What can be done to prevent cyber-fraud in the legal sector?

Annie Button has written an article that analyses what can be done to prevent cyber-fraud in the legal sector.

The discussion about whether legal professionals are lagging in the race to embrace digitisation has continued.

While traditionally, legal practices have often dealt with sensitive client information on a face-to-face basis, relying heavily on paper printouts of contracts and agreements, there’s no wonder why many clients implore them to adopt a more digital-friendly approach.

However, there is an alarmingly overlooked problem that comes with hastily making the inevitable digital shift.

The legal sector is no stranger to cybercrime and fraud:

As processes have become more cloud-based and client demands for online services have grown, the efficiency and productivity benefits are paramount.

However, if not adequately prepared or educated in online best practices, legal professionals could be prime targets for cybercriminals. The risks only escalate if a firm handles highly sensitive information and finances simultaneously, such as the 80 firms that suffered outages following a cyber-incident to their infrastructure provider CTS.

Fundamentally, without proper cyber-security protocols and training implemented across the board, legal firms leave themselves vulnerable to attacks which can range from the mildly inconvenient to the catastrophic, leaving their reputation in tatters.

To avoid this level of attack entirely, it’s prudent that conveyancing and legal teams take proactive measures and understand how to safeguard themselves and their client data.

This short guide explains some of the basic controls that can be implemented to bolster a firm’s baseline level of defence. It will also provide advice on disaster recovery planning to minimise the damage suffered if the worst should still occur.

It’s unlikely that every single hack will be prevented in a firm’s lifetime, but the severity and frequency will be exponentially lessened by implementing the advice outlined in this guide.

Common cyber-threats facing the legal sector:

Law firms face a variety of cyber-threats, including (but not limited to):

- - Phishing attacks – Fraudulent emails – with fake users often disguising themselves as known contacts or entities – often arrive in staff inboxes, bypassing their software’s built-in security software. If the text is urgent and convincing enough, staff could be persuaded to click links or attachments that install malware or compromise systems or logins, thus allowing criminals to steal data or funds. While invariably phishing emails manifest into big problems due to human error, they can still be devastating.
  - Ransomware attacks – Ransomware refers to a specific type of malware that encrypts systems and prevents users from accessing data until a ransom is paid. Often used in tandem with social engineering and blackmail tactics, ransomware attacks can result in temporary or permanent data loss, not to mention the loss of funds should businesses pay up. It’s widely believed that ransomware accounts for 60% of personal data breaches in the UK every year.
  - Business Email Compromise (BEC) – A situation like this arises when criminals infiltrate and mimic internal accounts to send fake payment or data transfer requests. Similar to phishing, malicious actors disguise themselves and deceive users into thinking requests are legitimate and authentic, whereas they are the complete opposite.
  - Distributed Denial-of-Service (DDoS) attacks – Systems, servers and websites will often be flooded with traffic – often courtesy of bots sending numerous HTTP requests – in an attempt to crash them and cause disruption.
  - Brute force attacks – Malicious actors may forcefully attempt to access sensitive data locked behind usernames and passwords with the help of bots. Systems and files are made all the more accessible to them if passwords are weak and not backed up by multi-factor authentication (MFA).

In the legal sector, legal professionals are particularly susceptible to these attacks due to the high-value transactions and sensitive information exchanged in processes such as conveyancing, property exchanges, and employment disputes or settlements (among others).

As more legal firms begin to offer innovative solutions like eSignatures, tech-savvy criminals can exploit systems and networks before firms can even detect them. This is why it pays off to learn vital cyber-security defences and invest in enterprise-grade solutions like managed detection and response (MDR) to uncover any vulnerabilities in your infrastructure.

However, the most vital defensive asset a firm can have is essential staff education.

Prevention through staff education:

Educating legal professionals – whatever their experience and seniority – in cyber-security best practices is a vital first layer of defence in the continual fight against cybercrime.

