscription fee. (More on that later). In other words, managed legal services do not rely on billable hours but instead use alternative fee arrangements (AFAs).

Another benefit for the law firm has to with knowledge management. By using managed legal services, the knowledge within the law firm is moved from individual lawyers to the underlying service infrastructure.

Danh Nguyen, in Legal Business World, described it as follows, “As a service model, it’s more considered and effective – and gives clients more bang for their buck – because it’s driven centrally from the clients’ own business objectives and needs. A managed legal services provider invests time and effort into understanding those objectives and needs and assembles a cross-functional team that works collaboratively (sometimes, cross-regionally) to co-design and deliver tech-enabled solutions.  These solutions integrate technical expertise in specified areas of the law, regulatory affairs and government relations, project management, and change and stakeholder management.”

How does it work?

How it works in practice entirely depends on the managed legal services you offer and on the needs of your clients. Clear communication and collaboration are the key elements when determining exactly what the client can expect and how technology can be integrated to automate processes. Typically, you will assign a team with members of your law firm as well as from your client to do this. You must be clear about what is covered and what is not. Often, managed legal services also use legal project management.

Types of managed legal services

There are different types or categories of managed legal services a law firms can offer. Overall, four different categories can be distinguished.

  1. Regional / geographic coverage: your law firm provides support for clients who don’t have a substantive legal presence, team, or capabilities in a particular geographic region. Often, for smaller businesses, e.g., smaller law firms can fulfil the role of an outsourced legal department.
  2. Expertise: your law firm can provide technical expertise or experience in certain specialised areas of the law that you happen to specialize in.
  3. High Volume work: your clients can outsource very specific high-volume tasks to you that involve lower risk legal, regulatory, or contractual projects (e.g., response to request for proposal (RFP) processes, review of high-volume transaction due diligence documents, etc).
  4. Repetitive work: your law firm can take on repetitive legal work, such as repetitive contracts and standardised playbooks.

 

Pricing

We mentioned earlier in this article that managed legal services typically use alternative fee arrangements. The two models that are most commonly used are subscription billing and itemized billing. Itemized billing can be used, e.g., for high volume and/or repetitive work. In both cases, clients know exactly what they are paying for.

You can also work out package deals with your client. Those can be tailor made, depending on what the client needs. And note that the package deal does not necessarily have to be limited to purely legal aspects. The big accounting companies all offer managed legal services where legal, fiscal, and compliance services are combined with accounting solutions.

Some additional tips

Clear communication remains essential once the project is up and running. This implies that you must make sure the teams on both sides get to know each other and know what to do to cooperate. It also means that you, as a managed legal service provider, need to keep your client up to date of everything you do for them. To this end, you can provide reports, organize meetings, use a client portal, etc.

As the dedicated legal service provider of your client, you represent your client in their relationship with their providers and customers. Parties must make sure that the way your law firm operates under these circumstances fits with the company culture of your client.

Accountability and performance reviews are also important. How and how often do you measure performance? Will you offer a service level agreement? What about troubleshooting and what do you do when issues arise? And what about escalation if more advanced expertise is needed?

It is recommended to work out these details in advance.

In conclusion, managed legal services are on the rise. They increase profitability and productivity for the law firm, while offering transparency, higher accuracy, and cost-efficiency for the client.

 

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Legal IT

Using Teams and SharePoint in Law Firms

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Upon request, we will have a closer look in this article at using Teams and SharePoint in law firms. In previous articles, we already talked about running your law practice in the Cloud with law firm management software. We also highlighted how Microsoft 365 was an essential part of that. (It was still called Office 365 at the time). For optimal results for a law firm, Microsoft 365 Business Premium is the recommended solution.

Since the pandemic started, Microsoft has been steadily improving Microsoft Teams. By now, it can be used as the central communication and collaboration hub of your law firm. It consolidates the available Microsoft 365 tools and streamlines business processes by offering team members a centralized location for all files, documents, and firm information. It allows law firms to share critical communications with their clients and their entire team, quickly, efficiently, and securely! It also enables seamless collaboration for all projects, from in-depth cases to day-to-day work by using SharePoint with other Microsoft 365 tools.

