As reported last week, it appears that a state-sponsored security hack has resulted in a major security compromise in widely-used software offered by a company called SolarWinds. The compromised software, known as Orion, is enterprise network management software that helps organizations manage their networks, servers and networked devices. The software is widely-used by both public and private sector companies.

The exposure, in the form of “spyware” inserted into one or more updates to Orion, is significant. According to an alert issued by the Cybersecurity and Infrastructure Security Agency (“CISA”), it is common for network administrators to configure Orion with pervasive privileges, which would allow it to bypass firewalls and other security measures, thus making it an enviable target for hackers. CISA categorized the SolarWinds attack as presenting a “grave risk” to government agencies and private entities.

The attack had been ongoing and undetected since perhaps March 2020 (or earlier, and certainly planned out for years). SolarWinds’s SEC filings last week estimated that about 18,000 of its customers may have downloaded the malware-laden software update for Orion.  However, the number of organizations impacted may be even higher.  Orion may be part of a larger infrastructure implementation or managed service provided by third party service providers.  And as a result, even entities that do not have a direct relationship with SolarWinds may need to investigate potential impacts.

It is important to note, however, that even though a business may have the malicious code integrated into their network, they may not yet have suffered an actual breach or intrusion.  “Luckily,” this actor seems to have taken great pains to remain concealed, and as a result, it appears that the perpetrators had not yet had an opportunity to invoke their ability to invade every impacted network in all potentially impacted cases.

While we are far from learning all of the various ways in which this backdoor was exploited, early anecdotal evidence suggests that these attackers were very interested in pivoting into other systems, including cloud-based systems, such as Office 365, that may not have any direct connection to a SolarWinds installation.  While the disabling of the so-called Orion “Sunburst backdoor” and the confiscation of the original domain name that was receiving communications from the attacker should stop further data loss from the initial entry point, it will not stop further incidents if the attacker has already established persistent access within the network. Thus, it is important to note merely because an affected organization may have closed the initial vulnerability, it should not declare itself as contained too quickly as the hackers may have surreptitiously achieved persistent access beyond the Orion entry point.

There are two sobering consequences from this recognition.  First, if an organization determines that it installed the corrupted version of Orion, an organization’s investigation may need to be very broad in nature.  Second, organizations may need to consider whether previous breaches that were resolved this year might, in fact, have had something to do with this issue that was undiscovered at the time of detection.  Accordingly, it may be necessary to revisit prior incidents thought long resolved.

A Response Checklist

How should businesses respond to this development, and how should legal departments direct or support this response?  This blog post spells out some of the specific steps that all potentially impacted organizations should consider.   Note, these steps are not necessarily appropriate in all cases and for all organizations, and each entity should design its response as appropriate for its particular situation.  However, the following thoughts are good starting point considerations for an organization as it plans and executes its incident response effort.

  1. It is essential that businesses respond to this threat in an internally coordinated and thoughtful manner. To the extent a business has established processes and procedures for such circumstances, such as an incident response plan, they should be reviewed and possibly invoked. Such plans typically draw together all of the necessary expertise and authority within and external to the organization to evaluate and respond to the situation as it is currently understood and as new facts are learned, and provide for input as appropriate from governmental resources and external experts.  All activity responding to this incident should be coordinated across the various functions of the business (including IT,  “business owners” of impacted systems (keeping in mind that if the attack is determined to span multiple systems, there may be different business owners), information security, legal, investor relations, compliance, public relations), all in accordance with the business’ response plan.  Given the sophistication of this attack, it is likely that an organization that has the compromised software will need to retain experts to assist them in the investigation.  Care must be taken to ensure that these experts are properly retained, and, any investigations are properly scoped.
  2. CISA issued an emergency directive for Federal agencies to follow. The directive spells out a number of exemplary technical steps to take to mitigate the risk of this incident and provides some specific indicators to look for to determine if data was accessed through the Orion-installed malware.  This directive is one possible starting point for the response process, and businesses should evaluate which of the steps set forth therein are practical and applicable for them.  Should it ever become necessary to defend the organization’s response, reliance on materials such as these could be used by an organization defensively as proof of the reasonableness of its efforts.
  3. For example, CISA advises federal agencies to evaluate which of their telecommunications systems use the Orion products at issue, and consider disconnecting from such system or blocking any connecting systems which use the Orion products as an immediate remediation step until longer term actions can be planned. While this is also an action that businesses should consider, alternatively, there may be less disruptive options available, such as restoring older versions of Orion, or installing newer, clean versions as they become available.  There may be other ways to reasonably address the risk, and based on the input from qualified experts, an organization should consider which avenue of risk mitigation is right for its specific circumstances. Organizations should also consider whether compensating controls, such as enhanced network monitoring, are prudent to mitigate risk while a more permanent repair is designed and implemented.
  4. In certain circumstances, an organization may need to evaluate whether it would be appropriate to invoke its business’ disaster recovery plan or use disaster recovery or business continuity systems. Or do those systems also use Orion?
  5. In cases where businesses either outsource the management of their telecommunications system to third party, use systems hosted by third parties or SaaS-based services, the business should evaluate whether it is necessary to reach out to their service providers to determine whether such third party uses Orion and evaluate whether it would have been possible for motivated actors to pivot from such third party systems into the business’ systems. Of course, in these circumstances, the contract between those parties should be reviewed by legal.  Legal should also be involved in determining the particular details of those communications, including whether these communications should proceed business-to-business or counsel-to-counsel.

