Peace of Mind: How To Ensure Your Outside Law Firm is Cybersecure

by MERITAS - Law Firms Worldwide
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MERITAS - Law Firms Worldwide

Even as the internet has transformed how business is done, it has also given rise to a number of challenges. One of the foremost of these is cybersecurity. Highly publicized incidents over the past several years have ranged from a breach of 3 billion Yahoo user accounts in 2013-2014 to the hack of email addresses, user names, and passwords of 150 million customers of Under Armour’s MyFitnessPal app in 2018.

The danger is not just something the biggest companies need to worry about. In 2017, 61% of small to mid-sized companies said they had experienced a cyber attack in the past 12 months, according to a Ponemon Institute study, The State of Cybersecurity in Small and Medium-Sized Businesses, sponsored by Keeper Security. More than half (54%) reported data breaches involving customer and employee information. Each of these companies spent an average of more than $1 million due to the damage or theft of IT assets and lost $1.2 million due to the disruption in operations.

Further adding to the challenge is that businesses need to ensure not only their own cybersecurity, but those of their vendors and service providers. While 54% of data breaches in small and medium companies were due to negligent employees or contractors, another 43% were due to third-party mistakes. Companies need to be confident that their outside service providers, including law firms, will keep their data safe.

“Third-party risk management is all about looking at the threats coming through vendors and suppliers,” says James Harrison, founder and CEO of Invisus, an information protection and risk management company. “Law firms process and retain some of the most confidential and sensitive information corporations have. Hackers and criminals know that and are specifically targeting law firms to get that information. They’re using law firms as access points to get to the client.”

“Cybersecurity is a top client concern right now, given recent breaches in confidential, sensitive information held by law firms,” says Tanna Moore, CEO of Meritas Law Firms, a global alliance of over 180 member law firms in 246 markets, which recently added cybersecurity standards to its quality assurance program. “In fact, some clients are already saying that they will only use outside legal counsel that meet certain industry and regulatory cybersecurity standards.”

Moore notes that minimum data protection standards may consume firm resources in the short term and result in some policy and procedural changes. “That said, I strongly believe that if law firms meet basic cybersecurity standards they will limit the potential financial and reputational risks associated with data breach incidents,” she says. “Even more importantly, they will protect their current and future clients from these same risks.”

Harrison believes that, going forward, corporations will only do business with law firms that not only have a formal information security plan, but also the reporting and metrics to prove they’re following through on it. “It’s not enough to have a plan,” he says. “You have to demonstrate compliance with that plan.”

HOW TO EVALUATE WHETHER A LAW FIRM IS CYBERSECURE

Determining whether a current or potential outside law firm is cybersecure can be complicated. Here are 10 questions to ask to ensure that your law firm, or other third-party service providers, are adequately guarding your sensitive data.

  1. Does the firm have an information security plan? This formalized, documented plan should include policies and procedures that meet industry best practices and government regulatory requirements for data security and privacy. It should cover policies and procedures, management and employee responsibilities, and breach incident response, among other details.
  2. Is firm management committed to the plan? Determine whether managing partners and other key stakeholders of the firm are strongly committed to safeguarding your information and promoting a culture of security throughout the firm. Ideally, the firm should appoint a committee consisting of IT staff, human resources, and the COO, as well as one or more senior partners, to oversee cybersecurity and the implementation of the information security plan.

    “Many firms fail to create a management structure for cybersecurity. They just relegate it to their IT staff, and that’s a mistake,” Harrison says. “To work, an information security plan has to have integral C-level oversight. The lack of an oversight structure involving partners is one of the greatest weaknesses I see in law firm cybersecurity plans.”

  3. How often does the firm conduct risk and compliance assessments? Any law firm you work with should assess how it’s doing when it comes to cybersecurity at least annually, as well as when new threats are discovered or a breach occurs. This is a common requirement in all major government data security and privacy laws in the U.S., Europe, Canada, and other markets globally.

    “It’s a process,” Harrison says. “There’s no such thing as 100% perfect cybersecurity. The cybercriminal underground finds new ways to get in over time, so if you don’t do an organization-wide risk and compliance assessment at least once per year, you’re opening yourself up to the threat of a breach.”

  4. Does the firm have technical safeguards in place? Measures such as encryption, data backup, and vulnerability testing should be implemented to protect computer, mobile device, telecommuting, and network security systems against disclosure of, or unauthorized access to, confidential information.
  5. Does the firm have physical safeguards in place? Don’t forget about physical security measures, policies, and procedures that protect against unauthorized access to buildings, offices, computer equipment, and paper documents. These include processes for the secure disposal of confidential paper and electronic information.
  6. Is there adequate employee training specifically addressing cybersecurity? Employee error and negligence are leading causes of data breach incidents. All personnel in a law firm, including firm management, should receive ongoing, formalized cybersecurity awareness training to ensure the maintenance of security best practices that support the firm’s information security plan. The training should also include contract workers and freelancers.
  7. How does the firm manage risk when it comes to third-party vendors, service providers, and business associates? Any outside company with access to confidential client information should also implement and follow appropriate security practices that meet minimum industry or regulatory standards. These requirements extend to all sorts of companies, from outsourced IT and document management services, to copier/office automation providers, to employee benefit and payroll processors, and beyond.

    “Not effectively evaluating the risk from third-party vendors is a gaping hole in many firm’s efforts to be cybersafe,” Harrison reports. “You need to evaluate not just how your law firm is doing, but also how your law firm’s vendors are doing.”

  8. Can the firm ensure that your data will be protected and available during a disruptive event? Natural disasters, power failures, ransomware, denial-of-service attacks, and hardware failures can create information security risks and render client information inaccessible. Make sure your law firm has a business continuity plan in place, covering data backup, data recovery, training, testing, and so on, to avoid major disruptions in your business operations.
  9. What will happen in the event of a breach? With law firms being targeted by cybercriminals, it is virtually certain that every firm, no matter its size and sophistication, will experience information security problems or data breach incidents that put clients and the firm at risk. It is critical that the firm have a formalized and documented data breach incident response plan detailing how to detect, respond to, and recover from potential security incidents in a timely and appropriate manner.

    “A weakness of many cybersecurity programs is the lack of a formal breach response plan,” Harrison says. “If I was hiring a law firm, I would ask, first, do you have a formal plan and how is it followed, and second, if you suffer an accidental or criminal breach, what steps do you take to contain the incident, notify those affected, and minimize damages?”

  10. Is the firm’s information security plan continuously reviewed and updated? Information security plans, policies, and procedures should be proactively reviewed and maintained in order to stay current with the latest threats and to protect the firm and its clients. An annual review and update should be done at minimum, with further reviews when security incidents or changes to business operations or regulatory environment occur.

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