(With Bill Kirby)

First of all, let’s define a few of the terms which are used in this area:

A hosted system is created where the bundle of computer applications that lawyers use (Word, practice management system, digital dictation etc) that would traditionally be run and managed in-house are run and hosted remotely by a third party on servers outside the offices, all accessed securely through the internet or leased lines.

Cloud computing is the practice of managing computer resources (software programs, storage capacity, databases) as a single remote utility rather than buying or renting separate services programs, boxes of hardware and network components.

Software as a Service (SaaS) is the process of obtaining software as a pay-as-you-go utility on a hosted system rather than buying program licences. (See http://blog.inpractice.co.uk/?p=492 for a short video on this topic.)

There is a wide variety of hosting options available now to enable legal practices to introduce “cloud computing” using practice management and case management systems (PMS and CMS) as Software as a Service.

Specialist hosted solutions providers host the firm’s entire IT environment, which includes a particular PMS that is capable of running in a hosted environment. Specialist hosting providers active in the legal sector include e-know.net (www.e-know.net), Intercept IT (www.intercept-it.com) and K-Cloud (www.k-cloud.com) with other providers like Onyx Group (www.onyx.net) edging in.

PMS suppliers like DPS (www.dpssoftware.co.uk) and Iris (www.iris.co.uk/legal) host their own applications and manage them directly for at least some of their clients, but may also have clients using their software hosted by any of the above specialist hosting providers. For example, DPS started ahead of the game by investing in hosted services from as far back as 2000. At that stage they created a dedicated and secure 1500 sq foot server room, from which they are now running just over 110 virtualised servers.

Some PMS suppliers can offer a comprehensive hosted solution from a specialist hosted service provider that incorporates their PMS. For example, e-know.net with Lexis Nexis hosting their Axxia PMS, Visual Files and InterAction, K-Cloud with Pilgrim and Intercept IT with SOS “Virtual Practices” (www.soslegal.co.uk).

Firms can rent rack space in a hosted environment provided by the likes of InTechnology and Civica where the hardware and applications can reside, to be managed either by the IT staff at the law firm or by the provider of the hosted environment, with variations possible in the extent of responsibility that each party takes on board.

Differentiation between providers

There is a wide range of applications that can be hosted, ranging from just Microsoft Exchange through to other standard Microsoft applications such as MS Office standard and/or professional and moving on to Sharepoint and CRM.

Another issue is whether the hosting company can host non-specific PMS add-ons such as BlackBerry, alternative CRM systems, document management, payroll systems, HR systems and digital dictation. So there is a case for leaving hosting to the specialist businesses and support operations with the relevant experience of a much wider domain than just the PMS application.

Some of the major providers insist on dedicated lines into the cloud whereas others believe DSL connectivity is sufficient.

The hosted environment can be in dedicated data centres or can be a shared resource with rack space being purchased.

Spam filters and firewalls can benefit from the investment of a shared resource but then there are unique benefits of databases and communication servers being dedicated to individual firms.

Hours offered can be normal business hours through to real people available 24 / 7. Business continuity and DR are becoming critical so guaranteed up time and service levels are important.

Many small businesses previously offering just third party maintenance and managed services are now also offering hosting services. Be careful here! This is a market where you get what you pay for.

Who’s using whom?

E-know.net host services for conventional legal practices like Martin Kaye (www.martinkaye.co.uk) who were probably the first legal practice to move to hosted IT services, Wolferstans (www.wolferstans.com) and Morrisons (www.morrlaw.com) which are all using Axxia PMS. Some virtual practices like Woolley & Co (www.family-lawfirm.co.uk) and Balinda & Co (www.balindaandco.com) are using SOS.

Intercept IT hosts services for SOS “Virtual Practices” including JBS Solicitors (www.jbslaw.co.uk) who have been able to focus on growing their business and new startups like Matrix Legal (www.matrix-legal.com) and Temple Bright (www.templebright.com); also Scottish firm Cameron Macauley (www.cameronmacaulay.co.uk). An added attraction here is the inclusion of cashiering support in both jurisdictions within the package of services available, which is particularly attractive to small firms and new startups.

DPS have grown rapidly to 62 legal practices using hosted services, which appears to be more than any other PMS supplier. Hosted clients include King Prior MacDonald Bridge (www.kingprior.co.uk), J D Spicer & Co (www.jdspicer.co.uk), Meldrum Solicitors LLP (www.meldrumsolicitors.com), Shepherd Harris (www.law4u.co.uk), Ersan & Co. (www.ersans.co.uk), Keene Marsland (www.keenemarsland.co.uk) and Biscoes (www.biscoes-law.co.uk), ranging from 20 to 200 users in each practice.

