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Humans Redesigned – More Disruptive than Climate Change?

The policy world is, to say the least, focused intently and contentiously on the disruptive effects climate change will have on humans and the biosphere. And rightly so—it’s not looking good. Aggressive public laws and policies must be put in place now, and private behavior must turn towards a much lower carbon future, if we are to effectively mitigate and adapt to the effects of climate change.

As I discussed several weeks ago, however, my friend and colleague Michael Bess has recently published a book, Our Grandchildre Redesigned, examining an unstoppable trend that could be disruptive on the same scale as climate change—the convergence of pharmaceutical, technological, and genetic advances aimed at substantially redesigning humans.  This is not science fiction—it is already happening and is picking up.  It is not implausible to believe that by mid-century we will have the capacity to manipulate our bodies and minds to be healthier, stronger, smarter, better, and to live longer. By the close of this century it may be possible to routinely produce what we today would think of as a superhuman.

Yet the policy world is virtually silent when it comes to the prospect of a society of redesigned humans notwithstanding (as outlined in my post and of course in the book) that the trajectory towards that state will disrupt society as we know it and pose new and more extreme pressures on the biosphere (think humans, lots more of them, living to 150). Why is that?

One explanation may be that the public and policy-makers simply don’t appreciate how transformative the human redesign will be. They may see it as just about more incremental improvements on medicine and technology. But climate change is also perceived by many as incremental—very incremental—with all the doom and gloom not really felt until decades from now. Climate change policy shapers, however, have stressed the ideas of tipping points, irreversibility, and nonlinear change to get across the point that action must be taken during this “incremental” phase. Yet, again, the same could be said of the human redesign trend—there will be nonlinear advances and a point of no return.

Another possible explanation is that people and policy-makers can’t see any bad coming from the human redesign trend, whereas climate change has very clear downsides for many parts of the world (albeit some upsides for other areas, at least for a while, such as longer growing seasons). By contrast, what’s bad about humans getting faster, stronger, smarter, better, and living longer?  Well, read Bess’s book! Sure, a lot of good will come out of it, but so could a lot of bad if we don’t manage it well.

Lastly, one difference between climate change and the human redesign trend is that climate change discourse is brimming with climate models that show, with a a good degree of credibility, what the trends and end points look like generally. It’s easy to construct a map showing what happens to a shoreline if sea level rises five feet, or to depict new temperature regimes on a map, or to estimate economic impacts of more floods. To be sure, climate change models are still very rough, but they are being produced and improved daily. By contrast, it is much harder to capture the disruptive impacts of the human redesign trend on a map or to envision and quantify the economic impacts.

Some combination of these differences between climate change and the human redesign trend likely accounts for their starkly different treatment in current policy discourse notwithstanding their starkly similar scales of disruption. But I am starting to get worried that neglecting to confront the human redesign trend–to start thinking now about policy responses and initiatives–may mean that progress made on climate change could be undermined in large part by the effects of transforming to a society of superhumans. I plan to devote some of my attention int he next couple of years to correcting that potentially grave oversight.

Can Humans End the Anthropocene?

There has been a great deal of buzz and attention in the science and policy communities over the idea that Earth has left the Holocene epoch and entered the Anthropocene, a proposed epoch that begins when human activities started to have a significant global impact on Earth’s geology and ecosystems. What is unique about the Anthropocene is that it is human-driven. We started it through the massive impacts our industry, resource extraction, agriculture, and sheer numbers have had on the biosphere. The question is whether we can end it, and if so, how and at what cost to humanity?

In a fascinating article in Science on this theme, Francois Sarrazin and Jane Lecomte outline five different scenarios for how humans handle the Antrhopocene based on how we treat our fellow species. In the most dystopian (for Earth) scenario, which they call the Blind Anthropocene, we give up on conservation of ecosystems and engage in runaway consumption to serve human needs only. In a range of three Deliberate Anthropocene scenarios, humans engage in conservation efforts, but for different goals. In the most human-focused scenario we conserve biodiversity to produce flows of provisioning (e.g., extracting timber) and regulating (e.g., wetlands providing sediment capture) ecosystem services benefitting human communities. An intermediate scenario adds protection of wilderness and landscapes, but only to enhance cultural (e.g., recreation) ecosystem services. In the most progressive Deliberate Anthropocene scenario, conservation is aimed at inter-generational fitness of humanity, which would focus on maintaining sustainable flows of regulating ecosystem services even at the expense of satisfying wants of present society.

Most environmental policy discourse focuses on which of these four scenarios, all of which are anthropocentric, should guide our decisions and actions. As Sarrazin and Lecomte argue, however, none of these approaches, not even the most aggressive Deliberate Anthropocene conservation scenario, will bring the Anthropocene to an end. They argue that a fifth scenario, which they call the Deliberate Overcoming of the Anthropocene, will be required. In this “evocentric” scenario, humans design conservation to ensure not only the fitness of future generations of humans, but also to ensure the future evolutionary fitness of all other species. Only if we can return other species to such an evolutionary trajectory—one not so influenced by human impacts—could we begin to entertain the idea that the Anthropocene is drawing to a close, thanks to us.

