By Legal Futures’ Associate The Cashroom
Regulatory Changes All Legal Partners And Senior Managers Should Be Aware Of
2019 has been an overwhelming area of transition for the United Kingdom (UK). A definitive break from the EU has already been delayed once with a further extension unlikely.
Amidst this uncertainty, regulators have considered the future of the legal sector and updated their regulations accordingly which have impacted many operating areas within a law firm.
With so much change and potential pain points already influencing the day to day activity of a law firm, it is understandable that cyber issues may be overlooked and passed to the experts dealing with the protection of digital assets.
However, these issues permeate through to all stakeholders within a law firm and managers and senior leaders need to be aware of how cyber crime and its prevention is a whole firm issue.
The legal sector has been a particular target of cyber criminals in recent years. In 2018, the Solicitors Regulation Authority (SRA) speculated that £11 million was lost to cyber crime. This figure has grown exponentially as the reach of cyber criminals has proliferated into most areas. According to Action Fraud, more than £364 million was lost through UK victims falling foul of sophisticated social engineering and impersonation tactics by the end of 2018.
In order to regulate the digital safety of UK law firms, a plethora of regulators have updated their regulations. The SRA’s new Standards and Regulations, set to be rolled out in November, place a greater cyber compliance emphasis on the Compliance Officer for Legal Practice’s (COLP) role.
The COLP will now experience broader compliance responsibilities including safeguarding the law firm against cyber threats and the increasing difficulty in preventing issues caused by human error.
The Conveyancing Quality Scheme (CQS) reflected the increasing cyber threat by amending and including a number of their Core Practice Management Standards (CPMS).
Section 6.2 insists that all accredited members should ensure that their firm embraces cyber security accreditations, like the Government backed Cyber Essentials.
Similarly, the Law Society’s Lexcel England and Wales Version 6.1 Standard for Legal Practices expects law firms to adequately safeguard against cyber threats by creating robust policies, approaches and defences. Again, Cyber Essentials is recommended as a minimum standard.
Safeguarding Reputations and Data
Unfortunately, UK organisations are still struggling to fully embed a thorough cyber security culture, according to a recent Government survey into cyber crime.
The ‘Cyber Security Breaches Survey 2019’, released by the Department for Digital, Culture, Media and Sport found a number of policy omissions desperately needed to protect a firm and their clients from the clutches of cyber criminals.
Only one third of UK businesses have created a cyber security policy within their organisations with little over a quarter (26%) training staff to spot the signs of cyber crime. Fewer than a third of organisations had also planned for a data breach.
If an attack succeeded, around three quarters of UK firms would be unable to easily take preventative measures to ease the issue. This leaves a firm open to scrutiny which may severely damage a reputation that takes so long to build. Law firm managers considering these issues and building a thorough cyber security policy could prevent attacks and also minimise the damage if the worst happens.
Whilst law firm leaders could benefit from taking a more active role in cyber policies, law firms also need to consider and scrutinise the threat from third-party security policies. Only 29% of the 6,600 IT and global organisation leaders had considered the cyber security processes of the suppliers and third parties they work with, according to a recent ‘Tech Vision Report’.
Morbidly, the report speculated that 25% of all global attacks will be attributed to supply chain attacks by 2025. Increasingly, consumers and regulators will expect a law firms’ internal processes to be robust, but they will also expect cyber due diligence to focus on how symbiotic organisations protect their data from unscrupulous digital criminality.
Planning for GDPR
Since the General Data Protection Regulations (GDPR) came into force in May 2018, evidence suggests that UK businesses are struggling to fully adapt their policies and protocols to ensure they are compliant.
Auditing firm RSM found that 30% of European businesses believe they remain uncompliant with GDPR, 13% are unsure if their approaches are compliant and 38% are unsure or are failing to comply with the new regulations.
The Information Commissioner’s Office (ICO) were inundated with four times more data breaches in the year since GDPR was introduced as UK firms look to embrace their responsibilities and disclose a breach within 72 hours of its discovery.
In the year to June 2019, over 14,000 data breaches were disclosed to the FCA.
However, 41,054 complaints were made to the ICO with GDPR savvy consumers unhappy with how their data was being used and stored by UK organisations. Big businesses, like British Airways and Marriot as well as the Metropolitan Police have been issued with fines and warnings for potential data breaches.
Whilst many firms may have become compliant with storing and protecting data, policies on satisfying data access requests, were of particular concern. Two thirds (63%) of UK businesses had reported a significant rise in requests by the public for the data a firm holds on them, according to Parseq.
87% of organisations have failed to reply to data access requests within the allotted time limit, resulting in significant delays which will lead to fines.
Whether it be through adapting policies to comply with GDPR, ensuring a law firm embraces robust cyber policies or just looks at existing practices to ensure a law firm is compliant with regulatory changes, senior members of a law firm need to embrace and permeate a cyber secure culture within their firm. This can only happen by embracing a hands-on approach.
Here at The Cashroom, our team of qualified and experienced legal cashiers and the sophisticated processes and procedures we implement can help firms to manage these risks, while benefiting from our efficient, cost effective finance services:
- We communicate with our clients via our secure Cashroom Portal.
- We have Cyber Essentials Plus accreditation.
- We have rigorous GDPR and data policies in place.
Contact Alex Holt for information about our services in England and Wales on firstname.lastname@example.org or Gregor Angus on email@example.com for Scotland, or enquire through the website at www.thecashroom.co.uk