International Finance
Interview Magazine March-April 2019

Why tech matters to legal experts

Why tech matters to legal experts
Industry practitioners should understand how new tech is reshaping the financial institutions—and who regulates it. This is especially important to stay relevant.

Jonathan Kim has worked with some of the world’s largest financial institutions prior to Cooley LLP—and still holds a significant position to advise Wall Street clients.

This interview explores his opportunities at the firm—and his broad views on the interplay between legal, technology and financial services.

How will your prior experience in financial services litigation fit in with Cooley’s expansion plans?

I have been with Cooley for nearly two and a half months now. Since the year I began my career in the financial industry, it is clear to me that financial technology is fundamentally changing. From the inside, I have spent more than a decade at Goldman; and expanded my coverage in recent years across the financial arena, noticing how technology has been revolutionising the payment systems in the global front.

At Cooley, I got to see things from a closer perspective—understanding what they do and realising their vision in the grand scheme of things.

There are two aspects to this: The first part is the regulatory enforcement and litigation risk for financial institutions. This is what I’ve done for many years—much before Goldman. I’m quite familiar with financial institutions and how they carry out business. In addition, my capacity to bring down the experience I have to not just financial institutions but emerging companies will help to scale-up their maturity. I think that’s a very core area. The second part of my practice is to provide advice in general for fintech companies in an effort to help and support them.

What’s your take on the global expansion of financial services and technology from a legal standpoint?

In technology, there are so many areas to focus on. This way, let’s address a couple we’re familiar with.

Jonathan Kim
Partner, Cooley LLP

The first: Blockchain technology is going to revolutionise the industry, and we’re already seeing it. The technology is much bigger than being just a currency or an asset. For example: blockchain can create efficiency and scale-up things on a digitalised ledger in a way we have never seen before. I think this is perfectly suited for financial services, especially in terms of private security: based on how they are being handled, issued or traded. It’s an incredibly exciting tool to adopt in the areas of payment systems and financial services.

The second: Artificial intelligence is another technology that combines all the complex computer algorithms to perform efficiently. Speaking of legal issues, artificial intelligence can hold inside information and of the sort. So, we can put these technologies together by using the paradigm here. I don’t like to approach these technologies individually. If they can all converge: Blockchain on top of artificial intelligence on top of cloud computing—it can bring us to a whole new dimension.

I see Cooley to be an effective, well-informed legal advisory firm. There are several law firms with good expertise, and we have to understand what the industry is going to look like five-ten years down the line. I do believe that fintech is revolutionising the financial institutions and the overall industry for both established and emerging companies. And it is important that the lawmakers keep up.

This is where Cooley comes into play for having an avid team of legal experts. And there is no comparison in terms of their vision. Many tech firms have great lawyers, but not all of them carry enough expertise in tech that makes them unique. However, at the firm we have experts who understand both law and tech—a prerequisite to become a law firm of the immediate future.

In emerging markets, what kind of legal opportunities do you foresee opening up the financial services?

From a technology perspective, it is important to question: where in the globe will the jurisdictions foster and hinder innovation? It holds a significant distinction, and that for a lawyer can express itself in multiple ways.

For example: Cryptocurrency in the United States is known as a currency, an asset, a commodity, and a liquidity token. The question is: who are the regulators defining the crypto. Worldwide, it seems there are some jurisdictions with a clear understanding of it, and others don’t. Therefore, an absolute understanding of the jurisdiction, the financial services and the legalities attached to it will ensure an inflow of more opportunities.

With the growth of advanced tech in finance, how does the law evolve along with new, unexplored challenges?

The first and foremost question you have to ask about technology is: what is it doing and how are the changes already different? For example: How is bitcoin different from siacoin currency? Because regulations and legal laws are very diverse, yet very conservative—and no one likes to create a legal regime based on nothing.

Then you ask, what are the emerging risks in this space, and its impact until a new regime is introduced. It is important to apply the legal principles at the law firm and conclude with the best answers possible. Sometimes, you have to be conservative and it is the only way to look at it until a regime catches up.

There is an increase in IP filings, thanks to evolving technology. So what do lawyers like you do to safeguard your client’s interests?

My profile does not match the requirements of an IP lawyer, but IP is obviously very important. I think I know enough to understand when IP is an issue; and luckily at Cooley, we have a lot of IP lawyers, prosecutors and litigators. I bring them in to guide me and guide the client on how to protect the case, and what’s the best way forward.

Are legal experts worldover equipped to handle tech at the pace its moving?

There are great lawyers in the United States, and from around the world. Especially in financial technology, a lot of people are intimidated by financial services. It seems revolutionising fintech is also a challenge; and the legal experts will have to ensure it is protected, fostered and not hurt people. At Cooley, we are well prepared. A law firm with a good understanding of technology can handle these challenges.

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