The interactive nature of web 2.0 technology presents business opportunities, while posing new risks for those with inadequate precautions as to employee internet use

You may not know it, but you’re living in a web 2.0 world. The interactive and collaborative nature of many new-generation websites means more information than ever is shared at the click of a mouse and can be available for potentially millions to view in an instant.

Websites are not closed pools of information – they act as gateways by connecting via links to almost endless information, blurring the distinction between the personal and the professional. This can prove embarrassing if information is accessed in an unexpected context, as some recent cases have highlighted. John Darwin, the missing canoeist declared dead over five years ago, and his wife Anne, were each sentenced last month to over six years in prison. Their deception was uncovered when a journalist found a recent photo of the pair alive and well in Panama, which had been posted on a website.

Another high profile figure recently at the sharp end of web 2.0 technology was Eliot Spitzer, former Attorney General and Governor of New York, who fell spectacularly from grace following the revelation of his alleged involvement with a prostitution circle (see panel). The flames were fanned when it was discovered that the call girl at the centre of the scandal had a MySpace page, allowing journalists to pore over details of her personal life and budding musical career, which she had posted on the site.

What is web 2.0?

The way that people are using the internet is changing. Previously users may have accessed a web page simply to read a newspaper. Now if they feel strongly enough about a headline, individuals can take the opportunity to share their views via a blog attached to the newspaper homepage. The name “web 2.0” has been used to describe the recent trend towards participation, collaboration and sharing of information between web users.

There are a number of key web

2.0 tools, including blogs (online journals, where users can post comments), wikis (websites with content which can be created or edited by users, such as Wikipedia), social networking sites (online networks for communicating and interacting, such as MySpace and Facebook), file-sharing sites (such as YouTube and Flickr), and even virtual worlds (computer simulated environments, such as Second Life), amongst others.

Some may say this is all just hot air, another fad with no practical business implications. But could these be the same cynics who claimed that email would never catch on, or that the internet was just for “techies”?

From personal to professional

Web 2.0 has a tendency towards informality, and can erode the boundaries between private life and work life. Most of us will have come across web 2.0 technology in our personal lives at some point, whether as a contributor (sharing photos with friends on Bebo), or simply as a viewer (reading book reviews posted by readers on Amazon). For employees generally, and perhaps particularly for lawyers, however, it is important to remember that failing to make use of the optional privacy settings on a social networking site could mean that clients as well as friends can access your holiday snaps and those pictures of the office Christmas party.

There is now an increasing trend for businesses as well as employees to make use of web 2.0 tools, and law firms are no exception. Firms need to be proactive in dealing with this new technology, and the opportunities and threats presented by it.

Pitfalls for the unwary

A key area where businesses should be aware of web 2.0 tools is the use that may be made of them by staff.

New technologies often present new ways of looking at old problems. One such problem is disclosure of confidential information. In the recent case Hays Specialist Recruitment (Holdings) Ltd v Ions [2008] EWHC 745 (Ch), recruitment firm Hays alleged that ex-employee Mark Ions copied and retained confidential information about Hays’ clients and contacts, which he used after leaving Hays and setting up his own venture. Hays claimed Ions deliberately uploaded business contacts from Hays’ confidential database to his account with business-focused social networking website LinkedIn, so that LinkedIn could invite the contacts by email to join Ions’ network. Ions argued that he acted with Hays’ consent, as it had encouraged him to join LinkedIn for business purposes, and that when the business contacts accepted the invitation to join his network, the information ceased to be confidential as it could be seen by other members of the network.

The High Court held that Hays had reasonable grounds for considering that it might have a claim, and ordered pre-action disclosure of certain documents and details in relation to Ions’ LinkedIn account. The case highlights the risk of networking websites (as well as file sharing sites, blogs and other web 2.0 tools) being used to transfer confidential information outside a business.

Another old chestnut given a new spin by web 2.0 is lost employee productivity. In days gone by, employees may have spent too much time taking cigarette breaks, or, more recently, surfing the net. Now a common complaint is that time is being wasted by employees updating their Facebook pages during working hours, with surveys showing millions of hours in lost productivity.

As reported in these pages last year (Bruce Caldow, “Monitor – at your own risk”, Journal, May 2007, 20), a widespread practice among employers is use of the internet to background-check employees and potential new recruits, with many businesses “Googling” or checking the Facebook pages of prospective employees as part of the recruitment process. While tempting as a way to gather information, and although such information may be in the public domain, this practice does raise a variety of concerns in relation to privacy and data protection, and should be approached with caution by employers.

Issues may also arise in relation to “user generated content” including, for example, comments and photos posted on blogs and social networking sites. Such content can pose a variety of legal problems, such as infringement of intellectual property rights, defamation, leaking of confidential information, and reputational damage. There may well be cases where vicarious liability arises for employers.

