Risk Update

Future Risk: A Look at Emerging Issues (Part 2: Data Ownership, Data Governance ‘Weaponization’)

Okay, we’ll get back to conflicts and disqualification news tomorrow, I promise. But here’s another 15 minutes into the future topic also worth noting. And it comes with a direct mapping to the legal sphere. Let’s talk about data. Data ownership, data privacy, data risk and the emerging landscape ahead.

Let’s start with the very interesting question about ownership of and access to client data. Sounds like a simple topic. But there are new twists noted by MyShingle: “Whose Legal Data Is It Anyway?” —

  • “Lawyer and legal business consultant Mark Cohen observes that the legal profession is essentially a data wasteland in the digital era , ranking behind all other private industries in utilizing big data and its uptown cousin, artificial intelligence to make decisions and serve clients. Still, both nature – and today’s clients – abhor a vacuum and more enterprising companies from outside legal are targeting the legal void.”
  • “Looking across its anonymized data set of contracts, Atrium can recommend the best clauses and most common set ups, like four-year vesting with one-year cliffs. You can see the status of the contracts every step of the way, from drafting and finalizing to getting employees to accept. [Kan says] that Atrium’s goal is to continue building on its archive of more than 100,000 legal documents to develop aggregated pools of data clients could opt into. If they’re willing to share their salary data, vendor contract pricing and more, they’ll get access to that of Atrium’s other clients.”
  • “Here’s the thing. We lawyers come into contact with lots of proprietary and personal data in the course of representing clients. In its role representing startups, Atrium is privy to an array of data from vendor costs, executive compensation, companies’ source and supply for different products and all kinds of other information.”
  • “To be clear, I’m not suggesting that Atrium is acting improperly or unethically by collecting and sharing client business data which is anonymized and shared only with their consent. What concerns me is that as attorneys and trusted advisors, we have the kind of special relationship with our clients that invites them to let down their guard and share proprietary and personal information because they know it will never be revealed. Sharing proprietary information gathered during the course of legal representation for purposes other than advising on the law and in a manner that can place clients at a disadvantage, or leveraging that information to market a law firm (“Unlike other firms, we have access to thousands of pieces of proprietary data on startups) makes me uncomfortable.”

As FTC cracks down, data ethics is now a strategic business weapon” —

  • “According to Deloitte, 80% of consumers are more loyal to companies they believe protect their data. Yet far fewer leaders at established, incumbent companies — the respondents of the same survey — believed this to be true. Customers care more about their data than the leaders at incumbent companies think.”
  • “Senior executives at major companies have been publicly interrogated for not taking data governance seriously. Some, like Facebook and Apple, are even claiming to lead with privacy. Ultimately, data privacy risks significantly rise in Third Wave industries where errors can alter access to key basic needs, such as healthcare, housing, and transportation.”

Clearly, this story is about the general business domain. But one might wonder in the world of tactical disqualification motions and aggressive lateral poaching if we’ll see firms more aggressively leveraging data governance and compliance capabilities as competitive weapons, as some of their corporate clients already are…

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