Their proposal is, to say the least, radical. What would it take to accomplish it? What laws and policies would we need to put in place now to start turning the Anthropocene around—to actually end rather than soften its impacts—and how long would it take? Is it even possible?

Regardless of its audacity, their proposal could prompt a useful thought exercise to test just how progressive even our most progressive conservation policies truly are. It could also provide a reference point for measuring how deeply entrenched the Anthropocene moves over time. It is at the very least worth thinking about.

Can AI Make AI Obey the Law?

Amitai Etzioni, the famous sociologist, and his son Oren Etzioni, the famous computer scientist, have posted an intriguing paper on SSRN, Keeping AI Legal. The paper starts by outlining some of the many legal issues that will spin out from the progression of artificial intelligence (AI) in cars, the internet, and countless other devices and technologies–what they call “smart instruments”–given the ability of the AI programming to learn as it carries out its mission. Many of these issues are familiar to anyone following the bigger AI debate–i.e., whether it is going to help us or kill us, on which luminaries have opined both ways–such as who is liable if an autonomous car runs off the road, or what if a bank loan algorithm designed to select for the best credit risks based purely on socially acceptable criteria (income, outstanding loans etc.) begins to discriminate based on race or gender. The point is, AI smart instruments could learn over time to do things and make decisions that make perfect sense to the AI but break the law. The article argues that, given this potential, we need to think more deeply about AI and “the legal order,” defined not just as law enforcement but also as including preventive measures.

This theme recalls a previous post of mine on “embedded law”–the idea that as more and more of our stuff and activities are governed by software and AI, we can program legal compliance into the code–for example, to make falsifying records or insider trading impossible. Similarly, the Etzionis argue that the operational AI of smart instruments will soon be so opaque and impenetrable as to be essentially a black box in terms of sorting out legal concerns like the errant car or the discriminatory algorithm. Ex ante human intervention to prevent the illegality will be impossible in many instances, because the AI is moving too fast (see my previous post on this theme), and ex post analysis of the liabilities will be impossible because we will not be able to recreate what the AI did.

The Etzionis’ solution is that we need “AI programs to examine AI programs,” which they call “AI Guardians.” These AI Guardians would “interrogate, discover, supervise, audit, and guarantee the compliance of operational AI programs.” For example, if the operational AI program of a bank called in a customer’s loan, the AI Guardian program would check to determine whether the operational program acted on improper information it had learned to obtain and assess. AI Guardians, argue the Etzionis, would be superior to humans given their speed, lower cost, and impersonal interface.

I get where they are coming from, but I see some problems. First of all, many determinations of legality of illegality depend on judgement calls–balancing tests, the reasonable person standard, etc. If AI Guardians are to make those calls, then necessarily they will need to be programmed to learn, which leads right back to the problem of operational AI learning to break the law. Maybe AI Guardians will learn to break the law too. Perhaps for those calls the AI Guardian could simply alert a human compliance officer to investigate, but then we’ve put humans back into the picture. So let’s say that the AI Guardians only enforce laws with bright line rules, such as don’t drive over 50mph. Many such rules have exceptions that require judgment to apply, however, so we are back to the judgment call problem. And if all the AI Guardians do is prevent violations of bright line rules with no exceptions, it’s not clear they are an example of AI at all.

But this is not what the Etzionis have in mind–they envision that “AI Guardians…will grow smarter just as operational AI programs do.” The trick will be to allow the AI Guardians to “grow smarter” but prevent the potential for them as well to cross the line. The Etzionis recognize this lurking “Who will guard the guardians” question exists even for their AI Guardians, and propose that all smart instruments have a “readily locatable off switch.” Before long, however, flipping the off switch will mean more than turning off the car–it will mean turning off the whole city!  

All of this is yet more Law 2050 food for thought…  

 

 

Our Grandchildren Redesigned, by Michael Bess – A Legal Futurism Treasure Chest

As you may have noticed (or if not, now you know), I haven’t posted anything on the site for a while. I have all the typical excuses: busy at work, family stuff, the holidays, etc. But truth be told, not much grabbed me. That changed when I read Our Grandchildren Redesigned, the latest by my Vanderbilt colleague and friend, historian Michael Bess. As a dabbler in legal futurism, Bess’s book is a treasure chest to me. The subtitle says it all: Life in the Bioengineered Society of the Near Future.

In Redesigned, Bess pulls off what others have tried but failed to deliver. Using what is known today about the past, present, and trajectory of pharmaceuticals, bioelectronics, and genetics and epigenetics (plus nanotechnology, AI, robotics, and synthetic biology), Bess constructs plausible scenarios of how humans will use these technologies to “improve” on our biology and how society will respond. There is no science fiction in the book, no extreme claims, no utopian or dystopian indulgence. Bess the careful, acclaimed historian has turned his sights on the bioengineered future with the same measured, thoughtful, methodical attention to detail and cogency. And one could spin an endless stream of questions about the law’s future from his scenarios, many of which Bess signals or even digs into.