Teams as your communication and collaboration hub

You can use Teams as the dashboard from which you coordinate your communications and collaboration. Teams seamlessly integrates with the other Microsoft 365 apps, like Word, Excel, Outlook, SharePoint, but also with apps like Planner or To Do. Outlook allows you to directly access the ‘Conversations’ of the Teams site, so you can manage all your saved emails through the Outlook interface. Teams comes with its own video chat for virtual meetings, which can be recorded and shared. The free MS Bookings app allows to easily set up meetings. But note that integration between Microsoft 365 and your law firm management software is essential. So, make sure this is the case.

One of the main benefits of using the Teams / SharePoint combination lies in its collaboration functionality.  Your team and clients can share documents and collaborate on them, securely and in real time. It is perfectly possible for several people to simultaneously work or comment on the same document. And because this solution is perfectly scalable, it can be used by law firms of any size. Worth noting is also that collaborating on a SharePoint server is more secure than sending documents by email, and therefore a better solution.

Using SharePoint also offers other benefits

It comes with built in version control, where it keeps track of all changes to a document, and where you can see the full history of all versions. Needless to say, it also automatically keeps backups of all those versions.

SharePoint also offer in depth-search functionality. You can perform searches on the full text, but also on meta data. It even comes with optional wiki functionality, and its search and KMS functionalities can be further extended with third party add-ons.

Important is also that it is easy to use Microsoft 365 in a way that is compliant with EU privacy legislation. All law firms that use its software have to do, is choose local European servers as their Microsoft 365 servers. As there are no other intermediate servers involved, you are completely compliant.

Security considerations

in its articles on the annual Legal Technology Survey, Law Technology Today explicitly recommends using cloud-based solutions like Microsoft 365 as it is the most secure solution, both for law firm communications and for file sharing / storage. It notes “Many (if not the majority of) law firms that favor on-premise or hosted solutions to cloud-based platforms will cite security as the reason they refuse to move their data to the cloud. But the truth is, cloud-based solutions are considerably more secure than on-premise or hosted software.”

After all, Microsoft encrypts all data transfers as well as all the stored data, which are encrypted at both disk and file level. In other words, the data you share inside SharePoint is secure, and it is more secure than keeping your data on a local OneDrive. (Microsoft 365 administrators are recommended to switch off synchronisation with a local OneDrive to reap the optimal benefits, including enhanced security, from using the SharePoint & Teams combination).

In short, using Microsoft 365 Premium Business edition offers you a centralized and secure communications and collaboration hub, which maintains client privacy as well as legal compliance. It improves the productivity of your law firm by allowing you to collaborate more effectively, from anywhere you have Internet access.

 

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Legal IT

Trends in Legal Technology in 2021

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Every November, the American Bar Association (ABA) publishes its annual Legal Technology Survey Report. In it, it gives an overview of the trends in legal technology in 2021. And while the data for the 2020 report were mostly collected before the pandemic, the 2021 report does reflect the impact of the pandemic. Those effects were reflected, e.g., in the primary hardware people use, where their primary workplace is, in the flexibility of work hours, and in telecommuting.

Each year, the Law Technology Today website publishes a series of articles, providing a summary of the key findings of the report. Here are the most important highlights.

Demographics

The average age of respondents remains high, at 57 years old (compared to 58 last year). More than 60% of respondents have been practicing for 30 years or more. The youngest age group (25-39) made up only 13.6% of respondents.

The respondents came from firms with the following sizes: 24% came from solo firms, 20% from firms with 2-9 attorneys, 20% from firms with 10-49 attorneys, 6% from firms with 50-99 attorneys, 15% from firms with 100-499 attorneys, and 15% from firms with more than 500 attorneys. The size of a firm is significant in the survey, as larger firms typically have greater budgets for investing in legal technology and the necessary corresponding technology training.

Websites and Marketing

The survey pays a lot of attention to communications with clients and the role websites, and more specifically client portals play in these communications. (We have previously published an article on client portals for law firms). The report recommends using secure client portals because communications are more secure than through email or traditional mail. But even though client portals have been around for years, only 29% of respondents say their firm website includes a secure client portal. They are most common in firms with 100+ lawyers (51%), followed by firms of 10-49 lawyers (22%), 2-9 lawyers (19%), while only 9% of solos offer a client portal. Most lawyers use traditional email to communicate with their clients, with only a minority using more secure email modalities like registered or secured email (23%), encryption (43%), or password-protecting documents (32%).

