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Firm News
Rob has been asked by Forbes.com to write a column
called "Good Counsel", which focuses on legal issues
affecting businesses. Rob's first two columns appeared this
month. To read each column online, click here: September
3, 2008, September
25, 2008.
Forbes.com has also asked Rob to serve as the legal
expert for its Small Business Exchange. This
is a question and answer column. Click
here to view Rob's first column.
Finally, Rob has a radio show, called The
Billable Hour, which airs every Saturday morning from 7:30-8:00 a.m. on
WHAT 1340 AM. The shows are also posted
on the website, which can be accessed here.
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With
banks failing, are there any concerns I should have with the money my
attorney is holding in trust?
"ASK THE ATTORNEY"
by
by Robert M. Bovarnick
The
Evening Bulletin
Attorneys often hold client's money in
trust, either as a retainer for services or temporarily as part of a
transaction. What happens if the bank where the money is held goes out of business? Is the money protected? Is the lawyer
liable?
Often, when you enter into a relationship
with an attorney you are asked to provide a
retainer. This money belongs to you, the client, until it is earned by the lawyer.
The Rules of Professional Conduct require
that lawyers maintain a "clearly identified" trust account
in a "financial institution" approved by the State
Bar. These financial institutions must be regulated state or
federally chartered banks, savings institutions
or credit unions in which the deposits are insured by an agency of
the federal government.
As a result, the safety of the deposits and
the soundness of the financial institutions are the subject of state
and federal regulation. Generally, a
depositor's account at a bank is insured by the FDIC for up to
$100,000. So long as the account discloses the existence of a
fiduciary relationship, the FDIC insurance will be available to each
client whose funds are held in the
account.
The name for lawyer's trust accounts is called IOLTA (Interest on Lawyers Trust
Accounts). For purposes of FDIC insurance, IOLTA accounts are
fiduciary accounts. So, even if the IOLTA has $500,000, so long as no one client has more than $100,000, it is protected.
While the money in the IOLTA account is not
counted as the law firm's money, it is counted as the client's money
and will be aggregated with any other money that particular client
has at the same bank-even if the law firm does not know that the
client has other accounts. So clients
may find that they have an inadvertent problem.
Another potential problem is if a law firm
obtains more than $100,000 on behalf of any one client, such as
through a settlement or as the result of a transaction. Even if
the money will only be there for a short time, the risk is
real. For example, if a lawyer put $500,000 in IndyMac bank on July 10, with the intention of
sending it to the client as soon as it cleared in a few days, the
vast majority of money would be unprotected.
The solution for both lawyers and clients
is to be aware that this issue exists. If this situation comes
up, one possible solution is to have the lawyer break up the deposit
into $100,000 chunks and place the money in different banks.
From the client's perspective, if you have
more than $100,000 in a bank account, it may be wise to check with
your attorney to see if both of you has the money in the same or
different banks.
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"Creating
a Digital Fortress"
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Greg Stenstrom, Stenstrom
Security Group's CEO, has 20 years of
leadership experience in developing high technology businesses.
Prior to founding Stenstrom Security
Group, he held executive and technical leadership positions with
Computer Sciences Corporation, AnswerThink
Consulting Group, and Netera. In addition to Stenstrom
Security Group, he is the CTO for Step-X, the manufacturer of Zoe Professional, an e-mail archiving and search
product. He is a graduate of the U.S. Naval Academy, and as a
selected Naval Reserve Officer served tours as an Executive Officer and
Commanding Officer.
What is the mission of your
company?
We provide high value, integrated security consulting services to
top-tier companies and organizations.
What types of companies do you
work with?
We have focused on companies and organizations that already understand
the value of top-tier security consulting and do not require education
and long sales cycles. Our engagements come mostly through
referral or are the result of a compelling incident.
Vulnerability assessments and review of existing security
infrastructures seem to be of highest interest to our clients.
Physical security is gaining much deserved recognition as a key
component of any information security program. Security is
increasingly being viewed as a holistic, integrated set of systems,
policies, and procedures rather than independent silos.
What are the best ways for
small companies to protect their information?
The most important component of
any security program for a company of any size is education and
knowledge. Computers and technology have been fully integrated
into most business landscapes and ignoring security considerations
it is done at a business owners peril. Our national media and
industry and trade periodicals regularly feature valuable information
regarding security that every business owner would do well to heed and
read. Leadership starts at the top and knowledgeable business
owners and executives at her responsibility to train their
people. Lastly the majority of business losses related to
information security occur from the inside not the outside, something
to consider.
