In recent years, law firms have become major targets of hacking and other cyberattacks. Knowing the reasons behind this and what you can do to minimize your risk of a data breach is the first step in preventing financial and reputational damage.
Hackers often target law firms because they store tons of valuable information on their servers, which they can use for financial gain. Even though they hold this sensitive data, law firms are also notorious for poor cybersecurity. These factors combined make them popular targets for cyberattacks.
Below, we’ll discuss why hackers target law firms in more detail. Then, we’ll give you some ideas on ways to minimize your law firm’s risk of an attack. Keep reading to learn everything you need to know!
Why Do Hackers Target Law Firms?
Law firms hold some incredibly valuable information on the individuals and businesses they represent. Some hackers target law firms to access this confidential data, while others do so because law firms typically have lower levels of security than other types of businesses.
In short, there are three primary reasons why hackers target law firms. These include:
To Bypass Data with Little Value
Sometimes, law firms are not the primary target of a cyberattack. If a hacker is looking for information on a particular corporation, they may bypass the company itself entirely and go directly to their law firm.
Large companies store a lot of data internally. While this does give hackers access to the information they’re looking for, it does so in a rather roundabout way. Once the hacker has the data, they’ll need to sort through it to find anything of value they can use for monetary gain. This takes much longer to do and reduces the chance of their attack’s success.
However, if a corporation will provide confidential information to anyone, it’s usually their legal team. Hacking a company’s law firm is often much more successful because it’s likely that most of the information they have on a company is of high value. When hackers attack law firms, they can quickly find the financial data, business strategies, and other secrets they’re looking for.
To Access Confidential Information
When law firms become the victims of cyberattacks, they can lose a lot of information on various types of clients. Some of this information may include:
- Contract data
- Personal details
- Financial details
- Trademarks and patents
- Merger and acquisition data
The hacker may or may not have a particular target in this scenario. However, any high-value, confidential information they do find, whoever or whatever it may be related to, can be used for financial gain.
If what the data hackers gain access to is important or scandalous enough, they may be able to sell it for millions of dollars. In some cases, hackers will even hold information as ransom against a major law firm. One example of this is a 2020 attack on the law firm Grubman Shire Meiselas & Sacks. The hacker group gained access to information on high-profile celebrity clients, then sought upwards of $42 million from online bidders for its release.
Law Firms Typically Have Low Data Security Levels
Many law firms, especially smaller ones, are lacking in terms of data security. Employees of law firms are some of the busiest people around, and amid the everyday hustle and bustle, they often neglect to review and update their security measures.
According to a 2020 study by the American Bar Association, less than 50% of law firms use two or three-factor authentication to protect their data, and only 43% reported using any file encryption at all. While most other industries have gotten the message that protecting and encrypting data is a must, law firms have been slow to upgrade their practices.
A low level of data security is like an open door for a cyberattack. When information is easy to access, it’s effortless for the wrong people to get their hands on it.
How to Minimize Your Risk of a Cyberattack
Law firms are becoming one of the biggest targets for online hackers, so taking precautions to minimize your risk is of utmost importance.
Some things you can do include:
Screen Employees Regularly
Sometimes, cyberattacks on your law firm can come from people working right in your office. An insider attack is one of the greatest threats to a law firm’s security, so make sure you’re doing sufficient due diligence on all personnel before officially hiring them.
Conduct all the background and reference checks you need to feel comfortable hiring a certain individual. In addition, employees should be regularly re-screened to ensure they do not pose a threat to the firm. It may seem excessive to some, but it’s better to be safe than sorry when you consider the damage an insider attack could do.
Remove and Destroy Old Files
Although digitization has made things a lot easier for law firms, it has also created a hole in security. It’s much easier for unauthorized individuals to access information on a server than it is to access paper copies, so limiting the amount of digitized information you store is one way to reduce your chance of a cyberattack.
As soon as a matter is closed, it should be taken offline. Whether you keep paper copies or not is up to you, but it’s usually recommended that you destroy any information if you’re no longer obligated to keep it. While taking the files offline will significantly reduce the chances of a hacking incident, keeping paper copies still leaves the threat of an insider attack.
Use Sufficient Security Measures
Every law firm should have sufficient security measures in place to protect both their own and their clients’ information. For the highest level of security possible, you’ll need to take precautions both in-house and while online.
Any data your law firm has access to should be encrypted, and granular-access controls should be set to dictate who can view, edit, or send files to another individual or entity. Whenever an employee accesses a particular piece of information, the action should be logged and reported.
Make sure to update and test your encryption as needed. Change passwords and review access logs regularly to ensure there hasn’t been a breach in security, and be sure your encryption technology never becomes compromised.
