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The Jimi Hendrix Experience: Sanctions For Destruction

December 2, 2018

James Marshall “Jimi” Hendrix, whom Rolling Stone ranked the greatest guitarist of all time, died intestate in 1970 at twenty-seven. His heirs have been embroiled in litigation ever since. They have recently entered the fiery realm of e-discovery and sanctions. Experience Hendrix, LLC v. Pitsicalis, No. 17-cv-1927 (PAE) (S.D.N.Y., 11/27/18). The opinion by District Court Judge Paul A. Engelmayer is interesting in its own right, but when you add the Hendrix name and family feud, you have a truly memorable order. After all, we are talking about the artist who created “Purple Haze,” “Foxy Lady,” “The Star-Spangled Banner,” “Hey Joe” and my personal favorite, his rendition of Bob Dylan’s “All Along the Watchtower”.

Case Background: The Hendrix Family Feud

The latest suit involves the usual serial litigants. On one side is Jimi’s step-sister, Janie Hendrix (shown right). She is, as Jimi would have said, a “Foxy Lady”. Janie assumed control of the Estate from Jimi’s natural father, Al Hendrix, when he died in 2002. On the other side is Jimi’s brother, Leon Hendrix and Leon’s business partner, Andrew Pitsicalis. Kerzner, Hendrix Sues Serial Infringer Andrew Pitsicalis (American Blues Scene, 3/20/17). There can be big money in the Hendrix name, the top guitarist of all time. I for one still get choked up when I hear his rendition of “The Star-Spangled Banner”:

Jimi’s father, Al Hendrix, won bitterly fought estate litigation in the seventies, but the trademark litigation has never stopped. Multiple injunctions are in place under the corporate name, Experience Hendrix, LLC, but the infringements just keep coming. Companies keep popping up to sell Jimi Hendrix branded goods. Andrew Pitsicalis and Leon Hendrix are frequently involved. Their latest attempts to profit from the Jimi brand include marijuana related products (apparently “Purple Haze” has long been a well know strain of cannabis. See: Legal Battle Ensues Over Jimi Hendrix Usage Rights (High Times, 3/29/17); Jimi Hendrix’s heirs wage court battle over branded cannabis, other products (Cannifornan, 3/22/17).

I am reminded of the closing line of the Hendrix classic, Are You Experienced:

Ah! But Are You Experienced?
Have you ever been experienced?

Not necessarily stoned, but beautiful.

Jimi’s brother, Leon Hendrix (shown right), is an artist and musician himself with his own following. Some think he was treated unfairly by his Dad and Step-Sister. For a variety of reasons, especially I suspect the impact of Pitsicalis, the CEO of “Purple Haze Properties” and Leon’s business partner, there is still bad blood. Chris Fry, Jimi Hendrix’s Brother Fires Back Against Estate (Courthouse News, 3/28/17).

This kind of family feud mentality is not uncommon in litigation, especially in cases involving the intentional destruction of evidence. I am reminded of a Hendrix line from Voodoo Child:

Well, the night I was born. Lord I swear the moon turned a fire red. The night I was born I swear the moon turned a fire red. Well my poor mother cried out “lord, the gypsy was right!” And I seen her, fell down right dead. Have mercy.

Spoliation sanctions generally arise from a haze, just not a stoned purple haze, more like an angry moon turned a fire red haze. Even a seasoned District Court Judge in the SDNY, Paul Engelmayer, was “dismayed” by the conduct of Pitsicalis and Leon Hendrix. Well, what did you expect in matters involving the Estate of a Voodoo Child musical genius? The best guitarist that ever lived?

Judge Engelmayer’s Sanction Order

The scholarly and well-written opinion by District Court Judge Paul A. Engelmayer (shown right) begins by observing:

As the docket in this matter reflects, the Court has been called upon dismayingly often to act when presented with evidence of the PHP defendants’ persistent non-compliance with basic discovery obligations. Plaintiffs now move this Court to sanction these defendants for (1) spoliation of evidence and, more generally, (2) “consistent, pervasive[,] and relentless discovery abuses by [d]efendants and their counsel, Thomas Osinski.” Dkt. 245. Plaintiffs request, inter alia, a preliminary injunction, an order of attachment, an adverse inference instruction at trial, and terminating sanctions. See Dkts. 237, 244. For the reasons below, the Court grants the motion for an adverse inference instruction and directs the PHP defendants to pay the reasonable fees and costs incurred by plaintiffs in bringing this motion.

Experience Hendrix, LLC v. Pitsicalis, No. 17-cv-1927 (PAE) (S.D.N.Y., 11/27/18). Expressing “dismay” is about as emotional as Judge Engelmayer gets in writing an opinion, even one sanctioning a party for destroying evidence and disobeying court orders.

The PHP defendants mentioned are Leon Hendrix, Andrew Pitsicalis and their corporation, Purple Haze Properties (PHP). As you can see from the first quote, the attorney who represents them, Thomas Osinski, was also accused of discovery abuse. That often happens in joker and the thief type cases like this.

A good sanctions case will always have a “parade of horribles” consisting of a list of things the spoliating party supposedly did wrong. Hendrix is no exception. That is how the severe sanctions are justified. It would take too long to list all of the abuses justifying sanctions in Hendrix, but here are the four main ones:

PHP Defendants’ Failure to Produce Forensic Images as Ordered. Apparent intentional disobedience of court orders to make forensic copies of and produce certain drives, even after daily fines are imposed for late production. One of the excuses PHP offered was especially humorous, especially considering the NYC venue, but they actually claimed “that they had had difficulty hiring an expert technician who could image the hard drives.” Yeah, it’s real hard. Need I say more about Osinski’s veracity? When they finally did produce some, but not all of the forensic images, they were not “forensic” images. They were just copies of all active files (a “ghost” copy) with no forensic copy of the slack space. That is what a forensic copy means. It allows for search and examination of deleted files, which was the whole point of the court order.
PHP Defendants’ Use of Anti-Forensic Software. Software allowing for the complete wiping of files was found installed on several of the computer images that were produced. In some there was evidence the software was installed immediately after a court order was entered requiring production. In these the plaintiff’s forensic expert could also show that the software, CleanMyMac, was actually used to wipe files and when, although it was not possible to know what files were destroyed. The moving party (Janie Hendrix and her company Experience Hendrix, L.L.C.) proved the use was knowing when their expert, John T. Myers, showed how the software was configured to have a pop-out and warn the user to confirm complete elimination of the file (it cannot be recovered after that). The defendants testified that they did not recall ever using it. Sure. Spoliate evidence and then cover-up, or try to.
Andrew Pitsicalis Deleted “Jimi”-related Text Messages from his iPhone. Plaintiff’s forensic expert was able to prove that more than 500 text messages had been deleted from Pitsicalis cell phone after the duty to preserve had arisen (suit was filed). Moreover, they were able to recover nine text messages pertaining to Jimi. As Judge Engelmayer explained: “Fortuitously, Myers was able to recover the deleted text messages from the imaged phone because those communications had been stored not in the applications used to send and receive them (e.g., iMessage), but in databases where files exist until overwritten or otherwise purged.”
Key Computer at First Hidden, then After Discovery in Photograph, Goes South to Florida and is Never Examined. This one sounds like a bad game of Where’s Waldo. A “Seventh Computer” was found, one never reported by PHP, by plaintiff’s study of photos on PHP’s Facebook page. Very clever. One picture on FB showed Andrew Pitsicalis, sitting in his office, in immediate proximity to a mystery desktop computer. When asked about it under oath PHP’s fine attorney, Osinski, swore that he thought it was just a dummy Apple monitor on the office desk, not a computer. He said he did not know that the monitor, and key board next to it, were a real, functional computer, an iMac. What? Did he think these were IKEA props in a display room? They were sitting on his client’s desk in a Facebook photo taken after suit was filed. But wait, there is more, Osinski went on to swear that the computer had moved to Florida. As Judge Engelmayer explained:

“Osinski testified that his present understanding is that the desktop computer belonged to an individual named Hector David, Jr. who has moved to Florida and who, Osinski assumes, took the computer with him. Osinski, however, did not have personal knowledge of this, or of the contents of the desktop in Andrew Pitsicalis’ office. … Andrew Pitsicalis, for his part, denied owning the computer and testified that David was not employed by PHP.”