Bess opens the book (and its ongoing website) with three premises. First, “It’s almost certainly going to happen.” By “it” he means the convergence of the technologies towards the capacity for human physical and mental engineering through drugs, biotech devices, and epigenetic manipulations. Lest there be any doubts, chapters two through five put them to rest. Second, “It will bring both opportunity and peril.” Sure, you might say, so have smartphones. So what? But third, “Its impact will be radical.”  Of course, it’s this third of his premises that might attract the charge that it’s Bess who is being radical, but by the end of the book my only concern was that he didn’t play the scenario out as fully crazy as it could get!

I’m not going to review Bess’s account of the technologies or even the scenarios he builds in any detail. Read the book! Rather, what makes the book of such tremendous potential impact and of value to legal futurists is Bess’s engagement of the social and ethical choices that will have to be made as redesigning becomes possible, then practical, then popular, and eventually part of all our (grandchildren’s) lives. There are three big themes Bess develops in this regard.

First, this will not happen overnight. Many of the legal issues one can envision will flow from the transitional nature of the uploading of redesign technology into society. New technologies will at first be expensive, thus furthering already pervasive wealth disparities. Some technologies will need to begin at young ages to be effective, creating inter-generational disparities. Of course, responding to social disparity is nothing new to the law, but we are not talking about who can afford smartphones, we are talking about who gets the smart pills, the fully-functional artificial eye, the tweaked gene expression for holding off cancer, and so on. Bess’s concern is on target—the redesign disparity could begin to rip apart society as it comes online. How will law respond?

Second, Bess explores issues that will be inherent in the new normal in which a substantial level of redesign is eventually available to the masses. If the average age moves to 150, it takes little imagination to play out what that could mean for employment, marriage, welfare, the environment, prisons, you name it? And if people can be better at anything, with potentially vast improvement on the horizon, what does that mean for sports, warfare, science, the arts, you name it? Plus, in all likelihood we can’t become the bast at everything, so, much as children do today, we will likely see specializations that produce even more extreme differences between groups than are possible today. Will the best tennis players have anything in common with the best flutists?  And what about people who, for moral or religious reasons, choose not to participate? What will we do with them? Lots of law change in store!

Third, Bess asks what we should do now to shape the new normal, if we can. Bess believes, and I agree, that getting control of the direction and intensity of redesign will be hard, but necessary. If the U.S. backs off on moral grounds (e.g., as with stem cell research), what’s to stop North Korea? And if we set international limits, domestic controls on private experimentation will need to be rigorous. And what would the limits look like? Bess suggests seven key challenges, including controlling radical inequality, defending mental privacy, and avoiding commodification of the human being. Again, law will have to be engaged.

I should emphasize that there is far more to Bess’s work than I have let on in this law-focused account. There is a profoundly philosophical dimension, as Bess asks early in the book whether we should redesign and then develops a set of human flourishing factors that he believes should guide our way. Bess animates his descriptive scenarios with short fictional vignettes of life and lives, and even some laws, in the redesign future. By no means corny or out of place, these allow the reader to personalize the impacts of a redesign future. In my case, I found myself drifting into thought about the legal future as well. In short, all I have hoped to do here is scratch the surface of Bess’s brilliant work to whet your Law 2050 appetites.

Bottom line, if you want to get a picture of how being a human will take a sharp turn by around 2050, Our Grandchildren Redesigned is your starting point.

The Ecosystem Services Framework Gains the White House as a Fan

Just as I focus my students in Law 2050 on spotting and following trends, I try to do the same in my field of environmental and natural resources law. One of the tends I have followed for years is the emergence of the “ecosystem services” framework. Some significant recent developments warrant this post:

The ecosystem services framework focuses on the economic values humans derive from functioning ecosystems in the form of services rather than commodities, such as water filtration, pollination, flood control, and groundwater recharge. Because many of these services exhibit public good qualities, ecologists and economists began forging the concept of ecosystem services valuation in the 1990s as a way of improving land use and resource development decision making by ensuring that all relevant economic values were being taken into account when making decisions about the conservation or development of “natural capital” resources. Research on ecosystem services exploded onto the scene and has been going strong since in ecology, economics, and other disciplines bearing on environmental and natural resources management.

The policy world quickly picked up on the ecosystem services idea as well. For example, in 1998 the President’s Council of Advisors on Science and Technology (PCAST) issued a report emphasizing the importance of the nation’s natural capital. The United Nations embraced the concept at the global scale with its Millennium Ecosystem Assessment, which assessed the status of ecosystem services throughout the world and explicitly tied ecosystem services to human prosperity.

