reported that according to an International Data Corporation (IDC) forecast, by 2020, spending on security-related hardware, software, and services will eclipse $100 billion. However, consulting company NTT Com Security recently surveyed 1,000 executives and found only about half of them reported having a formal plan to respond to a data breach. Franklin wisely noted that “an ounce of prevention is worth a pound of cure,” but he also reminded us that “by failing to prepare, you are preparing to fail.”

According to the IDC report, the banking industry is forecast to make the largest investment in security for 2016. This makes some sense – that is where the money is. But there is significant value and opportunity in other data that companies should consider when evaluating their data security spend.

For some, value is in access to data, not necessarily the data itself. According to a recent post by my colleague, Damon Silver, ransomware attacks have increased four-fold from just a year ago – now estimated to be 4,000 attacks reported per day. These criminals often do not want the business’ data, but prefer to extract significant dollars from companies by preventing the businesses from accessing their own data.

Of course, there are steps companies can take to help prevent these incidents. But if reports about the number of these attacks are true, it seems few businesses have taken those steps and those that have are not having much success.

For those that have been attacked, there are a range of things they have to address, and quickly – what should be done first, how can the business continue to operate, what vendors and who in law enforcement can help, is there insurance coverage, do the criminals possess the company’s information and how much, what are the legal obligations, including notification.

Data is power and can be used to influence. It is neither identity theft nor the desire to extract a few Bitcoins that is behind the hacking and release of emails about Hillary Clinton. Obviously these bad actors want to harm the presidential candidate, and have been somewhat successful influencing the election. If there is one thing we can learn from the current presidential election, it is that data breach prevention and preparedness is not just about credit cards and Social Security numbers.

Though on a different scale, breaches exposing insensitive email or other communications such as high-level strategy discussions among C-suite members, or that suggest systemic discriminatory practices, or that outline detailed labor management strategies can have significant implications for a company’s market position and profitability. Consider that the Ashley Madison breach did not just result in exposing potential cheaters. The hackers also disclosed company emails (at least 12.7 gigabytes of emails) which included sensitive computer code and worker salary data, furthering the efforts to bring the company down.

Increased investment and vigilance in preventing attacks and releases of sensitive data are coming. But, a steady drumbeat of security professionals and others continue to warn businesses that cyber attacks are not a matter of if, but when. Recognizing that no system of security is perfect, and as spending on data security continues to rise, a significant item of that spending ought to include breach preparedness and response planning.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.