The legal industry has been slower than other fields to adopt new technology. For example only 1/3 of practices use legal billing software. Attorneys often prefer to be conservative regarding new technology because of concerns about protecting client information, but if taken too far this reluctance can hurt a practice’s ability to stay competitive. Lately you’ve probably heard a lot about “the cloud” and may be wondering if it’s something your practice should be considering.
When you use traditional law office software, you install the program on a specific computer. All of your information is on that computer and you can access the data only if you can use that computer. If something happens to the machine, such as hardware failure, fire or theft, then your data is gone unless you were smart enough to make a backup. Cloud software, rather than being on your computer, is installed on the cloud provider’s servers. You access the software and your data over a secure internet connection. You can work from any computer and any location with an internet connection.
You don’t need to jump on every technology bandwagon that comes along, but the cloud is not just a passing fad. Cisco predicts that in 2014 over half of IT activity will take place on the cloud rather than on desktop computers or company servers, and they think that activity will rise from one half to two thirds within three years. It’s time for all businesses to look to the cloud.
Please note we didn’t say that it’s time to move to the cloud. We said it’s time to take a look. Yes it’s true that 82% of companies cut costs after moving operations to the cloud, and the cloud offers unprecedented flexibility, mobility and device independence. However you still need to evaluate how your business processes will change if you adopt cloud-based legal time and billing software. For example, if you don’t have regular internet access than traditional desktop law firm management software would be a better choice.
Resistance to the cloud is often based on lack of familiarity, but the fact is you probably already use the cloud in your personal and professional life. Do you use Dropbox or Google Docs at work? Are you a subscriber to an online backup service like Carbonite or Mozy? Do you watch movies on Netflix? Are you a computer gamer who plays MMOs? These are all cloud-based applications.
Another common concern is security. Is your client information safe on the internet? You can find many experts who say the cloud is safe and others who say it is not, but in the end the issue is not the cloud as much as it is the provider. Your information is actually safer on a well-run cloud server than it is on your office desktop, since cloud providers can afford to implement electronic and physical security features that would be cost-prohibitive for a small law practice.
The legal industry has viewed the cloud with caution but recently state bar associations have started to issue opinions on whether storing information on the cloud is acceptable. The first thing to do is discover your state bar’s opinion on the cloud to ensure you are following their guidelines. As of this writing 14 states have issued formal opinions. They all permit the practice of using cloud-based applications such as law firm billing software under the “reasonable care” standard common to law practice, though each state has specific guidelines to follow.
Like the other 13 states, the Pennsylvania State Bar released a formal opinion on cloud computing that gives suggestions on how to provide reasonable care when using cloud services. Their suggestions include ensuring the provider has no ownership of the data stored on their servers, provides adequate security measures to prevent data theft or loss, and that the law practice have an alternate method of connecting to the internet in case their usual connection goes down.
Any booming industry attracts a mix of experienced companies and get-rich-quick entrepreneurs. Newer companies often don’t have the financial resources to stay in business (and what happens to your data then!) or the technical knowhow to protect your information from unauthorized access. Investigate a company’s history to see how long they have been in the IT field, but be aware that some organizations are spinning off cloud services into separate businesses. A “new” company might actually have a technology pedigree that goes back decades.
Be wary of companies offering generic cloud-based time and billing software. These products are fine for most businesses but law practices have unique requirements such as matter-based billing and retainer management that require specialized legal software. Ideally you want a company that not only has extensive IT experience but specifically has legal technology experience.
You didn’t let the cool kids push you to smoke in high school, so why let the cool kids push you to move into the cloud before you are ready? You shouldn’t feel obligated to adopt new legal billing system technology just because everyone else is doing it any more than you should resist new technology just because that’s not the way Clarence Darrow did it. Evaluate your options, talk to the providers, consider how your particular practice will benefit or suffer from the change.
But what if you aren’t a tech guru? How are you supposed to evaluate technology? Find someone who is a tech guru and ask. Read the opinions, both pro and anti, from reputable periodicals and websites. You may not understand all the jargon, but you should be able to glean important factors about how it will affect your firm’s operations and finances. Take your time and make a careful decision.
The cloud has some amazing possibilities that may change the face of law office management software and the practice of law itself. The technology is maturing quickly and many of the problems of the past have been left behind. Cloud-based software might not be right for you at the moment but keep an eye on the technology for the future. You might find that the cloud becomes an invaluable part of your practice.
Dr. Rick Kabra is CEO of CosmoLex and has over 10 years of experience in the legal software industry catering to the specialized technology needs of small to mid-sized law firms. Rick has given numerous seminars and published articles on legal technologies such as law practice technology management, cloud computing, and legal billing & trust accounting compliance.
Learn more about our law office management software by visiting us online at www.cosmolex.com.