Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In the late 1980s and early 1990s, technology was simplistic and the associated costs were, therefore, simplistic. Today, the technology environments for legal organizations are much more sophisticated causing the cost structures to also be much more complex. The cost of technology has been growing at a double-digit pace for the past 12 years and is expected to continue to increase well into the future. For law firms, information technology is the third-largest operating expense, trailing just behind the cost of office space and salaries. For a firm of 21 to 40 lawyers, the average cost for computer equipment expenses is $8,340 per attorney a year, or approximately 2 percent of the firm’s annual revenue, with the ratio of technical staff to attorneys exceeding .05 or one full-time equivalent for more than 20 attorneys. Factors of Rising Costs There are many factors driving up these costs; however, the overarching reason is pretty obvious. We are always looking for ways to improve our services, our productivity and ultimately our bottom line. Technology offers us these promises, but we are continually on the lookout for something faster, more robust or more flexible. This increase in technology expenses has been happening gradually right under our noses and because technology is used in every aspect of a business, we often don’t know the true costs. As our networks become more complex, there becomes a multitude of points that have to be managed, and as a result there are also multiple points of failure, including hardware and software, telecommunications, backup services, and much more. The Internet has also been a major contributor to the heightened complexity. Now, with the potential of malicious attacks, computer networks require more equipment, such as firewalls, anti-virus software or anti-spam solutions, and there is a potentially significant cost of not using these technologies. One of the major reasons we are on a never-ending mission to improve our technology is for increased convenience. Being able to work at home or when traveling has become a normal business practice. Therefore, viable remote access solutions have become a critical element of an IT infrastructure that are also driving up IT expenses. As businesses rely more on technology and strive to become paperless environments, their once paper documents turn into electronic files and require more storage space. The expanded use of PDFs and image files stored on systems and often replicated multiple times throughout one organization also amplifies the need for more storage space. This growth in storage requirements introduces storage management challenges related to backup media and space needed that negatively impacts the bottom line. When budgeting for technology, hardware and software costs quickly come to mind, but often people forget to include the cost of the staff dedicated to keeping the system up and running and positioning the firm on the cutting-edge of technology. For a 20-attorney law firm, for example, one full-time person is needed to manage the infrastructure. Therefore, as a system becomes more complex, the size of the staff increases and the costs multiply. Another downside is there isn’t always someone available, day or night, to answer the technical questions of lawyers working long hours. And the management of a tech person, if you are a lawyer, is often a challenge. It not only takes you away from practicing law, but you typically can’t provide them with the technical direction that they need and their growth opportunities are limited, making recruitment and retention difficult. Why be in the �IT’ Business? Let’s face it, technology is a critical element of almost any business these days. We couldn’t live without it. However, most legal professionals did not get years of education to deal with the frustrations associated with managing a computer network. But what are your options? A strong technology infrastructure is critical to the firm’s success and someone has to be responsible for it. The answer: Like many other functions within your organization, you could outsource it to a specialist. Like most services, you have many different alternatives. In IT outsourcing there are a range of options. On one end of the spectrum, you can continue to manage your network in-house, and hire a technology consulting firm to handle hardware and software upgrades, maintenance, implementations, troubleshooting and help desk support. Or, you can outsource your entire computer network from soup to nuts. This would include all your servers and applications, as well as your employees’ individual desktops. In the complete outsourced scenario, you provide your staff with relatively inexpensive workstations with applications and data being stored on fault-tolerant systems at a highly secure, off-site data center and accessed via a dedicated line. Your staff can work at home, in another office, at a client location or on the road and access their entire desktop just like they would if they were in the office. By outsourcing, you also have a team of experts that are focusing on preventative maintenance. The IT service provider would offer 24-7 network administration, network performance monitoring, network and applications software updates, backup and security monitoring. With an in-house IT department it is difficult to have all this expertise on staff. Additionally, having your data and applications stored at an off-site location, provides the necessary protection in the event of a system failure, as well as the secondary storage to support the organization’s growth. And, by turning to IT experts to manage your computing environment, you can be ensured that you will always have updated protection from intruders, viruses, spam and spyware. It has been calculated that the average annual savings for outsourcing is 25 to 30 percent. Add these costs to the other benefits of outsourcing your IT infrastructure � high performance; no need to deal with hardware or software upgrades; 24-7 support; and robust security, remote access and disaster recovery � and the idea of getting out of the IT business sounds pretty good. Edward J. Grubb is president and co-founder of Network Alternatives Inc. (NAI). He has more than 20 years of experience in law office computing. NAI is a nationally recognized provider of full-service, cost-effective and reliable technology solutions for law firms and other professional services organizations. NAI provides solutions that are distinctively tailored to meet its clients’ needs and include: application hosting, document management, file management, consulting, network integration and customer support. Contact Grubb at [email protected].

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.