Law firms have an obligation to stay compliant with a host of regulatory requirements on the federal, state and local levels, depending on the jurisdiction and area of practice.
In addition to the core work of legal filings, retainer agreements, complaints or petitions, contracts, discovery requests and other practice tasks, firms are required to keep abreast of myriad changing business rules and regulations related to data security, anti-money laundering laws and conflicts of interest. These efforts can be complex, time-consuming and costly to administer.
Fortunately, law firm practice management software can help ensure compliance with regulatory requirements by providing a range of information management and accounting functions that cut the time and cost involved in regulatory compliance.
Below are some examples of key compliance obligations that law firms face and how effective technology aids in staying up to date with them.
Contracts, Agreements and Forms
By far the greatest compliance-related focus for law firms surrounds contracts, agreements and legal filings – the very center of the practice of law. With advanced document automation powered by HotDocs, CARET Legal can boost the productivity power of law firms across a variety of activities.
Having HotDocs integrated with the CARET Legal environment simplifies and speeds up the drafting process, allowing attorneys to generate documents in a fraction of the usual time by answering a few simple questions.
HotDocs makes it easy to adapt to constantly evolving compliance regulations. When a compliance regulation changes, processes and documents must also be updated to remain in compliance. This involves editing existing documents, removing or adding clauses and checking the information conveyed in the document. With HotDocs, a one-time change to update templates assures that all staff have access to the most current and compliant forms and documentation.
Enterprise Advance – the combined power of CARET Legal practice management and HotDocs document automation – allows your firm to produce high-quality compliant work product.
Law firms handle a large amount of confidential client data. Keeping data secure and protected from unauthorized access or cyberattacks is critical. According to the 2022 ABA Cybersecurity Tech Report, 27% of law firms have experienced a form of security breach. Don’t allow your firm to become a data breach statistic.
Compliance efforts include implementing adequate security measures, training employees on best practices for data security and staying up to date with evolving cybersecurity threats.
When you choose to manage your practice in the CARET Legal environment, our cloud security helps you sleep at night, knowing that client data is protected. Our experienced security team employs state-of-the-art technology to detect, investigate and stop threats before they can impact your firm’s operations.
Conflicts of Interest
Law firms must manage conflicts of interest to ensure that they are not representing clients with interests that are in opposition to each other. This can be particularly challenging for firms that work with large corporate clients or operate in multiple practice areas.
CARET Legal helps identify conflicts. To learn how we do it, read our knowledge base post “How Do I Conduct a Conflict Check?”
Anti-Money Laundering Laws
Law firms must comply with anti-money laundering laws and regulations, which require them to conduct due diligence on clients and report suspicious activities to regulatory authorities. Money laundering is relevant to law firms because they are often used as a conduit for laundered money. This can pose a compliance risk for law firms, as they can be held liable for knowingly facilitating money laundering.
To reduce the risk of improper financial activity by a client, firms must identify the client and pay due diligence to its requests and behavior. Law firms should also collect information about the client’s source of funds and perform background checks to ensure that the client is not involved in any illegal activities.
When establishing and enforcing firmwide policies and procedures on anti-money laundering compliance, these should be designed to ensure that all employees know their obligations under the law and understand how to identify and report suspicious activity.
Caret Legal offers a complete business accounting system and detailed financial analytics and reporting, allowing you to identify out-of-bounds activity or unusual transactions. The new Closing Period feature enables firms to restrict users from altering financial transactions after the accounting period is closed.
Stay on Top of Compliance with CARET Legal
Effective practice management technology can help law firms streamline compliance processes, reduce the risk of compliance violations and free up resources to focus on core legal work.