Why Cybersecurity Increase Firm Value

As we continue exploring the elements that contribute to long-term law firm value, cybersecurity has become a central part of the conversation.  In earlier articles, we discussed technology adoption and digital value as factors that affect a firm’s marketability.  Cybersecurity is the natural extension of that theme.  It is not just a technical requirement.  It is an ethical obligation, a business imperative, and a succession issue.

For many small and suburban firms, it can feel as if cybersecurity concerns belong to large institutions.  In practice, smaller firms are often more vulnerable.  Hackers view them as easier targets because they may lack dedicated IT teams or formal security policies.  A breach can disrupt operations, undermine client trust, and trigger an array of ethical duties.  It can also complicate, or even derail, any planned transition of the firm.

From an ethical standpoint, cybersecurity obligations are woven throughout the Rules of Professional Conduct.  Lawyers must maintain competence, communicate effectively with clients about material risks, and safeguard confidentiality.  Rules 1.0, 1.1, 1.4, 1.6, 5.1, 5.2, and 5.3.

Cybersecurity readiness also affects firm value.  Buyers and internal successors increasingly evaluate cybersecurity the same way they evaluate clean financials or documented systems.  A firm that can demonstrate secure digital tools presents far less risk to a buyer.

Cybersecurity insurance is also an increasingly important tool.  A comprehensive policy can cover breach response, forensic investigation, data recovery, and client notification.  Having insurance in place shows that the firm understands its risks and has taken responsible steps to mitigate them.

Client trust ties all these pieces together.  Clients expect that lawyers will protect sensitive information, whether stored in the cloud, accessed remotely, or shared through secure portals.  Firms that invest in cybersecurity preserve the goodwill that is essential to a smooth transition.

For those looking to strengthen their practices, the Rockland County Bar Association is hosting a program on cybersecurity for lawyers on January 14, 2026, from 5:30 p.m. to 8:00 p.m. at the Sheriff’s Training Facility.  I will be speaking on the panel, and the session will offer practical guidance for implementing strong security measures and meeting ethical requirements.  Registration information is available on the Bar Association website.

In succession planning, cybersecurity is not simply a technical concern.  It is a value-building investment.  A firm that treats data protection seriously will be easier to transition, more appealing to buyers, and better positioned to preserve its long-term worth.