Be a smarter legal leader

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Background

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Memes, Law, and AI? Yes, Alex Su, Head of Community Development at IronClad, is that versatile. We were fortunate to sit down with him to discuss his content, his thoughts on the industry, and where AI will take the practice of law.

Alex: “If you're on Instagram you probably know me for my memes and Tik Toks. What you might not know is that I began my career as a pretty typical Biglaw associate. I ended up making a pivot to legal tech startups six years out of law school, to sell software to lawyers.

Somewhere along the way I discovered the power of social media marketing, and now I've got a unicorn job at Ironclad, a legal Al company that's focused on contracts.”

Matt: “Wild ride, man. How did you end up going from BigLaw to Legal Tech?”

Alex: “It definitely didn't happen overnight. After leaving Biglaw, I went to a plaintiffs' firm where I saw them use legal tech to level the playing field against huge litigation teams on the other side. After some introspection and setbacks (including starting a solo practice that ended up failing) I decided to jump into the tech space. I was living in the San Francisco Bay Area at the time and saw how tech was revolutionizing other industries and figured it wouldn't be long before it happened to the legal industry.

Matt: “That's awesome. You were one of the first people (actually maybe the first person) who I knew who made a move like that. Did people trip up when you did it, Friends/family in particular?”

Alex: “They definitely did. Especially since there's this perception that if you go into legal sales (like tech, recruiting, and others) you're a failed lawyer. You also lose the feeling that you're Headed In The Right Direction. So explaining yourself to your friends and family can be hard. But I had the support of my family and loved ones, and was in a good financial place after paying off loans and saving up money. I figured I'd be making a bet on the next few decades of my career.”

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Pivoting from Big Law to Social Media

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Matt: “ So you’re all over the internet. Memes, Tiktoks, Reels, Tweets etc. How’d you get into it and how did you go from memes/videos to writing on Substack?”

Alex:  “It all started on Linkedin of all places. I was a sales guy who struggled to get in touch with the lawyers I was trying to sell to. So I decided to try my hand at ‘social selling’ by writing about my career journey on Linkedln. I built a small following over the years, and saw firsthand how it could help drive business development.

When the pandemic hit I was in the right place at the right time. In March 2020, I was actually scared I was gonna get fired because all of my buyers stopped responding to me. All my work dried up. So I decided to experiment with all kinds of new things, including putting out controversial hot takes, hosting Zoom meetups, and making video skits poking fun at the legal industry. Those videos took off, I got on TikTok, and ended up riding the wave.

About two years ago, l started writing long form commentary on Substack about what I've seen and heard in legal tech. Given my social media platform and unique position in the legal ecosystem, I meet lots of people and hear about all these changes that are taking place in real time. My goal is to share those insights with my subscribers. That’s why I write the newsletter.”

Matt: “Yeah that's how I found your stuff - TikToks via Linkedin. Funny the comments you used to get vs. now get.”

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Will AI Replace Lawyers?

Matt:  Do you think AI will replace lawyers and if it replaces you, what are you going to do with your life?

Alex: “Definitely not. This latest wave of generative Al is really good at summarizing information, which at first glance might seem like it would replace lawyers. But lawyers do so much more. Complex stuff like counseling, advising, managing risk in dynamic environments. In fact Al might create even more demand for legal work given how people seem to be using it carelessly these days.

However, I do think if your practice involves *only* summarizing and providing information, or copying and pasting text into legal docs, you might be in trouble. I'm optimistic about the impact of Al though, I believe we'll see lawyers do more high value work in the long run.

As for me, I'll just thank my lucky stars that I pivoted out of law. Until Al can make memes reliably I think l'll be ok, haha.”

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Adoption of AI

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Matt: “What do you think lawyer adoption of Al looks like? Are firms & legal departments going to jump in and start using these tools right away?”

Alex: “I believe we'll see pockets of early adopters for Al. Generally I believe small firms and corporate legal departments will be the first ones to lean into it. My belief comes from my experience selling e-discovery tech. Biglaw has a harder time adopting because there are so many partners who have to approve the tech. Like a lone partner who objects to Al can kill off an entire initiative! There’s also this underlying incentive challenge, where efficiency might reduce billable hours.

Also I believe there are certain use cases that are ripe for Al. Contracts for sure, given what l've seen with our customer base at Ironclad. Any time you have a large amount of structured text, you're going to see opportunities to process that information more quickly with Al. Other use cases include startups that are focusing on use cases like generating discovery responses and summarizing documents into chronologies or timelines.”

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The Effect of AI on Legal Professionals

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Matt: “Now what about legal professionals? Paralegals and legal assistants in particular. Do you anticipate Al having a big effect on their roles?”

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Alex: “We definitely will see impact across the board. But historically people said the same thing about paralegals when discovery technology became a thing 15-20 years ago. They said the technology would remove the need for paralegals. And yet history has shown it actually increased the demand. That's the story of technology in a nutshell. We can easily see what tasks it replaces but it's so hard for us to imagine what new work it creates.”

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ChatGPT

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Matt: Now what about the big elephant in the room - ChatGPT. We have that recent story of an attorney using ChatGPT and receiving fake court cases/fake holdings. What's your take on that situation and how do you think courts will react to Al use going forward?

Alex: “Everyone's worried about ChatGPT. It can make up cases and laws that don't exist, which can be dangerous for clients who try to use it on their own. But another challenge, we've seen recently, is that it can enable careless attorneys to use it as a legal research tool, without actually reviewing the underlying cases.

ChatGPT is a free chatbot. It's not the same as an Al-powered legal tech tool that's trained on legal data and documents. It's good for some things and less good for others. Over time it will improve, and people will learn to use it safely. And in doing so, the courts will relax and start to accept it. There’s historical precedent for this: Many years ago the courts were worried about online legal research tools because before then, everyone used physical books. But these days it's not even an issue.

In the meantime though, I highly recommend manually verifying the output of any kind of AI you use. If checking over its work makes you lose efficiency gains, then maybe Al isn't the right tool for that task. At least not yet.”

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Final Thoughts

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Alex: “The world is changing and while the legal industry has historically been insulated from these changes, it won't be for long. The combination of Al, social media, and changing market dynamics means that the career formulas that worked in the past won't necessarily work in the future. But lots of things will get better. And as the world changes, and traditionalist lawyers push against them, you can always rely on me and Matt to make fun of them.”

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Alex Su is a former lawyer who now works at the intersection of law, technology, and new media. Currently, he’s the Head of Community Development at Ironclad, a technology company that helps accelerate the contracting process for corporate legal departments. Earlier in his career, he was an associate at Sullivan & Cromwell and clerked for a federal judge. Alex graduated from Northwestern Law in 2010, where he was an editor of the law review and the student commencement speaker. Alex also publishes a weekly newsletter called Off The Record that includes his commentary on the changes coming to the legal industry.

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Unveiling the Journey: Join us for an insightful conversation with Julian and CeCe, legal professionals turned social media influencers, as they open up about their personal struggles and triumphs in dealing with mental health challenges in the legal field.

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In this event we cover:

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• Setting boundaries for work-life balance
• Dealing with burnout
• Establishing clear time management guidelines
• Shifting your mindset

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Set boundaries and unplug

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In a profession known for its demanding schedules and high-stakes cases, it can be easy to fall into a constant state of being on-call. However, it is crucial to recognize the importance of personal time and establishing clear boundaries between work and personal life.

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• 03:01 By setting boundaries, such as defining specific working hours or designating dedicated time for self-care and relaxation, legal professionals can mitigate the risk of burnout, reduce stress levels, and enhance overall job satisfaction.
• Unplugging from work allows individuals to recharge, nurture their relationships, pursue hobbies, and engage in activities that promote a healthy work-life balance.

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Time is not the metric

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In the legal industry, the prevalent focus on speed and efficiency, epitomized by the billable hour system, has overshadowed the importance of quality. Lawyers are often evaluated based on the number of hours they bill, rather than the excellence of their work. Consequently, this mindset can foster a race to prioritize speed and efficiency, neglecting the essential aspects of innovation and creativity that drive true success.

