Eliminating data breaches is vital for the legal industry; therefore, businesses in it need third-party risk management solutions.
This is because law firms manage highly sensitive and critical data like trade secrets, deals, acquisitions and mergers, trademark applications, and non-public information.
However, law firms mostly require third-party vendors to perform critical activities like cloud storage, e-discovery, and accounting.
But, giving such access makes data vulnerable to data breaches and theft.
This is why third-party risk management (TPRM) is vital. It complies with professional and ethical standards, ensuring that vendors abide by the online security and confidentiality levels they’re required to observe.
Want to know more about TPRM, its significance, and its benefits for legal firms? Read on!
What’s TPRM Exactly?
TPRM is a process of examining the risks connected with using third-party vendors.
It involves determining who has access to a company’s intellectual properties, operations, customer information, finances, and data.
TPRM is specifically designed to provide organizations with the know-how of third parties they utilize, how they employ them, and the type of safeguards third parties put in place.
The requirements and scope of a “third-party risk management” program depend on the firm and can differ considerably based on regulatory guidance, industry, and other factors.
Nevertheless, many TPRM practices are comprehensive and relevant to any kind of organization or business, including the legal industry.
While precise definitions might vary, TPRM is often interchangeably used with various other industry terms like “vendor risk management (VRM),” “supplier risk management (SRM),” “Supply chain risk management (SCRM),” or “Vendor management (VM).”
Why Third-Party Risk Management Is So Important?
Here’s the thing: TPRM is highly important in the contemporary landscape for slashing costs, improving corporate reputations, and mitigating risks. Robust strategies will significantly minimize the adverse effects that your firms’ tech decisions might have on your financial integrity and clients.
“Third-part risk management” significance is self-evident when you take into account the recent incidents of malicious assaults on poorly-managed supply chains.
For example, ineffective, negligent protocols at a legal firm contributed to a massive security breach in 2014. Additionally, Equifax in 2017 pointed out a weakness in its third-party software as a catalyst to a significant data loss.
Furthermore, Paradise Papers (containing 13M+files describing offshore tax evasion by influential individuals and organizations, including law firms) were leaked in 2017 to the German newspaper, the ‘Weakest Link.’
You should know that these aren’t some isolated cases. In fact, according to a 2020 study on third party risk:
- 80% of companies (including law firms) have experienced third-party related data breaches in the last ten to twelve months
- 77% of companies have limited visibility near third-party vendors
- On average, companies experience 2.7 data leakages/year
Overall, the lack of monitoring over third parties access to confidential and sensitive data is the main reason for so many data breaches in various organizations, including legal firms.
Top Benefits Of Vendor Risk Management Technologies For Legal Firms
By having solid legal risk management software programs in position and displaying robust security postures, law firms can build confidence early in their relationship and draw more clients.
To help with that, there’s a range of dedicated and credible tools, which can help law firms streamline information-gathering and risk management processes.
Wondering how Saas third-party risk management technologies will help mitigate such security hazards? Here’s how :
- TPRM will help automate and simplify vendor risk review processes (or better known as the “Vendor risk assessment VRA” process”
- It will compare various third parties (vendors) with their risk and effect on law firms
- Will categorize third-party vendors as per the customized criteria you see fit, such as what kind of data and other information can they easily access? Do they manage PII or PHI? What other departments are they collaborating with? Are they economically healthy? How crucial are they for your daily business operations? Do vendors have cyber liability insurance and an upgraded penetration test?
The most vital third-party vendors ( contractors, service providers, or partners) will be ones having remote access control to your networks, such as login details to access servers containing client’s data and other confidential information.
TPRM technologies will help you understand whether third-party vendors are doing what they are supposed to do to protect law firms and their clients.
Why Computer Resources of America?
Looking for a sustainable and effective TPRM program? If so, choose Computer Resource America (CRA)! At CRA, we built unique TPRM automation platforms that will help your law firm streamline third-party risk assessments for securing the data provided by corporate clients. Our managed IT solutions can help you solve all sorts of tech-related issues.
Want to know how CRA can help law firms streamline third-party risk management? Contact us!
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