The adoption of advanced technological solutions to add value to firm operations is a growing topic of discourse within the legal industry. This is particularly so when it comes to the utilisation of cloud computing technology. Cloud computing, whilst in no way new, has for years been championed as the next step in the evolution of technology, and considering how it has come to change the way companies work and their scalability, it could also be heralded as the next step in the evolution of business.[i]

A ‘Cloud’, You Say?

Cloud computing, also known as ‘the Cloud’, is a term used to refer to the provision of remote web-based servers to businesses in order to manage, share, process and store data instead of having to resort to local in-office network servers to do so. In essence, the cloud operates as a web-based software solution for businesses by relying on the Internet to enable on-demand access to “a shared pool of configurable computing resources”[ii], including private networks, dedicated servers, data storage space, online applications and other services, like email and package applications.

Microsoft Office 365, Gmail, Dropbox and Evernote are but some of the more notable examples of cloud-based services that are frequently in use across various industries.

Reaction from the Legal Industry

In recent years, the expediency, efficiency and accessibility offered by technological developments in cloud computing technology have popularised the adoption of cloud-based solutions by law firms in the form of tailored practice management software used for functions such as simplifying time-tracking for lawyers and generating accurate legal billing for clients.

The adoption of such solutions forms part of a growing trend amongst legal firms towards establishing a better technological presence and offering more competitive solutions to clients. In a 2021 Thompson Reuters Survey conducted on over 400 legal professionals, 74% of senior partners in the UK were found to believe in the need for greater firm investment in technology, with 89% of corporate counsel echoing the sentiment by emphasising the importance of exploring new ways to use technology innovatively.[iii] In light of the abovementioned, it comes as no surprise that cloud computing is increasingly coming to be viewed as a modern, more advanced alternative to traditional on-premises data management via in-house servers.

Benefits of Cloud Computing Solutions for Legal Practice

The ongoing popularisation of cloud-based solutions within the legal profession is arguably attributable to the advantages that it brings to legal practice, including:

Better Data Management

Cloud-based software solutions enable firms to better manage client data through simplified and automated system functions, increase data security in line with data protection obligations and reduce storage infrastructure costs all while increasing digital storage capacity. Cloud-based practice management software could also be seen as a way to streamline admin work and mitigate data management issues, particularly in light of a 2015 American Bar Association study[iv] indicating that administrative errors accounted for 23% of all malpractice claims.

Reliable Storage Infrastructure

Cloud computing also provides what could be deemed as a more reliable storage infrastructure by allowing for online data backups that serve as disaster recovery mechanisms and secure data against any potential physical damage or loss. This measure also helps avoid the unfavourable consequences of client dissatisfaction or harm to firm reputation where unanticipated damage occurs to data stored in-house.

Time and Cost Efficiency

Cloud service providers, the companies hosting cloud-based service platforms, tend to offer around-the-clock remote system monitoring and automatic system updates, which saves both time and costs that would otherwise be spent having expert technicians resolve such issues for servers located on-site.

Flexibility

Flexibility made possible through cloud computing is another crucial benefit that allows for remote work to adapt to changing work conditions and accommodate individual employee circumstances.

Flexibility and Covid-19

For many law firms, the urgency regarding the need to switch to digital solutions for the sake of work continuity has become ever-apparent during the Covid-19 pandemic. In this instance, cloud computing has proven particularly effective in rapidly adapting to changes in work situations by ensuring firms are still readily available, capable of accessing documents and able to work remotely to continue meeting client needs more safely and efficiently. Even before the Covid-19 pandemic, a 2016 American Bar Association TechReport highlighted the significance of flexible work when it revealed that 77% of lawyers (excluding those whose home is used as an office) regularly perform legal work from home, 38% while travelling and 28% from client offices.

However, in a more recent report published by Thompson Reuters in 2021,[v] 65% of UK lawyers maintained that remote working due to the Covid-19 pandemic positively impacted their well-being, with 86% seeking to incorporate some flexibility in the way they work in the future, such as working remotely at least 2 days a week. Interestingly, 1/3 of senior lawyers even suggested leaving their firms within 2 years where some form of flexibility could not be arranged. Thus, not only does the flexibility conferred through cloud-based technological solutions benefit lawyer well-being, which decreases the likelihoods of burnout and related administrative errors, as GLS had previously written about, but it could also be said to help reduce employee turnover and ultimately contribute to increased productivity.[vi]

Flexibility and Diversity

This advantage of remote work could, furthermore, be said to increase accessibility to a more qualified and international workforce in addition to unlocking a greater number of opportunities for those with disabilities or medical issues who are unable to remain physically within an office, promoting better diversity practices within firm culture.

