More than 80% of legal leaders agree that third-party risks arise due to negligent onboarding and risk management. There are not enough risk controls to ensure continuous compliance. Law firms are working on establishing business-driven methods for ongoing risk management analysis.
Over the last few years, we have seen dynamic changes in the industry and the recent COVID-19 events have promoted vendors to focus on data access control and risk management features.
There’s a lot of pressure from consumers and shareholders about non-IT related risks in legal departments and it is causing organizations to pause and think about adopting sophisticated legal tech solutions, which will improve visibility, to add a layer of intelligence. Third-party risk is identified as a top concern in legal compliance and third-party networks are evolving at unprecedented rates among organizations.
It is also important to consider business reputational risks, vendor demographics, ESG information, etc. when investing in modern legal tech solutions. Law firms need to balance the risks and benefits of using third parties for delivering legal services. Fortunately, there are many approaches to centralize structures and ensure successful technology implementation.
Businesses that are experiencing pandemic-related third-party disruptions are working on mitigating resiliency risks, and are re-assessing tier-one third-party relationships. These areas will not only address concerns regarding financial stability but also help with workload balancing by carefully monitoring relationships.
Fragmented third-party risk management is a major challenge and to fight this many companies are reducing their exposure by unifying security and by executing a single view of risks across third-party populations. C-suite leaders are investing time in collecting intelligence and focusing more on innovation, growth, and creativity in the legal sector.
Businesses are tasked with the challenge of finding talented professionals in areas such as business, risk, and procurement. Without proper legal teams, departments will struggle to assess true exposure when it comes to third-party risk management and legal business disruptions. Hence companies are turning towards TPRM tools that function as an aid to the internal teams.
One good example of how organizations are improving third-party risk management is through the use of internal utility tools which can process and package data for executives and help make informed decisions.
Third-Party Risk Management (TPRM) Tools
Third-party risk management tools include products specifically designed to support TPRM workflows across multi-risk terrains. They address issues related to supply chain management, business continuity risks, data management, legal compliance, anti-money laundering, and anti-corruption.
The top third-party risk management (TRPM) tools in the industry are currently Thomson Reuters CLEAR, Atmos Platform by Axis Security, and ProcessUnity Vendor Risk Management. Many other players are emerging in the industry and we can expect further developments soon.
Risk leaders now understand that the key to third-party risk management is not just using technology but rather, adopting a centralized, proactive approach to managing third-party risks in effective ways. Reassuring customer trust, confidence, and growth as well as strengthening businesses.