March 15, 2022

Is Your Legal Department Prepared For A Data Breach?

The security of clients’ data should be the top priority for any business, especially if it’s a legal profession. The American Bar Association’s (ABA) Ethical and Model Rules of Professional Conduct mandate lawyers to make every reasonable effort in protecting the client’s information, otherwise face serious legal implications if a breach occurs. 

The evolution of technology, and its day-to-day advancement has brought everything to our fingertips, making life more enjoyable and convenient. However, the technological breakthroughs are equally empowering the perpetrators, who are now making businesses more susceptible to the threat of cyberattacks. Companies, law firms, and private practising attorneys have faced serious legal implications, and financial losses, resulting from data breaches due to their lack of legal compliance with data privacy rules. IBM Security, estimated in their Cost of a Data Breach Report 2021 that organizations with a low level of compliance failures, resulted in breaches costing over 50% loss to the company. This added cost also includes lawsuit fees and hefty penalties imposed due to a lack of compliance.

Cybersecurity incidents have grown manifold, threatening the public and private sectors, and ultimately the security and privacy of the American people. President Biden’s May 2021 Executive Order, “Improving the Nation’s Cybersecurity,” discussed the surge in the cyber-crime attacks on the public sector, which has increased in recent years, as well as the direct costs of its serious implications have grown exponentially. The report attributed the ballooning of the direct cost, as the work has switched over to a remote environment, enforced by the Covid-19 pandemic. Also, the legal departments working remotely are not entirely technologically equipped, therefore facing data infringement issues. While the pandemic is not over yet, remote working is helping to keep matters moving, although it has other negative effects as well. Often, responding to data privacy issues in remote working takes longer than usual. For instance, if a company’s legal department has more than 50% of its workforce working remotely, the company take almost two months long to identify the breach and take effective measures to contain it. 

So, what procedures and robust policies need to be put in action to mitigate a firm’s risk of data violation and keep clients’ data as secure as possible? It’s crucial for all, especially for a legal professional to stay up to date with and understand the latest technological tools available in the market. But the second question that pops up is with the evolution of technology, which one is best to get hold of?

Below, we have outlined the fundamentals of data security that a law firm needs to implement to prevent security breaches. Read our detailed guideline on some of the best practices for keeping your firm’s data secure; a summary of ethical and regulatory guidelines about tech; providing a brief list of data security risks and information on resources that can help uptick the data security of your law firm.

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What is a risk to the data security of a law firm? 

Keeping a law firm’s data secure is a crucial task, and its breach can cause serious implications for you and your firm. For cyber-criminals and hackers law firms are an easy target for breaching their data security quite easily. A law firm’s data includes sensitive information of the clients and other valuable information of the firm including the intellectual property rights of clients, trade secrets, details of merger and acquisition deals, and confidential attorney-client-privileged data can attract the perpetrators to your firm

Despite the numerous risks, law firms are mandated to protect clients’ data. If a cyber-criminal infringes your firm’s security, the consequences can be lethal including:

  • Leaking of Personally identifiable information (PII) or business information in the market, or on social media
  • Inability to access confidential firm information due to ransomware 
  • Lawsuits, and hefty penalties
  • Loss of client’s trust in your firm

 What are your firm’s ethical and regulatory  obligations?

As an attorney, you are ethically and professionally bound to protect clients’ data and report any error if a breach occurs. The American Bar Association (ABA) Rule 1.6: Confidentiality of Information, enunciate that lawyers “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client”. Besides that, the ABA provide a detailed guideline through its Ethics Opinions - Securing Communication of Protected Client Information and Lawyers Obligations After an Electronic Data Breach or Cyberattack) - for legal professionals on how to address cybersecurity issues.

It’s quite pertinent to keep ethical responsibilities and best practices in mind while adding LegalTech to your firm’s digital toolkit. In compliance with the ABA rules, a law firm must take reasonable steps to protect a firm’s data by implementing a robust cybersecurity policy, adding layers of security i.e. Two-factor authentications on mobile devices to access confidential files, and vetting LegalTech software before use. 

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Best practices for protecting a law firm’s data

Surprisingly, there’s no single step procedure to adopt for protecting your law firm’s data. However, you may need to undertake reasonable security steps that ensure numerous checks along with the use of the latest LegalTech tools for enhanced security. You may also consider adopting the following best practices for your firm’s security.

Create and implement a robust data security plan for your firm

  • Develop an easy-to-follow data security plan and share it with the team members before being implemented to have their valuable feedback. 
  • Train employees to deal with security breaches and introduce extra layers of security such as using two-factor authentication for logins and only using apps vetted by the firm. 

Encrypt your data 

Always search for the latest software that will take care of encryption for you. For example,  there are multiple applications available in the industry using the best practices (such as  HTTPS and TLS) to protect, store and transmit your firm’s data securely. 

Ensure your communications is secured

 Hackers, often intercept the data in your communications. To enhance your firm’s data security policy, you should review any loopholes across your communication channels and try to mitigate them, for example by encrypting emails and only sharing password-protected documents. You can also look for communication apps, offering end-to-end encryption for internet calls, and messages.  

Don’t provide passwords and access control to an unauthorised person

Good Firm 2021 research revealed that 30% of data breaches are due to password leaks and owing to poor password practices and weak password setups. Everyone on your staff doesn’t need to know about your passwords. Be careful, when sharing the passwords and limit the access of new users to only the viewing specific matters.

Conclusion

As technology continues to evolve with each passing day, hackers will come up with new ways of breaching data security. Law firms should proactively work to create a cybersecurity plan to lower the risk of an attack on their system. Improving old data security plans and integrating new LegalTech tools can help law firms to avoid the negative consequences of a cyber-attack or data breach.