Tech innovation and disruption | How in-house lawyers can smooth the pathway to digitalisation

Investment in technology and innovation is not an optional extra for any business"
- John Buyers, Head of AI and Machine Learning, Osborne Clarke

Transformative digitalisation projects are a feature of every commercial sector and are opening up new opportunities for many businesses. But they also throw up new challenges, both in terms of understanding the law and optimising the way we work. Where do in-house lawyers sit in all of this disruption?

On 27 June 2018, Osborne Clarke hosted a morning of discussion and thoughts around innovative technology, for an invited audience of in-house counsel.  We were delighted to welcome our guest speakers:

• Sarah Brufal, Head of Legal EMEA at Siemens Industry Software Limited
• Marcus Lambert, CTO of Omobono
• Justin North, founder of Janders Dean and
• Natalie Semmes, Head of Intelligent Automation at KPMG,

who shared their experiences of introducing transformative technology into business processes. The event was chaired with energy and insight by Claire Temple, Associate Director.

Understand what you are dealing with

Our Digital Revolution Knowledge Lawyer, Catherine Hammon, kicked off with a working glossary of the different types of tech which are changing our world. She explained what these technologies can do and highlighted some of their current and expected commercial applications.

Partner John Buyers, gave his insights into the significant legal ramifications of the self-improving way in which machine learning software writes and refines itself. Provisions of the GDPR can be very difficult to apply, while intellectual property rights don't map well onto these systems (although the new Trade Secrets Directive may offer an answer). Bias is a significant concern and can derive from the training data used to set up a machine learning system.  John also raised the possibility that a new tax could be imposed to generate funding to support workers displaced by AI-driven automation. Finally, the difficulties around liability for self-directing software were considered: the problem of foreseeability and the "black box" characteristics of AI.

Adopt new ways of working to meet new challenges

The seminar focused on the role of in-house lawyers in digitalisation projects both for business processes and for the legal department itself – Mathias Loertscher, Tech, Media and Comms and Corporate Partner, joined for the former part of the discussion, and Dan Wright, Director of OC Solutions, led the latter part.  Themes from both parts of the discussion included the following:

• The velocity of change is unprecedented. This means that it may be better to react to change rather than to try to stick to a plan.  Fast, reactive innovation inevitably means mistakes will be made and this has to be accepted. Often, new solutions or approaches will have to be created very quickly to deal with a new type of problem.  Do not strive for perfect answers.
• The need to collaborate in order to maximise creativity is paramount: "the crowd creates faster". People need to be empowered and encouraged to think as creatively as possible in addressing challenges and finding solutions. Diversity within teams is essential to achieve this.  Genuinely open communication is facilitated by acceptance of the possibility of mistakes and failure. Working collaboratively (whether with the business teams or with a client) results in better thought-through and more effective results.
• Automation necessitates the front-loading of processes. Systems have to be designed from the outset with compliance, privacy, ethical constraints etc built into them.  To avoid late-identified issues upending a digitalisation project, make sure the legal team is included from the outset. Ideally (and particularly for machine learning software with decision-making autonomy), we should also design in explainability, responsibility and on-going accuracy.
• Don't introduce tech for tech's sake. Fully understand and map out the process in question to pinpoint where problems arise. Simple solutions and incremental gains are important. Introduce tech solutions where they enhance the quality of the output or the quality of the process (greater reliability, for example). Do not remove the human element where it adds value, such as quality of service.
• Protection of assets and data is essential. This is important both in terms of protecting and preserving rights to your intellectual property in the tools being created, and also in relation to cybersecurity. Data and tools in the cloud necessitate excellent digital security and discipline.

Positioning the in-house legal team front and centre of tech innovation and disruption can not only mitigate the unique legal challenges presented, it can help to deliver real value to the business.

We are hugely grateful to our guest speakers and to all those who were able to attend.