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  • Sat, July 14, 2018 7:10 AM | Akriti Dayal

    Artificial intelligence (AI) is virtually everywhere. But forget about Alexa, self-driving cars and those pesky pop-up ads that follow you around the Internet. Think litigation tools.

    As the legal profession adapts to changes in the marketplace—from evolving technology to a declining demand for services and competition from a growing number of non-traditional legal providers—more law firms are looking for alternative ways of doing business.

    Demand growth for law firm services was “essentially flat in 2017,” according to the “2018 Report on the State of the Legal Market,” issued by the Center for the Study of the Legal Profession at Georgetown University Law Center and Thomson Reuters Legal Executive Institute. “This continues a seven-year pattern (with the exception of a brief uptick in 2011 and a slight negative turn in 2013). It stands in stark contrast to the four to six percent annual growth in demand experienced in the legal market prior to 2008,” the report states.

    Over the past few years, there has been “mounting evidence that law firms that proactively address the needs of their clients—e.g., by implementing alternative staffing strategies, pursuing flexible pricing models, adopting work process changes, making better use of innovative technologies, and the like—can achieve significant success,” the report concludes.

    Clients’ higher expectations and tighter budgets at firms also are forcing improved productivity and efficiency to maintain a competitive edge. But that’s easier said than done at small and mid-size, budget-conscious law firms.

    The ABA’s 2017 Tech Report notes a “troubling” technology gap between large firms and small firms in hardware and software, IT staff and assistance, training, and overall resources. Fifty-eight percent of solo firms and 40 percent of firms with two to nine attorneys reported that they did not budget for technology.

    However, there are glimmers of hope. The number of AI products in the marketplace suited for litigation purposes, such as machine-assisted research, document review and analysis tools for trial preparation, is greater than ever, providing myriad opportunities to make it easier and more affordable for smaller and mid-size firms take advantage of innovative technologies.


    Nearly 700 legal technology startups are currently listed the blog of Massachusetts lawyer, writer and media consultant Robert J. Ambrogi, who tracks websites and products related to the legal profession. He says that the legal profession “is a significant market that is ripe for innovation and disruption, and so is alluring to many entrepreneurs” and that “[t]he price of innovation is cheap, in that virtually anyone with a good idea and a laptop can bring a product to market.”

    Ambrogi, however, predicts that only a small percentage of the startups will stand the test of time, but the number of startups “attests to the variety and creativity of new products being brought to the legal market.”

    The ABA report noted that the most popular software being used by law firms is related to litigation support, available in 39 percent of firms that responded to its survey.

    AI for Litigation

    Among the many examples of AI litigation tools is LegalMation,™ which uses AI to automate key tasks involved in the early stages of litigation. It analyzes legal complaints and produces draft versions of answers and initial sets of written discovery in as little as two minutes. Its website claims that the application “shaves hours of attorney or paraprofessional time from each filed case, facilitating greater cost predictability and improved accuracy and productivity.”

    AI systems, such as that offered by ROSS Intelligence, leverage natural language processing to help analyze documents. ROSS is designed to improve the efficiency, accuracy, and profitability of legal research and firms using ROSS have reported a 30 percent reduction in research time and found 40 percent more relevant authorities, according to its website.

    Allegory automates “everyday litigation tasks, connecting your case from every angle” and helps manage transcripts and leverage deposition testimony.

    Similar to the way online retailers use predictive analytics to predict customer behavior, law firms can use analytics to predict how judges and courts rule and the precedents they rely on. “Learn how judges think, write and rule,” touts Ravel Law’s Judge Analytics.

    Premonition claims the world’s largest litigation database and mines data to find out “which lawyers win which cases before which judges.” Similarly, Lex Machina’s legal analytics reveal insights “never before available about judges, lawyers, parties, and the subjects of the cases themselves, culled from millions of pages of litigation information.”

    What About Ethics?

    To date, 31 states have adopted the duty of technology competence set forth by the American Bar Association’s Model Rules of Professional Conduct into their ethical rules, requiring that lawyers “keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.”

    The version adopted by the New York State Bar Association reflected in Comment 8 of the New York Rules of Professional Conduct, however, slightly differs from the ABA model rule and states that attorneys should “keep abreast of the benefits and risks associated with technology the lawyer uses to provide services to clients or to store or transmit confidential information.”

    While some lawyers view integrating AI into their practice as a risky proposition and many are historically averse to change, others say that not integrating AI into a law practice in the not-so-distant future will not be an option.

    “Alexa, what’s a paradigm shift?”

    About the Author 

    Mario D. Cometti is a partner at Tully Rinckey in Albany, focusing his practice on civil and commercial litigation.


  • Sun, July 08, 2018 3:31 AM | Akriti Dayal

    Understanding the benefits and drawbacks of Litigation Funding

    Filing a lawsuit can be an expensive and time-consuming endeavor. The average lawsuit lasts between one to two years. Asides from mounting attorneys fees, litigation also often involves costs in order to move the case forward.

    The best way to pay for those costs is litigation finance.

    Although commonly misunderstood as a loan, litigation finance is actually a non-recourse investment into a lawsuit (similar to a contingency arrangement), and any repayment only comes out of the winnings of the court case. In situations where attorneys are not able to take cases on contingency, litigation finance acts as a bridge in which the plaintiff gets a contingency arrangement from a firm like Legalist.

    In todays legal marketplace, cases are often settled early and for too little, simply because the plaintiff lacks the resources to continue fighting. While getting litigation finance often means that you will give up more of your case than you would if you self-funded, it also helps to give you the warchest you need to win your case.


  • Sun, July 08, 2018 3:15 AM | Akriti Dayal

    The EU's General Data Protection Regulation (GDPR) went into effect in May, requiring all organizations that handle the data of EU citizens to comply with its provisions regarding collecting and using personal data. However, a majority of companies likely missed the compliance deadline, and many employees remain unaware of the policies needed to keep data safe.

    "Data privacy is a hot topic with GDPR going into effect," said Dave Rickard, technical director at CIPHER Security. "An awful lot of companies may not think they have exposure to it, but there are lots of variables in that."

