The impact of technology in Africa

As a major transformative force around the world, technology is increasingly disrupting existing monopolies and in some segments, completely changing the game. From  artificial intelligence technologies (AI), financial services technology (fin-tech), Medical care technology (med-tech), education (edu-tech), innovations in law (legal tech), mining and exploration (mine-tech) among others, supported by high-speed internet penetration and mobile phones offers Africa a huge opportunity to enhance development.

Africa’s penetration of smartphones is expected to reach 50% by 2020, from only 18 percent in 2015.[1] Mobile payments are sweeping across the region with East Africa being the global leader in mobile payments. E-commerce is growing fast as is e-learning.

Technology has also been used to bring government officials to task and therefore there is an increase in integrity and accountability of government officers. This should offer investors comfort to come in. Given this relative stability, some of the regions commercially oriented start-ups such as Africa Internet Group and Interswitch are either being acquired or going public. Investors will be keen on which others show similar potential.

Ubiquity in internet access 

Placing internet access in a ubiquitous position requires consistent innovation. Companies have began testing alternative technologies to make this possible such as Google’s balloons [2] and Facebook’s solar powered drones[3]). Currently there are two impediments to a fully connected continent:

  1. Cost – costs are many times higher in Africa, an Internet Society report mentions that a person needs 15.7% of average GDP per capita in Kenya to get broadband – compared to less than 2% in Europe[4].
  2. Geography – the geography of Africa is extremely challenging with large open spaces or dense jungle – often sparsely populated.

Full internet connectivity is likely only going to come through a mix of technologies and cost improvements.

Example:

In 2013 Kenya completed a pilot on the deployment of internet use in rural areas. Dubbed Project Mawingu[5] (Swahili for “cloud”), Microsoft together with Strathclyde University, local telecoms firms and the Communications Authority began tests to provide affordable, high-speed wireless broadband to rural areas using alternative untapped technologies in TV “whitespaces” (TVWS).

White Space refers to the unused broadcasting frequencies in the wireless spectrum. Television networks leave gaps between channels for buffering purposes, and this space in the wireless spectrum is similar to what is used for 4G and so it can be used to deliver widespread broadband internet. It is believed that Kenya could lead the way with a model of wireless broadband access that in Europe and the USA has been tied up in red tape.  This pilot does not require mains electricity and is being run totally on solar power.

The internet  impacting  traditional/rural societies on education and social norms

There are, two schools of thought in African societies in relation to the impact of the internet:

  • Those who embrace the internet as a tool to protect, maintain and promote cultural diversity; and
  • Those who believe that the internet serves only to endorse capitalist ideals and sanction products of the modern industrial society[6]

There is no denying that a democratization of information will lead to impacts on traditional and rural societies.  Western social mores, celebrities and news are going to be now available to everyone.

That said, there is no guarantee that traditional and rural societies will be overwhelmed.  The internet will allow people’s art, language, culture, histories and traditions to be shared, learned, promoted and distributed[7].

The expansion of mobile money payment systems such as M-Pesa. 

Expansion to new markets in developing countries is continuing as is bringing more people into the mobile money market. As at March 2016, M-Pesa had entered into Tanzania, DRC, Mozambique, Uganda, Rwanda and Zambia.

In India, the National Rural Livelihoods Mission uses M-Pesa to enable financial inclusion for women’s groups. The Mission is using the service to disburse pre-natal health benefits.

A mobile money solution is proven in Kenya to bring people into the money economy and in unbanked countries, is a good way of bringing people out of barter into the money economy. However, M-Pesa’s current iteration will  not have success in more developed countries.  Mpesa failed in South Africa[9] partly due to the fact that most South Africans already have good banking access.

The impact of drone technology in inaccessible areas.

The potential in this space is huge. In Rwanda, San Francisco based start-up Zipline got the go ahead to pilot drone tech in doing daily deliveries of critical medical supplies (primarily blood and vaccines) to 21 locations across the country.  Drones allow items to be delivered in areas where roads are unreliable or impassable.

As elsewhere in the world, African regulators are struggling to determine the appropriate regulatory response. In Nigeria [10] the person flying the drone must have a pilot license and pay significant fees to get a security clearance.  Kenya has similar rules currently before the National Security Advisory Committee.  Until then, the use of drones is banned. Drones will remain a future technology until the regulatory issues are resolved.

