SaaS: What Is It, And Why Should You Care?

Vol. 28 No. 4

By

Eric Hunter is the director of knowledge management and technology at Bradford & Barthel, LLP, a California-based workers' compensation and defense firm. He was also named Knowledge Management Champion of the Year by the International Legal Technology Association in its 2010 Distinguished Peer Awards.

Donald R. Barthel, Esq., is one of the founding partners of Bradford & Barthel, LLP,  and, in addition to his legal work focusing on workers’ compensation defense, is passionate about marketing and the intersection of technology and business.

 

With all the buzz surrounding cloud computing these days and its applicability and viability within the legal market, the $64,000 question remains why should law firms, regardless of size or complexity, care? Why all the chatter now? And, what can or should we expect from software-as-a-service (SaaS) delivery, collaborative cloud computing, and other similarly weighty buzzwords within the next decade or so?

In order to adequately address the avalanche of questions that these topics have generated at our own firm, Bradford & Barthel, LLP, we organized an open discussion—a lively debate, if you will—between Donald R. Barthel, one of our firm’s founding partners, and Eric Hunter, our director of knowledge management and technology. We hope you find the ensuing dialogue informative and helpful for your own practice.

Donald R. Barthel (DRB): As a co-founder of a fast-growing law firm, I’m comfortable with the “learn-by-doing” approach to life. I have no formal training in computer science or technology—after all, I went to law school to practice the law. I’ll readily throw my laptop (desktop, smart phone, etc.) onto my pile of pagers, typewriters, and White-Out in favor of smoke signaling the client and court . . . if that would (1) please my clients (and attracts future clients), (2) increase productivity, and (3) increase my profit margin! So, Mr. Technology/KM Director, what the heck is “SaaS”? How does it relate to the cloud? And why should I, or any attorney for that matter, care?

Eric Hunter (EH): SaaS, or software as a service (also known as software on demand) is software that resides on the Internet, as opposed to your hard drive. To understand what SaaS can do for the practice of law, just look at what it’s doing everywhere else. Social media technology—on sites such as Facebook and Twitter—is actually SaaS that we take completely for granted but that is altering consumer behavior across the globe and providing outlets for expression and organization in countries without freedom of the press. Many of us forget that the genius of these sites is the information management and search components these platforms provide. If no self-respecting political/social revolution would dare proceed without such information management and search capabilities, can the legal practice?

DRB: Come on, Eric. You’re losing me. These revolutions are led by a bunch of kids. In the world of “high tech,” I’m an old (48), stodgy, not-the-first-in-my-neighborhood-to-buy-the-latest-and-greatest lawyer. (Full disclosure: My car has more than 100,000 miles on it and sports a cassette player.) I often reflect fondly on the “good ole days” and how we did things back then. Executive summary time, Eric. Give me the bottom line: Why is my SaaS in the “clouds” and what does it/they do? What do the tools of revolution have to do with increasing the quality/quantity of my widgets (legal services) and/or decreasing my overhead costs?

EH: In a word: everything! Don’t worry too much about the terminology. The evolution of SaaS to cloud is an exercise in differentiation rife with redundancy. Whether you refer to it as the cloud, SaaS, or any other name is largely trivial. Consider SaaS “the host with the most” because it’s hosted (no internal software needed), transparent, and integrates with third-party applications.

As a lawyer/partner, ask yourself:

  • How many software programs/packages has your firm purchased?
  • How much of each program’s capabilities do you actually use?
  • How quickly does it become outdated?
  • How much does it cost to maintain your tech department?
  • Can your clients collaborate and partner with you?

Along these lines, would you like to:

  • Stop buying software?
  • Gain access to only the program capabilities you need?
  • Never have your software go out of date?
  • Dramatically decrease—if not altogether eliminate—tech department costs?
  • Keep your clients from looking elsewhere for representation?

SaaS is the answer. It is a medium that is ideally structured to host and perform information management analyses because of the integrated nature of the hosted environments and the enormous resources at play within those settings. It represents a paradigm shift: Intranet, Internet, and Extranet functionality can be combined with document management, document assembly, document sharing, business intelligence, knowledge management, and unified messaging. Storage and backup is a given, and all information can be accessed from one place via a single log-in.

How do consumers search the vast amount of information across the Internet? Through Google and Bing, primarily. And how is it shared? Many share through Facebook and Twitter. What we are currently experiencing is the molding of how consumer information is searched and how it’s shared in both the consumer and business-to-business markets. As time passes, there will be less and less differentiation between the two. Why? Because the best SaaS competes in both markets, provides services for both markets, and achieves maximum revenue from ads related to knowledge sharing and searches from all devices, small to large.

DRB: So, from Twitter to torts . . . is that the plan, Eric? But if all my files, notes, and discovery are on a cloud, how do I access the document I’m looking far?

EH: Let me put it this way: If Google search engines can find everything you’re searching for on the Internet, imagine how quickly they could find documents in your own “little” universe of stored information.

DRB: I’ve got to admit, ever since we started using Gmail at our firm, I’ve stopped organizing saved e-mails in various folders. The hundreds of e-mail folders I once needed to organize e-mail information have been replaced by . . . nothing (that is, nothing other than Gmail’s “filter” that allows me to search through every e-mail I’ve ever received and/or sent and find the one I’m looking for in just seconds).

