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This bonus episode is an interview with Josephine Wolff and Dan Schwarcz, who along with Daniel Woods have written an article with the same title as this post. Their thesis is that breach lawyers have lost perspective in their no-holds-barred pursuit of attorney-client privilege to protect the confidentiality of forensic reports that diagnose the breach. Remarkably for a law review article, it contains actual field research. The authors interviewed all the players in breach response, from the company information security teams, the breach lawyers, the forensics investigators, the insurers and insurance brokers, and more. I remind them of Tracy Kidder’s astute observation that, in building a house, there are three main players—owner, architect, and builder—and that if you get any two of them in the room alone, they will spend all their time bad-mouthing the third. Wolff, Schwarcz, and Woods seem to have done that with the breach response players, and the bad-mouthing falls hardest on the lawyers.
The main problem is that using attorney-client privilege to keep a breach forensics process confidential is a reach. So, the courts have been unsympathetic. Which forces lawyers to impose more and more restrictions on the forensic investigator and its communications in the hope of maintaining confidentiality. The upshot is that no forensics report at all is written for many breaches (up to 95 percent, Josephine estimates). How does the breached company find out what it did wrong and what it should do to avoid the next breach? Simple. Their lawyer translates the forensic firm’s advice into a PowerPoint and briefs management. Really, what could go wrong?
In closing, Dan and Josephine offer some ideas for how to get out of this dysfunctional mess. I push back. All in all, it’s the most fun I’ve ever had talking about insurance law.
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