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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. Call it unauthorized law if you must, a regulatory wrong, but it was fraud and theft well beyond that, a seeming crime! "In three specific cases, the hearing officer found that Westerfield did little to no work for her clients but only issued a partial refund or no refund at all." That is theft by deception, folks. "In its decision to suspend Westerfield, the Supreme Court noted that she already had a long disciplinary history dating back to 1996 and had previously been suspended in 2004 and indefinitely suspended in 2005. She was reinstated in 2009 after finally giving the commission a response to the grievance for which she was suspended in 2004." WOW -- was the Indiana Supreme Court complicit in her fraud? Talk about being on notice of a real bad actor .... "Further, the justices noted that during her testimony, Westerfield was “disingenuous and evasive” about her relationship with Tope and attempted to distance herself from him. They also wrote that other aggravating factors existed in Westerfield’s case, such as her lack of remorse." WOW, and yet she only got 18 months on the bench, and if she shows up and cries for them in a year and a half, and pays money to JLAP for group therapy ... back in to ride roughshod over hapless clients (or are they "marks") once again! Aint Hoosier lawyering a great money making adventure!!! Just live for the bucks, even if filthy lucre, and come out a-ok. ME on the other hand??? Lifetime banishment for blowing the whistle on unconstitutional governance. Yes, had I ripped off clients or had ANY disciplinary history for doing that I would have fared better, most likely, as that it would have revealed me motivated by Mammon and not Faith. Check it out if you doubt my reading of this, compare and contrast the above 18 months with my lifetime banishment from court, see appendix for Bar Examiners report which the ISC adopted without substantive review: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS

  2. Wow, over a quarter million dollars? That is a a lot of commissary money! Over what time frame? Years I would guess. Anyone ever try to blow the whistle? Probably not, since most Hoosiers who take notice of such things realize that Hoosier whistleblowers are almost always pilloried. If someone did blow the whistle, they were likely fired. The persecution of whistleblowers is a sure sign of far too much government corruption. Details of my own personal experience at the top of Hoosier governance available upon request ... maybe a "fake news" media outlet will have the courage to tell the stories of Hoosier whistleblowers that the "real" Hoosier media (cough) will not deign to touch. (They are part of the problem.)

  3. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  4. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

  5. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

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