July 15, 2019

Artificial intelligence (AI), virtual reality and other disruptive technologies were once just part of a far-fetched, sci-fi fantasy, but the future has arrived in the last five years. It would be ignorant and short-sighted to think they’re not a threat. Technology will be the bone marrow of all industries and jobs, and its rapid and progressive advancement will relentlessly and radically change how the world operates. If you’re not prepared for the apocalypse, you’re going to be wiped out. Robson Lee, a partner at Gibson, Dunn & Crutcher, agrees, “Fiction has become reality. What we thought was impossible 20 years ago is now an integral part of our lives.”

Newer technologies such as AI may still be a work-in-progress, but they are certainly encroaching every industry imaginable, from healthcare to property to law. For one, many traditional businesses are going digital. While this reflects the evolving demands of the general consumer (for instance, print magazines are shutting down due to our preference for instantaneous online access), it also stems from the fact that the growth of technology has made seamless global connectivity and instantaneous worldwide communication the norm in the 21st century.

Why spend a significant amount of your budget on printing flyers and booking billboards when you could release an advertisement that has a borderless outreach for a mere fraction thereof or even for free via social media? Why pay for a crew of customer service specialists when you could get an AI-powered bot to intelligently communicate and interact with customers 24/7, 365 days a year? Robson adds, “At present, you have to go through an agent and do a lot of paperwork to buy your property. The Singapore government has recently announced that the legal documentation for property transactions will in the near future go digital.”

“Likewise, in shipping, you have bills of lading and letters of credit, which are traditionally voluminous and susceptible to fraud. In future, shipping transactions will go digital as well in Singapore.  This is going to affect jobs. People who are used to filling up forms and attending to the paperwork are likely to be turfed out.”

The law industry is not immune to this disruption either. Paralegals and junior lawyers, for instance, typically spend a lot of time doing their due diligence, filling up forms, doing research, and physically maintaining transactional records and files. Technology has now enabled law firms to undertake these laborious tasks more efficiently and effectively. For example, client records can now be scanned and electronically filed in cloud storage instead of maintaining physical files. A godsend remedy that saves time, money and resources, it’s no doubt going to enable the legal industry to leap-frog into the digital future.

The Ineluctable Global Business Disruption of Technological Advancement Art-2
Robson, who has begun to read voraciously on the subject to keep pace with it, explains, “Technology has moved faster than the law. In the past to undertake legal due diligence, you have to be physically present at an office to plough through files containing records of contracts and legal documents that may be as thick as Yellow Pages. You have to hire junior lawyers to be stationed at a physical location to read through and review the voluminous legal documentation and paper records. Now, all files and records can be digitally accessed in an electronic data room that has been set up for lawyers to undertake legal due diligence without being confined to a particular location. In the future, lawyers must  have the wherewithal to interpret smart contracts as part of the legal due diligence service as transactions are increasingly being digitalised and configured using blockchain.”

An encoded agreement running on blockchain technology that digitally enables and verifies the performance of a contract, smart contracts are able to automatically execute transactions seamlessly and validate the contractual terms and conditions, making the middlemen completely obsolete. “If you’re not equipped to interpret smart contracts when everything has been digitalised, you would be irrelevant,” Robson adds. “Blockchain is actually quite a feat in preventing fraud and falsification. It’s virtually non-penetrable by third parties who are unauthorised users. On the other hand, you can falsify a letter of credit. The global industries are on the cusp of what I would call the ABC of the future—artificial intelligence, blockchain and cryptocurrencies.”

So how does one survive in this era of tech disruption? Here’s a perspective to consider: These technologies may be more efficient than us human beings, but they’re not necessarily job thieves. What they’re replacing are low-value tasks—menial and repetitive tasks that consist of a small part of a much bigger job. If you’re stuck in a “small” job, then you’re not making use of your full potential as a living, breathing person.

“It has been widely documented that humans have underutilised their own prowess, their own abilities,” Robson observes. “Do you know that animals can detect and forecast when an earthquake is going to happen? We are like a very high-tech computer, but we’re just using it for work processing and reading e-mails. Actually, we’re a lot more capable than that. We have certain unused capabilities that are innate in us but which have never been deployed.”

Businesses have to reframe the way they approach technological disruptions, and use them to their advantage. Turn them from job-eating disruptors into collaborators, and fully apply the human potential as your “killer-app”. A machine may be technically adept, but it can’t lead a group of employees with empathy. It takes a group of people to programme a machine and develop these technologies. Because of this, the technology is only as good as its creator(s). Human beings have historically been highly adaptable creatures. This means it’s possible that things like AI will only push us to be smarter.

