The technology world is constantly buzzing over the latest and greatest technologies—many of which fizzle and disappear before ever making it to market. But Software as a Service (or SaaS) appears to be one technology with staying power. SaaS, also called "cloud computing," refers to a category of software that's delivered over the Internet to a Web browser (like Internet Explorer) rather than installed directly onto the user's computer. Although the terms SaaS and cloud computing are relatively new, the concept is not. Software has been delivered over networks for decades, including though the application service providers (ASPs) that rose to prominence in the 1990s.
Today, a variety of legal-specific and general business SaaS solutions have emerged as popular contenders in the legal technology market. To help you understand the technology and its potential (good and bad) for your law practice, here are some of its essential characteristics.
Data in the Cloud
One of the defining (and most controversial) characteristics of SaaS is the use of off-site data storage. With traditional software, data is stored locally on a user's computer or on a server within the office. A brief drafted in Microsoft Word, for example, would usually be saved directly to a file on the user's computer and any subsequent viewing or editing would therefore require access to that computer. If the user wished to share the brief, he or she would have to actively transmit it—by copying it to a shared file server, attaching it to an e-mail or using another similar method.
SaaS data, in comparison, is typically stored on large servers located off-site under the control and administration of a SaaS vendor (although often the servers are in a “Tier 4” data center provided by companies like Amazon, RackSpace or other host). Data is created, edited, and even shared without ever actually residing on the user's computer. This arrangement causes consternation for many lawyers, who rightly worry about the security and confidentiality of client data and work product stored outside of their immediate control.
Despite the concerns, however, a strong case can be made that data stored in "the cloud" is at least as secure, if not more so, than data stored locally. Most SaaS vendors use sophisticated data centers to house their customers' data. These data centers feature elaborate, redundant security and backup systems to ensure that data is protected from both accidental loss and unauthorized access. The technology and the expertise typically employed are considerably greater than one would find at all but the largest law firms.
Consider banks, by way of analogy. A $20 bill kept in your pocket is secure in the sense that you know precisely where it is and you can quickly place your hands on it. But while in your pocket, the bill is subject to many risks: It can be stolen, misplaced, destroyed or misspent. If you place that $20 in the bank, however, you trade physical control for broader and arguably stronger security, since the bill is less likely to be stolen, lost, destroyed or improperly used while held by the bank.
Of course, the banking analogy also helps illustrate another vital point: Just as you wouldn't trust your life savings (or your client trust account) to an unfamiliar, uninsured bank with mysterious origins, you shouldn't trust your data to just any SaaS vendor. When considering SaaS solutions, you should carefully evaluate potential vendors to ensure that they're stable, reliable and employing best possible practices for data security. SaaS vendors, especially those servicing the legal market, should provide thorough and candid answers to your questions regarding security. If they fail to do so, they may not be a wise choice for your valuable data. (See the sidebar “18 Questions for SaaS Vendors” at the end of this article.)
For those concerned with maintaining a copy of their data locally, so that it does not solely rest in the hands of the vendor, there are several ways to make sure that the firm’s data is always mirrored. Some SaaS vendors provide the ability to download data at any time, while others have the data held by a third party. You want to make sure that the data can be retrieved in a non-proprietary format so that it can be migrated into a different system. Efforts are now being made by a number of SaaS vendors to provide greater data portability. If users demand it, the vendors will hear the call.
Mobility: Software Everywhere, Anywhere
The practice of law has become increasingly mobile as lawyers have adopted new technologies and focused more on work-life balance. Lawyers today are working from home, from client offices, and even from public places like coffee shops and cafes—but moving from location-to-location can be difficult and costly using traditional software. Because most traditional software is sold on a one-computer-one-license basis, those wishing to use their software in multiple locations are forced to either purchase multiple licenses or to install the software on a laptop that they can carry with them. The former solution can be prohibitively costly given the price of legal-specific software packages, while the latter solution can disrupt your backup strategy and expose your computer (and data) to numerous risks.
SaaS products, on the other hand, allow lawyers to access their software and their data from virtually any location seamlessly and without additional cost. As long as you have an Internet connection, you can access your SaaS from the computer in your office, from your laptop at the courthouse or from a relative's computer while away visiting for the holidays.
Furthermore, because most SaaS is accessed through a Web browser, system requirements are minimal. Rather than requiring the latest version of Windows and a heap of RAM, SaaS usually just requires a modern Web browser. This is particularly valuable for Mac and Linux users who have fewer options for traditional legal software. It also allows many SaaS solutions to be accessed via smartphones like the BlackBerry and iPhone.
The simple, quick accessibility of cloud-based products has another benefit: business continuity. Because your software and data are not tied to a single computer or even a single office, you are protected against many common business disruptions. Whereas a full computer crash on a traditional system might mean several days of careful system reconstruction before you're operating 100 percent, with SaaS you could simply purchase a new computer, connect to the Internet and be back in business in a matter of minutes.
