Foley & Lardner revealed the existence of a cyber-attack in October 2018, and worked quickly to assure clients that no confidential data was compromised. As this incident illustrates, law firms are not immune to cyber threats.
To prevent unauthorized access to client information, law firms are protecting themselves by adopting strict law firm cybersecurity policies to protect their reputation.
Cybersecurity is becoming a growing concern for BigLaw firms, insurance defense firms, and others. Insurance companies are starting to stress the importance of cybersecurity measures for panel counsel members. Inadequate cybersecurity may cause a law firm to risk valuable panel counsel appointments.
A recent CyberSecurity Business Report by CSO identifies cyber attack trends that can help law firms implement or update their cybersecurity policies. Titled, “Top Cybersecurity Facts, Figures and Statistics for 2018,” law firms are advised to protect themselves against fileless malware attacks which are becoming more common. While such viruses are not arriving as attachments to emails, email security continues to be a significant weak spot since email is still the chosen medium for malware attacks including phishing.
In light of the CSO report, law firms may be able to minimize these risks by adhering to published industry guidelines. Meeting compliance recommendations can be an effective cybersecurity strategy, according to the Thales’ 2018 Data Threat Report. By keeping up-to-date with what’s happening in cybersecurity, law firms have a better chance to protect client data as well as their reputations.
After a cyber-attack, law firms often face financial costs that could negatively impact their profit margins. The CSO report states,
“Ponemon pegs the average cost of a single attack at $5 million, with $1.25 million—a quarter of the total—attributable to system downtime, and another $1.5 million (30 percent) to IT and end user productivity loss.” In addition to protecting client data and the law firm’s reputation, law firms are advised to adopt cybersecurity policies that minimize or eliminate the risks of downtime and productivity loss associated with recovering from a cyber-attack.
Implications for Insurance Defense Panel Counsel Members
If you are an insurance defense firm or an attorney on an insurance panel, you want to be aware of how law firm cybersecurity issues could affect your business. By anticipating how your firm can become a target, you can implement policies as a preventive measure in addition to employing other strategies such as outsourcing cybersecurity to an information technology provider. At the same time, you can also utilize strategies to minimize any negative effects if your firm suffers a cyber-attack.
Additionally, as cybersecurity claims increase there will be new insurance panel counsel positions for those law firms who have experience in the cybersecurity realm.
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.