Contents
Introduction
Most businesses and law firms know that client data needs to be protected and kept confidential; however, it seems to be a low to medium priority for legal firms, making them prime targets for cyberattacks and strict regulatory scrutiny under the General Data Protection Regulation (GDPR).
From legal contracts to financial records, law firms deal with a large amount of client data (up to 50 terabytes), obliging them to comply with GDPR. Failing to comply with GDPR can lead to massive regulatory fines, reputational damage and possible legal action.
What’s the need for risking it all? When implementing GDPR within your organisation can lead to improved data security/management, while enhancing client trust and reputation, ultimately giving legal firms that competitive advantage of operational efficiency.
This blog will delve into what law firms need to know about GDPR compliance, the biggest risks they face, and how they can protect their clients’ data while staying on the right side of the law.
Understanding GDPR: What is GDPR and Why Law Firms are High-Risk Targets
The General Data Protection Regulation (GDPR) is a European law designed to protect individuals’ data that came into force in May 2018.
As a result of Brexit, the Data Protection Act 2018 introduced a UK version of GDPR, formally referred to as UK-GDPR as of January 2021.
This means that if a law firm in the UK receives personal data from the European Economic Area (EEA) or stores it in EEA data centres, it can continue transferring and processing that data without needing to apply extra security measures, such as Standard Contractual Clauses (SCCs) or Binding Corporate Rules (BCRs).
This is because the UK has an ‘adequacy decision’ from the EU, meaning the European Commission recognises that UK data protection laws provide a level of protection equivalent to the GDPR.
Anyway, let’s dive into GDPR rights for clients:
- Right to Access (Article 15 GDPR) – Clients can request copies of their data.
- Right to Erasure (Article 17 GDPR) – Clients can ask for their data to be deleted.
- Right to Data Portability (Article 20 GDPR) – Clients can request a copy of their data in a machine-readable format.
These three main rights of GDPR give clients responsibility for their data. ensuring that businesses, especially law firms, handle personal data responsibly.
We have established that law firms hold a goldmine of sensitive information.
And
Yes, GDPR can help protect client data, but how much can it really help protect?
Holding large amounts of data puts law firms right at the top of the list for being targeted by hackers, as cybercriminals see this as a jackpot to steal data, which then can be sold or used for fraud.
Other reasons why law firms are high-risk targets:
- They work with Multiple Third Parties: For example, relying on external partners like cloud storage providers and IT vendors. Even the slightest sniff of weak security can lead to data breaches.
- UK law firms report a 60% increase in experiencing a cyberattack:
Hackers know how hectic a law firm can be from time to time. Hence, allowing hackers to conduct ransomware attacks (locking up files for ransom), phishing (tricking staff into giving up passwords), and even insider threats (disgruntled employees leaking data) to break in.
In 2020, Grubman Shire Meiselas & Sacks, a top law firm representing stars like Lady Gaga and Madonna, was hit by a ransomware attack. Hackers stole legal documents and demanded a $42 million ransom to keep them private. When the firm refused, confidential files were leaked online.
Therefore, law firms must prioritise GDPR to prevent such data breaches from occurring!
Core GDPR Principles when Handling Personal Data For Law Firms:
1. Be Transparent About Data Use
- Clients need to know how their data is collected, processed, and stored.
- Firms must have clear privacy policies and obtain explicit consent when required.
2. Only Collect Data You Actually Need
- Don’t gather unnecessary client information.
- More data means more risk, so stick to what’s essential.
3. Keep Client Information Up-to-Date
- Outdated or incorrect information can cause legal issues.
- Clients have the right to request corrections under Article 16 GDPR.
4. Don’t Store Data Longer Than Necessary
- Implement data retention policies that automatically delete old records.
- If you don’t need it, get rid of it securely.
5. Keep Data Secure
- Use encryption, strong passwords, and access controls to protect sensitive files.
- Avoid storing confidential data in unprotected online environments.
What Happens If You Don’t Follow the GDPR?
Ignoring GDPR can be a costly mistake. Here’s what can happen:
1. Massive Fines
- GDPR violations can cost up to €20 million or 4% of annual turnover.
- Doesn’t matter how big the firm is; anyone can get fined.
2. Loss of Client Trust
- A data breach can destroy your firm’s reputation.
- Once trust is lost, clients will take their business elsewhere.
3. Legal Trouble
- Clients can sue for data breach damages, resulting in further GDPR-related audits and investigations.
It’s Time for Law Firms to Adhere to GDPR: Here’s How
1. Start by appointing a Data Protection Officer (DPO):
Under Article 37 of GDPR, law firms that handle large amounts of personal data must appoint a DPO.
DPOs are responsible for monitoring GDPR compliance, ensuring that the law firm is meeting the minimum GDPR requirements.
2. Assess Data Protection Risks
Regular Data Protection Impact Assessments (DPIA) will help law firms spot weak points, allowing them to fix security gaps before they become a problem for the law firm and an opportunity for a hacker.
3. Implementing Strong Security Features
Multi-factor Authentication (MFA) is the way to go to protect sensitive files, alongside encrypting any emails and legal documents that may be at risk of breaches.
4. Training Employees
As discussed before, most data breaches happen due to human error. Hence, staff must be trained on how to spot different phishing emails and how client data can be handled securely and responsibly.
5. Review your Vendor Contracts
Ensure that any third-party service provider you collaborate with complies with GDPR. This can be done through Data Processing Agreements, which ensure third-party providers meet security standards.
6. Finally, have a Plan Ready for Data Breaches
If a data breach occurs, you are responsible for reporting the situation to the Information Commissioner’s Office (ICO) within 72 hours. Even if you are not sure, still report it as it means you have logged the necessary information required if the data breach were to occur.
And don’t forget to notify affected clients, as they have a right to know. Moreover, by notifying affected clients, the law firm can devise a strategy, outlining steps to contain the damage.
Other GDPR Challenges You Should Be Aware of:
- Remote Work: As we all live in a world of remote work, so do lawyers. Hence, it is equally important to use secure devices and VPNs to prevent unauthorised data access. This stresses the fact of remote work polices that comply with GDPR polices.
- AI and Data Processing: Law firms have a lot of work to do in a day. Sometimes, they may result in AI-powered tools for document review. Yes, work smarter, but please ensure that these tools comply with the GDPR principles of fair processing.
Conclusion
GDPR compliance isn’t just about avoiding a regulatory fine. It’s more…
It’s about protecting your clients and reputation. Law firms that prioritise data security and comply with the standards of GDPR will not only avoid legal trouble but will also build long-lasting client relationships that will gain them a competitive advantage in the industry.
By taking GDPR compliance seriously, law firms can stay ahead of threats, protect their clients and operate with confidence in the digital age that we live in.