“Digital adoption has taken a quantum leap” due to the pandemic, with companies transitioning to remote work “40 times more quickly than [executives] thought possible,”1 according to an October 2020 McKinsey report.
January 13, 2021 Feature
Legal Sector’s Tech-Enabled COVID-19 Adaptation: Distinct Challenges, Unparalleled Long-Term Opportunities for Dynamic Digital Transformation
By Lev Breydo
The legal industry has been no exception, overcoming traditional equivocations with celeritous adaptation to a tech-enabled “world of remote everything.”2
Aptly capturing the zeitgeist, Judge David R. Jones of the bankruptcy court for the Southern District of Texas (SDTX) remarked to the Wall Street Journal: “We’ll all be on videoconference and I’ll have a shirt and tie on and my pajama bottoms, but you won’t see those.”3 (See the COVID-19 Judiciary Case Study regarding SDTX’s adaptation to COVID-19 on page 6.)
Yet, notwithstanding initial successes, stresses to certain facets of the system are starting to emerge and may compound over time, depending on the pandemic’s duration. Some challenges—like human capital management and organizational culture maintenance—mirror concerns felt across industries. Others are unique or particularly acute for the legal industry, with the complex interplay between cybersecurity, client confidentiality, and professional responsibility likely the most significant.
At the same time, the legal industry’s adoption of technology thus far has primarily focused on tools enabling legal practice to continue as it existed before COVID-19. While still meaningful and quite logical, it is rather distinct from adoption of “LegalTech”—i.e., sophisticated sector-specific tools leveraging AI, legal analytics, and no-code automation—that could entail greater changes to the practice of law itself.
However, the disruption caused by COVID-19 may yet “turbocharge” a latent confluence of secular trends, positioning the legal industry to come out stronger on the other side by embracing dynamic digital transformation.4
This article will focus on three areas: (i) the impact of COVID-19 across the legal value chain; (ii) corresponding challenges, with an emphasis on the interplay between cybersecurity, data privacy, and professional responsibility; and (iii) long-term opportunities for the sector.
COVID-19 Has Upended the Legal Value Chain
The legal industry has been no exception, overcoming traditional equivocations with celeritous adaptation to a tech-enabled “world of remote everything.”2
Aptly capturing the zeitgeist, Judge David R. Jones of the bankruptcy court for the Southern District of Texas (SDTX) remarked to the Wall Street Journal: “We’ll all be on videoconference and I’ll have a shirt and tie on and my pajama bottoms, but you won’t see those.”3 (See the COVID-19 Judiciary Case Study regarding SDTX’s adaptation to COVID-19 above.)
Yet, notwithstanding initial successes, stresses to certain facets of the system are starting to emerge and may compound over time, depending on the pandemic’s duration. Some challenges—like human capital management and organizational culture maintenance—mirror concerns felt across industries. Others are unique or particularly acute for the legal industry, with the complex interplay between cybersecurity, client confidentiality, and professional responsibility likely the most significant.
At the same time, the legal industry’s adoption of technology thus far has primarily focused on tools enabling legal practice to continue as it existed before COVID-19. While still meaningful and quite logical, it is rather distinct from adoption of “LegalTech”—i.e., sophisticated sector-specific tools leveraging AI, legal analytics, and no-code automation—that could entail greater changes to the practice of law itself.
However, the disruption caused by COVID-19 may yet “turbocharge” a latent confluence of secular trends, positioning the legal industry to come out stronger on the other side by embracing dynamic digital transformation.4
This article will focus on three areas: (i) the impact of COVID-19 across the legal value chain; (ii) corresponding challenges, with an emphasis on the interplay between cybersecurity, data privacy, and professional responsibility; and (iii) long-term opportunities for the sector.
COVID-19 Has Upended the Legal Value Chain
With court hearings held exclusively over videoconference, multibillion-dollar negotiations occurring over Zoom, and armies of attorneys trading stately offices for their living rooms, it is fair to say that COVID-19 has necessitated vast changes to most aspects of legal practice. So far, rapid industry adoption of communications and productivity technology—Zoom, Join.Me, Teams, Slack, etc.—has enabled a generally smooth transition.
The following diagram presents a simplified model of the legal services value chain, denoted as seven distinct steps,5 collectively spanning the full life cycle of a legal matter, from business development to analysis and implementation.
These seven steps can be further grouped into three core nodes: (i) front-end business development, (ii) core workflows and matter management, and (iii) client-facing advisory and matter implementation.