By contrast, uptake in law was slow to come. Almost two decades after the PCAST report, it is fair to say that the ecosystem services concept has made few inroads into “law to apply” status in the form of legislative and regulatory text. In one prominent example, when the U.S. Army Corps of Engineers and the Environmental Protection Agency issued a joint regulation in 2008 overhauling their policies on compensatory mitigation under Section 404 of the Clean Water Act, the agencies adopted a watershed-scale focus and declared that compensatory mitigation decisions would take compensating losses to ecosystem services into account. See 33 C.F.R. 332.3(d)(1). That and the few other federal initiatives to use ecosystem services in decision making, while on the rise, have been ad hoc and uncoordinated.

But that is set to change. On October 7, 2015, the Office of Management and Budget (OMB), Council on Environmental Quality (CEQ), and Office of Science and Technology (OST) issued their Memorandum for Executive Departments and Agencies on Incorporating Ecosystem Services into Federal Decision Making (the Memorandum). If fully implemented, the Memorandum has game-changer potential to infuse the ecosystem services concept deep into the fabric of environmental and natural resources law.

The Memorandum “directs agencies to develop and institutionalize policies to promote consideration of ecosystem services, where appropriate and practicable, in planning, investments, and regulatory contexts.” The goal of doing so is “to better integrate in Federal decision making due consideration of the full range of benefits and tradeoffs among ecosystem services associated with potential Federal Actions.” The scope of the policy goal is broadly stated to include all federal programmatic and planning activities including “natural-resource management and land-use planning, climate-adaptation planning and risk-reduction efforts, and, where appropriate, environmental reviews under the National Environmental Policy Act (NEPA) and other analyses of Federally-assisted programs, policies, projects, and regulatory proposals.” To facilitate agencies in achieving its policy goals, CEQ will prepare a guidance document outlining best practices for: (1) describing the action; (2) identifying and classifying key ecosystem services in the location of interest; (3) assessing the impact of the action on ecosystem services relative to baseline; (4) assessing the effect of the changes in ecosystem services associated with the action; and (5) integrating ecosystem services analyses into decision making. In the interim, agencies are by March 30, 2016, to have submitted documentation describing their current incorporation of ecosystem services in decision making and establishing a work plan for moving toward the goals of the policy directive. Id. at 4. Meanwhile, CEQ has assembled a task force of experts from relevant agencies to craft the best practices implementation guidance, which will be subject to interagency review, public comment, and, by November 2016, to external peer review consistent with OMB’s information quality procedures and standards. Once the guidance is released, agencies will adjust their work plans as needed. The Memorandum also acknowledges that “ultimately, successful implementation of the concepts in this directive may require Federal agencies to modify certain practices, policies, or existing regulations to address evolving understanding of the value of ecosystem services.”

Environmental lawyers should watch the Memorandum’s implementation over the next year closely, for if agencies follow its directives faithfully and fully the ecosystem services framework will be teed up to permeate the policies and regulations of a broad range of federal programs that touch our scope of practice. In particular, incorporation of best practices for ecosystem services impact assessments under NEPA would project the ecosystem services framework into state, local, and private actions receiving federal agency funding or approval. To be sure, there is plenty of work to be done before one can evaluate the Memorandum’s impact on the mainstreaming of the ecosystem services framework into environmental law. Significantly, the timeline of the Memorandum directives will deliver the best practices implementation guidance in the final days of the Obama administration, leaving it to the incoming administration to determine where to take it. Nevertheless, simply by declaring the incorporation of ecosystem services into federal agency decision making as an Executive policy and laying out the tasks and timelines for doing so, the issuance of the Memorandum has done more to advance the ecosystem services framework as a legal concept than has any previous initiative. And in the long run, the reality is that the ecosystem services framework is by now so deeply ingrained in ecology, economics, and other disciplines of environmental and natural resources management, it will become increasingly difficult for agencies not to incorporate it. Hence I believe I can safely predict that the momentum the Memorandum will give for mainstreaming the ecosystem services framework into environmental law will not easily be turned around.  Stay tuned!

Law’s Big Mechanism

Right now, as I write, researchers are loading medical journal articles into a computer to see if they can tease out the causes of cancer. Their goal is to use the artificial intelligence (AI) trio of big data, natural language processing, and machine learning to automate research on causal models of the complex biological systems underlying cancer.

Who’s doing this, you ask? It’s the Defense Advanced Research Projects Agency. That’s right, DARPA is researching cancer. As the agency explains it, the systems that matter most to the Defense Department tend to be very complicated systems in which interactions have important causal effects. While cancer might not be foremost as a system that influences national defense, its biology certainly is a complicated system in which interactions have important causal effects. So DARPA is testing methods for learning more about what causes cancer so it can learn more about the complex systems that do drive national defense decisions.

DARPA calls its research initiative the Big Mechanism program. Big mechanisms are models of how complex systems work. Although the collection of data needed to develop a big mechanism model is now largely automated—thus the rise of big data—the development of big mechanisms is still mainly the product of human research and reasoning ingenuity. The point of the Big Mechanism project is to see whether the development of useful big mechanism models also can be automated. If they can be, then DARPA could (automatically) load big data into the model to (automatically) develop causal models to (automatically) predict what’s going to happen of relevance to national defense.