    For example, one online retailer Rickard works with has many customers from the EU, but can't geolocate them from the website. Others don't work with EU citizens, but have data processing and storage facilities there, which are also subject to GDPR.

    GDPR will likely influence data privacy policies in other countries, Rickard said. However, cultural differences, particularly between the EU and US, may make this difficult.

    "In the EU people are very centered on the perspective that 'My name, my social security number, my passport information, everything that is PII about me, belongs to me. It's part of my individuality,'" he said. "Whereas in North America, people have long since taken the perspective instead that data is currency. There are so many business models that are built on it. Data is money."

    The majority of companies that need to be compliant with GDPR are not yet, Rickard said. "I'd say compliance right now is only at about 35% or 40% at the most," he said. "I think a lot of people are taking a wait and see approach."

    Some of the bigger players like Facebook, Google, and Amazon are going to be the canaries in the coal mine, Rickard said. "I think that they'll have actions taken on them first, and people are going to wait and see if the actual GDPR penalties play out the way that they've been published."

    Companies that fail to comply with GDPR will face a penalty of either 4% of their global revenue or €20 million, whichever is greater.

    Here are five types of policies that companies must ensure they have in place and have trained employees on in the age of GDPR, according to Rickard.

    1. Encryption policies

    Most companies lack policies around data encryption, Rickard said. "Most people who are data owners are unaware of whether their data is encrypted at rest or not," he added. "GDPR is big on encryption at rest."

    2. Acceptable use policies

    An acceptable use policy should covers things like what applications are allowed, what web searching and social media habits are appropriate for the business, and the potential threats to brand reputation, Rickard said.

    3. Password policies

    Passwords remain a common digital entry point into an organization for hackers. Even if, in the best case scenario, employees use complex passwords that are changed often and not shared, human error and carelessness can still put a business at risk. "One of the easiest ways to breach a company is to put somebody on the janitorial staff and go looking at desks," Rickard said. "People often have Post-it notes on monitors with passwords on them."

    4. Email policies

    IT should have an email policy in place that hardens systems and can detect spam and viruses, Rickard said. "The kind of information that can be disclosed via email should be spelled out very clearly," he added.

    5. Data processing policies

    Companies need to do data process flow mapping to see what data is being collected, how it's being processed, and who is receiving processed copies, Rickard said. "GDPR closes all those gaps," he added.

    Employee training is paramount for ensuring these policies are enforced, Rickard said. Raising awareness of the threat landscape and common vulnerabilities can help counteract human error.

    "Security awareness and training is the cornerstone of any security program," he added.

    About the Author

    Alison DeNisco Rayome is a Staff Writer for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace


  • Sat, July 07, 2018 3:06 AM | Akriti Dayal

    The General Data Protection Regulation (‘GDPR') took effect on 25th May, replacing the Data Protection Act 1998 (DPA) and the 1995 Data Protection Directive, from which the DPA stems. The Directive was implemented to enshrine privacy as a fundamental human right.

    The intervening years between the adoption of the Directive and its replacement by the GDPR have witnessed an exponential increase in the development and adoption of consumer technology. In two decades, connected devices have become so compact, user-friendly and powerful yet affordable that they are now ubiquitous. The proliferation of connected consumer technology has both fuelled and been fuelled by the wholesale adoption of the internet by the general public.

    This in turn has spawned a whole digital economy, in which personal information is a fundamental resource.

    Many web users have enthusiastically uploaded information about themselves into cyberspace, both knowingly through their engagement with social media, and unknowingly, by expressing interests and preferences in the course of online searches and commerce.

    At the same time, online businesses have eagerly harvested and found progressively more sophisticated ways of exploiting this personal data. Some of these techniques may be so subtle that the affected individual has no idea that the processing is taking place, nor any idea of the associated risks.

    Not that long ago, the most likely harm an online ‘over sharer' risked was being bombarded with unwanted advertisements, however, recent developments such as Cambridge Analytica demonstrate how times have changed. In an environment where ordinary people do not fully understand how their information is used by highly sophisticated and commercially-motivated online operators, the need for legal protection is readily apparent.

    The GDPR was introduced by the European Commission as a means of promoting the digital economy by increasing individuals' trust. The GDPR aims to enhance trust by granting members of the public choice and control over how their personal information is used. A critical element of control consists of making individuals' consent a prerequisite for the use of their personal data.

    However, as the online economy has matured, as have ways of circumventing genuine consent, such as pre-ticked boxes, indecipherable small-print and purported consent that is conditional for accessing a product or service.

    These practices have had the effect of eroding individuals' rights. However, the GDPR reverses the trend by specifying that consent must be freely given; there must be a genuine choice, not ‘take it or leave it'. Consent must be specific, rather than vague ‘catch-all' wording designed to grant a collecting business ‘carte blanche'.

    It must be indicated by an unambiguous, positive affirmation by the data subject. In other words, the individual must positively do something that indicates he or she consents to a particular processing activity, rather than their agreement being inferred from the fact that they have not objected.

    The GDPR does not always require consent where personal data is used. It includes a number of alternative grounds, for instance where processing is necessary for the performance of a contract with a customer, or where processing is necessary for legitimate interests pursued by the organisation collecting personal data, often relied upon by employers to process staff personal data. However, where organisations have no alternative but to rely on individuals' consent, for example, in the context of online profiling and marketing, those individuals must have a genuine, informed choice.

    The GDPR is not a revolution, but an evolution of the Directive; it includes the same principles and concepts, albeit updated in places and often more stringent, but there is a lot of common ground. Like the Directive, the GDPR imposes the requirements of ‘fairness, lawfulness and transparency' on organisations that process personal data, but the GDPR goes further in its efforts to grant individuals choice and control.

    As Brexit looms, the UK will need to demonstrate that it protects personal data to European standards if it is to avoid complicated data transfer restrictions with the remaining Member States. As a result, the UK is likely to have to adhere more closely to the GDPR, making compliance a more pressing issue for operators that collect and store large volumes of personal information to run their businesses. The GDPR is not Y2K; for businesses that process personal data, the challenge of data protection compliance is not over. It has just begun.