Apparently no one has been able to locate this mysterious Hector David or know where he took the iMac computer sitting on Pitsicalis desk.

Legal Standards of Spoliation in Hendrix

Judge Engelmayer’s opinion in Hendrix examines two legal standards, Rule 37 and Spoliation. He begins the discussion with the duty to preserve, the threshold issue in spoliation:

The first issue is whether the PHP defendants had an obligation to preserve the categories of evidence at issue. A party has an obligation to preserve evidence when it “has notice that the evidence is relevant to litigation . . . [or] should have known that the evidence may be relevant to future litigation.” Kronisch v. United States, 150 F.3d 112 , 126 (2d Cir. 1998) (internal citations omitted).

That standard is easily met here.

He then goes on to discuss whether that duty as breached, another no-brainer based on the impressive parade of horribles in this case:

The Court further finds—and the evidence to this effect is overwhelming—that the PHP defendants repeatedly breached this duty. The breaches fall in three categories: (1) the use of cleaning software on covered computing devices, (2) the failure to disclose the existence of a seventh computing device containing potentially relevant documents, and (3) the deletion of relevant text messages.

Judge Engelmayer’ then discusses the key issue of intent, the mens rea to spoliate.

Much of the PHP defendants’ spoliation of evidence, the Court finds, was intentional. …

The Court finds that, by installing anti-cleaning software on his own computer and causing it to be installed on Schmitt’s in the face of an unambiguous and known duty to preserve potentially relevant evidence, Pitsicalis intentionally caused the destruction of such evidence.

The defenses proffered by the PHP defendants are unavailing. That Schmitt personally may not have acted with the intent to deleted responsive files is beside the point. The relevant mens rea here is that of Andrew Pitsicalis, who owned PHP, for which Schmitt worked as an independent contractor, and who, despite being a repeat litigant amply on notice of his duty to preserve potentially relevant evidence, urged Schmitt to run this software to delete files. Tr. 125, 133. Also unhelpful is Pitsicalis’ [*13] explanation that, at some unspecified point, he went on “Google to search for ‘top anti-forensic software’ and went through the first 10 pages of search” without finding anything for CleanMyMac. Andrew Pitsicalis Decl. at 2-3. Regardless what Pitsicalis’ internet research may have shown, the evidence adduced at the hearing clearly established both that the CleanMyMac software had the capacity to cause the deletion (and shredding) of files, and that Pitsicalis knew this, not least because the software’s causation of such deletion was made explicit to the user each time. Pitsicalis does not offer any reason for installing and using this software on his computer, let alone for having done so without first creating an image of the full contents of the computer that would have assured preservation of the computer’s contents.

Andrew Pitsicalis’ deletion of relevant text messages was also clearly intentional. By his admission, he personally and deliberately deleted, among other text messages, a series of texts concerning the marketing of “Jimi”-related products, the very subject of this lawsuit. He did so one day after the Court issued an order requiring the Purple Haze Properties defendants to: “produce to plaintiffs the forensic images of” every device, including phones, containing files that are relevant to this action. Pitsicalis did not offer any coherent defense to this misconduct. The Court finds it to have been a willful and blatant violation of the duty to preserve relevant evidence.

Finally, the Court finds that the removal of a computer from Andrew Pitsicalis’ office and its transfer to a Floridian, Hector David, Jr., was an act of intentional spoliation. To be sure, the question is a closer one, if only because the contents of that computer are unknown, and so the Court cannot rule out the possibility that these contents were wholly extraneous to this litigation. The location of the computer in Pitsicalis’ office, however, suggests otherwise. Had the Court been notified of the existence of this computer, it assuredly would have ordered that the computer’s contents be searched for responsive materials. It is also noteworthy that Andrew Pitsicalis did not inform his attorney of the existence of this computer. While conceivably these circumstances, in isolation, might have been consistent with the merely reckless disposal of evidence, when this episode is viewed in the light of Pitsicalis’ other acts of willful spoliation, the Court has little difficulty finding it, too, to bespeak intentional misconduct.

Sanctions Imposed

Judge Engelmayer begins his analysis of the appropriate, proportional sanctions by stating the black letter law:

The trial judge must determine the appropriate sanction for spoliation [*14] of evidence on a case-by-case basis. F, 247 F.3d at 436 . Such sanctions should be designed to:

(1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore the prejudiced party to the same position [they] would have been in absent the wrongful destruction of evidence by the opposing party.

West, 167 F.3d at 779 . Case-dispositive sanctions, however, “should be imposed only in extreme circumstances, usually after consideration of alternative, less drastic sanctions.” Id.

Based on these objectives Judge Engelmayer sanctioned defendants as follows:

Considering these objectives, the Court imposes the following two sanctions, regarding (1) Andrew Pitsicalis’ computer, iPhone, and desktop computer; and (2) Schmitt’s computer, as to each of which the Court has found intentional spoliation. First, the Court will instruct the finder of fact that it may draw an adverse inference from the PHP parties’ failure adequately to preserve and produce these materials, to wit, that the devices in question contained evidence of conduct by the PHP defendants in breach of their legal duties to plaintiffs in connection with the sale and marketing of Jimi Hendrix-related materials.8

Second, given the resources plaintiffs again have had to expend in establishing the above-chronicled acts of non-compliance by the PHP defendants with the Court’s discovery orders, plaintiffs are entitled to an award reflecting the reasonable attorneys’ fees and costs incurred in connection with bringing and litigating the instant successful motion.

Judge Engelmayer went on to explain why a lesser sanction was inappropriate:

The Court has carefully considered whether lesser sanctions are adequate to cure the harm caused by the disposition of these materials. The Court’s firm conclusion is that no lesser sanction than the combination of an adverse inference instruction and an order directing the prompt recompense of plaintiffs for costs reasonably incurred litigating the meritorious motions for sanctions based on spoliation would adequately remedy plaintiffs’ injury. See, e.g., Moody v. CSX Transp., Inc., 271 F. Supp. 3d 410 , 432 (W.D.N.Y. 2017) (finding adverse inference appropriate where defendants intentionally lost material evidence); Ottoson v. SMBC Leasing and Finance, Inc., 268 F. Supp. 3d 570 , 584 (S.D.N.Y. 2017) (granting an adverse inference instruction where plaintiff “has acted willfully or in bad faith” in [*15] violation of her duty to preserve certain emails); First Fin. Sec., Inc. v. Freedom Equity Grp., LLC, No. 15-CV-1893-HRL, 2016 U.S. Dist. LEXIS 140087 , [2016 BL 337069], 2016 WL 5870218 (N.D. Cal. Oct. 7, 2016) (imposing adverse inference instruction for intentional deletion of text messages and awarding plaintiffs attorneys fees incurred in bringing sanctions motions). The Court has also carefully considered whether this is the rare case in which terminating sanctions are merited, as plaintiffs have urged. See Dkt. 237. At the present time, the Court’s judgment is that such extreme sanctions are not warranted, although further acts of spoliation and/or other discovery abuses could produce a different result.

