Year in Review

Top 7 legal tech stories from the Journal in 2019

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Between facial recognition, Facebook and state privacy laws, it was a busy year for law and technology. The ABA Journal takes a look back at 2019's biggest legal tech stories.

1. Facial Recognition Goes Mainstream

Smile! You’re on camera! And chances are, your image is being analyzed and run through a database so that you can be identified for all sorts of reasons. Facial recognition programs are already being used by several law enforcement and governmental agencies throughout the country, and admitted as evidence in criminal trials. Meanwhile, businesses, airports, and venues, including Amazon, are either using facial recognition or plan to identify new customers or make user experiences easier.

This year, several cities, including San Francisco and Oakland, California pushed back and banned the use of facial recognition by government agencies, citing privacy concerns, as well as reported inaccuracies in the software. “Good policing does not require that we live in a police state,” Lee Hepner, legislative aide to San Francisco Board of Supervisors member Aaron Peskin, who championed the bill, told the ABA Journal in September. Proponents of the technology feel like they’re being singled out unfairly. “A lot of people miss the value of facial recognition because they’ve got a lot of questions about how it actually works,” Peter Trepp, CEO of FaceFirst, a facial recognition company told the ABA Journal in September.

2. Rough Year for Facebook

Good thing Facebook added sad and angry emojis for users to use in reacting to posts on their timeline. Mark Zuckerberg could use either to describe the year he and his company have had. In July, Facebook was hit with a $5 billion fine from the Federal Trade Commission over its privacy practices, most notably relating to its association with Cambridge Analytica. The social media giants promised to overhaul their privacy policies and do more to safeguard user data.

Then, in October, Zuckerberg was grilled by Congress over a myriad of things, including Facebook’s planned cryptocurrency, Libra, as well as defend its stance against fact-checking political ads. While Facebook’s stock price remains healthy, the social media company has lost nearly 15 million users over the past two years, according to reports. Am Law firms, in particular, are fleeing. According to a November report from Good2BeSocial, lingering concerns over privacy have caused large firms to turn to other social media platforms, in particular LinkedIn and Instagram (the latter is owned by Facebook).

3. Alternative Legal Service Providers Rake in the Cash

It’s a good time for alternative legal services providers—at least when it comes to their bank accounts. In September, cloud-based practice management company Clio announced a $250 million Series D funding round, one of the largest ever in legal technology. Meanwhile, in February, Axiom announced plans to file an IPO—only to change course seven months later and sell a majority stake to private equity company Permira.

The new majority shareholders in Axiom are no strangers to the legal tech arena, having purchased a controlling stake in LegalZoom in 2014. Those were only a couple of examples. In September, Bob Ambrogi of LawSites reported the $1.2 billion invested in legal tech companies in the first three quarters of 2019 was already a record for any year. Additionally, the ABA Journal reported in May that eight for-profit and nonprofit legal tech organizations have taken part in Silicon Valley’s prestigious accelerator, Y Combinator, since 2018—a sign that some experts believe is indicative of a robust legal tech market.

4. Bar Associations Lead the Way on Controversial Reforms

Nonlawyer ownership, fee splitting and allowing certain nonlegal professionals to provide legal services have long been a no-go zone for many lawyers and bar associations. But in 2019, bar associations in three states took the first steps toward entering that previously forbidden territory. In California, the Task Force on Access Through Innovation of Legal Services released a report over the summer recommending reforming unauthorized practice of law regulations to allow certain nonlegal professionals to provide legal services under certain conditions and amending state ethics rules to allow for fee-splitting and nonlawyer ownership of law firms.

The proposals engendered quite a bit of controversy and opposition from public commenters. As such, the California bar’s board of trustees announced in November that the task force’s final recommendations would be delayed until March 2020 to better evaluate the public comments. Meanwhile, in August, the Utah Work Group On Regulatory Reform put forth its suggested reforms. Stopping short of allowing nonlawyer ownership or reforming UPL regulations, the group, instead, called for a regulatory sandbox where alternative legal services providers could test out new ways to deliver legal services without running afoul of ethics rules.

Then, in October, Arizona’s Task Force on the Delivery of Legal Services proposed removing the prohibition on nonlawyer ownership of law firms.

5. States Lay Down the Law on Digital Privacy

When the European Union enacted the General Data Protection Regulation in 2018, one of the big questions would be whether the United States would follow suit. That hasn’t happened at the federal level, but that hasn’t stopped some states from taking the initiative.

In January, the California Consumer Privacy Act went into effect. Seen as “GDPR-lite,” the California law is the strongest data privacy law in the country, giving consumers access to their data, the right to have their personal data deleted and the ability to opt out of having their data sold. That same month, Vermont enacted a law regulating third parties that buy or resell consumer data.

6. EU Courts Grapple with Takedown Requests

This autumn saw a pair of seemingly contradictory court decisions in Europe concerning the right to force an internet company to take down or de-list information online. In September, the European Court of Justice ruled Google did not have to de-list or de-reference information pertaining to a French citizen worldwide—just in the EU.

In its opinion, the court seemingly shut down the argument that the so-called “right to be forgotten” applied throughout the world, finding: “It follows that, currently, there is no obligation under EU law, for a search engine operator who grants a request for de-referencing made by a data subject … to carry out such a de-referencing on all the versions of its search engine.” Some experts, however, pointed to another line in the opinion, which refused to rule out a worldwide application: “EU law does not currently require that the de-referencing granted concern all versions of the search engine in question, it also does not prohibit such a practice.”

Meanwhile, in October, the same court ruled that EU courts can force Facebook to remove specific posts on all versions of its site internationally if said posts violate national laws. “This judgment raises critical questions around freedom of expression and the role that internet companies should play in monitoring, interpreting and removing speech that might be illegal in any particular country,” said a Facebook spokesperson in a statement. “It undermines the long-standing principle that one country does not have the right to impose its laws on speech on another country.”

7. Keep an Eye on China

The country is rapidly moving forward with several technological innovations, including blockchain, all-virtual internet specialty courts and, most controversially, DNA surveillance.

In February, the New York Times reported that the government set up “free physicals for all,” took DNA swabs from the patients that showed, and then put them into a DNA tracking database built, in part, with help from a Massachusetts-based company. The Times reported that the information was used to track ethnic minorities, primarily Uighur Muslims, in the name of national security.

Then, in December, China instituted a rule requiring all citizens to get their faces scanned by telecommunications carriers before they can sign up for mobile telephone service or access the internet. The government’s rationale, is to “safeguard the legitimate rights and interests of citizens in the cyberspace” and prevent fraud, according to Quartz.

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