The educated urban elite and global competitiveness

The educated urban tech-savvy African now has all his work and school in his phone and backed up in his email-managed cloud account. With good internet access, he/she can join meetings virtually, submit school assignments and work reports, run a successful business while still keeping tabs on family and friends.

The educated urban elite in Africa is becoming more like the urban elite of other countries and joining the global middle class.  Africans have been ready adopters of platforms like Facebook and twitter.

Africans are learning to code and adapting programs to their particular needs.  There is a thriving technology scene in Africa’s bigger cities – Lagos, Nairobi, Cairo – where Africans are developing African solutions to their problems.

That said, it is unlikely that African technology will emerge as a major player on the world scene.  The big money in technology resides in Los Angeles/San Francisco, London and New York.  Africa’s best and brightest technologists will likely end up in those cities working for Google, Facebook or Microsoft.

Social media as an organizational tool for political systems

The Arab Spring showed the power of social media on corrupt and violent governments.  High internet penetration and social media allowed protesters to mobilize and organize these revolutions.

Social media gives a voice to the people that might not otherwise have existed in many regimes.  It is clear that the Chinese Communist party has realized that not only does social media bring down governments but that it also gives governments a real time insight into what people are interested in[11].

In China, the government is both listening and also looking to capitalize on the data created by social media and internet interactions as a tool of social control[12].  China’s track record of censorship and suppression is now extending online with no open Internet and no Net Neutrality in their vocabulary.

In Africa there is a big hurdle to social media having a positive or negative social impact – only urban elites are generally on social media so it is unlikely to lead to a mass movement in sub-saharan African countries (Kenya and South Africa excepted where internet usage much more prevalent). Consequently, social media is unlikely to have any impact on political systems in the near term – but who knows about the future.

There will still be brain drain

The internet has removed the tyranny of distance and allows a good professional sitting in Africa to work anywhere in the world.  Sites such as upwork, freelancer and others allow people to sell their services to a worldwide market.

That said, the big deals and high profile jobs are still based in London, New York, Paris and Berlin.  It is, to a certain extent, a rite of passage for an African professional to seek professional fulfillment overseas.  The internet is unlikely to change this to any great extent.

Tech prospects on raw material extraction and advanced manufacturing in Africa?

  • Mining

African mining is currently extremely labour intensive and dangerous for the miners.  Technology will undoubtedly change both of these things.  Mining in many other jurisdictions is much more automated – especially once the grades of ore become poorer.

Much of the mine-tech used in Africa is developed abroad. As a result, most companies remain at the early stage of the adoption curve-placing a majority of their innovation focus on technological optimization of old techniques in a bid to reduce costs or discover deposits more efficiently. Given the rapid pace of technological advancement, companies have to keep an eye on cross sectional innovations that may impact mining in the future. These include:

Artificial Intelligence: The move towards autonomous vehicles and automated technologies such as Australia’s AutoHaul has already revolutionized mine operations. As the “intelligence” of these machines grows, they will be able to perform increasingly complex tasks, including hazardous processing activities—reducing labor costs and enhancing productivity as a result.

Wearables: there is huge potential for innovations in the occupational safety market which mining is one of them. For example Night runner a US product initially developed for night athletes is being reconfigured to cater for miners of the night shift.

  • Advanced manufacturing

The prospects for significant amounts of advanced manufacturing in Africa are bleak.  The lack of infrastructure (bad roads, ports, limited rail options), political instability in some states, lack of reliable water and electricity, lack of access to local markets and generally low productivity among the workforce means that companies seeking to set up advanced manufacturing generally look elsewhere.

That said, progress is being made in relation to each of these impediments and it may be that Africa can look forward to a future of rapid industrialization.

Investment interests and drivers

Africa shows that there is potentially a feasible market in catering to the developing lower classes.  You don’t need to have a product that appeals to the AB demographic in a western country to be successful or make a meaningful impact in Africa.  There is a huge demand for products and services that cater to the less developed parts of the continent.

For example the informal economy represents about 80% of the total job market. A large number of informal businesses lack access to services such as ERP systems, small business banking (even with Mpesa, a large number of Africans are still unbanked), affordable third-party logistics or internet access. These present a huge opportunity for VC-backed start-ups to attempt scalable applications.

