Litigation Committee conference session, Buenos Aires, May 2023: Reshaping legal services - what tech companies are demanding from lawyers

Sean Adams
Gowling WLG, Birmingham

On Thursday 4 May 2023, during the IBA Litigation Conference in Buenos Aires, the first session of the conference sought to explore what tech companies are demanding from their lawyers in the new and evolving global economy for legal services. Rodrigo Fermín García of Marval O’Farrell & Mairal, who had compiled an excellent panel of speakers from South America's tech scene, moderated the session. The speakers were Mariana Alvarez Gaiani (JPMorgan Chase Argentina), Daniela Bianchi (Uala), Santiago Gini (OLX), Horacio Liendo (Mercado Libre) and Pamela Moreno (IBM).

The focus of the session was to explain tech companies' expectations of their outside counsel, and how that may differ from 'traditional' clients. There was lots of discussion and practical tips, offering guidance to private practitioners on what this group of in-house counsel do (and do not!) find helpful.  

What makes the in-house legal role at a tech company different? 

It was recognised that in-house tech company lawyers face many of the same challenges which are often identified by in-house lawyers in other industries. In particular, they have a broad field of responsibility, are relied upon to anticipate and 'fix' issues, are expected to keep abreast of new and rapidly evolving regulatory landscapes and have to focus on supporting their business and its products. In general terms, in-house lawyers are now perceived far more as 'business partners' than outside observers/bystanders. However, the tech industry then brings its own unique challenges.

It is important for any lawyer to understand the business and products that they are supporting. In the tech industry, this can be extremely difficult, both because of the inherently technical nature of the product / business in question (which is not familiar territory to most lawyers, who often have different educational and training backgrounds) and because of the speed and scale of innovation. This was aptly described as follows: Just when you think you understand the business and its products, they all change again, so you have to be really quick on your feet.

Many of the panel members also pointed to the challenges which arise from uncertainty. This could be uncertainty in a particular geographic region (e.g. Argentina, where the conference was held, has a number of significant challenges within its economy and labour market, as well as very long litigation timelines). It could also be uncertainty around the regulatory environment, which is often developing and evolving slower than the tech which is governed by it (this appears to be particularly prevalent in the financial services sector, given the high degree of regulation in that sector, especially focussing on consumer protection). When changes are made to regulation, even if they may initially appear small to the regulators, that can lead to huge development requirements for the tech businesses affected and a consequentially significant impact in terms of cost and time expended on making changes to bring products into regulatory compliance. The result of this uncertainty is that in-house lawyers are trying to apply regulation, which was often not designed for their businesses, to entirely novel scenarios, at "break-neck" speed. They are frequently trying to do so with no certainty as to the outcome and in a way which protects their company. This is leading to a greater need for dialogue between in-house lawyers and regulators, which then creates another drain on in-house resources.

What is needed from private practice lawyers?

Those challenges are translating into different demands by in-house tech lawyers of their outside counsel, as the difficulties and stresses faced internally are passed-on to private practice. In seeking outside advice, the in-house tech lawyer is looking for support and expertise – this is a practical as well as a substantive issue (ie how the advice is provided, as well as the content of that advice). 

The general consensus was that in-house lawyers rarely want long, complex memoranda of advice. What they are looking for are the tools to help them advise their businesses on the available options and the management of risks. They want that advice in a digestible format, from a lawyer who has understood the brief and the commercial context of the question that is being asked. They also want the advice to be accompanied by recommendations based on the broader field of experience that outside counsel can access (acting for a number of businesses, not just one) and summaries of the key issues / risk areas.  The most impressive external lawyers make the complicated things appear simple, not the other way round, and they are often sought for their unbiased, objective opinions (not simply to feed back what the client wants to hear).

There was also a strong emphasis from the panel members on increasing communication and engagement between private practice and in-house teams, and generally building relationships for the long-term. Take the time to answer the phone and provide a sounding board (without necessarily starting the billing clock) from that in-house legal contact in their time of need. A pro-active approach to learning about the business and products in question was also encouraged, and feedback was highlighted as a way to achieve better results (including a plea for private practice lawyers to conduct client satisfaction surveys, and to make positive changes in response to the results). The in-house lawyers recognised, and encouraged, the fact that often, to provide the advice which is needed, then there needs to be a 'two-way street' for the exchange of information and ideas – providing advice can often be an iterative process.

A specific example was explored in the context of what is sought by in-house lawyers when their company faces a security or data breach. This is a highly regulated area, and one where in-house tech lawyers often turn to external counsel. When they do so, they expect a swift response and crisis management plan, together with support in implementing that plan, given the fast-paced and dynamic environment in which everyone will be operating when these incidents occur. This is also an area where communication and relationship building was identified as key – in order to be able to operate effectively at times of high-stress, the foundations need to already be in place and teams need to be well versed in working together and sharing knowledge. The audience was encouraged to make security and data breach responses a priority, and something to be talking regularly to their clients about. 

Current and future trends 

In addition to the broad range of topics which were explored in covering the points above, there were three further points made by panel members which merit brief coverage here:

• Artificial intelligence is a genie which can't be put back in the bottle, and it will affect lawyers across the world. In-house teams are already seeing AI=driven solutions which assist with accuracy, efficiency and consistency (for example, in e-discovery, contract review processes and monitoring IP portfolios). However, the panel do not see AI as a replacement for external counsel – they still expect to need external lawyers to make judgment calls and to provide strategic and creative advice. The future is external counsel supported by AI solutions. It is the external lawyers who do not embrace the AI revolution who will not survive.
• Diversity and inclusion is a key focus area for many tech clients. The tech industry has historically been a leader in this area anyway, implementing diversity and inclusion strategies through their business policies and structures, but what is different now is the sheer number of topics which make up the diversity and inclusion agenda. Tech firms are increasingly looking to outside counsel who reflect this culture and take these matters seriously. In addition to being a business imperative for external law firms from the perspective of maintaining client relationships and their own businesses, it is also a fantastic way to drive the world forward and to generate more creative solutions and services.
• Flexible working has long been part of the tech business model, and in-house tech lawyers are embracing law firms which offer their staff flexible working. People delivering a great service do not need to be in an office to do so, and the pandemic has clearly accelerated change in this area. However, even from the in-house perspective (looking in at private practice from the outside) it is apparent that there are still significant benefits to employees being in the office sometimes. People need to be together in order to interact and have discussions which lead to learning and creative solutions. Perhaps unsurprisingly, in-house lawyers care more about the service they are delivered, than where it is delivered from.