The footnotes in these last paragraphs are interesting. Footnote 8 explains that “The Court defers decision on the precise formulation of the adverse inference instruction until closer to trial.” That means it could become a mandatory presumption, or merely permissive. Footnote 9 acknowledges that there may be more discovery misconduct in the works. The court noted it could still strike all defenses, if the conduct continues, and save everyone the cost of a trial.

Conclusion

Even with just a permissive presumption, the case at this point will almost certainly be won by Janie Hendrix’ company, Experience Hendrix, L.L.C.. Experience Hendrix, LLC v. Pitsicalis. Yet another loss for Jimi’s brother, Leon, in a long list of losses. Another injunction and businesses shut-down, but for how long? The Estate and L.L.C. have won so many times before. Yet they keep coming back. Is this yet another Pyrrhic Victory in a long line of pointless litigation? How long before the next suit? Some things are just beyond Law’s reach. Purple Haze.

Purple Haze

Purple haze all in my brain
Lately things just don’t seem the same
Actin’ funny, but I don’t know why
‘Scuse me while I kiss the sky

Purple haze all around
Don’t know if I’m comin’ up or down
Am I happy or in misery?
Whatever it is, that girl put a spell on me

Help me help me
Oh no no… No

Yeah
Purple haze all in my eyes
Don’t know if it’s day or night
You’ve got me blowin, blowin my mind
Is it tomorrow or just the end of time?

No, help me aw yeah! Oh no no oh help me…

When you are the best in the world at something, like Jimi Hendrix was at guitar playing, and when you are still famous and admired by millions fifty years after your death, there will be profiteers around. When you add sibling rivalry and family resentments to the mix, then the trouble goes from bad to worse.

The Hendrix family saga, and this lawsuit, are tragedies. So too is the destruction of evidence and this Sanctions Order. It is part of his guitar star legend. Jimi Hendrix’ boy genius was born out of a troubled childhood and family. Diamond in the rough. Bigger than life. Exploded with art, fame and fortune in just three years. Dead at age 27 of an overdose. The day he was born the moon turned a fire red, “Lord, the gypsy was right!”

The greatest guitarist of all time was a Phoenix – tragic, fiery, short-lived, but beautiful and spell-binding too. Where will musical genius appear like that again?

4 Comments | Evidence, Forensic Exam, Lawyers Duties, New Rules, Review, Search, Spoliation/Sanctions | Tagged: best practices, discovery, document review, ethics, evidence, facebook, law, legal profession, preservation | Permalink
Posted by Ralph Losey

The Great Debate in AI Ethics Surfaces on Social Media: Elon Musk v. Mark Zuckerberg

August 6, 2017

I am a great admirer of both Mark Zuckerberg and Elon Musk. That is one reason why the social media debate last week between them concerning artificial intelligence, a subject also near and dear, caused such dissonance. How could they disagree on such an important subject? This blog will lay out the “great debate.”

It is far from a private argument between Elon and Mark. It is a debate that percolates throughout scientific and technological communities concerned with AI. My sister AI-Ethics.com web begins with this debate. If you have not already visited this web, I hope you will do so after reading this blog. It begins by this same debate review. You will also see at AI-Ethics.com that I am seeking volunteers to help: (1) prepare a scholarly article on the AI Ethics Principles already created by other groups; and, (2) research the viability of sponsoring an interdisciplinary conference on AI Principles. For more background on these topics see the library of suggested videos found at AI-Ethics Videos. They provide interesting, easy to follow (for the most part), reliable information on artificial intelligence. This is something that everybody should know at least something about if they want to keep up with ever advancing technology. It is a key topic.

The Debate Centers on AI’s Potential for Superintelligence

The debate arises out of an underlying agreement that artificial intelligence has the potential to become smarter than we are, superintelligent. Most experts agree that super-evolved AI could become a great liberator of mankind that solves all problems, cures all diseases, extends life indefinitely and frees us from drudgery. Then out of that common ebullient hope arises a small group that also sees a potential dystopia. These utopia party-poopers fear that a super-evolved AI could doom us all to extinction, that is, unless we are not careful. So both sides of the future prediction scenarios agree that many good things are possible, but, one side insists that some very bad things are also possible, that the dark side risks even include extinction of the human species.

The doomsday scenarios are a concern to some of the smartest people alive today, including Stephen Hawking, Elon Musk and Bill Gates. They fear that superintelligent AIs could run amuck without appropriate safeguards. As stated, other very smart people strongly disagree with all doomsday fears, including Mark Zuckerberg.

Mark Zuckerberg’s company, Facebook, is a leading researcher in the field of general AI. In a backyard video that Zuckerberg made live on Facebook on July 24, 2017, with six million of his friends watching on, Mark responded to a question from one: “I watched a recent interview with Elon Musk and his largest fear for future was AI. What are your thoughts on AI and how it could affect the world?”

Zuckerberg responded by saying:

I have pretty strong opinions on this. I am optimistic. I think you can build things and the world gets better. But with AI especially, I am really optimistic. And I think people who are naysayers and try to drum up these doomsday scenarios — I just, I don’t understand it. It’s really negative and in some ways I actually think it is pretty irresponsible.

In the next five to 10 years, AI is going to deliver so many improvements in the quality of our lives.

Zuckerberg said AI is already helping diagnose diseases and that the AI in self-driving cars will be a dramatic improvement that saves many lives. Zuckerberg elaborated on his statement as to naysayers like Musk being irresponsible.

Whenever I hear people saying AI is going to hurt people in the future, I think yeah, you know, technology can generally always be used for good and bad, and you need to be careful about how you build it and you need to be careful about what you build and how it is going to be used.

But people who are arguing for slowing down the process of building AI, I just find that really questionable. I have a hard time wrapping my head around that.

Mark’s position is understandable when you consider his Hacker Way philosophy where Fast and Constant Improvements are fundamental ideas. He did, however, call Elon Musk “pretty irresponsible” for pushing AI regulations. That prompted a fast response from Elon the next day on Twitter. He responded to a question he received from one of his followers about Mark’s comment and said: I’ve talked to Mark about this. His understanding of the subject is limited. Elon Musk has been thinking and speaking up about this topic for many years. Elon also praises AI, but thinks that we need to be careful and consider regulations.

The Great AI Debate

In 2014 Elon Musk referred to developing general AI as summoning the demon. He is not alone in worrying about advanced AI. See eg. Open-AI.com and CSER.org. Steven Hawking, usually considered the greatest genius of our time, has also commented on the potential danger of AI on several occasions. In speech he gave in 2016 at Cambridge marking the opening of the Center for the Future of Intelligence, Hawking said: “In short, the rise of powerful AI will be either the best, or the worst thing, ever to happen to humanity. We do not yet know which.” Here is Hawking’s full five minute talk on video:

Elon Musk warned state governors on July 15, 2017 at the National Governors Association Conference about the dangers of unregulated Artificial Intelligence. Musk is very concerned about any advanced AI that does not have some kind of ethics programmed into its DNA. Musk said that “AI is a fundamental existential risk for human civilization, and I don’t think people fully appreciate that.” He went on to urge the governors to begin investigating AI regulation now: “AI is a rare case where we need to be proactive about regulation instead of reactive. Because I think by the time we are reactive in AI regulation, it’s too late.”