Example:

Kenyan based startup Lynk focuses connecting households with informal workers. Borrowing from the LinkedIn model, the application has been dubbed the LinkedIn for the ‘linked out’ allowing customers to book services from over 60 categories, ranging from plumbers to nannies. The platform works via mobile app, the web and SMS, and automatically identifies qualified workers based on sub skills and other signals such as location, price range, language and experience.

There are several pre-requisites for Africa to draw investment and interest:

  • Political stability – African countries have risen from past hostilities, creating the political stability necessary to attract investment thus far. For the momentum to continue there has to be a continuation of this stability and a strong legal protection of assets.
  • Appropriate regulatory standards towards Data Protection and Cyber Security – Africa’s tech sector is not bullet proof to cyber threats that face the industry in other parts of the world. Anti-virus adoption and creation of awareness around cyber security is key to building the trust of investors. In addition, Africa needs an increase in tech lawyers to better advise potential investors.
  • Increase Africa’s internet bandwidth and develop a stronger and more reliable tech infrastructure.
  • Tech-preneurs need to be equipped with business skills – there is a reason why only around 2% of start-ups attract investors, compared to more than a third in Silicon Valley. Africans may be tech savvy but not so much in the business skills to successfully grow their companies.
[1] Estimated by MGI using forecasts from The mobile economy: Sub-Saharan Africa 2015, GSMA, 2015; UN Population Division
[2] https://en.wikipedia.org/wiki/Project_Loon
[3] https://www.wired.com/2016/07/facebooks-giant-internet-beaming-drone-finally-takes-flight/
[4] http://www.internetsociety.org/sites/default/files/InternetInAfrica-20150708%20Final.pdf
[5] See http://dynamicspectrumalliance.org/assets/TVWS_Report_for_Kenya_final_final_24_Aug.pdf  accessed on 3/1/2017
[6] http://www.ecoliteratelaw.com/09_DigitizationIndig.cfm?sect=text
[7] http://www.wadsworth.com/anthropology_d/special_features/ext/earthwatch/rt.html
[8] https://en.wikipedia.org/wiki/Natural_language_processing
[9] http://www.bbc.com/news/world-africa-36260348
[10] http://africanbusinessmagazine.com/sectors/technology/drone-technology-help-africa-overcome-developmental-challenges/
[11] https://www.washingtonpost.com/world/in-china-government-mines-public-opinion/2013/08/02/33358026-f2b5-11e2-ae43-b31dc363c3bf_story.html?utm_term=.347301bbf75f
[12] http://fortune.com/2016/11/29/china-alibaba-tencent-baidu-social-credit-score-behavior-grading-system/
[13] http://www.businessinsider.com/africas-population-explosion-will-change-humanity-2015-8

Bitcoin 101

 

What is Bitcoin?

It’s a digital currency.

Yeah, I get that, but who is behind Bitcoin?

Nobody.

What do you mean by nobody? Somebody must be controlling it!

Nobody is controlling it, it is an algorithm.

What? You mean like I-Robot? So you say the world is going to be taken over by machines?

Well, not the world, but maybe some businesses.

Right… (Rolling her eyes) But who controls the algorithm? Some mad scientist?

It’s an open source project.

An open what?

Open source, as in it’s free code. You can download it from the internet and do with it whatever you want.

So you don’t have to pay for the “program”?

Well, it’s free as in freedom, not free as in beer.

What does beer have to do with it?

The code is not only free in the sense that you can use the program free of charge, it is also free in the sense that you can take the code, modify it, and release a program of your own with it.

Wait a second! If I can do that then I can make my own bitcoins. What value does a bitcoin have then?

No, you cannot mint your own bitcoins. What you can do is invent your own currency. And then you have to somehow make it gain acceptance…

Oh! But this surely is the end of Bitcoin. If you can make as many currencies as you want, none of them would have any value.

Currencies have value because of social convention. Bitcoin has value because people are willing to assign value to it.

I don’t think you are right. Euros or dollars have value, everybody knows that.

Well if bitcoins do not have value I will gladly accept your bitcoins (smiling).

Bitcoins are not backed by anything so they cannot have value.

Neither shillings, dollars nor Bitcoin are backed by anything. You can say that all of them are the result of consensual hallucination. They have value because people give value to them. There is not much difference between them in this regard.

I don’t think so. You can buy things with euros or dollars, but what can you buy with bitcoins?