    About the Author

    James Castro-Edwards is a partner at Wedlake Bell LLP


  • Fri, July 06, 2018 3:28 AM | Akriti Dayal

    Understanding the benefits and drawbacks of Litigation Funding

    Filing a lawsuit can be an expensive and time-consuming endeavor. The average lawsuit lasts between one to two years. Asides from mounting attorneys fees, litigation also often involves costs in order to move the case forward.

    The best way to pay for those costs is litigation finance.

    Although commonly misunderstood as a loan, litigation finance is actually a non-recourse investment into a lawsuit (similar to a contingency arrangement), and any repayment only comes out of the winnings of the court case. In situations where attorneys are not able to take cases on contingency, litigation finance acts as a bridge in which the plaintiff gets a contingency arrangement from a firm like Legalist.

    In todays legal marketplace, cases are often settled early and for too little, simply because the plaintiff lacks the resources to continue fighting. While getting litigation finance often means that you will give up more of your case than you would if you self-funded, it also helps to give you the warchest you need to win your case.


  • Fri, July 06, 2018 2:38 AM | Akriti Dayal

    According to the China Cross-Border E-Commerce Development Almanac (2017), in 2016, the total volume of cross-border export and import online retail reached RMB 54.343 billion. This figure represents an increase of 42.44% on a year-on-year basis. The total import tax in 2017 reached RMB 2.62 billion, increased by 545.11% when compared to 2016. Cross-border e-commerce has grown increasingly popular in recent years as a distinct model from traditional modes of business operation. As a result of this, administrative oversight on cross-border e-commerce (including finance, commerce, customs, customs inspection, foreign exchange, tax, etc.) is also undergoing a process of change. In this process, there has emerged much controversy over the legal nature of and liability related to cross-border e-commerce.

    In a case involving the smuggling of ordinary goods or property in the Intermediate People’s Court of Guangzhou City ([2015]Hui Zhong Fa Xing Er Chu Zi No. 106), the defendant (Mr Chen) placed bids for foreign wines through a cross-border e-commerce platform on a well-known Japanese website. The prosecution accused the defendant of the false declaration of product name and price in order to evade duties. The duty payable was in the amount of RMB 983,761.7. Dr Chen’s counsel argued that the Japanese website had played a principal role in smuggling foreign wines jointly with Chen. This line of argument was advanced so that Mr Chen would be downgraded to an accessory offender (with the principal offender being the online platform). The court reasoned around the above issue by remaining silent as to whether a cross-border e-commerce service provider’s services may constitute a smuggling offense.

    There is therefore a large degree of uncertainty regarding this newly developed mode of business operation, which is constantly discussed by theorists and practitioners. This article will firstly introduce the definition and import trade modes of cross-border e-commerce. What follows is a legal analysis on the possibilities of suspected smuggling of cross-border e-commerce service providers under different cross-border e-commerce business models. We intend to provide some comments on the compliance of cross-border e-commerce, its daily operations and how to avoid litigation risks.

    What is Cross-Border E-Commerce?

    E-commerce refers to electronic commercial activities. All commercial activities such as deal inquiries, negotiations, conclusion and performance of contracts, etc., that use internet and other electronic means of communication can be regarded as e-commerce. According to the draft version of the Chinese legislation on e-commerce refers to import and export activities of goods or services by means of Internet.

    The reason why cross-border e-commerce has experienced dramatic development in recent years is that it breaks through the traditional B2B (Business in country A to Business in country B) model. It establishes new cross-border models of B2C (Business in country A to Consumer in country B) and even C2C (Consumer in country A to Consumer in country B).

    In response to the rise of the B2C model, China has launched a series of preferential policies to support as well as regulate it. According to the Notice on the Tax Policies on Cross-Border E-Commerce Retail Imports (No.18 [2016] of the Ministry of Finance), the “Cross-Border E-commerce Taxes ” shall be levied on imported goods that are included in the List of the Imported Commodities in Cross-Border E-Commerce Retail. The e-commerce transaction and logistics platforms (such as express delivery and postal services) are networked with China border customs to consolidate transaction, payment and logistics information in the form of three key documents (Declaration Forms, Payment Lists and Logistics Waybills). For “Cross-Border E-commerce Taxes”, the applicable tariff rate shall be temporarily set as 0% and the import VAT and consumption tax payable shall be temporarily set as 70% of the statutory tax amounts payable. For example, given that the VAT rate is generally 17%, the import VAT payable shall be 11.9%. The same rule applies to the consumption tax. When it comes to personal articles that are not imported through cross-border e-commerce, and retail import goods that cannot provide electronic information in the form of the above three documents, a personal tax will be levied. This personal tax combines customs duties, VAT and consumption tax. The rate of personal tax is levied on different levels, they can be either 15%, 30% or 60%, in accordance with the Chinese government’s taxation policy for cross border e-commerce. There is a tax exemption amount of RMB 50.

    Import Business Models of Cross-Border E-Commerce

    A. Overseas Daigou

    Overseas Daigou, also called Haidai, refers to the third party purchasing of specific goods overseas by consumers in China. This authorized purchasing service may be provided by either the consumer’s acquaintance or professional Daigou merchants. The goods are usually carried by individuals or mailed to China. Daigou businesses run by individuals may later evolve into professional Daigou websites, which in turn then provide comprehensive and streamlined overseas purchasing services to consumers. Due to the lack of transparency in the purchasing process of Daigou websites and their reluctance to provide receipts for overseas purchases, consumers have little knowledge about the information flows, fund flows and the logistics of the goods they have authorized others to purchase. Nevertheless, given the huge price difference between goods purchased through Daigou service and those in domestic stores, Daigou service remains highly popular in China.

    B. Direct Purchase Import (B2C)

    Overseas direct purchase is also known as overseas direct delivery. It refers to when domestic consumers place orders and pay the personal postal articles tax either by themselves or logistics companies on an e-commerce platform. Sellers abroad then send the goods as parcels or couriers into the destination country. Sellers’ warehouses overseas proceed to prepare and collect the goods, after which they will be delivered to customers in China by means of international postage by logistics transit companies or air fright.

