Originally Published in Law360 | February 1, 2013 | By Sean McLernon
Law360, New York (February 01, 2013, 4:18 PM ET) — A significant portion of the country’s largest companies are not properly prepared to prevent data security breaches, according to a survey published Friday in which 30 percent of Fortune 1000 general counsel said their employers lack the defenses necessary to fend off cyberattacks from hackers.
The results of the survey, which was conducted by the consulting firm Consero Group LLC, raise concerns about the safety of sensitive data stored away within corporate computer systems. Along with the 30 percent of general counsel who find their company’s cybersecurity insufficient, 28 percent say their employers were victim of a data breach in 2012.
Consero CEO Paul Mandell described the results as “alarming,” and said companies should quickly revisit their security plans and make necessary changes.
“From cyberterrorism to competitive attacks to random hacking, the proliferation of security breaches remains a growing threat facing corporations,” Mandell said in a statement. “A renewed focus on preparedness and collaboration with their [chief information officer] counterparts seems necessary as GCs confront evolving threats in 2013. The stakes are high for GCs, particularly in highly regulated areas.”
The New York Times and Wall Street Journal recently admitted to being infiltrated by Chinese hackers, and a number of companies, including LinkedIn Corp. and Nationwide Mutual Insurance Co. are facing massive class action lawsuits from users who had their personal information stolen by cyberinvaders.
Even if a company manages to avoid costly lawsuits, other expenses can still loom large. A security breach suffered by financial transaction processor Global Payments Inc. in March will cost the company at least $84 million in fines from credit card networks and investigation and remediation costs, according to the company.
The Consero survey, which questioned 48 general counsel, suggests that the attorneys may be well-positioned to persuade their employers to address gaps in data security. Ninety-one percent of respondents said they believe they have a sufficient level of access to their CEOs, and 85 percent expressed satisfaction with their relationship with the board of directors.
Most of the general counsel surveyed are also satisfied with their budget, with 72 percent saying they have enough financial resources to effectively manage their departments. Forty-five percent of those surveyed said their budget increased in 2012, with another 34 percent reporting no change.
A slight majority of general counsel — 54 percent — said they report directly to the company’s CEO, with another 40 percent answering to the president, chief financial officer or chief administrative officer.
Sixty-eight percent of the attorneys surveyed said they are paid at least $250,000 per year, with most of that group falling into the $250,000 to $276,000 range. Only 4 percent of the GCs said they have an annual salary of more than $400,000.