The progression of technology has enabled criminals to become more savvy when looking to exploit businesses. The legal sector in general has become a huge target for cybercriminals when they appreciate the large sums of money transacted each day. Given the level of trust between a solicitor and their clients, it is not surprising that these particular relationships are targeted for their own financial benefit. Criminals are not just looking for financial gains, but also for the confidential data which is at the crux of a solicitor-client relationship, causing a risk to the legal sector.
The risk to the legal sector is posed by the interception of emails, cloned websites and fake headed letters are amongst just some of the techniques these criminals are using, meaning it is becoming more and more important for law firms to ensure that their due diligence and compliance policies are constantly up to date. When considering the protection of client money, it’s paramount to understand the significant risk which cybercrime presents.
Protection by way of prevention
To protect law firms, solicitors, and clients, firms must ensure that they safeguard digital information from both internal and external sources. Firms must meet all of the legal and regulatory requirements to lower the risks posed and conserve their reputation. The SRA’s Risk Outlook 2016/17 gives a helpful overview of various cybercrimes and suggests perhaps moving away from complex rules to free up firms to innovate and grow, whilst ensuring a high level of protection. The challenges around cybercrime, whilst not new, are evolving and require constant vigilance.
The SRA are entrusting solicitors with the responsibility to manage their own risks and offers the Risk Outlook as a tool to aid them with this mammoth task. It provides an overview of the risks to the protection of people who use legal services; the operation of the rule of law; and the proper administration of justice. The risk posed to these three areas is something which needs to be taken seriously.
What should we do about it?
In cases where law firms have not been vigilant enough in checking simple things such as email addresses for a slight change, solicitors could be liable for losing client funds; be forced to pay money back to lenders; be subjected to raised insurance premiums; and suffer brand damage. It is therefore crucial that, as merely one example: no notifications of changes to bank details are sent by letter or by email.
The opportunities for criminals are vast, but equally so are the opportunities for mitigating risk by outsourcing due diligence and compliance solutions. Outsourcing will not only reduce the pressure upon a solicitor who already has to be vigilant when undertaking various daily tasks, but it will free up fee earner time and leave due diligence to specialists who can keep up with the rapidly evolving issues we face today.
It is therefore of utmost importance that there is a general awareness of the risk of cybercrime and fraud in the legal sector. Not only should risk management be carefully considered by law firms to meet legal and regulatory requirements, but solicitors themselves should be acknowledging risk when undertaking their daily tasks to ensure that the relevant precautions are undertaken each and every time.
Jennifer Davies – Lawyer Checker