Key Insights From Our Article With the Society for Computers & Law – Software Escrow and The Influence of AI
Published on 08/01/2025
Our Operational Resilience Director, Mark Ryan, and Head of Technology, Tom Sweet, recently collaborated on an article with a partner of ours, the Society for Computers & Law (SCL). The article explores the evolution of software escrow, its use in legal frameworks, and the influence of AI. The full article can be found on SCL’s website.
The Society for Computers and Law is the leading educational charity for the tech law community, with a UK-wide vision and global significance. SES’s objective of providing guidance and support to the law community is one that aligns with SCL’s mission to educate legal and technology professionals, academics, students, and the wider audience on the impact of IT on law and legal practice. The partnership with SCL is hugely meaningful to the team at SES.
This blog looks at the key points that are addressed within the article with SCL.
Across a vast range of industries, the increasing demand and utilisation of software security tools is reflective of the ever-increasing level of risk that’s associated with software usage. As a result, the ability of software escrow to facilitate risk mitigation and the safeguarding of critical IT assets has been widely capitalised on.
The world of law is now more intertwined with technology and software than ever before. Currently, modern day legal practice harnesses the value of software escrow in numerous ways, such as implementing it for the safeguarding of case management software, communication and collaboration software, and document automation software.
In line with the increasing prioritisation of risk mitigation planning, more law-based organisations are acknowledging the power of software escrow to not just secure their assets but also protect the best interests of all stakeholders that are in some way impacted by them.
In the long run, software escrow can safeguard a legal professional and/or a law firm's reputation, financial position, relationships with stakeholders, and much more.
The use of software escrow can be traced back to the 1980s, a time when there was a boom in software demand and usage. In conjunction with this, measures for software risk mitigation were introduced to address the risks associated with third-party software suppliers. Such risks included suppliers going out of business, suppliers facing maintenance issues, and suppliers failing to provide adequate support. Interestingly, these risks are still very much present in the current software climate.
Throughout the years, whilst software has advanced massively, the foundational core of software escrow as being a means of ensuring business continuity has remained the same. Nonetheless, the offering of software escrow services is now different to what it once was.
Traditionally, the format of a software escrow agreement was limited to single licensee arrangements that were designed to safeguard on-premises software. However, modern day software escrow agreements can involve:
Prior to any form of agreement being set up, the first step of an SES client’s journey involves an informal yet in-depth conversation. This supports our team with clearly understanding and identifying the best possible solution for the client’s needs, wants, preferences, and specifications.
The legal framework of a software escrow solution typically comprises of five components:
A software escrow solution involves a tri-party legal agreement being set up between a software vendor, an escrow agent such as SES Secure, and a software application’s end-user. This agreement specifies the specific criteria (referred to as release or trigger conditions), that must be met in order for a source code release event to be activated.
In-depth details on release conditions are added to the agreement. When release conditions are met, an escrow agent is authorised to release the materials held under escrow to the software licensee, also known as the end-user.
At SES, after a client deposits their source code, our technical team evaluate it to ensure that it is accurate, up to date, and can be redeployed if required.
The intellectual property rights of the parties involved in the software escrow solution need to be clearly defined. This clearly determines source code ownership and the end-user’s rights upon release.
Within certain projects, it may be a necessity for a party to implement software escrow. Additionally, many emerging laws involve regulations that can be satisfied through a software escrow solution, such as the Digital Operational Resilience Act (DORA) which will apply to the EU Finance Sector as of the 17th of January, 2025.
Within numerous industries, software forms the backbone of integral organisational operations. In legal practice, many lawyers often recommend software escrow implementation to clients due to the enhanced security and continuity that it enables. However, it’s not always a tool that they utilise themselves.
A major duty of legal professionals is the safeguarding of clients, which is a responsibility that is personified through a comprehensive risk mitigation strategy. Utilising software escrow is a great example of a legal professional proactively prioritising the interests of those with whom they work.
There is an immense amount of value that software escrow can provide to a legal professional. For example, software escrow equips legal professionals with the ability to have uninterrupted, operational access to the critical applications that they rely on (such as case management software), regardless of any disruption that occurs.
The software escrow landscape has undoubtedly evolved over the years and the recent influence of the AI revolution is something that has transformed it noticeably. An example of a major advancement that has been shaped by AI is the deployment of machine learning algorithms. These algorithms enhance the capability to identify and address security threats. For clients, this offers a comprehensive way to safeguard critical assets. AI and machine learning technologies can also help identify vulnerabilities in code more quickly.
AI can also further improve the efficiency of operations through methods such as process automation and predictive analysis.
Ultimately, as highlighted in the full SCL article, “these intersections of AI with software escrow services are set to shape a new era of innovation and security, resulting in an ongoing evolution of the escrow space.”
If you’d like to learn more or would like to understand how our team can enhance the operations of your organisation, please don’t hesitate to get in touch.