Earlier this year, I was riding with a friend, from an upscale neighborhood in Silicon Valley into San Francisco. As we passed the Nordstrom and Tiffany stores, she apologized because she had to take a conference call. As a software sales rep for Amazon, she was facilitating a top local law firm’s move to the cloud.
“It is no longer practical, nor cost effective to have in-house storage for software and data,” she explained, after turning off her mic while software engineers from Amazon and the client discussed unintelligible technical details with each other. “My husband’s law firm has also done it. It is quite inescapable at this point,” she said.
Law firms have not been among the first to adopt the new technology, but they are quickly catching up according to ABA’s 2018 Legal Technology Survey Report.
Some of the key concepts of cloud computing are Software as a Service, Infrastructure as a Service, and Platform as a Service. These hosted services substitute locally stored software, data, and other practice management tools.
My friend’s employer, Amazon, is the leader in this market, alongside Microsoft. In the case of law firms, there are dedicated providers who offer cloud computing solutions tailored specifically for our profession’s needs.
The cloud subscriptions currently available to law firms include a variety of tools consolidated into practice management packages often featuring solutions for:
- Storing documents
- Email Marketing
- Managing Leads
- Developing proposals
- Integrating social media
- Tracking hours
- Sharing documents with enhanced security
The most popular cloud-computing providers for law firms, including mycase, App4Legal, Lexicata, Clio, NetDocuments, PracticePanther, Bill4Time, Rocket Matter, and CosmoLex can streamline many processes previously hosted locally.
The American Bar Association found that in 2018, cloud usage in the legal services industry went from 52 percent to 54.6 percent. However, only 36.2 percent of survey respondents in large firms were aware that they were using cloud computing. On the other hand, smaller and one-lawyer firms displayed a higher rate of cloud adoption.
There are many reasons for these trends. The main factor is that paying a monthly subscription to access cutting-edge legal technologies eliminates the need for upfront investments, not only in hardware and software, but also in critical support services.
In many industries, software providers are discontinuing local-storage programs and switching to subscription services instead. Adobe’s Creative Cloud, which offers subscription-based film and photo editing, has been one of the pioneers, but legal software companies are quickly following. In fact, ABA’s 2018 TECHSHOW saw a surge in the number of cloud products exhibited.
Key Findings from Legal Tech Survey
- Six out of 10 respondents reported no special security policies were implemented after their firm adopted cloud computing.
- About a third of respondents believe cloud-based services can be more secure than locally hosted software.
- Dropbox, Google Drive, and iCloud are still more popular than legal practice management services.
- The two most popular cloud computing services designed for lawyers and law firms are Clio and NetDocuments.
- Attorneys value cloud-based services because they provide:
- Easy access from anywhere, anytime
- Reliable data backup
- Stable monthly fees (as opposed to steep upfront payments)
- One in ten respondents said they plan to switch to the cloud for at least one of the software tools they are currently using.
The Future: Millennials Will Drive Client Focus
Only 36 percent of firms provide client access to cloud-based tools. But this is likely to change very soon.
In 2020, millennials will make up half of the global workforce. As consumers, millennials have demonstrated a preference for flexible services. They want to manage a wide variety of tasks using their phones and other digital devices.
As they age, millennials will require legal services more often, and the traditional law firm setting will no longer satisfy them. According to Clio’s Legal Trend Report, nearly a third of millennials in need of legal advice want to be able to share documents with their attorneys using cloud software and smartphone apps. The figure is significantly lower in the case of older consumers.
Clio is the most popular cloud-based practice management provider in the world. According to its CEO, Jack Newton, “technology will continue to transform and redefine the legal practice.” Newton says his company wants “to provide a fertile ground upon which additional innovation can occur.” “We want the Clio platform to be the first place developers look to build innovative legal technology tools. In turn, we know this will benefit our customers, who will gain a competitive edge from the full breadth of creativity and innovation in the tech industry,” Newton said in a statement.
Cloud services are here to stay. They have become a key element of the IT equation for over half of U.S. law firms. Undoubtedly, the shift has been slower in our field than in other industries, where cloud adoption can be as high as 95 percent. Yet it is steady, and the trend will continue. But if firms want to make a smooth transition, they will need to pay more attention to security and confidentiality in the cloud.
Based on the results of the Legal Technology Survey Report, cloud cybersecurity and cloud-based client interactions should be at the forefront of any competitive law firm’s technology plan for the next few years.