Compliance Is Shifting: Why Law Firms Need Scalable Information Governance in the Age of AI and Increasing Regulation

Why Your Compliance Strategy Needs to Shift

Technology has made compliance around record keeping both easier and harder. Easier because you automate tasks that were manual 30 years ago. Theoretically less expensive, too (metal filing cabinets and larger offices being big purchases). But it’s also made it harder because there’s infinitely more data to manage and keeping client information safe is no longer about how well secured your physical office is. And client data is valuable - meaning bad actors online have more incentive to want access and you have to worry about cyber threats. 

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Because of these threats, clients are more concerned about their information being secure. Compliance becomes as much about meeting legal regulations as your clients’ peace of mind. Firms must adjust their compliance strategies to be increasingly proactive and resilient. 

SEC Disclosure Rules Are Just the Beginning

On July 26, 2023, the U.S. Securities and Exchange Commission (SEC) introduced new rules requiring public companies to disclose material cybersecurity incidents within four business days of their determination. The rules, mandated via a new Item 1.05 of Form 8-K, require companies to describe the nature, scope, timing, and impact of the incident. Additionally, they mandate annual disclosures in Form 10-K about the company's cybersecurity risk management, strategy, and governance.

While your law firm may not fall under the direct purview of the SEC, your clients might. Law firms can support their clients by helping them with the often-complex process of determining materiality, preparing for the four-day disclosure window, and documenting their cybersecurity policies and procedures.Compliance strategies that go above and beyond show that you understand client expectations and can match their same level of diligence

Where Law Firms Are Most Vulnerable

A fragmented information landscape is the biggest obstacle to effective governance. Future in Tech (FiT) believes a unified view of data is crucial for risk management, but most firms are still struggling with key components of a unified data landscape. 

• Fragmented storage: Data is scattered across multiple repositories, from a document management system (DMS) and SharePoint to OneDrive and offline archives.
• Lack of clear policy enforcement: Without automated workflows, it’s difficult to know what’s being deleted, what's being retained, and who is approving these processes.
• Shadow data: Old case files, drafts, and duplicate documents sit in forgotten folders, creating unnecessary risk and inflating expensive cloud storage costs.
• Missed deadlines: Responding to discovery requests or audits can be slow and painful when information isn’t organized and accessible from a single source.

Information Governance Is the Compliance Backbone

At its core, information governance is the proactive framework that puts policy into practice. It ensures your retention and disposition policies are understood and enforced consistently across all your systems.

According to FiT’s VP of Sales, one of the biggest challenges for law firms is "enforcing policy across multiple repositories." FiT's platform provides this backbone by giving firms the tools to manage mass disposition workflows. By creating order out of chaos, our information governance platform directly addresses the security, privacy, and compliance expectations that clients demand.

AI Readiness Is the New Compliance Frontier

The future of legal tech is being shaped by AI, but as FiT's VP of Operations, James Higdon, points out, “AI is only as good as the data it’s trained on.” Poor information governance directly undermines your ability to leverage AI effectively. While the practice of retaining every document revision and version is often seen as a necessary feature in the legal field, it frequently results in duplicates and triplicates that complicate your AI training. As Higdon puts it, “You don’t want to train AI on six drafts and three duplicates.” A strong information governance strategy ensures your data is a reliable asset, not a liability, when preparing for the next wave of legal innovation. And an effective policy that removes duplicates allows the AI workplace to function at its best.

5 Questions to Ask When Evaluating Your Information Governance Strategy

• Are retention and disposition policies consistently enforced across all systems? Without consistent enforcement, you risk non-compliance with regulations, exposing your firm to legal liability, fines, and reputational damage. A disorganized approach to data management can also make it difficult to respond effectively during a legal discovery or audit.
• Do we know what data we have—and where it lives? Having a clear understanding of your data landscape, a process also known as data mapping, is foundational to any successful governance strategy. This knowledge allows you to protect sensitive information, make better business decisions, and avoid unnecessary storage costs.
• Can we respond to client, regulatory, or internal audits within 24 hours? Rapid response is a key indicator of a mature information governance program. The ability to quickly locate and produce documents demonstrates a robust and defensible process, reducing the time and cost associated with audits and litigation.
• Are our systems integrated or stitched together with manual workarounds? Manual workarounds are a major source of risk and inefficiency. They lead to inconsistent data, higher error rates, and a lack of traceability, which can undermine your entire information governance strategy and expose the firm to compliance and audit risks.
• Could we safely train an internal AI model on the data we’ve got? High-quality data is the most critical component for effective AI. Training AI models on disorganized, inconsistent, or duplicate data can lead to biased, inaccurate, and unreliable outputs—a classic case of "garbage in, garbage out."
  
  

Easily Build Resilience into Your Compliance Strategy with FiT

The market is changing, and your firm needs to be adaptable. FiT's platform is designed to make compliance enforcement both simple and efficient. It allows you to build and implement complex governance workflows in three clicks or less, ensuring your firm can not only meet but exceed regulatory requirements without a significant investment of time or resources. This powerful simplicity unifies your data structure, reduces risk, and boosts agility for the future seamlessly, without the need for custom coding.

Ready to transform your firm’s compliance posture for the future of legal tech?

Book a demo with FiT and discover how to enforce policy, reduce risk, and build agility in three clicks or less.

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