Beyond such communications, legal may need to review their agreements with their technology providers that may be, in part, responsible for any Orion infection, and consider what contractual remedies may be available to them.  As a more general issue, businesses should implement more rigorous policies and procedures for the implementation of third-party software.  These should be part of internal procedures and should be requirements for any third party technology providers.  For more details on that, please see a companion post about SolarWinds-related issues on our Privacy Law blog.

  1. To the extent a business has been impacted by this incident, it should (as may be required by law or contract), to the greatest extent possible, identify any specific data that has been accessed or acquired. Businesses should consider what notices are required to be issued pursuant to applicable law or contract and when those notices must issue.
  2. Even to the extent not required by law or contract, businesses should consider how they will communicate to their community (including customers, business partners and employees) on this issue. Businesses should put together a response plan for such inquires based on input from amongst others, governmental resources, internal and external technical experts, public and investor relations experts and counsel. Businesses must keep in mind that the implications of this incident may include claims and assertions against the business by members of the community, notwithstanding the fact that the business itself is a victim of this incident, and thus all internal and external communications must be crafted with that in mind.
  3. To the extent this incident or a business’ response will interfere with business operations, the business should consider whether this may constitute a force majeure event under relevant contracts.
  4. Impacted businesses should consider notifying insurance carriers of the potential claims arising from this event.

Final Thoughts

The forensic investigation into the SolarWinds hack and the mitigation efforts are still ongoing and will continue into 2021.  Since the attack was undetected for months, and conducted by a sophisticated actor using advanced techniques designed for operational security and secrecy, affected service providers likely do not yet know the extent of infiltration (and, may never even discover the entirety of the scope).  As noted above, given the sophistication of the attack and extent of unauthorized access (particularly given the nature of Orion software which analyzed company networks), the hackers may have had the ability to establish other access mechanisms and backdoors within the affected networks beyond the exposure that has already been detected, patched and disabled. Thus, the evaluation process promises to extend over a significant period of time.  Staying abreast of developments, CISA advisories and advisories from other experts, alerts from major technology companies involved in the response and further communications from SolarWinds are important and will define further risk mitigation approaches. This process will continue as the extent of the incident is further clarified.

As part of the evaluation of the impact of this incident on any organization, it is important to remember to conduct the incident response and risk assessments under privilege whenever possible to minimize the generation of potentially harmful discoverable materials.  Please see our discussion of that and related issues in a detailed post on the firm’s Privacy Blog.

To learn more information about the SolarWinds attack and evolving cybersecurity threats, please visit the NSA’s Cybersecurity Advisories & Technical Guidance.  Additional information about this attack and emerging cybersecurity threats can be found in a recent post by Microsoft calling the cyberattack a “moment of reckoning.”

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Photo of Jeffrey Neuburger Jeffrey Neuburger

Jeffrey Neuburger is a partner, co-head of the Technology, Media & Telecommunications Group, a member of the Privacy & Cybersecurity Group and editor of the firm’s New Media and Technology Law blog.

Jeff’s practice focuses on technology, media and advertising-related business transactions…

Jeffrey Neuburger is a partner, co-head of the Technology, Media & Telecommunications Group, a member of the Privacy & Cybersecurity Group and editor of the firm’s New Media and Technology Law blog.

Jeff’s practice focuses on technology, media and advertising-related business transactions and counseling, including the utilization of emerging technology and distribution methods in business. For example, Jeff represents clients in online strategies associated with advertising, products, services and content commercialized on the Internet through broadband channels, mobile platforms, broadcast and cable television distribution and print publishing. He also represents many organizations in large infrastructure-related projects, such as outsourcing, technology acquisitions, cloud computing initiatives and related services agreements.

Serving as a collaborative business partner through our clients’ biggest challenges, Jeff is part of the Firm’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team helping to shape the guidance and next steps for clients impacted by the pandemic.

Photo of Margaret A. Dale Margaret A. Dale

Margaret Dale is a trial lawyer and first-chair litigator handling complex business disputes across a wide variety of industries, including: consumer products, media and entertainment, financial services, telecommunications and technology, and higher education. She is a former vice-chair of the Litigation Department, and…

Margaret Dale is a trial lawyer and first-chair litigator handling complex business disputes across a wide variety of industries, including: consumer products, media and entertainment, financial services, telecommunications and technology, and higher education. She is a former vice-chair of the Litigation Department, and heads the Department’s Data Privacy and Cybersecurity Practice Group. Margaret has been recognized since 2017 in Benchmark Litigation’s Top 250 Women in Litigation.

Margaret’s practice covers the spectrum of complex commercial disputes, including privacy and data security matters, as well as disputes involving M&A, intellectual property, bankruptcy and insolvency, securities, corporate governance, and asset management.

