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More Legal Issues When Working in the Cloud

With the number of virtual law firms on the rise, expect cloud computing to become more pervasive. After all, because virtual firms do not share office space, it's the most efficient tool for enabling individual lawyers within a virtual firm to share files, prepare joint bills or access common documents.

Just as law firms are shifting to the use of cloud computing, so too are many of their clients. And in this regard, lawyers must understand the legal issues involved in order to effectively advise thoes clients. This article in The New York Law Journal summarizes the legal issues that corporate clients using cloud computing may face, from privacy concerns and the implications of cloud computing for pretrial discovery.

On the topic of privacy issues, the article explains that a company's obligation to protect customer data does not end merely because storage is outsourced. Moreover, laws governing storage of financial or corporate documents may impose additional restrictions on the use of cloud computing. And the law is a moving target -- governing law in different jurisdictions could change, making it important for firms using this technology to keep abreast of current regulations. The article reminds us that:

While a business might be able to make a claim against a cloud server for escape of private data, the business may not be insulated by its claim that a privacy breach was the result of the acts by the cloud server.

Another issue raised by cloud computing is the impact on electronic discovery. Traditionally, parties in litigation may discover all relevant documents in the "possession, custody or control" of another party to the suit. But who controls the documents when a third-party provider houses them? And how can they be authenticated? These are issues that will need to be resolved as more companies turn to cloud computing.

Posted by Carolyn Elefant on July 8, 2009 at 02:34 PM | Permalink | Comments (3)


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