Every staff member should complete training to:

- - Recognise phishing emails and unsafe website links.
  - Create unique complex passwords for all accounts.
  - Learn how malware infects devices via unsafe internet activity.
  - Spot signs of BEC attacks or fraudulent changes to invoices or account details.
  - Implement safe protocols for client identity verification.
  - Know how to securely handle client data and carefully validate any transaction requests.
  - Understand how to implement MFA effectively.
  - Validate clear reporting procedures for anomalies or suspicious activity.

Enforcing this training during the hiring and onboarding stages, with regular refreshers initiated yearly, should ensure that cyber-threats stay top of mind.

It’s easy to overlook security when workloads are heavy and when deadlines loom close, however, the negative repercussions of a data breach will far outweigh those incurred by taking extra time to validate requests and follow correct protocols.

Before long, legal firms can become inherently more cyber-aware and feel reassured that they are taking proactive steps to reduce their attack surface.

Technical safeguards:

While education should form the basis of all ongoing cyber-awareness and -training, human error can still happen, despite a firm’s intent to automate as many time-consuming tasks as possible.

Some vital technical controls include the following, which can exponentially boost defences:

1. Install comprehensive security on all devices

Enterprise-level antivirus, firewalls and malware protection will undoubtedly prevent infections or data theft from occurring as frequently.

2. Enable Multi-Factor Authentication (MFA)

MFA adds an extra credential to logins, often in the form of a text message, phone call, email code, or one-time password (OTP).

Enable MFA on all collaborative systems and software so that all user requests can be validated before access is granted.

Pair MFA with built-in strong password generators like LastPass or BitWarden to make logins more secure and unique for each user.

3. Install email security and spam-filtering

Bolster your email inboxes with advanced spam-filtering and email security plugins that can scan content and confirm sender authenticity with precision.

4. Segment networks and control access

Limit employee account privileges based on their positioning and seniority, following the principle of least privilege.

Consider deploying virtual private networks (VPNs) for dispersed teams or remote workers so sensitive files can only be accessed by validated, authentic machines.

5. Back up all company data

Store all client files and financial data in highly secure servers which back up regularly, ideally in an offline or inaccessible environment.

Continually test backup and restoration processes to ensure they work correctly.

6. Keep all systems and software patched

Run core system and software updates routinely to fix any known vulnerabilities that could be knowingly exploited by a cybercriminal.

Creating a cyber-disaster recovery plan:

Even by establishing proper training programmes and investing in reliable technical safeguards, firms are not ever guaranteed to be safe from cyber-attacks.

Should a firm fall victim, it’s imperative that business continuity and reputation remain intact. Maintaining them both hinges heavily on having an effective, decisive disaster recovery plan.

This could detail:

- - Emergency response procedures for each staff member, such as isolating infected devices or preserving evidence.
  - Lists of internal or external stakeholders to notify in the event of a breach.
  - Steps to retrieve backups and restore affected systems.
  - Plans to provide services until systems are restored.
  - Investigation processes to understand the cause and effect of breaches.
  - Improvements and ‘lessons-learned’ outcomes, like this notable NHS example.
  - Dates to refresh employees on threats and additional training if necessary to prevent attacks from repeating.
  - Incident reports, holding statements, and FAQs to evidence to clients for transparency.
  - Crisis communications and PR plans following a breach.

Expertly devising and testing a plan like the above makes a profound difference in reducing friction following a breach and maintaining client or stakeholder trust in the firm. While maintaining operations and client confidence should remain a priority, transparency and accountability should be exhibited in all correspondence.

Remaining proactive and preventative:

As digitisation demands continue to grow, cyber-threats evolve and become more sophisticated, and thus legal firms risk becoming more attractive targets.

If they fail to shift to ‌digital terrain, they risk losing buyer faith, whereas if they go digital without proper consideration for security, they risk falling victim to cybercrime.

Therefore, it’s a double-edged sword.

However, prioritising security and planning through education, basic technical controls and disaster recovery steps will prove pivotal in strengthening a firm’s cyber posture.

Attacks are likely to still occur, and occasionally some bad actors may still slip through the cracks, but firms can reduce risks, disruption and damage by making subtle and gradual improvements to manage incidents with confidence.

With the right approach, firms can migrate to a digital infrastructure securely and without compromising service delivery.