cyber security due diligence in M&A

This article is written by Shreya Shambhavi who is pursuing a Certificate Course In Technology Contracts from LawSikho


The unprecedented Covid-19 situation faced by everyone across the globe has taught humanity lessons in all walks of life. Not only have many people lost jobs but they have been made to live alone and isolated for a very long period of time which has been difficult not only for them but also for their family who have been stuck in different cities and have not been able to move due to the lockdown and travel restrictions. I am sure, that in this phase when the people have been isolated and left alone with almost nothing to do except working from home and household chores have left them depressed and longing for some activities to engage themselves and therefore many must have invested their time in self-realisation, self-development and thought about various survival strategies if this situation continues for long. Personally, I have done a lot of self-analysis myself and have tried to enhance my own skill sets by taking classes on IT Laws, Fintech etc.

The reason being that due to the travel restrictions and limitation on movement, Fintech solutions have come to the rescue of not only businessmen both big and small but have also helped the common man in solving his day to day payments and cash related problems due to non-access to Banks, ATMs etc.  However, due to the increase in Fintech, virtual payments services, the legal issues with respect to operation, management and securing interest of the transacting parties have also become complicated and evolved which mandates the requirement for more legal professionals who are experts in such issues. Hence, I am very certain when I say that lawyers, especially IT lawyers will have a booming career not only in the current situation but also in the years to come. 

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Current trends in the IT sector

Despite lockdown and several firms being temporarily shut or working remotely, the IT sector has been one of the prominent industries amongst others to have been smoothly operational throughout this time. Not only have the employees been given several benefits and relaxations including but not limited to flexible working hours and the option and assurance of continuing to work from home till 2021 as well,  but there has been an increase in innovative products being offered to deal with the situation. For the sake of this article, I shall be focusing mostly on the trends that we have seen pre-and-post COVID-19 from the beginning of 2020 until now. 

Technology is the only medium that has kept almost all the industries running. It is technology that makes life easier for everyone and the right use of this with smart innovations at all levels has the capacity to convert India into a cashless and fast progressing economy in line with the long term objective of the current government. 

Focusing on lawyers who practise in the IT sector, their role has been mostly into contract drafting and review of all forms that are standard to this industry. Litigation is also seen to be involved in cases where there are disputes arising out of contractual obligations and otherwise. The role of in-house IT lawyers I believe is smooth focusing on the contract management portfolio of the firm. However, with the fast digitization coupled with involving the aspects of data sharing and privacy, I feel that the role of in-house counsel lawyers would be onerous in a way where they have to keep their skills updated with the changing trends and policies in the country and the world. 

Transformation of the role of lawyers:

As I mentioned above, with the fast developments and the issues of data privacy being on the forefront of almost all IT firms dealing with data and use of software, lawyers shall have to be mindful of reviewing the various types of contracts with a view to protect the accountability of the firms. This will happen only if the lawyers continuously update their skill sets and keep a tab on the global privacy and other issues that may have an impact on the local market. 

Probable Challenges and how to deal with it

While I have never practised as an IT lawyer myself, nonetheless, I shall be able to highlight few challenges that such lawyers may have to face taking into account the current scenario:

  1. Litigation counsels shall have to be patient until the market has completely resumed its functioning and the courts are conducting regular hearing. As force majeure claims would continue to be the regular issue across the market, there may be various issues relating to software and other IT matters that shall only come to light once the market is fully functional. I feel that this challenge can be very easily overcome with the current mindset and have a strategic approach for things. In the time that is made available, lawyers should work on enhancing their skill sets by following the daily developments in law and the industry. 
  2. Due to the lockdown many activities and arrangements have been forced to be conducted virtually. With the execution of agreements and contracts now happening virtually and parties to contract are executing the agreements with digital signatures. This has led to a two-fold problem. Firstly, with the increased number of online arrangements and lack of physical access to documents and records for doing a detailed due-diligence before entering into a commercial arrangement, the instances with respect to fraudulent activities, misrepresentation, breach of trust etc. shall increase. This will result in involvement of IT Lawyers with respect to issues pertaining to enforceability of digitally executed contracts and enforcement of rights and obligations of parties in the absence of basic level due-diligence. Secondly, while digitally executed agreements are more or less secured due to various security measures like AADHAAR based signatures, presence of intermediaries which take assistance of data securing software etc. but still the role of IT Lawyers becomes important to ensure necessary preventive clauses and covenants in the contract are present to ensure protection of parties which might suffer damages due to data breach, signature fraud etc.
  3. Downsizing is the issue that is faced across all sectors and IT firms are no exception. This has led to many companies turning to automated software programs and algorithms for carrying out tasks which were earlier being handled by employees. This demands an increased role of IT Lawyers who should ensure that the organizations using these software are protected from damages, liability due to breach of basic issues like data privacy, breach of firewalls, hacking etc. Such breaches might happen on account of the service provider not complying with adequate safety protocols while handling and managing the data and works for such organizations and hence protection against such wilful misconduct and default is mandated and should be ensured by the IT lawyers overseeing the documentation for such services.
  4. Keeping abreast with the latest innovations and understanding the technology behind the contract as unless the lawyers understand the business intent, it is very difficult to provide legal opinion. Lawyers have to constantly evolve and update themselves with the most recent rules, regulations and the changing legal paradigm of any industry who they cater to. This becomes even more imperative in the case of IT Lawyers who have to constantly keep track of the daily innovations and improvements in technology happening. With developing technology, basic issues of data, security, piracy and software adaptability also increases and hence the IT lawyers are required to innovate and improve the protective clauses, scope of indemnities, warranties which forms part of the agreements and contracts governing these  arrangements.
  5. Competition: As this industry is considered to be booming, many other lawyers would aspire to practise in the IT field which will lead to immense competition amongst lawyers. The only way to survive is to be abreast with the developments made in the privacy and other areas concerning Technology and develop the requisite skill sets which are required to improve and innovate on a daily basis. Competition is a part and parcel of every walk of life, however the professionals should ensure that there exists a healthy competition among peers and all of us should strive for mutual development which is not only sustainable but also beneficial for the industry to which we are catering.


I believe that whatever the challenges may be, everything can be dealt with and faced with determination, patience, hard work and honesty towards ourselves. If one is working towards enhancing their skills on a continuous basis without ignoring the day to day developments, they are bound to succeed. This is no different for lawyers practising in any field. It may be noted that the times are changing and it is IT that will transform the world, lawyers should take this as a challenge and focus on developing skills that will lead to smooth innovation and development of the economy. 

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