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Technology Innovation in Corporate Anti-Corruption Investigations - The New Tools of the Trade for Law Firms
By Mini vandePol, Chair, Global Compliance & Investigations Group, Baker McKenzie, Hong Kong
Conducting bribery investigations within a multinational company across different geographies is time-consuming, costly, and disruptive. The old US Foreign Corrupt Practices Act (FCPA) model of investigations involving junior lawyers or local language contract attorneys poring over documents looking for the smoking gun brought significant fees for lawyers, but at the cost of the client having little control over a process that was inefficient and expensive.
With the increasing prevalence of whistle blowing (spurred by monetary incentives in countries such as the US and in China) and companies wanting to demonstrate stronger commitment to ethical practices, investigations conducted by law firms (to avail themselves of attorney-client privilege) are in high demand. However, businesses have to manage challenges such as reduced margins, increased competition, and limited budgets, compounded by management who want allegations investigated and wrapped up quickly to reduce disruption. This has encouraged the legal industry to turn to innovative technology to streamline processes, develop efficiencies, and work more collaboratively with their clients.
Case Management Software
Managing complex cross-jurisdictional investigations requires considerable time and effort: understanding local and global business models, liaising with in-house lawyers and business decision-makers both on the ground and at head office, instructing and coordinating local counsel and independent consultants to provide data imaging services and expert input such as financial analytics, all the while trying to keep a tight rein on the budget. In recent years, law firms have invested heavily in developing innovative software solutions and partnering with third party providers to create a unique product offering that complements their extensive legal and practical experience of managing complex cross-border investigations.
The most popular software platforms act as a one-stop-shop for managing matters.
Managing Complex Cross-Jurisdictional Investigations requires Considerable Time and Effort: Understanding Local and Global Business Models
These secure and confidential platforms provide progress tracking, task assignment, fee planning, deadline monitoring, and general coordination among the various actors in the investigation. More importantly, they provide for effective and efficient collaboration between client and lawyer, and secure and remote data access. They can also be used to protect privileged documents despite such documents being accessed in countries where privilege is not a recognized doctrine. Law firm investigators use software tools to enable them to create and modify documents and share them with limited members of the client's business without risking the loss of legal privilege over that document. These platforms also facilitate investigations being carried out by subject and local experts on the ground while keeping global stakeholders informed of developments in real time.
When using document-sharing tools in today’s digital world, a US court (Harleysville) recently reinforced the importance of both lawyers and clients understanding the technology being used, sharing with care, and the potential risk of loss of attorney-client privilege. In Harleysville, information posted on a cloud sharing site lost its privilege protection because the site was not password protected and “was available for viewing by anyone, anywhere who was connected to the internet and happened upon the site by use of the hyperlink or otherwise.” The court considered this to be “the cyber world equivalents of leaving its claims file on a bench in the public square and telling its counsel where they could find it.”
Technology Assisted Review (TAR)
Another emerging area is the use of artificial intelligence (AI) technologies to automate labor-intensive processes such as data review and legal analytics. Technology assisted review (TAR) is quickly becoming the norm for our unstructured data reviews through techniques such as predictive coding. Predictive coding is a good example of TAR, combining human guidance with computer-piloted concept searching in order to “train” software to recognize relevant documents within a document universe. This allows lawyers to develop a very targeted and relevant data sub-set from the outset, which speeds up the overall review and helps minimize the risk of data gaps. In addition, data visualization and analytics tools can be used to assist in advocacy as a means of persuading regulators to agree to a more limited investigation scope. Protocols on the use of TAR issued by the US Department of Justice in recent years has confirmed TAR's place as an important data review methodology. From a compliance investigation perspective, we consider that the use of data analytics across big data is one of the most effective ways of identifying and proactively addressing corporate risk.
As we face rapidly evolving technology and increasing globalization, law firms need to have more than just superior legal expertise in their tool box—they need to demonstrate that they are innovative legal providers who are client focused, industry experts, multi-disciplinary, locally and globally credible, technology and process enabled, agile, and accessible to clients in real time.