Why UK Legal Teams Rely on Virtual Data Room Software
UK law firms manage sensitive data daily, but 90% say cyber risk is now their biggest risk. Between Q3 2023 and Q2 2024, UK lawyers reported 2,284 data breaches. This represents an increment of nearly 7.9 million people or 39% as compared to the previous year.
Meanwhile, half of the mentioned breaches were related to phishing, and more than 40% were associated with human error. This is a clear sign that legal teams require safe and reliable document systems.
A data room for law firms provides a secure space for efficient file management, access, and sharing. The implementation is straightforward, so everyone in the team, regardless of their technical background, can set it up in minutes.
Core legal workflows powered by VDRs
There are many reasons why law firms might wish to use VDR solutions instead of traditional data rooms in their operations. In particular, data rooms are used by legal firms for the following purposes:
M&A procedures
Law firms that are involved in mergers and acquisitions (M&A) use this safe online storage to enhance deal preparation, disclosure, and the due diligence process. Such platforms enable safe document exchange with clients, counterparties, and regulators during the M&A lifecycle.
Unlike traditional physical data rooms, the online platform simplifies the search and management of confidential information.
Explore the features and benefits of VDRs in mergers and acquisitions by visiting the page.
Data room M&ALegal due diligence
A legal due diligence virtual data room helps law firms manage large volumes of contracts, agreements, and compliance records efficiently. You can structure, control, and share sensitive documents securely, ensuring that your teams and clients work with up-to-date information.
Legal litigation
Data rooms for lawyers simplify this process by providing a secure online space for managing disclosures, evidence, witness statements, and privileged materials. Moreover, the access controls and audit logs are detailed enough to allow your team to comply with the needs of the clients and regulations.
It is quite easy to set up a virtual data room, especially because this process does not take too much time due to the user-friendly interface.
Secure legal files storage and sharing
This is where virtual data room services appear to be especially useful because they offer secure storage space for legal documents.
VDRs let you decide exactly who sees what, and when. You can give a client read-only access to a contract, let a colleague comment on an evidence file, and block downloads altogether for sensitive reports.
All data is protected with the two-factor authentication process and granular access permissions. At the same time, you can also deploy advanced security measures to protect confidential documents even more.
Raising of capital
When clients pursue financing, law firms use VDRs to manage documents and deal records. A virtual data room for legal departments allows you to grant controlled access to stakeholders and share confidential documents without risk.
Establishment of strategic partnerships
Complex partnerships require careful collaboration between multiple firms and external advisers. VDRs offer shared workspaces for secure document management and protecting confidential data.
UK-specific compliance & data protection standards
Regulatory compliance is a defining issue for UK law firms today. VDRs support compliance with:
- The Data Protection Act 2018 (DPA 2018) governs the processing of personal data in the UK, aligning with the GDPR framework.
- The General Data Protection Regulation (GDPR) protects personal data and privacy for individuals in the UK and the EU.
- Solicitors Regulation Authority (SRA) Guidance sets expectations around client confidentiality, document management, and security best practices.
By implementing secure data room services for the legal industry, UK law companies meet regulatory requirements.
Essential data room features for lawyers
The table below shows the core features required for secure communication and document handling for law firms:
| Feature | Data room use cases and benefits | Virtual data room providers |
| Encryption and secure file storage | Protects privileged documents and sensitive client data from unauthorized access or breach in a secure online repository. | Ideals, Sterling, Intralinks |
| Granular user permissions | Controls user access at the matter, folder, or document level to limit exposure and comply with confidentiality obligations. | Firmex, Ideals, Ansarada |
| Audit trails | Provides immutable records of user activity, relieves GDPR/SRA audits, and improves internal oversight for client and regulatory reporting. | Ideals, Intralinks |
| Dynamic watermarking and IP/geolocation controls | Prevents unauthorized distribution and maintains jurisdictional control over document access. | Datasite, Firmex |
| Automated updates and notifications | Ensures legal teams and clients stay informed on critical document activity in real time. | Ansarada, Ideals, Intralinks |
| Bulk upload and smart indexing | Accelerates matter preparation (due diligence, litigation disclosures) via structured, searchable, and efficient document management. | Ideals, Firmex |
| Retention and deletion controls | Enforces defensible data lifecycle policies aligned with DPA 2018 and SRA confidentiality rules. | Datasite, Ansarada |
Data rooms have different use cases when it comes to using them for sensitive legal documents. Thus, electronic data room providers designed the following data management features, which allow:
- Uploading checklists and files. It is easy to import the document checklist into the online repository within just a few seconds.
