Cyber risks are skyrocketing. A recent IBM breach report revealed that 83% of organizations experienced more than one data breach in 2022. The severity of the situation continues to be evident in 2023 with the public disclosure of at least 310 cyber incidents in the first quarter of the year alone.

The use of Artificial Intelligence (AI) by law firms has recently become a hot topic of discussion. Definitive answers regarding the appropriateness of its use remain elusive. While technology evolves quickly and the conversation may change over time, it’s important to consider the potential issues around the use of generative AI. Currently, discussion with various law firms indicate that many firms are working to develop internal policies regarding the use of AI. Some have shared that they’re trying to get out ahead of the issue even as many lawyers are likely already utilizing AI. If so, policies are likely needed in relatively short order.

Technology impacts every aspect of our lives. From social media to biometrics or artificial intelligence, the world is changing at an astounding rate. Generally, technology makes life easier. It creates efficiency and enhances the ability to connect with others. However, technology also generates new risks, especially when companies deploy technology without fully considering the possible consequences, disadvantages, or how it may interact with the law.

Many private companies, especially early-stage startups, are struggling to find funding, and often, those that do are experiencing “down rounds.” In a down round, a company typically sells larger stakes to new investors at the same cost or less than what earlier investors paid, driving down the company’s valuation and diluting shareholder values in the process. Down rounds pose multiple risks, from reduced capital support, to shrinking confidence among investors and employees, as well as greater exposure to Directors and Officers (D&O) liability.

When it comes to cyber and professional liability exposures, law firms can’t afford to assume that a professional liability policy is enough to cover all the bases. It’s important to utilize the right coverage needed to address different areas of risk. However, despite growing cyberattacks, many law firms still don’t carry cyber insurance or wrongly assume that their first line of defense against cyber and phishing losses is their Lawyers Professional Liability (LPL) policy.