Increasing information security of sensitive data is a topic that is resonating throughout the legal profession. The growing rate of attorneys electronically transmitting and maintaining sensitive information increases a law firm’s risk surrounding its information security and controls. This risk factor is becoming a principal concern within the legal profession.
In fact, many large corporate clients, especially in the banking industry, are demanding law firms take more steps to guard against online intrusions and are insisting they be more proactive in strengthening their IT infrastructure.
With increased compliance concerns due to client demands, many law firms are incurring additional costs for information technology infrastructure and staffing. These cash outlays can eat away at a firm’s profits. As consultants and advisors to law firms, we’ve noticed two consistently applied strategies in the marketplace to recoup these investments.
Including Additional Terms in Contracts with Clients
This would essentially pass along additional IT infrastructure costs to clients. Increasingly, law firms are including terms such as “technology fees” or “security fees” in contractual agreements with clients in order to allow for additional billing surcharges.
You could consider broadly assessing clients these additional fees as a percentage of billable hours incurred or total fees billed. If some clients have fewer IT security needs and would be sensitive to fees associated with a broad-range assessment, you could consider billing technology fees based on the amount of storage or services required from the firm’s network. Such arrangements may more accurately reflect actual IT services being provided to individual clients as opposed to spreading costs among your entire client base.
Highlighting IT Compliance During the Proposal Process & for Existing Clients
Law firms that have had their IT departments closely examined by scrupulous clients or prospects during proposal processes, have likely made significant changes to their IT systems and processes. In most cases, the documentation and testing related to these examinations are extensive and oftentimes lead to changes in law firms’ IT systems to conform to clients’ or potential clients’ requests.
To mitigate concerns during the proposal process, many law firms are being upfront about the scrutiny their IT systems have undergone and the increased security that followed as a result. You could also consider proactively sending updates to existing clients about infrastructure changes being made in order to conform to industry trends. These types of communications can be successful in assuring current and future clients that the firm is taking necessary measures to keep sensitive information secure.
The market is demanding that additional emphasis be placed on law firms’ IT infrastructure and security capabilities. The ability for law firms to adapt to this emerging trend will be a major factor in retaining current clients and winning new work.
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