Bill Gates agrees. He said back in January 2015 that

I am in the camp that is concerned about super intelligence. First the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well. A few decades after that though the intelligence is strong enough to be a concern. I agree with Elon Musk and some others on this and don’t understand why some people are not concerned.

Elon Musk and Bill Gates spoke together on the Dangers of Artificial Intelligence at an event in China in 2015. Elon compared work on the AI to work on nuclear energy and said it was just as dangerous as nuclear weapons. He said the right emphasis should be on AI safety, that we should not be rushing into something that we don’t understand. Statements like that makes us wonder what Elon Musk knows that Mark Zuckerberg does not?

Bill Gates at the China event responded by agreeing with Musk. Bill also has some amusing, interesting statements about human wet-ware, our slow brain algorithms. He spoke of our unique human ability to take experience and turn it into knowledge. See: Examining the 12 Predictions Made in 2015 in “Information → Knowledge → Wisdom. Bill Gates thinks that as soon as machines gain this ability, they will almost immediately move beyond the human level of intelligence. They will read all the books and articles online, maybe also all social media and private mail. Bill has no patience for skeptics of the inherent danger of AI: How can they not see what a huge challenge this is?

Gates, Musk and Hawking are all concerned that a Super-AI using computer connections, including the Internet, could take actions of all kinds, both global and micro. Without proper standards and safeguards they could modify conditions and connections before we even knew what they were doing. We would not have time to react, nor the ability to react, unless certain basic protections are hardwired into the AI, both in silicon form and electronic algorithms. They all urge us to take action now, rather than wait and react.

To close out the argument for those who fear advanced AI and urge regulators to start thinking about how to restrain it now, consider the Ted Talk by Sam Harris on October 19, 2016, Can we build AI without losing control over it? Sam, a neuroscientist and writer, has some interesting ideas on this.

On the other side of the debate you will find most, but not all, mainstream AI researchers. You will also find many technology luminaries, such as Mark Zuckerberg and Ray Kurzweil. They think that the doomsday concerns are pretty irresponsible. Oren Etzioni, No, the Experts Don’t Think Superintelligent AI is a Threat to Humanity (MIT Technology Review, 9/20/16); Ben Sullivan, Elite Scientists Have Told the Pentagon That AI Won’t Threaten Humanity (Motherboard 1/19/17).

You also have famous AI scholars and researchers like Pedro Domingos who are skeptical of all superintelligence fears, even of AI ethics in general. Domingos stepped into the Zuckerberg v. Musk social media dispute by siding with Zuckerberg. He told Wired on July 17, 2017 that:

Many of us have tried to educate him (meaning Musk) and others like him about real vs. imaginary dangers of AI, but apparently none of it has made a dent.

Tom Simonite, Elon Musk’s Freak-Out Over Killer Robots Distracts from Our Real AI Problems, (Wired, 7/17/17).

Domingos also famously said in his book, The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World, a book which we recommend:

People worry that computers will get too smart and take over the world, but the real problem is that they’re too stupid and they’ve already taken over the world.

We can relate with that. On the question of AI ethics Professor Domingos said in a 2017 University of Washington faculty interview:

But Domingos says that when it comes to the ethics of artificial intelligence, it’s very simple. “Machines are not independent agents—a machine is an extension of its owner—therefore, whatever ethical rules of behavior I should follow as a human, the machine should do the same. If we keep this firmly in mind,” he says, “a lot of things become simplified and a lot of confusion goes away.” …

It’s only simple so far as the ethical spectrum remains incredibly complex, and, as Domingos will be first to admit, everybody doesn’t have the same ethics.

“One of the things that is starting to worry me today is that technologists like me are starting to think it’s their job to be programming ethics into computers, but I don’t think that’s our job, because there isn’t one ethics,” Domingos says. “My job isn’t to program my ethics into your computer; it’s to make it easy for you to program your ethics into your computer without being a programmer.”

We agree with that too. No one wants technologists alone to be deciding ethics for the world. This needs to be a group effort, involving all disciplines, all people. It requires full dialogue on social policy, ultimately leading to legal codifications.

The Wired article of Jul 17, 2017, also states Domingos thought it would be better not to focus on far-out superintelligence concerns, but instead:

America’s governmental chief executives would be better advised to consider the negative effects of today’s limited AI, such as how it is giving disproportionate market power to a few large tech companies.

The same Wired article states that Iyad Rahwan, who works on AI and society at MIT, doesn’t deny that Musk’s nightmare scenarios could eventually happen, but says attending to today’s AI challenges is the most pragmatic way to prepare. “By focusing on the short-term questions, we can scaffold a regulatory architecture that might help with the more unpredictable, super-intelligent AI scenarios.” We agree, but are also inclined to think we should at least try to do both at the same time. What if Musk, Gates and Hawking are right?

The Wired article also quotes, Ryan Callo, a Law Professor at the University of Washington, as saying in response to the Zuckerberg v Musk debate:

Artificial intelligence is something policy makers should pay attention to, but focusing on the existential threat is doubly distracting from it’s potential for good and the real-world problems it’s creating today and in the near term.

Simonite, Elon Musk’s Freak-Out Over Killer Robots Distracts from Our Real AI Problems, (Wired, 7/17/17).

But how far-out from the present is superintelligence? For a very pro-AI view, one this is not concerned with doomsday scenarios, consider the ideas of Ray Kurzweil, Google’s Director of Engineering. Kurzweil thinks that AI will attain human level intelligence by 2019, but will then mosey along and not attain super-intelligence, which he calls the Singularity, until 2045.

2029 is the consistent date I have predicted for when an AI will pass a valid Turing test and therefore achieve human levels of intelligence. I have set the date 2045 for the ‘Singularity’ which is when we will multiply our effective intelligence a billion fold by merging with the intelligence we have created.

Kurzweil is not worried about the impact of super-intelligent AI. To the contrary, he looks forward to the Singularity and urges us to get ready to merge with the super-AIs when this happens. He looks at AI super-intelligence as an opportunity for human augmentation and immortality. Here is a video interview in February 2017 where Kurzweil responds to fears by Hawking, Gates, and Musk about the rise of strong A.I.

Note Ray conceded the concerns are valid, but thinks they miss the point that AI will be us, not them, that humans will enhance themselves to super-intelligence level by integrating with AI – the Borg approach (our words, not his).

Getting back to the more mainstream defenses of super-intelligent AI, consider Oren Etzioni’s Ted Talk on this topic.

Oren Etzioni thinks AI has gotten a bad rap and is not an existential threat to the human race. As the video shows, however, even Etzioni is concerned about autonomous weapons and immediate economic impacts. He invited everyone to join him and advocate for the responsible use of AI.

Conclusion

The responsible use of AI is a common ground that we can all agree upon. We can build upon and explore that ground with others at many venues, including the new one I am trying to put together at AI-Ethics.com. Write me if you would like to be a part of that effort. Our first two projects are: (1) to research and prepare a scholarly paper of the many principles proposed for AI Ethics by other groups; and (2) put on a conference dedicated to dialogue on AI Ethics principles, not a debate. See AI-Ethics.com for more information on these two projects. Ultimately we hope to mediate model recommendations for consideration by other groups and regulatory bodies.

AI-Ethics.com is looking forward to working with non-lawyer technologists, scientists and others interested in AI ethics. We believe that success in this field depends on diversity. It has to be very interdisciplinary to succeed. Lawyers should be included in this work, but we should remain a minority. Diversity is key here. We will even allows AIs, but first they must pass a little test you may have heard of. When it comes to something as important all this, all faces should be in the book, including all colors, races, sexes, nationalities, education, from all interested companies, institutions, foundations, governments, agencies, firms and teaching institutions around the globe. This is a human effort for a good AI future.

