The End of Lawyers’ IT?

Richard Susskind states that ‘ … no one … is thinking systematically, rigorously and in a sustained way about the long term future of legal service. No one seems to be worrying about the fate of the next generation of lawyers … most [lawyers] confess to being clueless about how their profession is likely to unfold in the long run.’[1] Further to this one might add that little is being said about how lawyers might expect to be served with their IT in the coming years, or indeed the (potential) advantages to them of the changes in the nature of IT services currently underway.

 

While in this article I cannot promise the depth of analysis to which Susskind refers, I wish to update readers on developments in the legal IT landscape. My article in the Oct/Nov issue[2] on Software as a Service described SaaS and its benefits. I believe that over the coming years ‘cloud computing’ and SaaS will profoundly alter the way lawyers use IT, making categories of software which were previously unaffordable for some, possibly most, firms easily and cheaply available to all. The speed of development in the area merits an update outlining what is now available. I hope that by alerting readers to the current offerings they will feel both informed as to how (legal) IT is unfolding, and ‘clued up’ as to what they should be exploring.

 

Cloud Computing, Software as a Service and Lawyers’ IT

 

‘Cloud computing’ is the development and use of Internet (cloud) based IT services; services which users can access without the need to have knowledge of, expertise in, or control over the technology infrastructure that supports them.[3] It is being driven by Internet companies like Amazon, Google, Salesforce and Yahoo! as well as traditional technology vendors such as Dell, Hewlett Packard, IBM, Intel and Microsoft. Customers of cloud computing avoid the customary IT burdens of large, irregular capital outlays and instead pay as they use services or on a subscription basis. The financial success of Salesforce is testament to the viability of this model of IT services.[4]

 

A somewhat staggering insight into just how the companies providing cloud computing services are driving their initiatives is revealed in the following. A couple of years ago Microsoft would fill its data centres one server at a time. Then it bought them by the rack. Now it is preparing to add servers by the shipping container. The containers will remain sealed and once a certain number of servers in a container have failed it will be sent back to the manufacturer and replaced with a new one. This is just one way in which Microsoft intends to cope in a world where it adds roughly 10,000 servers a month.[5]

 

SaaS is a particular example of cloud computing;[6] it involves an application being hosted remotely and serving customers across the Internet, usually via a web browser.

 

The title of this article is intended to be a positive allusion to the benefits that cloud computing and SaaS promise for lawyers and business generally (particularly smaller firms) regarding the more onerous aspects of IT. I refer to the prospect of an end to (or at least a drastic reduction in) in-house hardware and software provision; updates, upgrades, patching and other maintenance; security and backup headaches; licensing, IT staff, equipment costs, and all the other associated overheads, disruptions and worries that accompany the provision of IT services.

 

It is also intended to convey the message that this ‘sea change’ in IT provision will affect not only lawyers but the legal IT industry itself, and that the change will be as profound as any changes in the legal services sector per se. While we might not exactly see an end to lawyers’ IT, it will undoubtedly be radically transformed from what we know today, reflecting a fundamental shift in the mode of IT delivery throughout the business world. This shift is already being observed and remarked on by analysts.

 

Gartner, for example, notes a consistent trend towards cloud computing, with collaborative applications such as email and Instant Messaging leading its mainstream adoption.[7] It believes that whereas only 1% of enterprise mailboxes are cloud-based now, 20% will be in 2012, due to their better ‘email economics’ compared to in-house mail services.[8] Furthermore, as regards the economics of business applications in general, Merrill Lynch says that cloud delivery will make them three to five times cheaper[9] – so we can expect ever increasing uptake of hosted business services.

