American LegalNet Releases Risk Management Survey Results, Revealing Law Firms’ Concerns

USA/Canada News

23
Sep
2016

Editor

Rising Cyber Threats, Malpractice Suits and Outdated Technology

Today, American LegalNet, Inc. (ALN) announced the results of its second annual Risk Management Survey, conducted during ILTACON 2016 in August/September. The Survey aimed to benchmark which risks were most pressing for ILTA members and gauge their readiness to address them.

The 2016 Survey showed that ILTA members – a mixture of law firm and corporate legal department IT, compliance, risk management, legal and support professionals – had major risk management concerns and expressed lesser degrees of confidence than last year in their capabilities to address the threats.

The 2016 Survey respondents worked for law firms of all sizes with the largest contingent (45%) from firms of 101-500 attorneys.  The majority (71.8%) of respondents were law firm IT professionals including CIOs, CTOs and IT. 

Highlights of the 2016 American LegalNet Risk Management Survey results:

• More General Counsels Now Bearing Risk Management Burden - Compared to the 2015 Survey’s results, the 2016 Survey respondents indicated a definite shift in risk management responsibility to the General Counsel’s shoulders rather than IT executives or heads of risk/compliance.  In 2016, 38.16% of respondents said their firm’s General Counsel bore the responsibility for their firm’s risk management function, an 8.94% increase from the 2015 number (29.22%). CIO/CTO responsibility for risk management dropped 17.26% from 38.31% in 2015 to 21.05% in 2016.
• Biggest Risk Management Challenge is Cyber Threats – 55.88% of 2016 respondents ranked cyber threats as their #1 biggest risk management challenge - a 36.6% increase from 2015.  This makes sense given the year’s Panama Papers and DNC hacking scandals, among others.
• Changing Confidence Levels in Capability to Address and Mitigate Risk – When asked to rate their firm’s overall capability to address/mitigate risk, 55% of respondents said they were “Capable” to deal with risk, a 14.72% increase from 2015.  However, the “Minimal” and “We have work to do” responses increased from last year and the “More than capable” and “Extremely capable” responses both decreased, showing that respondents were less likely to express more than basic-level confidence for risk management preparedness.  85% of firms saw the need for further investment in risk management, though only 46.67% had budget to make the changes now.
• Risk of Legal Malpractice Suits Is Rising – 39.71% agreed with the statement “The risk of legal malpractice suits has gone up significantly in recent years.” 5.88% disagreed and 54.51% said “not sure.”  Respondents said the biggest underlying causes of their firm’s malpractice claims were:  Negligence (23.53%), Conflicts of Interest (22.06%), Calendaring Errors (11.76%) and Missed Case Notifications (8.82%). 
• Outdated Docketing Technology Creates Significant Risk – Since American LegalNet provides powerful docketing solutions for law firms, the survey drilled down to capture more detail about calendaring and docketing technology.  More than half of responding firms (55.8%) said that a decentralized or outdated docketing system created significant risk.  When asked whether their firm had a centralized docketing/calendaring solution, 60.66% of firms said “Yes” and 21.31% said “No, we have decentralized tools”. Only 27.87% of respondents said their current docketing solution was built on the latest technology, indicating that many were using outdated software.

According to Erez Bustan, CEO and Founder of ALN, the 2016 American LegalNet Risk Management Survey clearly shows that law firm IT professionals are facing significant challenges protecting their firm from outside threats as well as internal liabilities.  “We at American LegalNet feel strongly that technology can be the answer to bolstering law firms’ confidence and strength to combat risk and prevent malpractice suits,” says Bustan.  “Ideally, this Survey will show law firm management how important risk management is, so they will authorize their IT leaders to invest in responsibly protecting the firm and its clients.”

American LegalNet will be exhibiting at the National Docketing Association’s Annual Conference in Las Vegas next week on September 25-27.