Peer to Peer Magazine

50 PEER TO PEER: THE QUARTERLY MAGAZINE OF ILTA | WINTER 2017 FEATURES Who Is In Charge and How Are We Doing? Insights from the 2017 Risk Management Survey Top Risk Management Challenges Survey respondents were asked, "What is the single biggest risk management challenge your firm faces over the next 12 months?" In 2016, the top challenge selected was cyberthreats (56 percent), but only about half that number (28 percent) gave the same answer in 2017. Two new answer choices — "Malware, ransomware and viruses" and "Negligence/human error" — made strong debuts at 22 percent each. At 13 percent, "I don't know" was the only other 2017 response of note, with all other choices scoring below 9 percent. Self-Assessing Capability to Address Risk Answers for the 2017 survey were mixed on this topic, with most firms expressing great confidence in their risk management approach and others admiing they had more work to do. Seventy-seven percent responded that they were either "Capable," "More than capable," or "Extremely capable." Twenty percent said, "We have work to do," and only 3 percent said "Minimal," all of which seems positive. In 2016, the top challenge selected was cyberthreats (56 percent), but only about half that number (28 percent) gave the same answer in 2017. Note, though, that "We have work to do" has increased each year (from 10 percent in 2015 up to 20 percent in 2017) and that taken together the three Capable ratings (Capable, More than capable and Extremely capable) have dropped each year (2015's 90 percent drops to 81 percent in 2016 and down further to 76 percent in 2017). Admissions of shortcomings plus reduced confidence in capability show a gradual downward trend in respondents' readiness to address risk management. Increasing Investment in Risk Management More than half (58 percent) of 2017 respondents said that within the next 12 months, "Yes — we will be making additional budget available for risk management initiatives." This is an 11% increase over 2016. Twenty-one percent of 2017 respondents answered, "No — we need to increase investment but we are unable to invest due to budget constraints," so there was acknowledgment of need but no money available. Another 21 percent replied, "No — we have made all the investment we need at the current time." Many firms are clearly seeing the need to allot more funds to address challenges in the coming year, and a substantial contingent realizes that investment is necessary, even if budget is not there yet. Malpractice Risk on the Rise Nearly half (49 percent) of 2017 respondents agreed that "the risk of legal malpractice suits has gone up significantly in recent years." Only 7 percent disagreed, with 44 percent not sure. In 2016, 40 percent had agreed; with agreement increasing more than 9 percent in 2017, malpractice concerns are apparently alive, well and growing. The Threat of a Decentralized or Outdated Docketing System Since one of American LegalNet's key areas of interest is calendaring and docketing solutions, the survey asked whether a "decentralized or outdated docketing system creates significant risk for my firm." Sixty percent agreed, 9 percent disagreed and 31 percent responded, "Not sure." The number agreeing increased nearly 4 percent from the 2016 finding. Risk 2015 2016 2017 Minimal 1% 5% 3% We have work to do 10% 13% 20% How would you rate your firm's overall capability to address and mitigate risk? Capable Responses 2015 2016 2017 Capable 40% 55% 40% More than capable 40% 18% 26% Extremely capable 10% 8% 10% CAPABLE TOTALS 90% 81% 76%

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