OK, what’s this got to do with law? Most of the applications of AI in law thus far have been to improve predictive capacity in a non-causal sense, such as using machine learning in e-discovery to sort documents. The prediction isn’t based on a causal model. There’s certainly a lot of value in that approach, both scientifically and commercially. But what about law’s big mechanism? Surely the legal system is a complicated system in which interactions have important causal effects. If we had a big mechanism model of what factors cause moves in the legal system, such as the next new wave of products liability litigation, that would be a very different kind of predictive capacity. Knowing what’s coming next can come in handy for lawyers!

Shift over to another outfit called Praedicat, a spin-off of the RAND Corporation. Praedicat is using AI to develop big mechanism models of catastrophe risk for the property and casualty insurance industry. As the company explains it, their AI applications “track the science and commercial exposures for more than 100 emerging risks” and “bring technology to insurers’ emerging risk activities, converting risk avoidance to portfolio optimization; exclusion to accumulation management; and avoiding the “next asbestos” to driving sustainable profits.” Like DARPA, Praedicat relies on “the world’s community of toxicologists, epidemiologists, and bioscientists to algorithmically identify emerging risks.” Their “patented “saliency” algorithm combs through the corpus of peer-reviewed science [and regulatory documents] for new hypotheses that chemicals, products and substances might cause bodily injury. The risks are automatically prioritized by the energy and intensity of new attention the risks receive, and are tracked over time as they mature.” Then it produces “industry profiles to capture the litagion® agents that might be found at companies in the industry, and provides a “heat map” that explores the potential for clash between the profiled industry and other industries.” “Litagion agents”? That’s not a misspelling. It’s Praedicat’s trademarked term for what is essentially the big mechanism model of catastrophe insurance litigation.

What Praedicate is doing is the same as what DARPA is doing, but for insurance litigation. Open the lens wider and one can imagine applying the same approach to search for the “litagion agents” for IP litigation, drug litigation, securities litigation, products liability litigation, and a wide variety of other legal applications.  That would be law’s big mechanism. That would be cool!

Privacy – The New Plastics

The thrust of my Law 2050 class is to develop skills for navigating two forces of innovation in legal practice—innovation “within” the legal industry (technology, outsourcing, etc.) and innovation “outside” the law (new technologies, social issues, etc.). Students identify a trend in either category and write a paper on it in the form of a bar journal article. Their final papers were fantastic—a real pleasure to read. I’ve posted previously about two of the major themes represented in the papers: the sharing economy and the frontiers of new technology. The third major theme revolved around privacy.

You’d have to be a hermit not to be aware of, and subject to, the relentless erosion of personal privacy in the digital age. It is becoming increasingly difficult to participate in modern society and not feel the effects. A recent special issue of Science on The End of Privacy starts with the ominous line, “At birth, your data trail begins.” The articles highlight the technological arms race in the battle to regain control of privacy’s erosion. One set of articles covers facial recognition, drones, hacking pacemakers, and the ease with which your identity can be revealed from just a few credit card purchases. The other set of articles covers counter strategies such as apps that allow use of location-based apps without revealing your location and a browser app that injects decoy queries to throw off your true interests.

Law is no stranger to this engagement, with a string of statutory acronyms already firmly in place and more to come. Litigation is surging over issues from the effects of gargantuan hacks of financial records to control over one’s social media sites. Student papers covered an impressive span of these emerging legal issues:

  • The controversy over Apple’s new encryption software for the iPhone 6
  • Litigation against social media providers over inadequate disclosures about use of user searches, locations, and geotagging
  • The implications of “predictive policing” – using machine learning to predict where crime will occur and intervening ahead of time
  • The pushback Google Glass has experienced based on privacy concerns
  • The implications of police forces wearing body cameras
  • A new technology for detecting when drivers send text messages
  • The implications of the increasing ease with which we can pay for things (1-Click, Google Wallet, Apple Pay, Snapcash, etc.)
  • The increasing use of “connected cars” that are essentially smartphones on wheels, streaming data about your driving
  • The health data privacy concerns posed by Apple’s Health and HealthKit apps for personal health monitoring
  • HIPPA – the 800-pound gorilla of privacy law
  • Trends in industry self-regulation to control privacy leaks and concerns
  • Concerns lawyers face when using cloud-based storage of client files

These themes cover just the tip of the privacy iceberg that is coming to law. So, my advice to law students and young lawyers thinking about a niche to carve out? To paraphrase Mr. McGuire’s classic advice to Ben in The Graduate: I just want to say one word to you. Just one word. Are you listening? Privacy!

Inventing the Next Shipwreck (and Shipwreck Law)

There is a saying that whoever invented the ship also invented the shipwreck. The point is that new technologies can have their pros and cons, and some of both can be entirely unexpected. Technological innovations thus have always been a challenge for law—how can we facilitate the good while regulating away the bad, especially when we don’t have a full grasp on all of the goods and bads?  But that also means technological innovation leads to legal innovation, and opportunity for lawyers to open up new fields of expertise. So, whoever invented the ship also opened the door for lawyers to invent shipwreck law!