    C. Bonded Import (B2B2C)

    Bonded import refers to the mode which either cross-border e-commerce service providers or logistics companies send goods into areas under special customs supervision or supervised bonded places, making it possible to promptly deliver specific goods to consumers once orders are placed. During this process, areas under special customs supervision provide a green channel to facilitate customs clearance of these items. Goods into and out of the special customs supervision area is under strict supervision and control of the Chinese customs, which makes the process relatively transparent. Under the bonded import mode, incoming goods are supervised and controlled by both the Customs and the Quality Supervision, Inspection and Quarantine Bureaus. The declared duty-paid value is the commodity’s price set by the cross-border e-commerce platform.

    Analysis of Smuggling Crimes of Cross-Border E-Commerce Service under Different Trade Models

    Model A: As A Third-Party Platform

    Cross-border e-commerce services that function solely as a third-party platform provide intermediary service to business and customers. Under this business model, product information such as price and the product description displayed on e-commerce websites are provided by their sellers, and products are also sold by the sellers. In such cases, the legal relationship between the cross-border e-commerce platform and the seller is therefore closely connected. In brokerage activities, the broker does not facilitate between the client and a third person. Rather, they provide intermediary services according to the intermediation contract. The broker neither acts as the agent of the client or the third person.

    Proving the intention of cross-border e-commerce service providers’ with respect to smuggling is difficult. Customers are responsible for payment of taxes during customs clearance. As such, the duties payable on imported goods do not constitute part of e-commerce platforms’ operation cost. Furthermore, there is no inventive for e-commerce services providers to evade taxes. Regarding the physical element, e-commerce platforms have no obligation in Customs declaration. This is because they are not be directly engaged in Customs clearance activities. This makes it less possible for e-commerce platforms to directly commit smuggling crimes.

    On the other hand, people who conduct Haitao and overseas Daigou through cross-border e-commerce platforms are more likely to be directly involved in smuggling crimes. This can occur in two ways. First, Haitao activities involving purchases of contraband products constitute smuggling crimes. Second, overseas Daigou service providers who carry excessive goods may be accused of smuggling. For example in July 2014, an individual purchased 24 imitation guns through an e-commerce website from an overseas seller. To evade customs, the seller hid the imitation guns inside water dispensers while simultaneously leaving the Customs declaration to an import and export company. The guns were discovered by the Shishi Customs Anti-Smuggling Sub-Bureau. 21 out of 24 of the imitation guns fired bullets with compressed gas and 20 out of 24 were capable of inflicting injury upon people. The latter 20 were identified as “guns” regulated by China’s Criminal Law. The individual was convicted of arms smuggling.

    It is also worth noting that although a third-party platform is not technically a party to a transaction, it should bear in mind that it holds certain legal obligations due to the fact that is is nonetheless involved in the transaction. Potential legal responsibilities of e-commerce platforms may include:

    reviewing the authenticity of both the sellers’ access qualification and product description;

    ensuring the traceability of parties to the transaction; and

    assisting anti-smuggling operations by enforcement authorities such as Customs.

    Some cross-border e-commerce platforms are not subject to an information sharing mechanism with Customs. This provides opportunities for smuggling activities of Haitao and overseas Daigou service providers. Currently, only a minority of e-commerce platforms cooperate with logistics companies. Whether there is an information sharing mechanism or a choice is made to voluntarily corporate with logistics companies, e-commerce platforms should always be vigilant and pay close attention to their operations so as to avoid the risks of smuggling collusion.

    Model B: Self-Run Business

    Generally, cross-border e-commerce enterprises are capable of conducting self-run businesses and are therefore able to achieve high revenues and carry the ability to achieve a high level of supply chain integration and organizational capabilities. Based on current operational models, it would appear that most cross-border e-commerce self-run business comply with relevant laws and regulations. However, the risk of smuggling is still worth noting under this business model.

    In recent years, many cross-border e-commerce enterprises have also encountered many problems. These include raising logistical expenses and a comparative disadvantage in the supply of goods in the face of sales campaigns launched by major e-commerce suppliers such as Taobao and Jingdong. As a result, many cross-border e-commerce enterprises are experiencing difficulty in generating profits. According the Ningbo Bonded Zone Economic Service Center, there have been 518 registered cross-border e-commerce enterprises in Ningbo Bonded Zone in July of 2017. Of those, only 75 enterprises have online transaction performance. Moreover, it is estimated that 90% of the trade volumes are attributable to major e-commerce platforms such as Jingdong, Tmall International and NetEase. Faced with such pressures, a small number of e-commerce enterprises have adopted their own business models. As a result, some of them have resorted to illegal operations. These enterprises attempt to evade taxes in respect of their own services by declaring lower import prices and false product declarations. Such practices constitute administrative violations or in more serious cases, smuggling. Of course, should e-commerce enterprises intentionally engage in illegally transporting arms, ammunition, obscene articles for profit or dissemination, drugs and other contraband, this will certainly also constitute smuggling crimes.

    Besides, some cross-border e-commerce giants have successfully established grand online platforms utilizing their strong resource integration capabilities. They not only conduct self-run business on such platforms but also allow other e-commerce service providers to sell products there. These giants apply the two business models above at the same time, which makes it necessary for them to pay attention to smuggling risks under both models. They need to not only ensure their self-run products go through customs clearance procedures pursuant to law but also fulfill their responsibility of supervising sellers or e-commerce service providers that utilize their platforms, in order to avoid the facilitation of smuggling by the provision of the online trading platform.

    Concluding Remarks

    According to relevant provisions of the PRC Criminal Law and judicial interpretations, where a company, enterprise or public institution commits a crime, the entity shall not be deemed to have committed a crime, nor be punished for it. If a company, enterprise or public institution is established by individuals for the purpose of committing illegal or criminal activities, or the commission of illegal or criminal acts within the territory of China constitutes the primary activities of a company, enterprise or public institution after its establishment, the offender shall not be punished for an entity crime.In 2015, custom officials across multiple administrative regions jointly uncovered a large-scale smuggling case. Through this operation, 5 smuggling gangs were eliminated with the arrest of 32 individuals. The convicted smugglers established a so-called cross-border e-commerce platform to conceal their smuggling activities and to provide a channel to sell illicit property. When cross-border e-commerce entities are established solely for committing smuggling activities, they are held to be individually responsible.

