The Three Legal Disrupts

Lawyers need to be aware of the theoretical and practical implications of technology on the law.

Technology and its impact should be approached from a broad base with the understanding that there are many facets to how it affects “the law”. And while the complexities of technology can be overwhelming, this shouldn’t be a deterrent to engagement. Just as a lawyer’s client is not expected to have an in-depth knowledge of the law, a lawyer does not require an intricate knowledge of technology. Like the law, the range of domains that technology covers is too wide for one person. Even so, because of technology’s pervasiveness, it is still important that lawyers have an understanding of technology and the factors that influence it.

Rate of Change
The first of these factors is “the rate of change”. Change is now constant and rapid. This can make understanding and keeping current with technology difficult for anyone, especially the non-technologists. How technology affects different aspects of our lives has been the subject of much research. This is especially so where there has been a large change that has dramatically affected an entire industry. Recognising that change is now largely precipitated by technology is one way that a lawyer can contextualise a range of issues affecting law.

Disruption
Another factor closely related to “the rate of change” is “disruption”. The terms “disrupt” and “disruption” may be familiar to many. Disrupt is the theory developed by Harvard professor Clayton Christensen.1 In it he stated that disruption occurred when an initially inferior technology, introduced by a new entrant, improves to meet the needs of the mass market and then becomes the dominant technology.2 Examples fitting this theory include the personal computer disrupting the main frame computer industry and digital music disrupting the music retail (CD) industry.

Recently, the use of the terms “disrupt” and “disruption” have expanded as they have entered more into common use. They are now used in conjunction with their common meanings. The use of the terms now extends to describe both a causative agent (for example, a “disruptive” technology) and an effect (disruption).3 In general, the terms now describe a concept where a technology, business or process (or combination of the three) is supplanted by a newer technology, business or process in such a way that it is difficult for the predecessor to adapt and survive (or at least dominate).

In terms of understanding change, “disruption” is a useful theory that describes many of the current challenges faced by the law which have been brought on by technology. When used in conjunction with its common meaning, “disruption” provides a descriptive term to a concept that would otherwise prove laborious to explain. As with many popular catch-phrases, “disruption” runs the risk of becoming over-used. This, however, should not detract from its utility and should highlight the term’s ability to describe a modern phenomenon.

In essence there are three aspects of “the law” that have been, and are continuing to be, disrupted. The three legal disrupts can be grouped as: the legal industry disrupt, the legal code disrupt, and the legal culture disrupt.

The Legal Industry Disrupt

The legal industry disrupt is that which affects the law as an industry. It accounts for changes within legal firms and the wider practice and administration of the law including law creation, administration and compliance. Some specific disruptions are now so fundamental to legal practice that lawyers almost take them for granted.

Example: An example is the disruption of the legal publishing industry by online sites such as AustLII. These sites now dominate access to legislation and case law. In addition, the rapid proliferation of online legal sites giving access to “what the law is” type information demonstrates the near complete commodification of legal information (as opposed to legal analysis). Further inside the legal practice, knowledge management, case management, and document management systems have made productivity inroads into firms to such an extent that they are considered vital to the profitable operation of the modern law firm.

Outside the internal operations of the law firm, the legal industry is being disrupted by systems such as PEXA (National Electronic Conveyancing), Red Crest (Victorian Supreme Court filing and case management) and ComCourts (Commonwealth Courts filing and case management). Practices that do not have the ability to incorporate these systems into their legal processes will find it increasingly difficult to remain efficient and therefore competitive.

A possible future legal industry disrupt: A report by the United Kingdom Online Advisory Group of the Civil Justice Council4 suggested that services must be delivered in an entirely new way. The group proposed that online dispute resolution (ORD) systems, such as those operated by eBay and PayPal, should be adopted in England for the resolution of small claims matters. ODR is likely to become more available through both private and public services. The costs associated with the service and the increased efficiencies make ODR extremely attractive to both providers and users. Lawyers are likely to become involved in more complex ODR processes in the future. Lawyers therefore should be mindful of developing ODR platforms and how ODR deals with online negotiations in contrast to face-to-face negotiations.

The Legal Code Disrupt
The legal code disrupt is the most recognisable of the three disrupts. It is where technology creates an inconsistency between a government sanctioned law (either statute or common law) and its practical operation. In the legal code disrupt technologies create a legal paradigm that was not previously contemplated by the law, resulting in unexpected and unwanted results. The legal code’s inability to predict what technology will produce and the unpredictable way in which technology gets used makes this disrupt particularly volatile. To this extent it has been noted that technology neutral drafting will not always be effective in a changing technological environment.5

Example: A well-publicised example of the legal code disrupt is that of sexting.6 Here, couples, usually under the age of 18 years, transmit sexually explicit images to each other via mobile telephone. These actions invariably constituted an offence under a variety of state and federal laws. In many situations the resulting criminal convictions were out of line with the original intention of the law.