As discussed below, the magnitude of COVID-19’s impact has been meaningfully heterogenous across these nodes, resulting in distinct challenges and different potential opportunities.
Front-End Business Development
In context of the above framework, the “front end” of a legal matter broadly encompasses the precursor steps leading up to retention by a client for a matter. Some, such as “beauty contest” pitches, may be matter-specific, while others, like speaking engagements and thought leadership, are more geared towards brand building and networking to position an attorney for winning business in the future.
At the macro level, the extent of COVID-19’s impact on the industry appears to barbell, with significant pressure on small firms and solo practitioners, but generally limited impact on the larger end of the market. For instance, according to Clio’s 2020 Legal Trends Report, which generally skews towards smaller law practices, in May 2020 “new opened matters were down 25% compared to 2019,” and remained somewhat depressed in July and August.6 In contrast, AmLaw firms quickly recovered, with many even announcing “special” associate fall bonuses.7
This bifurcation suggests that, all things being equal, the conditions may favor incumbents with institutional business or well-established reputations, which can effectively allow them to bypass or significantly pare back these front-end steps.
Less-established attorneys, on the other hand, may be doubly impacted by a combination of potential client reluctance to risk sending work to a lesser-known quantity, while also needing to develop business in an unprecedented environment. To address these challenges, marketing professionals suggest blogging and other digitally oriented business development strategies that can be implemented during periods of mandated social distancing.8
Core Workflows & Project Management
The “middle” steps of the value chain encompass the majority of core legal work. Here, the day-to-day changes resulting from remote working have been quite visible, though, for the most part, also substantively limited. This is because, especially at large law firms, these workflows—such as large-scale discovery, research, and drafting—are a coordinated, but often fundamentally solitary endeavor.
Most attorneys interviewed for this article, and especially junior practitioners, reported modest, or even minimal, changes to their workflows, with internal collaboration readily enabled by communication tools like Zoom, with little need to be in the office. In many respects, intra-firm collaboration has started to mimic traditionally remote workflows with external collaborators, such as co-counsel or financial advisers.
Indeed, many attorneys have found industrial-grade printers to be one of the few things they miss about the office. Even there, though, technology may be making headway, with new tools for analysis and digital contracting rendering “the increasing irrelevance of paper [] even more pronounced.”9
Yet, stresses at these points in the value chain may grow over time, with challenges ranging from talent integration to maintaining culture without in-person interaction.10
Thus far, the remote work transition has undoubtedly been streamlined by pre-pandemic working relationships as well as substantive and institutional knowledge. In contrast, integrating new associates and lateral hires may prove more challenging, given limited familiarity with organizational culture and processes. That difficulty may be further compounded over time, given sharply curtailed summer programs and delays in on-campus recruiting. Legal education is also feeling an impact, with some law school deans positing that online learning “is here to stay” in what commentators argue may be a “new dawn” for legal education.11
Mitigating these challenges may require law firms to take special steps to welcome new attorneys into the profession, with an emphasis on mentorship and ensuring similar access to development opportunities as pre-COVID-19 hires. Further, firms can take additional steps to support mental health, which remains a deep problem, with studies showing that lawyers have the highest loneliness levels among various professions.12
At the same time, the middle node of the value chain likely presents the most target-rich environment for value creation through LegalTech adoption. In fact, that may provide a unique opportunity for tech-savvy junior attorneys to add differentiated value by taking the lead on market surveillance, research, and early adoption of technologies that can provide firm-level competitive advantages.
Matter Implementation & Execution
As the most dependent on in-person meetings, the final steps in the legal value chain have seen the most disruption from, and highest adaptation to, COVID-19.
Indeed, over the last few months, a range of matters—ranging from cross-continental sovereign debt restructurings to crucial court hearings across the United States—have successfully been conducted remotely, some early hurdles notwithstanding.13
For instance, parties to Argentina’s $65 billion debt restructuring initially lamented that “[l]ess human contact won’t help resolve stressful, hostile and complicated discussions,” in contrast to an earlier restructuring sealed while “huddled in a windowless conference room at a hotel.”14 Yet, remote deal-making need not be a deal-breaker, as after a few months and despite some initial setbacks, the parties successfully reached an accord.15
In-court proceedings generally appear to have adapted well—one experienced practitioner conveyed a not-uncommon view that “the system has benefitted tremendously from the remote access period,” with hearings going “smoothly” and an increased “level of courtroom decorum.”16 Others expressed optimism regarding the prospects for digital adoption to enhance access to justice by reducing the frictional costs and expenses often associated with legal processes.
