It is no longer the case if a cybercriminal will attack you, rather than when it will occur. Therefore, if you do not have robust and properly-tested defences in place, you could suffer a significant cybersecurity breach.
Unfortunately, many firms believe they have sufficient protection through IT support or badges such as Cyber Essentials (CE) or Lexcel. Effective cybersecurity requires more than these basic practices.
The consequences of failing to pay due attention to cybersecurity can be costly both financially and to reputation. These may be obvious to you, and there are other ways a cyber incident can affect your law firm.
Real Cost of a Cyber Incident to Law Firms
- Management Stress
The consequences of a cyber incident are enough to cause partners and senior management many sleepless nights. For instance, imagine if your most significant clients’ emails were being read by unauthorised third parties. Or a client receives an infected email from one of your associates, causing considerable damage to their system. Or, you lose access to all your client data, facing a huge ransom payment to recover the information.
These examples are merely a few real-life consequences that cause significant management stress throughout a law firm. Having to explain to clients and partners why the firm was left exposed to cyberattacks isn’t something to relish.
You would face questions about cybersecurity procedures and your firm’s legal responsibilities for risk assessment, training, and testing. Typically, senior management is the main target of cyberattacks, increasing stress levels for all management.
- Financial, Data, and Identity Theft
Takeovers of email accounts have risen dramatically in recent years to become a significant concern. An initial email is typically indiscriminate and automated.
However, the consequences are directed and specific once a breach has occurred. For instance, an email compromise can result in payments being intercepted or redirected, both from and to a client’s account. Money stolen from a bank account is moved quickly through a series of accounts, making it extremely challenging to recover.
Cybercriminals also actively seek debit and credit card data. They typically gain these by enticing victims to make payments through fraudulent websites.
Getting hold of your email account and card details puts the cybercriminal along the path to stealing your identity. Depending upon your privileges, they can then access important confidential client information or transfer large amounts of unauthorised funds.
- Held to Ransom
Today, law firms are reliant on data and smooth-functioning IT systems. Ransomware is a popular cyberattack method that can quickly bring your practice to a standstill.
Even if you regularly back up your data, it doesn’t guarantee you’ll be back to business quickly. That is because it’s unlikely you’ve used a cybersecurity specialist to configure your systems. Indeed, a ransomware attack is likely to render your systems inoperable for a significant time.
How much would it cost your firm if your systems were down for a day, a week, or more? Of course, you can still operate offline using printed or handwritten documents!
Paying the ransom might seem an attractive option when you consider the costs of being denied your data. However, the ransomware attacker knows this, and your first payment is unlikely to be the last. Indeed, even paying tens of thousands of pounds doesn’t guarantee they will give you back access to your data.
- Total Data Loss or Theft
Ransomware attacks might deny you data access for some time. However, how would your firm cope if you were to permanently lose commercially sensitive data? Worse, if a client’s data was lost or stolen?
- Post-Incident Investigation and Management
One of the frequently overlooked consequences of a cyber incident is its aftermath. Investigating cyberattacks and managing their aftermath cost law firms hundreds of hours, time that partners cannot bill to clients.
You will likely require external experts, and these emergency cyber incident response professionals are expensive. Moreover, there is likely to be an extensive round of explanations to clients, colleagues, the ICO, and the SRA. You could need to hire an external PR company to deal with the situation.
- Damaged Systems and Software
The collateral damage of a cyberattack could be damage or destruction of your software and systems. Indeed, this could be the aim of the attack. Regardless, fixing or replacing damaged components will cost money and take time.
- Reputational Damage
Trust is a crucial part of any business relationship. It is imperative when dealing with legal matters. Your clients trust you with their most confidential and valuable information. Therefore, cybercriminals will go to extraordinary lengths to get hold of it.
Suppose your firm is a victim of a cyberattack. In that case, how you deal with it and the countermeasures you had in place determine the reputational damage. You must explain to clients the extent of the breach, what went wrong, and how you are rectifying the situation.
Your reputational damage will likely affect your relationships with larger clients. They will need to act to pacify their clients and shareholders. You could also suffer adversely in business relationships with third parties.
- Penalties and Fines
Legally, law firms must comply with cybersecurity regulations regarding clients’ data. Following a cyberattack, the ICO or SRA could investigate your firm. If you have failed to provide adequate security, your firm could face substantial fines and penalties.
- Compensation and Class Action Claims
If you lose or compromise a client’s data due to a cyberattack against your law firm, they could seek compensation. More significantly, your firm could face a class action if the breach affects multiple clients.
Individuals now have the right to seek compensation against data controllers (and processors) who fail to comply with their security obligations. This will provide fertile ground for a new breed of claims companies. Indeed, we have already seen the emergence of a new claims industry, with several class actions already launched. Clients or third parties affected by the breach may claim for consequential financial loss.
Conclusion
Cyberattacks are becoming more frequent and sophisticated. Understanding the real cost and consequences of a cyber incident will help protect your firm. It will also maintain your reputation and save you a considerable amount of money.
