Today social media are as mainstream in business and law as smart phones and email. But, like most new technologies, they bring risks to be managed and opportunities to be exploited.
On the legal front, LinkedIn has 250 million users worldwide; by 2011 it was already the second most well-known legal directory (after Martindale-Hubbell) to U.S. in-house legal counsel, according to a BTI Consulting Group survey. But the LinkedIn practice of inviting users to endorse one another’s skills raises ethical issues. Many North American law societies forbid lawyers from describing themselves as “specialists” or “experts.” Does accepting LinkedIn endorsements violate those restrictions? U.S. lawyers are debating the issue at length, and the Florida Bar Association has begun to regulate. Canada won’t be far behind.
On the business front, corporate privacy, communication and document preservation policies now must deal with social media. Here are some of the issues:
• Posting confidential business information can be a breach of confidentiality obligations in a business contract;
• Posting information about a transaction or dispute can waive lawyer-client privilege over legal advice;
• The sealing orders that protect confidential business information from disclosure in litigation, and the confidential nature of arbitration, may not be practically able to prevent disclosure on social media sites;
• Social media posts are “documents” that must be preserved and, if relevant, disclosed to the other parties in an arbitration or lawsuit;
• Removing information from social media sites can be spoliation of evidence.
It’s also important to remember that, once any of this confidential information gets on social media, a business has little control over it. Just ask JK Rowling’s lawyer, who let slip to his wife’s best friend that Rowling had in fact written The Cuckoo’s Calling. The friend tweeted a journalist and the whole world knew.
But social media has many potential benefits for business as well. For example,
it includes lots of potential due diligence information. For reasons no one really understands, just as people will say things in email they would never say in a letter; they will tweet or post on their Facebook page information they would never email. We’ve all heard of the “smoking gun” email. Think of the potential for social media.
The most effective and efficient dispute resolution mechanism is preventing disputes from arising in the first place.
The best way to do that is to thoroughly understand new business partners before deciding to enter into relationships
with them. Social media provides a priceless information opportunity for that. Doing a social media search on the other parties to a proposed relationship or transaction should be a standard part of business due diligence.
But even here social media raise new issues. For example, someone who posts information on social media probably has no reasonable expectation of privacy about it. But would it be ethical to “friend” someone on Facebook just to gain access to that kind of information as part of business due diligence?
When business disputes do arise, social media can also be a useful investigative tool. The best evidence of disputed events is what the parties actually did and said at the time. Social media sites can be gold mines for that kind of information. Earlier this year the American Bar Association’s Litigation News opined that social media searches of clients, the other parties and third-party witnesses are now just minimum level litigation due diligence (i.e. it would likely be professionally negligent not to do them). There’s no reason to think that’s only true in the U.S.
Courts in Canada, Britain and Australia have permitted service of legal documents beginning lawsuits, and applying for court orders, through Facebook and Twitter. For example, former Maple Leafs general manager Brian Burke was permitted by a B.C. court to serve legal documents in his defamation lawsuit on the defendants by return messages to the interest accounts on which they had posted their original messages. If a business has a legal dispute with a party who’s hard to find, offshore or evading service, this is worth bearing in mind. It does, however, cut both ways. If a business has a social media presence, it probably shouldn’t be surprised to find legal documents sent to it through those social media sites, and should have procedures in place to ensure they’re properly dealt with.
Social media have become pervasive in business and law. As with other new technologies, we should come to grips with them, and ask “How can I manage this risk?” and “What business opportunities does this present?”
