One indicator of the extent to which information technology is penetrating the very bones of the business world is the increasing number of legally related issues threatening to bump heads with the average CIO. From the threat of year 2000 lawsuits to intellectual property disputes to liabilities arising out of electronic commerce, a host of potentially very costly legal pitfalls lie in wait for the unwary, or unlucky, CIO. Let's start with the big one, Y2K.
GartnerGroup and Lloyd's of London both estimate that year-2000 litigation costs could reach $US1 trillion. (That's one with 12 zeroes behind it.) By comparison, they estimate that worldwide remediation costs will cost a "mere" $US300 billion to $US600 billion. Clearly your goal must be to reduce the risk of a Y2K lawsuit, but at the same time prepare the ground in case the evil day does arrive. The ability to prove appropriate due diligence is critical. Bear in mind that CIOs and IT managers are exposed to directors' liability and thus to possible lawsuits.
Electronic mail is another minefield. As the Monica Lewinsky affair and the current Microsoft antitrust case demonstrate, unguarded e-mails are bombs waiting to explode. Every company needs to have e-mail usage policies in operation, addressing issues like retention and deletion of e-mail, and spelling out what constitutes misuse of the corporate e-mail system. Merely issuing a directive is not enough, you need to follow up with training and auditing. Already there is a firm in the US, Seattle-based Computer Forensics Inc, which specialises in helping lawyers recover and analyse electronic evidence. And it's doing a roaring business. More and more, planning your IT policies will require you to liase with legal opinion in order to head off any potential issues. Take e-commerce for example. If your company sells products or services to a customer in a far-off location, then a dissatisfied person might attempt to sue under the perhaps unfamiliar laws of their region. You might even be required to travel there and defend yourself. Other Web-related pitfalls include the possibility of breaching copyright, or even defamation, laws with the material on your site.
Privacy will be a very hot issue in the new century. Customers are becoming concerned that their personal data is not misused. If you're transacting business with European customers, you need to bear in mind guidelines and regulations like the European Union's Data Protection Initiative. It's no accident that IBM has just started a privacy consulting service in the US.
ComputerWorld reported last month that IBM Global Services Australia will kick off a similar service here early next year. What's your company's policy on privacy? And then there's intellectual property, which is fast becoming the most valuable sort there is. Think about it. Many of your knowledge assets walk out the door each night. What non-disclosure agreements prevent them from revealing confidential or proprietary information they learned on the job? What non-competition agreements exist to prevent your employees from jumping ship to work for a competitor and then soliciting your customers or their old colleagues? Wal-Mart Stores is currently suing Amazon.com, the online book seller, and its CIO because Amazon recruited and hired at least 10 Wal-Mart employees with intimate knowledge of the retailer's proprietary data warehousing, distribution and merchandising operation. It fears that having these former employees will give its young competitor an unfair head start.
And we haven't even mentioned the legals of outsourcing deals, trademarks, relations with contractors, do's and don'ts of tendering situations, or -- dread word -- class actions! Make no mistake, your future professional success may come to depend on your having a sound knowledge of which legal issues are becoming a factor in IT decisions, and why, and how to protect yourself and your organisation. If I were you, I'd tee up a meeting with a friendly legal eagle sooner rather than later.
Steve Ireland is publisher of ComputerWorld newspaper
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