7 Trends in Cloud Technology Law Firms Need to Know

legal software

7 Trends in Cloud Technology Law Firms Need to Know

by Josiah Chaves, Director, Expert Sierra

For years we’ve heard the prediction that the cloud is coming to the legal market. While we’ve never really seen a wave of adoption in any given year, when we look back at how far we’ve come as an industry, it’s clear the cloud is already here.

Moving to a cloud environment has not been a sudden change but has rather unfolded in small incremental steps over the last few years. We believe a critical mass of law firms are now using cloud-based legal solutions to manage their firms.

That’s the consensus view of a group of dedicated professionals that gathered for a recent webinar I had the good fortune to moderate. The webinar titled, Cloud Technology for Law Firms – Ready or Not Here it Comes, featured a panel discussion that counted familiar faces in the legal technology community including:

All of the panelists have extensive experience in helping law firms move data and applications to the cloud. Their collective experience points to some trends in cloud technology we thought would be useful to share here.

1) Cloud momentum grows among small and mid-sized firms.

The panel suggested they see a “bona fide” move to the cloud among law firms. In particular, small- and mid-sized firms, which the panel quantified as those with between 25 and 150 attorneys, are rapidly adopting cloud tools.

These firms are beginning to see that the cloud is providing access to advanced technology that previously, only the largest firms could afford. Sophisticated legal applications used to require a sophisticated IT infrastructure and a large technology staff, but that’s no longer true.

The cloud is leveling the playing field for smaller firms to compete with larger firms with leverage gained through technology.

2) Cloud expenses are more predictable.

The biggest difference in cost that comes with the cloud is the structure. Typically, these products are sold on a subscription basis. This means the expense is classified as an operational expense as opposed to a capital expenditure; law firms no longer need to go out and purchase hardware to run the software.

Staffing is a related cost, but the panel noted that the cloud probably doesn’t mean firms will be replacing existing staff, but rather augmenting their roles. For example, firms will need people to enhance applications to gain efficiency, as opposed to staff to maintain hardware.

All of this means that cloud technology tends to be a predictable expense. A law firm will no longer be susceptible to a surprise requirement to patch, upgrade or replace servers. Rather focus on using technology to improve processes.

3) Cloud security has matured easing fears.

Security has long been a top barrier to cloud adoption. However, those fears are easing for three primary reasons:

  • First, modern cloud tools are being built with secure communications protocols and support important ease-of-use initiatives such as single sign-on. All this means in simple terms is that the security standards have matured, giving law firm CIOs greater confidence in the cloud.
  • Second, there’s a general acknowledgment that vendors dedicated to providing cloud environments are significantly better at securing the infrastructure than law firms. This goes for the larger firms too because they simply can’t match the security resources that is a natural part of the cloud business.
  • The third and final reason stems from the client base – one of the fastest growing segments of cloud adoption in legal comes from corporate counsel. Many law firms are surprised when they learn the corporate legal department of ‘that big banking client’ has moved legal operations to the cloud.

Those long security audits aside, this has conditioned clients to expect their service providers, such as law firms, to have similar technology delivery models.

4) Cloud provides operational continuity for essential processes.

Most firms seek out cloud solutions to support three key needs: a) time and billing, b) document management and c) email. The loss of any of these three technology services would have substantial consequences on a law firm’s business.

Take email, for example. It’s a crucial application since lawyers live in their inbox. Ann Gorr noted the business continuity benefits of the cloud really made a difference in the aftermath of Hurricane Sandy in 2012.

The storm pounded regions of the east coat with dense law firm populations – and disrupted electronic communications. Those firms with email hosted by a cloud provider were able to keep their law business running smoothly.

5) Law firms that succeed with cloud focus on a problem.

Having a plan for moving to the cloud is essential.  The larger firms are meticulously planning cloud implementations to operate more efficiently, and perhaps keep work that would otherwise go to smaller firms.

The advantage smaller firms have is agility to act faster. However, moving fast does not mean the move shouldn’t be well planned. The panel suggested that a strategy begins with an internal conversation that answers one big question: what is the business problem we aiming to solve with the cloud?

More precise opportunities are discovered by law firms that study how their lawyers work to identify areas where the cloud could make a difference. Several common processes law firms typically evaluate include:

  • Streamlining the client intake process
  • Automating conflict checks
  • Centralizing matter and case management
  • Improving document automation and management
  • Simplifying time-entry
  • Facilitating time and billing

The idea here is understanding what lawyers are not doing currently because it’s too cumbersome. Time entry is a great example since many lawyers dislike entering time – and the mechanisms they are provided for completing the task are often clumsy and awkward. In other words, it takes a process they already do not like and makes it worse.

6) Cloud yields greater accessibility to data.

One of the biggest benefits of moving to the cloud is the accessibility of information. The idea is to get the data out of the individual silos, and into a location where it can be mined and used to find answers to important questions such as:

  • Is this client or matter profitable?
  • Who are our top performing rainmakers?
  • Should we hire that lateral?
  • Should we acquire that practice group?
  • When we go to a federal court, how often do the decisions go our way?

Most law firms have this data – because law firms tend to save everything – but it’s commonly kept in a silo somewhere. For example, it’s in an email, or the time and billings system, or in document management.

A key objective of any cloud implementation, including hybrid models, should focus on finding ways to extract that information for analysis to drive better client service and decision making. This means enabling lawyers to have easy access to relevant information whether they are at a computer in the office, seated at client conference table with an iPad, or preparing for a meeting in the back of a taxi.

7) Successful cloud projects have a plan for integration.

It’s not uncommon for firms to use different products from different cloud vendors for different needs. For example, a firm might have one provider for email, a second for CRM, and a third for time and billing. This is a legitimate approach. However, firms need to be sure these service providers support a way for law firms to pull all this data together in one place for users.

It’s your data and you deserve the ability to move it around as you deem fit. The time to plan for this is before you select your vendors. As one panelist described, a law firm that had put data into four different cloud environments without a strategy found itself in a bind. It can be very messy and expensive to untangle.

The full webinar, Cloud Technology for Law Firms-Ready or Not, Here It Comes, was recorded and is still available. It runs just under 60 minutes and is well worth a listen.

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