COVID-19 Judiciary Case Study
Preparation Positioned Seamless COVID-19 Transition at the Bankruptcy Court for the Southern District of Texas17
The author would like to express a special gratitude to Judge David R. Jones and Judge Marvin Isgur, who graciously spoke with me for this article.
As many bankruptcy practitioners know well, the Southern District of Texas Bankruptcy Court (SDTX) has long led the way with respect to technology, with Judge Jones and Judge Isgur actively utilizing videoconferencing and collaboration tools long before the pandemic. As Judge Jones explained, this was a form of contingency planning, as they had been “expecting an event,” such as a hurricane, to occur, potentially disrupting in-person appearances.
SDTX’s seamless post-COVID remote access transition was, in reality, the product of “hundreds of hours” of hard work. The judges—who preside over many of the largest, most complex bankruptcies—researched and tested “lots of” different systems, analyzing the optimal feature mix for their specific use case, which placed paramount importance on system stability and reliability. Based on that framework, Judge Isgur explained that after reviewing Zoom, they determined that it had “so much capability” that reliability could become impaired by internet latency. So, they instead selected LogMeIn’s GoToMeet and join.me platforms.
Judge Jones and Judge Isgur balanced the need for attorney buy-in with their emphasis on “not forcing people” through leadership by example. Working on their own time, the judges conducted “over thirty” training sessions for attorneys; they “never said no” to training requests. At the same time, Judge Isgur highlighted the importance of being patient with people regarding technological glitches (this author, rather embarrassingly, included).
Overall, the remote access transition has gone very well, with some facets determined to be superior to in-person proceedings. For instance, bankruptcy first-day hearings were found to be “better” by video, with the judges indicating that videoconference may become the default approach going forward. In fact, even with witness testimony, the feedback was that it was unclear whether having witnesses in the courtroom was “any better”; Judge Isgur, for instance, noted that video can actually help detect certain things that are harder to see from the bench. Further, the SDTX court has been utilizing additional new tools, finding electronic signature platforms to be an apt substitute for traditional “wet” signatures.
The transition has not been entirely without trade-offs, though. For example, Judge Isgur remarked that, in consumer cases, “you do lose something” from conducting matters remotely, though the judges also both noted that there was a cost-benefit analysis involved, given potential value to the individual debtors from not having to potentially miss work.
Ultimately, based on SDTX’s highly successful experience, it seems fair to say that things may never return to exactly the way they were before the pandemic—and, for all constituencies, that may fundamentally be a silver lining.
COVID-19 Challenges: Cybersecurity, Client Confidentiality & Professional Responsibility
The increase in remote work necessitated by COVID-19 has heightened cybersecurity considerations for all companies,18 though the risks are particularly acute for lawyers due to a complex interplay between cybersecurity, client confidentiality, and professional responsibility. Compounding the challenges, law firms are natural targets for cyber criminals because they “have tremendous concentrations of really critical private information”19—a “treasure trove that is extremely attractive to criminals, foreign governments, adversaries, and intelligence entities.”20
Law firm cybersecurity risks are not a new development—it has been estimated that “at least” eighty of the one hundred largest have had “some sort of breach.”21 In 2016, then-U.S. Attorney Preet Bharara warned that a particularly audacious incursion should serve as a “wake-up call for law firms around the world: you are and will be targets of cyber hacking, because you have information valuable to would-be criminals.”22
However, the perils appear to have grown since the onset of COVID-19, with an increasing spate of incidents reported.23 For instance, in October 2020, Seyfarth Shaw was subjected to “a sophisticated and aggressive malware attack.”24 Shortly after, Fragomen reported a data breach in which an “unauthorized third party accessed a file containing [] information” regarding current and former employees of Google, a firm client.25
Model Rules of Professional Conduct—2012 Tech Amendments
Given the growing complexities, in 2012, the ABA amended the model rules of professional conduct to “provide guidance regarding lawyers’ use of technology and confidentiality” (the 2012 Tech Amendments). The ABA subsequently provided additional guidance through formal opinion 477R (FO-477), regarding securing client communications, and formal opinion 483 (FO-483), focusing on attorneys’ post-breach obligations.
Notable changes in the 2012 Tech Amendments included:
- Competence. Adding that lawyers’ long-standing duty of competence (Model Rule 1.1) includes understanding “the benefits and risks associated with relevant technology.”
