Software as a Service

By Nerino Petro Jr.

Nerino Petro Jr. is the practice management advisor for the State Bar of Wisconsin. He may be reached at .

When I first began practicing law in the late 1980s, the office where I worked had a mini-computer, and each secretary had a workstation on which the office applications ran. This model of using “dumb” terminals to access the programs on the main computer was very common in the late 1970s and early 1980s. These dumb terminals did nothing more than give the user access to the programs and resources on the mini-computer, with nothing actually running on the terminals.

With the advent of the personal computer, this model was slowly replaced by the client-server model, in which each workstation had the ability to operate on its own and connect to the server using network operating system software from Novell, Microsoft, or others. At that time, it was more efficient to run the actual programs on the local workstation and allow the server to handle the file storage.

This model had the added benefit of allowing a law firm to purchase software licenses only for the users actually using the software, if the programs were only going to be used by a limited number of staff. This is still the primary model we use today: word processing, practice management, e-mail, and other programs are actually run on the user’s computer workstation, and only data is sent across the network. This requires that each workstation have a copy of the software to be used, installed and properly licensed. In larger organizations, this can result in higher costs, as it effectively requires software to be installed on every computer whether or not each user is going to regularly access that software.

Some software allows a model that looks at the number of active connections to the data. Time Matters practice management software allows you to install the workstation software on all of the workstations but looks at how many users are connected to its database at any given time. Once the licensed number of users is reached, anyone else trying to access the data is disallowed. However, this still requires the client software to be installed on every workstation.

The frustration with the overhead and expense of this model has sparked interest in what today is commonly being called “software as a service” (SaaS). According to the Webopedia website, SaaS

is a software delivery method that provides access to software and its functions remotely as a Web-based service. SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee. Also, because the software is hosted remotely, users don’t need to invest in additional hardware. SaaS removes the need for organizations to handle the installation, set-up and often daily upkeep and maintenance. Software as a Service may also be referred to as simply hosted applications.

If this sounds familiar to some of you, it should be: This model isn’t a new idea. During the height of the dot-com boom in the late 1990s, there were numerous companies that offered software as “application service providers” (ASPs). The goal of these providers was to eliminate the need to load the software on the local workstations; the companies provided software and services through a web browser. This was a concept whose time had not yet come; broadband Internet access and computer technology were not at a point that made this a viable option for most law firms. These providers went the way of the dot-com boom and left a number of users with lost data and no service. For several years, the idea of delivering software and services across the Inter-net fell out of vogue both with providers and end users. This no longer appears to be the case, however, and this model of delivering software and service is on the rise once again.

There are any number of providers and products currently available at no charge or for a monthly fee. It seems that you can find everything from no-cost office suites such as Google Apps to enterprise-level, fee-based solutions including Microsoft Exchange Server hosting, practice management services, and document management services. Where prior attempts in the late 1990s focused on providing total solutions, today’s vendors are taking a more focused approach, providing single-issue solutions to entire organizational computing infrastructure.

Outsourcing Your Back Office

Jones Rose Dykstra & Associates (JRD), a computer forensics, e-discovery, litigation support, and computer security training company, is using a number of SaaS services to replace software running on the on-site network and is extremely happy with the decision to do so.

JRD has outsourced its Microsoft Exchange Server hosting for years to avoid the cost of maintaining it on in-house servers, and it also uses several other SaaS products. JRD has moved its various payroll management, human resource, and tax systems online, and 15 employees now use Intuit’s QuickBooks online for accounting and timekeeping. The firm finds that QuickBooks online is actually superior to the boxed version of the product, owing to its increased flexibility and scalability to meet growing needs. JRD still maintains word processing and data applications on its own servers, as past attempts to move them to the SaaS model have never proven satisfactory.

Brian Dykstra says people constantly ask him whether he is confident that his data is secure. His response is that your e-mail is already outside your control—it passes through someone else’s servers once you send it across the Internet. The real question is whether or not you can trust the company you select to host your online services. That’s why he recommends that you select a major, reputable company that uses adequate safeguards, including necessary language within the terms of the service agreement between the provider and the user.

Dykstra has no regrets for moving his back-office operations to a hosted service. Even though his is a technologically oriented company, he had more trouble when this software was on internal systems, and the move certainly made sense in terms of the best use of employees’ time. According to Dykstra, companies often overlook the expense of additional user licenses, backup service, and maintenance, especially for MS Exchange Server, which can drive up the costs of traditional software systems for small and moderate-sized companies.

Kegler Brown Hill & Ritter, a 57-lawyer firm in Columbus, Ohio, uses several SaaS products. Most recently, the firm adopted NetDocuments from LexisNexis as its document management system. Mark B. Manoukian, director of information systems for Kegler Brown, reports being very happy with the new system. The firm had been using the DOCS Open document management system since 1994 but outgrew its capabilities and looked for a replacement that would be able to meet not only current but also future needs. According to attorney Paul Hess, the firm’s IT partner, several factors led to the move to NetDocuments, including (1) the ability for remote access from any location; (2) business continuity in the event of a disaster; (3) functionality issues including ease of use, speed, and matter workspaces; and (4) improved search capabilities.

