Bank of America recently began to audit the data security policies of its vendors. I think this a trend that we will start to see more and more of, as corporate legal continues to explore more ways to collaborate and more and more data is shared. In addition to the actual review of firms’ cyber-security, the in-house team will also need to explore developing policies and requirements around cyber-security that must be followed as a cost of doing business with them. This will in turn also require some level of policy tracking, incident investigation and overall compliance monitoring. Since this is a byproduct of sharing legal data, no doubt the onus will be on the corporate legal team and the technical resources who support them to handle these additional tasks. As activity increases in the regulation of data security, litigation will inevitably occur, the implications of which can affect a company’s reputation and stock price. It is important that the legal department be proactive and aware of the security of not only its data, but the organization’s as a whole.

However, one must wonder about the associated risks and challenges that come with some of these proposed changes. For instance, one of the executive actions President Obama has outlined includes the tightening of functional claiming, which requires increased specificity in patent claims. Although seemingly a sensible change, some legitimate organizations could face additional risk or exposure from competitors on their intellectual property given the more limited nature of future patent filings.

Only time will tell the full effect of these actions, but it’s certainly going to put any IP attorneys or functions on alert. You can read more on the subject in the article “White House Takes on ‘Patent Trolls’” at ALM’s Corporate Counsel website.

According to this recent article from ALM’s Corporate Counsel, the Securities and Exchange Commission was very active in 2012, filing 734 actions. Perhaps more tellingly, the SEC is seeking an 18.5 percent increase in its 2013 budget. As Mr. Marder notes, this means that most large corporations will face some action from the SEC this year or just recently experienced an investigation. We can also infer that this trend will continue over the coming years as the public has latched on to stories of corporate wrong doing throughout the last decade resulting in the increases in regulation we have lately seen.

Mr. Marder provides some expert advice for those corporate counsel who may be squarely in the SEC’s path. In reading his article, it strikes me that preparing for and managing this type of inquiry would require careful collaboration across the entire corporate legal team. It would be highly desirable to have strong policies and business practices in place to manage the matter from start to finish, from responding to the initial inquiry, handling any internal investigations, tracking policies, retaining and producing documents and potentially working with outside counsel. Hopefully, by having these items in place with the assistance of technology tools, counsel can remain proactive and compliant, thereby reducing the risk of facing a dreaded subpoena.

Rather than just concentrating on this one example,  the article lists steps that corporations can take to protect themselves from overbilling; including law firm selection, staffing, experience levels and scrutinizing invoices. Our own research indicates that overbilling is not the only reason corporations overspend on outside counsel. Corporations often make the mistake of paying the same bill twice, or not clearly communicating their billing guidelines and acceptable rates to their law firms prior to working on a matter. Avoiding overpayments to law firms without a technology solution is possible, it is just more cumbersome on the legal staff.

An e-billing solution provides the technology and framework needed to automate invoice routing, recognize duplicate invoices and enforce billing guidelines, but the return on this technology is still dependent on the corporate legal department to embrace that technology and implement it in a way where both staff and outside counsel adopts it.  Regardless of whether or not technology used, law firm overbilling can be extremely costly and the steps to protect the corporate legal department from this activity are well worth pursuing.

In a recent survey of Corporate Counsel’s Agenda for 2013 from ALM Legal Intelligence, Chief Legal Officers and General Counsel indicated that doing more with fewer resources is their top concern for the coming year. As corporate legal continues to take on the role of partner and trusted advisor to the business, GCs worry about whether they have the appropriate amount of support to be able to react and respond to constantly varying needs. Those same respondents also categorically believe that workload levels will at minimum stay level and most likely increase in 2013 as other parts of the business require legal services as companies take advantage of the warming economic climate. This all comes along with the constant, ongoing challenge that law departments face to look for additional ways to reduce external spend by keeping more work in-house.

What are leaders within corporate legal to do to meet these challenges head on? One key strategic area will be implementing and refining workflow management, automating as many routine processes as possible and finding operational inefficiencies that be turned around. Drilling down to find those areas that are causing the biggest burden on your staff and altering or replacing them with more proven legal project management processes will no doubt position the legal department for a productive year, alleviating the tactical concerns that leaders have today and enabling them to focus on higher value strategic intiatives.

