Startup legal practices are increasingly turning to the "cloud" for IT support. Will older firms respond? The Journal's latest IT report looks at the issues

New legal practices are now regularly turning to cloud-based IT solutions for a low-overhead business model that also offers both efficient and secure data support. Are longer-established practices responding?

Some of course are, while others are still seeing obstacles to making the leap. But how much of a leap is it?

Looked at in perspective, for a solicitor or solicitors starting up a new firm the major decision is to do just that: they are embracing change in a big way. As Warren Wander, managing director of software providers LawWare comments: “When faced with a big change it’s easier to make a few smaller ones, like, ‘I want to file electronically rather than on paper’, or, ‘I’ll contract out my typing and/or cashroom rather than employ a secretary and/or cashier’, or, ‘I want to pay as I go rather than spend capital on equipment’.”

He adds: “Notice I refer to these things as small changes. To an existing firm these could be considered monumental departures from accepted practices, and unless everyone buys into an idea it will never happen – and I mean everyone.”

According to Wander, about half of the firms joining LawWare’s LawCloud service are startup practices. George Blair of Denovo, which offers “Intelligent Cloud”, sees a similar pattern. “New practices are looking at ways of keeping overheads to a minimum,” he observes. “Older practices are outsourcing their cashrooms and going on to the cloud with cashroom and other functions.” These cloud services are of course designed to comply with Law Society of Scotland rules.

Blair cites the example of a more traditional practice that had a cashier for many years but found itself having to cut back to reduce overheads, and automated the function by taking advantage of the cloud. “It doesn’t matter where the cashroom resides,” he notes.

Time to rethink

The advantages of the cloud, especially to the smaller practice, are well known by now. A client firm requires no expensive server and associated maintenance: an internet connection is all that is needed. Capacity, including storage, can be paid for as the practice needs it – no need to fork out for extra just in case. Data are held securely, probably more so than with either traditional paper files or on someone’s laptop or other device that might be lost or stolen. And being held remotely, the data can still be accessed from anywhere you can go online. Small wonder, then, that for a startup practice starting with a blank sheet, the word “cloud” tends to be added at an early stage.

What steps can other firms take to keep up? How to overcome resistance, if it is still found? And are there ways of easing the pain of transition? One good time to start would be when equipment is in need of replacement or, say, a warranty expires on the server. Check out comparative costs, as current pricing models may offer a replacement system at a similar cost to a firm’s current maintenance payments, and with no major capital outlay.

As for selling the idea to colleagues, it could be the opportunity to review and modernise working practices and processes at the same time. What about staff-friendly concepts such as flexible working? With current pressures on cashflow and profits, will colleagues see an advantage in outsourcing back-office services? Even a traditional firm can try to think in terms of a new opportunity, apply a fresh set of eyes, and perhaps make some helpful modernisations.

Case studies

Sometimes, therefore, it just comes down to leadership – something vital to law firms today. Wander suggests that some of his new practice clients have come into being precisely because their principals decided they would make more progress away from the shackles of their previous firm.

One of Denovo’s new-start clients is Glasgow court firm Thompson & Brown. Formed in 2011 by partners Graeme Brown and Michael Thompson, the practice was clear from the outset that it wanted to embrace new ways of working and the technologies that support them. With concerns about paper files as well as efficient internal communications, a cloud-based system was the obvious solution, one that kept capital costs to a minimum as well as enabling the firm to achieve its objective of becoming a “paperless office”.

Partner Graeme Brown comments: “With the cloud, every file that I have is on my laptop, smartphone or tablet, and is available to me with an internet connection wherever I am. I can go to court and add an outcome to a case and that can be available for my staff to see within seconds of a case having concluded.”

He adds: “Since our data is now stored in one central place, there is a higher level of confidence at the company, and the staff are much happier that data is sitting in a secure data centre, rather than on a physical server that can be removed. We naturally had questions about migrating from an on-premise server to the cloud in terms of disruption to the business, but once we were introduced to the team at Denovo and Rise [Denovo’s partner, a managed cloud services provider], we realised that it really was foolproof.”

Similarly, LawCloud client Scanlon Ewing of Clydebank was formed by Mairi Scanlon and Maureen Ewing after leaving a bigger practice. Both wanted better access to client and business information, including both types of accounts, and to improve overall practice efficiency. Scanlon comments that although significant preparation was required to enable all their client data to be imported from their former firm, and they then had to learn how to use the new system, all went smoothly with the support and training provided. “We just find it very easy to use, much easier than the system we used before,” she says.

Aberdeen practice Matthew Cohen & Associates is longer established and made the move to LawCloud from a system it was finding too specialist and expensive. Cohen explains that they now have “the flexibility to work in a better way, and, from a business owner perspective, the compliance functionality has reduced stress”. He continues: “We now have better time tracking, which means we avoid underselling ourselves, and this in itself has enabled a welcome improvement in fee income. It’s great that staff can work from the office or from home and you can trust what they are doing.”

Blair points to specific process improvements Denovo’s clients have enjoyed. One practice, acting for a housebuilder that offers trade-ins of people’s existing properties, which are bought by a third party finance company, found that paperwork that had previously taken an hour could be cut to 11 minutes through automation.

And a criminal law client is now able to create five documents relating to witness citations, for each of five witnesses, in only a minute.

He concludes by pointing out that it isn’t just new legal practices that threaten the old ways – with the Co-op and others attacking the market in England, and making noises about doing so in Scotland when ABS finally arrives here, solicitors’ firms will have to maximise their efficiency if they want to hold on to their market against the new competition.

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