- Communication. Clarifying the links between cybersecurity and Model Rule 1.4,26 including guidance that it may require a lawyer to discuss security safeguards with clients,” and potentially obtaining “informed consent” regarding costs associated with certain measures.27
- Confidentiality. Adding new Model Rule 1.6(c), which states: “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client,” including by “other persons who are participating in the representation of the client or who are subject to the lawyer’s supervision,” per Model Rules 5.1 and 5.3.
Cybersecurity & Client Confidentiality
The ABA defines “cybersecurity” as “encompass[ing] the broad range of issues relating to preserving individual privacy from intrusion by nefarious actors throughout the internet.”28 For law firms, cybersecurity, data privacy, and client confidentiality are closely interrelated, as cyberattacks often target confidential client information.
Indeed, FO-477 provides:
At the intersection of a lawyer’s competence obligation to keep “abreast of knowledge of the benefits and risks associated with relevant technology,” and confidentiality obligation to make “reasonable efforts to prevent the inadvertent or unauthorized disclosure of [client information],” lawyers must exercise reasonable efforts when using technology in communicating about client matters.29
“Reasonableness” in the cybersecurity context “is not susceptible to a hard and fast rule,” though an accepted legal standard is “emerging” based on “a fact-specific approach to business security obligations that requires a ‘process’ to assess risks, identify and implement appropriate security measures responsive to those risks, verify that the measures are effectively implemented, and ensure that they are continually updated in response to new developments.”30
For instance, sensitive matters may warrant enhanced security measures, such as encryption, while “standard security methods” may be sufficient for matters of “normal or low sensitivity.”31 FO-477R details factors “to consider when determining the appropriate level of cybersecurity,” shown in the following diagram.32 33
Cyber Incident Prevention & Response Framework
Given ever-changing technological dynamics, application of the 2012 Tech Amendments and ABA formal opinions necessitates highly complex, fact-specific analyses of the framework underlying attorney best practices for cybersecurity prevention and response. For illustrative purposes, the above diagram provides a simplified, four-part summary of that framework and is divided into two parts by the dotted line indicating pre- and post-cyber breach.
In the context of the framework, prevention is unambiguously the most important step. Attorneys appear to be taking that to heart, with ABA surveys showing increasing adoption of security measures, such as antivirus protection, authentication, and encryption.34 At the same time, law firms are strengthening internal controls, consistent with FO-483’s requirement to “employ reasonable efforts to monitor the technology and office resources connected to the internet, external data sources, and external vendors providing services relating to data and the use of data,” which is analogized to firms’ obligations to safeguard physical client records from theft.35
After a cyber incident is detected, the focus turns to damage mitigation. FO-483 urges firms to establish detailed incident response plans, enabling “systematic[]” approaches following a cyber incident.36 FO-483 also clarifies that Rule 1.4’s communication obligations extend to post-incident client notification “in sufficient detail” to allow the client to make “reasonably informed” decisions.37
FO-483 also discusses potential governmental reporting requirements following a breach, which is particularly relevant given new state-specific legislation. In addition, after an incident, firms should likely consider the extent of any potential liability as well as applicable coverage under both professional liability and cyber insurance, which is rapidly growing in popularity among attorneys.38
Long-Term Strategic Opportunities from Dynamic Digital Transformation
In a “world of remote everything,” avoiding technology is unlikely to be practical or strategically prudent, given its integrality to enabling post-COVID productivity. At the same time, technology is not the underlying cause of cybersecurity risks, which fundamentally stem from lawyers’ privileged position as stewards of clients’ sensitive information. That information must be stored somewhere, and physical form is hardly foolproof, given the risks from traditional theft, weather events, and good-faith human error.
In the long term, the most viable solution is likely to be thoughtful adoption of security best practices coupled with continued leveraging of technology. Thus far, the benefits have been clear—all while barely scratching the surface of potential value creation from LegalTech. Over time, adoption and maturation of such technologies may meaningfully—perhaps even fundamentally—change the practice of law itself, generating competitive advantages for law firms, cost-effective value for clients, and a better experience for individual attorneys.
As Forbes columnist Mark Cohen put it: “The legal industry’s lawyer-centric, artisanal profile is morphing into a multidisciplinary, digital one that is more closely aligned with business . . . even if many in the legal industry don’t yet see or acknowledge” the trend.39
Cross-Sector & FinTech Context
Digital adoption and maturity are complex concepts but generally understood to encompass broad-based transition of an organization’s information and work processes towards a technology and data-centric operating model. Notwithstanding limitations of cross-industry comparisons, the weight of the evidence illustrates the value proposition and competitive advantages of digital adoption, both of which have only grown through the pandemic.