Scalability

Cloud computing is also particularly advantageous for smaller enterprises and firms by enabling ‘simple and secure scaling’: firms can reap the benefits of flexible work whilst increasing data handling capacity and reducing expenditure on internal IT staff. Moreover, cloud computing technologies could be seen as furthering growth and scalability, since team expansion would not be restricted by geographical location or the need to purchase and distribute dedicated firm hardware, such as work laptops and tablets, as cloud-based services are designed to work on various types of hardware.

Legal Industry’s Hesitation towards Risks of Cloud Computing Solutions

Despite such benefits, there remains some hesitation within the legal industry regarding the full-scale adoption of cloud computing solutions. Historically, law firms were notorious for insisting on servers being hosted in-house to manage client data. Though there has been a recent shift towards adopting newer technological solutions, there are several reasons why the legal sector has taken more time to move on from a model other industries have long abandoned. These could be said to relate to a few risks that are inherent to such newer cloud-based technologies, including:

Service Stability

An issue that may come about from the use of cloud computing is the risk of service stability. A stark example of this is seen in the recent news surrounding US cloud computing services firm, Fastly, experiencing an outage that disabled access to several websites, including Amazon, the Financial Times, PayPal, Reddit and even the UK government’s gov.uk website. Despite lasting around an hour, the outage, which stemmed from technical issues in Fastly’s content delivery network service, was said to result in losses estimated to exceed £100mil.

Some have maintained that this event is merely a blip in the predicted exponential growth of cloud-based services, but it would, nevertheless, be prudent for firms and enterprises intending to make use of cloud computing technologies to be aware of the possible service stability risks and ensure that any requisite contingency plans are put in place.

Security and Data Protection

Another issue that the legal industry is wary of when it comes to cloud computing is the inherent security and data protection risks that may arise, despite these also being deemed one of the primary benefits of such cloud services.

There is massive publicity around several major cloud data breaches, such as the incident at Yahoo which saw over 1 billion users’ data stolen over time. Although Yahoo wasn’t the first incident involving a cloud breach, it was arguably one of the largest and most significant ones to date, with data ranging from users’ names and emails to password security questions being compromised.

As a result, there were concerns within the legal industry regarding the security and data privacy aspects of cloud computing solutions, such that any adoption by the legal sector has been relatively slow compared to other industries. Such hesitation is also largely attributable to the vast quantities of confidential and sensitive client information that the legal sector deals with that would need to be uploaded onto cloud-based servers.

It is crucial to note that cloud service providers and vendors do seek to ensure that cloud computing services are kept as secure and safe as possible through layers of heavy encryption and continuous security updates. Nonetheless, firms and enterprises seeking to rely on cloud solutions should not only ensure that they conduct proper screenings and extensive due diligence when selecting a service provider, but it would also be important for them to confirm that data processing, storage and transfer practices are kept up-to-date in line with the UK’s General Data Protection Regulation and Data Protection Act 2018 to safeguard their clients’ data security and privacy.

No Control Over Features

Firms may also be faced with risks relating to a lack of control over cloud-based software features used for their practice. As cloud service providers and vendors would have the ultimate say as to any software customisations or features availability and pricing, there is no guarantee that these same features and customisations would continue to be made available for the same price. Thus, firms may find themselves in the precarious position of needing to pay extra for these services, which their clients rely on.

Considering these challenges to cloud computing, it becomes clear why some law firms have prolonged migration to the cloud, especially given the legal industry’s general aversion to risk and primary duty to uphold client data confidentiality and security.

So, What is the Consensus?

However, the reality remains that in a post-Covid world, the accessibility, work efficiency and cost savings afforded by enterprise cloud-based computing is not a luxury. Rather, it is a competitive necessity driven by client, workforce and market demands and expectations. Recent reports and surveys have even highlighted the current trend of rapid uptake of technological solutions, like cloud computing, within the legal profession.

Though the significance of technology in law may have been discreet before, as of current, there is no disputing the fact that firms lacking the right technological systems will be stifled and forced to stagnate, and law firms that are able to continue working when physical access and mobility is restricted will grow and expand their services by continuing to meet client needs in new and innovative ways.