Lawyers mainly use their websites for marketing purposes. By now, 94% of lawyers have a website. 69% of respondents said their website was mobile-friendly, 5% said it was not, and 26% did not know. Virtually all websites for law firms contain profiles of the lawyers. By now, 59% of law firm websites also provide legal articles and 51% provide information on recent cases of interest. 37% of law firms said they have a blog, 57% said they did not, and 6% did not know. The larger the law firm, the more likely it had a blog. Law firms are still underutilizing their websites and use them mainly for one-way communication. Lawyers need to find better ways to engage with their target audiences, rather than just push information out to them. And simple things like client-intake or scheduling of appointments also remain the exception, rather than the rule.

Social media have become an important marketing tool for law firms. 87% of respondents said they were active on LinkedIn, 61% on Facebook, 37% on Twitter, and 13% on Instagram. Client email alerts remain important, too, with 72% of law firms using them. Video is a medium that is barely utilized, with only 28% of respondents saying their law firms use video for marketing purposes. (If you would like to find out more about using video in your law firm, we published an article on the subject).

As was the case in previous years, the report concludes that law firms largely lack a strategic approach to marketing. They also are not paying attention to analytics, so they do not really know which strategies are working, and which are not.

Practice Management

Overall, the report found few noteworthy changes when it comes to practice management. The main exception pertains to hardware trends and changes. This is an area where effects of the pandemic were most clearly felt. With more attorneys working from home, for the first time, the majority of respondents (53%) indicated that they were using a laptop as their primary device, while 44% still use a desktop as their primary device.

The number of attorneys using e-books for legal research has remained unchanged at 52%. Website libraries remain the most convenient tool for legal research.

Document-related software can be split up in five categories: document assembly, metadata removal, document and records management, redlining, and PDF creation. All five categories stayed relatively constant in the last year.

Communication software can also be broken down in five categories: voice recognition, CRM (customer relations manager), instant messaging, electronic fax, contacts, and remote access. Here, too, there are no noteworthy changes compared to last year.

General office use and management software can be broken down into nine broader categories: project management, databases, presentation, accounting, electronic billing, time and billing, spreadsheets, calendaring, and word processing. Overall, “general office use” is the most popular reason to have software. Of these nine categories, usage of project management comes in last position, but did grow from 27 to 31% of law firms using it. Counterintuitively, the use of accounting software dropped from 78% to 72%.

Maybe surprisingly, the use of web-based software and cloud computing only rose from 59 to 60%. The firms not using cloud software mention concerns about confidentiality, privacy and security as their main reasons. Many of those concerns, however, are unfounded. (See below in the section on cloud computing).

Legal-specific software can be broken down into four broad categories: specialized practice, docket/calendaring, case/practice management, and conflict checking. Like other software areas, the access rates to these categories have stayed relatively constant.

Budgeting and Planning

2021 saw law firms increasing their technology budgets. The increases were most notable for solo practitioners and small firms. The report found, however, that solos and small firms still fall short when it comes to budgeting for security to protect confidential client information. The report urges all law firms to increase their budgets for security.

Technology Training

In the introduction, we mentioned that the larger the firm is, the larger the budget is for technology training. By now, 39 out of 50 states within the US have imposed a ‘duty of technological competence’ on their lawyers. More are in the process of doing so. This corresponded to 68% of respondents replying that they had a duty to stay abreast of the risks and benefits of technology.

Another important consideration regarding competency is whether attorneys have input into the types of technologies they use. 74% of respondents said that they were involved in the selection process for the technologies employed at their firm, which is down from 81% in 2020. The report recommends each law firm should set up a committee of potential users that identifies their needs, evaluates existing solutions, and make recommendations. 88% of respondents state they asked peers for advice for the chosen solutions.

While 74% of respondents mentioned they had the duty to be technology competent, only 59% considered themselves very comfortable in using the technology they had at their disposal, and only a dismal 29% thought they had received adequate training. 67% of respondents said they had some sort of technology training available at their firm, but this availability varies widely based on the size of the firm, with only 35% for solo practitioners, 56% for firms with 2-9 attorneys, 71% for forms with 10-49, and 99% for firms with more than 100 attorneys.

