Articles Posted in Policies and Procedures

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Last year, SEC Chair Mary Jo White named cybersecurity as the biggest risk facing financial markets. But the risk isn’t limited to the financial industry – even a casual review of breach reports in the mainstream press shows that cybersecurity is a risk common to all companies in any industry.  The challenge facing companies is how to prepare for what seems to be inevitable, and how to do it in an efficient and economical basis.

The key element in preparing for a data breach is less a technical matter than a traditional evaluation of business risk.  Companies regularly analyze the risks of business decisions, and just as regularly, recognize that risk analysis requires legal advice.  Evaluating cybersecurity risk is no different – it requires that a company understands the risks it takes, which risks it is willing to assume as part of its business and which risks need to be eliminated or shifted (through insurance, contractual arrangements or otherwise).  Understanding this, obtaining competent legal advice before a breach is a critical aspect of any cybersecurity plan.

Despite this fact, many companies focus their data protection programs in IT, and only bring in their lawyers late in the game to bless their cybersecurity measures. While legal expenses are always a concern, companies will reap a greater return on their overall cybersecurity investment by soliciting advice early on, and stand better odds a breach will be handled correctly and efficiently.

What can cybersecurity lawyers bring to the table?

Hand-in-Glove Collaboration

Perhaps most importantly, legal counsel commonly work with a variety of corporate players and are in a unique position to work hand-in-glove with IT, HR, and other functions to assess and reduce cybersecurity risk while still permitting a company to function efficiently. An experienced lawyer is often the best person to lead a team that establishes key protocols to avoid a breach, including policies and procedures for privacy, confidentiality, mobile device usage, record retention, and breach protocol.  Lawyers are particularly able to address the key elements of an effective cybersecurity plan. Continue reading

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Cyber risk affects businesses of every size and industry. A data breach can lead to negative publicity, loss of customer confidence and potential lawsuits. There can be a variety of unanticipated – and costly – business disruptions.

Just ask the owners of the Romantik Seehotel Jaegerwirt hotel, in the Austrian Alps, which recently had their systems frozen by hackers, resulting in the complete shutdown of hotel computers. The hackers breached the hotel’s key card system, making it impossible for guests to enter their rooms and preventing the hotel from reprogramming the cards.

The hackers did not scrape guests’ credit card data, as has happened with other hotel data breaches, but instead demanded a ransom payable in Bitcoin. The Romantik Seehotel Jaegerwirt – which was fully occupied at the beginning of ski season – paid the ransom, at which time control of the key card system was restored.

While highly disruptive, it’s easy to imagine how it could have been worse. Fortunately, the hotel located and fixed the backdoor left by the hackers (which the hackers tried to exploit almost immediately) and secured their systems.

Vulnerability to hackers seeking to take control of a building’s system is a very real threat to organizations of all kinds: hospitals, hotels, law firms, research facilities, banks, retailers – virtually any kind of business that is housed in a “smart” building. Continue reading

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3679571-business-peopleOne of the challenges – perhaps the biggest challenge – to achieving cybersecurity is complexity.  Every day we are faced with new threats as hackers display their creativity and new technologies and approaches to addressing those threats.  Governments, both U.S. and foreign, regularly propose laws and regulations better to protect us – and to confuse us.  And underlying all of it is technical language which seems designed to prevent us from understanding the challenge of cybersecurity.

It’s no wonder that one of the things our clients most often ask is where to start – what is one thing that they can do to start the process of becoming cybersecure.  And the fact is that there is one thing that will put you on the road to cyber security:  Creating a culture of security.

While many firms claim to have a “culture of security,” it’s unclear that they have made the commitment to engage every aspect of their operations, and every one of their personnel, in the goal of creating a cybersecure environment.  Cybersecurity requires a firm to create in each of its personnel a “human firewall.”

An enterprise-wide focus on security requires a focus on people, not on technology.  However important security technology may be – and we do not suggest that a company skimp on its technology budget! – most technological defenses can be overcome by individuals, whether through lack of training, negligence, or malice.  Consequently, bringing individuals into the cybersecure culture and making them stakeholders will have an immediate and measurable impact on cybersecurity efforts.

So, then, how is a cybersecure culture achieved?  A few essential steps are required: Continue reading

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Cybercrime cost the world economy about $445 billion in 2014 and the 2015 numbers will be even higher. The cost of data breaches will reach $2.1 trillion globally by 2019. Worldwide spending on information security is estimated to reach $77 billion in 2015. In the midst of these astounding numbers, the role of the “human factor” has gotten lost. This is a frightening fact. Why? Because “they will click.” A breach is just one click away – a single person can and will overcome any technological safeguard. This is an unassailable reality, but one that gets mostly lip service by companies.
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Co-chairs of the Jeffer Mangels Cybersecurity and Privacy Group, Robert E. Braun and Michael A. Gold, discuss why companies need a cybersecurity training program. The other videos in this 4-part series include: First steps to take when there’s a data breach at your company; Cybersecurity for middle market companies; and Impact of international privacy laws on U.S. companies.

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Co-chairs of the Jeffer Mangels Cybersecurity and Privacy Group, Robert E. Braun and Michael A. Gold, discuss cybersecurity for middle market companies. The other videos in this 4-part series include: Why companies need a cybersecurity training program; First steps to take when there’s a data breach at your company; and Impact of international privacy laws on U.S. companies.

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Multinational companies often face challenges in enforcing claims against their employees and agents located in foreign jurisdictions. In December 2012, a federal appeals court decision — MacDermid, Inc. v. Deiter, No. 11-5388-cv (2nd Cir. Dec. 26, 2012) — made enforcement a bit easier when a company goes after employees who commit cyber theft beyond U.S. borders.
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There is no shortage of advice on how to secure electronic information. Companies can look to pronouncements by state and federal agencies (for example, the recent statements by the California Attorney General and the Federal Trade Commission on mobile application security), private industry (like the Payment Card Industry’s Data Security Standards) and foreign standards (like the European Union Data Protection Directive). There is guidance regarding technical standards, corporate protocols, contracting requirements and others.
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Published in The Bottom Line, the State Bar of California’s law Practice Management and Technology Section, as well as Hospitality Net, Hotel Online and ehotelier.com.

Download a PDF of the article: Losing the expectation of privacy bit by bit, byte by byte

 
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