© 2018 Perkins Coie LLP

Diversity and Technology: They’re in Everyone’s Business and They’re Everyone’s Business.

Neal Suggs (Microsoft), Judy Jennison and Dominique Shelton Leipzig (Perkins Coie)

© 2018 Perkins Coie LLP

TECHNOLOGY IS MOVING MORE QUICKLY THAN THE LAW

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I. TECHNOLOGY IS MOVING MORE QUICKLY THAN THE LAW

A. The law has always struggled to keep pace with technology

1. Bicycle, steam engine, automobiles - it took decades for the law to catch up.1

2. It is even more true today because the pace of change is exponential, and it will only get faster.2

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I. TECHNOLOGY IS MOVING MORE QUICKLY THAN THE LAW (CONT’D)

B. But why is ever-changing technology a problem?1. Uncertainty in the ever-changing landscape of technology is bad for

business. But a company getting it wrong is bad for everyone, leading to unintended consequences down the road.

2. Right now, the pace of change is so fast, that consequences from bad actions are likely to be discovered and adjusted for in the near term, not the long term. a. Gone are the days when a company could engage in “gray area” behavior for

decades, reaping huge profits and big paychecks for its executives, who would be retired and long gone before the world changed.

b. Now the world is changing almost immediately. What’s in the best interest of the shareholders is the long view, because the long view could be here in 2 years.

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I. TECHNOLOGY IS MOVING MORE QUICKLY THAN THE LAW (CONT’D)

C. If we accept that slow legal development through historical methods is the wrong approach, what is the right approach? Do we, as lawyers, have an obligation to think about this problem differently? If so, how should we be thinking about it?1. Diversity is a critical piece. We know that diverse groups achieve better

outcomes.3a. Company boards, SLTs

b. Customers - For a global company, or any company that hopes to be global, the customer base is diverse. To reach those customers you need to have people developing products that understand what those customers need and want.4

c. Legal Departments - Some legal departments in tech companies have more gender diversity than engineering departments; in some instances, the lawyers may be positioned to help them make better decisions that include diverse opinions.

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NEW TECHNOLOGICAL AND CULTURAL CHANGES

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES

A. Issues Impacting Work1. Gig Economy5

a. Worker benefitsi. Stock into an industry fund that would provide ownership to temp workers. Will the

SEC let that happen? ii. Healthcare – Medicare for all?

b. Company liabilityi. Background checks – what do you need to look at? Should you look at?6 Why?7

ii. Should we think about background checks differently so that diverse populations will have more opportunities besides driving and construction?

c. What obligations do we have as a result of the gig economy making some jobs obsolete or significantly changing some markets? Do we have an obligation to provide training for these new industries to those most affected?

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

A. Issues Impacting Work (cont’d)2. Recruiting: What about algorithms that “evaluate” employees?

a. How does the algorithm work?8 Does it know some words that are bad in the abstract aren’t bad in context?

b. What is the impact on diverse candidates?9

3. #Me Tooa. Not a technological advancement, but a cultural one.

b. Elimination of arbitration agreements.10

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

B. Medical Issues1. Crisper controversy: Genetic engineering of babies to eradicate HIV.

a. Is this ethical? Where does it end?11 How can we control it without regulation?

b. What about genetic modification for characteristics?

2. These are old issues; de-humanizing the patients.

3. Future lifeforms/future applications.a. Sentient AI – who decides personhood? Is it just to serve humans?

b. Biological, silicon-based, etc.

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

C. Privacy Issues1. As machine learning proliferates, the demand for data will continue to

increase exponentially. We know that AI is only as good as the data that’s teaching it. How do we know the best data is being used?

2. Who owns the data?12 Does the platform that contains my data own it? What if the platform became a broker of the data, and I could get paid for its use?a. Reports about inequities in facial recognition.13 There’s not sufficient data from

darker pigmented people. That means their data/images should be in high demand. They could get paid more for their data.

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

C. Privacy Issues (cont’d)

3. Misconstruing Data In a Manner That Can Harm Diverse Populations

a. A legitimate data set can be extrapolated in the wrong way, or you can create a dataset that’s misleading.

b. Welfare Meme.

4. California Consumer Privacy Act –broad definition of “sale” of personal information.

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

D. Financial Services1. Should society become cashless?

a. What are the ramifications? If you get out of the business of printing money, you’d save money.

b. But what about people who don’t have access to bank accounts, devices, etc.?14 How do you ensure everyone has access?

2. AI powering loan reviews.15

3. Proliferation of crypto currencies.a. How do we ensure access to everyone?

What about people with no Internet access?

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II. NEW TECHNOLOGICAL AND CULTURAL CHANGES (CONT’D)

D. Financial Services (cont’d)4. Money Laundering

a. Are there diversity related issues?

b. Who gets to choose who participates? If in MJ business today, can’t use a bank account.

