Canadian Lawyer InHouse

33 CANADIANLAWYERMAG.COM/INHOUSE MARCH 2017 ROBIN KUNISKI wanted $5 million in cyber-risk insurance, but the company wasn't able to get it. The fi nancial resource needed to handle inter- national regulatory hurdles also stopped the company's expansion into China and Ma- laysia, he recalls. Funds may be small, but the challenges to fi ntech fi rms remain large. Alongside the regulatory issues, they face everything from intellectual property to labour law challenges, not to mention the traditional legal requirements involved with tackling capital markets. Other challenges lie at the cutting edge and are barely visible. For example, Geof- frey Cher, partner at Wildeboer Dellelce LLP in Toronto, raises the spectre of ar- tifi cial intelligence, which is increasingly making its way into fi ntech. Using machine learning to assess loan applications may cut down processing times to seconds as op- posed to days, in a perfect example of how fi ntech is disrupting traditional processes. It might also introduce problems as computer code unwittingly causes a company to discriminate against some customers. Algorithmic bias is a real- ity, and it has already been alleged in other fi elds rang- ing from online advertising to predictions of criminal recidivism. "All of a sudden you now have constitu- tional laws and discrimination issues," he warns. The more of the future that technol- ogy carves away, the more frayed the edges become — and the more unexpected the challenges may be. Startup budgetary constraints combined with fi ntech's broad implications mean that lawyers have to think differently about the way they engage new players in this fast- evolving space. "Traditional fi rms service the banking world, which have big budgets," says Mo- go's Skakun. She challenges legal service providers to think of the engagement as a partnership that tests their own under- standing and use of technology to make themselves more effi cient. "Our roles are much more as strategic advisers [with] an under- standing of the technology envi- ronment. If you don't have that, it's very diffi cult to advise the client," says Zaman's colleague Wendy Gross, partner and technology co-chairwoman at Osler in Toronto. "It's about thinking outside the box, on a blank sheet of paper, about how you can creatively structure a relationship." Whether in-house or agency-based, legal counsel for fi ntech startups need a unique mix of skills. They must be arbitrators, able to negotiate between incumbent institutions and young tech experts who are charging unnavigated territory. They must steer a steady course through sometimes stormy regulatory seas, and — perhaps most importantly — they may fi nd themselves doing it on a shoestring. No one said disruption was going to be easy. IH I n d u s t r y S p o t l i g h t Check out in-house counsel's best networking tool! The 2016/17 Lexpert CCCA/ACCJE Directory & Yearbook online edition is a user-friendly, outstanding key resource for all in-house counsel. Along with immediate access to more than 4,100 listees at more than 1,500 organizations, you'll also find fresh editorial content, information on deals and links to important resources. Directory listees and CCCA members can also receive log-in credentials for access to detailed contact information to be able to connect with colleagues or research the in-house bar. ANYWHERE. ANYTIME. ANY DEVICE. CONNECT WITH IN-HOUSE COUNSEL COLLEAGUES AT LEXPERT.CA/CCCA Untitled-3 1 2017-02-02 2:38 PM

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