    Besides smuggling crimes, cross-border e-commerce also faces the risk of infringing on intellectual property rights. Amazon’s recent policy prohibiting infringements on copyright, patent, trademark and other intellectual property or other proprietary right has aroused much attention. Knock-offs and infringements of intellectual property rights have long been the recurring problem of e-commerce business. Considering that e-commerce platforms might share legal infringements liabilities with sellers, Amazon thus froze the funds in the account of some sellers who had been sued for infringement. This action sounds the alarm for sellers, reminding them to take into serious consideration whether or not their import and export goods are involved in infringement of others’ intellectual property rights. It also exhibits the fact that e-commerce platforms have begun to consciously avoid infringement liabilities.

    Cross-border e-commerce is a relatively new business model. Nonetheless, it still exists under regulation. Without vigilance, service providers run the risk of having their actions (or inactions) constitute the smuggling or infringement of intellectual property. There are a wide variety of goods or articles that are prohibited or restricted from import and export by China’s regulatory authorities. The protection of intellectual property rights of import and export goods, correct customs declarations all require professional knowledge. This involves a combination of administrative supervision and legal know-how. What e-commerce enterprises should attach great importance to is that the combination of administrative supervision and legal responsibility. It is suggested that one way forward would be for e-commerce enterprises to adopt best practice models in the areas of government policy, process design, compliance, risk management and crisis response. Cross-border e-commerce enterprises will need to identify such risks and have a compliance plan in place. In this respect, having professional legal advice is essential.

  • Fri, July 06, 2018 2:25 AM | Akriti Dayal

    It may be some time before we see cities in the sky, experience space tourism, and commute to work in flying cars (a la George Jetson). However, a concept once thought to be far outside the realm of possibility is now on the verge of transforming the modern workplace: artificial intelligence (AI). As technology continues to evolve, tools and applications built on or re-engineered with AI will proliferate.

    From chatbots that advise about whether you have to pay your parking ticket, to an algorithm that predicts US Supreme Court decisions, applications using artificial intelligence in tandem with legal service are mushrooming. Here are four trends driving AI adoption in the legal industry.

    AI Fueled Automation Already Disrupts the Delivery of Legal Services

    Technology is the driver of a “better, faster, cheaper” delivery of certain legal services. Several corporate legal departments and law firms utilize AI for the review and standardization of documents, and the list of potential tasks is increasing. AI’s impact on the legal market is in its nascent stage, but its impact on efficiency, risk mitigation, and dramatic reductions in the time and cost of human review is significant.

    Although not specifically dependent on AI technology, globalization and technological advances cultivated the “legal process outsourcing” (LPO) model. LPO relies on labor arbitrage and technology to dramatically reduce the cost of high-volume/low-value “legal” functions (e.g., e-discovery, contract review, knowledge management, compliance, and other routine practices). LPOs have successfully redirected certain repetitive tasks from high-priced law firms, demonstrating that automation technology and process management-together with legal expertise-are all essential components in legal delivery.

    Big Data Analytics

    There are multiple forms of analysis leveraging Big Data. They include descriptive, predictive, and prescriptive analytics, all of which have a significant impact on the future of law practice. Descriptive analytics uses advanced technologies such as natural language processing and machine learning to mine large volumes of historic legal data and turn it into actionable insights. The primary focus areas for descriptive analytics in law are identifying legal trends over time and analyzing behaviors of participants in litigation. Lawyers can use the information to better determine the likely outcomes of cases, develop winning legal strategies, estimate the value of a case, forecast litigation costs, and make crucial decisions, including whether to settle or proceed to trial.

    Many retail organizations use predictive analytics to create a 360-degree customer profile and predict customer behavior. Using a wide variety of data sources, they try to understand their customers so they can send the right message at the right moment, via the right channel. Law firms can use the same type of predictive analytics to gain a deeper understanding of judges and juries. By examining previous behavior in court or the profiles of individual judges, it becomes possible to predict how they will behave in a particular case. The legal tech startup, Judge Analytics, created a platform that offers detailed insights on any judge in the US. This information enables lawyers to deepen their insights on the judges involved in their cases and to develop the best strategy for their clients.

    While predictive analytics provides insights into potential futures based on data, prescriptive analytics offers actual advice, and continually refines its recommendations by tracking outcomes of actual decisions and incorporating that information in future recommendations. Predictive and prescriptive analytics require ongoing access to large amounts of data to build and refine the value of their output. Technologists need to focus on intuitive interfaces and pervasive data collection to lower barriers to these powerful methods. As analytics, machine learning, and natural language processing technologies advance, their relevance to daily law firm activities will also grow. With access, that value will accelerate – it is only a matter of time before these technologies become accepted, trusted partners to lawyers and legal teams.

    Legal Chatbots

    At the time Stanford University student Josh Browder’s “robot lawyer” DoNotPay was introduced in 2016, the legal community had barely heard of a “chatbot.” Since it’s launch, DoNotPay has helped appeal over 160,000 parking tickets across London and New York City. Chatbots have been making a splash and drawing attention in the legal industry.

    Legal bots don’t require sleep or vacation and work 24/7 to provide clients with a legal help on demand. When they are used appropriately, including oversight by legal professionals, they are a great way of optimizing specific work processes to save lawyers time and money.

    GC and Lawyers Increasingly Serving as CEOs and Corporate Board Members

    Today’s GC’s are involved in all business functions and manage many business teams. Attorneys are becoming true business partners, leading initiatives and providing strategic legal and business advice. It’s not uncommon for lawyers to manage parts of or the entire human resources, cybersecurity, and business development departments. Instead of preventing disasters, fighting fires, and assessing risk, GC’s are making critical business decisions, stirring progress, and leading innovation. In the corporate world, that innovation depends heavily on technology adoption.

    Legal education will need to resemble business school education, with case studies, leadership training, and active networking. The future law school, law firm, and overall lawyer training approach and curriculum will have to change. Some leading law schools have already started to include technology in their curriculum. Law students would be smart to look beyond their legal education and become tech literate, as their ability to analyze data and operate legal software may be just as important as their knowledge of cases.