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• 09:17 Success should be measured by the quality of work, not speed. Taking time to prioritize mental and physical health is crucial. By doing so, we can produce our best work and nurture our well-being.
• Employers should support employees by creating a boundary-friendly environment, offering resources and support for mental and physical well-being. This boosts productivity, efficiency, creativity, and innovation.

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Set time management guidelines

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Setting time management guidelines is vital for preserving a healthy work-life balance. This involves establishing clear boundaries between work and personal time, ensuring that we do not overburden ourselves with excessive work. It also means recognizing the importance of prioritizing our own well-being and self-care.

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• 14:36 By implementing effective time management guidelines, we can optimize our productivity while also safeguarding our mental and physical health. Striking this balance enables us to deliver our best work and maintain our overall well-being.

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Shift individual partner mindset

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The prevailing issue of long working hours and an imbalanced work-life dynamic in the legal industry is a growing concern impacting both employees and firms alike.

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• 30:03 The hierarchical nature of the field places immense pressure on junior associates to meet the demanding expectations set by partners, often resulting in burnout, stress, and a lack of fulfillment. To foster a healthier and more productive working environment, it is crucial to initiate a mindset shift among individual partners.

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Introduce a prorated bonus system

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Shifting from the "all or nothing" bonus model, implementing a proportional bonus system linked to hours worked can offer associates a sense of security while motivating them to excel. This change not only alleviates the pressure on associates to constantly meet partners' demands but also incentivizes their dedication and hard work.

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Create a culture of respect and understanding

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Creating a positive work environment entails actively listening to associates' concerns, valuing their opinions, setting clear boundaries and expectations for task completion, and providing adequate time to fulfill assignments. This approach reduces stress and cultivates a supportive atmosphere.

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Create a network of people who can help to navigate the system

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Forming a support system with mentors, colleagues, and professionals provides associates with advice, guidance, and a sense of community. This network reduces feelings of isolation commonly experienced in the legal profession.

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Join industry titans WeWork, Twitch, and Google as they share insights and experiences, unraveling the mysteries of global product scaling.

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In this event we cover:

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• The Role of a Product counsel
• Expanding Products Internationally
• Utilizing GenAI

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What is a Product Counsel?

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• 3:11 As a Product Counsel, you will play a crucial role at the intersection of law and innovation. Your expertise will be essential in guiding and supporting the development, launch, and ongoing management of cutting-edge products and services.
• You will collaborate closely with cross-functional teams, including product managers, engineers, designers, and executives, to ensure legal compliance, minimize risk, and drive business success.

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Their main responsibilities typically include:

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1. Ensure product compliance with laws and regulations.
2. Assess and mitigate risks associated with products.
3. Protect the company's intellectual property.
4. Provide legal advice and collaborate with cross-functional teams.

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Expanding Products Internationally

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• 17:27 As a lawyer, venturing into the realm of expanding products internationally brings a multitude of legal considerations. From compliance with foreign laws and regulations to intellectual property protection, you will ensure seamless legal transitions, mitigate risks, and safeguard the interests of our organization.
• With a keen eye on international trade, contracts, and cross-border negotiations, You will strive to provide strategic counsel that paves the way for successful global product expansion while maintaining legal compliance at every step.

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Utilizing Artificial Intelligence

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• 31:42 As a lawyer working with ML for content moderation, dedicate significant time to exploring how GenAI, like OpenAI's GPT-3.5, is poised to revolutionize the content landscape. The integration of ML models allows for more efficient and accurate identification of potential legal violations in content, ensuring compliance with relevant laws and regulations.
• By leveraging GenAI's capabilities, lawyers can streamline the content review process, reduce manual work, and focus on addressing complex legal issues associated with content moderation, ultimately enhancing the efficiency and effectiveness of their legal practice.

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Like this event? Check out our other event replays here.

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We had a chat with Douglas Boneparth (President, Bonafide Wealth) and Tiffany Lee (former Gc, Thrive Market) about two words that can be scary to many....personal finance. With their help, we managed to demystify equity, stock options and financial planning. Get your pen and paper ready to take notes!

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In this event we cover:

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• Managing Your Money
• Understanding Risk Vs. Reward
• Choosing Investments

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Managing Your Money

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To manage your money effectively, focus on both cash flow (money coming in and going out) and net worth (assets minus liabilities).

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• Prioritize paying off high-interest debt before investing or saving.
• Consider automating savings contributions to make it easier to save consistently.

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Understanding Risk vs Reward

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• 6:11 Investing involves balancing risk and reward. Generally speaking, higher-risk investments offer higher potential rewards but also come with higher potential losses.
• Diversification is key to managing risk in your investment portfolio. Spread your investments across different asset classes and industries.

Choosing Investments

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• When choosing investments, consider factors such as fees, historical performance, and the overall market environment. Index funds are a popular choice for many investors because they offer broad exposure to the market at a low cost.

Importance of Tracking Expenses

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Why Track Expenses

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• Tracking expenses is important to understand spending behavior.
• Getting 12 months of data is necessary to account for seasonality and smooth out spending habits.
• Use tools like Tiller Money, Mint, or Rocket Money to plug in accounts and get real data.

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Compensation Structure

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• 18:16 Partners in law firms receive a base salary for three years before their total compensation is increased to seven or eight figures. Partners are responsible for making estimated tax payments directly to the government instead of having withholding come out of their paycheck. This can lead to cash flow issues and confusion about promised compensation.

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Challenges of Partnership

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• The transition to partnership can be challenging due to the sudden increase in responsibility and financial obligations. It may take several years before things normalize, leading to frustration among new partners. Many professionals, including lawyers, lack financial education and rely on working hard and throwing money at problems rather than managing finances effectively.

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You leave a firm, an in-house position, the government, or another employer to finally hang your shingle and go solo. What do you need to know to ensure success? Well, we asked the lawyers of Twitter their thoughts and advice on the topic. Here are the top 10 responses:

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1. Income goes up and down but pay yourself the lower amount until 3 month saved in reserves. Then increase your salary a little until 6 month reserves.
2. Keep your overhead low. Identify low cost resources that fit the way you want to work (billing software, admin support (if needed), calendar, scheduling meetings, email).
3. Be a person. Clients hire people.
4. Learn accounting. You are responsible for the money/the IOLTA.
5. Get clear on your positioning. Be able to articulate: I provide X service for Y market.
6. Develop and nurture relationships with lawyers at big firms (for referrals).
7. Not all clients are worth having.
8. When you are short in cash there is a tendency to ignore client red flags. If you wouldn’t take the case if you were flush… don’t take it!
9. Rome wasn't built in a day... give yourself grace. Work from home as much as possible until you're comfortable enough to afford a store front/office rent. Make life very easy for your clients; emailing, calling, zooming to eliminate office visit.
10. If you’re not drawing a W2 salary from your firm, put 1/3 of every receivable into a separate savings account from your operating account. It makes paying quarterlies a breeze.

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And Lawtrades?

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Looking for clients? Want to build your book of business? We can help. Lawtrades makes it easy for you to operate as a freelance legal professional - helping you find opportunities, get paid, grow your reputation and everything else you need to be a successful legal freelancer.

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Our experts will match you to jobs based in your skill sets and interests and our tech-enabled platform lets you have all your billing and operations managed from one place...easy! Create your profile today and get matched with great opportunities.

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Today, we're going to talk about something that's been getting a lot of attention lately - privacy. With companies collecting and using more data than ever before, the risks associated with privacy breaches are becoming greater. 

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But what should you do as a GC or Head of Legal if you don't have a privacy attorney to guide you? Well, having a baseline level of knowledge about privacy and data protection is essential - even if you don't have a privacy lawyer on staff. To be effective in your role, you need to understand your business and what it does with data. Even if you think your company doesn't have anything to worry about, it's important to make sure you know exactly what you're dealing with. 

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Some questions for you to start thinking about:

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- What does your company want to do with data?

- How do they collect it?

- How do they monetize it? 

