Howden: Cybersecurity Risks in Law Firms

Law firms are an increasingly attractive target for cyber-attacks. Given the sensitive nature of our work – handling large amounts of client money, confidential data, and privileged communications — these assets make us a prime focus for cybercriminals.

Moreover, the trust placed in law firms by clients enhances their appeal as targets. If a law firm's email accounts are compromised, those receiving the fraudulent email are still being tricked into transferring funds to fraudulent accounts despite the training that most firms provide to their staff.

The Solicitors Regulation Authority (SRA) and the Law Society have been leading efforts to raise awareness about the dangers of cyber-attacks, with the support of professional indemnity and cyber insurers, however, attacks continue and the financial and reputational costs of successful cyber-attacks remain significant.

Rising Cybersecurity Threats

Several factors have contributed to the increase in cyber-attacks targeting law firms. Global and geopolitical instability, combined with a growing reliance on outsourced IT services, has amplified the threat landscape. Any vulnerability in a firm's IT infrastructure can have far-reaching consequences, impacting not only the firm itself but also its clients.

Cybercriminals continue to use tried and tested methods to infiltrate systems, but they have also been innovating and refining their approaches. One ongoing risk is business email compromise (BEC). BEC occurs when an email account is hacked and the attacker uses it to send fraudulent messages often with new bank account details so that client funds are diverted to the criminal’s bank account. Another common tactic is for the hacker to set up mailbox rules that will automatically forward emails to them and hide replies from the legitimate sender.

A variation of this attack involves hackers creating email addresses that closely resemble legitimate domains. For instance, an email address such as jdsmith@gmail.com might be altered to jssmith@gmail.com—a slight but critical difference that the recipients could overlook. These attacks are becoming more frequent and the ability of criminals to bypass multi-factor authentication systems is also a further concern.

Another troubling trend is the rise in ransomware attacks, where law firms are locked out of their systems, rendering them unable to access case management, email, or telephone systems. An attack of this nature occurred last year with an attack on CTS, a managed services provider used by law firms. This breach impacted a significant number of law firms and transactions they were handling and highlighted the importance of ensuring that third-party vendors have robust security measures in place to prevent compromises.

Looking ahead

Ransomware attackers are becoming more aggressive and sophisticated, often using social media to gather personal information about their intended victims and in some instances threatening to harm family members if ransoms are not paid.

Advancements in artificial intelligence (AI) are predicted to make phishing emails even more convincing and recipients will potentially find it even more difficult to distinguish between genuine and fraudulent communications. Cybercriminals are already using voice manipulation software, which  mimics a person’s voice.

The speed at which these cyber threats are evolving means that law firms must remain vigilant, closely monitor developments in the cybersecurity landscape and address emerging risks to their businesses.

How Law Firms Can Protect Themselves?

Mitigating cyber risks begins with identifying the threats that could compromise a firm’s security. There are several measures that law firms can adopt to increase protection:

Education and Training

The first line of defence against cyber-attacks is our people and comprehensive, mandatory training for all staff members is critical in building a security-conscious business.  Employees must be aware of the risks and recognise potential threats. Cultivating a "no-blame culture" is also important, as it encourages our colleagues to report suspicious activity without fear of blame and allows firms to act quickly and minimize damage.

Strong Defences

Whilst our people are our greatest asset, they are also the greatest vulnerability. A strong technical defence system is essential to prevent these kinds of frauds. Multi-factor authentication (MFA) blocking suspicious emails and applying update patches to software are vital to reduce the likelihood of a successful attack. Additionally, law firms could consider decentralising the storage of sensitive documents and exploring cloud-based systems which some commentators regard as a more secure location.

Business Continuity Planning

Despite taking precautions, if a cyber-attack does occur, a well-prepared business continuity plan is essential. The Information Commissioner’s Office (ICO) has found that firms with a well-developed response strategy recover faster and incur lower costs than those who are unprepared. They are also more likely to minimise the reputational damage that such attacks can cause.

Conclusion

There is no doubt but that cyber-attacks remain a significant threat to law firms and, as the methods used by cybercriminals become more sophisticated, the risks to client data, financial assets and a firm's reputation increase. By taking proactive measures—including staff education, strengthening technical defences, and ensuring rigorous scrutiny of supply chains—law firms can better defend themselves against the evolving cyber threat landscape. The key to long-term success in mitigating these risks, however, is the willingness to stay informed and adapt to the changing nature of cybercrime.

Guest article written by Clare Hughes-Williams Justin Tivey from DAC Beachcroft