Legal SaaS in 2010


4-Step Computer Security Upgrade

Learn to encrypt your files, secure your computer when using public Wi-Fi, enable two-factor authentication, and use good passwords.

Guest post by Danny Johnson.

A few weeks ago, roughly around the time around the time that oil started leaking in the gulf, being an incumbent became a major political liability, and Sam Glover was having an epic debate about cloud computing and blog ethics on the Lawyerist, I had an epiphany. I suddenly realized that the legal Software-as-a-Service (SaaS) market is about to tip.

The legal SaaS and cloud computing market has been around since at least 2001, longer than most people realize (even outdating the terms “SaaS” and “cloud computing“), but its initial growth rate was very slow. Although there were a number of forward thinking law firms that were early adopters and quickly caught the SaaS vision, it wasn’t until around 2007 or 2008 when legal SaaS grew up and the technology became an important strategic decision for all law firms.

5 Reasons for SaaS Acceptance

Most of the reasons for the surge in SaaS popularity have to do with the inherent benefits of its delivery model such as anywhere access, real-time collaboration, zero upfront costs and lower total cost of ownership, but there were also a number of external factors that boosted its acceptance.

1. SaaSonomics

Web hosted applications like Facebook and Google have become a way of life. In today’s society, it is much easier for the average person to know what their junior high school sweetheart is doing and communicate with him or her, than to communicate and collaborate with their co-workers on business critical tasks. Over the last decade, web sharing, collaboration and instant communication became a way of life for most of us in our personal lives, and people began to want the same freedom in their work life. Just as it has in the past, consumer demands were a key driving force behind business innovation and the demand for legal tools accessible from anywhere with the power to collaborate with clients, opposing parties, etc., forced businesses and technology vendors to innovate and create those tools for law firms.

2. Economics

With the economic downturn, cost cutting became trendy and law firms of all sizes were looking for ways to reduce costs while remaining competitive. Many firms saw SaaS as the way to do that. Legal Software-as-a-Service tools not only gave law firms a competitive advantage by providing innovative technology, but the lower cost of ownership and pay as you go pricing model enabled firms to lower technology expenses as well.

3. Mobile

The rise of SaaS technology perfectly coincided with the proliferation of internet ready mobile devices. It gave lawyers the ability to access the same technology they used at the office, or from their laptop, directly from their mobile devices through the browser or an app without any extra cost or IT headache.

4. Innovation

It would be easy to look back and wonder why the old guard in legal technology did not recognize this changing business climate and figure out a way to deliver their own legacy products over the web, but then again, the old model was lucrative and the vendor had total control of the customer, and has history has demonstrated, control and power are hard to give up. It took a new breed of legal technology companies, especially in the practice management area, to build quality products that provided lawyers with the tools they were accustomed to, coupled with the tools of the new web for Software-as-a-Service to gain universal acceptance. Over the past three years, numerous companies such as Advologix, Clio, and RocketMatter have done a lot to promote awareness and adoption of SaaS for law firms.

5. SaaS Evangelists

Along with the growth new legal SaaS companies, there were a whole slew of lawyers who didn’t just enjoy the benefits of the technologies in their own practice, but took it upon themselves to promote it to others. People like Steph Kimbro, Seth Rowland and Niki Black didn’t just make terms like “Cloud Computing,” “multi-tenancy” and “SaaS” household terminology, but made sure we understood their meanings and ethical implications.

Current State of Legal SaaS

The proliferation of cloud/SaaS tools and adoption has made it so it lawyers working at small firms, or solo practitioners running a virtual office can have access to the exact same powerful technologies that were once available only too large firms with dedicated IT servers and staff. The multi-tenancy architecture of the Software-as-a-Service model provides everyone the power to throw out their IT hat and pay only for what they use.

Will the lawyer who would rather be locked in by legacy software products continue to exist? Maybe for a little while, but a radical paradigm shift in technology and in the way lawyers work has begun.

Danny Johnson works for the NetDocuments marketing department.