The second major category of my student bar journal articles in the Law 2050 class was all about inventing the next shipwrecks with new technology and how law might respond.  Like the topic of the first category of articles I covered—the sharing economy—student papers covered varied topics in thoughtful and insightful ways.

I could have used “dronewrecks” for my title, because a healthy number of papers looked at how we are going to take advantage of drones in various commercial applications without running into obvious problems like them crashing into homes and each other (and people). There is interest in applying drones for newsgathering, television and film production, law surveillance, and commercial delivery. A brewery in Minnesota used drones to deliver cases of beer to people ice fishing, until the FAA shut that down.  Ah yes, the FAA—the agency is working on regulations for drones, which they refer to as “unmanned aircraft systems,” which the industry fears will be quite constraining of the new technology.  States are entering the field as well. My students predicted a slow, incremental approach to easing in of drones under aviation regulation.

The same is true for the close cousins of drones—driverless cars and crewless cargo ships. Driverless cars, which some students covered last year, seem to be moving slowly toward market with regulation moving cautiously to let that happen. But crewless cargo ships? Well, why not? The EU and Rolls Royce are developing the technology, which raises all sorts of pros (lower labor costs, less environmental waste, no crew safety concerns) as well as interesting questions (job losses, cyber-piracy, runaway ships). Both the International Marine Organization and the insurance industry will have plenty of interest in how this develops.

Other topics covered in student papers, from tame to most out there, included:

  • Bitcoins and other digital payments
  • Regulation of 3D handguns
  • Smartphone apps that allow the user to upload series of pictures to 3D printers, thus eliminating the need for CAD programs and allowing easy copying of sculptures and other forms
  • 3D bioprinting of organs
  • Organs on chips
  • Commercial spaceflight
  • Asteroid mining and other space property claims
  • Neural implants
  • My personal favorite—personal invisibility devices (don’t think they’re not working on them!)

The point of the assignment, of course, is to push students to think about law’s development in an entrepreneurial way. Although many of these technologies have a home in an established field (e.g., drones in aviation law; 3D printing in IP law), the established field isn’t a perfect fit and no lawyer is more of an expert on what doesn’t fit than anyone else. There’s no reason a recent law school graduate can’t bust into an established field on the crest of a new technology, outlining the challenges and proposing thoughtful legal innovation, to make his or her brand valued. Kudos to my students for taking that objective to heart and producing many excellent papers I’m sure bar journals would be happy to publish!

Impact Scores for Disruptive Legal Technologies

This will date me, but I remember a day when law was practiced without computer-based Westlaw or Lexis, when legal technology consisted of the five essentials: a land line telephone, Dictaphone, IBM Selectric, light switch, and thermostat. Westlaw and Lexis were, from the late 1970s until 1986, accessed only via phone modem. I recall using the modem in law school, and then at my firm in the mid-1980s experienced the miracle of using a computer to run simple searches. Life after that was not the same.

So this is not the first time legal practice has faced “disruptive technology.” But what exactly does that mean—disruptive technology? And how do we apply a metric to “disruptiveness”?

As many readers will know, the origins of the term stem from Harvard Business School Professor Clayton Christensen’s theory of disruptive and sustaining innovations. A disruptive innovation helps create a new market or industry and eventually disrupts an existing market or industry. In contrast, a sustaining innovation does not create new markets or industries but rather evolves existing ones to achieve better value.

Much of the commentary on new legal technologies has focused on the disruptive side of the equation, whereas many have a sustaining quality as well. Overall, however, I don’t find that dichotomy very useful for purposes of understanding and teaching how the new wave of legal technology will affect the practice of law and thereby affect the demand for lawyers. So this fall in my Law 2050 class my students and I disaggregated “disruptive” and “sustaining” to get more under the hood of how new technology platforms like Lex Machina, Legal Zoom, Ravel Law, and Neota Logic will change the way law is practiced. (We did so purely intuitively without dipping deeply into Christensen’s detailed theory or other business theory and commentary on the topic—so he and my colleagues at Vanderbilt’s Owen Graduate School of Business Management might cringe at what follows.) Modifying somewhat the typology we developed in class, below I use the introduction of Westlaw and the current play of Lex Machina to explain our typology and impact scoring system.

What is disruptive (and sustaining) about disruptive legal technology?