    AI can improve efficiency and accuracy by automating tedious, repetitive work such as research, document review, or litigation support. It can also learn and make valuable predictions across vast amounts of data that would be impossible for humans alone to consume. It will not replace lawyers or the strategic value they provide, but it will profoundly alter the way legal services are delivered. The real concern is for the leaders of legal departments and law firms who will find their traditional value replaced by competitors who are leveraging AI to maximize data and improve services.


  • Tue, July 03, 2018 7:35 AM | Akriti Dayal

    Whenever a professional sector faces new technology, questions arise regarding how that technology will disrupt daily operations and the careers of those who choose that profession. And lawyers and the legal profession are no exception. Today, artificial intelligence (AI) is beginning to transform the legal profession in many ways, but in most cases it augments what humans do and frees them up to take on higher-level tasks such as advising to clients, negotiating deals and appearing in court.

    What is artificial intelligence?

    Artificial intelligence mimics certain operations of the human mind and is the term used when machines are able to complete tasks that typically require human intelligence. The term machine learning is when computers use rules (algorithms) to analyze data and learn patterns and glean insights from the data. Artificial intelligence is a large factor shifting the way legal work is done.

    Review documents and legal research

    AI-powered software improves the efficiency of document analysis for legal use and machines can review documents and flag them as relevant to a particular case. Once a certain type of document is denoted as relevant, machine learning algorithms can get to work to find other documents that are similarly relevant. Machines are much faster at sorting through documents than humans and can produce output and results that can be statistically validated.They can help reduce the load on the human workforce by forwarding on only documents that are questionable rather than requiring humans to review all documents. It’s important that legal research is done in a timely and comprehensive manner, even though it’s monotonous. AI systems such as the one offered by ROSS Intelligence leverages natural language processing to help analyze documents.

    Help perform due diligence

    In law offices around the world, legal support professionals are kept busy conducting due diligence to uncover background information on behalf of their clients. This works includes confirming facts and figures and thoroughly evaluating the decisions on prior cases to effectively provide counsel to their clients. Artificial intelligence tools can help these legal support professionals to conduct their due diligence more efficiently and with more accuracy since this work is often tedious for humans.

    Contract review and management

    A big portion of work law firms do on behalf of clients is to review contracts to identify risks and issues with how contracts are written that could have negative impacts for their clients. They redline items, edit contracts and counsel clients if they should sign or not or help them negotiate better terms. AI can help analyze contracts in bulk as well as individual contracts. There are several software companies who created AI tools specifically for contract review such as Kira Systems, LawGeex and eBrevia that help sort contracts quicker and with fewer errors than humans.

    Predict legal outcomes

    AI has the capability of analyzing data to help it make predictions about the outcomes of legal proceedings better than humans. Clients are often asking their legal counsel to predict the future with questions such as “If we go to trial, how likely will it be that I win?” or “Should I settle?” With the use of AI that has access to years of trial data, lawyers are able to better answer such questions.

    Automating divorce

    A typical divorce settlement can take a year or more and can cost $27,000 on average in the United States. With a goal of “making every divorce amicable,” Wevorce provides couples a self-guided online divorce solution for a fraction of the cost. Couples can define their “optimal outcomes” and the AI-powered machine walks them through five modules and all the critical decisions that need to be made for their particular circumstances. There are also legal experts available to step in to provide guidance when needed.

    How will AI impact the legal profession?

    According to Deloitte, 100,000 legal roles will be automated by 2036. They report that by 2020 law firms will be faced with a “tipping point” for a new talent strategy. Now is the time for all law firms to commit to becoming AI-ready by embracing a growth mindset, set aside the fear of failure and begin to develop internal AI practices. There are many who believe innovation is the key to transforming the legal profession. That’s precisely what NextLaw Labs, “the first legal technology venture created by a law firm,” plans to do.

    It’s clear that AI and machine learning are already transforming law firms and the legal sector. What changes have you seen?


  • Mon, July 02, 2018 6:28 AM | Akriti Dayal

    Davis & Gilbert LLP

    Jennifer Taffet Klausner


    Pre-dispute arbitration clauses recommended by the American Arbitration Association (the "AAA") have become increasingly common in commercial contracts. Because of the efficiency, expediency and cost-effectiveness associated with arbitration, lawyers frequently assume - without engaging in any meaningful analysis of a particular contract - that arbitration is preferable to litigation for resolving contractual disputes. There are, however, risks associated with arbitration. Companies and their counsel should carefully consider the nature of the contract, the company's practices and the relevant law on important issues before agreeing to include a pre-dispute arbitration clause in a contract.1 

    The Benefits Of An AAA Arbitration 

    Of all the well-known benefits associated with arbitration, its efficiency and cost-effectiveness are most touted. In an AAA arbitration, the discovery process is generally limited to the exchange of documents and the identification of witnesses/exhibits. Therefore, arbitration is typically less burdensome than the drawn-out discovery associated with commercial litigation.2 In addition, pre-trial motions, including discovery motions, are not common in arbitration. The AAA Rules3 give the arbitrator the authority to resolve any disputes concerning the exchange of information,4 and a telephone conference between the attorneys for the parties and the arbitrator is usually all that is necessary to resolve a discovery-related dispute. 

    In addition, arbitrations typically move faster than judicial proceedings, which can, in some cases, span the course of several years. Notably, the AAA rules provide special Expedited Procedures in cases involving claims less than $75,000 (or when the parties agree).5 If the dispute is governed by the Expedited Procedures, the hearing is usually limited to one day and is scheduled to take place within 30 days of confirmation of the arbitrator's appointment.6 In smaller cases, where no claim exceeds $10,000, if the parties agree, the arbitrator will resolve the dispute solely by submission of documents.7 

    As important as the speed and the cost-effectiveness of an AAA arbitration is the fact that arbitrations frequently preserve business relationships. Usually less contentious in nature, arbitrations can result in a more creative determination that does not necessarily terminate a business relationship.8 

    In addition, arbitration proceedings, unlike court proceedings, do not become a matter of public record. Therefore, when confidentiality is a concern, arbitration offers a significant advantage over litigation. Similarly, arbitration may be preferable if a company is looking to avoid setting a bad precedent that may have a future impact on an important area of a company's business. 