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Think about an analytical framework for privacy. Privacy laws are largely mechanistic, meaning they allow you to use data provided you meet certain criteria. If you approach privacy law with this framework, you'll be much more successful in drafting a privacy strategy that meets your business needs. For smaller legal teams, having a baseline level of knowledge about privacy is even more important. If anything, it's even more critical that they understand the risks associated with privacy breaches and how to prevent them.

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One of the biggest challenges that we're facing today is data mapping and governance. With regulators across the globe pushing for more transparency and visibility into how data is used, it's only going to get harder from here. It's tough to put together a dynamic data map that isn't obsolete the moment you publish it. But despite the challenges, it's something that needs to be prioritized if you want to ensure compliance with privacy regulations like the CCPA and GDPR.

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Of course, we understand that not every company has a huge legal team or unlimited resources to throw at this issue. So, what should you prioritize if you're starting a new privacy program? Our advice: data mapping and governance. It may not be the easiest task, but it's one of the most important when it comes to protecting user data. 

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And as for cost-effective ways to do data mapping, we don't have a one-size-fits-all answer. It can take a lot of time, and there are some great tools out there that can help. But ultimately, it's going to depend on your specific company and needs. Talking always helps : sit down with your business units and take lots of notes - it’ll help you understand more about what is being collected and how it is being used.

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And Lawtrades?

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Looking to implement a privacy framework in your business? Need an expert to come in and help? We’ve got you covered. 

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Legal departments of all shapes and sizes use our tech-enabled platform to hire world-class flexible legal talent. We have a top quality bench of privacy attorneys who can ensure that you are staying up to date with the ever-changing state, national and global privacy policies. Check out why you should use us.

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Whatever industry you work in, you can't escape AI. Our co-founder Ashish Walia is obsessed with it and uses different tools every single day. That's why he was so excited to sit down with Ashley Pantuliano (AGC, OpenAI) to discuss how AI will transform the legal industry.

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In this event we cover:

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• What it’s like working at a company with over 20 million monthly users
• How the OpenAI legal team use AI
• Concerns around privacy and liability
• What’s next in AI?

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What is OpenAI?

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• 03:29 OpenAI was founded as an AI research organization in 2015 with a mission to create artificial general intelligence that benefits all of humanity.
• 04:10 It's still governed by a non-profit organization today with a capped profit structure which helps them stay true to their mission.

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How Does Chat GPT Work?

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• 04:49 ChatGPT uses AI to generate human-like text that prioritizes safe and beneficial AI development over returns. It is built on OpenAI's large language model called GPT (Generative Pre-trained Transformer). It’s basically fancy autocomplete that suggests words based on what it has learned from large amounts of text data from the public internet
• 07:40 It predicts the next most likely word in a sentence by adjusting its weighted numbers slightly. After processing texts over time, it will learn which words are more likely to come after certain phrases or sentences.

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Impact on Legal Industry

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• 08:17  AI models like GPT will not eliminate lawyers or paralegals but rather make them more efficient.
• 08:54 AI models will be useful for natural language tasks like document summarization, customer support, content generation,  reviewing contracts and flagging terms that are against internal policy. It can also help with e-discovery by taking out human error from the equation.

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Privacy and Security Concerns

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• 15:31 Users can ppt-out of training on user data if you're a lawyer using it for your legal work for clients. For legal tools built on APIs, there's a 30-day retention period for data. Ensure that whatever data you're putting in there is compliant with existing privacy laws.
• 17:14 Copyright is another consideration as some jurisdictions don't recognize AI as the author in terms of copyright.
• 17:34 Liability is also a concern, especially regarding malpractice liability. Who's responsible? Does your professional liability insurance cover that?

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The Future of OpenAI

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• 20:59 OpenAI's mission is to achieve artificial general intelligence. The models are improving in quality with each iteration, reducing inaccuracies and improving their ability to answer questions and provide information. There is a lot of work that needs to be done in terms of safety mechanisms, but achieving artificial general intelligence would be very exciting.

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Like this event? Check out our other event replays here.

In our recent commercial contracting event, we asked our expert panel of speakers from Vroom, Elastic, Twist Bioscience & Ironclad what they’re currently experiencing during negotiations.

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Changes in Force Majeur provisions

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The pandemic has changed the way that we contract. We’re seeing the need for more nuanced provisions, and an uptick in negotiations around continuity. It’s almost become an SLA, and providers need redundancies in place for situations like pandemics or natural disasters. If you can’t provide something for a certain amount of time, do you give a discount? What is the back-up plan? These are things that companies are aware of, and asking questions about. Thanks to the economy, businesses are more cost-conscious so we’re also discussing points around termination for convenience and early termination policies much more that we previously did.

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Rise in indemnity caps

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With GDPR and CPRA regulations, companies are experiencing an increased awareness of potential costs associated with data breaches and global privacy laws. What was once a nebulous idea now has actual numbers attached to it and the goal is to limit any risks. One thing to note though, is that privacy negotiations tend to be regionally based and depend hugely on who is involved, along with the type of information being exchanged between both parties.

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Privacy related indemnities, supercaps related to security, confidentiality and procedure in the event of a breach are now highly negotiated terms. In order to mitigate risk while still managing the goals of the business, in-house legal teams are getting much more creative and flexible with regard to privacy related negotiations whereas, 5 years ago, it wasn’t necessary. It’s a different world now when it comes to exclusions and carve outs.

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And Lawtrades?

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Looking to implement processes to ease your legal team's workload and improve the workflow with sales? We’ve got you covered. Not only can our flexible, highly qualified legal talent help improve efficiencies, but the hiring and onboarding process is easy too! 

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Legal departments of all sizes use our tech-enabled platform to hire world-class flexible legal talent. We can help you to stay up to date with commercial contracting market trends, and review your entire network of agreements with our commercial contracting specialists. We also have a top quality bench of privacy attorneys who can ensure that you are staying within the flux of ever-changing global, national and state privacy policies, and make sure are mitigating risk wherever possible. Check out why you should use us.

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Want to see more of our content? We've put together the top 5 things a first-time GC needs to know about privacy and for all you commercial contracting fans, check out our 5 ways in which commercial lawyers can do more with less. You're welcome!

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We welcomed Alex Su (Head of Community Development at Ironclad), Aprajita Tyagi (Commercial Counsel at Elastic), Taylor Dimler (Sr Commercial Counsel at Twist Bioscience) and Ariel Risinger (Commercial Counsel at Vroom) to discuss all things commercial contracting in 2023.

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In this event we cover:

• Tech adoption in contract management
• AI in the legal world
• Market trends in 2023
• What to expect in 2024

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Let’s dig in!

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Tech Adoption in Contract Management

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Increasing Reliance on Technology

• 04:00 Ironclad is seeing strong adoption of technology relating to contracts as that there's a lot of work to be done with very few resources. He mentions that many companies are still using paper for contracting but digital contracting is becoming increasingly popular.
• 05:20 There are many options available, making it difficult to find the right solution.
• 05:57 The contracting process can be complex due to factors such as organization size, process, and risk profile

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Importance of Buy-In

• 06:49 If team members aren't used to utilizing tech tools, implementation may fail.
• 07:48 Smart solutions like Ironclad can save time and improve communication between departments.
• 08:50 There is an increasing dependence on tech tools in day-to-day tasks such as using Monday for overall management or Slack for internal communication.

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New Tools in the Legal Tech Market

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The Limitations of AI in Legal Work

• 10:57 We explore skepticism about the impact of AI on legal work, stating that it cannot replace human critical thinking and troubleshooting. Even something as simple as an NDA required human intervention to resolve issues.

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The Role of Technology in Legal Work

• 13:43 CLMs make tasks easier by helping with organization and keeping track of deadlines.
• 14:16 They note that technology is great for organizing information and creating data about contracts but ultimately cannot replace human decision-making.

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Trends in Contracting

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Companies Moving Up Market

• 15:23 Companies are moving up market and selling more expensive products with complicated contracts meaning there is a lot of demand for commercial counsel across the board.