One way of thinking about how new technologies change the world is to ask a “technology native”—a person who has only known life with the technology—what his or her world would be like if the technology disappeared. For example, while I actually was able to get by years ago without Google (I am a Google “technology immigrant”), I can’t imagine my world without Google now, but I can remember one. So just think about a Google native—someone who has never seen life without Google! Ironically, with Westlaw and Lexis this is becoming increasingly less scary, as Google alone has supplanted them as the first search engine of choice for many legal searches. But let’s envision Westlaw and Lexis coming on line in the 1980s or disappearing in the 2010s and ask, so what, who cares, and why? In what ways is the world of lawyering different with or without them? I come up with five effects, each of which has a 20-point impact scale:

Quality enhancing impact: In the do it better, faster, and cheaper trilogy dominating the legal industry today, quality enhancing technology works on the delivery of better service. For example, Westlaw and Lexis vastly improved the accuracy of search results, such as “find cases from the federal courts in the Fifth Circuit that say X and Y but not Z.” Sure, a lawyer could have run key number headings in the books and read through legal encyclopedias, but the miss rate simply went down when Westlaw and Lexis came on line. So to, with its deep database of IP cases and filings and assessable research design, does Lex Machina improve accuracy of searches about IP litigation, though at present it does not run broad substantive research searches. Scores: Westlaw and Lexis 18 (like Russian skating judge, leaving room for some later contenders); Lex Machina 12

Efficiency enhancing impact: Anyone who has ever run key numbers in hard copy digests or Shepardized a case using the books will appreciate the efficiency enhancement Westlaw and Lexis provided—the “do it faster” component of today’s client demands. Similarly, although one could use the brute force of Westlaw or Lexis searches to assemble the results of a Lex Machina search about the IP litigation profile of a judge or patent, it’s a heck of a lot faster using Lex Machina. Scores: Westlaw and Lexis 18; Lex Machina 18.

Demand displacement effect: Assume a world in which the number and scope of client driven legal searches does not change. In that case, the introduction of a new legal technology that has quality and efficiency enhancement effects is likely to displace demand for service in some sectors of the legal industry if the technology is a cost-effective competitor. For example, Westlaw and Lexis allowed better and faster legal searches, but unless priced to be cost-competitive with the old lawyer-intensive ways of doing legal searches, they won’t penetrate the market. Bottom line, there are fewer billable hours to go around. Given the success of Westlaw and Lexis in establishing their markets, one has to assign them the potential for this displacement effect. It’s much harder to tell with Lex Machina, because it’s not clear what the demand was for the information its type of searches provides prior to its availability. Scores: Westlaw and Lexis: 15; Lex Machina 8

Transformative effect: The opposite side of the coin is the potential a new technology has to open up new markets for legal tasks not previously possible or valued. For example, other than paying for a bespoke lawyer’s judgment about the profile of a particular court for IP litigation, I find it hard to believe many clients would have paid lawyers to perform the kinds of hyper-detailed big data litigation information searches Lex Machina makes possible about lawyers, courts, and patents. Even more so, some of the search techniques Westlaw and Lexis made possible would have been virtually impossible to replicate the old fashioned way with the books. To the extent these new capacities are valued—e.g., they lead to better litigation prediction and outcomes—they will increase demand for service. Hence the transformative effect can work to offset the displacement effect, meaning a new legal technology might increase the pool of billable hours. Scores: Westlaw and Lexis 15, Lex Machina 12

Destructive effect: All of the above discussion has assumed it will be lawyers using the new technology, which clearly will not always be the case—the new technology might reduce or eliminate the need for a lawyer at the helm. Some new technologies will provide user interfaces that do not require an attorney to operate. The rise of paralegals conducting research on Westlaw and Lexis is an example. Even more destructive are technologies like predictive coding, used in e-discovery to vastly reduce the need for lawyers, and online interfaces such as Legal Zoom, which sidesteps the Main Street lawyer altogether. My sense is that Westlaw and Lexis did not have so much destructive effect outside of pushing some work down to paralegals, and the same will hold true for Lex Machina. Scores: Westlaw and Lexis: 8; Lex Machina 8.

Total Impact Scores: Westlaw and Lexis 74; Lex Machina 58.

Of course, this is all meant to be a bit provocative and poke some at the overuse and misuse of the “disruptive technology” theme in our current legal world. As I said, it is not informed by formal business theory, nor do I have any empirical evidence to back up my scores. But the categories of effects seem on point and relevant to the discourse on impacts of new legal technologies, and the scores strike me as decent ballpark estimates. At the very least, I’ll have a model the students can use to dissect the legal technologies they choose to study in next fall’s Law 2050 class!

Regulatory Innovation and the Sharing Economy

My Law 2050 energy has been devoted the past month to grading a pile of fabulous papers my students compiled on a broad variety of topics and planning some exciting new developments here at Vanderbilt. More on the latter, later. For now, some observations on several trends in law based on the student papers.

The major writing assignment in the law 2050 class requires students to identify an “inside law” or “outside law” trend and cover it in a blog post, client alert latter, and bar journal article. The purpose is twofold: (1) expose them to writing styles their future employers are likely to expect them to use for professional development and (2) encourage entrepreneurial thinking about how to “jump on” emerging themes and opportunities.

As I have mentioned before, the breadth of “outside law” topics was impressive. Three major themes dominated, however: (1) regulating the so-called sharing economy; (2) weird new technologies; and (3) personal data privacy.  Taking them one at a time, this post covers the sharing economy, a snarl of legal issues that ought to keep plenty of lawyers busy for the foreseeable future.