3 Comments | AI Ethics, informaton, knowledge, Lawyers Duties, Related Legal Webs, Technology, wisdom | Tagged: education, ethics, facebook, information, machine learning, ralph losey, robot, robots, science, too much information, wisdom, zuckerberg | Permalink
Posted by Ralph Losey

The Solution to Empty-Suits in the Board Room: The “Hacker Way” of Management – Part Two

August 22, 2013

This is the conclusion to The Solution to Empty-Suits in the Board Room: The “Hacker Way” of Management – Part One. This second part discusses possible applications in e-discovery of the Hacker Way ideals of Boldness, Openness, and Values. Part one has already covered Impactful and Fast. Both parts are a followup to my blog, “The Hacker Way” – What the e-Discovery Industry Can Learn From Facebook’s Management Ethic, and my LTN editorial, Vendor CEOs: Stop Being Empty Suits & Embrace the Hacker Way.

My LTN article on Empty Suits in the boardroom anticipated the keynote talk at ILTA by Scott Klososky, reported in LTN by Monica Bay in Are You a Dead Leader Walking or Driving With Your High Beams? Apparently many are now able to see that most of the emperors of e-discovery have no clothes, that the suits in charge do not know how to properly manage cutting edge, high-tech companies. Klososky’s advice seems compatible with the Hacker Way credo that Facebook’s CEO, Mark Zuckerberg, and I endorse. In his Dead Leader Walking speech Klososky is reported by Monica to have advised the ILTA audience:

[T]o avoid being “in the middle of the pack. It’s not safe. You have to be willing to bleed a little.” Take the “alchemist role, be creative and innovative. Ninety percent of business intelligence is to be creative and innovative,” he said.

Here is Klososky’s colorful slide from this part of his presentation.

Also check out the summary of Klososky’s presentation by VQ, entitled ILTA 2013: Technology Darwinism. They quote Klososky as saying:

The need to adapt to technology is no longer a technology thing – it’s about survival.

Klososky went on to explain what he calls Technology Darwinism, which occurs when, as the VQ article puts it:

[T]he pace of technology innovation is faster than the speed people adapt to new tools and methods, creating a technology risk gap. This gap might lead to a complete restructure of the market – and the survival of the fittest, i.e. firms who manage to adapt to the new market conditions. When the speed of change in a law firm is lower than the speed of change in the industry, a technology risk arises, which impacts the firm’s service relevancy, client connections, brand reputation and talent acquisition.

Klososky went on to describe what he calls a Technology Inflection Point where new technology changes an industry so dramatically that there are winners and losers. The winners thrive and prosper whereas losers enter into the “death spiral”. He gave several corporate examples, including Kodak, that made money until the year before it filed bankruptcy. VQ reported Klososky’s belief that:

[M]any law firm leaders, refuse to fully understand and act on the fact that the firm is almost dying. As long as the firm makes money, many law firm leaders seem to think that everything is fine and that they are so successful that there is no need to apply new technologies.

Klososky’s advice is well-aligned with the Bold and Fast contours of the Hacker Way discussed in part one of this article. As Zuckerberg’s puts it in his explanation of the Hacker Way, “The riskiest thing is to take no risks.” Now onto the other key pointers of Bold, Open and Values.

Bold

Who wants to hire a mousy lawyer? Nobody! Timid and lawyer are two words that should never go together. Yet for most AmLaw 100 law firms today, they do, at least when it comes to e-discovery. For a law firm to be bold, they need to do what my law firm did, and others have done. They need to hire outside attorneys who are already skilled, and they need to make a full commitment to these attorneys and what they bring to the table. The e-discovery experts should be provided with authority to make a real e-discovery team, not just design a marketing ploy. In that way law firms can keep improving and can build a truly effective law firm for the 21st Century.

As Zuckerberg explained in his Letter to Investors:

The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it — often in the face of people who say it’s impossible or are content with the status quo.

If a law firm is satisfied with the status quo, they will not invest in e-discovery. They will be happy with their empty suits. That is, until the hacker led firms start to eat their lunch. Law firm management needs to be bold, to go all-in for e-discovery. They need to hire full time specialists. It does not work to simply ask a few lawyers in the firm to dabble part time.

Timid, halfway, band-aid measures do not work in any complex endeavor, including e-discovery. You have got to go either all-in, or all-out. The days of a law firm setting up a marketing type e-discovery department by sending out a few of its attorneys to CLEs, and then posturing them as experts, are long gone. It takes bold all-out efforts. Again, you need to look beyond this year’s profits to the long term viability of the firm.

E-discovery commentator and consultant George Socha is also leery of poser type law firm practice groups. In an LTN article, True Grit: Four Models to Rein in E-Discovery Costs, George is quoted as saying that most law firms:

[C]ontinue to be marketing groups more than anything else. I continue to see that most lawyers at firms with putative internal EDD practice groups either do not know those groups exist or do not use them. Firms ought to do a better job of taking control of EDD, at least for those clients who lack the wherewithal to take on EDD themselves. Firms seem unwilling, however, to make the initial and on-going investments needed for that to happen.

How many of the AmLaw 100 law firm’s have bona fide e-discovery practice groups? That is the true litmus test for bold management, a test which most firm’s fail. It bears repeating: timid and lawyer are two words that were never meant to go together. Be bold law firm managers. Be a mighty mouse, not timid rat. Go all-in with e-discovery and insure the future prosperity of your firm.

As to vendors, you must also be bold, willing to take a chance, willing to lead, not just tag along with the changes sweeping the industry. Stop trying to milk your outdated products for all they are worth. Get rid of your old products instead of just adding a few minor enhancements each year. Shorten your new product cycles. Invest in research. Made bold moves, big moves. Get rid of the empty suits in your boardroom and go with bona fide hackers. See Vendor CEOs: Stop Being Empty Suits & Embrace the Hacker Way.

Bold vendors are already embracing the future of artificial intelligence, already building new types of active machine learning software. They are abandoning the old linear review models, and focusing on the SMEs, not the contract reviewers. They understand that the future is the Army of One review team, not hordes of contract lawyers. They understand how AI can change the law, can bring down the costs of review while at the same time improving quality. They are bold enough to act on this understanding, bold enough to pioneer new products.

I have been challenged by a few of my readers on my use of the term AI, artificial intelligence, in connection with the new search algorithms. They think it is a misuse of the word. They may be right in so far as some types of TAR are concerned, namely technologies that are not based on active machine learning. But for me, when I refer to the new search algorithms, the bold software that is rocking the world of e-discovery, I am referring to the active machine learning based software. Active machine learning is a type of machine learning. To quote Wikipedia:

Machine learning, a branch of artificial intelligence, concerns the construction and study of systems that can learn from data. For example, a machine learning system could be trained on email messages to learn to distinguish between spam and non-spam messages. After learning, it can then be used to classify new email messages into spam and non-spam folders.

Moreover, the generally accepted definition of AI is:

The study and design of “intelligent agents” where an intelligent agent is a system that perceives its environment and takes actions that maximize its chances of success.

This is what I mean by AI. The predictive coding software of some bold vendors use this kind of machine learning. The methods that I promote are also sometimes called by information scientists semi-supervised learning. You train the agent on relevancy using active machine learning. You give it this limited, but often very complex and nuanced intelligence. The now intelligent agent then perceives its environment, which is the corpus of documents, and applies its intelligence to analyze and rank the documents to maximize it chances of success. Success is defined by measures of recall and precision in locating the documents you want, or as information scientists like to say, meeting the information need of the searcher.