For instance, a Deloitte study demonstrated a “bounty of benefits” for companies with higher digital maturity, including “net profit margins significantly above their industry average—a pattern that held true across industries,” but also extended “well beyond[] the bottom line.”40 On an intra-sector basis, McKinsey found that “[c]ompanies with resilient, future-ready business models . . . have pulled further away from . . . those with legacy business models [which] have, for the most part, fallen further behind.”41 An earlier McKinsey report specific to law firms suggested “digital and technology innovation” as a key area for longer-term through-cycle strategic investment.42
“The future of legal technology will likely see the emergence of applications powered by artificial intelligence,” according to BCG, which also posited pending structural shifts to the legal industry’s core revenue model and staffing structure, with LegalTech becoming a core component of the business.43
In 2017, Goldman Sachs’ then-CEO Lloyd Blankfein declared: “We are a technology firm. We are a platform,” illustrating the bank’s ambitions towards the forefront of digital technologies.44 Indeed, in the decade following the 2008 financial crisis, incumbent financial institutions embraced FinTech, building mutually beneficial relationships with the fast-growing start-up ecosystem. FinTech investment moved alongside this trend, increasing from $1.2 billion in 2008 to $57.2 billion by 2018.45
This backdrop may offer some rough guideposts for the path of LegalTech adoption and maturation. Brushing off long-standing backwater status, in recent years, a growing confluence of factors—adoption by industry leaders, a maturing innovation ecosystem, and increasingly available venture funding—have pointed to a long-sought inflection point for the space.46 For instance, according to Forbes, LegalTech investment grew 713% from 2017 to 2018 and further continued to trend up in 2019, reaching $1.2 billion.47
Coming into COVID-19, LegalTech was on a significant upswing, with the Financial Times observing “an explosion of innovation”48; that trend appears to have continued, or even accelerated through the pandemic.
For law firms, a growing start-up ecosystem offers opportunities to experiment with new tools applicable both horizontally across practices at core value chain nodes and vertically with respect to practice-specific needs and use cases.
LegalTech Adoption & Maturation
The legal sector is generally understood to be “about five or 10 years behind other industries when it [comes] to technology.” This underscores historical adoption hurdles, but also suggests a clear silver lining: Relative to other sectors, law has a lot of low-hanging fruit, offering “early wins” with favorable return profiles to support future innovation.49
Discussion regarding “why” technology utilization in the legal space has been limited typically gravitates towards culture. Yet, that is unlikely to be the whole story, as illustrated by the discussion in the COVID-19 Judiciary Case Study of SDTX’s active thought leadership with respect to incorporating technology and integrating it with the practice of law.
Indeed, over-anchoring towards culture arguably underweights commercial factors, including potential exposure to professional liability as well as business model constraints rooted in prohibitions against nonlawyer equity ownership in law firms.50
Yet, the industry has started to navigate the commercial challenges with growing prowess. Firms have recruited top technology talent, started innovation labs51 as well as development partnerships,52 and built out venture capital arms.53 Prominent examples include Orrick, whose 2018-vintage LegalTech-focused vehicle54 recently invested in Priori Law’s Series A, Dentons’ NextLaw Ventures, which has backed a range of prominent startups,55 and Cooley, which has deployed capital across verticals, including LegalTech, while reportedly booking handsome profits on recent tech IPOs.56,57
Following a financial sector–pioneered strategy—where consortium-backed companies like Markit58 have successfully addressed sector-wide pain points—law firms are increasing tech collaborations. Perhaps most notably, nineteen large firms have backed Reynen Court, the LegalTech “AppStore,” whose most recent $4.5 million round included follow-on investment from Latham and Clifford Chance.59
Given the relative ease and unambiguous benefits of utilizing productivity and communications tools, many attorneys may be wondering why they did not make the jump sooner. Looking forward, given commercial pressures and competitive realities, it seems difficult to imagine a state of the world where LegalTech adoption and sophistication do not trend up over the long run. And because “[d]ownturns accelerate long-term secular trends,” that may come far sooner than expected.60
At the advent of new, but rapidly maturing technologies, tactically astute early adopters tend to capture disproportionate value. Once an industry’s direction becomes clear, the risk-reward shifts, typically favoring action over equivocation. For instance, despite potential apprehension to word processing and the internet, few seem to miss typewriters or faxes. Over time, technological obsolescence can become a greater risk than early adoption. After all, tradition notwithstanding, circa 2005, few would want to be stuck holding the profession’s last typewriter.
