Regulatory Concerns: Episode 44 – The Dangers of Non-Technical Lawyers Advising on Technology Issues with Ronald Yu and Donald Day | Thomas Fox – compliance evangelist

Ronald Yu is the director and co-founder of MakeBell Limited. He is also a visiting fellow at the City University of Hong Kong’s (CityU’s) Faculty of Law and a part-time lecturer in law at Peking University.

As a scientist and author, his interests include the intersection of law and technology: intellectual property (IP) and non-fungible tokens (NFT), artificial intelligence (AI) and its legal consequences, cross-border data flow in the APAC region, as well as computer forensics. At the University of Hong Kong (HKU) he taught courses on patents and IP information technologies. He also lectured on FinTech at CUHK and taught courses on intellectual property commercialization and patent law at CityU. He also lectured on intellectual property strategy at the Hong Kong University of Science and Technology and the Hong Kong University of Technology.

Donald Day is the COO of FinTech startup VDX, which is building a digital asset ecosystem for institutional investors. He was also an in-house cryptocurrency and digital asset expert at Hong Kong’s capital markets regulator, the Securities and Futures Commission, where he helped shape the licensing regime for virtual asset trading platforms and designed and led the oversight of virtual asset fund managers and traders. platforms.

In this episode of “Regulatory Talk,” Ron and Donald talk to host Ajay Shamdasani about the potentially dire consequences of using non-technical lawyers – particularly those who don’t have advanced degrees or extensive experience in science, technology, engineering or math ( STEM) – offering advice on situations where technology is important or at the heart of the matter. The law can be unforgiving to those who don’t know its often arcane rules, and ultimately it’s clients who pay for what lawyers either don’t know about or assume they share with their guests. In the age of artificial intelligence, machine learning and large language models (LLM), it does not go so far as to say that lawyers need to learn to code, but advisors need to understand the practical legal, business, financial and reputational implications of such technologies for their clients.

Technology can be a game changer sometimes, which stresses Ron and Donald. However, they also point out that sometimes lawyers suggest contract terms that are legally enforceable but impractical based on current technology – such as Bitcoin’s 10-second consensus period, which is a performance requirement that cannot be met. As our guests explain, if a contract contains terms that are unenforceable, it can lead to a lawyer invalidating the deal due to ignorance of the technology underlying the contract or lack of commercial acumen.

The discussion turns to how rare it is to find lawyers with technical backgrounds and licensed practitioners. It is clear that the more technical the topic, the less likely the average dispute resolution specialist in a typical multinational, Anglo-American law firm is to be up to the task. Our guests acknowledge that they leave clients with a very narrow range of specialists to choose from if they want to be represented by lawyers who understand both the law and the underlying technology.

However, as Ron Yu notes, even “non-technicians” can gain momentum by educating themselves, pointing to the living example of US federal judge Randall R. Rader – as was the case with FinTech and cryptocurrencies.

Lawyers often view technology through the lens of its legal and regulatory implications and focus less on its implementation. How it will work and how and where best to use it is a later question. When it comes to cybersecurity, it is considered an IT issue, they say. Yu said that if a lawyer ignores cybersecurity issues, he or she is leaving out important technical details that could harm the client.

The conversation ends by saying that when it comes to “tech lawyers”, it certainly seems that generally speaking in the Asia-Pacific region, those practitioners who market themselves well have the biggest platforms and the loudest voices and are therefore considered authorities in their respective fields.

Of course, there are situations in which appropriate technical support cannot be replaced. For example, as Donald Day mentions, it is not uncommon for patent litigators to deal with lawyers who do not understand technology, and these lawyers quickly become a hindrance.

Both guests highlight the persistent belief that it is not ideal to engage in intellectual property disputes in Hong Kong due to the lack of talent; Even if a specialist explains something thoroughly to a lawyer, the lawyer will always misunderstand it or simply not understand the topic. See less –