The cloud? It's down to earth...

Outsourcing has been a much debated topic in recent times. Applied to the legal sector, it often refers to large-scale deals where city firms ship quantities of work and/or back office administration to places where it can be carried out more cheaply.

But the potential advantages can be even greater for legal practices of a much smaller scale: the technology now exists to enable the average high street firm to offload many of the tasks that otherwise eat into valuable fee-earning time, providing expert help at a level that would otherwise be out of reach to most.

Here in Scotland, legal software providers LawWare and outsourcing business The Cashroom Ltd have collaborated to offer solicitors the means to take that step into the future – a step that many predict will be essential if the profession is to meet the challenge posed by increased client expectations combined with new competitive threats in the changing legal market place.

Light through the cloud

In a nutshell, LawWare offers a cloud computing solution, which it has christened LawCloud. The uninitiated should not let the term “cloud computing” fog the brain: it’s simply the popular name for outsourcing tasks through the internet that you would otherwise have to employ people and invest in IT systems to carry out within your office.

Launched in February 2011, LawCloud offers online the top-of-the-range Enterprise version of the LawWare case management software that has been adopted by 180 law firms in Scotland since the business was established in 1998 by managing director Warren Wander.

Trials in the preceding months resulted in 25 firms already being live on LawCloud by the time of the official launch. One of them is BBM Solicitors, a startup practice established at the turn of the year by brothers Eric and Alasdair Baijal, taking on high-end commercial and litigation work at offices in Wick and Edinburgh.

“When we decided to set up our own practice, we wanted an IT system that enabled us to share data and gave us easy access via a laptop if we were in court”, says Eric. “We had already decided to go for a paper-light system, scanning any mail, saving it to client files, and doing without paper file copies of correspondence. Our previous firm used LawWare. We didn’t know about LawCloud, but when we talked to Warren and had a demonstration we were very impressed – even Jennifer, our associate, who has worked in a big firm with a heavy duty case management system.”

Startup support

LawWare’s initial motivation for developing a “cloud” solution, Wander explains, was the realisation that, especially in the recent economic climate, the cost of server infrastructure could easily be prohibitive for small law firms seeking a technology solution and was a marked disincentive for firms looking to upgrade their existing systems. Baijal agrees.

“For the smaller firm not doing a huge quantity of work it is certainly cost effective not to have to invest in a server. LawCloud also has the attraction that you can add or remove individual users very easily if people join or leave the firm, and you just start or stop paying for them as they do. It would be a long time before we would be able to take on a dedicated IT manager, so it’s an efficient use of management time with much less impact on fee-earning work than if we tried to run it ourselves.”

Another advantage for Baijal was the speed of set-up, especially for a practice starting from scratch. “We were up and running probably within 72 hours. And Warren was a great help as an IT consultant without asking anything extra.”

Remote working is easier too, compared with the VPN (virtual private network) link that he had previously used for accessing data while out of office. “Now, provided I have a broadband connection, my access to client files is as good as when I am in the office.”

Remote money

BBM also subscribes to The Cashroom, a Scottish company set up in 2008 which now provides outsourced cashroom services to clients throughout the UK.

“We do everything an in-house cashroom does, only we do it remotely, without the need for lawyers to employ and manage cashiers and accountants, and all for a fixed monthly fee”, says The Cashroom director Catherine O’Day. “We are confident that the fee will be less than the equivalent employment costs, and you don’t have the hassle of employing people.”

The service is provided remotely, with Cashroom staff dialing into each firm’s practice management system. Once there they can function just as if they were in the room next door. Depending on the practice management system used, law firm staff complete their own entries, which are emailed to The Cashroom and posted by its staff. If the firm needs a cheque, the request is sent to The Cashroom, posted there, and the cheque is printed out remotely in the law firm’s offices.

Baijal explains that BBM has a particular cashier assigned to the firm with a named substitute if she isn’t available: “it isn’t just a random person from a pool who does the work, and although she has other responsibilities, she has a good understanding of our business”. People are assigned on the basis of experience, so BBM have someone with a background in litigation.

Family needs

Another client is niche Edinburgh family law firm Sheehan Kelsey Oswald, set up in late 2008 and already top rated in Scotland by the major directories. SKO also required help in starting from scratch IT-wise, and something that would support fee-earners having to provide rapid responses to clients facing crises in their lives. “We needed a system that would allow us to have client files that integrated with financial record keeping, enabling us to see and time-record work done”, says Susan Oswald, one of the founding directors of the firm’s holding company, and the firm’s designated cashroom partner. “They were very hands-on at first – it was a new system and we had to establish and agree procedures.”

SKO was not only The Cashroom’s first startup client but the first to be incorporated as a limited company rather than set up as an LLP; however close working at the outset established the necessary procedures, ironed out any teething difficulties and delivered a system that Oswald describes as “fairly slick”.

“The difference from a traditional cashroom”, she comments, “is that you have information available on screen, hour by hour, about client files – not just work done but the value of work in progress; you can look at the ledger and see what outlays are waiting to be paid, and when the client was last sent a fee note (and paid one). Our system helps avoid the client being presented with a big bill at the end and makes things more manageable for both firm and client.”

She adds that monthly management accounts are very easy to produce. “The Cashroom produce them but it’s very straightforward, because the figures are accurate and up to date. This helps us when we report to our bank, who are always very impressed by the standard of our reports. We have an excellent relationship with our bank – it helps that we are a successful firm, but we had to build relations from starting up.”

A further, not insignificant point is that The Cashroom will keep the firm right as respects Law Society of Scotland inspection and compliance.

LawWare users but not yet through LawCloud, Oswald believes that in a couple of years the firm is likely to be looking to dispense with its expensive server in favour of the cloud. “I think it’s the way ahead; it would be a great boon.”

Changed world

Other early adopters of the LawCloud system were Stewart Brymer and Scott Brymer of Brymer Legal Ltd. Established in 2009 to deal with general business law and specialist opinion work, the company did not want to be tied down to expensive servers and high levels of administrative support. “I had spent 30 years in a traditional law firm environment and it was time for a change,” says Stewart Brymer. “Client needs were changing and it was time to do something about it. LawCloud has enabled us to compete on more of a level playing field than I had anticipated. Indeed, one could argue that we are significantly better off given that we do not have expensive IT and large city centre buildings to pay for and maintain.”

All the firms interviewed agree on the importance of security of information, and the robustness of the service offered. LawCloud data is backed up automatically, held in a state-of-the-art UK data centre, and covered by a robust disaster recovery plan. “We discussed this with the Law Society of Scotland to check compliance, and had a look at what provision was made”, says Baijal. “I can only say that we were satisfied with what we were offered. With cloud computing security is always an issue; you just have to look at each provider on their merits.”

“It is also about quality of support”, Scott Brymer adds, “and we have found that LawWare understand the legal profession and the sort of IT challenges that solicitors can create.”

The pressure for change now facing the profession has been quietly building for several years, but the recession has brought things to a head. “Because of the recession clients have less money”, says O’Day. “Stated simply, clients want more for less, and they want it more quickly.”

With more and more legal advisers providing traditional legal services in innovative ways, more cheaply and more quickly than before, outsourcing could be the response for a larger proportion of the profession than you might have thought.