Admittedly, we are still in the early design stages of AI agents for e-discovery. I know that our programs today will look primitive in a few years. (So will everything else as the pace of change and improvements continue to accelerate.) But the first vendors out there with smart AI agents already have a huge competitive advantage. Those stuck in hyped-up keyword searches, which is just 1960s technology with better interface and faster execution, will go the way of the buggy whip manufactures, the way of the Blackberry. You can blame their timid management for the inevitable decline.

Open

Vendors need to be more open about their profits and their black boxes. Got some special mojo? Then patent it like the rest of the technology industry does, and protect yourself that way, instead of by over-use of trade-secrets. Software vendors, open up your black box! Show us the secret sauce and you will go a long way to building trust. No, we do not want to see the actual code. That kind of sauce should be kept secret. The code would not mean anything to us anyway. But explain the science. Tell us how it works, like Jason R. Baron and I attempt to do in a general way for all of this type of software. See: Introduction to Guest Blog: Quick Peek at the Math Behind the Black Box of Predictive Coding. Move beyond mere marketing hype. Offer real training to go with the software. Be more open and candid in what your software can and cannot do.

Lawyers also need to understand that openness builds trust. That is why transparency is now a key component to the new paradigm of discovery cooperation. The way to walk your talk in cooperation is by disclosure. How did you go about preservation? How did you go about finding the documents requested? Use the tools of sampling. Make aggressive disclosures so that you can support your proportionality arguments, otherwise you may lose, even though you have a strong position. That is what happened in the Pippins case, which the defendant later won on the pleadings. Pippins v. KPMG LLP, 2012 WL 370321 (S.D.N.Y. Feb. 3, 2012) (Judge McMahon):

[T]he record before me is devoid of information necessary to conduct such an analysis. . . . KPMG refused to allow Judge Cott, or Plaintiffs to examine even a single hard drive to ascertain the “benefit” of preservation, so there is nothing in the record before me to inform any decision. . . .

In short, KPMG is hoist on its own petard.

The petard here was KPMG’s refusal, no doubt upon advice of counsel, to make disclosure, to be open.

As Judge McMahon went on to explain:

I certainly do not intend to reverse Judge Cott’s Order on the purported ground that he erred by concluding that KPMG failed to demonstrate that preserving the hard drives was unreasonable. Frankly, the only things that were unreasonable were: (1) KPMG’s refusal to turn over so much as a single hard drive so its contents could be examined; and (2) its refusal to do what was necessary in order to engage in good faith negotiations over the scope of preservation with Plaintiffs’ counsel, in purported reliance on an order of this Court that it interpreted unreasonably. It smacks of chutzpah (no definition required) to argue that the Magistrate failed to balance the costs and benefits of preservation when KPMG refused to cooperate with that analysis by providing the very item that would, if examined, demonstrate whether there was any benefit at all to preservation.

KPMG’s attorneys here were bold in their litigation conduct, but not open. As a result their actions were seen as chutzpah. Judge McMahon earlier detailed some of the failures to be open that caused him to affirm the Magistrate’s earlier controversial ruling:

KPMG, hiding behind the stay of discovery, insisted it could not produce even one hard drive for inspection by Plaintiffs. It also refused to respond to any question regarding the content of the hard drives, furnish Plaintiffs’ access to any hard drives, inform Plaintiffs whether the data on the hard drives might be derived from other sources, or discuss the costs of possible alternatives to preserving the data on the hard drives. Instead, KPMG made a series of “take it or leave it” offers, and sought to have Plaintiffs agree that KPMG only had to preserve a smaller sample of the hard drives without giving Plaintiffs the opportunity to review the contents of any hard drive(s) first.

Old school, hide-the-ball, “take it or leave it” approaches do not work in e-discovery. Both lawyers and vendors alike have to learn how to be more open. This is difficult I know, especially for attorneys who must by ethical dictate keep their client’s secrets at all costs. But it is possible, especially if the equally compelling ethical duty of candor to the court is given proper weight.

Values

Building social value is no longer an idealistic pie-in-the-sky dream. It is an effective business strategy. It is an especially effective strategy for professions such as medicine and law, occupations that by nature have a higher calling than just making money. Lawyers serve their clients and the law. It is a dual task, and if there is conflict between the two, the law must always prevail. That is why we have an extensive code of professional conduct. That is why discovery works.

The ethical codes of the legal profession embody our values. They provide a solid guide to the conduct of our services, our noble quest for truth, justice and liberty. The ethical codes require all lawyers to be competent, and, if faced with a legal task wherein they are not competent, such as e-discovery, to bring in other attorneys who are. Model Rule 1.1 states:

A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation.

Management that embodies legal values will provide real and extensive training to its lawyers. It will take steps to ensure their competence. Vendors should do the same and ensure its customers know how to properly use the new tools they offer.

Legal ethics also requires diligence, a task that is impossible unless you actually know what to do and when to do it. Model Rule 1.3 states:

A lawyer shall act with reasonable diligence and promptness in representing a client.

Again, this mean training, helping professional know what to do. Diligence also often means fast action, just as the Hacker Way dictates. This is emphasized again by Model Rule 3.2 that requires lawyers to expedite litigation:

A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client.

It is also built into Rule One, which requires all other rules of civil procedure to be interpreted to allow for just, inexpensive, and speedy adjudication.

Our values also require candor towards the tribunal, the judges. Candor means openness and complete honesty. It is a core value that may never be broken under any circumstances. Should it violate your duty of loyalty to your client, you are required to withdraw from representation, rather than ever be dishonest and closed or deceptive to the presiding judge. Model Rule 3.3 states:

(a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; . . . (3) offer evidence that the lawyer knows to be false. . . .

Live by this rule. It trumps all others.

Our values as lawyers also requires fairness to the opposing party in litigation and fairness to the opposing counsel. This means, among other things, that games of hide-the-ball are forbidden. This does not mean that you should provide evidence harmful to your client that was not requested, or not relevant, or that you are not legally required to produce, such as privileged information. But if it was requested, is relevant, and you are legally required to produce it, it is unethical not to do so. If the client refuses to do so, you should withdraw. Model Rule 4-3.4 states:

A lawyer shall not: (a) unlawfully obstruct another party’s access to evidence or otherwise unlawfully alter, destroy, or conceal a document or other material that the lawyer knows or reasonably should know is relevant to a pending or a reasonably foreseeable proceeding; nor counsel or assist another person to do any such act.

Our system of justice, based as it is on attorney directed discovery, depends on voluntary attorney compliance with these values.

In the United States, like the rest of the civilized world, citizens have a fundamental right to justice, to due process. If it costs too much to discover the truth, they are deprived of that right. If only the rich can afford to find the truth needed to do justice, then the values we have worked so hard to develop in this country, and the world, will be destroyed. We cannot let that happen.

Lawyers and judges must take the proportionality principle very seriously. We must innovate and constantly improve our methods to control the costs of e-discovery, to make it affordable to all. Vendors have a key role to play in this process of cost containment too. They can and must work side-by-side with law firms to keep our litigation just, speedy and inexpensive. That is how we can all work together to build social value in e-discovery.

Conclusion

We can all learn from the Hacker Way that has been implemented so successfully by Facebook and other Silicon Valley companies Facebook’s five goals and three methods provide good advice to all, even to senior lawyers wrapped up in e-discovery who may think they already know it all. There is always room for improvement, for growth. Those of us who are hands-on everyday in e-discovery know this to be true.

