by Brett Owens*

More comment following the Insider’s recent op-ed on legal Software as a Service solutions…

Next Gen SaaS is here now For solos and small firms, that is.

This became apparent to me for the first time this March in Chicago. We were exhibiting as usual at ABA TechShow – and I was quickly struck by the attendees’ collective receptiveness to SaaS. It was a noticeable change over the show a year earlier.

I believe we are now at the SaaS tipping point for solo and small firms (which I define as firms between one and 10 attorneys in size). Our surveying of the landscape began four years ago when we launched a desktop-only time-tracking software product for attorneys, and intensified two years ago when we moved our product to the cloud.

At the time we were not sure if we’d survive the move. However we had to try because it became clear we were not going to be able to achieve enough scale with a one-time sale to the legal industry. To give you the full background, we sold the product for $99, and were trying to support a modest team of three.

So we made the move to SaaS out of necessity – not only for ourselves, but also for our product. While our initial SaaS version left much to be desired, we saw where the use of technology was going – with even attorneys – using an increasing combination of computers, smartphones, and tablets to perform work on. A SaaS hub was a necessity to support this move.

We made the leap, as did other startups in the legal technology space. Most of the others are cloud-based practice management systems, and I can say from first-hand experience that they are really starting to take away market share from the entrenched players in the space.

We currently have nine integration partners (practice management and accounting tools) so we see the market’s perception with these products first-hand. In the software world perception usually precedes sales trends, but it takes longer than you think it will. This is because the last thing someone wants to do is change out a piece of business software when they are used to it. Our integration inquiries used to be centered around the longtime stalwarts in the practice management space. Over the past year, this has changed significantly.  Attorneys now ask us which tools we recommend – and their strong preference is for a SaaS recommendation.

It took about five years for this trend to take hold – now that the tipping point has arrived, I don’t see anything stopping it for the foreseeable future. The startups are making a go of it, and this is a great thing for everyone.  It’s forced the old school software vendors to attempt a response as well. We will see if they succeed but the increased competition is benefiting all attorney software users.

Well, at the small firm level that is. I have to admit that we don’t really target firms above size 20 and I don’t see that changing anytime soon. The same goes for many of our startup cohorts. Personally I’ve found the sales process at these larger levels to be too onerous. It seems that deals are won with sales acumen and customization promises. For us, this doesn’t fit our strategy. We were only able to achieve SaaS scale with extreme focus. We don’t do one-off customizations. Popular feature requests are reviewed and rolled into our product based on priority we see.

This has allowed us to maintain a relatively low price point (our plans start at $19/month) which is rare for vendors in the industry. Our focus has also provided us with the opportunity to sell outside of the legal sector, where over 40% of our other business is generated.

I do believe the SaaS innovation at the small firm level can be applied upstream at medium and large firms. I think it will need to center around open APIs (basically getting one application to talk to another). This is an area where legal IT professionals can help tremendously.

Most vendors with open APIs are thrilled to have it used – the Silicon Valley buzzword is building an ecosystem. Most of the newer products also do not require much in the way of implementation consulting.  Which leaves a lot of spare horsepower that can be redirected towards these collective efforts. Next Gen SaaS is here for solo and small firms today.  I hope we can move this party upstream tomorrow.

* Brett Owens, CEO & Co-Founder, Chrometa, www.chrometa.com