In the dynamic sphere of legal technology, securing company secrets has become increasingly paramount, especially in the unfolding era of generative artificial intelligence (Gen AI). In this context, many firms are turning a spotlight on their employment contracts to ensure stringent protection of their confidential assets.
Last month, Kira Systems, an entity that specializes in artificial intelligence and contract review software and is a subsidiary of Litera, initiated a lawsuit against Kennan Samman, its former Vice President of Global Product. Kira Systems contends that Samman violated noncompete and confidentiality agreements, alleging that he took with him proprietary information. Samman’s new association is with AI legal tech startup DeepJudge.
Given this backdrop, experts in the recruitment and staffing arena predict an uptrend in litigation related to employment contracts. This is an anticipated countermove by legal tech companies as they strive to retain their proficient talent pools and proprietary Gen AI models.
However, as market consolidation persists, noncompete agreements are becoming less feasible, due to their increasingly challenging enforceability. Consequently, we could potentially see an increase in broader safeguards such as non-solicitation clauses and a wider applicability of these clauses for the protection of products and services. As an example of the industry’s evolving dynamics, earlier this year, the Federal Trade Commission proposed a rule to ban noncompete clauses entirely.
As a result, non-solicitation and non-disclosure agreements are gaining momentum in their application, primarily because of increasing consolidations and anticipated legislative overhauls around noncompetes.
David Netzer, president and chief recruiting officer at The Legal Tech Talent Network, predicts that companies will revise their noncompete, non-solicitation, and non-disclosure agreements to explicitly accommodate the rise of Gen AI. He furthermore notes that noncompetes and non-disclosure agreements might now be applicable to a broader range of employees than before, including those who wouldn’t typically be covered by such contracts.
It is clear that as Gen AI continues to redefine the landscape of the legal-tech industry, firms must proactively revise their legal structures and apply innovative solutions to protect their proprietary technology, and ultimately, their market position.