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BRINGING IT ALL BACK TOGETHERTangible things we can do to help our clients stay on the right side of history.

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III. BRINGING IT ALL BACK TOGETHER

A. Our jobs are to figure out where regulation is going and what the clients are doing.

1. Could model clauses be a good example?

2. You may ask yourself, “why should a company self-regulate if they don’t have to?”

a. It may be a way to avoid actual regulation (which is worse than self-regulation).

b. Sometimes failure to self-regulate can result in the C Suite losing their jobs if the issue is big enough – e.g. in data security space.

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D).

B. Things lawyers should be thinking about, and questions they should be asking themselves:1. How do you do proactive vs. reactive counseling?2. Will the new product/business be used for good/bad? Who will it help?

Will it potentially hurt anyone, if so, who?16

3. Is the new product being developed by a team with diverse perspectives or is the vision susceptible of being too narrow?17

4. What steps could the industry, government, or society take that would drive the positive change and limit the negative change?

5. What are the best levers to drive that change? Is your company powerful enough to drive change by itself?

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D)

B. Things lawyers should be thinking about, and questions they should be asking themselves (cont’d):6. Do existing agencies have jurisdiction?7. What geographic regions will be most impacted?

What existing businesses will be most impacted?8. Who are likely to be allies during this new endeavor (e.g. industry,

government, media, influencers)? Who are the likely opponents?

9. What are the top impediments to change (e.g. societal views, government views, industry resistance)?

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D)

B. Things lawyers should be thinking about, and questions they should be asking themselves (cont’d):10. Governance options:

a. Agency governance

b. Statutory addition/change

c. Industry self-governance

d. Company issued principals

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D)

C. Whose problem is this? Why should companies care? 1. This is not just an issue for tech companies. It impacts tech, non-tech,

big, small.

2. Every company is now a tech company.18

a. We all need to be concerned with security breaches.19

b. We all need to be cognizant of how the technology we develop and/or utilize effects societies.

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D)

D. Isn’t this someone else’s responsibility? Maybe the Chief Ethics Officer’s obligation?20

1. We are not the only people responsible, but we are responsible, as citizens, officers of the court and stewards for our client’s businesses. Your awareness and action or inaction can, could and will impact diversity and that impacts society and the world.a. It is in the businesses’ long-term interest to engage with the world in a constructive way.

Disrupters can make some money for a small number of people in the short term if wildly successful, but they cannot sustain it. (E.g. Napster). Officers are stewards of shareholder value for all, not short-term value for a few majority shareholders.

b. The promotion of equality is good for business. Diverse teams achieve better results. Diversifying customer base expands the market. In short, what’s good for the broadest number of people is good for business.

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III. BRINGING IT ALL BACK TOGETHER: (CONT’D)

E. Consider a harmonic view of your industry and ecosystem, rather than a kill or be killed attitude. Working together yields better results for everyone.

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References1Vivek Wadhwa, Law and Ethics Can’t Keep Pace With Technology, MIT Technology Review (Apr. 15, 2014), https://www.technologyreview.com/s/526401/laws-and-ethics-cant-keep-pace-with-technology/.

2 Michael Sainato, Stephen Hawking, Elon Musk, and Bill Gates Warn About Artificial Intelligence (Observer, Aug. 15, 2015), https://observer.com/2015/08/stephen-hawking-elon-musk-and-bill-gates-warn-about-artificial-intelligence/.

3 David Rock and Heidi Grant, Why Diverse Teams are Smarter, Harvard Business Review (Nov. 4, 2016), https://hbr.org/2016/11/why-diverse-teams-are-smarter.

4 Modupe Akinnawonu, Why Having a Diverse Team Will Make Your Products Better, N.Y. Times (May 23, 2017), https://open.nytimes.com/why-having-a-diverse-team-will-make-your-products-better-c73e7518f677.

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References (cont’d)5 Macy Bayern, How the Gig Economy Will Change in 2019, TechRepublic (Dec. 12, 2018), https://www.techrepublic.com/article/how-the-gig-economy-will-change-in-2019/.6 Background checks are becoming more common, including continuous background checks. Employers are also using social media as a method of pre-employment screening. Michael Klazema, What Every Employee Needs to Know About the Future of Background Screening, Glassdoor (Jan. 3, 2018), https://www.glassdoor.com/blog/background-screening/.7 Companies suffer when they fail to, or are accused of, not running comprehensive background checks. Mike Isaac, Uber Settles Suit Over Driver Background Checks, N.Y. Times (Apr. 7, 2016), https://www.nytimes.com/2016/04/08/technology/uber-settles-suit-over-driver-background-checks.html.8 Susan Galer, Make Sure Your Hiring Algorithms are Legal: Four Machine Learning Questions to Ask, Forbes (Jan. 26, 2017), https://www.forbes.com/sites/sap/2017/01/26/make-sure-your-hiring-algorithms-are-legal/#188aabed64c7.