48% of respondents replied they have internal support staff, and again those numbers grow depending on the size of the firm, with 94% of +100 firms, and only 9% of solos.

By now, 62% of law firms have a technology budget, and about half of them have increased it in 2021. For solo lawyers, hardware was the biggest expense, while the largest firms invested more than ever in security. Noteworthy is that virtually no budgets were needed for software customizations.

2021 also saw an increase in law firms creating technology policies and procedures, with 83% of respondents replying that their law firms have them in place. (The pandemic and lawyers working from home plays a role in this).

Solo and Small Firms

2021 saw changes for the hardware solo and small law firms are using, with laptops becoming the primary work computers. Windows remains the most popular OS (77%), but the usage of MacOS devices has grown from 16 to 21%. The iPhone remains the most popular smart phone, with 81% of lawyers in small firms, and 61% of solos using one.

Probably the biggest change caused by the pandemic is the primary workplace. Where in 2020, 22% of solos listed their home as their primary workspace, in 2021 that number had nearly doubled to 43%. This major change in primary workplace also happened in the big law firms with more than 100 lawyers, where the number spectacularly jumped from 3% to 46%. In smaller and medium sized firms, the changes were not that dramatic.

Along with the shift in primary workplace came a shift in implementing a flexible work schedule. In 2021, 79% of solo practitioners had flexible hours, 75% of lawyers in law firms with 2 to -49 lawyers, and 93% of lawyers in firms with more than 100 lawyers.

In line with these shifts, telecommuting, too, increased due to the pandemic, with 64% of lawyers saying they had telecommuted in 2021, compared to 55% in 2020. Notable is that of those who did telecommute, 39% of them did so full time.

Cybersecurity

Law firms are primary targets for cybercrime. They have a lot of valuable, sensitive information, which makes them “one-shop-stops” for cybercriminals. And law firms’ security set-up often is not very advanced. This combination of more data and easy access is what makes them prime targets.

While about three quarter of law firms use solutions like antivirus and antispyware, only half use firewalls, multi-step authentication, or encryption.

The report urges lawyers to spend more resources on security and on teaching staff to use the security tools that are available to them.

The report also recommends law firms should a) create ‘Acceptable Use Policies’ that outline the use of the firms hard and software; b) adapt cloud-based technologies, as they are considerably more secure than on premise or hosted software; and c) develop an incident response plan.

 

Sources:

Legal IT

The 2021 Social Law Firm Index

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Some weeks ago, Good2bSocial published its eighth annual report on how law firms use social media, the 2021 Social Law Firm Index. In this article, we look at its key findings, at social media practices to avoid, and at predictions for 2022.

Key Findings

Some of the findings were expected. As the pandemic endures, everybody is still having Zoom meetings, but as vaccines are rolled out, more and more people are returning to the office. And now that lawyers spend more time online professionally, their budgets for digital marketing are also still increasing with more spent on advertising. The report also notes that by now, all the major law firms are on LinkedIn. Apart from that, there are four key findings.

The number of law firms that are creating podcasts has grown exponentially. In 2020, 38% of the biggest law firms in the US had a podcast. In 2021, that number has grown to 75%, and many of them had more than one podcast. Overall, podcasts are popular, with 40% of the US population listening to at least one podcast a month. For law firms, they are an ideal way to establish themselves as experts in a given field and to attract a new and interested audience. For those law firms who consider starting a podcast, the report points out that it is important to maintain a consistent schedule. (For more information on starting a legal podcast, read our article on podcasting for lawyers).

The use of video has increased across social media. Video content is the most popular content on social media and has become one of the most mediums for law firms too. Videos tend to appeal more because they are more engaging and more memorable. (People are more likely to remember something they’ve seen than something they’ve read). Video also tends to score better when it comes to SEO (Search Engine Optimization) and CRO (Conversion Rate Optimization). Instagram, Twitter, and TikTok are the most popular platforms for videos. The report encourages law firms to produce more videos. It urges law firms to make sure their content is relevant and to include captivating headlines and descriptions. (For more information, read our article on using video in your law firm).

