We are re-publishing our Survey Results with working links! :)
RION Corp. –
Conflicts Analysis Survey Results March
2, 2015
PURPOSE &
OBJECTIVES
Our Founder and President has worked in the legal industry
for 10 years. As a Conflicts Analyst, he found himself frustrated with the
tools available, as well as the wide variety of conflicts procedures at
different firms where he worked. He set forth on a quest for a better conflicts
analysis tool, as well as an industry standard.
He founded RION Corp. (RION stands for Real-time Intake Optimization for
New business.,) in June 2014, and proceeded to develop a software product in
line with the best practices he learned and knew to be successful. The issue
still stands that there is no standardized process for conflicts, and we
decided to take a survey of the conflicts community through LinkedIn.com to
establish a baseline to begin forming a framework that all law firms can use to
improve efficiency and accuracy of conflict checks globally.
METHODOLOGY
We used a ten-question survey and distributed it
electronically (via SurveyMonkey) to our contacts and groups involved in
Conflicts Analysis around the world. The survey was open from January 11, 2015
to February 28, 2015; and we gathered 52 responses from 3 countries. We
analyzed our results using IBM SPSS Statistics v22, and Microsoft Excel.
FINDINGS
FIRM STATISTICS: Roughly
twenty percent of attorneys at a given firm will need a conflicts check each
day.
On average, a conflicts staff member will process
approximately 11 checks per day (we know a check can vary broadly on how much
time it takes), and we can see that if there is an influx of checks, for
example with a lateral hire, additional stress will be experienced by the staff.
We also notice that as the size of the firm increases, the
coverage of conflicts staff per attorney decreases:
# of Attorneys
|
0-100
|
101-300
|
301-600
|
600+
|
# of Conflicts Staff
|
3
|
1.62
|
1.57
|
1.44
|
PROBLEMS: We noted
that the only firms to report over-staffing (less than 5% of all respondents)
had over 600 attorneys. We also found that firms of this size had the most
consistent reports of “loose” adherence to conflicts procedures. Unfortunately,
firms of this size can also have the most to lose from poor quality conflicts
checks. The high cost of poor conflicts procedure adherence was outlined
recently for one
firm in the Washington Post, who lost a client that paid $12M in legal
services, and paralegals had spent over 20,000 hours on the case – only to find
out that a paralegal had accidentally left off two entities while compiling a
list of potential conflicts before accepting the business. They ended up
representing both the plaintiffs and the defendants in a lawsuit about false
advertising.
POLICY ADHERENCE: Our survey permitted respondents to anonymously
comment about the requirements at their firm, and how frequently they adhered
to the requirements. The findings indicated that in times of high demand, the
staff must deviate from the procedures in order to maintain timeliness in
conflict reporting. Of the procedures we surveyed, the findings of procedure
adherence (from high to low) is as follows:
Adherence
to Conflicts Requirements*
|
|
97%
|
Use
of Conflicts Software
|
83%
|
Searching
3rd Parties
|
82%
|
Engagement
Letter required to open a new client matter
|
76%
|
Use
of Workflow Tool
|
74%
|
Perform
Corporate Family Tree Search
|
74%
|
Search
Executives
|
73%
|
Conflicts
Attorney clears Conflicts
|
70%
|
Checks
against anti-money laundering, sanctions data bases
|
67%
|
Run
Credit Checks on new clients
|
63%
|
Corporate
Family Tree Searches for Lateral Hires
|
57%
|
Maintain
client relationship library
|
* We anticipate more research
in this area in future survey initiatives.
STAFFING: Firms with
less than 100 attorneys say they routinely utilize other departments to handle
high-demand for conflicts checking. One third of all firms report being understaffed,
and of those a majority see value in outsourcing conflicts in periods of high
demand. A majority of firms with more than 300 attorneys (who report adequate
staffing) concur with the concept of outsourcing in periods of high demand.
Three quarters of firms with over 300 attorneys who report themselves as
understaffed also see value in outsourcing conflicts checks in periods of high
demand.