Use of web 2.0 technology by employees outside of the workplace could also affect their professional lives. A comment posted by an employee online which brings their employer into disrepute, for example, may well be in breach of their contract of employment.

Many businesses will find their internet “acceptable use” policies do not adequately cover the uses (and misuses) highlighted above. It is key that such policies are in place, and staff are made aware of what a business considers to be acceptable use of web 2.0 tools, so that when an issue arises appropriate action can more easily be taken.

New horizons

As well as the potential pitfalls, web 2.0 presents a wealth of opportunities, particularly in harnessing the technology to improve internal and external communications.

In terms of external relations, the interaction offered by social networking sites such as Facebook has been adapted to the business context by networking sites focused on professional relationships, such as LinkedIn. Marketing is also an area where web 2.0 offers new prospects – London law firm Field Fisher Waterhouse certainly generated column inches when it opened a virtual office in “virtual world”, Second Life.

From an internal point of view, web 2.0 offers a new (and often cost-effective) option for training of employees. Clients in dynamic industries, such as IT and software, may find that traditional staff training courses simply cannot keep up to date with emerging products, and it is more effective to allow new recruits the chance to post queries to peers online. Many law firms already provide internal blogs for staff to comment on everything from new legislation to internal firm developments, or for allowing future trainees to keep in touch with the firm.

Podcasts, blogs and wikis also have a role to play in legal training and information gathering. There are a wealth of dedicated law blogs in the UK, covering a vast array of topics. While it is inadvisable to rely solely on views given in the context of a blog or networking site, they do provide a useful forum for airing of different opinions. An interesting new Scottish resource is CaseCheck, which provides a blogging platform allowing individuals to publish case summaries and comments on case law developments. Such resources are likely to become more widely used as young lawyers, familiar with such tools from university, come up through the ranks of the profession.

Here to stay

There are clearly pitfalls to be avoided, and there will undoubtedly be teething problems as people become familiar with the new capabilities and the law catches up with the technology. Web 2.0, however, is here to stay – and will make its presence increasingly felt in the business arena.

It could happen here

The digital trail that brought down New York Governor Eliot Spitzer, chronicled here by Sharon D Nelson and John W Simek, bears close similarities to what is available to the authorities in the UK

Eliot Spitzer’s undoing came about through the Patriot Act, a controversial measure giving the FBI new powers to snoop on suspected terrorists, and the Treasury Department authority to demand more information from banks about customers’ financial transactions – supposed to help identify terrorist money launderers. Treasury regulations require banks themselves to look for unusual transactions or patterns of transactions, and submit SARs – suspicious activity reports – to the government.

Banks installed sophisticated software to detect anomalies and began ranking the risk levels of their customers based on complex formulas. One element was whether an account holder was a “politically exposed person”, and the lists included many US politicians and public officials who were potentially vulnerable to corruption.

Treasury lawyers say that the vast majority of SARs filed involve white collar crime and have nothing to do with terrorism.

Spitzer knew enough not to process large cash transactions. Instead, he arranged a series of smaller wire transfers to a bank used by a company fronting for the prostitution ring. Apparently, he did not fully understand that these payments might trigger the filing of a SAR by his own bank, as well as the front company’s bank.

Most SARs don’t go anywhere, because so many are filed, but it was inevitable that someone would recognise Spitzer’s name. Uncertain of whether he might be a blackmail victim, a victim of identity theft or engaging in political corruption, the investigation was opened.

The FBI began wiretapping and the next round of electronic evidence proved utterly damning. The FBI monitored calls between Spitzer and the Emperors Club, working out the monetary details of paying for his now infamous encounter with “Kristen”. Ultimately, the accumulated evidence showed that Spitzer was mixed up with not one, but two prostitution rings and had been for some time.

Murphy’s law struck when journalists realised that the lady who had an appointment with Spitzer also had a page on MySpace. Kristen (real name Ashley Alexandra Dupre) was a wannabe singer, and everything on her MySpace page became the last of the electronic evidence to add utter misery to Spitzer’s disgrace.

The fall of Eliot Spitzer is a clear indicator that skeletons and personal foibles are far less likely to remain in the closet these days. Once any electronic data bubbles to the surface making any of us “of interest” to law enforcement, very little is likely to remain hidden. Privacy has been eviscerated far beyond the imaginings of even George Orwell. Although the essence of his message is correct: Big Brother is indeed watching.

Sharon D Nelson and John W Simek are the President and Vice President of Sensei Enterprises, Inc, a legal technology and computer forensics firm based in Fairfax, Virginia, USA:

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