EH: Exactly. Imagine that searching power in each of your files, whether they’re files you are personally handling or, with the right password and clearance, the files handled by an associate across the office or across several time zones.

DRB: So, like the e-mails—or Gmails—all my data is stored in the clouds? Hmmm. . . . I love not needing to own and operate our leased servers, and I’m thrilled about leaving those functions to tech folks not on my payroll, such as Google engineers. They certainly do seem to know something about searching through mountains of information and storing data. Still, I’m on a limited budget. I’d like to be able to provide my clients with the “latest and greatest,” but I don’t own a mega-firm with mega-funds.

EH: SaaS is, by nature, both cutting edge and competitively priced. SaaS is continually evolving. License upgrades, product enhancements, product evolutions, all take place within the SaaS pay-as-you-go environment. As for price, don’t forget how SaaS derives its primary revenue stream. SaaS is like the Costco of the software market. Google can afford to offer rock-bottom prices because its primary revenue-generating resource is advertising. Facebook can offer its social media service for free knowing its environment is putting together the most innovative forms of targeted ad sharing possible. Are these media going away? No, they’re only becoming more prolific. Third-party vendors are already developing SaaS models designed to integrate with the key players, much like the omnipresent “apps” developed for smart phones. Vendors that understand how to operate within a social media–driven, knowledge-sharing environment will drive out of business those vendors that don’t.

DRB: Any other ways SaaS stands for saving my firm money?

EH: Current and especially future cost savings for firms like ours and all others, pretty much regardless of size, are significant. Consider this:

  • From the IT operations side, firms no longer pay for backup, storage, or the energy it takes to supply the hardware running these services.
  • From the applications side, they pay a fraction of the licensing and support costs as part of a per-user, per-year licensing model.
  • From the information management side, processes are rethought and restructured from the top down until an organization rethinks (and acts on) how to approach clients, communicate with clients, and organize internally.
  • From the organizational management side, the potential for outsourcing is enormous. Whether technical or administrative outsourcing, an organization becomes more streamlined, as well as business and project focused.

DRB: So with this SaaS/cloud “paradigm shift” upon us, how might this alter or change altogether the role and job duties of a firm’s IT leaders like the CIOs and technology bosses?

EH: There will indeed be major change. Let’s get sci-fi with it for a moment. Think of a military commander leading a fleet of explorative ships over long distances of time and space—except in this model, the ships continually improve upon themselves and discover more innovative ways to navigate both time and space. Similarly, SaaS and the evolving cloud environments alter consumer behavior and retrain individuals how to think, how to approach problems, how to continually discover new ways to communicate and share information. The continual innovation and intuitive nature of these platforms ensure that businesses maintain forward momentum and growth.

Gone will be times where in-house developers provide countless customizations needed to run operations or create cost savings. Instead, analysts will rule the day—legal strategists and business-minded leaders who directly shape the intuitive environment without needing “technical expertise.” It means these positions will become more strategic and more forward thinking, with an eye toward industry-changing trends and behavior. Firms looking to roll out huge, sweeping changes will be able to do so with a focus on continually training their resources as opposed to focusing on development, rollouts, and testing.

DRB: You mentioned winning over, collaborating, and partnering with clients. How do I do that via SaaS?

EH: This is exactly what we, as a law firm, should maintain as our primary focus: A hosted collaboration platform that allows us to deploy business intelligence and business process management tools that enable instantaneous file sharing with our clients. Imagine working in “real time” with clients on a document without the delay of e-mail, snail mail, faxes, and the like.

DRB: Oh, I can imagine that pretty easily—this very article is being drafted by the two of us collaboratively, with each seeing the other’s updates almost instantaneously on Google Docs, even though we work miles apart.

EH: Now I’ve got a question for you, Don, as “the legal guy”: Are all the advantages I’ve outlined worth the security threat that gets mentioned every time we discuss the Internet and the law in the same sentence?

DRB: Yes! I consider security concerns to be, by and large, a red herring. The various state bar organizations that have explored cloud computing and the law all use the same words in approving this approach: “reasonable” and “appropriate.” Is cloud computing more “reasonable” and “appropriate”—that is, safer—than the old, tried-and-true approaches to security? Let’s see . . . safe and secure in the past meant locked in an office (or a car for that matter) that could burn, flood, be destroyed by earthquakes, or be broken into by outsiders or insiders posing threats. Abraham Lincoln is said to have stored important legal papers in his hat. Presumably, the Illinois Bar would, at that time, have found “hat storage” to be both “reasonable” and “appropriate.”

Now compare security in the cloud with what has historically passed muster. Theoretical modern-day thiefs/hackers may be very adept at breaking into Google’s or Amazon’s cloud, but they would need to break into at least several servers and numerous encryption devices. This certainly seems to take security a few steps beyond what old Abe (and our senior partners) once thought was sufficient. Think your firm’s and your firm clients’ security issues are of paramount concern? Just imagine how much the Googles of the world have to lose if successful hacking into their clouds became an option!

When taking a closer look at SaaS, collaborative cloud computing, and other current tech buzzwords, we shouldn’t spend much time consumed with translating the tech-speak, but instead look to lift the covers on the tangible and immediate game-changing advantages that these “software-less” service deliveries provide. Whether embracing SaaS as a means of cutting costs or turning to the cloud for better means of collaboration, law firms, from solos to mega-outfits, can see real benefits from these new service options.

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