Whether it is practice management, document automation, or litigation support, “the cloud” is becoming a viable technological platform for small firms.
By Jack Newton
Small firm lawyers have traditionally been at a technological disadvantage when compared to their large-firm colleagues. Unable to match the massive IT investment large firms make, small firms are typically forced to patch together a “make do” software solution that doesn’t adequately meet their needs. The great irony of this imbalance is that small firms need technology that is at least as good, if not better, than what large firms require.
Cloud Computing Offerings in the Legal Market
Fortunately, the emergence of cloud computing offerings in the legal market promise to, as they already have in many other industries, level the technological playing field in the legal services market.
Whether it is a cloud-based or traditional desktop software, technology can and should play a key role in law firms of all sizes. For small firms, two key factors are driving the adoption of IT: First, there is the ever-increasing need to improve efficiency. In a legal services market facing increased competition and commodification; good technology is proving to be a critical competitive advantage. Properly deployed, legal IT can significantly increase a firm’s productivity while driving down the internal costs of rendering those services.
The second driver for IT is the need to reduce malpractice-related risk as much as possible. IT can serve as an automated set of checks, balances, and reminders than substantially, if not completely, reduce the typical risks law firms of all sizes face. Investing in IT to support and streamline a firm’s activities is one of the most cost-efficient and reliable ways for firms of all sizes to reduce malpractice risk.
Practice Management Software Protects Against Risks
A category of technology named “practice management software” is specifically designed to help protect against the myriad risks small firms face. Missed client meetings, lapsed limitation dates, client communication issues, conflicts, and trust account mismanagement together represent the vast majority of complaints made against solos and small firms. Virtually all of these complaints could be eliminated through the effective use of practice management software.
Although practice management software designed specifically for solo and small firms has been available for years, adoption of comprehensive practice management software has been modest at best. A recent ABA technology survey indicated that less than 30% of solo and small firms use practice management software of any kind. The cost and complexity of implementing traditional practice management systems is often cited by small firms as a factor in their decision not to use a practice management system.
The emergence of cloud computing offerings promises to give solo and small firms access to the same level of technology as their large-firm counterparts, with drastically reduced complexity and investment. The concept of cloud computing is simple: rather than hosting software and servers “on premise,” as has traditionally been the case, firms will access SaaS (Software-as-a-Service) delivered via the internet. By virtue of being delivered via the web, cloud-based products offer reduced step-in costs, minimal training, and, typically, subscription-based “pay-as-you-go” pricing models.
For small firms, this transforms what was previously an untenable proposal by traditional software vendors (a large up-front software investment, capital expenditures for servers, and significant downtime for installation training) with a much more palatable proposal: no up-front investment; no capital expenditures; and no downtime.
Cloud Computing Model — A Democratizing Force
The cloud computing model has already proven to be a disruptive, democratizing force in many industries. In many ways, the impact cloud computing had on the enterprise and small business Customer Relationship Management (CRM) software market parallels the transformation we’re now seeing in the legal market. In a few short years, an early cloud computing pioneer, Salesforce.com, completely transformed the CRM industry. The industry incumbent, Siebel Systems, sold large, very expensive software installations to the Fortune 500; meanwhile small- and mid-sized businesses “made do” with ill-fitted, makeshift CRM systems like Microsoft Outlook or ACT!. When Salesforce.com launched, it offered the same enterprise-level CRM capabilities the Fortune 500 enjoyed to a much broader audience of small businesses. Firms with as few as one or two sales staff now had the same technology at their fingertips as their Fortune 500 peers.
Now, the same transition from desktop software to the cloud is taking hold in the legal industry, and small firms stand to reap the same benefits small businesses enjoyed with the launch of Salesforce.com. Whether it is practice management, document automation, or litigation support, “the cloud” is becoming an increasingly viable platform upon which the technological needs of a small firm can be built.
Jack Newton is the co-founder and CEO of Clio, a cloud-based practice management system for small- to medium-sized firms. Jack holds an M.Sc. in Computer Science, and has more than ten years of experience in building startups and cloud-based applications. Jack is a nationally recognized writer and speaker on the security, ethical, and practical aspects of cloud computing.
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