3 min read October 2023 — While firms in the professional services industry bolster its technological capabilities, this has led to increased vulnerabilities and cyber risk.
According to risk advisory Kroll, there was a 57% increase in cyber threat targeting within the professional services sector in 1Q23 compared to the end of 2022. Ransomware accounted for nearly one-third (30%) of cases and continues to be a pain point across industries, particularly among legal firms. IBM’s latest report on data breaches found that 51% of organizations are planning to boost security investments to mitigate threats, with the global average cost of a data breach reaching $4.45 million in 2023 — a 15% increase since 2020.
Invest: sat down with Franklin Zemel, partner at Saul Ewing LLP and Sheri Fiske Schultz, managing partner of Fiske & Company, to discuss how Broward County’s professional services industry is preparing to face present cyber challenges and how technology is shifting their industries.
How have you seen the role of professional services firms evolve in the age of ransomware attacks?
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Franklin Zemel: Ransomware attacks have evolved so rapidly that the nature of attacks or incidents from three years ago have little in common with what is happening today. Three or four years ago, someone would click on a link they shouldn’t have, and a virus or worm would immediately infect their system, encrypt their data and give clear instructions on how to get their date back. As companies began refusing to pay the ransom and focused on creating backup systems, it frustrated threat actors. In the “good old days,” malware would laugh at you while deleting your data every hour you did not pay. Then followed Black Cat, a ransomware where threat actors explore everything in your system for an average of six to eight months, and afterwards they spring it on you through triple extortion. Today’s bad actors threaten businesses to release their data publicly as well as notifying customers and clients that their private information has been breached and is being ransomed.
Law firms are primary targets of this type of ransomware because we are the keepers of our clients’ secrets. Recently, there have been repeated public announcements by law firms that they had been successfully breached. Class action lawsuits are piling up against law firms. It is not unique to them, though.
Sheri Fiske Schultz: Technology is reshaping the accounting profession. The arena is changing rapidly, and we have to keep up with it. Talent acquisition and retention is definitely a challenge as well. Even though we are able to attract talent from other states, it is difficult to find talent locally. Demand for CPAs has increased exponentially in Broward County, but our schools and universities have seen a 50% drop in graduates going into accounting. Graduates who are going into accounting are not looking to go into public accounting; they do not want to sit behind a desk. Being in forensic and business evaluation means thinking outside the box, so we are able to attract talent a bit easier, but it is still very difficult. We are partnering with the schools down here to ensure students know who we are. We go in as adjunct professors, and we also bring in student interns in partnership with the universities.
What is your outlook for the industry and your firm in the next three years?
Zemel: Law firms focused on cybersecurity and data privacy will have a tremendous advantage in the marketplace going forward. It is hard to imagine a law firm having a client that does not have the need for privacy and cybersecurity advice. At the same time, when incidents occur that lead to class action litigation, the law firms that have demonstrated their expertise in that area will benefit their clients. That is a very big area of growth for the legal industry. We also have a burgeoning issue in generative AI, which is a tool like any other. If I give someone a hammer, they can do something great or something very destructive with it. It has the means of vastly changing our economy the way the worldwide web did in the mid-90s. Nobody really understood what the world wide web was back then and what its potential was, except for a few visionaries. No one knew what these visionaries were talking about. That’s where we are at with generative AI, which also comes with its own problems. We are seeing more lawsuits against generative AI systems like ChatGPT. As just one example, how does generative AI affect copyright law? If I ask a query in ChatGPT that took its generated response from someone else’s copyrighted material, is that a violation? Being able to provide this advice is a very powerful economic feature for law firms.
Fiske Schultz: Fiske will continue working on attracting excellent candidates. We will also continue assisting clients with consulting needs beyond traditional services, such as tech-infused services and communication. Our firm also has a mentorship program where we pair experienced CPAs with young professionals in accordance with our recruitment and retention efforts. We are very focused on continuing educational efforts, as business valuation is evolving, and we want our employees to keep their skills and knowledge current. We continually support our employees in getting advanced certifications and education, too.
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