Endnotes
1. McKinsey & Co., Survey: How COVID-19 Has Pushed Companies over the Technology Tipping Point—and Transformed Business Forever (Oct. 5, 2020), https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever.
2. Jared Spataro, 2 Years of Digital Transformation in 2 Months, Microsoft Blog (Apr. 30, 2020), https://www.microsoft.com/en-us/microsoft-365/blog/2020/04/30/2-years-digital-transformation-2-months.
3. Jonathan Randles & Becky Yerak, Shirt, Tie and Pajama Bottoms: Bankruptcy Judges Adjust to Social Distancing, Wall St. J. (Mar. 20, 2020), https://www.wsj.com/articles/shirt-tie-and-pajama-bottoms-bankruptcy-judges-adjust-to-social-distancing-11584732397.
4. McKinsey & Co., COVID-19: Implications for Law Firms (May 4, 2020), https://www.mckinsey.com/industries/financial-services/our-insights/covid-19-implications-for-law-firms; Mark Cohen, COVID-19 Will Turbocharge Legal Industry Transformation, Forbes (Mar. 24, 2020), https://www.forbes.com/sites/markcohen1/2020/03/24/covid-19-will-turbocharge-legal-industry-transformation/#62d2c0771195.
5. Notably, for purposes specific to this discussion, the included version of the legal services value chain includes two steps—marketing as well as pitching and retention—that may arguably and not unreasonably be considered support activities, rather than primary activities core to the value chain. See Lev E. Breydo, Technology, Artificial Intelligence & The Legal Services Value Chain, ABA Legal Analytics Newsl. (Apr. 22, 2019), https://www.americanbar.org/groups/business_law/publications/committee_newsletters/legal_analytics/2019/201904/tech_ai/; see also Joel Barolsky, A Professional Services Value Chain, Relationship Capital (Aug. 31, 2017), https://relationshipcapital.com.au/2017/08/31/a-professional-services-value-chain.
6. Clio, 2020 Legal Trends Report (2020), https://www.clio.com/resources/legal-trends/2020-report.
7. Dan Packel, For 2020, Revenue May Fall, but Profitability Is Largely Expected to Hold, Law.com (Sept. 10, 2020), https://www.law.com/2020/09/10/for-2020-revenue-may-fall-but-profitability-is-largely-expected-to-hold/; Associate Bonus Watch 2020, AboveTheLaw, https://abovethelaw.com/tag/associate-bonus-watch-2020/.
8. Deborah B. Farone, Legal Marketing in the Time of COVID-19, Law.com (Mar. 17, 2020), https://www.law.com/americanlawyer/2020/03/17/legal-marketing-in-the-time-of-covid-19/; see also Larry Bodine, 12 Tips to Market Your Law Practice During the COVID-19 Pandemic, ABA J. (Apr. 14, 2020), https://www.abajournal.com/voice/article/how-to-market-your-practice.
9. Jenn Betts, Embracing Legal Technology Is Critical in the COVID-19 Era, Law.com (May 13, 2020), https://www.law.com/thelegalintelligencer/2020/05/13/embracing-legal-technology-is-critical-in-the-covid-19-era/?slreturn=20201003002038.
10. Andrew Hill, Lockdown 2: A Remote Work How-to Guide for Leaders, Fin. Times (Nov. 8, 2020), https://www.ft.com/content/63d7bfed-1081-4969-8adf-569059728bd3.
11. Mark Cohen, Post-Pandemic Legal Education, Forbes (Aug. 13, 2020), https://www.forbes.com/sites/markcohen1/2020/08/13/post-pandemic-legal-education/?sh=62480fa975d2; but see Emma Dorn et al., McKinsey & Co., Covid-19 and Student Learning in the United States: The Hurt Could Last a Lifetime (June 1, 2020), https://www.mckinsey.com/industries/public-and-social-sector/our-insights/covid-19-and-student-learning-in-the-united-states-the-hurt-could-last-a-lifetime (warning, albeit in distinct contexts, of a potentially impaired educational experience through online learning).
12. Debra Cassens Weiss, Lawyers Rank Highest on “Loneliness Scale,” Study Finds, ABA J. (Apr. 3, 2018), https://www.abajournal.com/news/article/lawyers_rank_highest_on_loneliness_scale_study_finds.