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Role of Technology in Contracting

• 16:10 Technology can help with routing to more approvers internally but cannot replace the negotiation or redlining process.
• 16:46 AI can create the bones of an agreement based on a database of agreements, but it does not take away from the need for lawyers to negotiate terms and evaluate risk.

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Using AI to Empower Legal Teams

• 18:00 Each AI unit should be viewed as another staff member on your legal team. There is a lot of implementation, training, review, feedback, and refinement involved when using AI for tasks like patent analysis or contract management.
• 18:56 Using AI can empower paralegals and contract managers to handle simpler tasks so that lawyers can focus on larger collaboration agreements.

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AI-Based Tools in the Legal Industry

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AI as a Helper, Not a Replacement

• 19:51 The panelists agree that AI-based tools are here to aid attorneys in their tasks rather than replace them.
• 20:16 There is more adoption of tools that help pull out data from historical documents or highlight key risks, but based on analysis and discussions, these tools will not be replacing attorneys anytime soon.
• 21:10 Chat GPT clarifies that lawyers apply the law to unique facts and situations, while the tool can help find the law that needs to be applied.

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Doing More with Less in Legal Operations

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Revenue Thresholds

• 26:10 Suggestion to follow ACV thresholds but there have been more exceptions lately to those thresholds.

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Conditional Workflows

• 27:36 Some people use conditional workflows as well so that they can automate certain processes and allow sales to understand what will and what won’t be approved.

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Sales Collaboration

• 28:56 Keeping things simple and letting sales self serve goes a long way.

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Providing Sales Team with Playbook

• 30:15 Provide playbooks to sales teams that include paragraphs they can share with customers to explain why they prefer their template.
• Empowering sales teams to use these playbooks will free up legal’s time and inbox.

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Market Trends in Negotiations

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Indemnities and Damages Caps

• 40:29 Participants mention that indemnities and damages caps related to customer information breaches are being heavily debated.

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Changes in Force Major Provisions

• 41:26 The pandemic has brought changes to Force Major provisions and businesses are required to make active steps to mitigate risks.
• Force Major provisions have become more nuanced.

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Continuity as an SLA

• 42:28 Continuity is becoming more like an SLA (Service Level Agreement). Providers need redundancies in place to continue providing services during pandemics or natural disasters.
• Customers should not have to pay full price if providers cannot provide all services.

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Focus on Privacy

• 45:12 Privacy has become a huge issue with CPRA and GDPR constantly being updated.
• 45:50 Privacy negotiations are regionally based and depend on who is involved. The type of materials being exchanged between parties also affects privacy negotiations.

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Reasons for Rise in Indemnity Caps

• 46:26 The rise in indemnity caps is due to a combination of factors such as GDPR regulations, increased awareness of potential costs associated with data breaches, and global privacy laws.
• 47:06 People realized that what was once a nebulous risk now had actual numbers attached to it, leading to an increase in demand for limiting risks associated with data breaches.

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Predictions for 2024

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Commercial Contracting Trends

• 48:25 AI will be important but may die down after initial hype.
• 48:44 There will be an increase in demand for commercial work due to more contracts being exchanged with technology being integrated into conversations.
• 49:36 More tech tools will be used to support tasks and there will be more utilization of AI to help with analysis or research.
• 50:09 Companies will empower staff members from different departments to negotiate contracts rather than just relying on attorneys.

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Like this event? Check out our other event replays here.

During our recent commercial contracting event, our expert panel shared some insightful predictions for 2024. In the coming years, we can expect significant changes in the commercial contracting landscape. Here are some additional thoughts on the top 3 predictions for 2024.

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Increase in demand for commercial work

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It looks like there's going to be an increase in demand for commercial work, and this trend is here to stay for the next few years. As businesses grow and expand, so does the need for human resources. However, finding qualified professionals to manage contracts effectively can be a challenge. Many law schools do not teach contract management negotiation skills, and there are not too many attorneys out there who can bridge the gap between legal and tech. Therefore, companies need to place greater emphasis on training their legal teams and investing in technology to streamline contract management processes.

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Higher adoption of legal tech

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Exciting news! There is a growing interest in legal tech that incorporates AI, and this trend is expected to continue into 2023 and beyond. In-house legal teams are already using AI for analysis and basic research, and we can expect to see more companies adopting legal tech to ease the flow of communication between business units and legal. With the adoption and expansion of legal tech, businesses can expect to achieve more efficient, accurate, and cost-effective contract management processes.

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More conversations with non-attorneys

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Did you know that in-house legal teams are increasingly talking with sales and procurement teams, as opposed to speaking with other legal teams? This shift in communication patterns is a result of companies empowering their procurement or sales teams to participate and lead negotiation calls. In-house legal teams will need to be prepared to have different conversations and talking points with non-attorneys, which will require building relationships and understanding the needs of these teams.

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And Lawtrades?

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We help legal departments of all sizes hire world-class flexible legal talent via our tech-enabled platform. Whether you're looking to implement new legal tech, overhaul your contract process or simply want support for overflow work, our pool of highly qualified legal professionals can help...and the onboarding process is easy too! 

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Want to see more of our content? We've put together a guide to buying legal tech and for all you commercial contracting fans, check out our 5 ways in which commercial lawyers can do more with less. You're welcome!

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Implement Conditional Workflows

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In our recent commercial contracting event, we asked Alex Su (Head of Community Development at Ironclad) how legal can stop being seen as the department of ‘no”. With 5 years of experience working in SAAS sales, he discovered that simplifying the legal process for salespeople was key to improving efficiency and implementing conditional workflows played a huge role in that. They allowed salespeople to receive a response based on the information they entered in the system, bypassing the need for shooting emails or slacking the legal team.

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Self-Serve is Key

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By providing salespeople with tools and language that they can share with customers, organizations can empower their sales teams to better understand the language of the legal department. Taylor Dimler (Sr Commercial Counsel at Twist Bioscience) and his team created a playbook that provided paragraphs to share directly with customers on why their template was preferred. Empowering sales teams in this way can also help with the adoption and commitment to using any legal tech going forward - as the sales teams understand the work behind contracting and don’t just feel blocked by legal. By highlighting how a CLM or the use of AI can improve efficiency and allow for quicker negotiations, Taylor saw a significant uptick in adoption by his sales team.

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Education, education, education! 

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Aprajita Tyagi (Commercial Counsel at Elastic) gets that  the sales teams are under an insane amount of pressure right now. That’s why she and her team created robust Wikis and FAQs to support the sales team in answering common questions from customers. This not only reduces the amount of emails in her inbox, but also gives the sales team the empowerment that they need to get deals done. She also initiated internal prep calls before negotiation to ensure that everyone is on the same page and working towards the same goal.

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And Lawtrades?

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Looking to implement processes to ease your legal team's workload and improve the workflow with sales? We’ve got you covered. Not only can our flexible, highly qualified legal talent help improve efficiencies, but the hiring and onboarding process is easy too! 

Legal departments of all sizes use our tech-enabled platform to hire world-class flexible legal talent. With an agile pool of admins that can optimize your contracting process from creation to execution, you can successfully reduce spend and limit risk on a cost effective basis…they can even create playbooks, Wikis and FAQ’s.

We also have a top quality bench of legal ops professionals who can provide the tactical knowledge to implement the legal tech you need, from project management and CLMs to e-discovery. Take a look at our flexible legal talent today.