The resounding report from firms of every size, regardless
of their staffing status (understaffed, overstaffed, adequately staffed), is
that while the prospect of outsourcing may be useful in an ideal world, it
seems there are several concerns about moving in this direction including:
·
Firm-specific needs (procedure)
·
Time for training
·
Skill level
·
Executive Buy-In
·
Ethics
·
Access to internal conflicts checking systems
and data by an outside vendor
It seems there may be room for an outsourced option once
these kinds of concerns can be addressed. The outsourcing vendor would have to
prove itself in outstanding ethical quality, and must provide a level of
conflicts checking that exceeds expectations at every firm. This would require
an agreeable standardized process for conflicts analysis.
SOFTWARE: We noticed that Elite and Intapp are the most
popular, and the firms that seem to be moving from one program to another
prefer to move-in with these two. Intapp has a strong standing in second place;
collectively these two hold the market at 62% of implemented or about to be
implemented in conflicts departments.
A total of seven software products were reported including
6% proprietary implementations.
OUTSIDE RESEARCH: The majority of outside research resides
with Dun & Bradstreet (over 35%), Lexis Nexis takes a strong second place
with 21%. The other contenders for top 5 include Hoovers (19%), and The
Internet and Google tied at 17%.
The full list of reported entities includes is 28 sources.
We note that some of these entities are specific to type of law or region of
practice, but may be worth considering to add robust practice your firm’s
conflict checking procedures:
Rank
|
Entity
|
1
|
Dun & Bradstreet
|
2
|
Lexis Nexis
|
3
|
Hoovers
|
4
|
Internet
|
5
|
Google
|
6
|
Bloomberg
|
7
|
OneSource/Avention
|
8
|
Westlaw
|
9
|
Bureau van Dijk
|
10
|
Pacer
|
11
|
Acuity
|
12
|
Captial IQ
|
13
|
10K Filings
|
14
|
Courthouse News
|
15
|
Knowledge Management (SAP)
|
16
|
Thomson Reuters
|
17
|
Accurint
|
18
|
Global Data
|
19
|
Edgar
|
20
|
TLO
|
21
|
OFAC
|
22
|
ABA
|
23
|
Corporations Canada
|
24
|
BC Registry
|
25
|
Open Corporates
|
26
|
Courtlink
|
27
|
Monitor Suite
|
28
|
Amber Road
|
AUDIT PROCEDURE: We asked if firms are permitted to reopen
matters for the purpose of audit. The results were pretty clear: a full half
said yes. 21% reported that they don’t handle audits this way, and 15% said
they handle it some other way. Some firms bill to one internal number to track
time spent on client/matter audit.
CONCLUSIONS
·
Procedure Adherence: When conflict checks are in
high demand, adherence to procedures suffers.
·
Staffing: When conflicts checks are in high
demand, a majority of firms would consider using an outsourced option; though
there are concerns about the adequacy of this option.
·
Software: 7 brands reported, majority held by
Elite and Intapp (62%). 6% noted a proprietary system.
·
Outside Research: D&B and Lexis Nexis are
most frequently used.
·
Audit Procedure: Half of firms are advised to
reopen matters temporarily for auditing purposes.
We found a few trends within firms that point to the beginning of a standardized process for conflicts checking. We noticed that when conflicts departments are in high demand the accuracy of the checks goes down, and that outsourcing is one option that is interesting but deserves more research.
RECOMMENDATIONS
• It
is the recommendation of RION Corp. to establish a standard framework for
conducting conflicts of interest research at law firms.
• We
have plans to create regionally based chapters for discussing and agreeing on a
standard for the industry: C.A.S.E. (Conflicts Analysis Standardization Effort)
• After
this framework is established, we will insure our software product and
outsourced staffing options for conflicts are aligned and fine tuned to be the
gold standard in this industry.
CONFLICTS ANALYSIS
STANDARDIZATION EFFORT (CASE)
For more information on CASE, please join the RION Corp mailing list for
updates.
Thank you for reading our report. If you have any questions
please contact:
Cori Blackburn: cori.blackburn@rioncorp.com
Ryan Vago: ryan.vago@rioncorp.com
