This week, we’re launching a 3-part article series about information governance (IG) for law firms. Every year, IG is getting more complex. As a result, even when law firms successfully launch IG programs they are often unable to follow through on implementation. High overhead costs and detailed manual procedures mean that compliance with IG policies isn’t 100%—or even followed at all. This leaves many firms at risk.
Why is IG becoming such a big problem? This article covers all the factors driving the shift towards more IG complexity.
Increasingly stringent regulations are impacting IG
Today, new and evolving industry regulations surrounding healthcare data, financial credit information, and personally identifiable information are creating an IG revolution. Until fairly recently, IG in law firms was really focused on chain of custody tracking, securing access to systems, and securing data. Over time, the emergence of industry regulations changed that situation. Just think about all the regulations today surrounding healthcare data, financial credit information, and personally identifiable information. Then think about all the regional regulations and global regulations around that data (such as EU Data Protection).
Increasing regulatory requirements have meant that during the past 5 to 7 years, clients in highly regulated sectors have been rapidly advancing their risk mitigation initiatives. As a result, they’ve been issuing increasingly detailed information governance (IG) protocols. This onslaught of new IG requirements is just now reaching law firms.
And the situation grows more challenging every year. In 2018 law firms with European business will be significantly impacted by the European Union General Data Protection Regulation (GDPR), which takes effect on May 25, 2018.
Industry cooperatives are driving IG compliance forward
The biggest factor making law firms comply with new IG protocols is industry cooperatives. Leaders in regulated industries – like financial services, government agencies, and the insurance industry – are collaborating to identify risks and define policies and practice to address these risks.
For industries with common risk profiles and regulated or sensitive information, collaboration enables them to pool their experience identifying risks and share successes reducing these risks. They’re also sharing their lessons from data breaches, which have occurred internally or through supply chain breach.
All of this knowledge is being used to create detailed information governance controls that are being adopted by the members of the consortium. These controls are supplied to law firms as Outside Counsel Guidelines (OCG), which are being included as part of engagements and subject to audits.
Outdated records management software is a factor
Without the external pressure felt in regulated industries, most firms have never worried about disposing of electronic documents nor destroyed physical records. In contrast, law firms working in highly regulated sectors have likely been forced to evolve their in order to comply. However, there are many firms outside such highly regulated sectors that have continued to employ more general firm-defined information governance across all their book of business.
Today, law firms are being forced to rapidly evolve their IG capabilities to accommodate the distinct guidelines of individual clients, reduce storage costs, and mitigate litigation risk by eliminating old documents and records. Unfortunately, the legacy records management systems they’ve been using have never included the most basic IG functionality, which would enable to apply retention policies against physical records and electronic documents.
As a result, according to the IGI Annual Report, 94% of law firms name Records Management as a key part of IG, ranking higher than eDiscovery (86%), Risk Management (77%) and Compliance (88%). Yet, it is estimated that over 70% of law firms are currently using records management software that is outdated, unsupported, or sunsetted.
Learn about the IG problem
IG is one of the biggest issues law firms face today. IG compliance threatens to overwhelm law firms’ resources, massively reduce productivity, negatively impact reputations, and undermine long-term profitability. Recently, we published an eBook that delves deep into the subject. Read more: Client Retention Hinges on Information Governance – How Automation Is Making Compliance Possible.