I am asked this question all the time. From solos to firms with 15 or 20 attorneys, the question arises – Is the cloud right for my firm? The answer is sometimes; it really depends on the firm.
Cloud computing has leveled the playing field and allowed smaller law firms to compete with larger firms by using technology hosted in the cloud. From Exchange servers to practice managements systems, cloud computing has a lot to offer firms of all sizes. However, sometimes it does not make sense for firms to move to the cloud, especially small to mid-size firms that have already made investments in software and hardware.
Several questions should be considered to determine if a firm is a good candidate for cloud computing. They include:
Does the firm have enough internet bandwidth?
This is my number one concern for cloud-based computing. The firm needs to have adequate internet bandwidth for cloud computing to be successful. If your internet is slow, your access to data will be slow and your employees will be frustrated. Several follow up questions regarding internet access include:
- How much are you paying for internet and does it make financial sense to upgrade if bandwidth is not adequate? Most internet service providers (ISP) require a longer term (two-three year) contract. Are you willing to make that long term commitment?
- When is the expiration of the ISP contract? At the end of a contract, a firm has an advantage of looking at other providers for internet service and can negotiate a better price. If you are in the middle of your internet service contract, you still can increase your bandwidth, but expect to sign another three-year contract with the ISP.
- Are you with an ISP that is giving you stable, reliable service? Without reliable service, cloud computing will not be a successful venture.
How old are the firm’s servers?
- Less than three years – Firms that have made an investment in server technology in the last three years need to consider the return on investment. Typical return on investment for servers is at least three years since most servers are under warranty for that long. If your firm has already made an investment in servers, it may not make financial sense to consider the cloud because you have not gotten your money out of them.
- More than three years – Once you reach the three-year mark, the return on your hardware investment has been achieved and it makes more sense to consider options outside of your own servers. However, just because the hardware should be replaced doesn’t automatically mean that you should move to the cloud. Software is a big consideration.
What software is the firm using for time and billing and practice management?
If your firm relies heavily on server-based time and billing and practice management systems, you need to consider if there an equivalent program in the cloud that performs all of these functions. Many of the cloud-based practice management systems and time and billing systems are not as robust as server-based system. Several items to consider in this area include:
- What functions do your server-based systems perform? From docketing and calendar control to time entry and note taking, the list may be long or short. By listing the functions that your server-based system performs, you are creating a list of requirements for a cloud-based system.
- Can the cloud-based practice management system and/or time billing system adequately provide you the type of reports that you need and the type of billing required by your clients, like insurance companies? Is there a critical weekly or monthly report that the managing partner relies on? What does your firm and/or accountant need for financial reporting? The time and billing functions of some cloud-based system do not provide as much flexibility and custom reporting as many server-based systems.
- Does the cloud-based practice management system provide the type of integration that your firm currently enjoys with their current server-based system? Server-based software has had years to develop integration with other server-based software. That is not as true in the cloud. The integration between different cloud-based systems is still in development and will be a focus for growth in the future. Some cloud-based software works with server or desktop software – like Quickbooks. But, that is an exception rather than a rule. Not much integration exists between cloud-based systems and server-based systems. If you are considering a move to the cloud, many programs have some integration, but they may not be what your firm requires. It may make your decision easy on which programs to choose.
In summary, you should consider the cloud if:
- You are happy with the speed of your internet access or can increase it without causing a financial burden.
- Your servers have passed their life expectancy and the investment that the firm has made has been depreciated.
- You are not heavily invested in the practice management system or time and billing system that you purchased and are only using a small percentage of the product.
If your firm decides cloud computing is right for them, the 30 day free trials offered by most cloud-based systems are important to make sure that the product is right for your firm. In addition, be sure to read the Terms of Service (TOS) to understand the program you are using, who owns the data, who has access to the data, how the data is backed up and how you get your data back if the provider goes out of business. Everything is spelled out in the TOS, so please read them thoroughly for each piece of software. Not all TOS agreements are the same.
In general, the cloud has what it takes for firms that are not heavily entrenched in their server-based software, but is still lacking the customizations that larger firms require. As cloud providers begin to target larger firms, the products will mature to include many of the features that these firms require. At the pace of technology today, it won’t be long.