Of course, it's worth repeating the major SaaS requirement mentioned earlier: a working Internet connection. While some SaaS providers have worked to provide offline capabilities, for the most part SaaS is inaccessible if your Internet connection is down. This may be a major concern for attorneys practicing in remote or rural locations where Internet access is less prevalent or reliable.
Software, whether traditional or SaaS, is ultimately nothing more than a tool. As such, the fundamental question is how well does it work? The key to this question—both pro and con—is in the age or "maturity" of both types of software.
A good many traditional software products have been in various stages of development for years. Microsoft Word, for example, has been on the market since 1983. Many of the legal-specific products have been on the market for more than a decade. The result of these years of development is mature, feature-rich software that has been shaped by copious feedback from end-users. Unfortunately, the other result is that traditional software is often bloated with antiquated tools and features, and it often has a complicated interface and steep learning curve.
SaaS, on the other hand, benefits from having been developed more recently in a Web-based environment that places a high value on usability and accessibility. The interfaces are typically clean and intuitive, allowing novices to quickly master key features with minimal training. The relative immaturity of the products shows through, however, in limited feature sets. Most SaaS products on the market today have a few key functions they do very well but lack the breadth and depth of products that have been on the market for more than a decade.
Service and Support
There are both practical and technical differences between the service and support offered by SaaS vendors and those offered by traditional software vendors. On a practical level, the relationship between the SaaS vendor and the user is ongoing; the vendor has an interest in keeping the user’s business on a month-to-month basis. As a result, service and support are usually included in the cost of SaaS and many vendors strive to make support fast, effective and personalized. If they fail to provide quality support, they know they may well lose the customer's business the next month.
With traditional vendors, the relationship is less immediate; once licenses have been purchased, it may be years before the vendor expects to receive additional business from the customer. As a result, service and support are usually treated as premiums, requiring additional fees on an annual or per-event basis. There is little incentive on either the vendor’s or the customer's part to carry on an ongoing relationship.
The technical support differences stem from the very nature of the products. Because SaaS is Web-based, technical problems are relatively uncommon. The problems that do arise are usually on the vendor's side and affect more than one user, giving the vendor a strong incentive to correct the issue quickly. With traditional software, technical problems can be very difficult to diagnose due to differences in hardware, computer configurations or server setup. As a result, traditional software users often find themselves being bounced from vendor to vendor when they encounter a problem—the software vendor directs you to the operating system vendor who directs you to the hardware vendor who sends you back to the software vendor.
Attorneys considering SaaS should ask the vendor about a service level agreement (SLA). A good SLA should guarantee both a certain level of uptime for the product and specific response times for technical and customer service support requests. If the vendor doesn't offer an SLA or is unwilling to negotiate one, it may not be the right choice to house your business-critical software and data.
One of the sharpest contrasts between traditional software and SaaS comes in their pricing structures. Traditional software costs tend to be structured around large upfront outlays. Licenses and maintenance packages must be purchased for all users, new hardware may be necessary, and consultants may have to be hired to put it all together.
SaaS costs, on the other hand, are usually based on a subscription model that minimizes up-front costs. The SaaS consumer pays a monthly fee covering the software, support and training. The amount of the fee may vary based on the type of user; some vendors charge different rates for lawyers and staff or offer bulk discounts depending on the total number of users. Because new hardware or consultant time is unlikely to be needed, the initial outlay for SaaS is simply the total of the first month's subscription costs.
The difference in cost beyond the initial outlay is more difficult to ascertain. SaaS critics argue that the monthly fees quickly add up and surpass the cost of the traditional alternative, making traditional software the better long-term investment. Proponents, on the other hand, argue that SaaS is cheaper in the long run because it is constantly updated and improved, whereas a law firm using traditional software will need to repeat the substantial outlay every few years to remain current. The difference grows even murkier when support, maintenance and training costs are factored in.
Ultimately, the cost issue may depend on the individual attorney's or firm's needs. If you're just starting a new solo practice, minimizing your up-front costs may be essential to keeping your firm afloat. In that case, SaaS offers an advantage over traditional software. Established law firms may want to examine their existing software costs over the previous two or three years and compare those with the monthly cost of SaaS to determine which offers them the better value.
You're Probably Using It Already!
SaaS may seem like a new phenomenon based on the buzz it generates. But the truth is that Web-based applications have been replicating and replacing traditional software for nearly the entire history of the Web. Here are a couple of examples of SaaS you're probably using already, even if you didn't realize it.
