How Does Legal Tech Help With Compliance (+10 Common Risks)​

 In Practice Pointers

How Does Legal Tech Help With Compliance (+10 Common Risks)

Law firms are getting a taste of the future courtesy of legal technology. No more hours spent on repetitive tasks, no more regulatory surprises, and no more sleepless nights worrying about data breaches.

What if you could outlaw mistakes and stay current with the latest rules and regulations? These tools make it happen and free you up to tackle more substantial legal work.

In this guide, we talk about the role of tech in legal compliance, how to modernize your own compliance strategy, and the best tool to start with.

lawyer taking notes on a laptop

What is Legal Compliance?

Legal compliance is all about following the rules and regulations that apply to your business. This involves mapping their operations to laws that dictate client confidentiality, financial prudence, and good old-fashioned common sense.

Key Elements of Legal Compliance

All law firms and legal departments need a solid compliance management strategy in place. To do that, they need to understand the most important elements of legal compliance obligations:

  • Understanding regulations: Law firms need to know the ins and outs of the laws and regulations that apply to their work. This includes everything from professional ethics to data protection laws.

  • Setting up policies: Law firms need clear policies and procedures to stay compliant. Building trust requires more than good intentions—it demands tangible safeguards like data protection policies, confidentiality agreements that client teams can rely on, and effective anti-money laundering measures that kick in automatically.

  • Training and awareness: Everyone in the firm needs to be aware of compliance requirements and trained on how to follow the firm’s policies. Regular training sessions help keep everyone up-to-date with the latest rules.

  • Monitoring and reporting: Law firms should constantly check their compliance status and report any issues. This involves regular audits and checks to make sure everything is running smoothly and by the book.

person working with some notes

10 Common Compliance Risks Law Firms Face

Law firms have their hands full when it comes to staying compliant. There are several common risks they need to be aware of and manage properly. Here are some of the key ones:

1. Data Breaches

Law firms deal with a lot of sensitive information, from client details to case documents.

Picture this: a sophisticated cyber attack exposes your client database, putting sensitive information at risk. The financial fallout is immediate⎯hefty fines and lawyers’ fees start adding up. But the real damage is to your company’s reputation, which may never fully recover. 

Unauthorized access is like an unwanted houseguest, you never want it to happen, and strong cybersecurity measures are the only way to keep it from showing up uninvited.

2. Client Confidentiality

Keeping client information confidential is a must. If client data gets leaked or mishandled, it can cause legal troubles and harm the client-lawyer relationship. Law firms should have strict policies to protect client confidentiality all the time.

3. Anti-Money Laundering (AML)

Law firms must make sure they’re not inadvertently helping clients launder money. Having a procedure in place for flagging and reporting fishy behavior is crucial⎯it’s the first line of defense against suspicious activities.

Skipping AML regulations can bring the hammer down on your business. Penalties can be harsh, and the consequences can be very serious.

4. Regulatory Changes

Laws and regulations are always changing. Keeping up with these changes can be tough, but it is necessary to stay compliant. Law firms can’t afford to get caught off guard by new rules—they need to stay vigilant and adjust their strategies on the fly.

5. Document Management

Managing a ton of documents can be a nightmare. Imagine the sinking feeling when you realize that crucial paperwork has vanished and it’s a compliance nightmare waiting to happen.

A document management system guarantees that kind of crisis never happens, freeing up law firms to concentrate on the law, not paperwork.

6. Conflict of Interest

Law firms must avoid situations where there might be a conflict of interest. To prevent divided loyalties, they draw a hard line: no clients with competing agendas are allowed under their roof. Proper screening processes are needed to spot and manage potential conflicts.

7. Ethical Violations

Following professional ethics is key to maintaining a law firm’s integrity. Ethical violations, like mishandling client funds or misrepresenting facts, can lead to disciplinary actions and losing the license to practice.

8. Billing and Fee Disputes

Clear and accurate billing practices are essential to avoid disputes with clients. Overbilling or failing to properly document billable hours can result in compliance issues and damage client relationships.

9. Employment Law Compliance

Law firms, like any other business, must comply with employment laws. At the core of it all are fair hiring practices, accurate employee classification, and a deep understanding of labor laws.

By nailing these fundamentals, you’ll set your organization up for success. Miss the mark on compliance, and you might as well write a check to your legal adversaries, or the government, for that matter.

10. Client Intake and Screening

Properly vetting clients before taking on new cases is important to make sure they’re legitimate and not involved in illegal activities.

Why do high-risk clients keep you up at night? It’s because one misstep can trigger a domino effect of financial and reputational damage. That’s why a rigorous client intake process is very important.

person working on legal

How Legal Technology Can Help With Compliance

Legal tech can be a real lifesaver for law firms trying to stay compliant. It’s like having a second pair of eyes on your project, tackling monotonous tasks, keeping your workspace organized, and flagging anything that needs attention.