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References (cont’d)9 Claire Cain Miller, When Algorithms Discriminate, The N.Y. Times (July 2015), https://www.nytimes.com/2015/07/10/upshot/when-algorithms-discriminate.html. Will Knight, Biased Algorithms are Everywhere, and no one Seems to Care, MIT Technology Review (July 12, 2017), https://www.technologyreview.com/s/608248/biased-algorithms-are-everywhere-and-no-one-seems-to-care/amp/.

10 Jena McGregor, The #MeToo effect: Sexual harassment charges with the EEOC rose for the first time in years, Wash. Post (Oct. 5, 2018), https://www.washingtonpost.com/business/2018/10/05/metoo-effect-sex-harassment-charges-with-eeoc-rose-first-time-years/?noredirect=on&utm_term=.56b9ffe82ce0.

11 James Gallagher, ‘Designer Babies’ Debate Should Start, Scientist Say, BBC News (Jan. 19, 2015), https://www.bbc.com/news/health-30742774.

12 See, e.g., http://www.healthinfolaw.org/comparative-analysis/who-owns-medical-records-50-state-comparison.

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References (cont’d)13 See, e.g., Steve Lohr, Facial Recognition Is Accurate, if You’re a White Guy, N.Y. Times (Feb. 9, 2018), https://www.nytimes.com/2018/02/09/technology/facial-recognition-race-artificial-intelligence.html.

14 “In some ways, making a card a requirement for consumption is analogous to making identification a requirement for voting. . . . The effect is the same: It disempowers communities of color.” Sidney Fussell, Who Wins When Cash is no Longer King? It Won’t be the Poor., The Atlantic (Dec. 21, 2018), https://www.theatlantic.com/technology/archive/2018/12/cashless-amazon-walmart-workers/578377/.

15 Charles Lane, Will Using Artificial Intelligence to Make Loans Trade One Kind of Bias for Another?, NPR (Mar. 21, 2017), https://www.npr.org/sections/alltechconsidered/2017/03/31/521946210/will-using-artificial-intelligence-to-make-loans-trade-one-kind-of-bias-for-anot.

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References (cont’d)16 Example, DNA companies telling customers diseases they are “predisposed to” based on DNA sequence. This information is not reliable, and its value is questionable considering Vivek Wadhwa, Law and Ethics Can’t Keep Pace With Technology, MIT Technology Review (Apr. 15, 2014), https://www.technologyreview.com/s/526401/laws-and-ethics-cant-keep-pace-with-technology/. Michael Sainato, Stephen Hawking, Elon Musk, and Bill Gates Warn About Artificial Intelligence, Observer (Aug. 15, 2015), https://observer.com/2015/08/stephen-hawking-elon-musk-and-bill-gates-warn-about-artificial-intelligence/.

17 David Rock and Heidi Grant, Why Diverse Teams are Smarter, Harvard Business Review (Nov. 4, 2016), https://hbr.org/2016/11/why-diverse-teams-are-smarter.

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| © 2018 Perkins Coie LLP

References (cont’d)18 Patrick Fisher, All Companies are Technology Companies now, Thomas Reuters (Mar. 21, 2018), https://blogs.thomsonreuters.com/answerson/all-companies-are-technology-companies-now/. Daniel Newman, In a World Where Data Rules, All Companies Are Tech Companies, Forbes (June 6, 2018), https://www.forbes.com/sites/danielnewman/2018/06/06/in-a-world-where-data-rules-all-companies-are-tech-companies/#6c450d9840bf. Stephenie Stone, Why Every Company is a Technology Company, Forbes (Jan. 23, 2017), https://www.forbes.com/sites/forbestechcouncil/2017/01/23/why-every-company-is-a-technology-company/#5667d68f57ae.

19 18 biggest security breaches in the 21st century includes at hotel brand, retail giants, etc. Taylor Armerding, The 18 Biggest Data Breaches of the 21st Century, CSO from IDG (Dec. 20, 2018), https://www.csoonline.com/article/2130877/data-breach/the-biggest-data-breaches-of-the-21st-century.html.

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References (cont’d)

20 The fear is that the proliferation of Chief Ethics Officer’s makes everyone else feel as if

they are “off the hook” and no longer responsibility for looking out for upcoming ethical

concerns. Hannah Clark, Chief Ethic Officers: Who Needs Them?, Forbes (Oct. 23, 2006),

https://www.forbes.com/2006/10/23/leadership-ethics-hp-lead-govern-

cx_hc_1023ethics.html#94e987351824.

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