You can buy almost anything with bitcoins. There are companies that will gladly accept your bitcoins in return for regular currency that you can use to buy anything. Converting bitcoins to sovereign currencies is just a technical interface and many companies provide this service. Besides, you can do things with bitcoins that you cannot do with sovereign currencies.

Like what?

For example, you could launch a crowd-funding campaign, just creating a special type of Bitcoin transaction.

That sounds cool.

There are many more applications that were impossible until now, such as a car which reads its ownership from the cloud. If you want to buy the car, you just pay the owner with bitcoins and the car knows automatically you are its new owner because it can look it up in Bitcoin’s database. And there might be more applications to come that nobody has thought of yet, as was the case (and still is) with the internet.

I guess I did not think of it that way.

As they say, a currency is just the first application. The technology allows transferring value securely and in a decentralized way and this can lead to many new cool applications.

I am intrigued; I’d like to learn more.

Another drink?

*credits to Pedro Franco

The Internet of Things: approaches to liability

Think of a world where physical objects are seamlessly integrated into an information network; cars, homes, books, watches, spectacles, kitchens and so on. And where the physical objects can become active participants in business processes that is, they become ‘smart’, coupled with services being available to interact with these ‘smart objects’ over the Internet, analyze their state and any information associated with them, taking into account security and privacy issues. That is the Internet of Things (IoT) and it is here.

Mckinsey estimates that IoT impact on the global economy might be as high as $ 6.2 trillion by 2025 and there lies the issue. Given the current surge in cyber-attacks, businesses and consumers will be keen to understand liability and risk allocation in IoT.

The curse in the blessing

We are now able to control the various connected devices on the network using an app on our phones and tablets. However, like anything digital, these networks run the risk of being hacked. The question is who is liable when something goes wrong?

As the IoT can connect devices from different manufacturers, it is possible for a user to own a smart TV from maker X, a smart coffee machine from maker B, and a smart air vent from maker A, which are all controlled by a smartphone from maker Z that runs on software created by a third-party. Looking at the complexity of these connected devices makes it much harder to establish who is liable, under current laws and regulations, when something goes wrong.

Even on a simple level, if a smart cooker leaks when a smart toaster is turned on, causing it to explode and burn down a house, the owner has a plethora of companies who are liable for the loss. These range from the retailer, to the manufacturers, through to the developers of the phone app or cooker-toaster software. Will one party be solely accountable? Or will the parties involved in creating and processing the integrated data components of the cooker and toaster be liable to some extent?

This interoperable risk is heightened as many of these devices are likely to be mass produced and therefore, not secure enough to protect personal data.

Product liability

The situation with product liability may not be that complex today. When a stand-alone consumer device is malfunctions within a specified period of time, the user is entitled to certain remedies that are implied into every sale.

Product liability law in Kenya is governed by the Consumer Protection Act (the CPA) which introduced statutory liability for defective products. Liability under the CPA exists alongside liability in negligence, and in some cases a common law claim may succeed where a claim would not be available under the CPA. The CPA applies to both products used by consumers and products used in a place of work. The CPA imposes strict liability on manufacturers of defective products for harm caused by those products. This means that people who are injured by defective products can sue for compensation without having to prove that the manufacturer was negligent. It is merely necessary to prove that the product was defective, and that any injury or damage was most likely caused by the product.

Product liability will continue to play a role in the IoT. For example, if a smartwatch develops a mechanical fault shortly after purchase the user is able to return it to the seller.

Degree of liability

Worryingly to manufacturers of IoT devices, network providers and software developers, a user may bring a claim against one or all of them following a device malfunction or security breach. It is not clear if the aggrieved user will be required to prove that they have suffered damage as a result of an IoT player’s actions or if the courts will adopt a ‘strict liability’ approach.

Alternatively, courts can consider apportioning liability between everyone in the IoT product and network circle, regardless of their culpability. But even this poses problems. For example in a security hack of a network router, a court would have to decide if liability lies with the router manufacturer, the internet service provider or the actual hacker. The latter option may prove problematic as many hackers are anonymous.

Criminal or civil remedies

Currently, the law is not clear whether an aggrieved user is entitled to a criminal remedy, a civil remedy, or both. All likelihood points to the severity of the liability. For example, a mere malfunction of a smart fitness monitor leaving the user unable to measure their heart rate at the gym, is not likely to give rise to a civil or criminal conviction.

