Legal professionals manage an abundance of data, and the bedrock of the legal business is confidentiality. Clients must trust that their attorney-client privilege ensures their shared information remains secure. Regrettably, the frequency of data violations is rising, posing a significant threat to the privacy of clients’ sensitive data and potentially harming the reputation of law firms. The ABA discloses that over a quarter of law firms have incurred a data breach in the past. Given this reality, cybersecurity must be a pressing concern for law firms. This article outlines why attorneys should safeguard their clients’ information underscores the primary threats confronting an average law firm, and offers essential strategies for bolstering your firm’s cybersecurity policies.
The Importance of Cybersecurity for Law Firms
Law firms are tantalizing targets for potential cyber criminals. These organizations store priceless, confidential data and may even be custodians of trust accounts overflowing with their clients’ funds, rendering them susceptible to theft and exploitation.
In such breaches, law firms face a conundrum: comply with the criminals’ demands and suffer significant monetary losses, or risk the public exposure of their clients’ sensitive information.
In some instances, firms might have additional obligations to safeguard specific types of information, like personal health information, as stipulated by HIPAA or as mandated by New York’s SHIELD Act, which requires law firms to establish “reasonable” security measures to shield their clients’ data.
Data breaches can unleash catastrophic repercussions for law firms and their clients alike. The firm risks potential penalties and litigation, and its reputation incurs a severe blow. The message is crystal clear: no firm, regardless of its practice area, size, or location, can risk a data breach.
Protection Obligations of Lawyers
During the ABA Annual Meeting in August 2014, the ABA ratified a resolution on cybersecurity. It “promotes all private and public sector organizations to develop, implement, and uphold a suitable cybersecurity program that aligns with applicable ethical and legal responsibilities and is adapted to the characteristics and extent of the organization and the data and systems to be protected.” This resolution envelops all law firms.
However, amidst resolutions, firms comprehend it’s their ethical and professional obligation to ensure the safety of their client’s data—and, in case of a breach, promptly communicate it to the necessary authorities.
For instance, RI-381: Syllabus of the Michigan Bar Association (MBA) mandates, “Lawyers have ethical obligations to understand technology, including cybersecurity, take reasonable steps to implement cybersecurity measures, supervise lawyer and other firm personnel to ensure compliance with duties relating to cybersecurity, and timely notify clients in the event of a material data breach.
References: MRPC 1.1, 1.3, 1.4, 1.6, 5.1, and 5.3; R-1, RI-86, RI-187, RI-245, RI-249, RI-313, RI-344, and RI-355.“
That said, your firm’s specific liabilities might differ depending on the nature of the information—for example, if it falls under HIPAA.
The Cybersecurity Risks Encountered by Law Firms
Sensitive information can be compromised in several ways. Human error often emerges as a primary factor, such as when attorneys misplace their computer, smartphone, or briefcase or they become victims of theft. Simultaneously, firms may also endure an online hack; their website could be compromised or experience physical intrusion.
Generally, the larger the firm, the increased risk it bears. Based on ABA statistics from 2021, 17% of firms with up to nine employees experienced a data breach, 35% with 10 – 49 employees, and 46% with 50 – 99 employees. This trend is hardly shocking – the bigger the firm, the more sensitive data it likely retains.
Striking Strategies for Law Firm Cybersecurity
Having addressed the theory, let’s delve into how firms can fortify their cybersecurity strategies and maintain the integrity of their clients’ confidential data in the future.
Conducting a Risk Assessment
Undertake regular risk assessments to detect if your firm possesses critical vulnerabilities that could jeopardize your clients’ data privacy. No firm wishes to discover a latent risk of a data breach. However, it’s paramount to identify these blind spots before a breach occurs, which allows you to take the necessary preventive steps.
Consider engaging a third-party service to perform an independent audit, assisting you in detecting cybersecurity gaps, developing an Incident Response Plan, implementing enhanced security measures, and training your staff on the latest best practices.
Adopting a cybersecurity framework can provide an understanding of your firm’s risk potential and showcase your security qualifications. For instance, the Center for Internet Security (CIS) framework instructs firms to demonstrate their data security proficiency to prospective clients.
Securing Law Firm Cybersecurity Insurance
Cybersecurity insurance extends additional protection to firms during a data breach. Although insurance cannot directly secure the stolen data, certain policies compensate for specific financial impacts of a breach, such as fees associated with the restoration of data, income loss due to downtime, crisis management, or forensic investigations.
Alternatively, another feasible option is third-party cyber liability insurance that shields firms from liability claims in a data breach.
Developing a Comprehensive Law Firm Cybersecurity Policy and Incident Response Plan
Unfortunately, many firms lack rigorous cybersecurity policies and incident response plans. The ABA reveals that only 53% of firms possess policies to manage the information/data retention held by the firm, while merely 36% have an incident response plan. A staggering 17% of firms need more procedures, with 8% unaware of cybersecurity policies.
Firms cannot simply adopt a one-fits-all approach to implement a cybersecurity policy. Each policy must be uniquely designed to cater to the firm’s specific needs. Consequently, each procedure will differ. Firms must thoroughly audit potential risk areas, create a tailor-made policy considering these vulnerabilities, and ensure that each team member understands their obligations related to cybersecurity.
Developing a rigorous cybersecurity policy is only possible if the staff is informed about it, understands it, and knows its role within its framework.
Utilizing Cybersecurity Tools
Firms must employ comprehensive, state-of-the-art tools to bolster their data security. These tools vary in complexity, from spam filters to software-based firewalls to hardware-based firewalls. However, getting the right tools is merely the first step—firms must also enforce reliable data encryption and protection, such as multi-factor authentication and encrypted data storage.
Collaborating With Practice Management Providers who Prioritize Security
When choosing practice management providers, cybersecurity must be a key consideration. The best providers understand its significance and incorporate cybersecurity best practices into all their services.
Final Thoughts on Cybersecurity for Law Firms
While achieving 100% breach-proof security is impossible, firms can bolster their cybersecurity strategies and reduce their risk. The key is to give cybersecurity the critical importance it deserves before costly missteps occur.
