Thought Leaders Roundtable: Technology & Data Protection

Publicado vendredi, juin 24 2022
Thought Leaders Roundtable: Technology & Data Protection

Thought Leaders Roundtable: Technology & Data Protection

Leaders League recently moderated a round table hosted by Deloitte Legal in Madrid that brought together several leading lawyers in technology & data protection to discuss the latest trends in the sector and their thoughts for the future. The wide-ranging conversation touched on recent and upcoming legislation, compliance challenges, the increasing role of technology in society, and their thoughts on how their profession will change in the coming years.

Regulations and compliance issues

One of the biggest issues facing the European tech sector is the arrival of new and forthcoming regulations, according to Raúl Rubio, partner in Deloitte Legal’s digital rights and technology practices. This includes relatively recent EU legislation such as the General Data Protection Regulation (GDPR) and the Data Governance Act (DGA), the latter of which is still awaiting formal approval by the EU Parliament and Council. These rules cover both personal and non-personal data, and in the case of GDPR, cover a broad group of different sectors, including banking and telecoms. The complexity involved in these regulations can create challenges for the businesses that must comply with them, a process which can be both time-consuming and expensive, with no legal certainty at the end of the day. The problem, according to Rubio, is not the rules themselves, but the complexity they are currently adding. “It’s not about protecting users, it’s about doing it in an effective way,” he said.

Javier Samaniego, managing director at Samaniego Law, argued that the main driver behind these regulations has been less about protecting consumers and more about protecting the European tech sector from large US tech companies. “We’re using regulations as an economic tool,” he said.

Alejandro Touriño, managing partner at Ecija, added that the issue is particularly problematic in Spain, which authorities have been aggressive in applying and interpreting the EU framework. The issue has made the country less attractive to investors, he said. “In several situations Spain is at the back of the list as a market because of legal restrictions and its interpretations by regulators.” While the situation may be particularly acute in Spain, Touriño said that in many ways it is reflective of a broader EU regulatory philosophy. “In the balance between business and individual rights, in the EU we sometimes prefer to protect individuals more than it is reasonable.”

Despite this, Rubio said that the burden imposed by the new regulations is falling more on small European companies rather than large foreign competitors, which often have much more resources they can throw at compliance. “Some might think all these regulations are barriers for big tech companies, but in my experience it is the opposite. The rest of the market, especially European startups are suffering a lot because of this complexity of the regulations.”

In the case of regulations that have not been formally approved yet, such as the DGA, much will depend on how their application is eventually interpreted. “We need to wait to hear what the courts say,” Bartolomé Martín, data protection and cybersecurity partner at Squire Patton Boggs. Much of the current challenges stem from the ambiguity regarding how the judiciary will ultimately rule on how these regulations are applied. The main task now, according to Rubio, is for companies to cooperate regulators in order to better define the legal concepts laid out in the regulations.

Touriño agreed that the national interpretation of EU rules can go a long way to determining how attractive a country is to outside investment. “The Irish authorities have the same rules as we have but interpret them in a more pro-business manner.”

 

Brave new world

According to the panelists, one of the reasons new tech regulations are so time-consuming for companies in all sectors to comply with is the ubiquity of technology in all areas of business now. “There is no board of directors that isn’t facing tech issues on a daily basis,” Touriño said. This is a trend that stretches back decades, but only intensified in recent years. “Technology today isn’t where it was five years ago, because the pandemic acted as an accelerator,” Samaniego said. In fact, it has become such a dominant force in business that in many cases it has gone beyond its traditional role as a tool for helping companies implement their strategy. “I think technology is the strategy,” Martin said. That means even companies that may not traditionally identify as being part of the tech sector are finding technology increasingly at the core of their identity and core competencies. ““If you want to compete, you need to bring tech aboard.” This is particularly true for areas such as the financial sector. “The big banks aren’t hiring key people from their competitors, they’re hiring them from big tech,” Touriño.

Álvaro Bourkaib, partner in Cautrecasas’ intellectual and industrial property and trade secrets and fintech practice area, says the driver is not necessarily the pace of technological innovation itself, so much as the way those innovations are impacting the world in general. “What’s changing isn’t the technology it’s society,” he said. “What’s fundamentally changing is the nature of society. Businesses will have to adapt to that.” This will only become truer as the children and teenagers of today who are growing up as digital natives become clients in ten years. “Companies need to change the way they do business, because their clients in ten years are going to have completely different profiles,” Martin said.

Clients aren’t the only side of the legal sector that will experience major changes in the future. The profession itself is likely to experience a massive transformation in the coming years. One of these changes will be the disaggregation of different legal services into different firms with greater specialization. “In the next five to ten years, the legal business will be completely different because of disaggregation,” Rubio said. “We’ll have different roles.” Samaniego pointed to recent news regarding plans by business services firm EY to split its audit and consulting businesses into different companies as an example, allowing the firm to avoid some of the conflict-of-interest issues that have prevented it from being more active in legal services in the past. The firm is unlikely to be the last to adopt the strategy. “There is a huge revolution coming this summer,” Samaniego said.

While bigger players may be disaggregating, small competitors will also crop up to offer specialized solutions that are currently included in the services provided by larger firms. “Legal startups are taking part of the cake,” Rubio said. The changing landscape will also affect how large firms staff themselves, according to Bourkaib, who said we will likely see technology practice groups look for different types of lawyers. “We need different positions in the legal profession: legal technicians (experts in the law), legal-technology experts (experts in the technology for the practice of law), and sector-specific experts (experts in the business),” he said.

In other cases, some of the tasks currently being done by law firms will be offloaded onto automation and digital tools, many of which will be adopted internally by existing clients, according to Touriño, who said his firm is seeing more companies adopt legal tech tools themselves. “We are being hired to help clients identify legal tech tools and train them on how to use them.”

While the more mundane legal tasks may be adopted by AI and automation, that doesn’t mean law firms will be going extinct anytime soon. But it does mean that they will increasingly focus on the more value-added aspects of legal services, Martin said. “What clients need is the added value, what artificial intelligence can’t provide.”