Get Lawyerist in Your Inbox, Daily

Current Articles
Current Lab Discussions
  • Gyi Tsakalakis

    I used to be skeptical of SaaS. This was primarily due to privacy and “what happens if I don’t have a connection” concerns. However, with the rise of mobile, I think SaaS is probably an inevitability.

    While I don’t claim to be a cloud expert, and the experts seem to agree that cloud computing is safe, the thought of “everything” being in the cloud ether still makes me cringe. Maybe cringe is too strong, but you get the point.

  • Marty Thompson

    Interesting little history. On the topic of SaaSonomics, I liked the idea of workers knowing more about wierd personal relationshiops than other employees. I think that should be the direction that practice management even document management SaaS should be going. Salesforce has done it with their Chatter app and I think lawyers could benefit also.

    @guy I’m the same way. I love technology and have been monitoring SaaS security for some time. I’ve been fully converted and think SaaS is more secure than doing anything in the office. Now we just need to make sure downtime isn’t ever an issue like it was with Intuit this week.

  • I could not agree more with what Danny covers here. I wrote about my thoughts on the changing SaaS recently as well on our blog.

    One thing to add relating to acceptance is that this is happening because legal teams, and the general public, are more comfortable with privacy and security issues relating to SaaS.

  • @Guy Very good discussion points and it would be interesting to hear what exactly makes you “semi-cringe” because your concerns are definitely concerns held by a large number of lawyers.

    @Marty Cool you brought up Chatter. I’ve heard good things about it since it came out recently. Have you used it?

    @Jeremy I see your agreement and I will call. Public sentiment towards SaaS has drastically changed over the last year or two. That is a HUGE point that I did not touch on.

  • Ryan Craig

    @Marty I think it is interesting also that people know more about some random person from halfway across the world and can get in touch with them faster than they could with a Co-Worker. When Facebook first came out a few years ago, I remember getting an account and it being a very restricted Colleges-Only service, and it was kind of like a secret online life.

    Then they suddenly went public “everyone can have an account”, and it scared and angered a lot of people, but that has almost completely transformed society. I think people are scared about cloud computing the same way that they were scared about the everyone model of facebook. But, in the end, I think that those who embrace the SaaS model will be rewarded, and those who don’t will be left wondering what Facebook is, so to speak.

  • Marriott M

    Great post Danny, and good follow-up comments.

    Watching the SaaS-olution over the past several years has been interesting…similar to a teenager going through the awkward years of an identify crisis or run-ins with the law, SaaS has been earning it’s stripes through tough debates on accessibility and security. Some argue, and I tend to believe, that SaaS is maturing to adulthood (Gartner touts $70MM in 2010), and leaving behind some of these growing pains. …although there are plenty of adults who’ve held on to their awkwardness, teenage pimples ‘n all. Let’s hope SaaS quickly moves beyond that.

  • Your enthusiasm for SaaS is laudable, but getting most attorneys to use SaaS, if that ever happens, will be a long, dreary, slog. At a recent seminar Sam and I did for about 60-70 lawyers about Ethics and Cloud Computing, one attendee called the session ”irrelevant“ to his or her practice. Another asked us to explain what “Linked-In” is. Many lawyers still do not have websites, have never signed up for an RSS feed, and rely on their fax machines more than their scanners.

    Not only is the idea of using SaaS foreign to most attorneys, many have invested tens of thousands of dollars in software, licenses, and training and are not likely to abandon those systems to chase the Next Hot Thing. Even after a financial collapse and bankruptcy, who sells the most cars in America? GM. People stick with what they know. It takes them a long time to adapt to change.

    • Eric,

      While I agree that attorneys on the whole are slow-adopters, Lawyerist readers (ie, anyone reading this) tend to be some of the profession’s most tech-savvy.

      • Another thing to keep in mind with cloud software for lawyers is that many cloud transitions, such as VOIP, Dropbox, and more, can be made for an attorney without much effect on the attorney’s workflow (or maybe even without the attorney’s knowledge).

