Cloud Computing in The Legal Sector


Cloud Computing in The Legal Sector – Will 2014 Be The Year Cloud Computing Goes Mainstream In The Legal Sector?

A recently published report by IDC predicted that the public IT cloud services industry will grow from being a $47.4 billion market in 2013 to reach $107 billion by 2017. That is an astounding compounded annual growth rate of over 23.5% over the five year period. One of the leading drivers for this change is the arrival of cost-effective cloud solutions that can easily and efficiently replace traditional technology systems in the market. These solutions, apart from making technological innovation simpler, have been instrumental in making cloud computing mainstream

To understand the true implications of this change, one needs to look at industries that have traditionally stayed away from technological innovations. Take the legal sector for example: according to the Legal Marketing Association, the United States is home to more than 1.1 million attorneys who, even today, consume as much as 1000 pounds of paper per year. Given the huge reliance on traditional business practices, the legal sector is a great place to study and understand the transition of cloud computing from a niche technological innovation into a mainstream business practice.

In this context, a survey report recently released by the American legal research firm LexisNexis makes for an interesting read. The study showed that close to 72.4% of legal firms in the United States could be making use of cloud services this year. Also, slightly over half of the individual lawyers surveyed expressed the possibilty of them migrating to cloud solutions in 2014. This is a sharp rise from the current cloud user base among attorneys that hovers around the 40% mark.

The LexisNexis report has a number of other interesting insights. For instance, the report showed that document storage and data backup are among the most popular cloud services used by lawyers. Other popular services used include hosted email exchange, file sharing, hosted applications (like Office 365) and Practice management. However, nearly 23.7% of the cloud use among law firm employees is learned to be without the firm’s knowledge or approval. This is a possible indication of the fact that such services are still not considered a standard business practice.

If cloud services are to proliferate the legal sector, it is necessary for the law firms to see the cost benefit in deploying this process change. Let us take the example of a law firm that handles corporate paperwork. The Legal Marketing Association study has shown that the average cost of printing and shipping legal contracts between the signing parties is $30. Assuming that an average law firm handles around 100 contracts every month, that’s an expenditure of around $3000 every month. Replacing this process with a cloud based electronic signature system like e-SignLive from companies like Silanis or DocuSign should bring the cost down to a few hundred dollars a month.

Despite the promise that cloud services bring to the efficiency and cost optimization of industries like law, there are a number of concerns that still need to be addressed. The LexisNexis survey revealed that nearly 60% of the surveyed respondents were not comfortable with the security of data stored in the cloud. Given that the legal sector handles extremely confidential data, the concerns about data security are likely to have a great impact on the adoption rate of cloud among law firms. Recent revelations about NSA’s spying programs have not helped either.

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2014 will be the year when cloud is expected to proliferate among non-technological industries like law. However, the long term adoption rate will depend on how well the cloud vendors can assure the potential customers about the safety and security of their systems.

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