Introduction

Law firms process sensitive information on a daily basis. Confidential client data is targeted by hackers and insiders for a variety of reasons including financial gain or retaliatory purposes. When a law firm has a security breach—no matter how insignificant—its reputation is at stake and, therefore, its client base.

An effective cybersecurity compliance program works to identify, monitor, and correct this risk. While developing and implementing a cybersecurity compliance program can be challenging, it is critical for the safe receipt, storage, and transmission of confidential client data as well as to guard against the prevalence of security breaches.

Attorneys need to understand the importance of implementing a cybersecurity compliance program, the key components that make a successful program, and best practices for their law firm.

Why is a Cybersecurity Compliance Program Important?

Cybersecurity compliance programs offer numerous benefits to law firms such as protecting legal information, transferring and storing confidential client data, and safeguarding the financial assets of the firm. Without them, law firms are exposed to data breaches, extortion, theft, and significant reputational harm. While many law firms understand the importance of a cybersecurity compliance program, there are some law firms that are reluctant or slow in its adoption and implementation.

The problem here is that many criminals and hackers are aware of the firms that choose not to adopt such programs or that are slow to implement them. A further problem is the prevalence of data breaches by insiders.

For instance, according to Verizon’s 2021 Data Breach Investigations Report, privilege misuse breaches by internal actors accounted for 99% of incidents. This is the risk posed by “insiders” of the firm.

The information compromised for this breach was mostly personal information, accounting for about 65% of compromised data. While these incidents are motivated primarily by financial gain, their consequences can be far-reaching, including reputational harm and loss of future clients. Compliance programs are therefore a top priority for law firms.

Statistics on Compliance/Response Plans for Law Firms

Every year, the American Bar Association’s Legal Technology Resource Center publishes its Legal Technology Survey Report.

The 2020 Survey reveals a slight increase in law firms developing “incident response plans” for cybersecurity, going from 31% in 2019 to 34% in 2020. Maintaining a cybersecurity compliance plan is also a product of the law firm’s size: 77% of law firms with over 100 attorneys have such plans, with only 38% of firms with 10-49 attorneys, 23% of firms with 2-9 attorneys, and 14% of solo practitioners.

Cybersecurity compliance programs and response plans enable law firms to identify, prevent, and react to data breaches while reducing their liability exposure. As an example, in 2020, at least seven law firms have been victims of ransomware and had their sensitive data implicated. Such incidents could have been avoided or mitigated had there been a robust cybersecurity compliance program implemented.

Key Components of a Cybersecurity Compliance Program

Data breaches and cyberattacks can wreak havoc on a law firm’s reputation, financial assets, and fines and penalties.

It can also subject the firm to legal proceedings, namely to malpractice allegations if the claimants can show they suffered an injury due to the firm’s poor cybersecurity measures or inability to maintain a sufficient cybersecurity compliance program. Below are key components of a law firm’s cybersecurity compliance program:

• Common and accessible language: Compliance programs need to be consistent and drafted in a manner that is clearly understood and accessible by personnel at all levels of the law firm.
• Risk-based: The program must be structured in a manner that enables the law firm to assess and manage identified risks.
• Living document: Successful cybersecurity compliance programs are regularly updated and modified to account for changes in the legal and regulatory environment as well as changes within the industry.
• Cybersecurity awareness work culture: All personnel must be made aware of the importance of cybersecurity. The main reason for this is because many of the data breaches of law firms are committed by insiders.
• Legal counsel: Retaining legal counsel on behalf of the firm mitigates the severity of any risks identified and overall liability exposure of the law firm and its attorneys.
• IT security officers: These officers can perform a risk assessment of the situation and assess cyber-attacks.
• Crisis response plan and crisis management team: In case of breach, a well-detailed crisis response plan will outline the firm’s response that will be carried out by the firm’s crisis management team. This team will also manage social media accounts and the press in order to limit public attention.
• Regular training: Training enables personnel to not only understand the importance of cybersecurity but also to become trained in identifying fake email addresses, accounts, documents, or other issues that may pose a major problem to the law firm.
• Periodic audits: Conducting regular audits of the law firm’s financial systems and operations helps the firm identify weaknesses in its processes so that it can better respond to the resulting risks/threats to cybersecurity.
• Code of conduct on cybersecurity: The code of conduct for all personnel levels within the firm should emphasize the importance of maintaining strong cybersecurity practices.
• Detailed internal controls: A firm’s accounting practices should be reviewed and updated in an effort to detect and prevent cybersecurity risks.
• Software checks: A firm’s software should always be up-to-date and continuously monitored.

With the above components, the idea is to detect weaknesses and correct them before they cause a data breach.

Best Practices for Law Firms

In addition to establishing a robust cybersecurity compliance program, law firms should research and implement “best practices” to ensure cybersecurity within their law firm. A useful checklist of best practices for law firms maintaining cybersecurity compliance programs is listed below:

• Purchasing cybersecurity insurance
• Restrict access on a need-to-know basis or the “Principle of Least Privilege,” which states that someone should only be given the minimum privileges to complete a task. If someone does not need access, they should not have it.
• Adopt and use encryption software for sensitive data while in transit or at rest
• Always know where the sensitive and confidential information is stored
• Implement verification and authentication procedures for all users in the law firm
• Regularly monitor user activity and access logs
• Perform background checks on new personnel
• Employ greater scrutiny for third party transactions and transactions involving foreign parties
• Be on alert for suspicious activity, missing data, inconsistent info, etc.

“Cybersecurity threats have unfortunately become a major issue today, especially for lawyers and law firms. The problem is that these breaches are often not noticed until after the harm has been done – emphasizing the importance of cybersecurity compliance programs. If your firm's data has been compromised or you have reason to believe that it has been implicated in a cyber-crime, do not hesitate to contact an experienced defense attorney right away.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Conclusion

Cybersecurity compliance programs are a top priority for law firms, especially during an era of technological innovation, advances with the Internet, and novel viruses such as COVID-19.

These programs allow law firms to monitor their operations and internal processes for suspicious activities; identify weaknesses; and respond to threats. Because law firms are a depository for confidential client information, financial records, health records, and other sensitive data such as passwords, implementing a robust cybersecurity compliance program is imperative.

Law firms should be prepared to adopt and implement a cybersecurity compliance program within their operations to reduce risk and liability exposure.