There is an increased focus on diversity, equity and inclusion and corporate activism. Over the last years, there has been an increase in intolerance towards minorities. Law firms have joined the movement to turn the tide. They “issued press releases emphasizing their commitment to improving their diversity efforts, upped their donations to BIPOC causes, increased pro bono efforts, and showed their support for LBGTQ audiences with rainbow flags.” (p. 7). Some went further and created fellowships and/or they created partnerships with racial justice organizations.

Covid-19 resource centres. During the pandemic and its different waves, what people, businesses and organizations were allowed and not allowed to do often changed. Many law firms offered resource centres on their websites to keep their clients and potential clients up to speed with a variety of in-depth information and insights regarding the fast-changing developments.

Social Media Practices to Avoid

Every year, the report also highlights the worst practices that are still prevalent and should be avoided. This year, it lists five of these practices that law firms should avoid in their usage of social media and their website.

Poorly defined target audience: this is one of the most persistent errors law firms keep on making, i.e., they do not target a sufficiently defined audience. Many law firms still seem to cling on to the misconception that they have to target as wide an audience as possible. The opposite is true. If your message isn’t specific enough, it will just get lost in the information overload Internet users are bombarded with. The more specific your target audience, the higher the chance you will stand out for those potential clients that actually need your services. In other words, the more accurately you define your target audience, the higher your conversion rate will be.

Failing to engage in conversations: legal consumers want their lawyers to listen to them. Engaging in conversations demonstrates that you are listening and offers a chance to show your expertise. Respond quickly and consistently to the comments your law firms receive. The report advises to occasionally do a Q&A on certain topics or do an ‘ask me anything’ session.

Poor reporting and analytics capabilities: to know what social media and content marketing strategies work, you need to analyse the metrics. It helps you to evaluate your ROI, and to finetune your strategies and your budget. Unfortunately, most law firms don’t do a great job at regularly tracking the relevant data. (For more information on web analytics and metrics, you can read our article that provides an introduction to web analytics).

Treating all social media platforms the same: different social media attract different user groups with different expectations. LinkedIn has a more professional audience than Facebook, Twitter, Instagram or TikTok. What works on one platform does not necessarily work on another. It is crucial to understand each platform and to use the correct type of content, as well as the optimal rate of publishing content for that platform. (For more information, read our article on planning your social media activity).

Too much focus on firm-centric and promotional content: Another big mistake law firms tend to make is to mainly focus on self-promotion. Legal consumers may well be interested in what you can do, but they rather would know whether working with your firm will be a satisfying experience, and whether your firm will meet their expectations. (For more information, read our article on making your law firm more client-centred).

Predictions for 2022

Sticking to tradition, the report also makes some predictions for the year ahead.

Continued increase in paid online advertising: the pandemic more or less forced law firms to spend more on online advertising as the more traditional ways of business development – which for lawyers largely depended on socializing – were not available. Still, compared to regular businesses, law firms tend to spend a far lower percentage of their budget on marketing and advertising. This is especially the case for small and medium-sized law firms who hardly spend any money on marketing and advertising. The report expects that law firms slowly will start catching up with the rest of the market and will continue to spend more on online advertising.

Focus on account-based marketing and related technologies: as we explained in a previous article, the idea of account-based marketing is to identify key accounts and then customize your marketing strategies for each one of them individually, rather than having one general marketing strategy for all accounts. It is more effective, and makes it easier to track and measure goals, and identify a clear ROI. As it focuses on the client’s journey and experience, it also results in a boost in client loyalty.

Evaluation of firms’ marketing technology stack: the report defines the marketing technology (often shortened to MarTecK) stack as “the collection of marketing tools that your team uses to place ads, post on social media, and gather results and analyze ROI.” (p.11) Digital marketing campaigns use several different tools, and now additional tools are appearing that either combine the functionality of those tools or allow them to work better together. It is advisable for law firms to evaluate the tools they are using and see where improvements in the stack are possible.

Exploration of programmatic advertising and intent-based targeting: the report predicts law firms will start experimenting with intent-based targeting. What are we talking about? In a previous article on the digital marketing concepts lawyers need to know, we explained what a conversion funnel is. Intent-based marketing is a type of marketing that specifically targets those prospects who are in the last stage of the funnel, i.e., those who have shown an intention to make a purchase.

