Tuesday, November 10, 2015

Legal Conflicts, Legal Risks, LegalKEY

Conflicts continue to cause considerable concerns. Yesterday, we noted a story of one firm embroiled in a bit of controversy, with conflicts checking software playing a role.

A year ago, we noted another public story of a firm disqualified from representing a client worth over $12m in billings. At the time, that firm said it: "... made mistakes in the conflict check process for the merger, during which they used computers to run checks on more than 15,000 clients to screen for conflicts."

Conflicts complexities and surprises can affect any firm. So metaphorical stone throwing can be a risky proposition. However, there is a common thread in both instances: LegalKEY. (That these two firms use LegalKEY software is also public information, easily surfaced with the help of a search engine.)

LegalKEY Looks Locked
For nearly two decades, LegalKEY software has helped firms manage conflicts. But today, years after the last enhancements have been made to this product, and with future development concluded, the product is starting to show its age... and creating new potential risks.

For example, the pending end-of-life of Windows Server 2003 and 2008 will create significant  maintenance and support issues for firms. What’s more, growing evidence suggests that in common use data quality issues often surface in the product. In this environment, firms are increasingly and urgently pursuing new paths for conflicts management.

Third Party Perspective
The experts at InOutsource, who’ve worked with firms for over a decade on business intake, conflicts management, and other risk initiatives, have weighed in with their perspective on the technology risks. See Eric Mosca, CRM's piece: "Is LegalKEY Putting Your Firm at Risk" --
  • "LegalKEY has not kept pace with evolving industry standards and best practices. Firms using LegalKEY often cite their frustration with its reporting capabilities, noting the lack of tools to analyze hits, and filters that do not work as expected. Because conflicts reports are paper or PDF-based, they are difficult to review in sufficient detail, with no mechanism to centrally compile feedback from multiple stakeholders."
  • "Another challenge firms often cite is the “black box” nature of LegalKEY’s native data integrations."
  • "Similarly, integrations with external databases such as Dun & Bradstreet or OFAC are typically a bit of a mystery, leaving firms unclear as to what information is updated and with what frequency. This lack of visibility makes it difficult to know whether firms are using the most accurate, up-to-date data for their conflicts searches."
  • "As external factors affecting maintenance and support come to a head, and intrinsic software issues continue to present operational challenges, firms would be well advised to begin looking at other options now."
Note: InOutsource offers an assessment program for firms looking to understand their current risk exposure with LegalKEY.

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