Predictions 2006: A Miscellany

January 1, 2006

Neil Ewin, Visualfiles Ltd
Firstly, there will be a continuing mass investment in conveyancing technology in preparation for the forthcoming introduction of HIPs in June 2007. The success of HIPs depends on the implementation of an e-business solution and the ability of PISCES to deliver appropriate data standards will be pivotal. HIPs will introduce large scale e-business to the legal profession as a whole, and I anticipate other volume areas such as personal injury will follow suit.

Secondly, as law firms strive to become the ‘trusted partner’ to their corporate clients, we can see new styles of legal service and delivery. Some law firms are already offering ‘outsourcing’ services to support the basic administrative functions of their clients (typically provided to the ‘user departments’ eg Finance and HR rather than legal) escalating to a ‘value add’ legal service as and when necessary. Such services can of course only be delivered economically via extranet technologies.

Maureen Daly, Head of IP/IT, Beauchamps solicitors, Dublin, Ireland:
Some very interesting case law has been delivered recently by courts worldwide on issues such as the protection afforded to databases (William Hill case), trade mark infringement by search engines through its sale of keywords (GEICO case) and copyright infringement by P2P software distributors (Grokster and KaZaA cases).

The implications of these judgments is that, during 2006, businesses in the various sectors will have to examine (and strengthen, where possible) the rights they have and also examine ways in which they can avoid claims of infringement of any third party’s intellectual property rights. This is particularly important as technology is fast developing and quickly evolving with each passing year.

Other important issues for 2006 include the Unfair Practices Directive. Few businesses will be unaffected by this Directive, which must be transposed into national law by each Member State by 12 December 2007. Therefore, during 2006, businesses will have to review their practices, making whatever changes are necessary to ensure that their practices and contracts cannot be construed as being unfair.

Finally, we should not forget the Technology Transfer Block Exemption Regulation. If they haven’t done so already, software companies should review and (where necessary) amend existing agreements before 31 March 2006 in order to gain exemption under this Regulation. 2006 will most certainly be a busy year for us IT lawyers!

Kit Burden, SCL Trustee and Partner at DLA Piper Rudnick Gray Cary
The key issue for 2006 is likely to be that of convergence – not only of technology (as mobile phones morph into portable televisions, computers and mp3 players combined) but also of business processes and services providers. Expect to see more of the big players (IBM and Microsoft in particular) look to develop their new business offerings, whether organically or by way of acquisition, and for the larger India-based suppliers to gradually extend their offerings away from application development and support work into more sophisticated business processes and increasing amounts of “on shore” work, such as desktop outsourcing.

The impact of the Chinese market probably won’t be fully felt on the technology services side quite yet, but it is not far off.

Robin Fry, Technology partner with Beachcroft Wansbroughs, London:
It’s all gone mobile. With the success of the video i-pod, and Fox launching one-minute ‘mobisodes’ accessed via the Vodafone Network, it’s the very small screen that carries the future.

The release of spy thriller ’24’ onto mobiles and the proliferation of podcasts confirm that the real interest now is on mobile applications. And it’s here that there will be an acceleration of inward investment from the US into Europe. And, as we are already seeing here at Beachcrofts, this is filtering through to AIM rather than NASDAQ listings.

Rupert Kendrick, Solicitor and director of Web4Law Ltd., a risk management consultancy, and specialist in IT and Internet risk issues:
The Rise and Rise of Instant Messaging Risk
So much attention has been paid to the use, or abuse, of e-mail, that the emergence of IM has been virtually overlooked. Only now are organisations, including law firms, beginning to realise its implications. Like e-mail, it has similar vulnerabilities: viruses; spam; worms; Trojan horses; disclosure of IP addresses to potential hackers; distribution of inappropriate material; lost productivity; and the potential to overload a network through excessive use.

In 2006, law firms should:

  • determine IM use in the firm; identify risks; and create a plan to address them;

  • create use policies addressing, for instance:

  • specific standards for business use;

  • specific boundaries of acceptable personal use;

  • legally compliant monitoring of IM communications;

  • identity authentication of employees authorised to use IM;

  • content filtering software to minimise or eliminate infiltration of Spim;

  • archival of IM communications for legal and regulatory compliance.