The report also expects an increase in programmatic advertising, which it describes as “a way to automatically buy and optimize digital campaigns, rather than buying directly from publishers” (p. 12). This used to be something only the largest law firms could to. But more and more tools are becoming available that allow smaller law firms to use programmatic advertising, too.

 

Sources:

Legal IT

What lawyers need to know about the metaverse

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In the last few weeks, the metaverse has been in the news headlines on a nearly daily basis. Companies are investing billions in it and are looking to hire thousands of people to build it. In this article, we look at what lawyers need to know about the metaverse. It addresses the following questions: what is the metaverse, what can the metaverse be used for, what concerns have been raised about the metaverse, and how is the metaverse relevant for lawyers?

What is the metaverse?

Rather than starting off with an attempt at definition, it may be useful to first quickly go over the history of the idea or concept. The idea for the metaverse is the result of several technological evolutions that are converging. On the one hand, you have computer games that have created entire virtual online worlds that are becoming more and more life-like, and where people have avatars representing them to interact with others and the virtual environment. Another aspect is the increasing use of virtual reality and augmented reality tools in real life for different purposes like training, education, etc. Think, e.g., of a surgeon or medical students practicing a medical procedure. The pandemic has also created new needs for virtual meetings and conferences and has sped up the process of courts going online. All of these tools rely on the Internet. So, the vision rose to enhance the internet in a way that all these technologies could be combined in one parallel virtual / augmented online world where we can live, work, learn, relax, play, socialize, etc.

There is no commonly accepted definition for the metaverse yet. (There even are alternative names for it like, e.g., the omniverse). The Wikipedia, e.g., gives the following definition: “The metaverse (a portmanteau of “meta-” and “universe” or “Universe” and “Meta”) is the hypothesized next iteration of the internet, supporting decentralized, persistent online 3-D virtual environments.” This Wikipedia definition, however, is limited in its scope. These are some of the other aspects that leaders in the field are using to describe it: “a virtual world connecting all sorts of digital environments”, with “social human interaction at its core”; “a vision for a new place to interact with other humans and bots to play games, conduct business, socialize and shop”; “a fully immersive, partially real life, partially digital experience that runs in parallel with the physical world”; “a vast and immersive digital world that is inexorably enmeshed with our physical world”.

This new online world would, just like the Internet, always be on and accessible. At present, accessing such world requires the usage of virtual reality sets or augmented reality glasses, as well as smartphones, PCs, or game consoles. For the metaverse to become a success, investors and developers realise that they must make it more easily accessible, and that interoperability between metaverse applications is essential.

What can the metaverse be used for? Examples of current and future applications.

The early stages of the metaverse already exist. There are, e.g., well-defined use cases within the video game, business, education, retail, and real-estate sectors.

We already gave the examples of games that are being played in entire online worlds, and where millions of players can simultaneously interact with each other and the environment.

Anybody who worked from home during the pandemic undoubtedly is familiar with virtual business meetings. Many also became familiar with online training.

The same goes for education where classes were suddenly taught online instead of in class rooms or auditoria. In some cases, students can use virtual reality headset to learn to manipulate 3D virtual objects, etc.

There are virtual shops that you can walk around in to choose what you want to buy. Similarly, people looking to buy a house can take a virtual tour to determine whether it is worth visiting the actual house. Developers use 3D models of the projects they want to build and put them online for potential buyers and investors.

There already are early metaverse applications for sports and entertainment and for healthcare. During the pandemic there were live concerts that could be attended virtually, where the musicians physically were in different locations, all playing together.

All of this already exists and would be enhanced further. In the future metaverse, people and companies would have their virtual offices. The online shopping experience would dramatically change, too, where virtual shops become far more lifelike. You could have your avatar customised to match the way you look at present and, e.g., try on clothes in the virtual shop before ordering them.

Movies could become 3D environments where you can look around and have a 360-degree view of what is going on. Family reunions and gatherings could take place in virtual environments so those who cannot physically be present, can still attend.

The possibilities look endless.

What concerns have been raised about the metaverse?

While many of these evolutions are thing people can get excited about, there also are plenty of reasons for concerns. Here are a few.

Privacy: big tech companies like Google and Facebook already have a bad reputation when it comes to all the data they gather. Many privacy advocates rightfully point out that the situation could get far worse in the metaverse, especially if it is being run by the same or just a few companies.