The legal profession does not usually take advice from 27 year-olds, but that is part of a meritocracy. If a young associate is right on a point of law, they are right. Their age does not matter. The law has always striven to be a meritocracy, so this is really nothing new. We should take advice from wherever it comes, if it is good advice, if it has been proven to be sound. The success of Facebook, Google, Apple and others is proof enough for me. Code wins arguments, so too does success.

Try the Hacker Way. Be bold, be fast, be open, go for maximum impact and be true to your values. If you live these values, and manage an enterprise guided by this ethic, you will attract the top talent in the field. Your management will inspire. You will not be just another empty suit focused on next quarter’s profits. You will be a true leader. You could be the next Steve Jobs. Oh yeah, and you will make a lot of money for yourself and your company in the process. As Zuckerberg says: we don’t build services to make money; we make money to build better services.

5 Comments | Lawyers Duties, Review, Search, Technology | Tagged: discovery, facebook, machine learning, predictive coding, technology, too much information, vendors, zuckerberg | Permalink
Posted by Ralph Losey

The Solution to Empty Suits in the Board Room: The “Hacker Way” of Management – Part One

August 20, 2013

Facebook’s success shows that for organizations to prosper in today’s world they must: focus on impact, be fast, be bold, be open, and build social value. To attain these goals they must adopt iterative processes for continuous improvements; they must promote a hands-on and meritocratic culture where an idea is adopted if it works, no matter who suggested it. This is the core meaning of Facebook’s motto – Code wins arguments. It is a very practical and egalitarian approach to management. Too bad most of the e-discovery industry titans do not understand this, as my recent article in LTN explains in greater detail. Vendor CEOs: Stop Being Empty Suits & Embrace the Hacker Way.

In my earlier blog “The Hacker Way” – What the e-Discovery Industry Can Learn From Facebook’s Management Ethic, I focused on Mark Zuckerberg’s Letter to Investors. The letter disclosed Facebook’s core values, which Zuckerberg calls the Hacker Way. My blog also began an exploration of how this new philosophy of work can be applied to e-discovery. This blog takes the application theme a little further. I am convinced that all organizations in the e-discovery world – law firms, vendors, corporations – can benefit from applying Facebook’s three-fold code wins methods, and five-fold Hacker Way goals. We all need to adopt 21st Century attitudes to stay relevant. We are otherwise in danger of joining the empty suit parade and offering services and products that are more like Blackberries than iPhones.

It doesn’t take a Zuckerberg to realize that these methods and goals could be applied to any modern field of endeavor. Are you involved in some way in management of your law firm or company? Do you want to stay competitive and remain relevant? Do you want to attract and retain the top creative and technical talent like Facebook, Google, and Apple do? If you stand still and keep the old management style and values, you will quickly fall far behind. You will lose the next generation of movers and shakers. The business and professional motivations to study the new management ethic are obvious. I hope you will at least read on and think about it, maybe even be bold enough to try it out.

Personal Apps?

There may also be applications of the Hacker Way to your personal life and code of conduct. Do you want your life to have an impact on the world? To have meaning? Do you want your life to embody ethical values that you are proud of? Do you share, or are you closed off, an iconoclastic island? Are you open to change, no matter how fast it may come? Can you take action, make decisions? Can you quickly implement your decisions? Are you efficient and productive? Do you dare to be bold, or just follow timid conventions of old?

I certainly will not try to answer these questions here, nor share the kind of personal fractal solutions that I try to fashion on a day-to-day basis; the iterations of action, observations, analysis, adjusted actions, repeat. I just raise the questions to stimulate your personal thinking. Everyone has their own solution to the enigma that is life. There is no one right answer. We each have our own path on the Hacker Way. This essay will instead focus on the practical applications of Hacker Way to e-discovery management.

Impactful

In e-discovery, like anything else, you have to focus and prioritize. You cannot do everything at once, at least not if you are going for impact. Scatter-brained is a recipe for failure. Any writer of appellate briefs will tell you that. Focus on the key issues if you want to persuade. Put aside the rest. You have to pick and choose your battles, your time, energy, and money. All tasks are not created equal. Some are more important than others. For instance, in e-discovery look for the smoking guns first, check out the ESI of the key custodians first. Do phased discovery and start your search and production in the data sectors and custodians most likely to give you the biggest bang for your buck. Most of the time with phased production you never need to go beyond the first phase. The low hanging fruit you find up front is usually more than adequate to try the case in a just, speedy and inexpensive manner.

In all kinds of project management, not just discovery, you should focus first on the problems and issues that could have the biggest impact, and then move on to secondary problems. A business manager, just like a wise project manager in an e-discovery review, knows what to focus on and when. Empty suits in the board room lack this kind of focus and ability to prioritize. Perhaps they just do not understand what is important, and what is not. Maybe they are too preoccupied with next quarter’s profits to see the big picture.

Back to e-discovery, the big picture, from the highest elevation, shows that the core problems are the high costs of e-discovery and the low skills of practitioners in using new technologies. You could say high costs and high risks, but I really think that the risk management problem is secondary to the skills problem. Attorneys trained in e-discovery have the skills to avoid the colossal mistakes that we read about in the court opinions every day.

To maximize impact e-discovery teams everywhere should focus on these two, costs and training. They should look for bold new ways to control costs and train attorneys. As discussed briefly in “The Hacker Way” – What e-Discovery Can Learn From Facebook’s Culture and Management, for me cost control means focusing on search, since review is the most expensive part of any production project. It also means building new aggressive culling methods, such as Bottom Line Driven Proportional Review and multimodal predictive coding assisted review. SIRI and Pandora are the way of the future, not legions of low priced lawyers. The study of the non-profit Rand Corporation on e-discovery costs has reached the same conclusions. Where The Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery.

This is also an area for vendors to be bold. Vendors must lead the way not only in training, but by making advanced predictive coding type software less expensive than it is today. To be the kind of insanely great software the legal profession needs to prosper in these days of data deluge, the software also needs to be even more effective than it already is. Yes, we need cheaper and better. It can be done.

Vendors can attain the profits they need to keep feeding research and improving their products, and can lower prices at the same time, but they have to take a new approach. They have to focus more on volume. They have to stop thinking about predictive coding as a luxury only product where they make a lot of money on a few customers. Increased sales quantity does support lower prices. For example, if you make a thousand-dollars each on a software license, but do so on ten-thousand users, you will make $10,000,000. That is ten times as much profit as you would make selling licenses to one-hundred users with a ten-thousand dollars profit on each license ($1,000,000). Too many companies are still stuck in the low-volume, high-priced model.

You can attain the critical mass of higher sales, but to get there you have to lower prices and improve training. You have to do both. In-depth training and guidance will encourage greater utilization by the legal profession. The practice of law has always been just that, a practice. That is how we lawyers really learn anything, by doing. So although price is important, training is just as important, perhaps even more so because lawyers are involved, often subject matter expert lawyers at that.

We also need pricing models that are simplified and encourage all-in participation. The more data that goes into predictive coding, the better. That is how data analytics work. This also opens up a new field of application for search and review software, and with it a whole new customer base. By crunching ever larger datasets advanced data analytics can become part of corporate compliance. That means using advanced search software before litigation. It can even mean preventing litigation. With artificial intelligence enhanced data management the savvy employers and law firms of the future will be able to detect internal torts before they happen, or at least before they can cause real damage. Now that is real impact. The movie Minority Report is not as far-fetched as you might think when it comes to Big Data analysis.