K-Cloud hosts the Iris Law Business PMS for hybrid legal practice Scott-Moncrieff, Harbour & Sinclair (www.scomo.com) a virtual practice that has trebled in size in five years with widely dispersed lawyers working from home offices, keeping overheads down.

Legal PMS providers who are keen to provide the option of using their PMS as a hosted solution include:

Iris offer a hosted service but also have clients like hybrid virtual legal practice Scott-Moncrieff hosting their PMS through specialist third party hosting organisations. They also have many chambers using the Iris Meridian hosted product.

SOS have a relationship with Intercept IT to host their Virtual Practices cashiering system and also have clients using their system within an environment hosted by specialists like e-know.net.

DPS offers its own products in classic form or hosted.

Pilgrim recently entered into an arrangement with K Cloud.

Lexis Nexis offers its range of products such as Axxia, Visual Files and InterAction in partnership with e-know.net.

Linetime offers its products hosted in partnership with e-know.net.

Pracctice has offered its Osprey PMS as a hosted solution for the last 6 years.

Eclipse are not totally sold on the concept but Co-operative Legal Services is hosted by a third party along with three other firms using their software.

Cognito Software have only recently begun to promote hosted PMS but now have 5 firms using this service, with more in the pipeline using third party hosting services.

TikitTFB have just secured their first order for the new hosted version of Partner for Windows.

Making the move to hosted

There are good business reasons that can justify a move to a hosted solution which were covered in our article last year in the March/April 2009 issue (www.infolaw.co.uk/newsletter/?p=149).

The transition is not always as painless as providers might want to believe, but if the business case for making the change is valid, then this move needs to be actively managed and nurtured in the knowledge that niggles and reactions to them will have to be addressed until everything settles into place. Bear in mind that there can be a gap between what the providers see as an issue and something much smaller that a lawyer might see as an issue, but then that’s no different from any traditional relationship between suppliers and law firms. There is a learning curve which requires even more communication between law firm managers, supplier and users in this situation because the working relationship is so much tighter and impacts directly on day-to-day work.

Scott Moncrieff, Harbour & Sinclair (www.scomo.com) is a good example of why and how it is worth investing time and effort to make a change. They bring together lawyers who operate from their own offices across the country, where there are many variations in the PCs they use locally; there are also different operating systems, hardware specs and IT capability amongst the users. Without a clear vision of how this can operate from the innovative leaders of the practice prepared to take some risks, there wouldn’t have been the commitment and persistence needed to make it happen.

The flexible approach of their hosted provider, KCloud enabled them to get everybody on board using just one central system that everyone can access – but that doesn’t mean it was easy. Practice Manager, Helen Jones commented that “whereas some people could access the PMS easily and immediately, others required support from K-Cloud and 2e2 (who manage the data centre environment where the servers that run applications sit) to install the software and get the system up and running. The help desk provides IT support to consultants and Scomo’s administrative services. All help desk queries are logged. If no easy remedy is available problems can be escalated. Information is gathered about the nature of questions which will help to identify training and other needs – so don’t expect utopia. There is a learning curve that all parties have to go down to produce results.”

Results that can be achieved

Paul Barrett, Operations Director, JBS – “We could avoid a heavy upfront investment in IT by subscribing to a pay-as-you go model and also avoid the need for employing our own legal cashier straightaway” where JBS have the added value of an outsourced cashiering services from their PMS provider.

Ron Prior, Managing Partner, King Prior – “My computers were getting old and I needed to replace my servers anyway. Looking back over the years, replacing and updating computer hardware has been a never-ending task, we are always replacing them every 3 years or so … they take on the responsibility of the virus protection, spam filtering, security of access, backup and many other things that I now know I should have been doing but never did.”

Malcolm Cameron, Principal, Cameron Macauley – “The technology has reached a point where it is truly transformational in providing the smaller firm with a more profitable business model. I have saved around 25 hours a month which is now available for remunerative work and can organise the business around client service and quality. ”¦ In the past the treadmill of a heavy case load and constant quest for new business to cover high overheads left little time for improving client service. ”¦ I have reduced overheads by over 80 per cent and have the luxury of time to make service quality the cornerstone of my practice.”

Ron Prior also demonstrates why it is essential to work through and to help people understand the business case for making the change. “When I first looked at it as a fee versus what I was already paying it looked expensive, but when you balance it against the cost of the time involved in doing the job myself or having a ”˜super fee earner’ do it, or employing an IT person, it is actually very cost effective. It costs me no more to have a home worker than someone in the office, in fact I can offer home working to any of my staff and since they can’t work from home and the office simultaneously it makes no difference to my costs.”

Bill Kirby and Allan Carton are both directors of Inpractice UK Limited and MSC.

For more information or an informal discussion, call 0161 929 8355 or email solutions@inpractice.co.uk.

In the next issue, we will provide some direct feedback from current users of hosted services about their experiences of making the move – good and bad.