    The Risks Associated With An AAA Arbitration 

    There are risks associated with an AAA arbitration that companies and their counsel should consider before including a pre-dispute arbitration clause in a commercial contract. First, unlike in judicial proceedings, the arbitrator is neither bound by the law, nor the terms of the parties' contract. Rule 43 of the AAA Rules simply provides: "The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties, including, but not limited to, specific performance of a contract."9 Therefore, an arbitrator may fashion an award that is based on simple notions of equity, rather than the facts or the relevant law. Similarly, even if a contract is clear and unambiguous, there is a danger that an arbitrator will ignore the contract in favor of a more "equitable" result. Litigants often refer to this concept as "rough justice" or the "splitting of a baby." 

    Another concern is that the AAA does not necessarily employ lawyers as its commercial arbitrators. Due to unfamiliarity with the law, non-lawyer arbitrators may be more likely to rely on their own notions of fairness, rather than legal precedent or express contract terms. And, even where a "lay arbitrator" purports to defer to the law or the terms of a contract, there is still a risk of an "incorrect" decision. 

    Arbitrations are also risky because the Rules only require that the award be in writing and signed by the arbitrator (or a majority of the arbitrators if more than one). An arbitrator is not required to render a reasoned award.10 In fact, the AAA actually discourages written opinions because they "open avenues for attack on the award by the losing party."11

    A concomitant problem is that federal and state laws make it very difficult to overturn or vacate an arbitration award. Courts will not review arbitrators' decisions on the merits of the case. Typically, a court will vacate an award only if the requesting party can demonstrate some egregious error by the arbitrator. For example, the United States Supreme Court states that arbitrators' decisions are not subject to judicial review for error in interpretation, except for "manifest disregard" of the law. Wilko v. Swan, 346 U.S. 427, 436-37 (1953).12 Likewise, the Federal Arbitration Act, 9 USCA § 10(a), provides only limited grounds for vacating an arbitration award: (1) "award was procured by corruption, fraud, or undue means"; (2) "partiality or corruption in the arbitrators"; (3) "arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced"; (4) "where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made."13


    Recognizing that there are both advantages and risks associated with an AAA arbitration, companies should take other factors into consideration (including the type of contract, the company's practices and the relevant law) in deciding whether arbitration would be preferable. Or, a company can modify a pre-dispute arbitration clause in a contract so that it addresses the company's specific needs and concerns.

    Consider, for example, the following scenario: Company A (Advertising Agency) is re-drafting its standard agency/client agreement. The previous version of the agreement had the model AAA arbitration provision:

    Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

    Counsel for Company A has to decide whether to keep this provision in the new agreement or to excise it. Counsel may first consider whether there have been previous disputes under the form contract that have been arbitrated. If so, and the outcome of such disputes were favorable to the company, arbitration would likely be preferable to the more expensive and time-consuming judicial process. 

    The company or its counsel should also consider whether the law or the custom in the industry is more favorable to the company. Custom and practice may play a large role in the rendering of an arbitral award; therefore, if a company is operating in conformity with custom and practice, arbitration may be preferable. For example, it is customary in the advertising industry that a client provide notice to the agency before termination of the agreement, during which time the agency will still collect a fee from the client. If Company A knows that a 90-day notice period is typical in the industry and its contract contains a 90-day termination period, arbitration would probably be a wise choice, particularly if disputes concerning this provision are common. If, however, the law in the jurisdiction is well defined on this issue, then the company may decide to forgo an arbitration provision in favor of a litigation that may render a more predictable outcome. In addition, a party with the law on its side has a good chance of getting a case dismissed before trial - an unlikely scenario in arbitration. A little research may be necessary to make this decision.

    If these considerations do not necessarily result in a clear choice, counsel can tailor an arbitration clause to the company's needs. First, counsel may consider revising the model AAA provision so that the parties agree that the arbitrator will be a lawyer with a certain number of years of practice in a relevant area of law. Further, the parties can agree in the arbitration clause that specific laws or specific contractual terms bind them. Or, the parties can agree to limit the arbitrator's authority to deciding limited factual issues - i.e., the duration of a notice period in an agency/client agreement. The parties can also agree that the arbitrator be required to render a written opinion, thereby providing possible grounds for a motion to vacate an award. 


    In sum, companies or their counsel should not reflexively choose arbitration. Due consideration should be given to the benefits of an arbitration (i.e., the potential up-front savings, the more user-friendly process and the absence of potential bad precedent), as well as the risks (i.e., the likelihood of an arbitrary result and the difficulty in reversing an award). Ultimately, a company or its counsel should not hesitate to negotiate a modification to a standard arbitration provision to better suit the needs of the company's business.1 A similar analysis may be employed when a party brings litigation, despite the fact that a contract contains an arbitration clause, and the adverse party must decide whether to seek to enforce the arbitration clause. 
    2 AAA Commercial Arbitration Rules, R-21(a) and (b). 
    3 Unless otherwise indicated, all references to the AAA rules will be to the AAA's Commercial Arbitration Rules.
    4 AAA Commercial Arbitration Rules, R-21(c).
    5 Rule 1(b) of the AAA Commercial Arbitration Rules provides:
    Unless the parties or the AAA determines otherwise, the Expedited Procedures shall apply in any case in which no disclosed claim or counterclaim exceeds $75,000, exclusive of interest and arbitration fees and costs. Parties may also agree to use these procedures in larger cases. Unless the parties agree otherwise, these procedures will not apply in cases involving more than two parties.
    6 AAA Expedited Procedures, Rule E-7 and E-8(a)
    7 AAA Expedited Procedures, Rule E-6.
    8 AAA Commercial Arbitration Rules, R-43(a).
    9 AAA Commercial Arbitration Rules, R-43(a).
    10 AAA Commercial Arbitration Rule 42 provides: "The arbitrator need not render a reasoned award unless the parties request such an award in writing prior to appointment of the arbitrator or unless the arbitrator determines that a reasoned award is appropriate."
    11 A Guide For Commercial Arbitrators, p. 11 (American Arbitration Association 2004).
    12 The Second Circuit, in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930, 933 (2d Cir. 1986), held that "manifest disregard" is limited to an error of law which "must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator."
    13 State laws are similar. See, e.g., N.Y. CPLR 7511(b) and Cal. Civ. Proc. § 1286.2(a), both of which include fraud, corruption, arbitrator misconduct, partiality and the exceeding of powers as grounds for vacating an arbitration award.