The engine of the sharing economy, no surprise, is the internet and its capacity to link people. Sharing economy companies leverage this capacity to match supply and demand primarily for services, the big three so far being rides (e.g., Uber), rooms (e.g., Airbnb), and odd jobs and errands (e.g., TaskRabbit).

Two opposing narratives have dominated the debate over how to receive the sharing economy. In one, sharing economy companies project themselves as innovative middlemen who merely use smart phone technology to hook up willing service providers with those in need of a ride, place to stay, or broken pipe fixed. In the other narrative, regulated companies in the traditional economy who see the sharing economy as completion accuse its participants of illegally and unfairly skirting rules and regulations running the gamut from licensing to taxes to employment. Which is it? It seems like a little of both to me, which is what has made the sharing economy a regulatory challenge.

The rhetoric of the sharing economy began with its name, because it is not at all about sharing—it’s about charging for services. When ride-share companies ramped up around the nation, for example, they took the position that it was simply about using phones and their smart software to match people who needed a ride with people who for whatever reason felt like driving people around—any exchange of money from passenger to driver was a “donation.” But now with surge pricing and capitalized values in the billions, the sharing economy looks much more like a business model. The other preposterous premise of the sharing economy was that it is quaint and benign, presenting no concerns that should catch the eye of regulation.

The sharing narrative fell apart pretty fast, however, and the rhetoric shifted to fending off the regulatory wolves.  Questions raised about the ride-room-errand trio have been so obvious, however, it’s clear the inventors of the sharing economy decided just to go forward without asking permission and wait to see what hit the fan, when, and where. After all, it’s no accident that we regulated rides, rooms, and errands for hire, and for good reason—just check into the history of taxis in major cities in the early 1900s and you’ll find plenty of horror stories. Even a short typology of legal and regulatory issues these new upstarts present is chock full of issues:

  • business licensing and taxes:  Must Uber or its drivers be licensed as a taxi; must Airbnb or its “landlords” pay hotel taxes
  • employment status: Are Uber’s drivers and TaskRabbit’s tasklers independent contractors or employees?; Who payes TaskRabbit’s tasker employment taxes?
  • health & safety regulation: Are Airbnb accommodations subject to health regulations and the ADA
  • insurance and liability: Who is liable when an Airbnb “tenant” burns down the apartment or an Uber driver assaults a passenger or drives into a building?
  • zoning: What if local zoning does not allow hotels in a particular area–can Airbnb operate there?
  • private contracts: What is homeowner association bylaws or an apartment lease restrict rentals and sublets?

On the other hand, it’s just as clear that the regulatory system has gone far beyond managing the problems presented by unrestricted ride, room, and errands providers to become part of the problem, protecting the taxis, hotels, and other services industries as much if not more than it protects consumers. Surely the regulated companies do deserve some protection in return for bearing the burden of regulation, such as the fixed rates taxis must charge regardless of demand. But if I can get an Uber driver at a busy downtown location in one minute, have him or her drive me safely back to my reasonably-priced Airbnb apartment I rented for the weekend late the prior week, and get someone over quickly to clean up the place before I turn in the key, what’s wrong with that?  It’s hard to get that from the traditional regulated economy. And if the traditional regulated economy isn’t meeting demand, it’s worth taking a step back to ask how to improve the system.

So we have a regulatory conundrum on our hands: consumers love the sharing economy, but want some acceptable level of security and protection; entrenched regulated providers in the traditional economy such as taxis and hotels hate the sharing economy, but can’t deliver its same level of convenience because of regulation; government sees licensing fee and tax revenue slipping away, and can’t please both consumers and the regulated industries.

At the two extremes, one approach would be to unflinchingly apply all the status quo rules of the traditional regulated economy to the sharing economy, which would largely eliminate it, and the other would be to simply turn a blind eye and let tort law sort out the provider-customer relations in the sharing economy, which will cut deep into the stability of the regulated ride, room, and errands providers of the traditional economy. For a while it looked as if the live and let live model was prevailing, as companies like Uber and Airbnb shot into hipster prominence. More recently, however, the sharing economy has taken serious hits, such as Uber’s complete ban in Nevada and fines in San Francisco and Airbnb’s tangles with New York, to name just a few.

A compromise would be to think hard about innovative regulation for the sharing economy. Eric Biber and I, for example, have suggested using a general permitting approach to segregate different segments of sharing economy markets in terms of level of activity and corresponding level of regulation. Or, as Shrai Shapiro has suggested, intermediate forms of regulation, fees, and licensing could be used to open markets to the sharing economy in limited ways. Nashville, for example, recently allowed Uber to operate at the City’s airport, but subjected it to registration, insurance, inspection, and background check requirements.

Either way, its clear that the sharing economy is not going away, but neither are consumer protection regulation, licensing fees, and taxes. The legal issues remain numerous and unresolved. I was glad to see several of my students take hold of this theme and delve deeply and insightfully into its future.

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