Made your list and checked it twice? Don’t forget about the most important law and technology developments in 2012 — which can also help guide in-house counsel in the new year. Here, Foley & Lardner attorney Adam Losey, who also edits the online nonprofit IT-Lex and is a member of the editorial advisory board for Law Technology News (a sibling publication of The Legal), walks us through his top six tech issues of the year:
TECHNOLOGY-ASSISTED REVIEW AND PREDICTIVE CODING
The first case law on this issue emerged this year, with courts in New York, Virginia and Louisiana greenlighting the application of computer analytics to discovery. And given how much money companies “waste” on discovery, Losey said, “it’s really important to figure out ways to harness technology to do that better.”
Depending on the case, technology-assisted review can facilitate large-scale document review — and benefit the legal department’s bottom line. “It’s not right in every case, but you certainly should consider the application of these technologies,” Losey said. “This technology can give you significant cost savings.” He added that no one vendor has a monopoly on TAR, and that companies can kick the tires by running quality-control tests first.
PRESERVATION AS A PRIORITY
The Apple v. Samsung litigation has proven to be an epic chapter in the escalating patent wars — but it also demonstrated the increasing importance of data and document preservation. “The duty to preserve information under the common law arises when you reasonably anticipate litigation,” Losey said. “And that’s the same everywhere in the country.”
But once that duty triggers, no matter how quickly attorneys scramble to preserve what they can, Losey said there’s always going to be a chronological “gap” in the data collection — which can be made into an issue during a big lawsuit.
“Apple v. Samsung is a great example, because both Apple and Samsung argued the exact same thing: Oh, you didn’t act quickly enough to preserve data and you didn’t meet your preservation obligation,” said Losey. “Both of them won that argument against each other.” Ultimately, both sides agreed to drop the issue in court.
Data preservation will only continue to come under the microscope, Losey said. He recommends that in-house counsel implement a document-retention policy that spells out procedures for collecting and preserving email and other documents when a lawsuit hits. He also cautions counsel to be consistent; if you use multiple firms to handle preservation, differing methods could lead to inconsistences.
“An ounce of preventative legal work can be worth a pound of triage in the litigation,” Losey said.
EVOLUTION OF STATE RULES AND E-DISCOVERY PROTOCOLS
“Local jurisdictions and some states are adopting new rules to deal with e-discovery issues,” Losey explained. The state of Florida, for example, recently came out with new e-discovery rules.
But the changes can catch some unawares. “I had a hearing [recently] where the issue was entirely governed by Florida’s new rules, which took effect in October, and the lawyer on the other side was not aware the rules existed,” Losey said. “I have never seen that happen.”
His advice: “Make sure that the people you hire are really up to speed on this — or else they could wind up really losing badly.”
In-house counsel at Kia Motors go so far as to test outside counsel on their tech knowledge, which helps the law department make hiring decisions. “I think it’s a wonderful idea,” Losey said. “Everyone should do it, quite frankly.”
GENERAL AWARENESS OF PRIVACY ISSUES AND STATUTES
There are plenty of potential blind spots when it comes to the many state and federal laws governing privacy. For example, under the California Invasion of Privacy Act, parties that record a call without a person’s consent can be liable for a $5,000 penalty. “I think all companies that do business in the United States that record calls should be aware of it,” Losey said.
And at the federal level, companies will find that the Federal Trade Commission is an active enforcer — “very much the policemen of a lot of these privacy laws,” according to Losey.
Which is why it’s important to be vigilant in this legal arena. “If you’re a company of any size, and you don’t have someone looking out for you on the privacy front proactively, you run a very serious risk of stepping on a land mine,” he said.
CYBERSECURITY AND DATA BREACHES
Could we write enough about this topic in 2012? Probably not. “Frankly, most companies are terrible about [digital] security, because it’s difficult to be secure,” Losey said.
One way companies can be vigilant is by hiring experts to test your network security. Losey also recommended opening up lines of communication between the legal department and the IT department — including to those “who do the day-to-day grunt work,” he said, because a crisis is no time to be making introductions between tech and legal. “If there’s a data breach, it’s the kind of thing that should come to the attention of in-house counsel.”
BUSINESS AND LEGAL IMPLICATIONS OF SOCIAL MEDIA
Social media is presenting companies with a number of thorny legal and business issues — and companies shouldn’t ignore the cyber chatter. “It’s a good idea for a company to proactively be looking online,” said Losey. “What’s out there? What are people posting about you?”
On the business front, use the social media tools available to you to address negative comments. “A lot of companies do a really good job with that,” Losey said. “But you don’t want to not be aware that there’s all kinds of bad press about you lingering, and you haven’t taken an opportunity to respond.”
In the legal domain of social media, keep an eye out for things like leaking of trade secrets — which could end up on an employee blog — and IP infringement happening via Facebook, Twitter and the like. “If you’re keeping general track of what’s out there about your company, you’re going to find out if someone’s using your trademark,” Losey said. “You’re going to see if people are violating your copyright. And that’s really important to know so you can stop it.”
If one thing’s for sure, Losey said, it’s that the items on this list will change fast — and in-house counsel need to move at the same pace as today’s technology. “The most important thing is taking the time and effort to keep up,” he said.
Catherine Dunn is a reporter for Corporate Counsel, a Legal affiliate based in New York. •