Law firms may not be walking the walk on cybersecurity, according to the American Bar Association’s (ABA) TECHREPORT 2019. The report found that, while almost 60% of law firms use cloud computing applications to store client data, only 35% take standard precautionary measures to secure these data.
The annual ABA TECHREPORT examines how attorneys use technology in their practices. The results stem from the ABA’s Legal Technology Survey Report in combination with analysis from leaders in legal technology.
Articles on cloud computing, cybersecurity, practice management and websites and marketing have been released online. Five additional articles will be released on Wednesdays through Dec. 18.
One of the biggest red flags in the 2019 report was deteriorating cybersecurity in securing cloud computing applications. These applications include software or services that aren’t installed on a computer or phone, but are accessed over the internet (e.g., Google Docs, Slack, Clio and Evernote) and are commonly referred to as SaaS (software as a service).
Of the 13 standard cybersecurity measures evaluated in the ABA TECHREPORT, no more than 35% (down from 38%) of respondents reported that they used at least one of the measures. Seven percent of respondents reported using none of the security precautions. Moreover, only 28% of respondents said they review vendor privacy policies, down from 38% in 2018. This is specifically concerning due to the rise in data hacking.
Other standard precautions measured in the report include local data backups (27% reported use, down from 36% in 2018), reviewing Terms of Service (27%, down from 34%) and reviewing ethical decisions on cloud computing (25%, down from 34%). Only 4% of lawyers negotiated confidentiality agreements in connection with cloud services.
While some progress has been made in cybersecurity, the ABA TECHREPORT indicates that law firms still have a way to go in designing and implementing appropriate solutions.
A significant number of attorneys (26%) reported that their firms have experienced a security breach. Surprisingly, 19% weren’t sure. The larger the firm, the greater the percentage of uncertainty.
The number of respondents across all firms who reported having critical incident response plans in place increased in 2019 (31%, up from 25% in 2018). The use of plans only decreased in firms of 100 or more attorneys (65%, down from 71% in 2018).
Encryption and Cyber Insurance
More attorneys reported securing emails with encryption in 2019 (38%, up from 29% in 2018). The percentage of attorneys using file encryption (44%) and whole/full disk encryption (22%) dropped slightly this year compared to 2018.
The number of firms with cyber-liability insurance policies leveled off after growing in recent years. In 2019, 33% of respondents reported having policies in place, compared to 34% in 2018.
Websites & Marketing
Most solos and small firms don’t intentionally engage in marketing. Rather, they seem to employ “random acts of marketing” – if they market all – the ABA TECHREPORT says. In fact, 40% of firms with 10-49 lawyers, over 60% of firms with 2-9 lawyers and more than 80% of solos don’t have an annual marketing budget.
When attorneys do market, an increasing amount are relying on technology. Email was the marketing tool used most across all firm sizes in 2019 (41%, up from 33% in 2018). In addition, more law firms overall have established websites (86%, up from 77% in 2018), and solos are incrementally increasing their visibility online (57%, up from 55%).
Overall, 80% of respondents said their firms have a social media presence. This is the highest number since 2016. While the use of LinkedIn continues to decline, it’s still the most-used social platform in 2019 (79%, down from 93% in 2015). While the use of Facebook and Avvo continues to decline (54% in 2019 vs. 63% in 2018; 23% vs. 36%, respectively), Twitter has grown significantly. In 2019, 28% of respondents reported that their firm maintains a Twitter presence. This number is up from 14% in 2018.
Practice Management Tools
The use of practice management tools remains relatively constant across law firms of all sizes. These tools, which include programs like customer management and billing software, can enable firms to operate primarily through technology.
With more attorneys managing their practices on laptops (41%) and using remote access technology (73%), standardized practice management tools are becoming increasingly important. Small firms with 2-9 attorneys report using practice management software at the highest rates (43%); large firms with 100+ attorneys report the lowest rate of usage (22%).
The fact that usage numbers have remained relatively constant suggests that while these programs provide value, firms are still hesitant to switch from established practices. This may be attributed to time and costs associated with transitioning to new operating systems.
In addition, as Alexander Paykin, managing director of The Law Office of Alexander Paykin, P.C., points out in the report that the industry still lacks an all-inclusive software option. This means that firms must often purchase and train staff on more than one system.
To that end, more firms (44%) are opting for customer relationship management (CRM) software. CRMs offer more standardized (though still not fully comprehensive) corporate tasks and functions on one platform.
Robust discussion on the need for new law firm pricing structures hasn’t prompted firms to make a shift, according to the ABA TECHREPORT. The most popular fee structure remains hourly fees (69% in 2019, up 1% from 2018). This is followed by fixed fees (17%, up 2%) and contingent fees (9%, down 2%).
More firms, however, are offering electronic billing. This number increased to a record high of 74% across all firm sizes in 2019. Only solo firms and firms of 10-49 attorneys have decreased the use of electronic billing, however slightly (down 3% and 1%, respectively).
To read the ABA TECHREPORT articles in full, visit the ABA website.
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