The Economics of Cloud-based Software Services

One of the most common benefits touted by cloud computing proponents is the economic benefit of switching to the Cloud. With SaaS, there’s no need to purchase servers and software; no need to pay expensive annual licensing fees or software upgrade fees; no need to hire IT staff to maintain the servers and stay on top of software updates.

The software upgrade and installation song and dance with which most law firms are familiar becomes a thing of the past with SaaS-based services. Before cloud computing, law firms purchased and installed desktop or server-based legal software. In many cases, with traditional legal software, software updates are provided free of charge for a specified period of time after the initial installation of the software, but an additional annual licensing fee must be paid for access to updates after that time period expires.

With cloud-based services, you simply pay a monthly fee and the SaaS provider hosts the software for you, at no additional cost. You don’t have to worry about keeping track of and installing software updates. The provider automatically updates the software for you on their end. After the update is complete, the next time you log into your account, the changes to the software system will be in place, ready for you to use.

However, as explained in this post from the ABA’s Legal Technology Resource Center, in some cases, the cost savings may not be as clear-cut as they seem:

Over time, the cost of the two options is…more difficult to assess. While traditional software may require a substantial up front investment, the monthly charges for SaaS solutions can eventually surpass that up front cost. SaaS solutions, however, are upgraded continually, meaning that while a traditional software requires an expensive per-license upgrade fee every few of years to get the latest features, SaaS solutions are always up-to-date and new features are accessible as soon as they’re released.

Thus, for some law offices, a move to the Cloud may make financial sense after crunching the numbers and carefully balancing the risks. Once you’ve done so and are confident that the benefits outweigh the risks—and that your client’s data is reasonably secure—you can then move forward with incorporating the cloud-based system into your practice.

For some law offices, using cloud-based services may save time and money in the long run.

Debbie Stephenson

Debbie Stephenson is a former Content Marketing Manager at Firmex.