Law firms encounter distinct challenges in handling third-party risks. Data breaches may result in substantial reputational harm and legal responsibilities. The inherent nature of legal work, frequently entailing highly confidential information, further complicates this intricate situation.

The Ticking Time Bombs in the Legal Sector

  • Highly sensitive client data is a treasure trove for cyber attackers.
  • The complex and diverse nature of legal operations can lead to a convoluted network of third-party relationships, each potentially exposing the firm to risk.

Playing Defence in an Offensive Landscape

  • Firms must be prepared to both defend against and respond to cyber incidents, including those originating from third parties.
  • Regulatory scrutiny is intensifying globally, with laws like GDPR and CCPA setting a stringent standard for data protection.



Strategies for Third-Party Cyber Risk Mitigation

With the challenges clearly defined, it’s time to turn our attention to the strategies available for law firms to defend against third-party cyber risks.

Establishing a Third Party Risk Management Program

A third party risk management program is your first line of defence. It helps to identify, assess, and mitigate the risks associated with outsourcing to third-part

Third Party Inventory and Classification

  • Identify all third-parties with whom the firm shares data.
  • Assign risk categories to third parties based on their level of access to sensitive data.

Risk Assessment and Continuous Monitoring

  • Regularly evaluate the security practices of high-risk third parties.
  • Implement continuous monitoring for all third parties that have ongoing access to your network.

Remediation and Ongoing Review

  • Proactively work with third parties to address any identified security gaps.
  • Regularly review and update your supplier risk assessments and categorisations.

Incident Response Planning

  • Collaborate with third parties to ensure a coordinated response in the event of a breach.
  • Conduct joint exercises to test the effectiveness of your collective incident response plans.



Implementing Contractual Protections

Contracts with third-parties are not just about the legalities of a service agreement; they can be potent tools for risk mitigation. Ensure your contracts include robust cyber security clauses.

Data Protection and Security Obligations

  • Clearly articulate the third parties responsibilities for safeguarding your data.
  • Include clauses that require the third party to notify your firm of any security incidents.

Indemnification and Liability

  • Define the financial repercussions for the third party in the event of a data breach.
  • Ensure clarity on the liability of each party in different breach scenarios.

Termination and Transition

  • Include provisions for the quick termination of services in the event of a security breach.
  • Stipulate the process for transitioning services to a new provider if necessary.

Compliance Assurance

  • Require that third parties maintain compliance with relevant security standards and regulations.
  • Mandate regular, independent security audits as part of the contractual relationship.



Enhancing Cyber security Awareness

The human factor cannot be overstated. Training your staff and your third party staff is essential in the fight against cyber threats.

Training Programs

  • Develop comprehensive cyber security training for all employees, with a focus on detecting and avoiding phishing attacks, strong password practices, and safe internet usage.
  • Tailor training for third parties to include your firm’s specific security protocols and standard operating procedures.

Ongoing Education and Simulation

  • Implement ongoing educational programs to keep cyber security at the forefront of everyone’s minds.
  • Conduct simulated phishing exercises and training sessions to test and improve response to potential threats.

Cultural Integration

  • Foster a culture of security where all stakeholders understand their roles in keeping firm and client data safe.
  • Incentivise good cyber hygiene practices and create consequences for security negligence.




Monitoring and Assessing Legal Technology

The technology landscape is constantly evolving, and with it, the risks. Monitoring and assessing the technologies used by your third parties can provide critical insights into potential vulnerabilities.

Due Diligence in Technology Selection

  • Conduct rigorous due diligence when selecting new third-party technologies.
  • Look for security certifications, industry best practices, and a strong track record.

Regular Security Reviews

  • Integrate regular security reviews of your suppliers technologies into your firm’s operational processes.
  • Invest in tools and services that can help detect and address vulnerabilities in third-party tech.

Prompt Patch Management

  • Work closely with suppliers to ensure that all technologies are promptly updated with the latest security patches.
  • Have strict procedures in place for discontinuing the use of technologies that are no longer supported or secure.



Collaboration and Information Sharing

Cyber security is not a competitive advantage; it’s a shared responsibility. Collaborate with peers, industry groups, and even competitors to share information about cyber threats and strategies.

Partnership with Legal Industry Groups

  • Join legal industry cyber security working groups to share best practices and stay abreast of emerging threats.
  • Participate in industry-wide initiatives for cyber resilience and response.

Peer Benchmarking

  • Use informal and formal networks to benchmark your cyber security measures against those of your peers.
  • Learn from others’ successes and failures.

Shared Intelligence Platforms

  • Invest in or participate in shared cyber security intelligence platforms to boost your threat detection and response capabilities.
  • Contribute to these platforms with your own insights and experiences.



A Proactive Approach to Third-Party Risk

Cyber security is not a static problem with a definitive solution; it’s a dynamic challenge that requires constant vigilance and adaptation. By taking a proactive approach to managing third-party cyber risks, law firms can stay ahead of the curve and protect the interests of their clients and their own future.

Continuous Improvement Mindset

  • Foster a culture of continuous improvement within your third party risk management program and across all cyber security initiatives.
  • Monitor the effectiveness of your strategies and adjust them in response to new threats or changes in your firm’s operations.

Incorporating Cyber security into Supplier Selection and Onboarding

  • Make cyber security a key criterion in the selection of new suppliers.
  • Develop a robust cyber security onboarding process to ensure that all new supplier relationships start on secure footing.

Leveraging Technology for Vigilance

  • Use the latest cyber security technologies, such as AI for threat detection and blockchain for secure transactions, to bolster your defences.
  • Stay informed about emerging technologies that could present new opportunities or risks.




Third-party cyber risk is a complex and daunting challenge for law firms, but it’s one that can be managed with the right strategies and a strong commitment to cyber security. By taking a comprehensive and proactive approach to third-party risk management, you can protect your firm, your clients, and your reputation. Remember, it’s not just about what you can do within your own walls but also about how you manage the security of those third parties that you work with whether it be a supplier, an associate or a client.



Protect your firm with Arx Alliance

The Arx platform is unique. Our approach is collaborative rather than prescriptive. We give you the tools and the framework to create robust, secure supply chains in a way that is effective, and cuts through the noise and jargon of a complex industry.

Over time, through a guided step-by-step process, we can help you identify and mitigate risks inside your own organisation, and collaborate with your suppliers to create robust, secure supply chain relationships.

Arx provides your firm and suppliers with a suite of tools:

  • Visibility of the organisation’s attack surfaces
  • Efficient control of cyber policies and standards
  • Central place for managing standards and controls
  • Continuous monitoring of all touch points
  • Situational awareness for all tiers of supply chain
  • Risk scored suppliers to highlight weak links