This link will take you to the Carlton Fields website where the complete PDF can be downloaded.

Some of the high-level findings:

• Over half of major companies currently face class action suits, and approximately 11% of all litigation spending last year was on class action matters. Legal departments average 10 hours per week and more than 500 hours annually on a single class action matter.
• In-house legal leaders anticipate an onslaught of new consumer fraud class actions in the areas of data security, wireless and other untested technologies, and food safety and labeling, though they expect other areas, such as labor and employment issues, to decline.
• Advice on the top ways to mitigate class action risk includes enforcement of strong compliance, aggressive courtroom strategy and utilization of early case assessment.
• Recommendations on controlling class action costs include managing outside counsel terms and expectations and leveraging alternative fee arrangements to reduce legal spend.

If I were to pitch you on a $1 million investment that had a guaranteed return of $20 million, you would be a fool not to take it. Right? It doesn’t take a C-level executive of a Fortune 500 company to take you up on that offer. Unless that $1 million was to bribe a foreign official in order to be awarded a $20 million contract.

Legal Governance, Risk, and Compliance solutions have long provided organizations with effective methods to mitigate risk in their operations. In terms of regulatory compliance, identifying sources of risk can help an organization avoid potential penalties by proactively avoiding some event.

Although it has been around for quite some time, the Foreign Corrupt Practices Act has surfaced in the enterprise legal environment to a much greater degree over the past several years due to increased DOJ and SEC enforcement. Some of the settlements are absolutely mind boggling with Siemens AG topping the list at a whopping $800 million to settle. You can see the top ten settlements here.

Just recently, however, some news on the FCPA front has surfaced that will make your technology investment that much more valuable. A few weeks ago, the SEC announced a Non-Prosecution Agreement with Ralph Lauren. Specifically the SEC “has determined not to charge Ralph Lauren Corporation with violations of the Foreign Corrupt Practices Act (FCPA) due to the company’s prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC’s investigation.” You can read the full SEC release here.

The result? Ralph Lauren will disgorge roughly $700k in illicit profits and interest obtained in connection with the bribes, in addition to an $882,000 penalty due to parallel criminal proceedings. That sure beats the potential for millions in fines. All done through the implementation of a new compliance program and the strengthening of internal controls.

As a product manager, these interactions are invaluable. Being able to hear firsthand what is working for our clients and what their major pain points are informs our product strategy and lays the groundwork for what we do. Additionally, the group setting provides our clients, who are the leaders and innovators in the field of legal technology, to discuss and learn from each other to continue to improve their processes and receive the most value from their technology investments. Everyone benefitted from learning about how other clients in the same community have done a variety of things, from implementing a data retention policy, issuing and tracking legal holds, to instituting a knowledge management strategy.

Hearing that others are dealing with the same issues that you are can be reassuring. Finding out someone else has solved a problem in a way you’d never thought about can pay tremendous dividends, and I am excited to be a part of a community that is so willing to share best practices.

Check our events calendar to find a user group near you!

Being Product Marketing Manager at Mitratech, the technology item is the one I instantly connect with, but how technology interacts with people and process are key elements to understanding the needs of software buyers. Some of the important points to consider from the article include:

• Corporations array human capital on a task and functional basis, as opposed to the time dimensional approach that the law firm naturally takes
• To be successful, corporate counsel need to view IT staff and the systems they manage as collaborators working in a different medium
• Gains in efficiency are often made when identifying common dependencies and optimizing processes to better satisfy internal partners
• Automating existing corporate processes makes more sense than duplicating functions

Although the corporate landscape will be different and in some cases more complex for the attorney moving from a law firm, the possibilities that can be achieved by working with a dedicated IT department and technology partners can be far greater.

Some of the sessions that are on my personal to-do list:

• IP Update: Patent Law Reform:  I’ve been following the changes in patent law, so I’m curious to hear about the practical impacts on our clients.
• Conjoined Twins—Corporate Culture and Your Ethics Policy:  I’ve always been fascinated with corporate culture, its effect on a business and how to successfully define and instill it, so I’m looking forward to this session.
• Top 10 Financial Shenanigans:  Frankly, this one just sounds entertaining.

If you’re attending the conference as well, come by the Mitratech booth and see what we’re up to.