There is a cluster of interlinked concerns that has to do with the spread of misinformation, alienation from real life through confirmation bias, and the resulting polarization of society. What are we talking about? In recent years, we have witnessed how social media have been abused to spread misinformation, either intentionally or unintentionally. There already is a problem where the algorithms used in social media are designed to provide you with the information you are interested in, which strengthens the phenomenon of confirmation bias. The algorithm does not care whether what it shows you is true; it is interested in showing you want you want to read. If you hold beliefs that are not true, the algorithms will show you information that confirms those beliefs. In other words, the metaverse may further distort users’ perceptions of reality with biased content to keep them engaged. This can lead to an alienation from what is real, and further contributes to an ongoing polarization of society.

Another problem has to do with online addiction. There have been many well-documented cases where people develop online addictions. With a metaverse that becomes more lifelike and more all-encompassing, an increase in addictions is anticipated.

Another set of concerns has legal implications. Who is in control of the metaverse? Who makes the rules and what rules apply? How are laws applied in virtual worlds? Can insults or threats in a virtual environment have real life repercussions? What if the threats are about the avatars, like somebody threatening to disfigure or destroy your avatar, or somebody replacing your avatar with a less desirable one? There also are concerns about monopolies or oligarchies where some tech companies rule and control everything. Many lawmakers already have expressed concerns about the power big tech companies currently have. In the metaverse, that could get worse. What we are witnessing now are the early stages of a battle over who will control the metaverse.

There are criticisms that the metaverse companies are trying to lure in investors with what is at present merely a purely speculative, and over-hyped concept based on existing technology. They are accused of misrepresenting the largest limitation for wide-scale adoption of the metaverse, which comes from technological limitations with current devices and sensors needed to interact with real-time virtual environments.

And undoubtedly, the metaverse will introduce whole new sets of problems, which will raise new ethical and legal questions. There already is a company that sells tailor-made human digital servants. What about digital slavery and prostitution? What about virtual affairs? One problem that is often mentioned is that of currencies: will you be able to use existing ones, or will new ones be created? Will these virtual currencies be usable in the real world (as in, have purchasing power) or will those be limited to specific environments and providers? Many new solutions will have to be found.

How is the metaverse relevant for lawyers?

In a previous article, we talked about the two sides of legal innovation: one side has to do with adopting new technologies for better legal service delivery; the other side has to do with coming up with new legal solutions for new situations. Both aspects apply to the metaverse.

We already mentioned above that there are multiple concerns about the legal aspects of the metaverse. What existing rules can be applied and what new rules are needed? What new solutions do we have to come up with to deal with the abovementioned concerns? Will the metaverse create a whole series of new crimes? All of these are new problems that will need new legal solutions. And hopefully, we will learn from the mistakes that were made with the Internet, where legislation and jurisprudence were lagging far behind in addressing the new problems that arose. If not, the gap between new problems and the needed legal solutions to address them will be even bigger for metaverse.

The other side of the relevance for lawyers is how it will affect the daily operation of law firms. The metaverse with its new technologies will change the way lawyers work. We can expect an increase in and enhancement of virtual offices, where receptionists and paralegals could be bots or avatars of real people. We will see new virtual courtrooms, virtual arbitration, etc. During litigation, experts and lawyers could provide 3D recreations and presentations of their arguments and findings…

In short, the metaverse is expected to open up a whole new world of possibilities, concerns, and issues.

 

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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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Legal IT

Knowledge Management for Lawyers

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In today’s article, we will look at knowledge management for lawyers. The Wikipedia defines Knowledge Management (KM) as “the process of creating, sharing, using, and managing the knowledge and information of an organization. It refers to a multidisciplinary approach to achieve organisational objectives by making the best use of knowledge.”

Knowledge is different from information. It consists of information that is verified and that is highly structured, where the pieces of information have their place in a framework, and where attention is paid to the relationship between those pieces of information. One could say that knowledge consists of an architecture of verified information.

The Wikipedia is a good example of a knowledge management solution (KMS). It contains articles with the relevant information, and that information is structured. The information is also verified (by peer review). Apart from the articles on topics, it contains key words or tags, internal and external references, taxonomies, a thesaurus that keeps track of synonyms and ambiguities and uses redirects and disambiguation. It refers to related topics. The topics themselves are grouped in categories, etc. The knowledge is well-structured and can easily be shared and updated.

