Cloud technology has transformed the operations of businesses all over the world, giving them much more potential for flexibility and scalability. CRM and sales data are stored using platforms like Salesforce and HubSpot. Governance, risk, and compliance software applications are typically SaaS. In recent years we have seen the emergence of recruitment and HR applications like Success Factors and Workday, while finance data is stored in SAP Hana and the like. From sales to finance, CRM to HR, it seems like every area of business now has content stored in the cloud. Yet, when compared to other comparable industries, the legal sector has been considerably slower to explore the potential of the cloud.

Cloud usage in law firms increased to 60% in 2021, up from 59% in 2020, ABA Legal Technology Survey Report found. So, what explains this hesitancy to migrate to the cloud? Several reasons can be attributed to this sluggish transition to cloud technology: fears over the security of sensitive information and documents, potential high costs of transitioning, and a working culture that is largely office-based with no need for remote data access. However, times have changed in the wake of the Covid-19 pandemic. The Thomson Reuters report, 2021 State of Corporate Law Departments (SCLD), details how, for many legal departments, COVID-19 accelerated the pace of change:

“The pandemic year of 2020 stress-tested the current operations of most law departments”, the report notes. “Through unprecedented disruption, crisis management, and immediate shifts to new ways of working, the gaps within departments were revealed. Law department leaders quickly realised that traditional methods of work could evolve and still meet departmental goals.”

The SCLD report also found that 30% of corporate law departments are increasing their spending on technology, while 44% are focused on making better use of tech tools they already have. Many legal departments have already begun using this technology, while others have plans to do so, through cloud-based software-as-service options (SaaS). For law departments that have yet to move to the cloud, as we head into the new year, now may be the time to make the transition.

Why legal departments are hesitant to adopt cloud technology

Legal professionals are, by their nature, risk-averse. This is because a lawyer’s job is to protect their company from any potential legal issues or liabilities, which makes them wary of anything new or untested. As such, they may be more comfortable with traditional on-premises systems as they believe these offer superior security controls over their data than a third-party provider would.

Legal departments deal with copious amounts of sensitive and confidential data daily and need to adhere to strict rules surrounding data and privacy, which naturally means data security is a key issue when adopting cloud technology. There is a perception among some members of legal departments that on-premises solutions are more secure than their cloud counterparts due to their lack of exposure to external threats such as hackers or malicious actors.

However, this isn’t necessarily true; while on-premises systems can be better protected from external threats if properly configured and maintained by an experienced team of IT professionals, they can also suffer from internal misconfigurations or flaws in security protocols due to human error. In comparison, modern cloud architectures leverage sophisticated automation tools, which can help ensure security protocols remain up-to-date at scale without manual intervention – reducing the risk of costly mistakes being made by system administrators.

In spite of these concerns around security and uncertainty surrounding digital transformation initiatives within legal departments, there are many advantages associated with leveraging cloud technologies.

What are the benefits of cloud technology for legal departments?

With the rise of cloud computing, in-house legal departments have more technology options than ever before. While the use of cloud computing can present some challenges, it also offers many significant benefits that can help in-house legal departments become more efficient.

By leveraging cloud computing solutions, organizations can significantly improve efficiency, doing more with the resources they have. Companies no longer need to purchase, install, and maintain on-site hardware and software. As a result, the company’s IT staff can be better utilized to provide more value elsewhere within the organization. Additionally, since cloud services tend to be “pay as you go” models, companies only pay for what they use instead of being locked into expensive long-term contracts with traditional vendors.

Another significant benefit of cloud computing is improved agility and scalability. The ability to quickly scale up or down based on current needs allows companies to respond quickly to changing market conditions and efficiently manage peak workloads without having to over-invest in resources that may not be needed all year round. This flexibility allows organizations to maximize their investments while still meeting departmental demands. Furthermore, cloud solutions enable remote collaboration, which is especially beneficial when teams are spread across multiple locations or working remotely.

Security and data protection should never be overlooked as an important factor when considering any technology solution. Most leading cloud providers have sophisticated security measures in place, such as encryption protocols and access control measures that help protect data from unauthorized access or theft by malicious actors. Additionally, many providers utilize multi-factor authentication methods, which add another layer of protection against attacks from hackers or other malicious actors looking to gain access to your organization’s sensitive data. Compared to regular on-premises IT infrastructure, cloud technology offers inherent security benefits: storing confidential data in the cloud can protect against both human and natural disasters, for example.

But what are the possible implications to legal departments of not accepting SaaS as the de facto mode for legal applications?

• Inability to shift the ‘cost-centre’ needle in business and retain fixed costs vs more flexible SaaS costs.
• Unable to access many of the SaaS only applications available on the marketplace.
• Missing out on data & insights that SaaS vendors often provide as part of their product.
• Increased integration costs and challenges with other applications have a two-fold impact; missing automation opportunities and the increased overhead of maintaining integrations that are put in place.
• Reduced agility in the face of a changing demographic.
• When you move your application from your on-premises data centre to the Cloud, you’ll benefit from zero operational emissions from running that application.

The future of law tech is in the Cloud

Cloud computing is rapidly becoming a viable solution for in-house legal departments, offering many benefits that could be of great value to the team. Cloud computing provides cost savings by using resources on demand rather than storing them on-premises, giving your legal department the scalability and agility, that traditional models lack. Cloud computing offers an exciting opportunity to in-house legal departments, allowing them to reap the benefits of modern technologies while still protecting their data.

Altien Legal Matter Manager (LMM) offers features that let you manage and integrate your everyday activities into an effective Matter Management Solution. To learn more about our services, contact us today.