A possible future legal code disrupt: As both legal and technological systems become more complex, the likelihood of legal code disrupts occurring increases due to the inability of each system to understand and complement the other. Areas as diverse as genetics, computerised trading and cyber-terrorism, are part of a long list of future legal code disrupts.

The Legal Culture Disrupt
The third area of legal disrupt is legal culture. In this context the legal culture is a description of the relationship between law and society. The legal system of a society is very much a reflection of the culture that has developed within. As there are changes in the way that a society thinks and operates, there are often disconnects between people’s attitudes and the current law. Hyperconnectivity (internet, mobile telephony) has led to the rise of new cultural norms and these are not always in-line with current legal norms. As opposed to the legal code disrupt, those participating in the legal culture disrupt usually acknowledge the disconnect between their actions and the law. The essence of this disrupt is not with the competing requirements of certain behaviour, but with competing attitudes towards what participants believe the law should represent.

Example: An example of the legal culture disrupt is the mash-up culture and its disconnect to copyright laws. Here mash-up artists re-use copyright material to make new works knowing that there is a technical breach of the law. Research undertaken by Laura Demasi and Ipsos indicates that the culture of copyright infringement has been “normalised” in Australia.7 The “normalised” culture of infringement is disrupting the legal culture in Australia. Here technology has created a paradigm that would not have otherwise existed – being that the Internet has made available vast amounts of digital material, much of which is protected by copyright.

A possible future legal culture disrupt: With the implementation of data retention legislation and the growing awareness of privacy and implications, the interplay of these two areas is likely to create a near future legal culture disrupt.8 Manifestations of this can already be seen in the rising use of Virtual Private Networks by Australians.9 To this end, there will be situations where a new law will cause a reaction to an already established culture around either a law or a technology. As such, lawyers should be aware that the introduction of either a new law or a new technology has the ability to create a legal culture disrupt.

Practicing in a Disrupted Profession
What can be done to help lawyers work in a disrupted legal environment? The first step is to acknowledge the importance of technology to the legal profession. The next step is to educate lawyers so they have a sufficient level of technical knowledge to appropriately incorporate technology into their work. The appropriate level of technological knowledge will be determined by individual employers and the market. And as technology takes on more tasks in the legal environment, the minimum level of technological knowledge required to participate in the legal profession will be raised. It is unknown how much of this technical knowledge will be required in the future. There seems little doubt, however, that given the rate technology develops, at some stage both formal education and on-the-job training will be required to equip the future lawyer adequately.

Conclusion
Lawyers, and in particular practice managers, need to consider technology as a whole of practice issue. Lawyers should review their practice to see if it is susceptible to technological disruption. Practice managers should consider how firms will leverage off technology to be more efficient now and into the future. Those who are unfamiliar with current technology trends should obtain assistance in identifying how their practice might be disrupted.

While the legal industry disrupt is the biggest technology hurdle for many practitioners, the legal code and legal culture disrupts must also be considered. Lawyers will need to gain at least a rudimentary knowledge of all three legal disrupts if they are to remain effective problem solvers in a technology immersed society.

Fabian Horton
Principal Solicitor
Connect Law
fabian@connectlaw.com.au
www.connectlaw.com.au

Printed with permission from the Law Institute of Victoria, first published in the Law Institute Journal.

Fabian Horton is a lecturer at the College of Law, Victoria and director of the virtual firm Connect Law Australia. Fabian is also the chairperson of the LIV Technology and the Law Committee.

1. Clayton Christensen. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Boston, MA: Harvard Business School Press, 1997.
2. This is a simplified statement of the theory though it is sufficient for the purposes of this article.
3. See Ronald Kostoff, Robert Boylan, and Gene Simons, “Disruptive Technology Roadmaps” in Technological Forecasting and Social Change, vol 71, Issues 1-2. (2004), 141-159.
4. Civil Justice Council, Online Dispute Resolution Advisory Group in Online Dispute Resolution for Low Value Civil Claims, (2015) 8, 2.1.
5. Lyria Bennett Moses, “Recurring Dilemmas: The Law’s Race To Keep Up With Technological Change” 2007 in Journal Of Law, Technology & Policy, 239 239.
6. See Victoria, (Victorian Law Reform Committee), Inquiry into sexting, Parliamentary Paper No 230 (May 2013). Session 2010-2013.
7. See: Lauran Demias. “We’re an ‘out and proud’ nation of illegal downloaders’ The Age 10 November 2014. http://www.theage.com.au/digital-life/social-radar/were-an-out-and-proud-nation-of-illegal-downloaders-20141110-11jjiz.html . Accessed 9 March 2015.
8. Telecommunications (Interception and Access) Amendment (Data Retention) Act 2015.
9. Chris Griffith, “Australians flock to VPNs to avoid data retention” in The Australian (online), 13 August 2014, www.theaustralian.com.au/business/technology/australians-flock-to-vpns-to-avoid-data-retention/story-e6frgakx-1227022957464.