Cyber-attacks are becoming more prevalent, and law firms are among the most targeted victims, putting client data, business operations, and regulatory compliance at risk. It’s not just because of the personal data firms hold; they are targeted because they hold high-value data, including confidential case details, commercially sensitive information, and client money. The legal industry is also built on urgency, trust, and fast decision-making, exactly what cybercriminals can exploit.
Heading into 2026, firms must prepare and remain aware of ongoing risks and the rising sophistication of how businesses are targeted. Cybercriminals are getting smarter and more targeted, using AI, advanced social engineering tactics, and weaknesses in supply chains.
Last year, we highlighted an incident where the Information Commissioner’s Office (ICO) reprimanded a Hampshire law firm after a cyber-attack, which resulted in hackers accessing sensitive client details. The data watchdog found that the firm fell short of its obligation to implement robust security measures. As a result, hackers were able to access the firm’s secure cloud-based server. It is believed that the stolen data was then published on the dark web. Read, ‘Cyber Security Failures Leave Firm in Hot Water with ICO’.
As seen in other cyber incidents across 2025, one thing is clear: even well-run firms and large corporations can be exposed to cyber-attacks if their systems, suppliers, or staff processes aren’t keeping pace. So, what should law firms be paying attention to in 2026?
In this article, our compliance team looks at the five biggest threats law firms will face in 2026, and the practical steps firms should take to strengthen cyber resilience and meet regulatory obligations under the SRA Standards and Regulations, as well as data protection law.
Download our Cyber Security Audit Checklist:
We have designed a downloadable checklist to help firms undertake a cybersecurity audit, which is one of the most invaluable exercises a firm can take. Understanding the threats your law firm’s data faces, not just due to cyber-criminal attacks, is vital. Download the checklist here: Cyber Security Audit Checklist for Law Firms.
The Five Biggest Cyber Threats for Law Firms in 2026
- AI-Powered Phishing and Social Engineering
Artificial intelligence (AI) is drastically changing the sophistication of phishing attacks. While the old-style generic scam email is still used, it’s no longer the main problem. AI is helping criminals write convincing, personalised messages that sound like real clients, colleagues or suppliers, mimicking writing style, tone of voice, and even internal language. These attacks are increasingly aimed at specific staff members, including partners, finance teams, and fee earners, referencing live matters or recent email chains.
For legal professionals accustomed to urgent client requests and time-sensitive instructions, these attacks exploit the fast-paced nature of legal work.
What to do: Make verification standard practice, implementing robust verification procedures for all unusual payment requests or sensitive data requests. Use email security tools that flag suspicious sender behaviour or unexpected patterns. Train staff on realistic scenarios, tighten payment approval processes, and create an environment where staff feel able to challenge instructions without fear of “slowing things down”.
2. Deepfake Impersonation
Deepfake technology is one of the most worrying developments going into 2026. Criminals can now generate highly believable audio, video and images relatively easily. A convincing voice note or video call can be enough to trigger payments, authorise changes, or pressure staff into disclosing sensitive information. For firms that rely heavily on telephone and video communications, especially amid increased remote and hybrid working, this is a growing risk that firms must take seriously.
What to do: Ensure that multi-step verification processes are being used, especially for high-risk instructions, even if they come via video or phone. Introduce out-of-band verification (e.g., confirmation via separate trusted channels). Train staff on the rise of deepfake technology, making them aware of the risks and is being used in fraud.
3. Exploitation of Multi-Factor Authentication
Multi-factor authentication (MFA) has become standard practice across most firms and is still essential. However, this alone is not the safety net many firms assume it is. Cybercriminals are now utilising AI-driven tactics and automation to bypass MFA, particularly weaker methods such as SMS codes. Over-reliance on MFA can create a false sense of safety if it isn’t supported by layered controls.
Firms must recognise that MFA is one element of a comprehensive cyber defence strategy, not a complete solution.
What to do: Move to stronger MFA methods and ensure these are applied consistently across all systems. Move away from SMS-based MFA and implement app-based authentication or hardware tokens. Introduce additional controls, such as device recognition, access monitoring, and unusual login alerts.
4. Supply Chain Cyber Risk
Most law firms run on third-party systems or suppliers in some form. Case management systems, cloud email, document platforms, outsourced IT, and other legal software providers. While these all play an important role in the day-to-day running of a law firm, each one of those providers represents a potential entry point for attackers. Supply chain attacks are growing because criminals know they only need to exploit one provider to compromise an entire firm.