Online Legal Research Examples : Westlaw (www.westlaw.com) and LexisNexis (www.lexisnexis.com). In the late 1980s, both Westlaw and LexisNexis offered software for conducting legal research from a personal computer. As the Web took off, they gradually shifted the products to the Web-based interfaces we're familiar with today. If you're using either service (or any of the similar products that have since launched) you're using a SaaS product not terribly different from others on the market.
Web-based E-mail Examples : Gmail (www.gmail.com), Yahoo! (mail.yahoo.com) and Windows Live (home.live.com). Web-based e-mail uses virtually any Web browser to deliver the features of traditional software e-mail programs like Microsoft Outlook, including rules, away-from-the-office status, contacts management and more.
Productivity and General Software Cloud Solutions
Some types of software are essential to all businesses, whether it's the Mom-and- Pop pet shop or a large law firm. Here are a few examples of general SaaS software products.
Document Creation/Collaboration Examples : Google Docs (docs.google.com) and Zoho Writer (writer.zoho.com). SaaS document creation/collaboration products tend to be limited in features and geared more toward on-screen finished products, but they also include easy and intuitive collaboration and sharing tools.
Data Backup Examples: Mozy (www.mozy.com), i365 (www.i365.com), IBackup (www.ibackup.com) and Carbonite (www.carbonite.com). Whether you're working mostly online or offline, you're sure to have data that needs to be backed up. A good data backup strategy includes redundancy (more than one layer of backup) and geographic diversity. Online backup may help you achieve both.
Time Tracking Examples: Chrometa (www.chrometa.com) and Bill4Time (www.bill4time.com). Most lawyers still bill hourly, and even those that don't often like to keep track of their time. SaaS time tracking software can help lawyers track their hours even when they aren't sitting in the office in front of their primary computer.
Sometimes all-purpose software won't do. The legal profession has unique computing needs, and here are some of the SaaS vendors that have stepped up to meet those needs.
Case/Practice Management Examples: Rocket Matter (www.rocketmatter.com), Clio (www.goclio.com) and AdvologixPM (www.advologix.com). Case/practice management software is one of the more common types of legal-specific software, so it shouldn't be surprising that a number of vendors have entered the arena with SaaS offerings. Case/practice management solutions can help you keep your law office organized, on both the front and back.
Litigation Support Examples: Lexbe (www.lexbe.com), ImageDepot (www.imagedepot.com) and Fios (www.fiosinc.com). Litigation support and electronic discovery vendors were some of the first to offer their software as SaaS. For many electronic discovery products the model just makes sense, as often there are many parties who need to have access to the documents both inside and outside of the firm, including vendors, consultants, in-house counsel, co-counsel and opposing counsel, to name a few. By hosting the data in the cloud, providing access to the documents is greatly simplified. SaaS-based litigation support software is cropping up with a pricing model that makes it a game-changer from the traditional products. Instead of a per-user, per-month fee system, many of these cloud-based applications are employing a monthly fee based on the amount of data stored. This gives lawyers the flexibility of just using the software for certain cases and for a more limited amount of time.
Law Firm Collaboration/Communication Examples: PBworks Legal Edition (http://pbworks.com/legaltour) and Dialawg (www.dialawg.com). There are numerous SaaS-based collaboration and communication tools available, but only a few have specific features for lawyers, like added security, detailed audit tracking and electronic deal rooms.
SaaS is a model that holds appeal for many lawyers for a variety of reasons. While there are some potential pitfalls, as long as lawyers perform due diligence and make smart choices, they may find that the benefits outweigh the risks in some practices. The emergence of multiple cloud-based offerings for the legal market has created an explosion of options and innovations, which will ultimately benefit the end-users—and their clients as well.
18 Questions for SaaS Vendors
You don't need to be a technology expert to pick out the right SaaS for your firm. But knowing a few key questions to ask the vendor should help you avoid a bad situation. Be sure to ask these ones:
- Do you offer a trial period or demo of your product?
- What training options are available for customers?
- How often are new features added to the product?
- How many attorneys are currently using your product?
- What hours is your tech support available?
- Do you offer a Service Level Agreement (SLA) and/or would you be willing to negotiate one with me?
- What types of guarantees and disclaimers of liability do you include in your Terms of Service (TOS)?
- How do you safeguard the privacy/confidentiality of stored data?
- Who has access to the firm’s data?
- Have you ever had a data breach?
- How often, and in what manner, is users’ data backed up?
- What is your company's history—e.g., how long have you been in business, and where do you derive your funding?
- Can I remove or copy my data from your servers in a non-proprietary format?
- Where does the data reside—inside or outside of the United States?
- What happens to the firm’s data if the company fails?
- Do you require a contractual agreement for a certain length of service (e.g., 12 months, 24 months)?
- What is the pricing history for your product? That is, how often have rates been increased?
- Are there any incidental costs I should be aware of?