Today, supply chains span the entire planet. From manufacturing and retail to the tech sector and legal services, organizations in every industry rely on a series of third-party vendors to help them deliver value.
Like other organizations, law firms can no longer afford to ignore vendor management. Law firms now rely on a wide range software products and services delivered by third-parties. They can range from SaaS and CRM vendors to marketing agencies and even office supply companies.
Without proper vendor compliance solutions in place, third-party organizations may neglect certain standards. This can damage the efficiency of your operations, increase unnecessary costs, and even put your law firm at risk.
According to one study, 61% of U.S. organizations surveyed said they had experienced a data breach caused by a third party vendor.
To initiate vendor compliance standards, you must establish and document a list of requirements by which all your vendors must comply to do business with you. These requirements may include security standards, privacy standards, ethical standards, and even sustainability standards. You must also establish and enforce penalties for vendors who don’t meet these standards.
The easiest way to begin a vendor compliance initiative is to rely on business process outsourcing specialists to help you create a policy.
If you’re still unsure if vendor compliance is relevant to your law firm, here are 5 reasons why you should create a policy:
1. Supply Chains are Getting Longer and More Complex
When you work with a third-party vendor, you may deal directly with one of their representatives. But they themselves may have their own series of third-party vendors that help to deliver products and services to you.
Supply chains now reach across borders and jurisdictions. Without a vendor compliance policy in place, there’s no way to ensure every vendor in your supply chain is complying with laws or security specifications.
2. You Need to Control and Eliminate Costs
Creating a vendor compliance policy gives you more visibility into how your vendors operate. It can help you build an understanding with your vendors of what constitutes value. More importantly, your policy will help you identify invisible costs, as well as which vendors you need to part ways with.
3. You Can Make Vendor Management More Efficient
It isn’t uncommon for law firms to be in the dark about how many or which vendors they are using. Creating a vendor compliance policy forces you to take stock of all your vendor relationships. You can then create a program for managing those vendors, which will make the process more efficient.
You’ll also be able to identify new vendors to fill gaps and ensure every agreement you make with a vendor is mutually beneficial.
4. You’ll Mitigate Risk and Become More Compliant
Just because your law firm is complying with government regulations, that doesn’t mean your vendors are. Issues like GDPR compliance could still affect your firm, even if you’re based in the U.S. and you only service U.S. clients. To ensure you don’t run afoul of any regulations, you need to establish a policy that enforces compliance among your vendors and their supply chains.
But the most important aspect of your vendor compliance policy is your vendors’ adherence to comprehensive data security and risk management. 60% of organizations are aware of third-party risks, according to one report, but very few are doing enough to mitigate that risk.
Third parties often have access to your networks, posing a risk to data protection. They may even be sharing data with other suppliers and external partners.
5. You can Measure Performance More Effectively
When vendors are made to adhere to specific standards, it becomes easier to identify when they deviate from them. Vendor compliance will help you identify which of your vendors are performing well and which aren’t. It can also be a tool for discovering opportunities for increased efficiencies in your vendor relationships.
Get Peace of Mind When it Comes to Compliance
Even if you’re a small law firm, there is no reason to avoid vendor management and vendor compliance. Don’t assume you’re safe because you’ve been working with the same handful of vendors for years. All it takes is one phishing email sent to a vendor for your network to become compromised. The regulatory environment for law firms is constantly changing as well.
To get the peace of mind that comes with compliance, trust in an experienced back-office provider to help you establish your vendor compliance program. Your BPO experts can assess your current vendors, provide you with expert advice, and help you implement cost-effective vendor compliance solutions. Get compliant today with RiskView.