Here’s how legal tech can help law firms with compliance:

Automated Document Management

Legal tech tools do the heavy lifting so you can focus on locating that one crucial document amidst the stacks. With automated document management systems, you can make sure all important documents are safe, secure, and easy to locate.

Think of the countless hours you’ll save by having a well-organized document management system. No more searching high and low for misplaced files or wading through a sea of paperwork during audits.

Keeping Up with Regulatory Changes

Staying up-to-date with the latest regulations can be a hassle, but legal tech can handle it for you. These tools monitor regulatory changes and alert you when something new comes up. This way, you’re always on top of the latest rules without having to manually track them.

Maximizing Data Security

Legal tech solutions often come with top-notch security features to protect sensitive information.

To keep client information private, we’ve got a trio of protective measures in place: encryption to scramble data, access controls to limit who sees what, and regular security checks to identify potential vulnerabilities. This is incredibly important given the sensitive nature of the data legal professionals handle.

Making Reporting Easier

Reporting can be a real pain, but legal tech simplifies it. These tools can automate the reporting process and make sure all necessary information is included and submitted on time. With fewer errors to worry about, the whole reporting process becomes far less of a headache.

Helping with Anti-Money Laundering

Legal tech can assist with anti-money laundering efforts by automating client due diligence checks and monitoring transactions for suspicious activity. Monitoring for suspicious activity becomes a whole lot easier, and that’s a big deal when it comes to staying compliant with AML regulations.

Smoother Client Intake and Screening

Legal tech tools simplify the client intake process by automating background checks and risk assessments. This can help you make sure new clients are legitimate and not involved in illegal activities, which reduces the risk of compliance issues later on.

Automated Document Generation

Legal tech can be a real game-changer when it comes to creating documents. By automating this process, it saves a ton of time and cuts down on errors.

For instance, automated discovery document drafting is a lifesaver. It helps law firms quickly whip up accurate and comprehensive documents needed for the discovery phase of litigation. This means all the necessary info is included, and everything sticks to compliance requirements.

Increasing Efficiency

For lawyers, time is money. By offloading administrative duties and making data readily available, legal tech amplifies productivity and empowers you to take on more billable hours or simply enjoy a better work-life balance.

Handing off tedious tasks to automation frees up staff to tackle the more important work, and that’s not all. It also reduces the likelihood of human error, a major compliance headache.

Ensuring Consistency

Consistency is important for compliance, and legal tech helps ensure that all procedures are followed the same way every time. With standards nailed down, you’ll worry less about flying under the compliance radar.

Types of Tech Designed For the Legal Profession

Legal technology includes a variety of tools designed to improve the efficiency and effectiveness of legal services. Here are some key types:

  • Document management systems: Organize, store, and retrieve legal documents to make it easy to manage large volumes of paperwork and ensure compliance with legal standards.

  • Case management software: Helps law firms manage their cases, track deadlines, and organize client information, which can improve overall efficiency and client service.

  • Contract management software: Automates the creation, tracking, and management of contracts to manage compliance and reduce manual errors.

  • Legal research tools: Provide quick access to legal databases, case law, statutes, and other legal resources, which makes research faster and more comprehensive.

  • Time tracking and billing software: Tracks billable hours and automates invoicing for accurate billing and better financial management.

  • Client Relationship Management (CRM) systems: Manage client interactions, track communication, and improve client service through organized client data.

  • Litigation support software: Assists with trial preparation, including managing exhibits, witness information, and case timelines.

  • Legal analytics tools: Analyze legal data to identify trends, predict case outcomes, and provide insights that inform legal strategy.

Are Legal Tech Solutions Foolproof?

While tech solutions offer many benefits for the legal industry, they’re not completely foolproof. No technology is perfect, and there can be occasional glitches or bugs that disrupt workflows.

The good news is that they’re usually just a temporary setback. While tools can free up our time, they can’t think for us, that’s why we need to stay involved. Relying solely on technology without regular checks can lead to complacency, and critical errors might go unnoticed.

Additionally, not all legal tech solutions are created equal; some may lack the robustness needed for complex legal tasks, and firms must carefully choose the right tools for their specific needs.

Moreover, legal tech often involves a learning curve. The people behind legal teams need training that’s both thorough and sustained. Only then can they wield these tools with confidence and precision.