What happens when AI successfully passes the bar exam? What does that mean for the legal field, and how does it redefine what a human lawyer does—if at all? These are no longer hypothetical questions, as GPT-4, the latest release of OpenAI's large language model AI, passed a simulated bar exam in the 90th percentile. Researchers had tested an earlier version of GPT (version 3.5) "in late 2022, finding it could not pass any portion of the [Uniform Bar Exam]," a statement from OpenAI reads. "Their forthcoming paper shows that GPT-4, however, passed the multiple-choice portion and both components of the written portion, exceeding not only all prior large language models’ scores, but also the average score of real-life bar exam test takers." So, here we are. Not 3 months later, a computer code is upending the legal profession. Or is it? According to AboveTheLaw, legal tech firm Casetext has released an AI-powered legal assistant called CoCounsel. But CoCounsel is "not about replacing the human that makes the decision, it’s about replacing the write-off hours sending a junior off to slap together drafts." But you still need a human lawyer somewhere in the system, Michael Bommarito, one of the researchers who tasked GPT-4 with the UBE, wrote in a LinkedIn post. He continued: "You can't just send confidential docs straight to ChatGPT. But the future ain't gonna' look like the past.If you have an existing diligence or compliance process today, accelerate it. If you don't have a process or tools yet, it's an incredible moment in time to start 'blank slate.' Either way, regardless of whether you're buy-side, sell-side, compliance, or counsel, it's clear that the world will be changing."

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The Verdict

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No one can say what the future of AI will be, or how it will change the legal profession. What we can say is that it will. Fundamentally. But whatever those changes bring, its safe to assume that the interpersonal skills of an attorney will always be in demand.

This is a tale of two suits. For crypto critics gouging on schadenfreude, it was the best of times. For crypto titans and the industry as a whole, it was the worst of times. This week, the Commodity Futures Trading Commission sued crypto exchange Binance for having an “ineffective compliance program” and "knowingly" breaking the law. According to The Verge, "the CTFC also charges Samuel Lim, Binance’s former chief of compliance, for allegedly 'aiding and abetting Binance’s violations through intentional conduct that undermined Binance’s compliance program.'" The CTFC alleges Binance executives “failed to properly supervise Binance’s activities” and “actively facilitated violations of U.S. law." Meanwhile, the Securities and Exchange Commission has issued a Wells notice to Coinbase (also a crypto exchange) alerting them that the SEC had discovered potential violations of securities laws following an investigation that began last summer. 

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• Binance CEO Changpeng "CZ" Zhao responded to the CTFC suit in a blog post, stating that “the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint.” 
• Coinbase also responded to the Wells notice in a regulatory filing, stating "based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet… The potential civil action may seek injunctive relief, disgorgement, and civil penalties.”

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The Verdict

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It remains to be seen if federal regulators catch up with the industry in time to curb its excesses, but with no sign of regulation on the horizon (let alone politicians who even understand what crypto is), consumers will continue to operate in this market without protection.

Twitter was back in court this month, and not for the most obvious of reasons. Last week, the beleaguered social media platform subpoenaed Github over the leak of part of its source code onto the site. "The purpose for which Twitter's DMCA subpoena is sought is to obtain the identity of an alleged infringer or infringers, and such information will only be used for the purpose of protecting Twitter's rights," the court filing reads. Github took down the source code that day. According to the New York Times, "it was unclear how long the leaked code had been online, but it appeared to have been public for at least several months." Moreover, it is unclear whether the leak led to CEO and owner Elon Musk's announcement that all source code used to recommend tweets will be made public at the end of the month. 

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• The code was posted by an account named FreeSpeechEnthusiast, reports CNN.
• The leak is "concerning" as “it does make it a little bit easier and speedier to probe for vulnerabilities,” and potentially hack data, Brett Callow, a cybersecurity expert, told the Times. He added that “one of the best ways to mitigate insider risk is to keep your employees happy and that certainly hasn’t been the case at Twitter.” 
• Musk also announced that Twitter, which he bought last year for $44 billion, was now worth about $20 billion by his estimations. The company has faced steep layoffs in recent months and public criticism. 

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Secret List

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A recently released report by Platformer found that Elon Musk and 35 other "VIP" accounts have monitored and given increased visibility by Twitter. The list includes President Joe Biden, conservative commentator Ben Shapiro, and NBA star LeBron James. Just last week, actor William Shatner tweeted calling out the company's paid verification scheme as being akin to the Columbia Records-Tape Club scheme. "It’s more about treating everyone equally," Musk responded. "There shouldn’t be a different standard for celebrities imo."

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The Verdict

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The question here is did the leak spur Twitter (re: Musk) to release the recommendations algo to the world, or was the leaker's goal something else? Regardless, the bird app has been plagued by confusion, scandal, and seeming chaos since Musk set his sights on it. Will the continue until the company collapses, or can things turn around?

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Panel Speakers Info & Links:

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Johanna Carlsson (Head of Legal at Klarna)

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Graeme Barron (VP, Head of Legal at GWI)

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Natalie Salunke (General Counsel at Zilch)

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How do you go about retaining legal talent in this current market?

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Natalie Salunke: This might be controversial, but I don't believe we should be obsessed with retaining talent solely for the sake of retention. While it's important to keep the best talent, sometimes the best talent is also the most ambitious and may need opportunities for growth that your organization can't provide. Therefore, the key is to create an environment in which they can thrive while they're with you, and hopefully they'll stay because it's a great environment.

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I believe that it has become more common for people to change roles every couple of years. Therefore, we should view having someone for a couple of years as a success. We should be comfortable with the fact that people want to change rather than trying to keep them for as long as possible. In some cases, keeping people for too long may not be the best thing for the team. A fresh injection of talent can be quite beneficial.

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Transparency is Key

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As a leader and coach, it is crucial to know your team members as individuals, including their motivations, career goals, and how you can help them achieve success. By facilitating honest conversations, you can determine if a team member is committed for the long haul. Transparency is key: they should be open about what they want, and you should be transparent about what you can provide. If you see a gap on the horizon, you may need to acknowledge that the person could outgrow the organization. The goal is to maximize the value of each team member while they are with the organization.

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In addition, helping team members achieve their goals can contribute to your legacy. When people move to different places, your reputation can still live on through the impact you had on their success. However, there is currently an issue with the expensive talent market, particularly in the UK. Junior lawyers are expecting salaries that match those of more experienced lawyers, but this bubble must burst at some point. It is important to focus on the positives of your ecosystem and to try to align people's desires and abilities with the team. There are more business opportunities available now, and it may be possible to move into different lateral roles that are not necessarily law-related. While it may not be for everybody, it is worth considering how you can sell what your organization has to offer.

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Johanna Carlsson: People move more quickly now than ever before. When it's time to leave, it's up to them to decide, and there should be no hard feelings about that. However, it's important to ensure that those who remain with the organization feel connected and integrated into the business so that they can contribute as well as possible.

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Company Culture

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When I joined Klarna, I found that we were having too many meetings. We would spend a lot of time discussing business planning and personal matters, and I felt it was a waste of time. However, over time, and especially when Covid hit, I realized that our meeting culture was crucial. It helped us build relationships and stay connected, even when we had to meet virtually.

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It's important to give people the opportunity to develop in their professional roles, whether they are lawyers or not. Otherwise, they may leave for a more exciting opportunity elsewhere.

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However, a paycheck should not be the only decisive factor in staying with an organization. There should be other reasons to stay. For me, it's the opportunity to develop relationships with great people every day. We also have team building activities such as puzzles and online games, allowing us to have fun with colleagues even if they are located in various offices or remote home offices. This helps to increase efficiency and allows us to reach out to those we have worked with before for professional advice. Building a strong culture is also important for speeding up communication around work topics.

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Let Go Of Things Beyond Your Control

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Graeme Barron: It's important to avoid getting too hung up on things beyond your control. While there will always be roles that pay big bucks, often salaries are determined by bandings within the organization or external factors. So, if someone has an offer of £250,000 to become a privacy lawyer, that's great, but it's important to be transparent about other opportunities available.

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Instead, focus on creating an environment that's enjoyable to work in and helps individuals grow as lawyers. Offer high-quality work and tailor it to the way your lawyers want to develop. Don't worry about competing with other offerings in the industry. Be open with your team and expect that they will move on to develop new skills.

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Create an environment where they can enjoy their work and do a good job, and if they choose to move on, bring in new energy to the team. Don't get too worried about things beyond your control.

