United States: Untrusted Advisor: How Your Law Firm May Fail To Protect Your Data

Last Updated: December 9 2015
Article by Richard D. Lutkus

In recent years, the prevalence of data and information security breaches at major corporations have become increasingly more commonplace. While general awareness may be increasing, many companies are still neglecting to address serious information security issues.

Breached data can include proprietary or confidential information, trade secrets, personally identifiable information, health-related data, privileged communications, and regulatory data. Such data is often subject to preservation due to pending or reasonably anticipated litigation, government investigation, due diligence, or other applicable legal matter, meaning the data is routinely transferred and shared with outside counsel for analysis and support of clients' claims and defenses.

Many law firms provide guidance regarding information governance to clients, however more times than not, firms fail to realize that they too are also responsible for following similar guidelines. Appropriate precautions must be in place throughout a firm to protect the integrity and sanctity of client data, prevent unauthorized access, and to ensure timely remediation. However, firms must also have this data available for litigation response, analysis, and review. Therefore, keeping data entirely offline is rarely an option.

There are several pillars of governance that law firms should consider when examining the handling of both their own data as well as that of clients. As a fiduciary of their clients' data, firms that fail to address these issues will eventually find themselves in an ethical nightmare, that when applied to a partnership creates a considerable problem.

Information Storage, Retention, and Remediation

Organizations must work to ensure that data is protected from physical threats including loss of power, environmental disasters, hardware failures, and theft. Thus, careful planning and selection of datacenter features and location is paramount; some qualities of preferable datacenters include geographically diverse co-location, failover systems, backups of key data, backup power sources, cloud usage, and encryption at rest and in transit.

Various options for hosting data exist, however due to the prevalence of unreliable datacenters, clients are now requesting that their firm disclose information about where and how their data is stored, the protections in place to secure it, and data breach response plans; some sophisticated clients even put law firms through information security audits. Two very core compliance questions often involve a few main categories of inquiry:

1. Industry-Standard Compliance Protocols

As technology advances and attacks become increasingly sophisticated, it is critical that data be secured using industry accepted protections including but not limited to SAS 701, SSAE 162, and SOC1 – SOC33. While the details of each are extremely complex and beyond the scope of this article, firms should consider seeking compliance with them because they are critical measures of standards.

Another key measure is the "tier" system associated with datacenters, which can be summarized as follows:

Tier Features Datacenter Availability Offline Time per Annum
Tier 1 Non-redundant capacity components (single uplink and servers) Guaranteeing 99.671% data availability System will be completely down/offline/no access for almost 29 hours a year
Tier 2 Tier 1 + Redundant capacity components. Guaranteeing 99.741% data availability System will be completely down/offline/no access for almost 23 hours a year
Tier 3 Tier 1 + Tier 2 + Dual-powered equipment and multiple uplinks Guaranteeing 99.982% data availability System will be completely down/offline/no access for almost 2 hours a year
Tier 4 Tier 1 + Tier 2 + Tier 3 + all components are fully fault-tolerant including uplinks, storage, chillers, HVAC systems, servers etc. Everything is dual-powered Guaranteeing 99.995% data availability System will be completely down/offline/no access for around 27 minutes a year

The cost of provisioning services in these tiers varies greatly, which obviously is a critical decision factor for companies and firms alike. Note, of course, that nobody gets to choose the downtime other than for scheduled maintenance.

2. Data Availability and Security

As previously mentioned, firms need to provide data to authorized users when necessary. Often, preservation data is only needed when it's time to cull the data for document review or analysis. Beyond that, having an entire preservation copy on the network may not be necessary. If it is online for convenience of reference, firms should consider setting up a VLAN (virtual network) that allows the system to only exist within the firm's physical network and only allow access to specific employees.

Encryption also provides for protection of client data by ensuring that any data coming into or leaving the firm is transported either on encrypted media or via SSL with TLS over the Internet. The proper use of encryption software, such as VeraCrypt protects against inadvertent leakage of data while in transit with common carriers. Accordingly, law firms should train employees to send passwords separately or over secondary communication sources to avoid providing an interceptor with full access to the underlying data.

For data on firm servers, information technology or security professionals should ensure that two-factor authentication (2FA) is used, as it combines a username and password with a second layer of security. Firms may also conduct routine audits to find stale accounts present on the network, and also use "tripwire" software that monitors client evidence repositories and maintains an access trail that allows for alarms to be triggered upon certain events on the evidence.

While a firm may make significant efforts to ensure that data is available when needed, it must also consider the process surrounding secure destruction of data when appropriate. This is a complicated process, requiring the case team to consider whether preservation obligations exist, whether the data may be connected to other matters, and whether a certification of deletion may be appropriate.

Device Management

Risk of theft remains a prevalent issue for laptops and other mobile devices as they usually contain sensitive business information. Once again, the proper use of robust encryption can safeguard data from being disclosed to unauthorized parties.
Although members of a law firm's IT group will traditionally keep an updated inventory of all workstations and devices in use by its employees, they may be unaware of devices received from clients, third parties, or opposing counsel. Proper procedures to account for these devices can help to avoid loss of data, inadvertent destruction, and/or infinite retention of the devices. As part of a firm's device management policy, firm-appointed personnel should carry the responsibility of tracking any such devices, and creating chain of custody forms for original evidence.

Firms should also consider employing Bring Your Own Device (BYOD) policies, which allow employees of the firm to utilize their personal cell phones, tablets, computers, or other devices for use with firm data. Mobile Device Management (MDM) software can help to manage employees who seek to check corporate email on personal cell phones and allows the firm or corporation to reset a device and remove firm or corporate data from the device. Without such software an employee is able to, easily forward company information via a personal mailbox on the device unbeknownst to the company since the email would not be flagged on their email servers as having been sent/forwarded. Citrix, Sudo Security, and Apple offer MDM software.