 

SaaS Provided by Legal IT Suppliers

 

Over the past 12 months there has been clear evidence of the legal IT sector starting to embrace the world of online services. For example, conventional digital dictation has seen an exponential uptake by lawyers over recent years, and now firms like Winscribe have launched an on-demand/SaaS option. Also, in the conveyancing market, companies such as Ochresoft offer a pay-as-you-convey ASP/SaaS version of conveyancing case management software.[10] A further example is Eclipse Legal Systems which provides an SaaS implementations of its Proclaim case management system, with pricing aimed at smaller firms.[11]

 

In the overall context of the increasing number of legal IT providers offering online versions of their products, comments from Eclipse sales director Russell Thomson possibly reflect general sentiment: ‘Vendors have seen a lot of stop start in this area, with hosted solutions, ASP and services of this ilk being taken up somewhat tentatively. We held fire in providing an SaaS option until both technological maturity and market needs are present together.’ However a more cynical view is that legal IT firms have been galvanised by the activities and pronouncements of Microsoft and the like over the past 12 months.

 

Whereas in the past legal software companies may have been reluctant to explore the web services option (ie to adapt their products and, perhaps more importantly, their associated revenue models so that pay-as-you-go and quarterly/annual subscriptions replace large up-front charges), they now seem to have little choice. Microsoft will push them to offer online services to complement those that it is itself offering.

 

 

Microsoft

 

Most lawyers use Microsoft programs. Many firms use its enterprise software. Many more would like to use those flagship products but cannot afford to run them themselves and are wary of third-party providers. Therefore the greatest interest for lawyers regarding online services is probably what Microsoft itself is doing.

 

Software plus Services

 

Microsoft’s focus is on what it terms Software plus Services. S+S describes the idea of combining hosted services with capabilities that Microsoft claims are best achieved with locally running software. There are arguments for S+S and counter arguments for the pure SaaS model. For example, the recent unavailability of Google Docs, Amazon S3, and other online services,[12] bolster Microsoft’s argument for a local component to such services. The counter argument is that these ‘outages’ were so remarkable because they were so unusual (ie online services are reliable). Additionally, cloud competitors are adapting their SaaS products to enable offline working. However, whatever the merits and demerits of the respective views, the important point for Microsoft users is that S+S is the line it is pursuing.

 

Microsoft Online Services

 

As part of its S+S strategy Microsoft is resolutely developing and deploying Microsoft Online Services,[13] which offer hosted versions of core Microsoft products such as Exchange, SharePoint, Office Communications Server, Office Live Meeting and Dynamics CRM. The significance, for smaller firms in particular, of Microsoft’s move to itself offer these products on a hosted basis is that it acts as a sort of ‘all clear’ signal to organisations which have been reticent about introducing a separate vendor between themselves and Microsoft.[14]

 

This fact has certainly resonated within the extremely active US based TechnoLawyer legal IT community which notes: ‘[Exchange and SharePoint] have become mainstays of large firms, but despite being offered on a hosted basis today by many service providers they have not been embraced to the same degree by small firms. With Microsoft itself getting into the hosting game … the situation could change.’[15] Couple this thinking with comments expressed within the same community on the experience of 15 months of hosted Exchange use and one can envisage Microsoft’s online services proving a great success with small law firms. Those comments remark on the hardware and software cost of running an in-house dedicated Exchange server or Microsoft Small Business Server, plus the complexity involved, and contrast that with the higher levels of availability of an outsourced service, the ancillary benefits of shared calendars and shared contact lists and the cheapness, at $10 per month per 500MB mailbox.[16]

 

Looking across the rest of Microsoft’s online services range, the pricing seems attractive. Each of the hosted versions of SharePoint, Office Communications and Office Live Meeting services has its own per-user, per-month pricing of under $10. Alternatively all are available bundled together with Exchange for $15 per user, per month.[17]

 

Other cloud-based initiatives that Microsoft is working on include ‘Live Mesh’, currently being rolled out across the globe. At present it is primarily a mechanism to allow synchronisation of data across multiple devices (eg your desktop computer at work, your laptop at home, and your mobile when elsewhere). While this capability may itself seem attractive to many lawyers, Microsoft promises that in the future Live Mesh will include a cloud storage component, called Live Desktop, that will allow synchronised folders to be accessible via a website.[18]

 

Microsoft’s commitment to hosted services

 

Though initially viewed with scepticism Microsoft’s long-term commitment to online services does now seem certain. This much can be deduced from the increasing influence of Ray Ozzie, always regarded as a supporter of the model, and the determination of Steve Balmer to continue investing hugely in the area in spite of the online services division’s heavy loses last year.[19]