13. Ben Bartenstein, Pandemic Threatens to Disrupt $160 Billion of Debt Negotiations, Bloomberg (Mar. 21, 2020), https://www.bloomberg.com/news/articles/2020-03-21/pandemic-threatens-to-disrupt-160-billion-of-debt-negotiations?sref=OOpRUZ8l.
14. Id.
15. Benedict Mander, Argentina Clinches Near-Unanimous Backing for Debt Restructuring, Fin. Times (Aug. 31, 2020), https://www.ft.com/content/e3e8b783-9455-46f3-946f-15c31a29778b.
16. Interview with Kevin Eckhart (Oct. 2020).
17. Interview with Judge David R. Jones & Judge Marvin Isgur (Oct. 27, 2020).
18. Companies may be subject to state-specific reporting regulations, including from California, New York, and the European Union.
19. Ed Finkel, Cyberspace Under Siege, ABA J. (Nov. 1, 2010), https://www.abajournal.com/magazine/article/cyberspace_under_siege.
20. Ellen Rosen, Most Big Firms Have Had Some Hacking: Business of Law, Bloomberg (Mar. 11, 2015), https://www.bloomberg.com/news/articles/2015-03-11/most-big-firms-have-had-some-form-of-hacking-business-of-law?sref=OOpRUZ8l.
21. Id.
22. Press Release, S.D.N.Y. U.S. Att’y’s Off., U.S. Dep’t of Just., Manhattan U.S. Attorney Announces Arrest of Macau Resident and Unsealing of Charges Against Three Individuals for Insider Trading Based on Information Hacked from Prominent U.S. Law Firms (Dec. 27, 2016), https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-arrest-macau-resident-and-unsealing-charges-against.
23. Zack Needles, Trendspotter: Law Firms Keep Getting Cyberscammed—and COVID-19 Isn’t Helping, Law.com (Aug. 2, 2020), https://www.law.com/2020/08/02/law-com-trendspotter-law-firms-keep-getting-cyberscammed-and-covid-19-isnt-helping.
24. Andrew Maloney, Seyfarth Shaw Targeted by Weekend Cyberattack, Am. Law. (Oct. 12, 2020), https://www.law.com/americanlawyer/2020/10/12/seyfarth-shaw-targeted-by-weekend-cyber-attack.
25. Zack Whittaker, Fragomen, a Law Firm Used by Google, Confirms Data Breach, TechCrunch (Oct. 26, 2020), https://techcrunch.com/2020/10/26/fragomen-data-breach-google-employees/?guccounter=1.
26. John G. Loughnane, 2019 Cybersecurity, ABA Techreport (Oct. 16, 2019), https://www.americanbar.org/groups/law_practice/publications/techreport/abatechreport2019/cybersecurity2019/.
27. ABA Standing Comm. on Ethics & Pro. Resp., Formal Op. 477R, Securing Communication of Protected Client Information (May 11, 2017) [hereinafter FO-477R], https://www.abajournal.com/files/FO_477_REVISED_05_22_2017.pdf.
28. Id.
29. FO-477R at 4 (emphasis added).
30. Jill D. Rhodes & Robert S. Litt, The ABA Cybersecurity Handbook: A Resource for Attorneys, Law Firms, and Business Professionals (ABA, 2d ed. 2018).
31. FO-477R at 5.
32. Loughnane, supra note 26.
33. Formal Opinion 08-451 “analyzed Model Rule 5.3 and a lawyer’s obligation when outsourcing legal and nonlegal services.” ABA Standing Comm. on Ethics & Pro. Resp., Formal Op. 08-451 (Aug. 2008).
34. Loughnane, supra note 26.
35. ABA Standing Comm. on Ethics & Pro. Resp., Formal Op. 483, Lawyers’ Obligations After an Electronic Data Breach or Cyberattack (Oct. 17, 2018) [hereinafter FO-483].
36. Id.
37. Id.
38. Loughnane, supra note 26.
39. Mark Cohen, COVID-19 Is Transforming the Legal Industry: Micro and Macro Evidence, Forbes (Sept. 15, 2020), https://www.forbes.com/sites/markcohen1/2020/09/15/covid-19-is-transforming-the-legal-industry-macro-and-micro-evidence/#539407e83269.
40. Deloitte, Deloitte Insights: Uncovering the Connection Between Digital Maturity and Financial Performance (2020), https://www2.deloitte.com/content/dam/insights/us/articles/6561_digital-transformation/DI_Digital-transformation.pdf.