Margaret regularly counsels clients before litigation commences to assess risk, adopt strategies to minimize or deflect disputes, and resolve matters without going to court.

Margaret is a frequent writer, including authoring a regular column on corporate and securities law in the New York Law Journal. She also serves as the lead editor of Proskauer’s blog on commercial litigation, Minding Your BusinessShe also authored the chapter titled “Privileges” in the treatise Commercial Litigation in New York State Courts (Haig, 5th ed.), as well as the chapter titled “Data Breach Litigation” in PLI’s Proskauer on Privacy.

Margaret maintains an active pro bono practice advocating on issues relating to women, children and veterans. She serves on the Board of Directors of CFR (Center for Family Representation), VLA (Volunteer Lawyers for the Arts), JALBC (Judges and Lawyers Breast Cancer Alert), and the City Bar Fund.

Photo of Nolan Goldberg Nolan Goldberg

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range…

Nolan M. Goldberg is a partner in the Litigation Department, co-head of the Data Privacy and Cybersecurity Litigation Group, and a member of the Patent Law Group. His practice focuses on technology-centric litigation, arbitration (including international arbitrations), investigations and counseling, covering a range of types of disputes, including cybersecurity, intellectual property, and commercial.  Nolan’s understanding of technology allows him to develop defenses and strategies that might otherwise be overlooked or less effective and enhances the “story telling” that is critical to bringing a dispute to a successful conclusion.

Nolan is a registered patent attorney before the U.S. Patent & Trademark Office; and an International Association of Privacy Professionals (IAPP) Certified Information Privacy Professional, United States (US CIPP) and Certified Information Privacy Technologist (US CIPT).


Nolan’s electrical engineering background, coupled with a litigation and risk management-centric focus, allows him to assist companies in all phases of incident response. Nolan often acts as a bridge between the technical and legal response teams (both inside and outside forensic consultants). Nolan uses this deep familiarity with the company and its systems to defend the company in litigations, arbitrations and regulatory investigations, including before the Federal Communications Commission (FCC); Federal Trade Commission (FTC) and before various State’s Attorneys General, including Multi-State investigations.

Nolan has worked on incidents that range from simple phishing attacks on e-mail accounts by cyber-criminals to intrusions by (formerly) trusted inside employees to complex technical breaches of hosted systems by state-sponsored advanced persistent threats (APTs). These incidents have involved both client systems, and systems of a vendor of a client that hosted its data.

It is often the case (both in response to an incident and for other reasons) that a company will want to undertake an assessment of its security posture, but has concerns about the discoverability of any such analysis.  Accordingly, Nolan also frequently assists companies’ scope and conduct privileged security assessments, including “dual purpose” assessments where privileged analysis are also used for ordinary-course purposes.

Commercial Disputes

Nolan also assists companies with commercial disputes, particularly in cases where there is a technology component, including disputes arising from hosted software agreements; outsourcing and managed services agreements; software and technology development agreements and the dissolution of joint ventures.  When these disputes cannot be amicably resolved, Nolan has litigated them in State and Federal Court and in arbitrations, including international arbitrations.

Intellectual Property

Nolan’s work has included numerous patent and trade secret litigations and negotiations, primarily in cases involving computer and network-related technologies. In particular, the litigations have involved at least the following technologies: hosted software; telecommunications, computer networking; network and computer-related security hardware and software; microprocessors, voice-over Internet protocol (“VoIP”); bar code scanners  financial business methods and software, including securities settlement, fail management and trade execution and reporting software; data compression; handheld computers; pharmaceuticals; cardiac electro-stimulatory devices and prosthetics.

Nolan also has experience prosecuting patent applications before the U.S. Patent and Trademark Office in encryption, CMOS, HDTV, virtual private networks (“VPN”), e-commerce, XML/XSL, financial instruments, semiconductor electronics, medical device technology, inventory control and analysis, cellular communications, Check 21 and business methods. Nolan also has conducted numerous freedom-to-operate searches, written opinions, and counseled clients in the areas of bar code scanners, imaging, book publishing, computer networking, business methods, Power Over Ethernet (“PoE”), and digital content distribution.

He has assisted in evaluating patents for inclusion in patent pools involving large consumer electronics and entertainment companies concerning CD and DVD technology.

Computer Forensics and Electronic Discovery

Nolan is often called upon to develop e-discovery strategies to be used in all types of litigations, with a particular focus on selecting appropriate tools, developing proportionate discovery plans, cross border electronic discovery, managing the overall burden and cost of the electronic discovery process, and obtaining often overlooked electronic evidence, including computer forensics. He also assists clients to develop and implement information management programs to reduce expense and risk, meet compliance obligations, and tame e-discovery burdens.

Thought Leadership

Nolan has authored numerous articles and given numerous presentations on emerging issues and trends in both technology and law, and has often been called upon to comment on various media outlets including Business Week, IPlaw360, IT Business Edge,, Forbes, and The National Law Journal.

Prior to practicing law, Nolan was a computer specialist at Underwriters Laboratories (UL).