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Rate Hikes & Intended Consequences

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On Friday, the second largest bank failure in US history (the collapse of Silicon Valley Bank) jolted global markets, economists, and investors alike. Then, on Sunday, the third largest bank failure in US history, Signature Bank, followed suit. The panic caused by SVB's sudden collapse had triggered a similar run on Signature, whose primary customer base is law firms and real estate firms in the New York area, but was also extremely friendly to cryptocurrencies (hello, Silvergate). By Monday morning, President Joe Biden, Treasury Secretary Janet Yellen, and even foreign officials in the UK and EU, raced to assure markets and the general public that the banking system was solid. Fears of mass contagion were unwarranted.

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"The American banking system is really safe and well-capitalized. It's resilient," Yellen told CBS's Face The Nation. "In the aftermath of the 2008 financial crisis, new controls were put in place, better capital and liquidity supervision, and it was tested during the early days of the pandemic and proved its resilience. So Americans can have confidence in the safety and soundness of our banking system."

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Everything Is Different Now

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So, what exactly happened?

It could take years to fully understand the minutiae of what happened and answer that question. But it appears that 3 major factors collided with perfect (imperfect?) timing.

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First: Deregulation.

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As the New York Times details, Barney Frank, former Congressman and namesake of the 2010 Dodd-Frank banking reform act, began lobbying in 2013 to reform his own landmark legislation. He wanted to "tweak" the regulations stating "that any bank with more than $50 billion in assets should face especially intensive federal supervision," and increase that threshold to $250 billion—which would then exclude all but the largest US banks. Silicon Valley Bank would be a beneficiary of this new deregulation, as would Signature Bank, for whom Frank sat on the board of directors. In 2018, with Donald Trump in the presidency and Republicans controlling both houses of Congress, and citing the belief that midsized/regional banks were not key to the financial system, this deregulation went into effect and negated certain capital requirements, stress tests, and living wills for these institutions.

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Second, Rate Increases.

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Without strict regulations on what regional banks could do with deposits and how leveraged they could be, Silicon Valley Bank began placing nearly all of its deposits into long-term treasury bonds. The tech industry’s boom times of 2020 and 2021 meant the bank's vaults were nearly doubling with deposits and management wanted to turn that into profits. Of course, the boom times went bust in 2022, and downsizing start-ups began withdrawing money from their accounts. To cover this, SVB was forced to sell bonds it had bought in the previous year. The problem was that rates had increased dramatically since 2021, so selling these low-yield bonds were less attractive and thus worth less. In turn, SVB was losing money in these sales just to cover deposits. And word began to spread.

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Third, Speed.

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Late on Wednesday last week, SVB revealed that it had lost $2bn from selling its entire $21bn treasuries portfolio over a single day. This news worried VCs and others around Silicon Valley. Some large VCs, including Peter Thiel, started telling the start-ups they invested in to pull all their money out of their SVB accounts. This quickly accelerated throughout the day on Thursday causing a bank run that collapsed SVB not 48 hours after fault lines began to appear. It was so fast, in fact, that House Financial Services Chair Patrick McHenry described it as "the first Twitter-fueled bank run" in history. Not only does Twitter and group chats spread information far and wide instantly (where, in the past, news of a teetering bank would take time to disseminate), but the adoption of mobile banking means that depositors no longer need to stand in line at a physical branch location to pull their money out, but can move millions of dollars instantly on their phones. What a world!

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So, now what?

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Silicon Valley and Signature banks were both FDIC insured institutions, meaning that deposits were insured by the federal government up to $250,000. However, as Time magazine notes, over 85% of SVB's deposits were non-insured. "Many Silicon Valley startups had millions, or even hundreds of millions of dollars deposited at the bank—money they used to run their companies and pay employees," Time continues.

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OK. But after the FDIC took over SVB on Friday and froze withdrawals, some $175 billion in deposits were in limbo. What would be returned? What would be lost? How many companies would fail as a result of not being able to pay their bills? Or, at the very least, how many employees across Silicon Valley would not get paid because start-ups who banked as SVB couldn't make payroll by that Monday?

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These questions raised fear among depositors at Signature Bank and various regional banks. With the swift collapse of SVB and the cratering of stock prices for First Republic and others, people and companies wanted their cash out and safe. In other words, even the appearance of instability was causing very real instability. So, in an unprecedented move, the FDIC decided to guarantee all deposits at SVB and Signature—even those above $250,000. Just don't call it a bailout.

“This is an important point: No losses will be borne by the taxpayers,” President Biden told the American public in a press conference Monday morning, reports the New York Times. “Let me repeat that: No losses will be borne by the taxpayers.”

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Then what is it? "Mr. Biden noted that the cost [of the insurance] will be financed by fees paid by other banks into the Federal Deposit Insurance Corporation, or F.D.I.C.," the Times continued. "What he did not mention was that a separate loan program that the Federal Reserve has opened to help keep money flowing through the banking system will be backed by taxpayer money."

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The failed banks themselves were not bailed, but the depositors were. Even if those depositors are (or are backed by) billionaire VCs. The move then raises the question of moral hazard, and what sort of precedent has just been set: the worry, as Mohamed El Erian told Fox Business News, is that the genie may never be able to be put back into the bottle. "Politically, it's going to be impossible not to extend this same full, unlimited deposit guarantee to all banks. "Once you do it for one bank, it's hard not to do it for another. Are you going to say that this bank was special because of Tech? That has all sorts of political issues with it."

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By Tuesday, the stock market had stabilized, and money was flowing again for start-ups in Silicon Valley to pay their bills. But now what? Did 2008 prove that major banks are too big to fail, and this weekend teach us that regional banks are….too small to fail? Have we basically proven that banks have no risk of failure, only of success? And how many other banks are teetering on the edge of collapse?

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As for Signature Bank and Silvergate Capital, "these were the two most bitcoin-friendly banks, supporting the lion’s share of fiat settlement for bitcoin trades between trading counterparties in the U.S.," Mike Brock, CEO of TBD at Block, told CNBC. Liquidity in the crypto world is basically dried up, raising concern that large investment funds or other banks with exposure to the sector will collapse in time. If and how the government will step in remains unclear.

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Matt Margolis: We are witnessing a surge in legal technology. When I was in private practice, the only significant innovation in the market was e-discovery.

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CLM Products

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Nowadays, we are seeing Contract Lifecycle Management (CLM) products that make things much easier. These products also have an AI component that identifies helpful key provisions or provisions that have been utilized in the past.

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They can also identify termination dates, which would normally take time and effort to find, and build a client. If I'm in-house, it would take time to build a "no client." We are definitely seeing growth in this area and more adoption of these tools. Over the next few years, we will see more and more automation and better tools that make our lives much easier.

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Charlotte Smith: Exactly. One of the incredible things about technology is that teams will need to go through the process of change more frequently. Therefore, having a strong change management strategy and process is incredibly important.

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Matt Margolis: Oh, absolutely. I recall receiving an e-discovery tool, I believe it was Relativity or something similar. I remember everyone accessing the e-discovery page, and it was extremely difficult because there was no strategy in place. We were all just trying to figure it out on our own, which ultimately led to a failed implementation.

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Why Are Teams Investing In Legal Tech?

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Marie Widmer: One of the biggest drivers is the pressure on legal teams to do more with less. In corporate environments, they are often viewed as a cost center, resulting in lower budgets and reduced headcount. This necessitates a redefinition of the term "scrappy" to deliver high-quality service with limited resources.

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Additionally, whether working in a law firm or an in-house team, customers and stakeholders increasingly expect efficiency and convenience. In today's world, where you can order groceries and rent a car on your iPhone, we have come to expect everything on demand, including professional services. Legal teams must adapt quickly to changing customer expectations and demands.

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Increasing Demands & Adaptation

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Matt Margolis: We are seeing an increasing demand for readily available information, particularly in legal departments. For instance, you may receive an email or a Slack message requesting immediate answers or statistics. Specifically, I've noticed a trend where people want to know the amount spent on X, Y, and Z deals by outside counsel. This demand for quick information is not going away anytime soon.

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Marie Widmer: It's a lot to take in, especially considering the previous state of the industry where lawyers weren't often questioned or required to provide details about their work behind the scenes.