  • @Eric C – Good stuff.
    “Getting attorneys to use SaaS…will be a long, dreary, slog.”

    I the only modification I would make to that statement is that it HAS been a long, and at times dreary, journey. At the company where I work, we’ve been selling the SaaS idea to law firms since 2002. In 2002 we couldn’t get a CIO from a law firm to even acknowledge the SaaS idea but fast forward 8 years and firms of all sizes, as well as every blawg, legal tech magazine and technology show is buzzing about SaaS. Sure, some lawyers still use typewriters, dictation and fax machines but that doesn’t mean that computers and scanners aren’t thriving in law firms…And you hit it right on when you mentioned large investments in servers etc., but what happens when those servers need to be upgraded or some legacy software needs a patch? The investment spiral continues.

    Also, one other point that I did not add in the post is that of SaaS reseller and consultant development. With tons of attorneys relying on tech consultants to manage and suggest technology, the increasing number of consultants who are buying into SaaS will bring new technology to the “LinkedIn illiterate” lawyer.

  • I second Eric’s sentiments. While I expect more senior lawyers to lack web/tech knowledge, I am consistently surprised by lawyers in their early 30’s and younger, who lack even the basics. It’s easy to forget that not everyone reads Lawyerist…

    However, I would suggest that once the concerns related to privacy and accessibility are put to bed, SaaS computing is relatively low on the “tech know-how” scale.
    Especially when it comes with a familiar name like Word, Excel, etc…

  • FYI: Software as a Service (SaaS) for Lawyers ABA:

  • Also included in this discussion should be the issue of serving the public and what will be necessary in order to provide access to justice to a larger number of our public of moderate means but also allow us to communicate adequately with them. I recently wrote a post about the “digital natives”, the fact that our clients are going to prefer and expect to receive legal services using SaaS technology. This is largely a consumer-driven change in my opinion and one that legal professionals would be wise to education themselves on as their client base gets younger. Also, we really need SaaS in order to cost-effectively implement many of the document automation and assembly applications that are going to help solve this access to justice problem in our country. These changes don’t happen overnight and some attorneys will never accept them, but it is inevitable that this is the direction that practice management and the delivery of legal services will go based on other professions, the public demand and the changing legal marketplace.

  • Deepa Patel

    You made the most compelling point here. Clients are the ones who are going to demand that Law Firms change the way they work with them. If not a lot of the lawyers are going to face steep competition with firms that do adopt to the newer technologies and the new way of client collaboration that technologies like NetDocuments and SalesForce chatter offer to businesses. In order to stay in business, Law Firms will have to adopt to newer technologies.

  • I personally feel times are changing and Cloud/Online hosting of data and applications is going to be the norm, one day.. but not just yet. We develop traditional desktop based legal software and have no ‘cloud’ version as such so it is a bit of a worry for us as we are seeing more and more articles referring to the modern lawyer and how its going to be the future BUT in all honesty, it was only last year we were installing software for one law firm where they were still using a typewriter in the office! Can you believe it?

    There are a LOT of small law firms/solo attorneys out there who are very archaic in their practices because it works best for them and they are hesistant to change. Just moving to case management software is a big step, never mind moving all their data out of the office and becoming totally reliant on the internet.

    • I think “the norm” and “what law firms do” are never going to be very closely related when it comes to technology. Most law firms are at least a decade out of date, if not more.

      For everyone else, cloud storage is already the norm. We’ve got our photos backed up to Carbonite or Mozy, our files shared with Dropbox, our music in iTunes Match or Amazon Cloud Player or Google Music, and much of our software lives in a web browser. In another decade, it will be the norm for law firms, too.

  • Sam,

    Very interesting discussion. We are also a case management software company but our focus is more on cloud of course. Contrary to other opinions we think that the new age attorney is going to change the landscape. The new age attorney, uses his Blackberry 24 x7, loves to tweet, pro active on linked in and give ipad as a gift to his wife on her birthday. The rest will follow suit. Times have changed.