According to Dean Myers, president of Core Insurance Agency, “the risks facing law firms and accounting firms have become more complex and pervasive than ever before, with growing vulnerabilities stemming from the virtual workforce and cyber threats.” While legal offices are situated.
According to him, law firms that embrace complete remote work are satisfying the needs of contemporary professionals, but doing so might also provide special difficulties for retaining control and monitoring.
Employers are losing some control over their workforce, according to Myers, because of the monitoring of work quality and checks to make sure lawyers aren’t doing two jobs.
This lack of control may cause “an uptick in severity” in claims as attorneys learn to manage the challenges of working remotely without the supervision of a physical office. Furthermore, the provision and consumption of legal services have evolved more broadly as a result of technology, which has made it possible for practices to cross geographical boundaries. But there are drawbacks to this change, particularly in terms of cyberthreats.
Globally, the cost of cybercrime is expected to rise from $8.15 trillion in 2023 to $13.8 trillion by 2028, according to Statista study. Furthermore, in the last three years, the number of cyber insurance claims has increased by a startling 100%, and payouts have increased by an additional 200%. Furthermore, cybersecurity is becoming a bigger worry for accounting and legal organizations alike, as Myers told IB.
“One of the things that I’m seeing with cyber related to accounting and legal firms is that their clients are getting hacked and compromised, rather than the firms themselves,” he stated.
Attacks using ransomware and email-based fraud
Such breaches can have disastrous results; Myers recently had an insurance claim because a bogus request caused $150,000 to be transferred to the incorrect bank. 80% to 90% of all claims handled by cyber insurers are related to ransomware attacks and email-based fraud, and the trust that is violated after such an incident is frequently significantly more harmful than the actual monetary loss.
“We could easily write a check for the client’s cyber insurance because they had it, but now they’ve lost that client’s trust,” Myers stated. “If you are unsure, call the person; confirm requests; take initiative; your clients will value it.”
This straightforward act of verification could maintain client connections and avert expensive blunders. Still, the problem is not limited to handling the immediate aftermath of these kinds of events. Keeping a strong cybersecurity posture in a setting where the stakes are always getting higher is the bigger problem.
Furthermore, today’s professionals’ desire for remote work has only made the cybersecurity environment more complicated. The traditional career path in law firms is changing as a result of the need for flexibility in the workplace. Many people are choosing to launch their own practices instead of following the classic model of working for decades at one firm.
“The entire cybersecurity problem will only get worse.”
These shifts bring possibilities and difficulties for the insurance industry. Although Myers welcomes the move towards more autonomous practices since it gives attorneys more discretion over the cases and clients they take on, he is aware of the additional risks involved and issues a warning that errors could occur due to a lack of supervision in a virtual environment.
The quality of the representation, which typically entails a statute being missed, an administrative mistake, or, of course, cyber concerns, is the sole problem, he claimed. Tailoring risk management solutions to the unique needs of law firms is becoming more and more important. Here, Myers emphasizes the need of customizing solutions to meet the unique requirements of every practice, regardless of size—whether it’s a larger practice in a big city or a smaller practice in a tighter-knit community.
Still, cybersecurity is a worry for everyone. Businesses must invest in strong IT infrastructure and cybersecurity measures to safeguard sensitive client data as a result of the shift to virtual operations. According to Myers, “the whole cybersecurity issue will continue to grow.” “There could be serious legal and financial ramifications if you don’t bring an IT team on board right away.”
