Occupation: Lawyer – a partner in the Providence office of Peabody & Brown. His concentrations include computer law, where he has devoted considerable effort to the Year 2000 computer issue (Y2K).
Backround: Has been at Peabody & Brown for four years. Before that was a lawyer at the Providence firm of Tillinghast, Collins & Graham, for 22 years.
Education: Bachelor’s from Yale University in 1969, LLB from the University of Virginia in 1972.
Age: 52
Residence: Exeter
Family: Married, four children
PETER V. LACOUTURE: “There will be small businesses that won’t be able to open on January 3rd.”
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PBN: Have you always practiced computer law?
Lacouture: I’ve practiced computer law off and on for most of my career. I have done a lot of environmental, public utility, high-tech work.
You were drawn into this Y2K issue.
It’s become a significant part of my practice in the past year. We were discussing the issue very early in 1998, a group of us, and I said I thought it was an issue that had been neglected by a lot of lawyers and a lot of businesses. I thought we could provide some help for our clients in the area so I wrote an article, which you published, and appeared on Frank Coletta’s and really got into it. Some clients started listening to us, and it’s been a good year.
This is mid-March of 1999. We’ve already seen some problems, and now we’re seeing some reports that things aren’t going as smoothly as some people had thought. What is your view of how well we’re handling this Y2K problem?
I think some of us are handling it very well. The publicly traded corporations, big companies, the highly regulated companies, the financial industries are being responsive in large part because the regulators are requiring them to address the issue. A lot of the smaller businesses aren’t treating it seriously, and I think there’s the potential there for some real problems at the end of the year.
We also hear that government may not be as attentive as it should be?
That’s certainly what the Senate special committee report has suggested. I think they said the federal government is spending $7.5 billion on it, and some of the federal agencies are doing well and other agencies aren’t doing as well. I think the same problem permeates all levels of government.
Some people have suggested both Rhode Island and Massachusetts aren’t as far along as they should be with the Y2K problem.
I’ve seen the reports in the paper to that effect. I’m representing the state of Rhode Island, working with the state Y2K coordinator in addressing the issue. They certainly are working hard on the problem.
If all of these off areas — small business, government, the non-regulated industries –come to the end of the year and have not done their work, what might the outcome be?
It could be a major problem. The assumption you made in your question that none of these organizations deal with it I think a more likely outcome is many of them will deal with it. Most of the government agencies will be ready. I think there was a statement in the Senate report that said 40 percent of small businesses aren’t planning to do anything. That means that 60 percent are planning to do something.
It will certainly result, I believe, in some minor localized problems. There will be small businesses that won’t be able to open on January 3rd and may not be able to operate for some days or weeks after that. That’s not going to be the end of the world. It’s not going to be a global recession, I believe. I think there will be some serious local problems. It may very well be a major problem if you are an owner or an employee of one of those small businesses.
There are those who predict world crisis, from recessions to brownouts to chaos in the air. Do you discount what they are suggesting?
I do. You can also find well-known experts who will say that there’s no problem. It’s all media hype. It’s the lawyers, the consultants, the media trying to sell their various services. That there really is no problem. I think the truth is probably somewhere between those two extremes.
Bottom line is we’ll survive it, there may be some inconveniences, but we’ll survive it?
I think that’s true. One of my partners uses the analogy of a hurricane. It’ll cause some serious problems locally; it’s not going to be a countrywide or worldwide problem. I was thinking the other day about the blizzard of ’78. It was right after we moved out to Exeter. We spent a week in the house. We didn’t have power for a couple of days. Once we got the power back, it was the best vacation we’ve had. There may be pockets of that sort of problem, beginning of 2000, but not a major worldwide crisis.
From a legal standpoint we’ve begun to see the lawsuits. Are they mostly point of sale oriented?
No. The Produce Palace was the big point of sale problem. Apparently an entity had installed a new cash register, electronic point of sale cash register system at the Produce Palace in Michigan, a big grocery store. I understand if anybody came in with a credit card that had an expiration after December 1999 it would lock the whole system up. It wouldn’t just lock that one particular cash register, it would lock the whole thing. I don’t know about you, but I get very frustrated when I’m waiting in line at the grocery and somebody ahead of me is delayed for a price check Apparently they lost a lot of business because the system kept locking up. I’m not sure why they didn’t teach the cashiers to look at the credit card to look if it was ’99 or earlier on the expiration. Apparently they didn’t. They ended up settling the case for a fairly substantial payment.
That was the first.
That was the first case. There have been a number of other cases – generally class action suits against some of the consumer software. I think there was a suit against the Norton Anti-Virus, claiming that an old version of that was not year 2000 compliant. There was a suit over an old version of Quicken, saying that Intuit should upgrade Quicken for free.
They were charging back, I think $39.
Thirty nine or $49 for the upgrade. I think Microsoft has an interesting approach to the problem. If you go to the Microsoft web site you can find upgrades for nearly any version for any software package they’ve ever made. If you’re using an old version of Microsoft Word, for instance, you can find a patch for it. The patch doesn’t cost you anything to replace it. But if you want the features of the new upgraded version you have to pay for it. I think they’ve reached a good compromise.
Of what nature do you see future lawsuits involving Y2K?
There will be a lot of claims for damages for the dislocations we talked about. If I make widgets and you buy them from me and we have a contract and I’ll supply you X number every week or so for your process and I’m closed down for the first month or two for the year 2000 because of a bug, a glitch, you may very well come back and sue me. Depending on whether I’m able to get up and running or end up out of business, that suit may not be a very productive way to solve your problem. What we’re encouraging clients to do is plan for the contingencies and make sure that their critical vendors either are compliant and that they have some good assurance that the vendor is compliant, or they have alternate sources for those critical components.
Power companies were a major concern.
The Senate report seems to indicate they do have the situation under control.
When we talk about the 40 percent of small business that has not addressed the problem, is there any stereotype to what kind of business that is?
I was at a function a month or so ago. There was a guy there who was the owner of a small business. I don’t know what his revenue was. Obviously a small operation. Probably a dozen employees. His point was I can always do my bookkeeping by hand if I have to. Whatever it takes to get back on my feet. He wasn’t real concerned about the building. He had more immediate problems than the Year 2000 issues. He was just concerned about running his business.
When 2000 hits that doesn’t take these people off the hook?
Certainly if they start the computer up the first week, January 3rd, and it doesn’t operate they’re going to have to find a new computer somewhere. One suggestion I’ve heard is that there may be a shortage of computers at the end of the year because some percentage of this 40 percent that is not paying attention is all of a sudden going to wake up or maybe after the first of the year will try and go out and buy a computer and there won’t be any. But they’ll have to deal with that issue. I think the more difficult problem is if it starts up and it runs, they say I knew better than the big banks did, I didn’t have to do anything. They may get corrupt data. The computer may run, but the data may not be reliable. They may not discover that until they’ve run it and corrupted a lot of data. I think there’s no substitute for advanced planning.