Phishing and Social Engineering

If an attacker is interested in gaining access to firm information, various attack vectors may be pursued. A highly effective yet very basic attack uses social engineering by impersonating members of an organization (frequently IT), and convincing a user to disclose passwords, documents, and other sensitive information. This method doesn't require the attacker to have detailed knowledge of the underlying systems and relies on the victim to circumvent any security measures, and thus is extremely low risk and carries with it the potential for significant rewards.

Phishing on the other hand relies on the untargeted distribution of fraudulent information to substantial numbers of recipients. A phishing email may instead impersonate a common social networking website demanding that a user reset their password. The link may contain malicious software or direct the recipient to a third-party website to steal their credentials.

The primary method of preventing social engineering and phishing attacks is simply through user education.

Additional Security Considerations

Law firms are increasingly adopting additional security precautions regarding the identification and authentication of its users when accessing documents, networks, and devices. The most basic precaution is having its users regularly create and revise complex passwords.

In order to protect a firm from information theft, a standard process for employee separation should be implemented, involving device deactivation (or at least password resetting), and return of all mobile devices and access cards.

Finally, when an employee is traveling, domestically or internationally, devices should be properly encrypted to prevent the disclosure of information in the case of physical theft. If connecting to a public or potentially insecure network, employees should always endeavor to utilize a VPN connection or through remote desktop environment, such as Citrix.

Ethical Considerations

The American Bar Association Model Rules provide broad guidance regarding ethical obligations. ABA Model Rule 1.14 requires competence in selecting and using technology and calls for attorneys who lack the necessary technical competence for security to consult with qualified people who have the requisite expertise.

ABA Model Rule 1.65 generally defines the duty of confidentiality and broadly extends that duty to "information relating to the representation of a client." It's now commonly accepted that this duty applies to client information in computer and information systems as well. An amendment to this rule added Comment 166, which requires reasonable precautions to safeguard and preserve confidential information.

ABA Model Rule 1.47, Communications, also applies to attorneys' use of technology and requires appropriate communications with clients "about the means by which the client's objectives are to be accomplished," including the use of technology. It requires keeping the client informed and, depending on the circumstances, may require obtaining "informed consent" and also requires notice to a client of compromise of confidential information relating to the client.

These rules set up broad definitions regarding what an attorney should do in relation to holding data and communicating. Some states have taken these broad principles and developed more specific standards. For example, in Arizona, attorneys and law firms are obligated to take competent and reasonable steps to assure that the client's confidences are not disclosed to third parties through theft or inadvertence. Lawyers in Arizona must also recognize their own competence limitations regarding computer security measures and take the necessary time and energy to become competent or alternatively consult available experts in the field.

Whereas, in California, attorneys have an express duty "[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.8" Rule 3-110(A)9 also prohibits the intentional, reckless or repeated failure to perform legal services with competence.

Massachusetts law, M.G.L. c. 93H10, is unique in that it applies to "persons who own, license, store or maintain personal information about a resident of the Commonwealth of Massachusetts." It requires covered persons to "develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards." In addition to requiring a risk assessment, the regulation contains detailed requirements for the information security program and detailed computer system security requirements. Some observers believe that this Massachusetts law will become a model for comprehensive protection of personal information.

Finally, Nevada also has laws that require "reasonable security measures" and encryption11(NRS 603A.210 and NRS 597.970).

Cloud Storage and Ethics

Aside from the ethics opinions above, the specific issues surrounding the use of cloud storage is a relevant topic for attorneys as cloud storage offers convenience and savings. Thus far, US ethics commissions have determined that it is ethical for lawyers to use cloud computing, with most concluding that lawyers must take reasonable steps to ensure that the firm's confidential data is protected from unauthorized third party access12. The ABA also provides a helpful map that delineates cloud computing provisions by state13.

Conclusion

A security policy is only as strong as its weakest physical or digital link. Law firms must ensure that their information governance policies and strategies consider both its own data and the data of its clients. Although members of a case team may not know the underlying protections and precautions that have been put into place within the firm, they should be able to consult with IT in order to provide those answers.

Footnotes

1. More information is available at: http://sas70.com/sas70_overview.html

2. http://ssae16.com/SSAE16_overview.html

3. https://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2012/CPA/Jun/Easy123.jsp

4. Available at: http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_1_competence.html

5. Available at: http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_6_confidentiality_of_information.html

6. Available at: http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_6_confidentiality_of_information/comment_on_rule_1_6.html

7. Available at: http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_4_communications.html

8. See 1/ Bus. & Prof. Code, § 6068, subd. (e)(1).

9. Available at: http://rules.calbar.ca.gov/Rules/RulesofProfessionalConduct/CurrentRules/Rule3110.aspx

10. Available at: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93H

11. Available at: http://www.leg.state.nv.us/nrs/nrs-603a.html and http://www.westernreportingservices.com/NRS597.970.pdf

12. See generally: North Carolina State Bar Council 2011 Formal Ethics Opinion 6; Massachusetts Bar Association Ethics Opinion 12-03; Oregon State Bar Formal Opinion No. 2011-188; Professional Ethics Committee of the Florida Bar Op. 10-2 (2011); New York State Bar Association's Committee on Professional Ethics Op. 842 (2010); Pennsylvania Bar Association Ethics Opinion No. 2010-060 (2010); and Iowa Committee on Practice Ethics and Guidelines Ethics Opinion 11-01 (2011).

13. Available at: http://www.americanbar.org/groups/departments_offices/legal_technology_resources/resources/charts_fyis/cloud-ethics-chart.html#

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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