41. Chris Bradley et al., McKinsey & Co., The Great Acceleration (June 14, 2020), https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-great-acceleration.
42. McKinsey & Co., supra note 4.
43. Notably, while BCG qualified that AI-based “offerings probably won’t become commercially relevant in the next five years,” that report qualification was written almost exactly five years ago. See Boston Consulting Group and Bucerius Law School, How Legal Technology Will Change the Business of Law, BCG (Jan. 2016), http://media-publications.bcg.com/How-legal-tech-will-change-business-of-low.pdf.
44. Brittany W., Goldman Sachs—A Technology Company?, Harv. Bus. Sch. (Apr. 26, 2018), https://digital.hbs.edu/platform-digit/submission/goldman-sachs-a-technology-company.
45. McKinsey & Co., FinTechnicolor: The New Picture in Finance, https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/bracing%20for%20seven%20critical%20changes%20as%20fintech%20matures/fintechnicolor-the-new-picture-in-finance.ashx.
46. Lev E. Breydo, LegalTech VC Investment Trends: Finally, an Industry Inflection Point?, Bus. L. Today (Sept. 5, 2019), https://businesslawtoday.org/2019/09/legaltech-vc-investment-trends-finally-industry-inflection-point.
47. Nick Dolm, 713% Growth: Legal Tech Set an Investment Record in 2018, Forbes (Jan. 15, 2019). https://www.forbes.com/sites/valentinpivovarov/2019/01/15/legaltechinvestment2018/?sh=7c5f29d57c2b.
48. Cat Rutter Pooley, Lawyers’ Next Challenge: Too Much Technology, Fin. Times (Oct. 22, 2019), https://www.ft.com/content/d9d475c2-d544-11e9-8d46-8def889b4137.
49. Ashley Stewart, Lawyers and Tech Are “Oxymoronical”—But That Is Changing, Puget Sound Bus. J. (Aug. 30, 2019), https://www.bizjournals.com/seattle/news/2019/08/30/lawyers-and-tech-are-oxymoronical-but-that-is.html.
50. Lev E. Breydo, A Floating Law Firm?, Regul. Rev. (Oct. 7, 2014), https://www.theregreview.org/2014/10/07/breydo-floating-firm.
51. John Kang, Clifford Chance Launches Legal Tech Innovation Lab in Singapore, Law.com (Dec. 17, 2018), https://www.law.com/2018/12/17/clifford-chance-launches-legal-tech-innovation-lab-in-singapore.
52. Rhys Dipshan, Reed Smith’s Tech Subsidiary Gravitystack Hits Maturity Milestone, Law.com (Jan 23, 2019), https://www.law.com/legaltechnews/2019/01/23/reed-smiths-tech-subsidiary-gravitystack-hits-maturity-milestone.
53. Breydo, supra note 46.
54. Orrick, Orrick Announces New Corporate Venture Fund to Advance Legal Tech Innovation, https://www.orrick.com/en/News/2018/11/Orrick-Announces-New-Corporate-Venture-Fund-to-Advance-Legal-Tech-Innovation (Nov. 15, 2018).
55. Dentons, Nextlaw Ventures Portfolio, NextLaw VC, https://www.nextlawventures.vc.
56. Disclosure: Cooley is an investor in CoParse, where the author is co-founder, president, and COO.
57. Artificial Lawyer, Priori Legal Marketplace Bags $6.3M, Orrick Joins Funding, Artificial Law. (Oct. 28, 2020), https://www.artificiallawyer.com/2020/10/28/priori-legal-marketplace-bags-6-3m-orrick-joins-funding; see also Brian Baxter, Snowflake’s IPO Was a Startup Stock Success for One Big Law Firm, BloombergLaw (Sept. 30, 2020), https://news.bloomberglaw.com/business-and-practice/snowflakes-ipo-was-a-startup-stock-success-for-one-big-law-firm.
58. Telis Demos, Matt Jarzemsky & Katy Burne, Markit Raises $1.3 Billion in Expanded IPO, Wall St. J. (June 18, 2018), https://www.wsj.com/articles/markits-ipo-increased-in-size-priced-within-forecast-at-24-a-share-source-says-1403130660.
59. Artificial Lawyer, Reynen Court Bags $4.5M More, CC + Latham Invest Again, Artificial Law. (Oct. 28, 2020), https://www.artificiallawyer.com/2020/10/28/reynen-courts-bags-4-5m-more-cc-latham-invest-again.
60. McKinsey & Co., supra note 4.