Like Rocket Matter before it, Clio is a promising online practice management solution. Clio gave me a tour last Friday, so I have seen it in action and had the opportunity to ask the developers all kinds of questions.

For lawyers currently wrestling with Time Matters, Amicus, Abacus, and other clumsy practice management packages, Clio would be a breath of fresh air, and well worth the $49 per month for attorneys and $25 per month for staff. For lawyers like me whose practice management software is based on disparate webapps like Google’s online applications, Freshbooks, and Remember the Milk, Clio has no real advantage.

I like everything about Clio except the price. For me, Clio just does not pass the cost/benefit barrier.

Since first writing this article, I’ve taken advantage of the opportunity to do an in-depth test-drive of Clio. While I still think the price is high, I also think it is worth it, especially for growing firms where the cost of equivalent hardware, software, and support would be comparable, if not greater.

Clio offers a streamlined, simplified, matter-based case management (contacts, calendar, and tasks) plus timekeeping, billing, and rudimentary document management. Significantly, Clio does not handle email, although users can add email correspondence to a file by using a BCC workaround.

Like most web-based, software-as-a-service solutions, Clio excels at allowing multiple users to use the system. And because you do not have to host information yourself, Clio cuts down on some costs. No need to buy and maintain your own Exchange server, for example, or even worry about getting everyone in the office using the same operating system. Clio is friendly for Windows, Mac, and Linux users alike.

Clio encrypts your data and backs it up four times per day to servers on both coasts. It keeps your files very secure.

In other words, as you might expect, Clio is great for all the reasons webapps are great.

On the other hand, Clio will not sync to your Blackberry, iPhone, Android, or Windows Mobile phone. Too bad, since most lawyers will at least want to access their contacts from their phone, and maybe their calendar and task list, as well.

And while Clio includes a full suite of productivity software, none of it is as good as the standalone webapps. Clio’s calendar works great, for example, but it cannot touch Google Calendar.

The dealbreaker for me is the price, which Clio made public today. Clio is priced about the same as Rocket Matter, at $49 per month per attorney, and $25 per month per staff. That is $600 per year for a one-lawyer office. Most non-webapp practice management software will be cheaper by a long shot. Or you could use Plaxo or Google Apps, which do most of what Clio does, but for free.

How should it be priced? I really like Freshbooks‘s pricing model: $14 per month for the base plan, which includes one extra biller, and $10 per month for each additional user. You also pay for the number of clients you need to have open at any one time, at $10 for every 250 clients. For $149 per month, you could have 20 people working on 5000 accounts. With Clio, that is only three lawyers. To use Clio with that many people, you would pay $449-$1029 per month.

Like Rocket Matter, Clio claims that “If Clio helps you regain just one billable hour per month, it will have more than paid for itself.” True, but Clio cannot help you find an extra hour to bill. You can only do that by making sure you are capturing all your time accurately. No software is a silver bullet, but Clio will definitely cost you a pretty penny.