Strategies for Managing Vendor Risk in Law Firms
As a law firm, you’re quite familiar with the art of managing risk in your clients’ cases. But as a business, you also need to manage risk in your own organization.
After all, a breach at a law firm does more than just breach a client’s privacy. A law firm breach can violate a client’s legal and civil rights. That’s a lawsuit waiting to happen and the death knell of a law firm.
Here’s a look at why cybersecurity risk management in law firms is critical to your success, and some strategies to help you protect sensitive information.
Cybersecurity Risk Management in Law Firms
Did you know that an average of 89 vendors access a company’s network every single week? That’s a lot of vendors to begin with. The problem is that while 71% of companies agree that their vendor numbers are likely to rise over the next two years, only one-third of companies are confident that they know the exact number of vendors already in their system.
And in cybersecurity, much like the courtroom, what you don’t know can come back to bite you.
Even worse, many law firms are not prepared to meet cybersecurity challenges. The 2020 Tech Report by the American Bar Association found that key cybersecurity practices are only in use at half of all respondent organizations, including:
43% use file encryption
39% use two-factor authentication
39% use email encryption
29% use intrusion detection
29% use intrusion prevention
28% use remote device management and wiping
27% use device recovery
26% use web filtering
23% use employee monitoring
12% use biometric logins
In other words, if your law firm were targeted, odds are, you would not be prepared to defend against it. And while the rate of adoption has risen among small law firms, the overall rate of adoption remains painfully slow.
Strategies for Vendor Risk Management in Law Firms
It’s time to take a smarter approach to vendor risk management. Your firm cannot afford the fallout–and your clients deserve nothing less than the best. The good news is that the right strategies and tools can make a world of difference.
Here’s a look at a few key strategies to strengthen vendor risk management in law firms.
Know Your Sensitive Data
Picture a client.
Before you take on a case, you need to know the details. That way, you can get a lay of the land, develop a strategy, and deliver a great result. So, you schedule a consultation with every new client to figure out the basic details of a case and what you can or can’t do to help them.
Your sensitive data is the same. If you don’t know what you’re trying to defend, you won’t do a good job of defending it.
Before you share a single byte of data with a vendor, you need to categorize all of your sensitive data. Ideally, you should do this with all of your sensitive data, not just the data you plan to share with a third-party vendor. Some examples of sensitive data include:
Information protected by the attorney-client privilege
Client personally identifiable information
Employee personally identifiable information
Sensitive corporate information
Break all of your data into categories, first by type, then by risk level (i.e. the severity of consequences for your firm if the information were breached).
Establish a Risk Management Process
Once you know what you need to protect, it’s time to establish a risk management process to protect it. Or, if you already have a risk management process, it’s time to turn a critical eye to it and make sure it’s doing enough to protect what matters most for your firm.
If you’re not sure where to begin, your best bet is to turn to what you know: the law. Several industry regulators provide risk management frameworks, either spelled out indirectly in the law or through direct resources. A great place to start is the NIST risk management framework, which provides a whole library of free resources and guidance to help businesses establish a risk management process.
At the end of it, you should have a comprehensive risk management process that walks you through every individual stage of risk management at your firm. If an employee ever had a question about risk management, they should be able to turn to the plan as a complete roadmap.
Risk Management Documentation and Due Diligence
Every law firm is familiar with due diligence. Now, it’s time to apply due diligence to your would-be vendors.
Before you bring on a single vendor, you should go through due diligence to ensure that they’re a good fit. That means a thorough questionnaire identifying their risk management processes and protocols, as well as a thorough validation process. That way, you can score the risk level of every vendor using the same objective yardstick and make an informed decision about whether or not to take them on, in much the same way you would gather information before taking a new case.
Make Risk Management Part of Your Vendor Contract
However, your work does not end once you’ve validated information and confirmed that the vendor could be a good fit. Remember, risk management with a third-party vendor is a partnership, and they need to be just as involved as you are.
To that end, risk management should be baked into your contractual agreement with the vendor. The contract should spell out exactly what is expected of the vendor, what your risk management process will look like, and the consequences for failure to comply. That way, all involved parties know exactly what they’re getting into.
Your Partner in Managing Third-Party Risk in Law Firms
Risk management in law firms is no small task. In fact, it’s a full-time job. And when you already work as much as two full-time jobs to keep pace with your client load, you need tools to make risk management easier.
That’s where we come in, with specialized risk management solutions that make it easy to ask the right vendor the right question at the right moment. That way, you can take the guesswork out of risk management and deliver a strong risk management program while giving your clients your A-game.
Sound good? Then get in touch today to learn more about how our solutions can empower your firm.