    Jennifer Tafet Klausner is a Partner with Davis & Gilbert LLP. The author would like to thank Elizabeth Yoo, an Associate with Davis & Gilbert LLP, for her research and advice with respect to this article.

    Please e-mail the author at with questions about this article.


  • Fri, June 29, 2018 6:50 AM | Akriti Dayal

    Over recent years, data has grown to become the most precious commodity that we have: more valuable than oil or gas and with innumerable potential uses. Below Lawyer Monthly hears from Masoud Gerami, Managing Director of Justis, who has been at the forefront of legal research technology and the digitisation of case law for the past 30 years.

    Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft are now the five most valuable listed companies in the world. In the provision of legal services data is also increasingly important, providing a tool which law firms can use to gain competitive advantage over each other.

    This does not simply mean having access to large amounts of data in the form of case law for their own sake alone; the real value lies in effective interpretation and analysis of what lies buried deep in the content. In practice, this requires offering data that is refined rather than raw, with the presentation of data in a form that lawyers can readily use to their advantage being a key concern.

    Accordingly, the process of synthesising of refined data requires an ability to look at the raw data from a multi-dimensional perspective, providing a level of detail that would not otherwise be possible. This has become one of the most important factors in staying ahead of the competition, not least because of the benefits that it promises to deliver in cost, efficiency and effectiveness both for law firms and for their clients.

    Every lawyer knows that our legal system generates an ever-increasing amount of raw data, yet despite the interconnectedness that comes with ever more digitisation, large volumes of unstructured and unrefined legal data are still produced, making proper management of it a universal problem. So too is deciding exactly what data to use and when to use it. Each new case that is brought adds further to the existing body of knowledge that a lawyer potentially has to accommodate and consider in their research in order to do their job effectively.

    The wealth of potentially useful data stored in documents, statements and court judgments is perhaps most evident in litigation, as well as the allied issues of discovery and investigation, where its impact on legal practice has been labelled as an ongoing revolution.

    In response, litigation analytics has become a discrete area of research and analysis which enables lawyers to search millions of records so that they can give better advice to clients, predict a range of possible outcomes with greater certainty, and inform their litigation strategy.

    Historically, businesses have been very reluctant to get involved in most types of litigation for two very good reasons: it is often hugely expensive and it usually carries enormous risk. Unlike most other areas of business activity, both elements have usually been unquantifiable. Sometimes, however, they have no choice but to become involved. And when they do, intelligent use of data can help to provide a more accurate measure of risk and cost for business: the two key drivers at the heart of litigation analytics.

    Of course, businesses have been using systems involving data analytics, and for much longer than lawyers have, in order to understand, manage and mitigate their risks in multiple areas of operation. Only recently have lawyers begun to play catch up as they increasingly turn to innovative technologies to create distinct competitive advantages in the legal market.

    Drawing on a range of extensive databases can help inform those lawyers advising businesses in dispute resolution who can then make an informed value judgment about risk and cost. It also allows them to shape a distinct litigation strategy and facilitate a better prediction of the potential outcome of each case. As an example, taking into account the impact of judges’ previous decisions in related cases can provide a useful benchmark, which in turn adds to the information being considered in terms of risk and cost.

    But this alone may not be sufficient. Although relevant data can certainly make dispute resolution practitioners better informed, they can only become wiser in their personal judgment about the case in which they are advising, and the potential outcome, if the available information is readily accessible and in the right format. Then, and only then, can it be easily evaluated and used to plan ahead.

    A key element of modern litigation strategy therefore is thorough research of the wealth of information available. This has to fulfil two criteria; it must be both effective and comparative. Essentially, it must help to put data about previous cases into context.

    Significant improvements in technology and burgeoning demand from practitioners has led to data-driven research becoming increasingly more innovative, specifically in the methods made available to lawyers in evaluating and interpreting big data. This can range from historical information about judges and lawyers, notably including the cases in which they have been involved and the decisions reached, to the different parties in dispute, and even specialist IP issues, such as patents.

    However, the major databases operated and delivered by large service providers function primarily as search engines, offering relatively few tools for automated analytics. The critical element for lawyers, however, is for more value to be added by organising it in such a way that it can be analysed comparatively. This is something which is achieved through using technology to improve how we access and analyse the law, and this is the driving principle behind Justis.

    Analytics of judgments and legislation can do exactly by streamlining the research process. The flagship JustisOne platform enables those conducting legal research to access the most cited parts of a judgment quickly, seeing if it has set precedent and how, as well as reviewing which other cases may support or challenge it. All of this helps to improve efficiency when building the argument in a new case.

    It also helps to amplify the thinking of the lawyer and to make them more effective in working through data. However, the potential applications of technology can stretch much further than case law research alone. With the right tools at hand, practitioners are able to analyse the earlier decisions made by the judge or judges overseeing their case, and then see which precedents they have previously relied on or challenged, and so tailor the arguments used in the current case accordingly. Analysing the previous decisions of judges allows for legal professionals to make decisions that are more data driven.

    Against this background, potential questions may arise as to how far analytics could go in providing additional areas which may need to be considered in legal research, and whether these may come to alter fundamentals of the profession. As more tools are released, it is vital for practitioners to ensure that these services work for them, and facilitate the application of the research and analysis skills associated with the legal profession.

    For now, there can be no doubt that additional analytical tools are already assisting practitioners, and will do so to an even greater extent in the near future. The world of litigation analytic tools informing case strategy is here to stay. But in the process, lawyers should maintain their focus in using technology to help support the core task of building a strong, well-researched case.


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