The Inevitable Development of IT Hosting within the Legal Sector

June 8, 2012

There is little doubt that cloud/hosted computing will become a serious consideration for law firms. It is simply a matter of time before firms reach this point, depending on factors such as scale, position on the evolutionary ladder and budgetary planning.

Law firms have to become businesses and need to perform successfully in an increasingly competitive world. The firm’s clients and potential investors want to see a strategy, a business plan with milestones, compliance, business development programmes and a high level of legal performance. Achieving this requires the highly supportive application of available and resilient information technology.

In reality law firms:

• have to focus on their key activities of improving efficiency, productivity, profitability and cash flow

• have to look after and find new clients

• need business continuity and disaster recovery that really works, to support clients and ensure compliance

• need a secure and reliable infrastructure and the availability of support staff to match the extended hours and skills required

• need to prioritise added-value activities rather than IT infrastructure management

• need to extend the working day and work on the move, or from home, in a high performance environment

• need to invest in in-house resources and find and retain highly skilled staff

• have limited budgets and tight working capital but need to invest to remain competitive

• prefer not to pay capital up-front for IT infrastructure and systems as a start-up or a break-away business might.

Cloud/Hosted Advantages

A hosted environment with the right key service level agreement criteria in place can help meet all of the above demands, with the following positive implications for the firm:

• Not worrying about the IT infrastructure allows focus on business performance, business development and the client experience.

• The SLAs of a hosting contract effectively meet the business continuity and disaster recovery (BC/DR) criteria of Lexcel and therefore make commercial common sense for a law firm.

• The headache of having to ensure the availability of the necessary infrastructure skills is removed.

• IT resource can focus on added value services such as case workflows, management information and client interface.

• A hosted system can allow 24×7 working from anywhere.

• There is no requirement for capital outlay and payment is on a flexible per user, per month basis.

• Upgrades to variable releases of Microsoft can be controlled by the firm.


Unfortunately, as the opportunity of the cloud opens up, there are so many vendors coming into the market that the buyer has to carefully assess the hosting partner and related terms and conditions. Key considerations include:

• Does the company have a sound history of hosting? What percentage of their income comes from their hosting activity?

• With the security of client data being an essential, ISO 27001 should be a minimum requirement, accompanied by the fact that British datacentres should be used by a British company. Global cloud solutions may offer a cheaper alternative, but they are much more appropriate for a business like Facebook than for law firm client data! With these provisos, client data held in a protected datacentre is much more secure than data in the offices of a law firm.

• Does the vendor own their own data centre? As a minimum they should be able to explain the proposed infrastructure, its capacity and future plans and the disaster recovery failsafe.

• Does the vendor have the support capacity for the required hours and level of service (ie 08.00 – 18.00 and 24×7)? What are the arrangements for occasional out of hours support?

• SLAs need to be very clear – uptime has to be for sensible timeframes that make sense. There has to be remedy for non-performance.

• Commercial terms – many vendors now offer concurrent pricing for the non-software elements of the hosted environment, pricing per user, per month should be very clear, so be sure to agree sufficient data storage capacity at the beginning so there are no surprises further downstream. Be clear on the cost implications as the firm grows or declines. The cheapest solution isn’t always the right solution.

• Most applications used by law firms can run in a cloud environment, but this should be verified pre-contract. Ask if the vendor has specific experience of supporting legal applications and are they prepared to take all support calls and drive them through to conclusion?

Who is doing it?

Just about every core practice management and case management systems (PMS/CMS) supplier is now offering a hosted solution, either with its own resources, or in partnership with an experienced hosting company. Some hosting companies specialise in the legal/professional services industry and have experience of multiple systems.

On the client side, law firms of all shapes and sizes, with multiple work-types and multiple locations are moving to the cloud.

It doesn’t have to be an all or nothing exercise. Moving to the cloud can begin with just an HR, customer relationship management or payroll system to enable the firm to get an understanding of the service, but the greatest impact is arguably the BC/DR benefits for the firm’s core PMS/CMS systems.


This is not a revolution to be ignored. With no capital outlay, costs calculated on a per user per month basis, peace of mind and the ability to focus on what the law firm does best, as was stated at the start, it is only a matter of time before the trickle becomes a torrent.

Bill Kirby is a Director of Professional Choice Consultancy. He has many years’ experience in the legal sector and advises law firms on their business, IT and CRM strategies. In the last seven years, with the growth of hosting, he has been involved with a number of successful projects throughout the country, managing the process between application vendors, the hosting vendor and the client: