Microsoft Office 365 is a suite of securely hosted (“Cloud”) online applications available now direct from Microsoft that has potential to radically improve use of IT for a wide variety of law firms, not just small firms. However, it may have an Achilles heel for users in the UK; nothing to do with the technology but down to US legislation designed to give their government powers to combat terrorism (see further below).

In the March/April 2011 issue I wrote about the extensive Microsoft stack of products already well-established in law firms, with new initiatives to extend their footprint in legal firms being launched, where Microsoft are already the most prolific provider of IT. Lawyers routinely use Outlook and Word; marketing teams use PowerPoint and Excel for analysis and finance use SRSS for management reporting and business intelligence. Microsoft also provides the IT infrastructure for most law firms and the majority of practice management systems are now built around a Microsoft SQL database at the core of the firm’s data. Use of Microsoft SharePoint, CRM, OneNote and Lync has all been on the increase in law firms over the past 18 months.

Next up is the Microsoft-hosted Office 365 suite, the successor to Microsoft’s BPOS (Business Productivity Online Suite) package. For a practice of up to 25 people, the “Professional and Small Business” version costs just £4 per user per month for an extensive package of the core applications needed to run a legal practice; all in a highly secure, constantly updated and managed environment, which guarantees 99.9 per cent uptime. Lawyers can then get on with doing the legal work and running it efficiently. Even the Enterprise version options range from just £6.50 to £17.75 per user/month and you can sign up for a 30 day free trial on either version.

Core products

Microsoft Office 365 comes in two different flavours: Office 365 Professional & Small Business includes basic versions of the core applications for up to 25 people; Office 365 Enterprise has 4 levels of subscription depending on the variety of extended features and support you want to include in the package for larger businesses.

Office 365’s securely hosted applications included in both flavours are:

• Exchange Online so you can use your calendar, contacts secure email facilities through the web and from your mobile phone; all including anti-virus and anti-spam with a 25-gigabyte mailbox letting you send email messages up to 25 megabytes;
• SharePoint Online for document management and team collaboration based on SharePoint Foundation 2010 including Access Services web database technology so you can create your own Intranet to store and share files securely online;
• Office Online to edit and collaborate on, for example, Word, Excel, PowerPoint documents in a web browser using Office Web Apps;
• Lync Online, the replacement for Office Communicator and Live Meeting, so this provides instant messaging and web conferencing facilities formerly provided by Live Meeting and Communications Online;
• Email Support.

Extended services available in the Enterprise level versions include email archiving and retention, cross mailbox search, full SharePoint Server 2010 capabilities including portals, social networking capabilities with enterprise search for SharePoint and 24/7 Phone Support.

See the full summary of the Enterprise level options (E1, E2, E3 and E4).

Security

Levels of data security are higher than the average law firm can reasonably maintain if they manage their IT systems in-house with access to the Internet – as all law firms do. Readers interested in the important detail of how security operates can download a helpful White paper on the topic. There are also options such as “Proofpoint Compliance for Office 365” to improve security even further to include eg encryption of emails.

Microsoft CRM, is not included in this Office 365 package. However xrm4legal.com provide a hosted or on-premise version customised for law firms which has native integration with Office 365, enabling everyone even in small firms to improve their use of IT in the increasingly critical area of pro-active client relationship management.

Getting started

New start-up practices can readily adopt Office 365 from scratch. Established users will need to migrate some data across to the online system, but this is not difficult and there are useful tools available. Higher level enterprise versions combine both on-premise and online to ease the transition.

The solution is attractive enough for LawWare, a specialist provider of the LawCloud practice management system to law firms – who claim to provide 20 per cent of law firms in Scotland and some in England and Wales – to incorporate Office 365 in their offering, with good take-up and satisfied customers according to managing director, Warren Wander.

So Office 365 is being used in earnest in law firms in the UK now, through LawWare and elsewhere. We have heard some concerns about performance and downtime but there can be a wide variety of reasons for this, including the quality and speed of the connection to the Internet, where all firms should be aiming for the best possible value for money service now anyway. Warren Wander commented “We haven’t experienced any noticeable reliability issues. We configure using offline cached exchange mode which I suppose may help. We have lots of sites who opt for 365 and feedback is that the service is good.”

The best way to test this is to take out the 30 day trial.

An Achilles heel?

The underlying problem that has already caused some of our legal clients to rule out Office 365 as a non-starter is caused by US legislation in their “Patriot Act” and lawyers are not alone in recognising a problem here.

The UK Data Protection Act forbids an organisation acting as a “Data Controller” to pass user data outside the European Union unless the recipient country provides guarantees as to how the data will be used. However, the Patriot Act, introduced to protect US national security, can require that any US company (wherever data is held) must disclose data on demand to the US Government without the knowledge of the owner of the data, which is contrary to the UK Data Protection Act. Microsoft has been up-front in acknowledging that they cannot give that guarantee and this applies to data held in all their hosted solutions. As a result, in December 2011, BAE ditched plans to adopt Office365 because Microsoft could not guarantee the company’s data would not leave Europe, in spite of operating a data centre in Dublin.

Conclusion

We have yet to see how the Patriot Act issue will unfold and perhaps it is not a concern for the average client of a law firm; or maybe even for firms of any size, but this compliance issue needs to be addressed. However, it is unlikely that Law Societies will take a definitive stance.

Otherwise, Office 365 is an option that most firms should at least check out on the free trial for now, to be able to make informed decisions about using it or other similar solutions that may become available along similar lines. Other local EU-based providers of hosted solutions that don’t have to comply with the Patriot Act may well move into this space.

Allan Carton is Managing Director of Inpractice UK, specialist advisors to legal practices on all aspects of business development. See also their blog, with many useful articles on building a more profitable legal practice.

Email acarton@inpractice.co.uk.