Futuristically on the other hand, a smart city malfunction could create both criminal and civil liability. For example, if smart traffic lights installed by a county council malfunction, and an automated car driving under them is incompatible with the traffic lights, meaning that the car fails to stop and drives into an oncoming vehicle, the result could be serious injury to road users. A situation like this could raise claims of criminal liability. However, it appears unfair to hold the car owner/driver responsible for causing injury when the culprit was in part the malfunctioning traffic lights and in part the malfunctioning car. In this type of situation, looking outside the traditional liability frontiers may be required.

IoT is still a work in progress

Regardless of how they are used, there is always the potential for a device to malfunction or for a network to be hacked. The IoT will create new risks and this in turn will require a focus on liability.

Indeed IoT is still in its early stages. The legal fraternity needs to consider either new forms of liability, or new ways to manage and apply existing laws to different entities in the IoT supply chain. With the security and privacy risks a growing public interest issue, the IoT is still a work in progress.

Getting regulatory approvals for Fin-tech: It’s not a one stop shop yet.

Fin-tech in Kenya was pioneered by Safaricom’s M-pesa application at a time when there was no regulation, pushing the unbanked and informal sector (which represents 80% of the total job market) to buy mobile phones and move from brick-and-mortar banking into the digital economy. Since then, Fin-tech has expanded to person-to-business (P2B – utility payments, shopping etc.), business-to-business (B2B), and credit and savings services, purchasing and transferring of airtime and so on.

Regulatory Framework

The current regulatory framework poses challenges that could potentially be a barrier to innovation and investors. Fin-tech obscures the current independent sectors of regulation; telecommunications and banking presenting an overlap between different ministries and Government agencies. It involves confirming with these agencies whether licensing or authorization is needed to operate, in addition to understanding which licenses would apply.

Generally, a tech company looking to launch Fin-tech in Kenya should be aware of the following licenses and applications.

1. An application to be authorized and designated as a payment service provider from the Central Bank of Kenya (CBK) for the money transfer services it would offer its proposed users. CBK has to be satisfied that the tech company has a minimum core capital of Kenya Shillings five million (KES.5,000,000/=) to be licensed as an electronic payment service provider. The CBK may label/designate the platform as a payment system if it believes that its payment system poses systemic risk, is necessary to protect the interest of the public, or if designation is in the interest of the integrity of the payment system. Though Kenya Electronic Payments and Settlement System (KEPSS) is the only payment system that is known as having been designated, the decision to designate remains with CBK.

2. Application to the Communications Authority of Kenya (CA) for a Content Service Provider (CSP) license, an Application Service Provider (ASP) license and /or a Network Facilities Provider (NFP) license;

  • Where the platform features sending SMS’s using a network carrier in Kenya, it will be considered to be providing a communication service under Kenya Information and Communication Act and thus a Content Service Provider CSP license would be needed.
  • Where the platform provides notifications and alerts in connection with the Fin-tech products that it offers, the platform will need to be licensed as an application services provider (ASP) by the CA.
  • Where the tech company will in addition to the above set up and operate communications infrastructure (based on satellite, mobile or fixed), it shall be required to procure a Network Facilities Provider (NFP) license.
  • If the application will only be web based then CA approval may not be needed however this needs to be confirmed by them.

3. If the platform offers cross border sending or receiving of money (money remittance), the tech company has to be licensed as a money remittance operator. For this license, the company has to demonstrate that it has a core capital of at least Kenya Shillings twenty million (KES. 20,000,000).

4. Other legal requirements that would be considered are money laundering, bribery, consumer protection, data protection and cybercrime.

M&A, Data Protection and online shopping

Kenyan consumers are increasingly turning to online distribution channels such as Kilimall, Jumia and Rupu to select and buy products. The traditional sales model of wholesale has been disrupted.

FMCG businesses have to adapt to these new selling methods. Social media and its effect on how consumers select and experience their products is a direct FMCG issue. Facebook and Instagram have transformed the way in which branded products are presented to the consumer. Retail shelf space is slowly becoming a thing of the past with social media opening up new opportunities carrying the potential to increase sales and lower costs. With sales migrating online, there is a direct contact and interaction with a consumer through the user visiting the brand owner’s website. And when the consumer opts-in, interactions and e-marketing is made possible through email and text messages. The result is that an FMCG business will be receiving and processing personal data. The Kenya Information and Communications (Consumer Protection) Regulations provides for the opt-in principle in which an FMCG business can market to a consumer electronically but only after having accorded the consumer an opportunity to accept or reject inclusion in the marketer’s mailing list.

