In the wake of the global financial crisis, companies are facing increased regulatory pressure go. To tighten regulatory controls in the United Kingdom, the British government restructured financial regulation and divided Financial Services Authority (FSA) in the two regulatory bodies – the Financial Conduct Authority and the Prudential Regulatory Authority. Across the pond, the US put on the Dodd-Frank Wall Street Reform and Consumer Protection Act, which changed the American financial regulation and almost every part of the nation’s financial services industry. Following this sweeping regulatory reform, companies in regulated industries such as finance and healthcare, will be high-diligent with their plans.
Today, industry regulators in the UK and the US are hard to investigate all allegations of corruption and bribery, especially in relation to abroad. Subsequently, the number of investigations and lawsuits has increased significantly, and companies face heavy fines for noncompliance – and even risk criminal prosecution
When the trial takes place, corporate legal departments often need to provide large amounts of information to satisfy . regulator requests. The traditional ways of collecting and collating the information and reviewed for relevance are no longer feasible. Legal departments need to have the ability to review information quickly and cost effectively, so they can respond well to regulatory reports.
Law firms may not be the ideal choice to manage large amounts of information and data in a timely and cost-effective manner. The collection and ESI processing, forensic analysis, storage, database management, hosting and software configuration and maintenance are not legal that can be provided for any legal experts. Legal outsourcing providers (Legal Process Outsourcing) are better suited to handle these tasks because they typically offer advanced technology and greater emphasis on these skill sets, which are now required for both litigation and regulatory investigation. Seasoned LPOs are geared up to provide exactly this type of determination of costs and timelines for disclosure and can work with a fixed budget. This provides greater certainty and allows customers to control costs particularly in complex trials and litigation cases.
At the same time, the courts are mandating wider and deeper coverage of electronic documents in legal proceedings and explanation of what steps the parties have begun to recover potentially relevant e-documents. Again LPOs are well equipped to provide end-to-end data management, allowing customers to outsource security document management and audit in regulatory matters. Some customers are even setting up panels of LPOs and require external law firm to work collaboratively with these LPOs to ensure that potential cost is right and proper to reality.
The global financial crisis has forced the company to develop new approaches to cost-effectively and efficiently handle investigations and judicial proceedings. As more companies look to manage the associated costs and risks arising from official control, document review and e-discovery are likely to be a growth area for LPOs.