A data room allows for all parties to upload, review and share important documents from a single location. This secure digital environment can simplify complicated legal procedures and can also help prevent crucial security breaches, such as during M&A deals or real estate acquisitions, as well as regulatory audits.
Legal professionals are bound by a complex set of privacy regulations. The violation of these regulations can have serious consequences. When sharing sensitive information with clients, it is best to use a data room as the most secure way to do it. Utilizing a virtual data room also allows lawyers to work with mobile and remote teams, which reduces time-consuming manual tasks and improving productivity.
The best data rooms are simple to navigate, thanks to an organized structure for folders and standardized document names to make it easier for users to understand. The more organized the data room is the more easy it users will be able to locate relevant information, and also ensure that they are viewing the most current version of a file.
It’s also important to periodically examine the activity logs and access permissions of a data room in order to maintain security and ensure the right individuals have the right level of access. For example an accountant might not need access to a company’s full financial records. To decrease the risk of sensitive information falling into unintentional hands, a room can contain a watermark that can be added to specific files to hide information, deter photocopying or screenshots and deter unauthorized distribution of legally protected documents. This feature is especially useful for M&A diligence, where the risk of sensitive data being released to the public is high.