- Regulating user access and setting permissions. You can easily control who can view or download your documents. You can also restrict access to certain files by IP address or apply watermarks as an additional security measure.
- Sending notifications and alerts to users. It is possible to set automatic notifications within a digital data room to know for sure when new files are added to the data warehouse for future use. These documents can be viewed only by authorized users.
- Keeping track of data room activity. User activity can be easily tracked by means of special document management features.
In this way, although litigation is known as a difficult process, the use of an online virtual data room for this procedure simplifies matters considerably.
Choose the Best Data Room for Your Legal Team
Practice areas benefiting from VDR technology
Virtual data rooms are currently used across different businesses and industry segments. They are beneficial and suitable for many types of law practices.
In this regard, corporate law is one of those spheres that were the first to see the benefits of virtual data rooms in contrast to the use of traditional data storage options.
Over time, the merits of using VDRs for the needs of legal firms have become especially pronounced, so that nowadays law companies use this way of storing data in many spheres, such as the following:
- Corporate law. The M&A process can be tiresome and complex, which is why online data rooms prove to be especially helpful for banking entities and lawyers who are engaged in the due diligence procedure. In this way, dealmakers continue to benefit from the use of data rooms in their legal practices.
What’s more, all processes are now better protected than previously because VDRs are covered by multiple layers of security features, which are aimed at preventing hacker attacks and other hazards.
- Corporate finance sphere. Virtual data room for finance represents an excellent tool for lawyers who work in the sphere of corporate finance. All the transactions can now be carried out much more easily and safely than previously.
- Legal litigation. Litigation lawyers often require exchanging sensitive data with others quickly and reliably. In this regard, VDRs can give them such an opportunity. That’s because they provide a safe and confidential space for collaborations with various experts, clients, and other litigation participants.
- Private client and estate planning. Lawyers who work with wills, trusts, and personal documents use VDRs to grant approved access to executors, beneficiaries, and advisers for simpler document handling.
- Real estate law. Property transactions involve many parties and generate extensive documentation. VDRs help law firms manage these materials efficiently by providing secure legal files storage and sharing, giving authorised parties controlled access to critical documents throughout the transaction.
- Intellectual property law. Protecting proprietary information is vital in IP matters. VDRs allow lawyers to store and share patent applications, trademark files, and licensing agreements securely, supporting due diligence and negotiations.
Top advantages of virtual data room solutions for the legal industry
Let’s break down the most significant benefits of a legal data room:
Speed and deployment readiness
The majority of VDRs are cloud-hosted and can be implemented within a few minutes. When your team needs to respond quickly (be it an urgent transaction or litigation disclosure), you can act immediately, without waiting for IT support or setup delays.
Simplicity and ease of use
Modern VDR software is built to reduce operational complexity. Lawyers and staff can upload, organise, and manage files without technical training. Even with large volumes of documents, advanced search tools help users find what they need fast.
Secure legal files storage and sharing
VDR technology prioritizes data security, with encrypted data storage, multi-factor authentication, and exact permission settings. Ultimately, your firm controls exactly who can see, download, or edit each document.
Compliance and audit readiness
VDRs provide detailed audit trails that show exactly who accessed what, when, and why. This makes it easier to demonstrate adherence to data protection rules such as the DPA 2018, GDPR, and SRA guidance. If a client or regulator asks for proof, you’ll have clear records at your fingertips.
Supporting client trust and reputation
A protected, well-organized VDR helps reinforce your firm’s reputation. Such attention to security and professionalism can be a deciding factor when clients choose legal advisers. Given this, it’s important to choose data room software carefully.
Beyond these operational benefits, the adoption of the right virtual data room supports broader business priorities. In particular, it’s a perfect instrument to protect sensitive information, work faster, meet compliance standards, and earn client trust.