YOUR COMPUTER AND THE MILLENNIUM:
A CONUNDRUM WRAPPED IN AN ENIGMA
(1998)

If you are starting to think that all of the noise about of the world's computer systems shutting down when the date changes at midnight on December 31, 1999 is much ado about nothing, think again. At lease four class action lawsuits on the subject have already been filed, and more are on the way. If the rush of lawyers, accountants and consultants to create Year 2000 (or "Y2K") action groups, think tanks and cooperative partnerships is any indication, the noise level regarding the Y2K problem will be a tornado's roar come New Year's Eve, 1999.

Even if your company is not yet "Y2K compliant," however, do not despair. The Y2K gurus agree that you can become compliant by following these three easy steps:

1. Make sure your company's internal computer systems will be able to handle the change in the date from December 31, 1999 to January 1, 2000;

2. Require that your suppliers certify to you in writing that they (and/or their products) are themselves Y2K compliant and that they are undertaking the same steps that you are to avoid problems with computer systems when the Year 2000 arrives; and

3. Make sure your products are Year 2000 friendly. This applies in particular if your products are dependent upon or employ computer software, hardware or imbedded code. The imbedded software code issue is the trickiest. Imbedded code contained in hidden silicon chips is everywhere, from the elevator you ride every morning to the ignition system activated when you turn the key in your au tomobile.

For publicly traded companies, there may be disclosure and reporting issues to be addressed. For example, Staff Legal Bulletin No. 5 from the SEC's Division of Corporation Finance and Investment Management recommends that publicly traded companies "should review, on an ongoing basis, whether they need to disclose anticipated costs, problems and uncertainties associated with the Year 2000 consequences, particularly in their filings with the Commission." The SEC's Report to Congress in June 1997 raises similar concerns and reduces the Y2K issue to a single kernel of wisdom: "Efforts to solve Year 2000 problems are best described as 'risk management.' Success in the effort will have been achieved if the number and seriousness of any technical failures is minimized, and they are quickly identified and repaired if they do occur." (Staff Legal Bulletin No. 5 and the June 1997 Report to Congress can be obtained from SEC's Internet web page or by contacting DGW&W). The pundits agree also on two additional aspects of the problem. First, it is not enough for a company simply to assign someone the task to remediate Y2K problems and thereby assume that those problems will be solved and liability issues will disappear. Instead, companies must assume that failures will occur and plan accordingly. Second, the pundits recommend that, after the New Year's Eve party ends at 12:15 a.m. on January 1, 2000, don't be the first person to take the elevator to the ground floor.

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