The costs associated with a data security breach can be substantial.   In addition to addressing the security issue that gave rise to the breach, companies often must assess notice obligations under federal and state law, manage public relations challenges, and work to rebuild consumer trust.   The costs–in terms of time and resources–needed to accomplish these tasks can easily reach into the millions of dollars.  Considering potential additional losses of business and customer goodwill, the overall effect of a breach can be devastating. 

Fortunately, recent studies have shown that companies can significantly mitigate the costs of a breach by putting in place strong incident response procedures.  For instance, the most recent Ponemon study on the costs of a breach reported that from 2010 to 2011, the average overall cost of a breach declined from $7.2 million to $5.5 million.  The study states that “[t]his decline suggests that organizations represented in [the] study have improved their performance in both preparing for and responding to a data breach.”    

The improvement identified in the Ponemon study aligns with our recent experience: more clients have come to us with questions about what they can do to prepare for and respond to breaches more effectively.  Although every company–and every breach–is different, we think there are about ten basic elements that a company should consider when thinking about incident response.  My colleague Steve Satterfield and I recently wrote about these elements in this article published in Corporate Counsel.  Again, there is no one-size-fits-all approach to these issues, but we thought this article might provide a useful starting point for attorneys and other information security professionals as they consider implementing or strengthening their companies’ incident response procedures.    

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of David Fagan David Fagan

David Fagan co-chairs the firm’s top ranked practices on cross-border investment and national security matters, including reviews conducted by the Committee on Foreign Investment in the United States (CFIUS), and data privacy and cybersecurity.

Mr. Fagan has been recognized by Chambers USA and…

David Fagan co-chairs the firm’s top ranked practices on cross-border investment and national security matters, including reviews conducted by the Committee on Foreign Investment in the United States (CFIUS), and data privacy and cybersecurity.

Mr. Fagan has been recognized by Chambers USA and Chambers Global for his leading expertise on bet-the-company CFIUS matters and has received multiple accolades for his work in this area, including twice being named Dealmaker of the Year by The American Lawyer for 2016 and 2019. Clients laud him for providing “excellent advice,” “know[ing] everything there is to know about CFIUS” and being “extremely well regarded” by key regulators. (Chambers USA)

In the foreign investment and national security area, Mr. Fagan is known for his work on matters requiring the mitigation of foreign ownership, control or influence (FOCI) under applicable national industrial security regulations, including for many of the world’s leading aerospace and defense firms, private equity firms, and sovereign investors, as well as telecommunications transactions that undergo a public safety, law enforcement, and national security review by the group of agencies known as “Team Telecom.”

Mr. Fagan’s practice covers representations of both foreign and domestic companies before CFIUS and related national security regulators. The representations encompass matters in which the principal assets are in the United States, as well as those in which there is a smaller U.S. nexus but where solving for the CFIUS issues – including through proactive mitigation and carve-outs – is a critical path for the transaction. Mr. Fagan is also routinely called upon to rescue transactions that have run into challenges in CFIUS, and to negotiate solutions with the U.S. government that protect national security interests, while preserving shareholder and U.S. business interests.

Reflecting his work on U.S.-China investment issues and his experience on complex U.S. national security matters intersecting with China, Mr. Fagan is regularly engaged by multi-national companies, including the world’s leading technology companies, to advise on strategic legal projects, including supply chain matters, related to their positioning in the emerging competition between the U.S. and China. Mr. Fagan also has testified before a congressional commission regarding U.S. national security, trade, and investment matters with China.

In the privacy and data security area, Mr. Fagan has counseled companies on responding to some of the most sophisticated documented cyber-based attacks on their networks and information, including the largest documented infrastructure attacks, as well as data security incidents involving millions of affected consumers. He has been engaged by boards of directors of Fortune 500 companies to counsel them on cyber risk and to lead investigations into cyber attacks, and he has responded to investigations and enforcement actions from the Federal Trade Commission (FTC) and state attorneys general. Mr. Fagan has also helped clients respond to ransomware attacks, insider theft, vendor breaches, hacktivists, state-sponsored attacks affecting personal data and trade secrets, and criminal organization attacks directed at stealing personal data, among other matters.

In addition, he routinely counsels clients on preparing for and responding to cyber-based attacks on their networks and information, enhancing their supply chain and product development practices, assessing their security controls and practices for the protection of data, developing and implementing information security programs, and complying with federal and state regulatory requirements. He also frequently advises clients on transactional matters involving the transfer of personal data.