Corporate Legal Counsels Fret Over Cybersecurity

A majority of in-house legal counsels at US corporations view data breaches and cross-border data privacy regulations as among their biggest e-discovery related legal risks.

BDO Consulting, a company that provides financial, business, and technology advisory services, recently surveyed over 100 senior legal executives at organizations ranging in size from $100 million to over $5 billion.

Seventy four percent, or nearly three in four of the respondents, pointed to data breaches as one of their top data-related risks, while 68% say the legal department in their organization was more engaged with cybersecurity compared to 12 months ago as result of such concerns.

"E-discovery systems collect, store and process highly sensitive information that is a potential goldmine for hackers," said Shahryar Shaghaghi, head of BDO International’s cybersecurity and technology advisory Services practice in the report. "These systems and the data they contain require strong risk management oversight as well as proper cybersecurity defenses and protocols."

In situations where third-party service providers manage the data for enterprises, more than one quarter of the survey respondents (27%) say they are unaware of the risk posed to their organization by third-parties.

"The challenges of e-discovery—and protecting the data involved in the process—increase each year," BDO said in its report.

The growing ubiquity and use of mobile devices, cloud services, social media, and the Internet of Things, have combined to drive a massive increase in the volume of enterprise data that might need to be retained and protected from an e-discovery perspective.

Exacerbating the issue is the constantly evolving nature of regulatory and data privacy laws, especially those involving cross-border investigations and compliance with varied local laws, the BDO report said. Sixty percent of the corporate counsel in BDOs survey—a full 9% higher than last year—pointed to numerous, often conflicting international security and privacy laws as their biggest challenge in dealing with cross-border e-discovery.

The biggest cross-border headaches appear tied to the move last year by the European Union to invalidate the Safe Harbor agreement governing the transfer of data between companies in the EU and the US. Thirty-seven percent of the BDO respondents cited that specific development as presenting the biggest cross-border problems.

Data breaches and cross border issues are not the only concern. The survey also revealed a high-level of unease over data-related legal threats posed by the adoption and use of mobile devices in enterprise environments: 35% of in-house counsels worry about BYOD policies and 32% cite mobile device management concerns.

Data preservation and over-preservation, data disposal practices, and data encryption all were cited as other concerns by the in-house counsels.

Somewhat unsurprisingly, the BDO survey reflected increased attention on better information governance overall as a way to make the e-discover process. The goal increasingly for instance is to enable a sharper focus on the most relevant and responsive data during e-discovery or an investigation by looking for and culling irrelevant data from enterprise systems.

"How an organization manages data overall has a massive impact on e-discovery," says Judy Selby, managing director in BDO's consulting and technology advisory services group.

Too many companies have a tendency to store all the data they generate because storage is cheap and they don't have an adequate retention policy.

"If you get a discovery request in for a certain type of document, the less data you have within your corporation and the better organized it is, the better able you are to respond," Selby says.

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