Consider for instance Laura Kibbe’s article There’s More to TAR Than Litigation (LTN Aug, 2013) where she says:

Despite its cutting-edge reputation, on the document production front TAR is approaching mainstream. But what if it could also be used proactively in business to help manage information — or gain insight into problems before they occur? Using these tools to identify patterns of behavior, risk decision points, and control data expansion has the potential to not only save money, but also facilitate proper risk planning and training in the ordinary course of business in all industries.

Quite a few people I know are starting to think this way about the use of AI for corporate compliance and information management. This is a form of crime prevention, just like in Minority Report. It is also a question of business intelligence. It is only a matter of time before a truly bold CEO gets the message and designs software that can be customized to accomplish these Big Data tort-prevention, business efficiency ends, not to mention training in risk-control, pre-litigation usage methodologies. (You really cannot have one without the other.)

Laura’s article mentions one way it could be used in the pharmaceutical industry, a place where she is an SME. Her article shows how a drug company could search and analyze its data to prepare in advance for possible claims before a new drug is released. Lawsuits could be anticipated. Any failings could be corrected in advance of the new drug release.

There are many other possible applications. Fraud prevention and trade-secret theft come to mind. So too does prevention of discrimination, wrongful discharge, and retaliation. The potential applications are as endless as the law itself. It also goes beyond law, into general quality control and business efficiency. The potential impact of all of this is truly mind boggling.

Fast

This kind of new software and methods can make a huge impact on the law, indeed on all of society. But getting these new products and methods to market require fast action. First of all, the need is great. Secondly, the competition is great. There can be a large first to market advantage, but only if quality controls are observed and it is done right. There is a difference between fast and reckless; moreover quality is always critical.

Acting fast is second nature to most e-discovery practitioners by now. The 2006 Amendments to the Federal Rules of Civil Procedure put a premium on speed. We have now had seven years of experience with the need for speed. We all know you have to work fast to get your act together before the initial 26(f) conference. You have to be prepared to discuss and disclose your e-discovery plan, including your preferred format of production, preservation efforts, and plan for search and review. Evolving case law on litigation holds also requires you to act fast, to send out written notices quickly, to collect key ESI quickly.

Obviously most search, review, and production projects also require you to act very fast to meet tight time deadlines. How many files per hour can your CAR go, your Computer Assisted Review? You have got to be fast to succeed in e-discovery. Yet, at the same time, you must act reasonably and minimize mistakes. This means that you must have quality control methods built into your CARs. You have to know when to double-check your efforts. There are straightaways in e-discovery where you can go fast, such as irrelevancy culling, and there are curves, such as privilege review. You have to know when and where to slow down so you don’t go flying off the curves.

Some analyses and conversations need to happen quickly, right at the beginning of a case. Determination of key players and key player interviews and preservation instructions come to mind. So too do conversations with IT to suspend automatic deletions and old hard-drive recirculation. So many things in e-discovery are front-loaded that all who practice in this field are used to this kind of time pressure. We know how to act fast, yet tempered, and not hurried. We expect the same from our vendors. Most of the project managers of vendors seem capable of acting fast, but, alas, not so most of the empty suits they report to. Vendor CEOs: Stop Being Empty Suits & Embrace the Hacker Way.

Fast is also important in law firm management. Firms need to quickly get their e-discovery departments up to speed. They need to move fast to ramp up their attorneys’ skills. Gradualism is a recipe of failure. You cannot just wait until the next generation figures it out. Yes, it may be easier for the twenty-somethings to learn this new area of law, but do you really want them to do that by trial and error on your clients’ cases? Do your clients want that? Anyway, they won’t learn the right way to do things. They will stagger along without the benefit of senior advisers.

For a law firm to move fast, they really need to do what my law firm did, and others have done. They need to hire an outside attorney or attorneys who are already skilled. Then the senior experts can train and help others get up to speed, especially the young rock-star e-disco associates who otherwise practice e-discovery without adult supervision.

Vendors need to move fast too. Indeed, the pressure on vendors is even more intense because the competition is hotter. Speed and early adoption are all important in the world of e-discovery vendors. They cannot slow-poke around with yesterday’s technologies, such as keyword-only based search, or expensive on-site licenses. They need racing CARs. They need to move, and move quickly. They need to bring those prices down and science up, if they are going to win the race. They need advanced search with artificial intelligence type agents that the user trains, i.w. active machine learning based software. Take a look at Nokia’s and Research in Motion’s stock values as compared to Apple. Which team do you want to be on?

Fast does not mean you abandon quality control or appropriate beta testing. Apparently Facebook itself has had to learn this lesson. See Facebook Puts the Brakes on ‘The Hacker Way’. The Wired article by Ryan Tate points out that since going public Facebook has started slowing down product releases:

It’s testing new tools more thoroughly prior to release and then parsing goodies out slowly to help smoke out even more problems. Facebook’s move toward greater testing is a sign of maturation at the company…

I agree this is a sign of maturation, but I do not agree with Ryan Tate that this means Facebook has put the brakes on the Hacker Way. Tate’s article misstates the Hacker Way as being built around the adage “move fast and break things.” But as Mark Zuckerberg’s Letter to Investors shows, that is only a small part of this new work ethic. Moreover, I do not think Facebook has backed off one bit, in fact the speed of product development after going public has increased dramatically. As Tate’s article admits:

In some regards, Facebook is moving faster than it ever has before. Since going public, it has launched a search engine, a mobile “operating system,” a camera app, a pages app, a “poke” app, an app store, an ad exchange, an online store, a gift card, a video sharing system, at least two major news feed updates, and plenty more. The teenaged Zuckerberg, in full hacker glory as a Harvard underclassman, would have approved of the breakneck product release pace.

Fast does not mean reckless. But the more skilled you become, the faster you can move and still remain safe, still remain within acceptable quality control parameters. Knowing just how fast you can go is an artifact of experience, of age, and it looks like Facebook is gaining that experience.

One careful reader pointed out the Tate article in a comment to my earlier blog “The Hacker Way” – What the e-Discovery Industry Can Learn From Facebook’s Management Ethic, which I appreciate. He also criticized the Hacker Way as promoting, or at least tolerating, age discrimination, and said this was rampant in Silicon Valley. This may or may not be going on at high-tech start-ups. I hope not. But I do know if has nothing to do with the Hacker Way ethic, at least not as this old hacker understands it. Not only is age discrimination illegal, it goes against all of the core values of the Hacker Way, which, above all, is built on the importance of values. The Hacker Way is a meritocracy, no matter what the age or color of a person. This is not a youth culture movement, nor an exclusive enclave of the young. It has been around since the sixties, and its primary gurus now are geeks of my age or older. The Yoda of Hacker Way, Steve Wozniak, is hardly a kid. And many think, myself included, that Steve Jobs was at his best after he turned fifty.

Mark Zuckerberg may still be young, but he has learned fast, and as Darth Vader said: The Force is strong with this one. When Zuckerberg and his company gain maturity and wisdom from experience, they will be an even greater power to change the world for the better. I just hope they remain true to the Hacker Ethic and remain value driven. As Zuckerberg put it:

Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected. . . . Simply put: we don’t build services to make money; we make money to build better services.

The Hacker Way is an ideal, one that has been inspiring to many in the high-tech world for many decades. It is not an excuse to discriminate, nor a credo that sacrifices quality for mere speed. Above all else it is a value driven work ethic, a new model for corporate leadership. There is far more to work than just making money, and the companies that realize that are well along the path of the Hacker Way.

To be continued ….