All of this comes down to using better cybersecurity. Cybersecurity practices protect your servers, networks, electronic systems, and most importantly, your data from cyberattacks. If you do not have sufficient cybersecurity in place, hackers gain an easy access point from which to steal valuable information. If you do not feel you have sufficient cybersecurity in place, consider working with a cybersecurity IT team to find areas that could use improvement.
Get Sufficient Insurance Coverage for Cyberattacks
If a cyberattack ever does occur at your law firm, you must have enough insurance coverage to minimize your losses. Data breaches can end up costing law firms millions of dollars in lawsuits, but having the right insurance can decrease your liability.
Your law firm should have both cyber liability and legal professional liability policies to ensure as little damage as possible. Let’s discuss what each of these will cover.
Cyber Liability Policies
Cyber liability coverage offers businesses protection against data breaches and other issues related to cyberattacks. This type of insurance often comes with access to resources that help you manage your law firm’s risk of a hacking incident, and depending on your level of coverage, it may cover costs associated with:
- Cyber extortion
- Forensic investigations
- Crisis management costs
- Recovering compromised data
- Interruptions to regular business
- Litigation and defense expenses
Before you discuss cyber liability coverage with your insurance provider, be sure to have a detailed incident response plan you can present to minimize any premium increases.
Legal Professional Liability Policies
Legal professional liability insurance will protect you against any negligence claims filed against your law firm after a cyberattack. In addition to negligence, your policy may also cover damages caused by a lack of security within your firm. It can also reduce your costs for defending yourself against these claims, as well as any mistakes made by staff or independent contractors that led to a breach.
Have Confidential Discussions on Secure Platforms
With so many people now working from home, it’s easy to forget that any discussions regarding legal matters should be limited to secure, password-protected channels. Only share data on a “need to know” basis, and once you’re finished discussing the matter, either encrypt or destroy the information.
What to Do if Your Law Firm Gets Hacked
A cyberattack can be detrimental to your business, both reputation-wise and financially. Apart from claims and lawsuits against you from clients whose information was compromised, you also have to consider how this will affect your business in the long term.
Your search results ranking could be lowered since most search engines will not recommend “unsafe” websites, and clients may be reluctant to hire your staff. To reduce the damage a cyberattack does as much as possible, you need to handle it quickly with a well-thought-out incident response plan.
What is an Incident Response Plan?
An incident response plan (IRP) outlines all the steps to adequately respond to a cyberattack. If you follow this plan to a tee, you’ll likely escape the incident with as little damage to your reputation and financials as possible.
You should be thinking about your IRP before an incident even occurs. This allows you to begin responding immediately after an attack. Below, we’ll discuss the information to include in your law firm’s IRP.
Contain the Attack and Begin Recovering Data
This first step is all about securing the breach and then recovering any compromised data. Your IT team should be the primary people handling this. They’ll start by eliminating any holes in security the hacker used to access your information, doing things like changing all passwords, verifying encryption protocols, and running malware checks on servers and devices.
After securing the network, your IT team should identify and locate compromised data. Any information logs created during this step should be preserved for later investigation, and hiring a digital forensics consultant is often a good idea. They can work with your team to investigate further and find any issues you may have missed initially.
Hire a Data Breach Expert
If you do not already have a data breach expert on staff, outsource the help. Depending on your cyber liability policy, you may be able to get the cost of doing so covered. Data breach experts will use their knowledge to preserve information that will be helpful throughout the investigation.
Notify Your Insurance Company & Law Enforcement
Even if the attack was unsuccessful, quickly notifying both your insurance company and law enforcement of the breach is critical. Your insurance company needs to be aware in case any claims result from this attack, and you must notify law enforcement that a hacking event has taken place at your law firm.
Notify All Affected Parties
This next step will likely be the most difficult. Once all the official parties are notified of the attack, it’s time to let any affected clients know what has happened. Ensure to give anyone whose information was compromised all the details you have related to their cases. A phone call or email is usually sufficient, but larger attacks may warrant a press release.
Your notification plan should put the third parties at ease. Providing as much information as possible on what you’re doing to solve the problem should offer enough assurance to limit the damage a cyberattack has on your reputation.
Follow Compliance Procedures
Depending on the state you live in, you’ll have to follow all the relevant data breach notification laws. Include these regulations in your IRP to ensure the proper channels are aware of attacks and your response is within legal limits.
Update Your Plan
After following the entire IRP to minimize financial and reputational damage, review the plan to add any updates that the breach warrants. Now’s a great time to reflect on what you can do to improve cybersecurity protocols.
Hackers often target law firms because of the vast amount of confidential data they hold. Some hackers will even go directly to a law firm when trying to gain information on a particular company, taking a shortcut to find the most critical or sensitive information possible.
Since law firms are notorious for insufficient security, they’re incredibly easy targets for not only cyber hackers, but insider attacks, as well. To minimize your risk, be sure to implement strict safety and security protocols and outline a high-quality incident response plan.