Sunday, October 25, 2009

Is Your Firm Ready for Red Flag?

Delayed several times, the FTC's Red Flag rules are set to take effect next week. These rules mandate that organizations, including law firms, implement programs that prevent and detect identify theft.

Earlier this year the ABA filed suit to bar the application of these rules to law firms. Congress introduced legislation recently (October 8) that would exempt legal organizations with fewer than 20 employees from the rule under certain circumstances. But unless the FTC reverses itself, or the courts step in, the rules are set to go into effect on November 1.

Several law firms have chartered internal teams to assess and respond to Red Flag rule requirements, developing plans for more stringent management of applicable confidential client informtaion and other procedures. This issue is far from settled. We're expecting more industry news as November approaches...

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