is innovation really at odds with compliance obligations?
Linklaters has a long history of early adoption of technology to allow our clients and lawyers access to the tools and products required to excel. In 1996, we launched Blue Flag, an internet-based legal services division. We are currently the firm behind CreateiQ, the contract management platform of choice for over 100 companies across financial institutions, consumer goods, real estate, energy corporations and more. Over the years we’ve found that when our technology, legal and risk and innovation teams provide our people and clients with tools that are effective, legal, and compliant, we produce the best outcomes.
In 2023, Generative AI went mainstream, driving debate in the legal industry — and among clients — about the risks and rewards of leveraging such potentially transformative technology. For those of us who operate at the intersection of technology, innovation and regulatory compliance, this conversation isn’t new; our teams by necessity collaborate to identify, analyse, explore, and where appropriate integrate, new technologies into our ways of working. While the questions may be slightly different — now including the proliferation of misinformation and inaccurate or biased output — the need to protect our clients’ confidential information and data privacy issues remain consistent, as do the benefits of having a truly multidisciplinary team set up to help the firm and its clients ride this new wave and manage our risk.
The regulatory considerations
The number one regulatory item on any legal team’s list needs to be confidentiality — of your clients’ data, the firm’s data, your data subjects’ data. Technology, legal and risk and information security must be confident that the data we input into a product is secure, encrypted, and inaccessible to others who don’t need to access it. Everyone needs to be on board with how that product will be supported by the vendor and the robustness of the contractual commitments the vendor has made, including the eventual business owner. Equally important are the data protection considerations and assessments — and keep in mind that, depending on where you operate, it’s no longer just the EU’s GDPR you need to consider.
For those of us who operate at the intersection of technology, innovation and regulatory compliance, this conversation isn’t new
It’s not only a question of legal, however. Does the tool work? Is it fit for purpose? Do people like using it? Do clients want you to? Should we be using it? Those are questions that legal and risk, technology and innovation may all interpret slightly differently based on their areas of focus — each perspective is relevant and must be considered.
Generative AI adds another layer to the complex picture. Your view must now expand to include not just existing data protection, intellectual property, and competition regulations, but the new targeted AI regulation, non-binding frameworks and other guidance emerging from different authorities with varying risk appetites and enforcement abilities. Your end goal (or mine certainly) is evidencing (concisely) that you’ve done all the thinking and analysis to reassure your people, clients, insurers and regulators that you are using tools that work, are secure and that produce accurate, explainable results — while adopting them in a considered, ethical fashion.
The future
The reality is that GenAI is here to stay. Despite the sudden hype, this development has been a slow burn, and the quality of output is ever improving. That said, GenAI will not replace the legal community or lessen the critical importance of the legal and risk, technology and innovation functions in a law firm. These are built on person-to-person relationships developed through strategic collaboration and leveraging of one another’s skills and knowledge. Finding the balance between being the innovator and engaging responsibly in a world where the regulatory landscape is evolving quickly is a tricky one. Building a relationship of trust between the teams driving the change is critical to your success.
Read more about how law firm leaders are navigating the terrain of potential process transformation by leveraging generative AI in our latest Briefing spotlight:
