Thought Leaders Roundtable Report: Technology in Spain

There will be a raft of new opportunities for technology lawyers in Spain as the digitalization of the economy accelerates, but this rapidly changing environment also poses many challenges for such practitioners, who will have to do more to prove their value to clients, according to leading lawyers speaking at the Leaders League Thought Leaders Roundtable.

Posted Wednesday, June 24th 2020
Thought Leaders Roundtable Report: Technology in Spain

The coronavirus pandemic and the associated lockdowns around the world have accelerated the digitalization of many industries. As a consequence, opportunities for technology lawyers are increasing considerably as businesses are forced to consider the legal, and ethical, implications of e-commerce and new digital platforms. However, as was highlighted in the recent Leaders League Thought Leaders Roundtable, which focused on technology in Spain, this is also a very challenging time for technology lawyers, who are having to work much more efficiently, keep up-to-date with a flood of new technology-related regulations and deal with increasing pressure to differentiate themselves and demonstrate the value they provide to clients.

The lack of face-to-face meetings during lockdown has meant it has been difficult for technology lawyers to meet new clients, but, that said, their services are in demand as businesses seek guidance on artificial intelligence, blockchain and the internet-of-things. Meanwhile, despite the devastation wrought on the global economy by the pandemic, there is an expectation that new, more innovative, technology business will emerge from the wreckage.

Ecija managing partner Alejandro Touriño   said that the economy was going through “uncertain times and it is not clear what will happen”. He continued: “These are difficult times for clients but there are a lot of opportunities.” Touriño highlighted how digital businesses – such as Zoom for example – are now taking a leading role in the economy. “This is an opportunity for law firms to get close to the clients – such as IT companies – that are operating in the digital economy, it is also an opportunity to help traditional clients to transform into digital businesses,” he added.

Touriño said that, from the perspective of technology lawyers, it can be difficult to understand what clients intent to do with new technology and that it was up to law firms to present “the right vision of law in terms of permitting what clients are trying to do”. He added that ethical issues also needed to be considered when developing innovative technological businesses. “You cannot do whatever you want from a legal perspective”, he said. “We try to identify what they want to do and do it in a legal way”.

Beauty contests

Another challenge for law firms, according to Touriño, is ensuring they work as efficiently as possible. He added that pricing was becoming an issue in that clients were increasingly running beauty contests in the hope of getting the best-priced legal service.

Touriño said that artificial intelligence and blockchain would present many new opportunities for law firms in future. However, he added that some clients’ technological needs may be less complex than others. “Some clients don’t need blockchain and will just need e-commerce – in this case, there will be work for law firms related to cybersecurity as many companies are turning into digital platforms,” Touriño explained. He added that lawyers would also need to monitor European Court of Justice developments, particularly those concerning the employment relationship between drivers and commercial platforms, for example. In addition, lawyers and clients need to monitor developments regarding the potential liability of internet service providers.

One effect of the pandemic is that it has made it more difficult to get new clients as it is difficult to meet new people, according to Touriño. He added that, while it can be easier to get new clients with regard to more sophisticated matters, with regard to other matters, clients are more likely to differentiate between firms and look for those providing added value.

The digital transformation of the economy has been speeded up by the pandemic, according to EY Abogados partner Blanca Escribano. She added that, as a result, boosting e-commerce and platforms, as well as investment in artificial intelligence, blockchain and the internet-of-things (IoT) has moved to the top of clients’ agenda. “As a result, the fourth industrial revolution will be achieved earlier than expected,” she said. Escribano added that the current challenge for lawyers is to become more efficient in their use of legaltech, to look at how clients can use legaltech to improve their operations and to provide “real value” in addition to such tools. Escribano added that, in the technology sector, there are “good years ahead” for law firms. “Technology lawyers will be in demand and they will be able to add value to other areas such as finance, health, and real estate, which have been very much impacted and transformed by digitization,” Escribano said. She also said there was a risk that technology lawyers’ services become commoditised. “Technology law issues will become embedded in all practice areas – the challenge for tech lawyers will be to continue to prove their value as a stand alone practice,” Escribano remarked. She also said technology lawyers will need to work closely with ethics and corporate governance experts.

Working with philosophers

Verticalization and softwarization are other significant trends that will be accelerated by 5G, according to Escribano. She added that tech lawyers will be in demand for advice on liability issues as the “value chain in digitized markets becomes very complex and regulating liability will be key when something goes wrong”. She also that technology lawyers will be working hand in hand with other professionals – such as philosophers and data analysts – in areas like artificial intelligence.

Samaniego Law managing director Javier Fernández-Samaniego said the digitalization of some sectors has taken place very quickly as a result of the coronavirus pandemic, with examples of universities “going online” in a matter of weeks, a process that had initially been expected to take place over a period of years. Similarly, the increase in teleworking presents many opportunities for technology lawyers, as does 5G, given that the deployment of this new telecoms infrastructure is becoming a priority.  Samaniego said that technology is becoming embedded in all areas of practice and, consequently technology lawyers in law firms face the “internal challenge of how to maintain a differentiated practice”. He added that virtual hearings and online dispute resolution was becoming much more common. However, Samaniego also said that technology lawyers are often requested to support lawyers in other practice areas.

With reference to changes in the legal market, Samaniego said the “paradigm has now changed”. He continued: “I stopped believing some while ago in the need for big buildings and big headcount to be able to deliver high quality for premium clients and some firms will have to reinvent themselves because their existing cost structure doesn’t make sense – there are new disruptive models that, without sacrificing quality, are delivering exactly the same as the traditional providers with very different pricing models”.

No clear roadmap

With regard to future developments, the EU regulation on platform-to-business relations (P2B regulation) – with which platforms must comply by July 2020 – and the discussions on future new e-commerce regulations (DSA Digital Service Act) will be significant, according to Samaniego. He also says that outsourcing and “managed services –even of legal departments – will become more popular among companies that will be looking to reinvent themselves in order to deal with the effects of the coronavirus pandemic”. Samaniego added that 5G will have a lot of implications for technology lawyers, as will online dispute resolution and the resolution of conflicts by artificial intelligence. He also said that cybersecurity expertise is in high demand. In addition, Samaniego said that there would be new players, and “not necessarily law firms” entering the Spanish legal services market, including potentially some US companies and private equity funds investing in legal services.

Typical company cultures that have been resistant to technical change are altering and companies’ top management are looking at how to change their business from a technical perspective and have to consider “what is possible, what is legal and what is ethically desirable,” according to Cuatrecasas partner Álvaro Bourkaib. He added that there are examples of companies where all staff are receiving questionnaires from CEOs about the use of technology and there is considerably more interest in practical questions related to technology.

One of the big challenges for technology lawyers is that it can be complicated to “staying on track with regulatory news”, said Bourkaib. “They often don’t have a clear road map,” he added. “Also, keeping track of new technology providers can be challenging.” Bourkaib said another key issue was that new technology is “touching areas that are not regulated and this can be challenging from a legal advisory point of view”. He also said that law firms would need to evolve as the market evolved, but it can be “hard to take decisions on the path firms should follow, but firms have to take some steps”.

Tech lawyers must reinvent themselves

With regard to future trends, Bourkaib said that among the most significant will be the wider use of electronic signatures. He added that technology would also have the effect of changing behaviour with the use of robust methods of digital identity being used and increased cybersecurity risks.

The digitalization of many aspects of the economy has been particularly evident in the last 12 months, according to Uría Menéndez partner Leticia López-Lapuente. “Big companies are turning into platforms, they’re not doing business in the same way and they are exploring non-core business opportunities,” she added. López-Lapuente also said that regulators are reviewing new business models in the technology sector, but the complexity of such models is making this a much more difficult task.

Among the key challenges for technology lawyers working in private practice is the fact that clients are developing very good digital legal teams in-house, according to López-Lapuente. “Technology lawyers have to reinvent themselves, they have to become trusted advisors because technology is becoming very strategic,” she added. “There is also an onus on technology lawyers to learn about different industry sectors – the finance sector is different from the distribution sector, for example.” López-Lapuente said there was also a role for law firms advising clients on how to adapt “off-the-shelf” technologies for their business.

Law firms need to evolve

With respect to future developments, López-Lapuente said that the European Union had created “big expectation” around the European Digital Strategy and this means technology will “no longer be local in terms of legislation”. She added that the EU will need to make important decisions regarding the regulation of platforms, for example.  López-Lapuente added that companies are making such decisions and moving their business to online platforms and, therefore, they will need EU rules that provide them with “certainty and guidance to develop these new business models”.

Prior to the coronavirus pandemic, clients’ primary concerns had been the General Data Protection Regulation (GDPR) and cybersecurity, but now it is all about survival, said DWF-RCD co-managing partner Ignasi Costas. He added that, among more established clients, there will be an increase in investment in “innovative solutions to become stronger players in the market”. Costas continued: “Since in innovation time is of the essence, certain decisions, will be taken faster.”

Costas said entrepreneurship is seen as a “new path” as there is plenty of liquidity in the market and, despite the fact that a slowdown in the economy is expected, a lot of new ventures will be created and financed. “In economic downturn, new players emerge,” he said. Costas added that clients and law firms are exploring more innovative ways of working. “Law firms won’t practice law in the same way, there will be more flexibility in the delivery of our services.”

Costas said that, while law firms may think they are offering “cutting-edge solutions”, they need to keep “adding value”. He continued: “Law firms need to evolve and need to embrace technological change, though technology will not replace all of lawyers’ skills.” Costas concluded by saying that, while law firms would make greater use of machine-learning and artificial intelligence, the implementation of “deep legal tech will take longer than people expect”.