Given that attorneys are extremely busy and pay attention to issues like legal practice management (LPM) systems only when going out on their own or reaching sufficient pain that they start asking isn’t there a better way, let’s focus on what are the actual costs of on premise solutions. The costs are both hard dollar and opportunity. In this note I will focus on hard dollar costs.
The most significant hard dollar costs are licensing, installation, hardware, and support. Let’s talk about them one at a time.
Licensing of smaller law office software packages are generally not prohibitive per seat. If you amortize it over say three years before you purchase the next upgrade it will be significantly less than a subscription service for SaaS.
But as you will discover licensing is the least of your expenses. What is the cost to install the software? Do you pay an IT professional their rate to set it up for you or do you work over the weekend to get it up and running? If you do not like messing with this sort of thing you will probably spend a couple hundred dollars to get it installed. (Alternatively if you are prepared to invest the time you should not discount your opportunity costs. For example, assuming the IT professional is twice as fast as you are at these tasks, do you really want to discount your legal billing rate by that much?)
Hardware cost can be trivial if you select a system which runs on your desktops/laptops accessing a centralized file system. In that case you may not even need to purchase a separate server computer dedicated to this purpose. You just have to be sure that your computer can handle the LPM system in addition to your other work. If your legal software requires a dedicated server you may now be talking over a Thousand Dollars for the hardware including networking gear.
If you have on-premise software you will need some sort of recovery plan to ensure that in the event of a hard disk failure your important data records are not lost. Either you need to spend the time creating and implementing a plan or once again you are calling your IT guy and spending real dollars with them. In addition any inconsistencies that arise between your on-premise LPM system and the operating system or other software packages will require you to hire that IT Consultant, unless in addition to practicing law, this is in your skill set.
What about needing to access your LPM when you are out of the office. This is difficult at best, but several attorneys will pay for software to “log into” their office LPM system. These packages tend to run slow but can get the job done, at least from your home. Hopefully, you don’t need to do this often and when you do it is just to check a quick detail.
I would advice putting together a total TCO budget for your LPM system and compare it to a subscription service SaaS offering. Unlike some comparisons I have found out on the web, I tried to take a conservative view on the TCO for on-premise and not assume that your practice needed more expensive solutions than you actually might.
Even if you find that costs are comparable or in some instances for DIY’ers lower for on-premise versus SaaS, you still need to think about the Opportunity Costs. Look for my Part 2 on this subject.
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