A survey conducted by Macfarlanes CIO Andrew Powell ahead of #GlenLegal19 has revealed a dramatic increase in cloud adoption rates, with well over three quarters of law firms saying their HR and payroll systems will be in the cloud next year and just under three quarters saying it will be SaaS.

The survey was returned by 64 international firms from across the UK, Europe and United States with annual turnovers ranging from £18m to £1.8bn.  The firms had a combined IT budget of around £700m.

It reviewed the rate of cloud adoption broken down by different systems such as practice management, document management, and, of course, HR and payroll.  The survey looked at which of those systems are or will be on premises; PaaS; IaaS; or SaaS measured across last year, this year and next year.

Last year more than 50% of law firms had their HR and payroll systems on premises but next year that is projected to drop to less than 15%, with just under three quarters of firms saying they will use a SaaS product.

Speaking to Legal IT Insider about the results, Powell said: “We changed our HR system recently and have put it live in SaaS – it’s all cloud-based and everything is accessed via a web interface, including a recruitment module.  I think one reason that cloud adoption has gone up in this area is that the HR system doesn’t have to deal with integrations to the extent of ‘core’ legal tech – no billing system or client matter intake or archiving to worry about.  With a DMS or PMS you have a central system with multiple touchpoints that you can’t just pick up and move to SaaS without some very careful planning.”

While you could argue that law firms’ email has always been in the cloud there is an undeniable shift to Exchange Online: last year around 90% of firms said their email was on premises and this year that percentage is more like 30%, with around half saying they will move to SaaS email.

Powell said: “Microsoft Enterprise Agreements have been changing for some time now.  There is a clear drive towards cloud services such as O365 and M365 and, as time goes on, fewer on-prem alternatives are available.  I think firms are embracing Exchange Online because Microsoft’s licensing model is driving them towards it.  Once you have an O365 commitment and are actually using it for Office deployment, there seems little point in building and running Exchange yourself.”

Document management will see a fairly dramatic increase in cloud adoption: over three quarters of firms said their DMS was on premises last year; just over half this year; and next year that figure is expected to creep to less than 50% with an increase in SaaS and IaaS.

Intranets will shift from being largely on premises to largely SaaS, and Powell said: “Similarly, if you have access to SharePoint Online as part of a wider Microsoft agreement why wouldn’t you build your intranet on it? Our MS agreement didn’t provide that a year ago so we opted for HighQ Publisher – it’s also SaaS and works really well as an Intranet – but we didn’t look at any on-prem solutions at the time due to high costs and slow deployment timeframes.”

You can also expect a dramatic shift towards Saas in the service desk:

When it comes to Dev & Test, while the number of on prem installations will drop below 50%, there are very few SaaS instances. Powell said: “This suggests that almost no-one is putting it in Azure or AWS. I would assume that is because to be useful, most dev and test environments are just as complicated as the live systems they are trying to replicate, and contain confidential data. PaaS/IaaS is potentially easier to do as you can replicate a live environment in its entirety on the same infrastructure, with the same infosec regime.”

Of course, the last bastion of on premness is the PMS, where just under three quarters of law firms say will still be on premises next year. Powell said: “It appears from this survey that very few firms are putting PMS in SaaS environments right now. There are some notable exceptions to that of course with a growing number of SAP implementations, 3E Cloud in use in the US and the future direction of Dynamics looking SaaS only… but if your starting point is an old PMS with multiple touchpoints, each with decades of iterative customisations, it’s difficult. Granted, any PMS replacement is difficult… and when we come to replace ours, we will look at SaaS options with an open mind. But if you have a PMS in place already and are presented with an option to move the same system to the cloud… I can see why that might seem daunting.”

This article first appeared in the March Orange Rag, click here to download: http://www.legaltechnology.com//wp-content/uploads/2019/03/insider321.pdf