Often a distinction is made between two different types (or dimensions) of knowledge: there is explicit knowledge and there is tacit (or implicit) knowledge. Explicit knowledge is what we usually think of when we talk about knowledge. It is the knowledge that an individual consciously holds in a form that can easily be communicated to others. Tacit knowledge, on the other hand, represents internalised knowledge that an individual may not consciously be aware of. (Lawyers may, e.g., know which judge will be more favourable to a certain case, but may not be able to express exactly all the reasons why that is the case). Tacit knowledge often consists of patterns that have been subconsciously identified but have not yet been expressed. As such, one of the challenges of knowledge management is to make tacit knowledge explicit.

Why should law firms pay attention to knowledge management? Lawyers are knowledge experts. Their knowledge or expertise is their biggest asset. For law firms, this expertise can be their main selling point, and protecting it can be crucial for their survival. You do not want a situation where only one specific lawyer in a law firm knows how to deal with a specific problem. Ideally, the knowledge should be leveraged across the law firm, meaning that it should be available to everybody in the law firm. Making knowledge accessible to law firm members also increases productivity because you have access to solutions that have worked in the past. It also allows new lawyers to acquire the knowledge faster.

Other benefits are that it facilitates innovation and organizational learning. A decent knowledge management solution also makes it easier to manage and grow the intellectual capital and assets of the law firm. It typically also makes it easier to find new solutions for more complex problems as it is easier to draw on past expertise. Keeping track of best practices and past solutions that worked and those that did not work, also reduces the chance of professional liability issues.

Setting up a decent KMS involves different aspects and phases. These include:

  • knowledge mapping, where you create a map that details who in the law firm has expertise in what areas.
  • knowledge gathering or submission: once you know where to find the knowledge, it has to be entered into the KMS. For this, one can use push and/or pull strategies. In a push strategy, the people who have the knowledge submit that knowledge themselves. In a pull strategy, the people building and maintaining the KMS ask the experts and enter the information.
  • knowledge modelling / structuring. We mentioned above that knowledge is structured, that it is consists of an architecture of information. A KMS typically will use indexes, taxonomies, a thesaurus, categories, etc. This is an important aspect that should not be overlooked. It is largely what sets a KMS apart from a documentation system.

Knowledge management comes with its own set of challenges. We already mentioned tacit knowledge. Another challenge is getting people to share their knowledge. Often, people may be reluctant to share their expertise because they think it may make them more expendable. Or they believe it will benefit others more than them. Lawyers – and especially older lawyers – tend to see it as something where the efforts involved are not justified by the benefits. This can be addressed by a double-pronged approach. On the one hand, people should be educated about the benefits and encouraged to share knowledge. On the other hand, the processes of sharing knowledge can be made less tedious and can be integrated in existing practices: brainstorming sessions can be knowledge gathering sessions. Reviews of actions taken in cases, analysing which were more successful than others is another way. Law firms typically also employ interns and young lawyers, where older lawyers have an ethical duty to assist and supervise them. So, these interns and younger lawyers can add knowledge to the KMS each time they ask for advice.

SharePoint as a Knowledge Management system?

Many law firms these days are heavily invested in Microsoft-based solutions and use SharePoint to store their documents. So, could they use SharePoint as their Knowledge Management system? After all, many users are already familiar with it. It is secure and reliable, and all the information is available in a single system.

As it is, SharePoint only offers limited knowledge management functionality. It stores information, and you can perform queries on that information. But it cannot handle large data sets or more advanced queries. At best, one can add metadata, but these tags / key words must be added manually. There is no support for automation. It has limited functionality to filter the search results. Native SharePoint also does not offer any information architecture solutions: it does not have taxonomies or a thesaurus, etc. Its content is not indexed. As it is, SharePoint is more of a document management and documentation system than a knowledge management system.

In recent years, SharePoint has started offering limited wiki functionality, for which it uses wiki templates which must be configured separately. It is a step in the right direction. Realistically speaking, though, if you would like to use SharePoint as a knowledge management system, you will need a third-party add-on that provides all the additional required knowledge management functionality.

 

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