Looking at Google’s Terms of Service for example, for a consumer to use the service, he/she has to agree that Google can use the person’s data in accordance with their privacy policies (usually by ticking a little check box that at the bottom of the screen). Their privacy policy indicates that they use the information they collect from all their services to provide, maintain, protect and improve them, to develop new ones, and to protect the company and their users. They also confess that they use the information to offer consumers tailored content like more relevant search results and adverts.

Data protection and electronic direct marketing compliance of the FMCG business are therefore key considerations. A key requirement in the UK is for certain information to be provided to data subjects (the individuals to whom the personal data relates) about the types of data collected and the purposes for which the business processes those data. In addition, circumstances where personal data may be disclosed to a third party will also need to be ascertained. As noted in  previous posts, data breaches are potential deal breakers in a target business, and it will be appropriate to ascertaining as part of due diligence, which third parties process personal data on the FMCG business’s behalf.

Vodacom ordered to pay ‘Please Call me’ Inventor

A South African inventor  has won his legal bid to compel Vodacom, a leading mobile phone telco to compensate him for inventing a popular messaging service ‘Please Call Me’. The service which is also used in Kenya was introduced by Vodacom in February 2001. It allows prepaid customers to send a message for free to other users asking to be called back.

The inventor Kenneth Nkosana Makate, was employed by Vodacom (Pty) Limited, as a trainee accountant. In November 2000, he conceived the Please Call Me idea which he intended to sell to a willing buyer. After seeking advice from within Vodacom, he approached Mr Geissler, who at the time was Vodacom’s Director and Head of Product Development. Makate entered into an oral agreement with Vodacom’s Director and Head of Product Development according to which Vodacom would experiment with the idea and if it proved commercially viable, Makate would be paid a share of proceeds from the product, subject to terms to be negotiated. Makate instituted a claim against Vodacom in the High Court after his demands on Vodacom to honour the oral agreement were unsuccessful. In the High Court Vodacom contended that in terms of Makate’s employment contract, the idea was Vodacom’s property for which Makate was not entitled to compensation. Vodacom, however, did not proceed with this claim as Makate conceived the idea outside of his scope of work. The matter proceeded to the Constitutional Court, which ordered Vodacom to compensate Makate for inventing the Please Call Me service.

This case highlights the importance of companies having proper policies and procedures in place to deal with the protection and enforcement of their intellectual property. This will help create certainty for both employers and employees and will also ensure that these important intellectual property assets are properly commercialized in accordance with good business practices.

For the full judgement, see below.

CCT 52-15 Kenneth Nkosana Makate v Vodacom (PTY) Limited

KM and the rise of AI

Having worked in Knowledge Management (KM) for a year now, one thing is becoming increasingly clear. Current KM techniques have little chance of success in law firms, especially if they are the first projects undertaken.For example, iManage is only as useful as the naming conventions applied to the document and therefore cannot work as a standalone KM solution. How is it that we still cannot Ctrl F on a scanned document?….i digress. If IBM can come up with Watson or Dan Roth with Discovery Cracker, then we are on the verge of seeing KM becoming increasingly automated and not just for the Save, Search and Retrieve model, but in discrete, well-considered projects that can be scaled up and rolled out throughout a firm with high chances of success.

Further, targeted, incremental approaches that work within the existing knowledge flow of the firm are being preferred. Examples of areas that should be given careful consideration are:

A. Litigation. Take the software CaseMap ( www.casesoft.com ). CaseMap allows you to pull information that otherwise might be hidden in legal pads, bankers’ boxes, or in the memories of individual lawyers into a format that allows lawyers to gather and analyze facts in a helpful manner. Through a simple method of tagging information, lawyers can use CaseMap to find answers to questions previously difficult to obtain. .

CaseMap creates a method for looking at the information involved in the case in a variety of ways and preparing and testing strategies as well as determining where additional work may be required on a case. In addition, a lawyer can determine the strengths and weaknesses of a case and the role that individual witnesses will play in developing a case.

