New risks new rewards

New risks, new
rewards

The productivity paradox: Does
more technology mean less growth?

Nobel Prize-winning economist Robert Solow famously remarked, “You can see the
computer age everywhere except in the productivity statistics.” This paradox remains
relevant today as industries rapidly adopt AI, automation, and digitalisation. Despite
their potential to boost productivity by automating tasks and optimising processes,
the initial costs of implementing these technologies—such as investments in new
systems and employee training—can temporarily slow growth.
Moreover, their benefits often take time to materialise, as companies navigate
integration challenges. Additionally, as technology advances, incremental
productivity gains may diminish.

AI in Commercial Contracts: A
Time Saver or a Source of Delays?

The integration of AI for drafting, analysing, and managing commercial contracts
marks a significant shift in how legal services are delivered. AI promises to
streamline the contract lifecycle by automating tasks and potentially lowering legal
costs for businesses. AI-powered tools can analyse vast amounts of data quickly and
accurately, identifying potential issues that might be overlooked by human lawyers.
This capability is especially beneficial in industries with large volumes of contracts,
such as finance, real estate, or international trade.
However, AI’s use introduces complexities. The accuracy of AI-driven analysis
depends on the quality of the training data. If this data is biased, incomplete, or
unrepresentative, the AI may produce misleading results, leading to legal risks.
Moreover, AI lacks the nuanced understanding of context that human lawyers
provide. Legal language often contains subtleties that require careful interpretation

within the contract’s specific context. As a result, human oversight is still necessary
to verify and interpret AI findings.
While AI can improve efficiency in managing commercial contracts, its
implementation requires caution. Businesses must balance using AI for routine tasks
with maintaining human oversight for complex or high-stakes negotiations to fully
realise AI’s benefits without introducing new risks.

Technology and Due Diligence:

Simplification or Overcomplication?
Technology has made due diligence in commercial transactions, mergers, and
acquisitions more efficient, yet simultaneously more complex. Digital and analysis of
vast amounts of data, allowing teams to review documents, contracts, and financial
statements quickly. AI-powered platforms can uncover patterns and anomalies that
might be missed in traditional methods, offering deeper insights into a target
company’s operations and risks.
However, the sheer volume of data available can overwhelm, leading to analysis
paralysis, where it’s challenging to identify the most relevant information.
Additionally, the increased reliance on technology introduces new risks, including
data security concerns and the potential for inaccuracies or biases in AI algorithms.
These issues can compromise the reliability of the analysis and potentially lead to
flawed decisions.
Businesses must invest in appropriate tools, train staff to use them effectively, and
enforce strong data security measures. By doing so, companies can leverage
technology to enhance due diligence processes while minimising risks related to
data overload and security.

Legal Risks Arising from

Technological Advancements in the
Democratic Republic of Congo
In the Democratic Republic of Congo (DRC), the rapid adoption of commercial and
consumer technologies has brought about significant legal challenges. As
businesses in the DRC increasingly rely on digital platforms and technologies, they
are exposed to a new set of legal risks.

1. Data Privacy and Protection: With the growing use of digital technologies, the
protection of personal data has become a critical issue. Although the DRC has
implemented regulations to safeguard personal data, enforcement remains
inconsistent, and many businesses lack the necessary infrastructure to comply fully
with these regulations. The risk of data breaches and unauthorised access to
personal information is high, particularly in sectors such as finance,
telecommunications, and healthcare, where large amounts of sensitive data are
processed.
2. Cybersecurity Threats: The proliferation of digital technologies has also led to an
increase in cybercrime, with businesses in the DRC becoming more vulnerable to
cyberattacks, hacking, and online fraud. The lack of comprehensive cybersecurity
laws and the limited availability of advanced cybersecurity solutions exacerbate
these risks. The financial and reputational damage caused by a cyberattack can be
devastating.
3. Regulatory Uncertainty: The pace of technological innovation often outstrips the
development of legal frameworks, leading to regulatory uncertainty in the DRC. For
instance, the use of blockchain technology and cryptocurrencies remains largely
unregulated, creating a legal grey area for businesses that wish to adopt these
technologies. Similarly, the absence of clear guidelines on the use of AI and
automated systems in business processes can lead to legal disputes and
challenges. Companies operating in the DRC must navigate these uncertainties by
staying abreast of regulatory developments and seeking legal counsel when
adopting new technologies.

Legal Opportunities and Risks for

Businesses
Understanding and anticipating the legal implications of technological evolution is
crucial for companies to thrive in an increasingly digital world.
1. Automation of Legal Processes: The automation of legal processes through AI
can lead to significant cost savings and efficiency gains for businesses. However, the
adoption of AI in legal processes also raises questions about accountability and the
potential for errors. Businesses must ensure that automated systems are transparent
and that there are mechanisms in place to correct any mistakes that may arise.
2. Blockchain in Commercial Transactions: Blockchain technology offers a secure
and transparent way to conduct commercial transactions, reducing the risk of fraud
and enhancing trust. However, the legal status of blockchain transactions remains
uncertain in many jurisdictions, including the DRC.

3. Liability for Technological Errors: As businesses increasingly rely on
technologies such as AI, IoT, and automated systems, the issue of liability for
technological errors becomes more pressing. For example, if an AI system makes a
faulty decision that leads to financial loss or harm, determining who is responsible
can be challenging. Businesses must be proactive in managing these risks and seek
legal advice on liability issues.

Conclusion

The productivity paradox, along with the integration of technology into legal and
business processes, raises complex questions about the relationship between
technological advancement, economic growth, and risk management. In the DRC,
these issues are particularly pronounced due to the rapid pace of technological
change relative to the development of legal and regulatory frameworks.
For businesses operating in the DRC, understanding and anticipating the legal
challenges of new technologies is essential. While technology offers significant
opportunities for growth and efficiency, it also introduces new risks that must be
carefully managed. By adopting a proactive approach to legal risk management,
businesses can harness the power of technology, while safeguarding against legal
pitfalls.
The integration of technology into business and legal practices is not a
straightforward path to increased productivity. It requires careful planning, investment
in skills and infrastructure, and a nuanced understanding of the legal landscape. As
businesses continue to embrace digital transformation, they must remain vigilant
about the legal implications of their technological choices and be prepared to adapt
to an evolving regulatory environment. Only by doing so can they fully realise the
benefits of technology while mitigating the risks that come with it.