2014: The Year of the Cloud?

Vol. 3, No. 10

Loretta Ruppert is the Sr. Director with LexisNexis Firm Manager.  Loretta brings experience as a previous business owner and legal technology consultant, a manager of professional services for a CPA firm, an accountant, and a subject matter expert for developing back-office software. Probably most relevant, she is a former law firm employee and user of law firm practice management and financial systems. Find her on Twitter @LorettaRuppert.

 

Is 2014 is the year of the cloud? If you’re like me, you’ve heard that question more than a handful of times recently.

The answer seems to be a resounding yes. Sure there are still lawyers who fear the cloud and don’t believe storing privileged client information is as safe as servers maintained on premise, but there’s more evidence that shows today’s small law firms and independent attorneys are ready to take the plunge and embrace the cloud.

                               

The Proof Is in the Data

At LexisNexis, we recently published the results of a survey on the law cloud that gauged the perceptions of 279 independent attorneys. Here are some of the highlights:

  • Attorneys are warm to the cloud. More than 50 percent of attorneys reported they were more likely to adopt cloud-based tools for their law firm business purposes.
  • Law firms are even warmer to the cloud. Seventy-four percent of survey respondents reported law firms are more likely to use the cloud in 2014.
  • Gaining confidence in cloud security. Forty-one percent of respondents reported feeling their confidential data is “safe,” indicating that while security continues to be a main concern, some attorneys are feeling more confident about the cloud.
  • Ethics a significant barrier to adoption. Ethics ranked the second highest, trailing only security concerns, among the top five barriers. Most concerns center on ownership and positive control over data stored in the cloud.
  • Mobility or freedom of access. Lawyers in small law firms largely say the top benefits of the cloud are mobility and the ability to access data from anywhere (45.2%). Disaster recovery and backup followed in at a close second (40.5%). Every other response trailed by a wide margin in the single digits.
  • Will cloud eclipse premise? Nearly forty percent of respondents reported cloud-based tools will trump premise-based tools in the next three-to-five years showing evidence that the cloud has reached a tipping point in the legal industry.

What’s Driving Adoption?

In a profession that is based on risk aversion, it’s not surprising that it has taken a while for even the legal industry to warm up to the cloud. However, even the naysayers are beginning to see there are some real benefits to the cloud. There are several underlying trends driving adoption and which we categorize into four primary trends:

1. Faster roads. Speed has traditionally been a major factor in performance of web-based solutions. The cloud isn’t new; many technologists will recall the 1999-era term “applications service provider” or ASP. In essence, an ASP is a cloud-based service, but the speed and performance of web connections was too slow to support reliable performance of managing applications—say law firm practice management tools—in the cloud. Today the roads have much higher speed limits and we take bandwidth, including mobile bandwidth, for granted.

2. Mobility. The reason BYOD is a topic of discussion is that mobile devices have become easier to use and affordable: everyone has mobile device. We shop with our mobile devices, we bank with our mobile devices—we can even hail a taxi with mobile devices. We can in part, run a practice from a mobile device; recall that independent attorneys said the single most valuable benefit of the cloud was “freedom and mobility of access.” Attorneys increasingly need access to client information on the go—and it’s increasingly becoming an expectation from customers.

3. Security concerns alleviated. Certainly no system is fool proof, but businesses, including small law firms are becoming increasingly comfortable with the notion a dedicated vendor can provide a higher level of security than they can. As The Droid Lawyer, Jeffrey Taylor wrote, “Personally, I’d rather have a company that’s actively engaged in improving security, backing up my data, and offering me efficient ways to interact and use my information, than my haphazard pasting of security suites, backup solutions, and half-hearted systems updates.”
4. Bar association approve ethics. Ethics was ranked second in the survey and trailed only security concerns among the top five barriers. Several state bar associations have laid out reasonable ethical standards for the use of cloud services. As of the time of this writing, 14 state bar associations have published cloud ethics opinions. These are neatly arranged on the American Bar Association’s website.

