Latest news – Cybersecurity focus for CLOs; Backing for electronic document processes; Workflow gains the 2021 goal

[Australasian Law Management Journal,Finance & Accounting,General Management,Marketing & Business Development,Strategy & Leadership] August 26, 2020

CLOs key players in cybersecurity planning

A new international survey reveals that within 71 per cent of organisations, the chief legal officer (CLO) plays a key role in leading cybersecurity strategies.

In its 2020 State of Cybersecurity Report, the Association of Corporate Counsel Foundation examines cybersecurity activities from an in-house perspective. It surveys 586 law departments across 36 countries and 20 industries.

Some of the report’s highlights include:

  • 40 per cent of companies’ report experiencing a data breach, with 21 per cent of all organisations surveyed calling on their CLO to deal with breaches;
  • wide implementation rates of cybersecurity strategies – from password and document retention to employee training – and greater participation of legal departments in these efforts;
  • 36 per cent of departments have upped their budget for cybersecurity; and
  • broad satisfaction (78 per cent) with the safety of third-party vendors who handle company data.

The survey also finds that damage to company reputation and brand remains the top concern arising from a data breach for organisations. However, liability to data subjects has become the second-greatest concern overall this year. Sixty-two per cent of organisations rated it among their top three concerns this year compared with just 20.3 per cent in 2018.

Another key finding is that 18 per cent of organisations have an in-house lawyer dedicated to cybersecurity, which is up from 12 per cent in 2018. In a majority of cases, this lawyer is responsible for cyber across the enterprise and is in an executive level position in 56 per cent of organisations.

 

Law Council supports electronic document processes

The Law Council of Australia has called on the government to improve the use of electronic processes in the execution of documents and says consideration should be given to consistency across the states and territories to avoid confusion.

Appearing before the Senate Select Committee on Financial Technology and Regulatory Technology, Law Council President Pauline Wright said that while the implementation of electronic document execution, introduced during the pandemic, should be applauded, it was important that the committee considered the medium and long-term supports needed, including the benefits of harmonising approaches across jurisdictions.

“There is no doubt that the COVID-19 pandemic has dramatically changed the economic and financial environment in Australia and has significantly affected the FinTech, RegTech and LegalTech sectors,” Wright said. “Improving the ability to undertake the witnessing and signing of crucial documents, as well as filing or registering documents with governmental and regulatory agencies electronically, should be (the) priority of any reform process.”

While the Law Council commends the initiatives regarding electronic document execution that have been introduced during the pandemic, the potential for inconsistency between jurisdictions has created uncertainty. “The Law Council asks that the committee consider the possibility of harmonising, where appropriate, processes for e-signature and similar activities nationally,” Wright said.

“We also suggest that the temporary provisions for the virtual running of company meetings, such as AGMs, under the Corporations Act, have clear benefits for the corporate sector and investors in times when the economy is under stress. In the Law Council’s view, these reforms should be maintained post COVID-response measures, with the necessary safeguards in place.”

 

Focus switches to better internal systems, workflows

Improving internal systems and workflows will be the priority in the 2021 financial year for mid-sized law firms, according to a new report.

The State of the Nation Outlook for Mid-Sized Australian Law Firms – 2020-21 indicates that 71 per cent of firms will pursue such a priority, while 61 per cent expect to increase business development and marketing efforts. Released by legal practice management systems provider PracticeEvolve, the report considers the impact that COVID-19 has had on law firms. The findings reveal that 90 per cent of respondents rate the transition to working remotely as either ‘good’ or ‘excellent’. However, issues have emerged, including how to better manage work and document flow, how legal services should be structured and delivered, and how best to re-evaluate the client experience.

Responses on productivity were mixed, with almost 47 per cent reporting no difference, over 24 per cent reporting increased productivity, and just 16.3 per cent reporting decreased productivity. The pandemic has had an impact on the types of work that firms are seeing in the market. Those surveyed reported an increase of 20 per cent in litigation, labour and employment law, as well as greater demand for wills and estate planning.

PracticeEvolve suggests that firms committed to building on the gains achieved in remote and flexible working conditions following COVID-19 will need to invest in sophisticated and intuitive technology and collaboration tools. They will also have to up the ante on training and development and imbed a new mindset that working remotely or flexibly will positively impact profitability and morale.