Is it really
worthwhile buying security software such as McAfee and Norton's
Anti-Virus?
Absolutely! Connecting to the Internet
without antivirus or anti-everything programs running to protect you is
like walking into an Eagles game naked with Cowboy logos tattooed all
over your body. Both are potentially painful experiences.
What are the best products
small businesses should buy to protect their computers?
Small businesses, with tight budgets, would normally do best to focus
on endpoint security at the laptop and desktop at a minimum.
There are many integrated security packages available for individual
users such as McAfee, Symantec, and TrendMicro
to name a few. Microsoft Windows includes a slim featured but
capable firewall that should be enabled in the
absence of other security products. As important as antivirus and
anti-everything software may be, accidents happen and backup systems
are a must.
The
easiest to use among the backup solutions available are single backup
drives that cost $50 to $200 that will back up and restore an entire
computer. I can't think of any better
insurance for a small business protect their data and
livelihoods. Other basic security considerations for small
business include perimeter defense systems like firewalls and intrusion
detection devices, securing internal systems with strong user
authentication and even encryption where appropriate.
How easy is it for someone to
hack into your computer because of the wireless systems that everyone
is using?
Most wireless networks are designed for
convenience, and Microsoft systems are similarly designed to easily
connect to wireless networks. Regardless of what security
measures are enabled on a wireless network which
might include encryption, strong user authentication, and system
identification, the fact of the matter is that most users often have no
idea what wireless network to connect to.
By
default, Microsoft systems will connect the strongest unencrypted
signal available first, and also automatically
trust whatever network is connected to. Among the favorite
locations of hackers are airports and locations which
offer Internet hotspots. Since most people do not know who they are connecting to it is relatively easy for
a hacker to set up a temporary hotspot of their own that unsuspecting
users will use to connect to the Internet and unknowingly provide their
passwords and private information.
How often should
data you back up your data and where should you send your
data?
My systems are configured to back up all file
changes immediately as well as archive e-mails and critical
documentation. There is a difference between a backup and an
archive. If you delete a file that you might need in the future
and run a backup after deleting the file, the file is lost
forever. Archiving involves saving snapshots in time that can be quickly searched and accessed. Even
small businesses can afford to do both and large businesses should do
so as well, yet few companies archive.
The
minimum I would recommend to a small business would be daily
backups. One strategy that works well and is economical is doing
a full backup to an external hard drive on a Sunday performing
incremental backups daily through Saturday, then rotating in a new hard
drive to go through the same cycle and keeping one of the hard drives
at an off-site location (maybe the owner's home). This ensures
that even in catastrophe a full backup will be available that is no
more than a week old.
For companies with limited budgets and relatively small amounts of data
that need to be backed up offsite hosting is a
good alternative. Daily backups, run to
an Internet provider is a cost effective alternative to on-site
backups. Larger backups of hundreds of gigabytes were terabytes
are more technically challenging and were sophisticated and expensive
technology is required for offsite backups.
Are there good services to use
for backing up data?
There are a number of good service providers for off-site back-ups.
Small businesses should work with local and regional
providers that provide co-location, software as a service (SaaS), and offsite backup solutions.
Otherwise, the "anti-everything" products from McAfee,
Symantec, and others all include increasingly capable back-up products
bundled into their desktop suites.
Are computer worms still a
problem and if so how do you protect your computer from viruses?
Viruses and Trojans and Worms continue to be the bane of
existence for most computer users. A number of words describing
malicious intent or unauthorized access such as "malware," "phishing,"
and like terms can be daunting for the average user or small business
owner. However, for most businesses, basic due diligence and good
security practices will be sufficient protection. For businesses
with special needs or the financial wherewithal, there are effective
systems available that will detect "zero-day" attacks and
malicious programs with limited distribution.
A
"zero day" virus, Trojan or worm is
one that is brand new and has not been typed with a signature by the
mainstream anti-virus programs. Many virus programs will detect
out of the ordinary (anomalous) activity but must compete for her
computer resources substantially slow down laptop and desktop
systems. Network devices specifically designed for this task are
effective but relatively expensive for a small business and range
between $10,000 and $40,000.
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I enjoy being able to share with everyone the
Firm's continuous growth and development. Whenever you get
the chance, pick up the phone or send me an email and let me know how
you are as well.
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