The National Cyber Security Centre (NCSC) has made supply chain security a national priority, and law firms need to respond accordingly. Read the guidance from the NCSC here: Supply Chain Security Guidance.
What to do: Carry out cybersecurity due diligence on third party vendor contracts, including clear contractual terms on data security and data protection clauses. Ensure your client terms include appropriate cyber disclaimers. You should also review if your Professional Indemnity Insurance includes cyber incident cover.
5. Insider Threats and Human Error
Not all breaches come from outside the firm. ICO data shows that a large number of incidents are caused by internal mistakes. Poor access control, weak offboarding processes, misdirected emails, staff being tricked into opening malware-infected documents, or handing over sensitive information. The majority of these mistakes are down to human error, and even well-trained, senior members of staff can make them. However, some incidents are deliberate too and involve fraud, data theft, or misuse of access.
Regardless of whether these are accidental or intentional, insider-related incidents can be just as damaging as external cyberattacks. Firms must be aware of the risks and implement policies, controls, and procedures (PCPs) to address them and demonstrate to their regulators it takes these responsibilities seriously.
What to do: Tighten role-based access controls to ensure staff only access what they genuinely need. Review and secure leaver/offboarding processes. Monitor unusual activity, and train staff regularly on confidentiality, data handling, and typical scenarios of insider data breaches. Encourage open reporting of errors without fear, so issues are caught early.
Regulatory Obligations and Cybersecurity Requirements to Be Aware Of
- Data Protection and SRA Standards and Regulations
Alongside the requirements set out by the UK General Data Protection Regulation (the UK GDPR) and the Data Protection Act 2018 (the Data Protection Act), firms should also be mindful of their obligations from the Solicitors Regulation Authority (SRA). Rule 4.2 of the Code of Conduct for individuals and Rule 5.1 of the Code of Conduct for firms, places an obligation on the profession to ‘safeguard money and assets entrusted to you by clients and others’.
Law firms must have appropriate data protection policies in place. These policies should be designed to manage and control the significant amount of personal data that law firms handle regularly.
A failure to implement the necessary policies and procedures to manage, control, and protect this data can result in severe consequences for law firms. Not only will they be in breach of legislative requirements, but they will also be in violation of their SRA code of conduct. These failings will put them at risk of facing regulatory scrutiny and could expose them to reputational damage
Under UK GDPR, firms must also report relevant breaches to the ICO within 72 hours.
- Professional Indemnity Insurance Requirements
Many professional indemnity insurers are also tightening expectations and include specific cybersecurity requirements. Firms that fail to meet basic controls, such as MFA, regular software updates, and staff training, etc., may find their cover is restricted or that claims related to cyber incidents are excluded. It is essential that firms review policy conditions and ensure they meet the required standards the cover requires.
Preparing Your Firm for Cyber Threats in 2026
Cybersecurity shouldn’t be treated as a one-off project. It needs ongoing attention, review, and improvement, regardless of firm’s size. Law firms should be reviewing their position now and:
- Establish clear cybersecurity PCPs that people actually follow
- Implement regular, practical, relevant training (not just tick-box-ticking)
- Use layered cybersecurity controls, not just MFA
- Run regular risk assessments and testing
- Build and test an incident response plan
- Strengthen supply chain controls
Firms should also consider obtaining the Cyber Essentials Certification, a Government backed scheme that will help the firm to protect itself, against a whole range of the most common cyber-attacks.
How RACO Can Support Your Firm
At the Regulation and Compliance Office (RACO), we support law firms in strengthening cyber resilience in a way that’s practical, proportionate, and aligned with regulatory expectations.
Our services include:
- IT & Cyber Security Consultancy – helping firms assess cyber risk, implement controls, and protect client data and operations
- Cyber Essentials Application Service – guiding firms through certification so they can demonstrate strong baseline controls
- GDPR & Data Protection Audit – reviewing UK GDPR compliance and identifying improvements, including incident response readiness
- Training – tailored sessions for staff, including bespoke courses on cyber security, data protection and compliance
Contact RACO Today
To discuss how RACO can support your firm, please contact us:
Telephone: 0203 985 8550
Email: info@regulationandcomplianceoffice.co.uk
Online Enquiry: Complete our contact form
Our compliance specialists provide practical, sector-specific guidance that enables law firms to meet their obligations without hindering commercial operations. We work with firms of all sizes, tailoring our approach to each practice’s working methods and risk profile.
