The idea that deep pockets can affect congressional action is hardly a new one. What surprises me, however, is this account in The Hill, describing lobbying attempts to affect the deliberation of the Supreme Court as it considers the constitutionality…
Posts Tagged ‘legal cloud’
Legal Cloud Computing Association Publishes Responses to ABA, North Carolina State Bar
18
Jul
The Legal Cloud Computing Association (LCCA) has published responses to proposals issued by the ABA Commission on Ethics 20/20 and the North Carolina State Bar regarding the use of cloud computing within a law practice.
The Legal Cloud Computing Association ("LCCA"), formed in December 2010, is the collective voice of the leading cloud computing software providers for the legal profession, consisting of Clio (Themis Solutions, Inc.), DiaLawg, LLC, DirectLaw, Inc., NetDocuments, Nextpoint, Inc., RealPractice, Inc., Rocket Matter, LLC, and Total Attorneys, LLC.
Response to ABA Commission on Ethics 20/20
The LCCA’s letter to the ABA Commission on Ethics was issued in response to the Commission’s Initial Draft Proposals on "Technology and Confidentiality" published on May 2, 2011. The Proposals include certain modifications to the ABA Model Rules of Professional Conduct that are designed to facilitate the responsible adoption of technology that will increase the quality, and reduce the cost, of legal services. The Proposals were issued as part of a process initiated in early in 2010 where the Commission published an Issues Paper requesting comments and feedback from the legal community.
The LCCA fully supported the Commission’s Proposals, and concluded that the Commission ‘s recommendations provided a reasonable framework the would enable law firms to make infomed decisions about using cloud computing resources.
Response to North Carolina State Bar Proposed 2011FEO6
The LCCA’s letter to the North Carolina State Bar pertains to Proposed Formal Ethics Opinion 2011FEO6. The Proposed FEO attempts to address the ethical issues relating to the use of Software-as-a-Service or cloud computing within a law firm environment.
While the LCCA supported the NC State Bar’s efforts to provide clarity on the use of cloud computing, the Proposed FEO as written would negatively impact a broad scope of attorneys from those who do nothing more than use a web-based email client or conduct online legal research to those that do full scale online delivery of legal services.
The onerous requirements of the Proposed FEO, detailed in full in the LCCA’s response to the NC State Bar, would force many cloud computing providers to withdraw from the NC market entirely, thus negatively impacting the technological capabilities and competitiveness of NC-based law firms.
Unlike the recommendations of the ABA Ethics 20/20 Commission, the draft North Carolina bar opinion, as it stands, is likely to have a negative impact on the use of cloud computing resources and applications by law firms in North Carolina. One result is that North Carolina’s law firms, particularly solos and small law firms would be handicapped when competing with law firms from other states.
We are hopeful that the revised opinion will be more compatible with the recommendations of the ABA Ethics 20/20 Commission. Why is it necessary for each state bar to have their own set of guidelines in this area, when the companies that offer cloud computing services operate nationally?
North Carolina Bar Regulates Legal Cloud Computing
02
Jun
A proposed Ethics Opinion of the North Carolina Bar that provides guidelines for attorneys using cloud computing services, commonly known as SaaS (Software as a Service), contains language that is troubling because of its potential impact on solos and small law firm practitioners who are creating virtual law practices. The Bar is soliciting comments prior to making the Opinion final. Here are some comments for consideration.
The Opinion states that to comply with the attorney’s duty to keep client data confidential there should be:
"a separate agreement that states that the employees at the vendor’s data center are agents of the law firm and have a fiduciary responsibility to protect confidential client information and client property."
DirectLaw is a SaaS vendor that hosts law firm data at a Tier IV Data Center that implements the security controls that a bank or major financial institution uses. The idea that our data center would enter into an agreement that would make its employees agents of a law firm is not realistic. There is not sufficient consideration to expose the Data Center to this kind of liability, and there is no way that they would modify their terms and conditions to meet the needs of a single SaaS vendor. I doubt that counsel for the Data Center would ever approve such language. The Data Center would just tell us to take our business elsewhere. Amending the contract terms just for SaaS vendors that service the legal industry is not likely to happen.
There are other approaches to providing assurance to law firms that client confidential data is secure and less burdensome.
I think a better guideline would be to suggest or require that SaaS vendors host their data at a data center that is a Tier IV Data Center. A Tier 4 Data Center is one which has the most stringent level requirements and one which is designed to host mission critical computer systems, with fully redundant subsystems and compartmentalized security zones controlled by biometric access controls methods. The Data Center should also be SAS 70 certified. The Data Center should also have PCI DSS certification if credit card data is stored within the Data Center. With these safeguards in place, a law firm should be considered to have undertaken reasonable due diligence to satisfy the obligation to insure that client data will remain confidential.
There are other problems with the North Carolina opinion. Another guideline:
"requires the attorney to undertake a financial investigation of the SaaS vendor: to determine its financial stability."
What does that mean? I am not about to divulge our private financial statements to just any lawyer who inquires. How is it relevant? If there are provisions for data capture and downloading data that is stored in the cloud, and the law firm has access to that data, what difference does it make if the SaaS actually goes out of business?
It would make more sense to simply require that a SaaS vendor carry Internet liability insurance for the benefit of its law firm clients. Law firms will have problems securing Internet Liability Insurance to cover data loss. Data loss as a result of a Data Center outage is not normally covered under a law firm’s malpractice policy. For solos and small law firm’s securing this kind of coverage would be a burden and cost prohibitive. It makes more sense to require the SaaS vendor to secure such coverage and make its law firm subscribers a beneficiary of the coverage.
Another guideline states that:
"The law firm, or a security professional, has reviewed copies of the SaaS vendor’s security audits and found them satisfactory."
How much does such an audit cost? Can solo practitioners afford such an audit? Who qualifies as a security professional? I think this requirement will act as deterrent to solos and small law firms who are seeking cloud-based solutions that they can use in their practice. I think that a less costly and more effective solution would be for an independent organization to issue a Certificate of Compliance to the SaaS vendor indicating that the SaaS vendors has satisfied or complied with well recognized standards. Like the Truste Certificate in the privacy area, this would give solos and small law firms this would provide stamp of approval that minimum standards have been satisfied. This would move the cost burden of undertaking due diligence to the SaaS vendor, rather than to the solo or small law firm practitioner.
Another guideline states:
"Clients with access to shared documents are aware of the confidentiality risks of showing the information to others. See 2008 FEO 5."
This guideline should be clarified because it is not clear what "shared documents" means. This kind of statement is likely to scare clients into thinking that a law firm that stores client data on the the Internet is putting the client’s data at more risk than storing the data in a file cabinet in the lawyer’s office.
As the American Bar American, through its Ethics 20/20 Commission, and state bar associations adapt ethical rules to deal with the delivery of legal services over the Internet, it is important to consider that the burden of compliance may have a different impact on solos and small law firms, than on large law firms. The rules should not act as a barrier to solos and small law firms exploring new ways of delivering legal services online which are cost effective for both the law firms and their clients.
For a similar point of view see Stephanie Kimbro’s blog post on the same topic.
Disclosure: DirectLaw is a SaaS vendor that provides a virtual law firm platform to solos and small law firms.
