Cloud Computing. The Pros, Cons And Costs Of Cloud Based Services For Law Firms
Since cloud-based services hit the market, users of all kinds from commercial outfits to personal users have jumped on board the bandwagon. However, law firms have been cautious to adopt this new service as they investigate how to best leverage the technology. In doing its due diligence, law firms have been looking at its advantages, potential legal concerns it may present, and the practical costs associated with it versus those they already pay now for in-house IT services. We had a chance to speak with Darren Cerasi, Managing Director at I-Analysis, about cloud computing services, its pros and cons, costs, and whether there is a real cause for concern for law firms when adopting this new technology into their existing infrastructure.
Conventus Law: What is cloud-based computing?
I-Analysis: A generally accepted definition is that cloud-based computing is the usage of remote computers on the Internet to host, manage, and process data, rather than a local server or a personal computer.
So using that definition one could argue that cloud-based computing has been around for quite a long time and that it is just a term invented by the marketing department. For example Yahoo! Mail and Gmail have been around for some time and these are cloud-based solutions.
The reality is a little more subtle as there are many cloud-based offerings available to customers. From simple email hosting and document storage to private clouds in country or even on-premise. Some prefer terms such as SaaS and IaaS, which are Software as a Service and Infrastructure as a Service. These denote the usage of virtual computing and monthly billing which allow for greater scalability and redundancy to organisation’s IT infrastructure.
CL: One area where cloud-based computing is likely to rise in popularity in 2016 is in the e-discovery marketplace. However, there are some law firms that feel an on-site or locally hosted solution is a safer and more practical option than a cloud-based one. In your professional opinion, which one is better equipped to handle a firm’s needs?
I-Analysis: It really depends on what the requirement is.
There are pros and cons to each solution. The advantage of cloud-based solutions is that in theory they can scale up quickly to meet tight deadlines and large document sets. The reality though is that clients need to perform a due diligence and better understand what each service provider is offering.
The problem with cloud-based eDiscovery is that it suffers from a misnomer. What a client might think is cloud-based is actually just a server in a datacentre. So like I said, a proper due diligence on what the service provider is offering is a good first step.
There are actually many different cloud-based computing eDiscovery services. These cover the entire spectrum of the EDRM, from Information Management all the way to Production. What people tend to focus on though is cloud-based hosting for eDiscovery, which seems odd to me.
Having said all that, clients need to ensure that they have the proper bandwidth to make use of cloud-based offerings.
In one case, we had a lawyer at a prominent law firm complain about the speed of access to one of our eDiscovery platforms. While we were working with our own network service provider to make improvements on our end, he emailed us to inform us that the problem had been resolved as initially he had been accessing the platform from his home.
CL: What are some of the concerns that law firms throughout Asia have shared with you on migrating to a cloud, and is there actual cause for their concerns?
I-Analysis: The main concern with putting data in the cloud is the perceived lack of control. The data is just “out there, in the cloud” but what does that actually mean? When we start asking specific questions, many times clients realise that they haven’t given the issues much thought. This is understandable as their primary duty is to provide legal services and not to know about these technologies.
Another concern of course is data security. This is a genuine fear founded on what clients read in the news. Data breaches are growing exponentially, and this concern is certainly understandable. One argument that has been made by clients is that as this is a cloud-based service provider’s core business, it is in the their best interest to have strong data security, whether they are providing email, storage or eDiscovery solutions. On the other hand, another argument I have heard been made is that putting your confidential data in the cloud draws attention to it. I am not so sure I agree with that line of reasoning, but some people use that argument as a reason to continue storing their data on-site.
A final concern is that clients don’t know where their data actually resides. This can be a problem because sometimes putting data in the cloud means that it gets copied or moved to another jurisdiction. What this means is that clients may be in breach of certain national regulations or even exposing themselves to production requests from foreign regulators or parties as the data now resides within the confines of another jurisdiction.
CL: What are some of the practical reasons for why a law firm should migrate to a cloud? (i.e. what makes cloud-computing better than the traditional on-site or locally hosted solution?)
I-Analysis: The clear advantage is that law firms do not need to own and operate the technology. There are a lot of hidden costs involved in bringing technology in-house, and to truly know the expenses law firms must perform a proper Total Cost of Ownership exercise. This will help them better understand and quantify the direct and indirect costs.
Some indirect costs are staff training, staff retention, updating the technology, utilities and server downtime.
CL: What happens if all of a law firm’s data and e-discovery is maintained on a cloud that goes bankrupt?
I-Analysis: Well first of all, no organisation is going to put all of their data in the cloud.
Having said that, every customer whether it is a law firm or not must carefully read the terms and conditions of their agreement with the cloud-based service provider. This is to ensure that they do not run into issues such as the one you have described in your question.
To best protect themselves, law firms should conduct regular back-ups, as this is a must for any organisation whether they put their data in the cloud or not.
For further information, please contact:
Darren Cerasi, Managing Director, i-Analysis