According to a survey, legal departments are becoming more like business units including hiring operations managers, increasing budgetary control and implementing information governance programs to decrease compliance risk.
The survey produced some interesting results across 120 U.S. companies of varying sizes.
- Of companies with $10 billion or more in revenue, 89% had a specific legal operations manager, while 50% of those with $2 billion or less have someone dedicated to this role
- 51% of companies stated that "increasing or changing regulatory requirements" is their top challenge
- 72% of those surveyed have either already implemented an information governance program or have plans to implement within the next 3 years
- 55% of organizations are currently using electronic records management
- 66% have implemented defensible disposition policies and procedures
Brett Baccus, managing director at Consilio (who helped conduct the survey), gave an impactful quote to Corporate Counsel around this change in legal departments.
“It helps ensure the risk is aligned between the law department and the law firm, and that costs are understood, so the right level of resources are brought to the matter.”
From a compliance risk standpoint, as Mr. Baccus points out above, this alignment is critical. We have discussed in the past how the alignment between business units contributes to a successful information governance strategy. Legal departments are increasingly becoming responsible for ensuring that an organization's data is compliant with regulatory and legal rules. Therefore, it makes sense that legal departments are implementing an operations manager that can handle this data from creation to disposition.
An area of concern around compliance risk that was uncovered in the survey is the management of third-party data. Only 21% of respondents stated they currently have a program in place to assess these risks. Law firms in particular often have a large amount of confidential data related to the organization. As we know, complete information governance must include all sources of data as a corporation can be held liable if there were to be a breach or accidental leak of this sensitive information.
Cybersecurity and data governance is crucial for legal departments of all sizes, especially related to eDiscovery and potential compliance risk. This further integration of an organization's legal department is a step in the right direction to ensure a holistic information governance program.