Steps Law Firms Should Take to Protect Client Data

Protecting client data in your law firm is essential because your business might depend on it. For example, if your firm does not use Managed IT services, a data breach can cause irreparable damage to your reputation, devastating your business.

Cybercrime is a profitable business. One study found that cybercriminals rake in around $1.5 trillion per year – more than the GDP of Australia.

At the heart of this profitable albeit nefarious enterprise is data. They will steal, sell, repurpose, or even hold it for ransom - anything that can turn your data into a quick buck.

Although cybercriminals traditionally targeted larger companies, trends show they are moving towards softer targets like small and mid-sized law firms, medical practices, and accounting firms.

Because of this, protecting your client data has never been more critical.

Law firms, especially those that provide online legal services, have much to lose in a data breach because most of the information they collect and store is confidential. With such high stakes, they must take extra precautions to protect customer data.

Before reviewing the steps your law firm can take to secure client data, here are the top dangers facing law firms in the event of a data breach.

Top Dangers of a Data Breach for Law Firms

1. Reputational Damage

Reputation damage stands as the single most dangerous fallout from a data breach. In 2017, Equifax announced that records of 147 million customers were compromised. The company lost $4 billion from the breach, was fined $425 million by the FTC, and has never fully recovered reputationally. Any law firm going through a similar experience would suffer irreparable reputational damage.

2. Risk of Lawsuits and Fines

Data breaches expose a law firm to lawsuits from clients whose data has been compromised. If a judge finds the law firm guilty, they could face steep settlement costs. Also, laws like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) impose punitive fines on companies that have not taken measures to secure client data.

3. Ransom Demands

Ransom demands are a popular technique used by cybercriminals. If your law firm data is compromised, the data might get encrypted and locked with ransomware. Once locked, you may be required to pay anything from a few hundred dollars (if you are lucky) to tens of thousands of dollars.

4. Loss of Intellectual Property (IP)

Law firms frequently store sensitive IP information like patents, trademarks, and proprietary works. A data breach can expose this information, which cybercriminals will quickly list on the dark net for sale. Law firms are particularly vulnerable because their clients entrust them with confidential information.

Follow These Six Steps to Secure and Protect Your Law Firm’s Client Data

You can protect your law firm’s client data by following a few simple data security steps. In most cases, you do not need to hire an IT firm to implement them, although working with a managed IT services company can make it easier.
Here are six steps to follow to secure and protect client data.

1. Limit Access to Data

Most law firms, especially the smaller ones, do not have a dedicated IT department. Employees will often share passwords, use computers interchangeably and have access to all data, exposing the firm to a potential data breach.

You can limit access to data by restricting who has access to sensitive data. A great way to do this is to use an encrypted folder that only a handful of employees can access. Another way is to nominate one or two computers and use them as a ‘secure data center’ for all critical data.

2. Introduce Password Management Tools

Weak passwords are the weakest link in any data security plan because they bypass all other security components like firewalls and encryption. Using password management tools like BitWarden or Lastpass can circumvent the inherent tendency of employees to choose easy-to-remember yet weak passwords. Such tools create and store complex passwords that employees do not need to remember or keep, ensuring all passwords used in the firm are strong and secure.

3. Keep All Software and Apps Updated

Software updates, especially for operating systems, are often overlooked in smaller law firms where doing so is no one’s express responsibility. Unfortunately, cybercriminals use Zero Day exploits to take advantage of known software vulnerabilities and compromise computers and apps that are not updated. This measure is easy to implement because most software vendors send regular software update notifications; all you need to do is accept the update, and they are installed automatically.

4. Sensitize Employees on Cyber Hygiene

Cyber hygiene is the practice of not clicking on random links on the internet, deleting spam immediately, not downloading unknown or suspicious files, and not sending sensitive data without verification of the recipient. In your law firm, sensitizing employees on cyber hygiene can go a long way in thwarting ransomware, phishing, and malware attacks, all precursors to a data hack.

5. Create a Cybersecurity Checklist

It is easy to read this list, implement the steps once and forget about them. The greatest defense against cyber-attacks is vigilance; the best way to stay vigilant is to have a cybersecurity checklist. On the checklist, add the previous four items. Next, secure the services of a cybersecurity or IT specialist and review the list, adding measures that can further protect your client data, like using a cloud storage service or implementing a disaster recovery plan.

Data Safety is Vital to Your Law Firm

Your customers trust you to keep their data safe. It is a significant reason why they started and continue doing business with you. Taking time to secure and protect client data is not outside the scope of your services; it is the foundation of your business’s credibility, especially in a digitized world where software and data run most companies. Follow the steps outlined above to ensure you do not break your customer's trust in you and secure your legal business so it can continue thriving for many years to come. 

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Posted - 08/29/2022