Richard Stephens, LORS (Law Office of Richard Stephens), Chairman of SCL:
What is going to be important in 2006? Like many people, I subscribe to lots of email updates from various sources, and a selection of comments in just the past few days gives a flavour:

Shared services are a stepping stone to the public sector reform and transformation that the Prime Minister is after” (Frits Jannsen, BuyIT chief executive)

Twenty-first century government is enabled by technology.” (Government IT strategy document)

As against this:

IT projects in government have always been difficult – actually IT projects in the private sector are pretty difficult” (Tony Blair)

Spend by Government is on the up – estimated by one commentator to be rising at a rate of 9% p.a. over the next four years, against private sector rises estimated at 4%. So we have a lethal cocktail: an increasing spend, more ambitious projects, a continuing reputation for failure of Government IT projects and, finally, the new and draconian OGC contract forms.

My prediction?  I think there will be a lot of attention paid to Government IT procurement, and how the all-too-common problems can be prevented – and how they should be sorted out contractually when things have gone wrong.

Pearse Ryan, Partner, Technology Life Sciences Department, Arthur Cox:
2006 is likely to be a bit of a curate’s egg as far as the IT lawyer in Ireland is concerned. The following is a summary of some of the more obvious trends in 2006.

In the old world areas of IT outsourcing and IT project work, the year is likely to be fairly stop-start. To date, in Ireland we have seen little in the way of public sector IT outsourcing, which has led to the general market in IT outsourcing not experiencing the levels of growth seen in the UK over the last decade. The unions seem fairly set against outsourcing as a matter of principle and I worked on at least one significant project in 2005 which was aborted late on the day due to failure to achieve union buy-in. In the private sector, IT outsourcing is likely to experience incremental growth, without any significant surge on the demand side. 

In the other area which is generally a significant part of an IT lawyer’s practice, public sector project contracting is likely also to experience stop-start trends in 2006. In the last few weeks we have had some public discussion of public sector IT projects, especially those of the recently formed Health Service Executive (HSE). Earlier this month, the Controller and Auditor General released his report on a long-running health sector personnel and payroll project. This and other HSE IT projects have become political footballs over recent weeks, with a number of projects currently suspended. In response to recent events, the Government has established a Civil Service cross-Departmental peer review process, the terms of reference of which is to review significant new and existing public sector ICT projects. One consequence of the creation of this watchdog group is that public sector project work will likely slow down, at least in the first half of 2006. However, budgets and user requirements being what they are, projects will be forced to move forward, possibly in the second half of 2006. So while public sector IT project work in the first half of 2006 may be quiet, we live in hope in relation to the second half. 

In relation to new world IT and related activities, looking into the crystal ball for 2006 a number of thoughts occur:

We expect the extension of betting duty, now reduced to 1%, to prompt some inward investment and consolidation in the betting industry with possible further reforms of the legislation so as to deal with newer forms of gambling. Gaming and gambling, especially in the Internet-based form, has been a significant growth area over the last few years.

The abolition of capital duty on issue of new shares, announced in the recent budget, should considerably reduce the overhead associated with venture capital investment. VC work has been a significant growth area over the last few years.

The recently appointed incumbent to the Data Protection Commissioner hot-seat will shortly issue his first Annual Report and we expect a further increase in enforcement activity under his tenure. Data protection, in line with trends across Europe in particular, has been a significant area of work over the last few years.

We expect to see new innovative approaches to database rights management during 2006, in light of the William Hill v BHB decisions.  We generally expect this will extend to many sports bodies and even beyond this. This area has been a growth area in recent times.

Shalina Agarwal, Partner at ALMT LEGAL, London:
The Indian legal services market hangs on the brink of an unprecedented change that may define its direction in years to come. While globalisation on the one hand has offered lucrative deals to Indian lawyers and paved the way for newer areas like legal process outsourcing (LPO), on the other hand it has also intensified the pressure on the Indian government to open up its legal services market. While no immediate changes are forthcoming, a gradual movement towards such a fiercely competitive scenario cannot be dismissed and is not far away. Moves to induct the proposed limited liability partnership (LLP) structures to replace existing partnership structures, the softening stand of the Indian government in view of its GATS commitment at the WTO and the clandestine approach of international firms aggressively courting and matchmaking alliances with Indian law firms to secure a foothold in the Indian market are all indicative of the new trends in motion. Foreign law firms operating in India in their own right seems a forgone conclusion – not a matter of ifs and buts but all a matter of time.