What the Rise of the Cloud Means for Law Firms

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When cloud computing was first pitched to law firms, most deemed it unworkable. Storing client data on someone else’s servers, in an unknown location no less, was inconceivable. Now, legal organizations have gone from cautiously reconsidering the cloud to embracing its possibilities.

This drastic evolution occurred within a span of five years. How did it happen? As vendors better understood what was making potential customers hesitate, cloud platforms matured. And as some pioneering law firms began to successfully take their applications and storage to the cloud, others came around to the idea. Now, the legal industry is not asking so much whether it should make the move, but how best to do it.

Overcoming Concerns of Security, Data Governance & Connectivity

Initially, the cloud suffered from the perception that it offers shaky data security and uptime. On top of that, worries about information governance were not helped by an international data privacy case with extraterritorial overtones, United States v. Microsoft (commonly referred to as “the Ireland Case” to differentiate it from the famous 2001 antitrust lawsuit).

These concerns made the cloud seem like a no-go for law, despite its benefits, which are considerable. Since the cloud no longer requires you to store programs and data on-premises, you can save on expenses such as hardware, cooling, and real estate. The cloud is also by nature highly scalable and flexible, meaning that its size can easily be adjusted, so that you only pay for what you use. Aside from these advantages, there are numerous others, including simplified management, smooth upgrades, and — perhaps somewhat surprisingly — security.

The reality is that most cloud vendors can provide better encryption, management, and monitoring than law firms can on their own. Indeed, security is declining as a concern as more organizations see that established cloud-vendor companies like Microsoft, NetDocuments, and iManage take security seriously. Likewise, it is now evident that cloud vendors tend to be able to provide even better uptime than an on-premises implementation can. Adopting the cloud does mean, however, that you need a strong, and preferably redundant, internet connection.

The reality is that most cloud vendors can provide better encryption, management, and monitoring than law firms can on their own.

Data governance in the cloud, however, remains an ongoing debate. The CLOUD Act, passed in March 2018 as a result of the Ireland case, stipulates that the government may issue a warrant or subpoena for data stored in the cloud, regardless of where the actual server is (whether it’s in Ireland or not). Though a subpoena could also be issued to a firm directly, the prospect of being left out of the process makes lawyers uncomfortable. In response, many cloud vendors are allowing customers to take a hybrid approach and keep certain data on-premise. While it is still rare for a firm to be all-cloud, hybrid environments are increasingly prevalent.

What to Know About Adjusting to the Cloud

Law firms should prepare for the continued expansion of the cloud into the legal industry.

First, account for the change in budgeting. Moving to the cloud normally means switching to a subscription licensing model. Large purchases of every several years of, say, operating systems and document management programs, turn into recurring monthly fees for Office 365 and NetDocuments. Though ongoing monthly costs may be higher, they will be more regular and predictable, and you will only pay for as many licenses as you need at a time.

Large IT projects and upgrades slated for every three to five years are also becoming a thing of the past. The cloud entails continuous upgrades, which has pros and cons, and is definitely a large change to which law firms will have to adjust. With cloud programs, new features are rolled out to users continually and incrementally. They can get used to them at a slower pace rather than if they were all batched together (in the traditional way), but ongoing training may be necessary for some.

Ultimately, the new model of continuous updates will entail a bigger change for IT teams than for users. Maintaining cloud systems requires a different set of skills. For instance, application packaging — the practice of making sure that various programs are compatible with each other so that they can run smoothly — will become much more important now. The processes of designing, testing, and deploying major systems, which IT teams normally take months to do, will now have to be completed at a much quicker pace, as new iterations of systems are released more quickly, such as Microsoft’s decision to release major updates to Windows 10 every six months.

Right now, it looks like the cloud will not go backward but only continue to make headway into the legal sphere. With careful planning and a moderate approach, you too can introduce the cloud into aspects of your firm’s technology — and reap the benefits.