 

Balmer was previously regarded as even more sceptical than Bill Gates (who anyway has now left Microsoft) about Web services, but further evidence of his conversion can be seen in his recent unequivocal statements to Microsoft’s partners, which are a vital part of the company’s overall revenue generating machine.[20] At Microsoft’s recent annual worldwide partner conference Balmer proclaimed the following: business models must change (for example service subscriptions becoming a prevalent means of income generation at the expense of income from resale of on-premises software), partners should see this as an opportunity (even though many have traditionally made their living through the resale and support of on-premises products), and Microsoft will end up competing with the very partners on whom it has heavily relied as it starts itself to provide online versions of its products.

 

Dangers of being an Early Adopter

 

Many of you may feel that online services are something too new, too cutting-edge and risky and therefore best left to the big boys who can afford to take the early adopter’s risk. The smaller your firm the more likely this is to be your view.

 

This is unfortunate as the smaller firms are the ones less able to afford their own IT and relatively speaking the most likely to benefit from what web services can offer.

Therefore, as a means to offer some encouragement, one might point out that you may well already have been using cloud-based services for quite some time, although they might not be referred to in such terms. For example, many firms use managed services from third parties such as Message Labs to scan e-mails for malware before sending them to recipients.

 

 

Conclusions

 

As one might expect with something new, for every proponent of cloud-based services there are many more detractors. A couple of the most voiced criticisms follow.

 

SLAs

 

The absence of SLAs has been advanced as a major reason why many businesses would not wish to use Web services. However providers such as Google are now addressing this matter. It offers an SLA promising that Gmail will be available 99.9 percent of the time, and says that SLAs are coming to the rest of Google Apps (its web based Office Suite).[21]

 

Google’s Gmail SLA of 99.9 percent uptime equates to downtime of less than 9 hours per year. This might be derided by those who can afford or themselves provide high-end services boasting of ‘five nines’ of reliability (i.e. having services available 99.999 percent of the year and therefore down no more than 5 minutes and 15 seconds per year).

 

However each firm should weigh Google’s SLAs against the potential recovery time if running its own in-house service. While larger firms with the latest hardware and dedicated IT staff may regard the Gmail level of service as inadequate, for the smaller firm with ailing PCs and overtaxed or faulty servers, and little on-hand IT support, a single serious incident could easily take over a day to resolve.

 

 

Privacy

 

Another criticism of the web services model concerns privacy. Can you be sure that data held ‘in the cloud’ will be private? Recent court decisions in the USA show a worrying trend and suggest that, at least as regards (US) government access to cloud-based e-mail, there should be no expectation of privacy.[22] A counter argument to the potential for unauthorised access to your data-in-the-cloud is that you can encrypt your data and thus ensure privacy, even without physical control.

 

 

Why Bother?

 

Even if you are not convinced that SaaS and S+S are for you, you will not be able to avoid them. Those who build, supply, and support your IT, whether Microsoft itself, its partners, third parties who build their products on and around Microsoft’s, or open source advocates who wish nothing whatsoever to do with Microsoft, are all modifying their approach to IT. Research by the likes of McKinsey & Co confirms this and reveals that many businesses both large,[23] and small,[24] are using, or are intending to use online services.

 

The best approach is to explore the possibilities. For example, Microsoft is encouraging its partner companies that wish to host the same product Microsoft itself does to differentiate themselves by tailoring their version to a specific market, combining it with other elements of their customer’s workflow, or offering additional guarantees that are not part of Microsoft’s service.[25] Also, ask your current supplier of a particular IT ‘function’ if it offers an online version; if it does not ask why not, and if not satisfied with the response consider an alternative provider that does. In short, seize the opportunities which the changing IT landscape presents and thereby free yourself to focus fully on the challenges which may arise in the evolving world of legal services, whatever shape that world might in fact take.

 

Alastair Morrison works at Strathclyde University where he evaluates, implements and runs IT services. He combines this ‘day job’ with continual monitoring of technology developments in order to write on how small firm IT needs can be better addressed: alastair.morrison@strath.ac.uk.