There’s also the risk of cyber threats; despite advanced security features like encryption, no system is entirely immune to breaches. Law firms can’t afford to let their guard down – they need to regularly bolster their defenses to stay safe from rapidly evolving security risks.

team working on laptop

How to Use Legal Technology Solutions Responsibly

Using legal tech solutions the right way ensures your law firm gets the most out of these tools while keeping risks in check. Here are some practical tips for making the most of legal technology:

Regular Training

Keeping your team well-trained is key, so stay on top of your tools with regular training sessions. This way, everyone’s on the same page when it comes to getting the most out of them.

This includes understanding new features, knowing how to fix common issues, and being aware of best practices for security and compliance.

Backup Plans

Even the best tech can fail, so having backup plans is crucial. This could mean regular data backups, alternative ways to complete tasks if the tech fails, and manual processes to fall back on during system outages.

Stay Updated

Keeping your tech tools updated is important for maintaining security and functionality. Software updates often include important security patches and new features that can improve performance.

An outdated toolkit is like an open door to cyber threats. Close that door by updating regularly, and you’ll not only be protected but also be able to seize new opportunities as they arise.

Monitor and Review

Regularly monitoring and reviewing your legal tech tools can help catch issues early. System troubleshooting, feedback analysis, and regular check-ins are just a few ways you can guarantee your tools are working as they should.

By tracking your tools’ performance, you’ll be able to spot what’s working and what needs an overhaul and make the necessary tweaks.

Combine with Best Practices

Legal tech should complement, not replace, established best practices. To avoid any compliance issues, revisit the basics. Regularly scheduled team syncs and spot-checks by hand will help you stay on track.

Remember: Combining legal tech with human oversight ensures you have a strong system in place.

Data Security

Prioritize data security by implementing strong encryption, access controls, and regular security audits.

Make sure your legal tech solutions follow the highest standards of data protection to safeguard sensitive client information. Take the time to educate your legal team on the dos and don’ts of data security. They’ll be the first line of defense against potential breaches.

Ethical Use

Make sure your use of legal tech aligns with your firm’s ethical standards. Clients need to know when technology is involved, and it’s your job to guarantee that automation doesn’t come at the cost of top-notch service. Regular ethical check-ins are a must, too.

A Faster Discovery Phase Without Putting Compliance at Risk

Discovery documents need to follow specific rules to stay compliant, but that doesn’t mean you should spend hours on each document to guarantee its accuracy and consistency.

What if you could finish this tedious task in minutes without putting your compliance at risk?

Enter, a generative artificial intelligence tool that can help you draft discovery documents in just a few clicks. That’s not all. Briefpoint keeps your data secure through several key measures. 

We use top-notch encryption for data both in transit and at rest. Regular automatic backups and redundant servers make sure your data is always protected, and our development practices include strict code quality standards and security reviews.

Here’s a sneak peek at what you can do with Briefpoint:

  • Upload your discovery request. Briefpoint’s machine learning system will automatically start extracting as much information as it can from your document.

  • Add objections and responses. At this point, Briefpoint has created a caption with most of the routine stuff already filled out for you. From here, you can add your objections to each request or interrogatory using the checklist.

  • Collect and add client responses: If you need to do so, Briefpoint Bridge can help you collect and input client responses into your documents without doing it all manually. Select your questions, send them to your client, and then plug in what they send back.

  • Finish up. Once you have a draft, you can download the document on MS Word and finish up there. It’s that easy.

Upgrade Your Legal Practice With Document Automation

Discovery responses cost firms $23,240, per year, per attorney. $23,240 estimate assumes an associate attorney salary of $150,000 (including benefits–or $83 an hour), 20 cases per year/per associate, 4 discovery sets per case, 30 questions per set, 3.5 hours spent responding to each set, and 1800 hours of billable hours per year.

Under these assumptions, you save $20,477 using Briefpoint, per year, per attorney.

Test Briefpoint yourself by scheduling a demo here

FAQs About Legal Tech and Compliance Management

What is legal tech?

Legal tech refers to technology tools and software designed to help law firms manage their operations, including compliance, document management, and data security.

How does legal tech improve compliance?

Legal tech improves compliance by automating routine tasks, monitoring regulatory changes, improving data security, and streamlining reporting processes.

Can legal tech replace human oversight?

No, legal tech is not a replacement for human oversight. It should be used as a helpful tool to support compliance efforts, but regular checks and balances are still necessary.

What are the risks of relying solely on legal tech?

Relying solely on legal tech can lead to new problems, such as tech glitches and a lack of human oversight. It’s important to use legal tech responsibly and have backup plans in place.

What are legal technology professionals?

Legal technology professionals are experts who implement and manage tech solutions for legal practices. They help law firms provide convenient legal service delivery and manage compliance using various legal tech tools, combining knowledge of law and IT.

How can law firms stay updated with regulatory changes using legal tech?

Legal tech tools can monitor regulatory changes and alert firms when they need to take action. This helps firms stay on top of the latest rules and regulations.


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