Law Practice Management Asked and Answered Blog

Category: Cloud

Feb 14, 2017

Law Firms Moving to the Cloud

Question: 

Our firm is a twelve-attorney business litigation firm in Sacramento, California. I am one of three members on our technology committee. Our IT infrastructure consists of an in-house Microsoft file server, a separate Microsoft Exchange e-mail server, document management as well as time billing and accounting software. Our documents are stored locally and managed by the locally installed document management software. Several of our partners have talked with other firms that are operating totally in the cloud. We would appreciate your thoughts on whether moving to the cloud is something that we should consider?

Response: 

It would be interesting to know the size of firms that your partners have been talking with. I am seeing many solo and very small firms operating completely in the cloud using cloud-based time and billing applications such as Clio, Rocket Matter, and QuickBooks online with their e-mail hosted using Microsoft Office 365. Some are using products such as DropBox and Microsoft One Drive to store their documents in the cloud. These billing applications do not provide the functionality and reporting that larger firms require and as a result larger firms are still using systems that firms have been using for years. Some firms that are using these systems are having them hosted in the cloud. These firms have no premises file servers. All of their data is hosted in the cloud – applications, documents, and e-mail. (Note this is different that cloud-based applications).

Firm’s your size are taking a more cautious approach to moving to the cloud. Many firms have large investments in their existing hardware and software and also have concerns about security and confidentiality issues. While it is tempting to look to the cloud as our savior from constant hardware and software upgrades as well as IT providers, moving to the cloud should not be explored without doing your homework.

Personally, I believe that in many cases the cloud may be more secure than the security that exists in many law firms on premises systems. Law firms and law departments are increasingly adopting the cloud. Fifty-six percent of the Am Law 200 firms polled in the Partnership Perspectives Survey use some form of cloud computing and 47 percent of those polled in the 2016 ITLA/InsideLegal Technology Purchasing Survey predicted that over a quarter of their firm’s software and service offerings could be cloud-based in the next one to three years. Sixty-one percent of small firms polled in the ILTA survey said that over half of their firm’s software could be cloud-based in the next one to three years.

Here are my thoughts and suggestions:

  1. Don’t rush off without doing due diligence on the application or hosting vendor. Checkout their security both while your data is in transit and at rest on their computers. Read all their whitepapers and contracts. Check references.
  2. Be careful of implmenting existing billing and accounting cloud-based applications. You may be going backwards until these systems mature and incorporate many of the features and reporting needed by larger firms.
  3. Don’t go with the new kid on the block. Insure that you go with a vendor that has staying power in the market.
  4. Take baby-steps – you might want to start with:
    1. Having your e-mail hosted.
    2. Later – implement a cloud-based document managment system.
    3. Later – have your existing billing and accounting applications hosted with a cloud provider.
  5. See where the time-billing and accounting cloud-based applications are in a few years and whether you should consider moving to such a system.

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John W. Olmstead, MBA, Ph.D, CMC

 

 

 

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