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This cultural shift, along with increasing compliance and regulatory complexities, has had a significant impact on the legal profession. For example, privacy concerns have become a major issue and have required us to adapt, particularly with audits and mergers and acquisitions.

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In addition, there is pressure to scale quickly and increase revenue when working in-house at a company. This type of pressure is not typically experienced outside of a corporate environment and requires a different approach to work.

Overall, these changes require lawyers to work in new ways and adapt to the evolving industry.

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Last year, Kristina Kashtanova submitted her comic book Zarya of the Dawn to the US Copyright Office and was granted copyright protection. However, in a letter Kashtanova received earlier this month, the protection was partially revoked. "[T]he images in the Work that were generated by the Midjourney technology are not the product of human authorship," the Office stated in the letter. "Because the current registration for the Work does not disclaim its Midjourney-generated content, we intend to cancel the original certificate issued to Ms. Kashtanova and issue a new one covering only the expressive material that she created."

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• "There are a number of errors with the Office’s arguments, some legal and some factual," Van Lindberg, Kashtanova's attorney wrote in an extensive blog post. "However, they all seem to stem from a core factual misunderstanding of the role that randomness plays in Midjourney’s image generation.”

• "It is fundamental to understand that the output of a Generative AI model depends directly on the creative input of the artist and is not random," Kashtanova wrote herself in an Instagram post.

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Legal Precedence

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As Reason.com notes, a 1997 decision by the 9th Circuit Court of Appeals in the case of Urantia Foundation v. Maaherra ruled that "some element of human creativity must have occurred in order for" something to be copyrightable. Yet, according to Ars Technica, Michael Noll of Bell Labs was able to copyright an AI-generated image of his in 1965 "on the premise that the machine created the image using an algorithm that Noll wrote." To bring it to the modern-day, however, Ars Technica adds that Getty Images does not allow AI-generated images on its site "over unresolved issues about copyright and ethics issues."

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The Verdict

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Week after week, I write about AI and copyright for this newsletter and I’m beginning to understand that technology has rapidly outpaced our laws. So will AI-generated art be viewed as an artist’s tool (like a paintbrush or camera) in the years to come, or a whole separate category of IP? This is the central question we face today.

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It feels like only last week we were hearing about ChatGPT for the first time. Suddenly, Silicon Valley giants are in a battle for survival to win AI dominance. The speed of technology today, I guess. And when it comes to the speed of legislating, California tends to move faster than the federal government (or other states, for that matter). So, it should come as no surprise that California state legislators have begun looking at AI and its role in both digital privacy matters and hiring practices, reports Bloomberg Law.

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• AI has "got the great ability to make decisions based on data that it has, but nobody knows what’s in that black box. We need to have our eyes wide open about the power of this, and make sure that it’s here to help people and not inadvertently injure consumers," State Senator Bill Dodd said regarding his bill (SB313), which would create a state agency to oversee AI.

• State Assemblywoman Rebecca Bauer-Kahan has introduced her own bill (AB331) that would regulate how the state's government uses AI.

• “There’s a focus on accountability; of those who are developing the algorithms …California is trying to find a path to merge accountability with employers and by focusing in on assessing the actual algorithm that you use,” Gary Friedman, a senior partner at Weil, Gotshal & Manges, told Bloomberg about the various bills.

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Snap Judgement

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Social media company Snap Inc announced this week that it will be integrating ChatGPT into its Snapchat platform. “The big idea is that in addition to talking to our friends and family every day, we’re going to talk to AI every day,” CEO Evan Spiegel told The Verge. “And this is something we’re well positioned to do as a messaging service.”

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However, the company also cautioned soon-to-be users that "All conversations with My AI will be stored and may be reviewed to improve the product experience. Please do not share any secrets with My AI and do not rely on it for advice," according to a press release. Snap further cautioned that "While My AI is designed to avoid biased, incorrect, harmful, or misleading information, mistakes may occur."

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The Verdict

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As AI becomes evermore integrated into our lives, its clear that strict regulation will need to stay on top of the technology and protect potential data leaks and other concerns. Are state politicians up to the task of properly designing legislation? Will see.

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The streaming wars are heating up—and they might end up killing Kenny (sorry, we had to). Warner Brothers Discovery, the newly formed media behemoth that was spun off from AT&T, is suing Paramount Global (previously known as CBS Viacom) over South Park streaming rights. According to CNBC, Warner paid $500 million in 2019 for the rights to license the long-running show and stream in on HBOMax.

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During the bidding process, Paramount requested to share rights to the show so that Paramount could also stream South Park on its platform. WBD says it rejected the proposal, and then alleges Paramount withheld special content as a result. As Variety notes, WBD accuses Paramount of engaging in "'verbal trickery' and 'grammatical sleight-of-hand,' characterizing the new content as 'movies,' 'films' or 'events' — but not 'episodes' — to avoid its obligations under the 2019 agreement."

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• Paramount wrote in a statement: “We believe these claims are without merit and look forward to demonstrating so through the legal process… We also note that Paramount continues to adhere to the parties’ contract by delivering new South Park episodes to HBO Max, despite the fact that Warner Bros. Discovery has failed and refused to pay license fees that it owes to Paramount for episodes that have already been delivered, and which HBO Max continues to stream.”

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• WBD responded in a statement that "Paramount and South Park Digital Studios embarked on a multi-year scheme of unfair trade practices and deception, flagrantly and repeatedly breaching our contract, which clearly gave HBO Max exclusive streaming rights to the existing library and new content from the popular animated comedy South Park.”

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Ctrl+Library+Delete

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Studios and streamers can withhold content from audiences, not just from each other. As The Hollywood Reporter says, streamers are pulling old TV series and films from their libraries (and even canning finished films!) to save money. "Entertainment companies have been forced to contend with consolidation, inflation, a possible recession and a constant chase for subscribers," The Hollywood Reporter continues. Streamers can "save money from not having to pay residuals to certain profit participants and talent associated with the shows if the shows were not exhibited on the streaming service,” entertainment journalist Matt Belloni recently told Marketplace.

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The Verdict

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Even streamers are penny-pinching these days. But as platforms compete for content and shuffle their libraries, it’ll set up some interesting future scenarios in which potential mergers and/or consolidation makes bedfellows of current litigants.

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Melissa La Forest: How did you decide to make your first legal hire and what prompted you to make that hire?

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Natalie Salunke: When considering the first legal hire, it depends on the organization's culture and lifecycle. The key factor for me is how to initiate a conversation about negotiating headcount and budget. In some roles, I've negotiated this before starting as the head of legal or general counsel, making sure I have access to those resources. Some of those resources include team and headcount.

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Hiring Process

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I tend to hire on the more junior end, especially when working for a scale-up startup with a small legal team. This is because the business is still getting used to the concept of having a legal team.

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Employers often think they've invested a lot of money in hiring senior lawyers, especially if the head of legal or general counsel is involved. Therefore, it's important to gather data points to support the team's value and the importance of the first legal hire. If you haven't had the opportunity to create this narrative before joining the company, it's especially crucial.

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If you're unable to find paralegal or trainee level roles for support with administrative and junior legal work, consider running an internship program. This is an interesting way to attract talent while also giving back to the legal community.

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Benefits of Hiring an Intern

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The idea is to hire several interns, such as law graduates or students, to assist with tasks like data mapping and other junior-level work.

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This approach creates a talent pool that can be used for permanent hires in the future. By testing out the interns, the company can identify strong candidates for future positions. Additionally, having junior-level staff can bring a fresh perspective to the data mapping process, which might not be considered by more senior lawyers.

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The Blueprint

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Natalie: I've carried around a blueprint for over 10 years now. There is a buoyant market for people wanting experience, which is often required to get a training contract or further opportunities.

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High-quality candidates are plentiful, and there are free tools available, such as LinkedIn, Milk Ground, and university sites, to advertise internship positions. In my last role, we received 250 applicants over the weekend after posting our ads. The challenge is not finding interesting talent, but rather managing the overwhelming demand and not being able to provide everyone with an opportunity.