 

Evaluating Cloud Providers

The indications are that cloud is poised for adoption in the legal industry in 2014, which leaves the question: how can we evaluate service providers?

A good place to start is by reading the terms of service (ToS) – according the 2013 ABA Technology Study only 40 percent of attorneys reported reading the ToS before using a service. Within these terms you’ll often find answers to four primary areas worth evaluating:

  • Functionality. Functionality focuses on features, functions and integrations with other applications, such as email, that will enable an attorney to run their practices.
  • Data protection. Data protection centers on assurances that any data you store is secure and is rigorously tested to maintain that protection.
  • Data ownership. Some cloud-services, especially those that are free to use, claim rights to data stored in their service, even if that’s only to monitor the metadata in order to profile prospective customers for additional services. The implications can come to head when and if an attorney decides to cancel a service—can they get their data out?
  • Availability. A law firm needs any service it uses to work—and to work when they need it. Availability evaluations should center on service level guarantees.


Functionality Evaluation

The following questions are useful for thinking about the functionality your firm might require. Functionality requirements may vary from firm-to-firm—from standard calendar integrations to features that enable the firm to standardize and automate routine tasks for improved efficiency.

  • Does the application offer secure mobile access across devices such as smartphones or tablets?
  • Does it offer a secure client portal for collaborating with third-parties?
  • Does it offer centralized calendar and task management?
  • Does it offer centralized client and contact management?
  • Does it offer centralized matter management?
  • Does it include storage of files and documents, online, with no preset limit?
  • Is there a global conflict of interest search?
  • Are there various levels of permissions based on roles?
  • Are there configurable areas of practice templates or forms?
  • Does it have real-time calendar management and sharing?
  • Is there 24/7 customer service? Can you get someone on the phone?

 

Data Protection Evaluation

The following questions are useful for considering the data protection and assurance requirements—particularly those that meet the ethics standards of an attorney.

  • What type of encryption is used to protect my data?
  • What are their third party certifications and/or other industry certifications?
  • How secure is their physical environment?
  • How—and how often—do they test their systems?
  • Do they monitor for intrusions in real time?
  • Are their data centers U.S. based?

 

Data Ownership Evaluation

Data ownership is a critical issue for independent attorneys and law firms. Given the often confidential nature of an attorney’s work, data ownership is simply nonnegotiable in choosing a service provider.

  • What are their contract terms and conditions?
  • What systems are in place to restore my data in case of disaster?
  • What happens if I terminate my service?
  • Who “owns” the data?
  • Who has access to my data, besides me and my authorized staff?
  • Does the vendor outsource any of their services to third parties providers, and if so, what are their credentials?
  • Does their Terms of Service or Service Level Agreement address confidentiality?
  • In what ways, if any, do they make use of my data (i.e. anonymously to track usage)?


Data Availability Evaluation

The results of choosing a cloud-service provider one week and spending the next uploading data and preparing to use it the following week would be disastrous if suddenly on week three the service suffered an outage. The following questions are aimed at service level agreements:

  • What are their uptime guarantees?
  • What financial penalties do they impose for late payments?
  • Do they have backups of their own data?
  • Do they offer a trial period?
  • How many data centers do they have in total?
  • If the vendor goes out of business, will I have access to the data and the software or source code?
  • Do they have a data recovery plan of their own in place?
  • Do they have a business continuity plan of their own in place?


Moving to the Cloud

The indications are quite clear that small law firms and independent attorneys poised to adopt the cloud despite reservations. As the industry trend evolves, so too must the conversation into the practical measures for evaluating cloud options.

As one respondent answered in response to an open-ended question asking how they would describe the cloud to peers, “As a fluffy white baby lamb. At least when the weather is nice.” A rigorous evaluation prior selecting a vendor is a fair path to ensuring good weather during the year of the cloud.

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