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services: IT Assurance

This article originally appeared on June 1, 2020 in Legaltech News.

Providing an adequate level of IT assurance for legal industry leaders has become a high-profile challenge, as firms of all sizes find themselves on the front lines of the global ransomware war.

Just last month, cyber hackers made a $42 million ransomware demand to a high-profile celebrity law firm in New York, and unfortunately these types of attacks are becoming more common. To compound this problem, the industry is faced with increasingly distributed IT systems, as cloud infrastructure, hosted applications, and outsourced services blur the boundaries between your firm and the rest of the world. So let’s define the issues and discuss actionable steps all legal industry leaders can oversee to provide effective IT assurance activities that will help keep your firm from becoming the next victim.

As we enter the new decade, our information systems are more interconnected than they have ever been. And this trend will not only continue, but accelerate. A typical organization computer system is interconnected with an entire ecosystem consisting of numerous integrated entities, including: service vendors, cloud vendors, peers, clients, and your own internal shadow IT. And it does not stop there, as vendors and their applications are also integrated with other clients, service providers, etc.; the web of interconnectedness is almost endless.

So how does a law firm gain assurance about cybersecurity when the interconnections are myriad and the boundaries are blurred? Before we start exploring answers to this question, let’s review a typical real-world example of how breaches occur across system boundaries.

For our history lesson, let’s examine the infamous 2013 Target breach. This well-studied breach clearly indicates it all started with a third-party heating/air conditioning maintenance contractor. This small vendor did not have the sophisticated security controls of a major retailer like Target. But, as a Target vendor, they did have access to Target’s vendor portal. After hackers breached the heating/air conditioning vendor’s network (via a phishing email), they then had authenticated access to Target’s vendor portal systems. Throw in a missing patch on the portal web server, and the thieves proceeded to gain administrative control of the network and steal information on approximately 40 million credit cards. Similar scenarios have played out over and over again in the ensuing seven years, and, as already noted, the number of integrated entities is only growing.

In modern integrated computer systems, assurance activities such as assessments, tests, and audits are increasingly difficult to perform in multi-party environments. But there are a few key tactics that can help.

At the strategic level, the first thing all organizations should do is rigorously inventory data assets and data stores. Know where your information is stored plus when, where, and how it is transmitted. Define who has data ownership responsibility, and who is responsible for securing the data. Only by knowing exactly what data your organization handles, and how you transmit and store it, can you begin to provide assurance about its confidentiality, integrity and availability (CIA).

Next, make sure you have strong contractual arrangements with your key vendors, service providers and partners. Whether your relationship is with a key cloud application, support, or internet service vendor, strong interconnect security agreements provide the foundation for assurance across boundaries. From data classifications to rules of behavior and incident reporting, a strong agreement defines responsibilities and reduces ambiguity. For clear guidance on what is essential to include in interconnect agreements, see the National Institute of Standards and Technology Special Publication 800-47 Security Guide for Interconnecting Information Technology Systems.

Ultimately, at the tactical level, we must, in the words of Ronald Reagan, “trust but verify.” Only penetration testing of controls can validate weaknesses in our IT defenses. And testing must be comprehensive, across not only technical controls, but also human and physical safeguards. As outlined in the Target breach example, a simple human attack (in this case, a phishing email) at a third party vendor can lead to a massive breach. Testing technical controls alone will not show where hackers can successfully attack your IT systems. Comprehensive testing will reveal cascading sequences of exploits that may lead to control of your system in a way vulnerability scans or program audits can never achieve.

Including key third parties in your testing regimen is not always easy, but there are some compelling arguments you can make. Remind key integrated entities we are all in this together, and we may very well share vulnerabilities. Attempt to convince them that only by testing the entire interconnected ecosystem can we find weaknesses. Reassure them the object is NOT to make them look bad. If all else fails, and key third parties refuse to provide permission, demand to see evidence of their own due care and due diligence, e.g. a cover letter from their penetration testing vendor. The good news is big players, like Microsoft and Amazon, provide almost blanket permission for third-party testing of their cloud infrastructures and applications. Getting all cloud/outsourced/interconnected vendors to participate remains a challenge, though.

When discussing IT assurance across boundaries, we are often asked about cyber liability insurance and related products. In our current multi-party liability landscape, the devil is in the policy details. Whether selling or buying, all parties should make themselves well aware of policy terms.

An easy example is defining exactly what systems, applications, and data sets are covered by the policy, e.g. are industrial controls systems covered? How about mobile devices or cloud applications and systems? The web of interconnected systems makes it difficult for underwriters to cover everything, and paying to cover all interconnected systems can be difficult for policy holders to afford.

It is also important to know exceptions in coverage based on inadequate due diligence, e.g. if the policy holder is not adequately performing configuration management (missing patches) or adequate vendor management (including vendors in tests or collecting evidence of their due diligence activities)?

All parties must also agree on what exactly constitutes a covered breach, e.g. is a physical theft of information assets a covered act? How about coverage of a state-sponsored attack? Is an inadvertent disclosure of PII covered? The list goes on.

In summary, providing real assurance across the boundaries of myriad interconnected systems is a daunting challenge. And the terrifying threat landscape we face puts business and personal interests, if not our very democratic institutions, at stake. The fact the security of any single entity affects the security of the entire integrated ecosystem demands we act in concert to defend our interests. The least we can do is attempt to get our key third parties to participate in comprehensive testing. Even if they refuse, the result of our conversation with them will be increased awareness, better communication and, hopefully, a call to action.

David Trepp is the partner of Information Security Assessment Services Group at accounting and advisory firm BPM LLP.

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