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Law firms should be concerned about cybersecurity

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Indiana Lawyer Focus

When cyber thieves hacked into the computer system of retail giant Target, consumers were stunned at the amount of personal financial information that was pilfered.

But on the black market, stolen credit card and pin numbers do not bring much money per number. The real dollars are paid for inside details about possible mergers and acquisitions, new public policy, and information about cutting-edge technology. In short, the kind of private, confidential information that many law firms hold in their client files.

apb_jeffkosc_il03_15col.jpg Describing himself as a “bit geeky,” attorney Jeffrey Kosc has always included cybersecurity issues in his legal practice. The Benesch Friedlander Coplan & Aronoff LLP partner said hackers are constantly trying to breach computer networks to get confidential information.(IL Photo/Aaron P. Bernstein)

Increasingly, cyber thieves are attacking law firms, and while large firms are the prime targets, firms of any size can be hit. Hackers can enter a system through a link in a phishing email or by a virtual backdoor in the software.

The bad news is the hackers will come. Law firms should no longer be asking what they should do if their network is breached, but rather they should ask what they will do when they get hacked.

The worse news is law firms may not know when a breach has occurred. Cyber thieves can break into a system and remain there, undetected, for a significant period of time.

“It’s the world we live in,” said Jill Rhodes, attorney and cyber expert who served on the American Bar Association’s Cybersecurity Legal Task Force. “It’s just the way we live now. No one is going to protect us but ourselves.”

Verizon’s 2014 Data Breach Investigations Report found 63,437 security incidents based on data submitted by 50 contributing organizations covering all sectors of the economy. Of those incidents, the professional sector, which includes lawyers, suffered 360 breaches.

The report found that the professional category of businesses was most hit by denial of service attacks which are intended to compromise networks and systems. The second most common mode of attack was cyber-espionage or unauthorized access with motive for spying.

rhodes-jill.jpg Rhodes

Based on Verizon’s methodology, 87 percent of the actors committing cyber-espionage were affiliated with a nation state while 11 percent were from organized crime and 1 percent was linked to competitors. Forty-nine percent of the incidents were attributed to entities in East Asia while 21 percent were in Eastern Europe.

Ten years ago, hackers were breaking into systems and doing things like defacing websites to make a name for themselves. They wanted the public to know who they were and what they had done.

Now, hackers are more sophisticated. They look for ways to gain entry; then they work to breach the layers of security to get to as much data as possible for economic gain.

Nicholas Merker, attorney in the intellectual property and litigation group at Ice Miller’s Chicago office, explained today’s hackers do not want to get caught. They want to lie in the weeds for as long as they can and siphon information.

Protection

Cybersecurity has been part of Jeffrey Kosc’s practice since his first day on the job as an attorney. He had just been hired as in-house counsel for True Value hardware stores and accepted the task of reviewing a software agreement after the other attorneys confessed they were not too sure what software was.

Nearly 20 years later, Kosc, now a partner at Benesch Friedlander Coplan & Aronoff LLP in Indianapolis, said constant attacks are the trend.

Hackers are “always trying to get in and always trying to stay one step ahead,” he said.

Law firms are attractive to cyber thieves not only because of the type of confidential information harbored but also because attorneys tend to use their own devices. Lawyers who work out of the office accessing files on the cloud with their own tablets, laptops and phones can create an additional vulnerability in a firm’s network.

A hacker needs only hours or days to break into a system, while a business might take weeks or months to discover the breach. Protecting against attacks includes changing passwords, using encryption programs, limiting access to extremely sensitive documents and having the ability to wipe data from any phone or computer that gets lost.

Also, firms should negotiate security agreements with vendors to clearly spell out what the expectations and responsibilities are. The average consumer will not be able to negotiate the usage agreement for iTunes but, Kosc said, a law firm making a significant investment in programs will have leverage to change the terms to ensure greater security.

merker Merker

There is no magic bullet to protect against all cyberattacks, said Scott Shackelford, attorney and fellow at the Indiana University Center for Applied Cybersecurity Research.

Defending against breaches, Shackelford continued, requires constant vigilance and starts even before the new computers arrive at the office. Devices can be purposefully contaminated with viruses at the factory so law firms, just like any business, should be working with vendors to ensure the supply chain is safe.

The weakest link in the protection chain is people. A 2011 test of cybersecurity by the U.S. Department of Homeland Security proved this. The agency tossed disks and flash drives in parking lots of other federal offices and contractors and found that employees picked up the items and inserted 60 percent of them into their computers.

Technology alone will not fix the problem, Merker said. Law offices have to change their cultures and implement training, policies and procedures for employees. The attorneys and staff need to know what to be leery of and how to avoid attacks.

Still, even with all the protections, Rhodes, vice president and chief information security officer for Trustmark Cos., believes a costly, high-profile attack is inevitable.

“I think there will be at some point – if not already – a significant lawsuit related to some sort of breach that resulted in a client losing a case,” she predicted.

Bottom line

A hacking incident in 2010 in which Canadian law firms were breached and sensitive information about a potential corporate takeover was accessed has been highlighted as an example of how vulnerable law firms are and the type of information available on a firm’s computers.

Indeed, in late 2011, the FBI met with New York’s Top 200 law firms to warn the attorneys of attacks and provide them with ways to prevent breaches.

Mounting and maintaining a defense against hackers does create a new line item in a law firm’s annual budget. However, law firms that skimp on protection now will actually start building what has been called a security debt. The longer the firm delays putting needed resources into cybersecurity, the bigger the debt grows until finally a breach occurs and the debt comes due, potentially making the cost to mitigate much higher.

Most states have data security laws regulating businesses and agencies. Indiana requires database owners to “maintain reasonable procedures to protect and safeguard” the personal information of Hoosiers. If a breach occurs, database owners must make notification without “unreasonable delay.” Failure to disclose the breach is a deceptive act that could bring a civil penalty of up to $150,000 per act.

The bigger consequence is the loss of client goodwill. Firms could have their reputations damaged and lose current and future clients. While customers tend to forgive when a store loses their personal financial information, Merker is not sure if clients would forget a breach at a law firm. The stigma of breaking clients’ trust and not keeping their information safe could be hard to erase.•

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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