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Value Adaptability

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Johanna: When I joined Klarna, the organization already had about 30 people. Since then, we've grown to around 130 people due to the addition of new business units, product launches, and entry into new markets. As our team has expanded, we've focused less on hiring senior people who can work independently and more on hiring individuals with personalities that appreciate change and backgrounds in companies that value adaptability.

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Our team is now more distributed, which brings value and helps people grow. Senior team members can develop their leadership skills and assist junior talent, while also being relieved of administrative and repetitive tasks.

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Instead of solely focusing on experience, we now prioritize personality and background when hiring new talent. It's important to find individuals who appreciate change and are adaptive in agile environments, which is something that most people claim to be these days.

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Marie Widmer: Buying legal technology is all about mastering the RFP. When purchasing legal tech, you should also be planning for change management. Knowing how to gain user adoption and prove the ROI is crucial. It's not just about getting buy-in, purchasing the tool, and figuring it out afterwards. You need to have all three issues solved in the beginning.

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Understanding the RFP is really broken down into three categories:

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1. Why do you need to buy tech?

Many people rush to buy technology because they feel pressured by the fear of missing out. However, it's important to ask yourself whether you actually need to make that purchase or if there is a manual process that could accomplish the same task. Consider cleaning up your current system before making a decision to buy new technology.

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2. What is the cost of buying tech?

When I refer to "cost", I am not only referring to the dollar amount specified in the contract. I am also referring to the impact on the timeline and resources, and the burden it will place on stakeholders. For example, will you need to utilize engineering resources within your company? Will you need additional headcount to assist with tool intake, such as CLM? Additionally, who will be responsible for building your repository?

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3. Do you have time to put in the manual hours?

There are many layers to consider when it comes to the cost of implementing technology. You must also evaluate what you expect to achieve from implementing technology. Is the return on investment (ROI) worth the expense at this time?

Perhaps your company is at a stage where you are too small to make this decision. Alternatively, maybe your team is too new and fragile, or you do not have the budget or headcount to withstand the burden of implementing technology.

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Charlotte Smith: To add a personal touch, it's important to ask your users what will help them and what their learning experiences are like. Getting to know your users is crucial.

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Marie Widmer: I made the mistake early in my legal ops career of rolling out a solution based on what I thought people wanted and what I thought my team would benefit from. However, I soon realized that they didn't want the same things.

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It's a difficult lesson to learn, but it's one you must consider. Are you actually providing a benefit to your users, or are you just focused on your own interests?

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What to Do After Buying a Legal Tech Tool

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1. Acknowledge and Validate Customer Experiences

I've been in situations where I kept lying to myself, thinking things would keep working out. However, I eventually had to face the truth and acknowledge the problem at hand. For example, when no one else wanted to use or buy the product and it wasn't helpful to anyone, I had to validate my own experiences and frustrations. It's important to acknowledge these situations and not necessarily see them as failures, but rather as misaligned intentions.

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2. Reinvest In Your Foundation

When considering reinvesting in your foundation, it's important to go back to square one and evaluate whether you need to address any gaps in your current infrastructure. For example, suppose you're working on a small startup at Dopper Labs and you're using a disorganized Google Drive for storing and negotiating documents.

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If you have no formal ticketing or intake methodology in place, except for perhaps a rough ticketing tool, it may be tempting to launch directly into a Contract Lifecycle Management (CLM) system with a lean team. However, in hindsight, it may have been more beneficial to first address some of the manual foundation issues, which would have resulted in fewer change management issues in the long run.

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3. Build Your Best Path Forward

So, start again from the beginning and think about the baby steps you can take. This will reveal to you why the end state didn't work as it should have.

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While disgraced crypto mogul Sam Bankman-Fried stays under house arrest at his parents' home in Palo Alto, he still seems to be meddling with bankruptcy proceedings in New York. Federal District Court Judge Lewis A. Kaplan has ordered that SBF "create a plan with prosecutors that would ensure Mr. Bankman-Fried did not delete text messages he sent while awaiting trial on charges that he orchestrated the theft of billions of dollars in customer deposits," reports the New York Times.

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In other words, Judge Kaplan believes the notorious founder of FTX has been communicating with the company's general counsel, Ryne Miller, and other former FTX employees via messaging apps like Signal, which automatically deletes the texts. "I read all the spy novels," Judge Kaplan said, referring to methods of hiding communications. Even worrying that SBF could write encrypted handwritten letters.

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• "Today, it came to the Government’s attention—based on data obtained through the use of a pen register on the defendant’s gmail account—that the defendant used a VPN or 'Virtual Private Network' to access the internet on January 29, 2023, and February 12, 2023. After learning this, the Government promptly informed defense counsel and raised concerns about the defendant’s use of a VPN," the US Attorney's office wrote to the court on February 13.

• The issue of using encrypted and/or disappearing messaging apps to skirt communications rules (and destroy evidence) has come up before with major Wall Street firms using WhatsApp and Signal, raising concern from the SEC and DOJ.

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Bill Pay

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It was an expensive November for beleaguered crypto firm FTX, says Coinbase, which reported that Sullivan & Cromwell billed $9.5 million for 6,500 hours across 151 staff over the period November 12 through 30, 2022. But Sullivan & Cromwell says it charged a discount for senior staff, and is only seeking 80% of the total bill (or $7.5 million).

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The Verdict

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Every new story about SBF and how he’s handling FTX’s collapse is more outrageous than the last. If your strategy is to appear as though you didn’t know what was going on behind the scenes of your own company, then maybe don’t use Signal and VPNs to communicate with your general counsel or reach out to witnesses in your case. Not the best look.

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When you think of Andy Warhol's famed Campbell's soup cans, do you think of great art or of IP theft? The same question is now being asked of NFTs, specifically in the case of legendary Parisian fashion house Hermes claiming the artist/NFT-maker Mason Rothschild stole its Birkin Bag IP to produce 100 "Metabirkins".

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As Vogue Business writes, Hermes alleges that the Metabirkins are not artistic commentary but trademark dilution and "cybersquatting (the practice of using a name in bad faith with the intent of making a profit)"—allegations a jury agreed with earlier this month and awarded Hermes $133,000 for. But Rothschild and his legal team have scoffed at the verdict—the first suit brought against an NFT-maker for this kind of IP infringement—and is appealing.

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• Blake Gopnik, an art critic for the New York Times and New Yorker, who is part of Rothschild's legal team, told Marketplace: "It seems pretty clear to me that these things are right smack in the middle of the Warholian tradition in art. They’re commenting on the world of commodities. That’s what artists have been doing at least since Andy Warhol in the early 1960s. It’s obvious to me. If he’d wanted to really confuse buyers, he wouldn’t have covered his Birkin bags and fake fur. He wanted to make them as JPEGs anyways, right? These aren’t bags, these are pictures of bags. And artists make pictures of things."

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• “Today's verdict for Hermès is a landmark victory. It signals that the NFT market is not a legal free-for-all — simply waving the flag of fair use will not automatically exempt you from liability for using someone else’s IP. …Fashion brands have already been learning from this case how to protect their IP in this space even more effectively. Even before the verdict, it highlighted the value in seizing the first-mover advantage. In the IP metaverse, everything is evidence.” Jeff Trexler, associate director of Fordham University's Fashion Law Institute, told Vogue Business.

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The Rogers Test

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In 1988, actress Ginger Rogers sued producer Alberto Grimaldi for using her name and likeness in a film and violating her trademark rights, right to publicity, and for "false light" defamation. The US Second Circuit Court of Appeals ultimately sided with Rogers, and created the "Rogers Test" which states that a trademark holds if it has no underlying relevance to the artistic work, or if that work explicitly misleads about the source. This test was the central argument of the Hermes-Rothschild case, notes Vogue Business.

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The Verdict

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Clearly, it’s difficult to define what is and what isn’t art. Especially since everyone has their own ideas. To that end, whomever ultimately prevails in this case, it may not set such a firm precedent.

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