Since implementing NetDocuments, Manoukian has noticed qualitative improvements as firm employees enjoy working from home—especially the timekeepers, who can easily access their documents. The firm also has been able to customize the product to minimize the staff’s learning curve to allow for tighter integration with other programs that they use internally.

In addition to NetDocuments, Kegler Brown uses a variety of other SaaS solutions, including Postini for e-mail spam filtering and bankruptcy accounting solutions from EPIQ Systems, Inc. In deciding on the latter system, they were especially impressed by stories of how firms using EPIQ products had been able to restore operations quickly after Hurricane Katrina. The SaaS bankruptcy trust accounting services have proven superior to the former product the firm had used, which was maintained on in-house computers; the SaaS system reduces maintenance and training time and costs for both technology staff and end users.

Net Documents and the other SaaS services have allowed Manoukian’s three-person IT staff to focus on helping the firm’s employees and maintain its technology infrastructure without having to dedicate someone to handle the document management service.

Like Dykstra, Manoukian stressed the importance of security and confidentiality in SaaS products—after all, service providers have access to company e-mails and documents. Security for NetDocuments is provided through a Secure Socket Layer certificate issued by the RSA security division of the EMC Corporation.

And like JRD, Kegler Brown chose to retain its individual productivity applications (word processing, spreadsheets, etc.) on internal computers. Although products such as Google Apps Enterprise version are priced competitively, Manoukian believes that Microsoft Office still delivers a superior user experience and offers the productivity solutions the firm needs.

A Complete SaaS Approach

The firm of Hamburg, Rubin, Mullin, Maxwell & Lupin adopted a slightly different model. When faced with a major upgrade and the prospect of purchasing all new computer equipment and software, Hamburg Rubin turned to Network Alternatives to provide not only network support but also to host all of the applications used by staff, including accounting and Microsoft Office. With four offices spread across Pennsylvania, Hamburg Rubin found this solution to be more cost effective and viable. Joan Wean, Hamburg Rubin’s administrator, was very pleased with the service and support provided to the firm’s 30 attorneys and 49 staff members. Using Citrix software, Network Alternatives provides each user with all applications across an Internet connection. Hamburg Rubin no longer employs an IT person; instead, users simply e-mail their support questions to Network Alternatives, which normally responds within an hour. The firm is currently working with Network Alternatives to implement Worldox for document management.

Wean points out that the firm has saved quite a bit of money on hardware costs, as it buys only “dumb” terminals (except for those few attorneys and staff members who use applications that will not run via the Internet on the Citrix software). According to Wean, “Network Alternatives has excellent support staff, and I can’t say enough for how they respond when needed.”

A Cautionary Tale

Although the firms discussed above found great success using SaaS, others have had less pleasant experiences. Community Justice, Inc., a Madison, Wisconsin, based law firm that provides legal services to low-income families and individuals, hoped that SaaS would help overcome several practice management problems. Because the firm relies on donated and older hardware and software, the firm sought a technology solution designed for nonprofit entities. Community Justice realized that the firm could not afford to purchase all the needed software, and that even if it could, the hardware requirements were too extensive for the available equipment. This made a web-based solution attractive.

Community Justice received a demonstration of a SaaS product and was impressed by its functionality and features. After the firm contracted for the service, however, it discovered that a third party was hosting the product, and Community Justice staff would need to log on to a different website to gain access. Once past the initial log in screen, they were unable to log in further, as the login screen was constantly refreshing. This happened 60 percent to 70 percent of the time when they were attempting to log in and defeated their ability to use the product. Even when they were able to log in, the speed was slower than they anticipated. Despite the low monthly cost, the need for training to resolve such problems ultimately made the system more expensive than a traditional in-house software and hardware package.

According to an attorney at Community Justice, the minimum requirements posted by the vendor were not realistic in light of the older and donated hardware the nonprofit relied upon. Nor were they informed that the system was not compatible with their Firefox web browser. All in all, “it was not a good experience.”


In looking back at the successful and unsuccessful implementations of SaaS detailed here, several common threads emerge. Although many firms will be reluctant to adopt the Hamburg Rubin model of outsourcing all applications, using services to replace targeted applications and uses such as Microsoft Exchange Server, accounting, and timekeeping may be effective when used in conjunction with in-house applications for word processing and time and billing. And as Community Justice learned the hard way, the reputation and abilities of the SaaS service provider are crucial. Your provider must not only deliver a usable system, but must also take the necessary steps to guarantee the security and confidentiality of your data.

Copyright 2007

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