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In-House Legal Departments and the Use of Cloud Computing

By Greg Freemyer and Hope Haslam

Cloud computing, the process of storing and processing data on remote, outsourced third-party-owned servers, is growing in popularity, largely because it provides users with access to state-of-the-art and constantly updated software and fast infrastructure ' without the overwhelming costs. As technology advances at exponential speeds, companies must find ways to remain competitive. Buying the latest and greatest, only to find it obsolete before it is paid for, is a progressively unsustainable option.

For international companies, however, there are tremendous legal hurdles to accomplishing an effective conversion. Two of the most troubling are:

  1. U.S. preservation requirements; and
  2. International privacy laws.

As companies begin to set up, or more likely expand, a cloud computing system, they must understand the legal issues that need to be addressed in order to avoid subjecting the company to sanctions, fines, penalties and enormous e-discovery costs when litigation arises.

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