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Take Reasonable Care When Storing Client Data in the Cloud

By Sara E. Costello, Litigation News Associate Editor – June 21, 2011

Lawyers are increasingly storing client information on online data systems maintained by third-party vendors on servers around the world. These “cloud” services include Google’s Gmail and Google Docs, Apple’s forthcoming iCloud, and online file systems such as Dropbox and Box. Recent guidance from state bar associations and the ABA Commission on Ethics 20/20 suggests that while this may be an acceptable practice, lawyers must still take reasonable care to ensure that client confidentiality is not compromised.

Confidential Information Must be Protected
The ABA Commission on Ethics 20/20’s proposed changes to the ABA Model Rules of Professional Conduct [PDF] emphasize that lawyers “must make reasonable efforts to ensure” that when using outside vendors “services are provided in a manner that is compatible” with their professional obligations.

Lawyers must take “reasonable care to ensure that the system is secure and that client confidentiality will be maintained,” explains the New York State Bar Association’s Committee on Professional Ethics in Opinion 842. According to that opinion, it is essential that lawyers “stay abreast of technological advances” and “monitor the changing law of privilege to ensure that storing information in the cloud will not waive or jeopardize any privilege protecting the information.”

Similarly, the Ethics Committee of the North Carolina State Bar, in its Proposed 2011 Formal Ethics Opinion 6, advises that such data storage may be used “provided steps are taken effectively to minimize the risk of inadvertent or unauthorized” disclosures. “If there is a breach of confidentiality, the focus of any inquiry will be whether the lawyer acted reasonably in selecting the method of storage and/or the third party provider,” advises the Alabama Ethics Commission in its Formal Opinion 2010-02 [PDF].

The Advantages and Disadvantages of Cloud Computing
Cloud computing “is great, it is convenient,” but there is always “a risk of a breach in data, if the appropriate security is not in place,” says Scott E. Reiser, Roseland, New Jersey, a subcommittee cochair of the ABA Section of Litigation’s Ethics and Professionalism Committee. To meet the reasonable care standard, lawyers must “understand the basics of technology” and “make informed decisions,” says Richard S. Stockton, Chicago, cochair of the Section of Litigation’s Technology for the Litigator Committee. Lawyers cannot assume that the “most well-known companies are the best choice by default,” Stockton cautions.

Instead, lawyers should examine the terms of service used by potential vendors and scrutinize any broad or open-ended provisions. Further, Stockton recommends that lawyers investigate whether firewalls are used and discuss whether it is necessary to encrypt information when sending data to the cloud. It is also important to learn what will happen to stored data in the event that a vendor goes out of business.

You have to “do your homework” when investigating data storage vendors, agrees Reiser. “Getting references, hiring a disinterested consultant, and networking” with other attorneys are good ways to evaluate different vendors. He also suggests checking the financial stability of smaller vendors.

Ultimately though, Stockton predicts that using the cloud will allow lawyers to offer “better representation to clients.” It will result in “less loss of data because the data will be backed up automatically.” With this type of technology, lawyers are able to “access materials from anywhere and offer more competitive prices,” he says.

Keywords: litigation, cloud computing, data storage, ethics

  • July 13, 2011 – Attorneys should not be placed at risk to decide which cloud vendors/terms are acceptable to the Courts and Ethics Committees. Such vendors should be identified and certified by a relevant and controlling Court or Ethics Committee.


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