How to stay on the right side of the law

Raise your hand if you have a degree in law. Not many folks in IT do, despite the fact that legal issues increasingly play a huge role in enterprise environments. So for those IT managers not ready to give up their careers to practice for the bar exam, we’ve compiled some of the biggest technology-related challenges that could turn into a court case.

IT Contracts: Better to be safe than sorry

IT managers often have to outsource work to an IT contractor. But according to some legal experts, many IT procurement contracts contain large holes that leave organizations susceptible to major legal headaches. “Problems can occur if a contractor comes in and invents some kind of code during the course of helping you out,” Don Johnston, a lawyer at Toronto-based Aird and Berlis LLP and president of the Canadian IT Law Association, said. “Now that code is not part of his or her job description, so it belongs to the contracting company and not to you. Under the Copyright Act, there’s no room for implied licences. So while you have the right to use the code going forward, you can’t lay claim to owning it.”

In some cases, Johnston said, the consultant would even be able to object to modifications on the code. These scenarios typically arise in relation to Web development, he said, where a consultant may like a site he created and wants to use it for another client.

“It is still extremely common for the parties not to define the IT goods or services that are being procured,” said Duncan Card, an outsourcing lawyer at Toronto-based firm Bennett Jones, said. “Services are often very poorly defined, with no sense of whether or not a deliverable outcome is required or if the services are mere consulting and advisory services.”

What to do: make sure the specs are very detailed

Card said IT managers need to understand that most IT procurement contracts contain legal issues at the heart of their governance obligations, risk management duties, dispute resolution rights, intellectual property and confidentiality rights. The most sensible solution, he said, is to make sure the contract is as encompassing as possible. “As for hardware and software, each contract should clearly state the operational, functional and technical specifications and requirements of IT goods to define the goods being procured, as the basis for the warranty being provided, and to set the threshold for acceptance testing,” Card said. “That failure is probably the leading cause of dispute and litigation.”

E-discovery: Are you prepared when Lady Justice comes knocking?

With the rise of new technologies, there has been an explosion of new electronic data. All of this needs to be securely stored, which presents another challenge for many IT administrators – especially if a subpoena is knocking at your door.

E-discovery is already playing a major role in court cases across the United States and many Canadian IT managers can also expect to feel its impact over the next few years. But Johnston said that the majority of Canadian enterprises are way behind the e-discovery curve, and the companies that do have policies in place are neglecting to enforce them. “I don’t think even the best run companies from an IT point-of-view have proper policies and procedures to handle e-discovery,” he said. “And it will only continue to grow. It brought down President Clinton and it didn’t do Lord Black any good either, so it could really affect any business.”

What to do: write a document retention policy

But like anything in IT, it’s never too late to get started. Card said that maintaining business and operational records as well as having a solid IT infrastructure to store the data is crucial to protecting yourself when a legal proceeding occurs.