B. Client Relationship Management. A highly important area in KM and Business Development is client relationship management (“CRM”). CRM is  a method of gathering, associating and using in an efficient manner information that you have about customers. The holy grail of CRM in law firms is to promote the cross-selling of business to existing clients. This area is an especially fertile one for potential knowledge management and artificial intelligence projects.

C. Conflict Checking/Chinese walls. Conflict checking is an area of difficulty for many law firms, especially as the number of clients increases and as companies enter into more joint ventures and combinations. While traditional databases can be of great assistance, often potential conflicts can only be seen by lawyers who are personally familiar with the relationships between a variety of companies and people. While CRM efforts will have a spillover effect in the area of conflict checking, the application of artificial intelligence specifically to conflict checking holds a great deal of promise. check (www.dolphinsearch.com )

 

Predictive coding software changing the legal landscape

In Pyrrho Investments Limited and another v MWB Property Limited and others [2016] EWHC 256 (Ch), the UK High Court considered whether to permit the use of predictive coding in an electronic disclosure exercise. This is the first reported English High Court decision on this issue (although predictive coding is well-established in the US and has previously been approved by the Irish High Court (Irish Bank Resolution Corporation Limited and others v Sean Quinn and others [2015] IEHC 175)).

“Predictive coding” (also known as computer assisted review), works by analyzing the coding decisions made on a sample document population, and extrapolating those decisions across a wider population. The judge in this case advised that “best practice” would be for a single, senior lawyer, who has mastered the issues in the case, to then consider the initial representative sample (marking it as relevant or not), in order to “train” the software to review the whole document set. Further statistical sampling by humans (usually taking at least 3 rounds) is then conducted to ensure the quality of the exercise. Once an acceptable level of accuracy is reached, the software then categorizes all the documents. (See also the more detailed description of the process at paragraphs 19-24 of the judgment.)

This was a multi-million pound case with 3.1 million electronic documents to review. The parties had agreed on the use of predictive coding between themselves, subject to the court’s approval.

The judge referred to the references to automated electronic disclosure in Goodale v Ministry of Justice [2009] EWHC B41 (QB). He also considered some of the US authorities and the Irish Bank case where the use of predictive coding had been contested (paragraphs 25-31, judgment). He approved the use of predictive coding because:

  • Experience in other jurisdictions suggested that predictive coding is useful in appropriate cases. There was nothing to suggest it was less reliable than manual and keyword review (and it may be more reliable).
  • It brings consistency, and could allow the electronic documents in this case to be reviewed at proportionate cost. A full manual review would be unreasonable.
  • It was not contrary to the CPR (see PD 31B.25), the parties had agreed that it should be used and trial was some way off so there was scope to use other methods if need be.

Case: Pyrrho Investments Ltd v MWB Property Ltd & Ors [2016] EWHC 256 (Ch) (16 February 2016)

Innovating Justice Forum in Nairobi

Lawyers and Tech-prenuers all converged at Strathmore Business School on the 21st of April 2016 for the first ever Legal Tech forum in Kenya. It began with workshops by Legal Zoom, Strathmore and the Bloggers Association of Kenya (BAKE) giving entrepreneurs insights on the legal framework regarding their businesses.

The Chief Justice also gave a talk on the need for innovation in the justice sector, which was followed by a panel discussion on the readiness of East Africa for Justice Technology. Next we had personal startup experience sessions by the founders of ShopOfficer and mSME Garage. Lastly we had Manu Chandaria on the enterpreneurship environment, what works and what doesn’t.

It was definitely a unique platform in a very conducive environment for Legal IT. What struck me was the knowledge gap in the tech sector in legal matters. Lawyers and innovators need to collaborate more if we are to break ground in Alternative Legal Services. The technology should be programed to provide a solution to a growing need. Simply put, lawyers just want life to be made easier. With all the work that goes into research, drafting and advising clients, the last thing we want is disruption. Thus the technology should solve an actual need while saving time and increasing billing but not something that would otherwise be redundant at some point.

9 Vital Numbers for Your Law Firm’s Health (Infographic) — Legal Productivity

A recent Georgetown Law study estimated that law firms collect only 71 percent of the work they perform. Law firms can solve this problem by gathering and analyzing data and using the information to identify areas for improvement. Here are 9 vital numbers that all law firms should be looking at to gain a thorough…

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