Accessibility Links

Managing legal risk 'becoming more difficult'

Posted by: Laurence Simons 10/02/14

We manage risk every day. Is having a third cup of coffee going to ensure you perform well in the meeting, or is it going to make you corner the advertising executive and breathe heavily on his face while you talk about revenue streams? Is it safe to cross the road? Should you really eat that kebab?

For lawyers in the modern corporate environment, however, risk management is becoming increasingly complex.

According to a new survey by Legal Business, a UK-based publication for lawyers, conducted alongside service provider Clutch Group, some 87 per cent of in-house counsel feel managing risk is more difficult than it was five years ago.

Furthermore, 69 per cent of respondents have seen a boost in spending on regulatory and compliance issues over this period, highlighting how much cash is being pumped into this thorny area.

Alex Novarese, editor-in-chief of the magazine, said the pressure facing in-house lawyers is greater than ever before.

"From rising costs to exponential growths in data, in-house counsel are looking for efficient and cost-effective strategies to manage these new realities," he added.

Alternative legal service providers are also having an impact on the market - 80 per cent of people expected the legal process outsourcing (LPO) market to expand over the coming years, while 58 per cent of respondents said they would be keen to work with LPOs to deal with compliance issues.

Worrying, 37 per cent of in-house lawyers say that LPOs are better equipped than law firms to use advanced technology and to use data and risk analytics.

Clutch vice-president Varun Mehta argued there is a clear demand for new solutions within the legal market.

"If alternative providers can satisfy blue-chip clients - and a sizeable group of clients report that they do - they will keep moving up the value chain," he suggested.

Although the market for LPOs in the UK is less developed than it is in the US, it is looking likely to expand further as liberalisation takes hold.