This article is part of the Handling Secrets series. In this first part, Valuing Secrets, we describe how to rate the likelihood of theft for common types of secrets. In the second, Protecting Secrets, we describe the easiest ways to prevent their theft.
Do you handle your client’s most sensitive and important matters?
Every day, lawyers, accountants, consultants, and engineers are entrusted with their client’s top priorities. Business owners spend extra care selecting a practice or individual they trust to perform well and to exercise discretion. They are deeply invested in the matter’s success and have little patience for missteps. They are willing to pay a premium to make sure these projects succeed.
Others also care about such matters: competitors, opposing counsel, or simple thieves may be willing to pay substantially for such privileged information. Sometimes even countries may be willing buyers of sufficiently valuable intellectual property, and many unethical traders would love the inside scoop on a publicly traded company.
Consider the following types of potentially sensitive client data:
Pricing: Do you have access to a client’s proprietary pricing? What would happen if those details were offered for sale to their customers?
Finances: Do you have access to your client’s finances? Would some of your client’s vendors or customers be interested in purchasing those details about your client if approached? How would they use it?
Intellectual Property: Do you collaborate on or review proprietary client product information such as schematics, design specs, BOMs, or test data? Would your client’s competitors pay for that information?
Mergers and Acquisitions: Do you advise clients on potential mergers or acquisitions? How would advance knowledge of those plans by competitors or stock traders affect your client’s plans?
Information under Attorney-Client Privilege: Would opposing counsel, their clients, or other parties be interested in the files and notes you take about your client’s matter? Would they pay for them?
How valuable are these secrets?
See here for a review of how these factors contribute to the overall chance that someone will steal them.
Client information is usually the most valuable to people and groups the client knows. You are the best judge of who would be interested and how much they would spend on it. Client information sells starting in the thousands.
Most proprietary client information has only a handful of potential buyers. It is most often competitors but may include anyone hoping to make a quick profit, especially when clients are publicly traded companies.
Loss of important and sensitive client information usually means the loss of the client relationship, an increase to your liability premiums, and potential damage to your reputation, which may impact sales and the rates you can demand. In some cases, the event may even trigger investigations by forensic specialists, revocation of preferred-vendor status, ejection from professional associations, and disbarment.
If your clients are individuals with a strong personal interest in the matter they entrust you with, losing their file may even result in a threat to your physical safety.
Next Steps
If you work with sensitive client secrets, you probably have a strong sense of how important their secrets are to them. Rigorously assessing the risk of loss is the first step to preventing it.
If you need help, we’re always here to help you determine the value of your information and the best ways to protect it.