Of course, you have to play a pro-active role in this. “No one can prevent disruption. The most important thing is to be able to forecast what’s on the horizon. You need to constantly upgrade your skills set, be prepared for constant changes and disruption that will come about because of technological advancement, and ensure that our level of service to our clients and customers remains superior irrespective of the current level of technology,” advises Robson.

“Whatever you have, you have to be able to fully utilise it to help you improve your services and enhance your capabilities in your industry and not just adopt the latest technology merely because it is fashionable to do so. That’s where the human element is still predominant,” says the 51-year-old mergers and acquisitions lawyer, who has more than 25 years of legal transactional experience in the corporate and capital markets. “Where does the human element come in? In making judgements when advising clients based on industry experience, in mapping out corporate legal strategies and in the application of the appropriate legal solutions when faced with complex problems and complicated situations, and the ability to help navigate your clients to avoid, mitigate and/or expeditiously resolve legal problems. In other words, it’s always making sure that you add value consistently and constantly, and not just keep up with technological changes, but to be like a silat master, skilfully deploying the appropriate technology to make you a more effective and cost-efficient lawyer.”

For lawyers, they must retain the ability to advise and apply the principles of law notwithstanding that transactions involving clients have moved into the technology space. Case in point: The traditional route of getting funds through an IPO requires you to come up with a prospectus, a financial forecast for the next two  years, and have your pro-forma financial accounts prepared and audited—and that’s just the beginning of the continual roles and responsibilities of a listed company and its managers and directors.

“In the last five to six years many start-ups have funded their operations by issuing tokens to online subscribers who can be situated all over the world, bypassing the traditional route of public fund raising through an IPO. They’ve raised hundreds of millions literally in minutes without a prospectus. They have what is called a white paper, which is basically a very brief, skeletal summary of what the business is, peppered with lots of caveats, carve-outs and uncertainties, which is published online” Robson says.

“Yet, people jump on the bandwagon to subscribe and invest, and they’re issued tokens. Tokens are not shares or units of a collective pool of interests like REITS. They’re basically a certain functional right to participate or a right to acquire certain services and/or products at a pre-agreed discounted price. It gives you no equity stake in the company, nor any share in its assets. It’s a form of crowdfunding. Many such ventures have failed. Money has disappeared. And securities and capital market regulators have now come out very clearly to say this is illegal. That’s where lawyers would have to step in and advise their client on how to ensure that the token offerings do not breach the securities laws and prospectus compliance regulations.”

Laws surrounding high-tech equipment such as autonomous and unmanned aerial vehicles are also up for re-definition. In the case of an accident, is the owner of the autonomous vehicle/unmanned aerial vehicle at fault, or the tech developer? While the use of mobile wallets, QR codes and data analytics will increasingly be the new norm in tandem with the burgeoning growth of e-commerce, accounts hacking, deepfake videos and audios, data and identity thefts will increasingly be the new global scourge of the 21st century. Lawyers who are at the forefront of technology would be well-positioned to advise on legal issues involving data protection and online security, and the defences and mitigations in respect of any online fraud and falsifications.

“Machines are faceless, emotionless and have no sense of right and wrong. You can’t replace virtues of integrity and honesty,” Robson believes. “When you tell me something confidential as a client, I must be able to take this secret to my grave. If I act for you, I can’t be acting for your competitor, or worse, acting against your interests. You cannot robot away your principles.”

Whether or not you’re armed with the capability to survive or stay ahead of these disruptions, the first, most crucial step is to adapt to the latest and educate yourself. If you stay within your idyllic comfort zones or utopian bubble, while ignoring the winds of change, it’ll be too late when you realise a tidal wave is about to engulf you.

As Robson illustrates, “Over the years, there are traditional profitable businesses that have lost significant market share and some have been completely sidelined by new competitors which are more technologically advanced. Take for example, the traditional taxis and limo cabs that have to cede significant market share to the Ubers and the Grabs. Traditional Telcos and printing businesses have also been overwhelmed by new technology companies and social media. The advent of Fintech, digital banks and initial token offerings have also eroded the dominance of the traditional players in the financial and capital markets and the list of disrupted and displaced traditional businesses will keep growing. Facebook has just announced the development of Libra, a hybrid cryptocurrency backed by a basket of major currencies to steal a march on existing cryptocurrency players as a game changer in the Internet of Money, leveraging on its 2.38 billion members that can potentially move money outside of the global financial system backed by partners such as Mastercard, Visa, Spotify, Uber, Vodafone, PayPal and eBay. This is not a potential disruptive global game changer to be sniffed at, although financial regulators worldwide are setting up barriers and roadblocks.

The traditional brick and mortar magnates and tycoons who used to make vast amounts of fortunes should not rest on their laurels. Technological disruption will now be part of the landscape and par for the course in any industry, a continuous, relentless and unchanging phenomenon. Unless you move ahead, or move in sync with technological development, your job or business could face not just disruption, but extinction.”