American LegalNet publishes findings of 2017 Risk Management Survey
Today American LegalNet, Inc. (ALN) announced the results of its third annual Risk Management Survey, conducted during ILTACON 2017 in August.
Overview of Findings
The 2017 Survey aimed to determine what law firms considered their greatest risk exposures, and to gauge their confidence and available resources to address these concerns.
In summary, the Survey results showed:
- growing uncertainty regarding who had overall responsibility for risk management
- expansion in risk management worries to include threats like malware/ransomware
- agreement that malpractice lawsuit risk was rising
- evidence of outdated or decentralized calendaring and docketing systems
- surprisingly slow adoption of cloud-based calendaring/docketing systems
- despite challenges, respondents felt capable of addressing these risks
- more than half planned to invest more in risk management in the coming year
Highlights of the 2017 American LegalNet Risk Management Survey Results:
- Nearly One-third of Respondents Don’t Know Who’s Responsible for Risk Management – At 28.73%, “Don’t know” was the most popular answer to the question “Who bears overall responsibility for your firm’s risk management function?” even though two new answer choices were added this year: Governance Committee and IT Director. There was a definite drop in General Counsel’s responsibility from last year– the 2016 figure was 38.16% and 2017’s figure was less than half that at 18.78%.
- Top Risk Management Challenges Include Malware/Ransomware & Human Error – While in 2016, 55.88% of 2016 respondents had ranked Cyber Threats as their #1 biggest risk management challenge, in 2017 Cyber Threats was joined by Negligence/Human Error and new entrant Malware, Ransomware and Viruses, the latter not surprising, given the devastating impact of WannaCry and other recent attacks. Cyber Threats scored 28.32% on the 2017 top risks list with Malware and Negligence both scoring 21.97% each.
- Risk of Malpractice Suits on the Rise – 48.84% of 2017 survey respondents answered “Agree” that the risk of legal malpractice suits had increased in recent years, only 6.98% disagreed, and the remaining 44.19% said they weren’t sure. “Agree” responses were already strong in 2016 (39.71%) but the number increased 9.13% in 2017.
- Negligence and Human Error Most Likely Causes for Malpractice Claims – 2017 respondents said the most likely underlying causes of malpractice claims were “Negligence/Human Error” with 36.42% and “I don’t know” with 34.68%. The “I don’t know” answer was added to the survey this year; since one-third of respondents chose it, it’s clear there is a substantial lack of awareness about malpractice claim risk exposures.
- Outdated Docketing Technology Creates Significant Risk – 59.54% of 2017 respondents answered “Agree” that a decentralized or outdated docketing system created significant risk for their firms. Only 9.25% disagreed, and 31.21% were not sure. Compared with 2016 survey numbers, the 2017 “Agree” numbers increased by 3.66%, the “Disagree” number decreased by 3.99%, and the “Not sure” number was about the same.
- Slow Adoption of Cloud-based Docketing/Calendaring Tools - Only a total of 10.43% responded to the two “Yes” options about having a cloud-based docketing/calendaring solution. A very large majority of 72.39% said “No” and 17.18% said “Don’t know”. Even though cloud-based technologies have gained credibility and popularity in many areas, the survey results show that adoption of cloud-based docketing and calendaring is slow and minimal in law firms so far.
- Confidence in Capability to Address and Mitigate Risk – this year’s respondents were confident in their ability to address and mitigate risk. A large contingent, 76.69%, responded they were capable, more than capable or extremely capable. 20.25% said “We have work to do” and only 3.07 said “Minimal.”
- More Plans to Increase Investment in Risk Management this Year – More than half of 2017 respondents (57.67%) said they would be making additional budget available for risk management initiatives in the next 12 months, an 11% increase over the 2016 response to this question.
About the 2017 Survey Respondents
The 2017 Survey respondent pool was more than double that of the 2016 survey, and was comprised of a diverse group of legal IT, general counsel, risk & compliance, and practice support professionals. The 2017 survey had 43.55% IT department respondents and more than half specializing in other areas like legal, risk/compliance and practice support. The 2016 survey responders were primarily IT professionals (71.8%).
The largest 2017 survey majorities responded from the biggest firms with 500+ attorneys (24.54%) and from firms with 101-250 attorneys (20.25%). 2017 marked a 6.21% increase over 2016 in responses from 500+ attorney firms.
According to Erez Bustan, CEO and Founder of American LegalNet: “The 2017 Risk Management Survey produced intriguing results. Taking this new data into account, American LegalNet will continue to focus on identifying and solving risk management problems for law firms from a technology standpoint.”
Register to receive the complete survey results here.