Why Local Processing Matters More Than Ever
In the ROI of Legal Tech & AI report released earlier this year, when law firms were asked what their top priorities were for the next 12 months, 65% reported accelerating digital transformation, but a close second at 63% was enhancing cyber security resilience and data protections.
However, when quizzed on the most significant challenges they face, 68% reported keeping up with client shifting expectations on legal services should be provided and 61% reported competition from alternative legal service providers.
As law firms further digitise their operations, operational security becomes a growing, and increasingly important concern for organisations while they battle to stay competitive.
Mid-sized law firms face a unique operational security challenge. They’re too large to rely on basic security measures, yet too small to employ dedicated teams. This can create a dangerous vulnerability gap where not only is sensitive client data, privileged communications, and confidential business information at risk, but so too is safeguarding your organisation’s IP.
Recent data breaches across the legal sector have made one thing clear: operational security isn’t just an IT concern – it’s a business, and reputational, survival issue. When any business suffers a breach, the consequences extend far beyond immediate financial losses to include regulatory penalties, professional liability claims, and irreparable damage to client trust and brand reputation. When it’s a law firm, these impacts are heightened.
The Critical Elements of Legal Operational Security
Data Residency and Control
The foundation of operational security begins with knowing exactly where your data resides and who has access to it. For legal professionals, this means ensuring client information never leaves controlled environments and remains subject to Australian privacy laws and professional privilege protections. Data residency isn’t just about compliance – it’s about maintaining the fundamental trust relationship between lawyer and client.
Access Control and Authentication
Mid-sized firms require secure authentication that balances robust protection with ease of use. Implementing Single Sign-On (SSO) or Direct Logins with embedded Multi-Factor Authentication (MFA) enables role-based access controls, ensuring only authorised personnel can access specific client matters. This approach supports regulatory compliance and traceability, while avoiding the complexity that often leads to insecure workarounds.
Encryption and Data Protection
Legal data must be protected both in transit and at rest using industry-standard encryption. However, encryption alone isn’t sufficient; firms need comprehensive data protection strategies that include secure backup procedures, version control, and automatic redaction of sensitive information during processing.
Compliance and Regulatory Alignment
Australian law firms operate under strict professional standards and privacy regulations. Operational security frameworks must align with these requirements while ensuring transparency and traceability to support regulatory review.
Incident Response and Business Continuity
When incidents occur, mid-sized firms need established response capabilities and clear recovery procedures. This requires not just technical solutions but also staff training, communication protocols, and partnerships with security experts who understand the legal sector.
The AI Security Challenge
The rise of AI in legal practice has introduced new operational security complexities. Many AI solutions process data through overseas servers or use client information to train their models – practices that violate the fundamental principles of client confidentiality and professional privilege.
Generic AI tools pose particular risks for legal professionals. When law firms use consumer-grade AI services, they often unknowingly expose confidential information to third-party training algorithms, create data residency issues, and lose control over how sensitive information is processed and stored.
CoCounsel’s Australian Processing Advantage
Thomson Reuters CoCounsel addresses these operational security challenges through local AI processing by LLMs, that keeps sensitive information within Australian borders and under Australian legal protections.
Local Hosting
CoCounsel is hosted in Australia, ensuring that client data stays in the country and remains subject to Australian privacy laws. This approach to data residency means mid-sized firms can confidently use CoCounsel’s AI capabilities while maintaining full compliance with professional obligations and regulatory requirements.
Zero Training Policy
Unlike consumer-grade AI services, CoCounsel never uses client data to train its Large Language Models (LLMs). This commitment means that confidential information remains confidential, and firms can leverage AI capabilities without compromising professional privilege or client trust.
Enterprise-Grade Security Controls
CoCounsel implements comprehensive security measures including end-to-end encryption, role-based access controls, and transparency and traceability.
Professional Standards Compliance
Built specifically for legal professionals, CoCounsel’s security framework aligns with Australian legal industry standards and professional obligations. This includes automated compliance monitoring, transparency and traceability, and built-in safeguards that protect attorney-client privilege.
Certified so you know you can trust it
CoCounsel was one of the first generative AI systems in the professional services space to achieve ISO/IEC 42001:2023 Certification. This achievement reflects our commitment to ethics, transparency and accountability in AI so you can feel assured that security of your, and your clients, data is safe. CoCounsel is also ISO/IEC 27001:2022 certified.
The Competitive Advantage of Secure AI
For mid-sized law firms, operational security is about risk mitigation, but it’s also about competitive advantage. Firms that can demonstrate robust security frameworks and responsible AI usage are better positioned to win complex clients, handle highly sensitive matters, and be one a level playing field with larger firms.
CoCounsel’s Australian processing enables mid-sized firms to offer clients the efficiency benefits of AI while maintaining the security standards they expect from their legal advisors. In an environment where security breaches can end careers and close firms – operational security has become one of the foundations upon which successful legal practices are built. CoCounsel’s local Australian AI processing by LLMs empowers mid-sized firms to confidently embrace an AI-powered future, ensuring sensitive legal data remains within Australian borders and under local legal protections.
