Why Cloud Software Beats On-Premise Software – At All Costs

Let’s start with a brief primer: ‘On-premise’ software is software that is downloaded to and manually updated at settled intervals on a specific device.  Cloud software is accessible via the internet, and is continually updated — in other words, the latest version is always available.  On-premise software is usually purchased once, and users have the option to pay for updates.  Cloud software is usually purchased on a continuing subscription basis (monthly or annually, at a discount).  For small firms, on-premise software is usually available on an individual user’s device or through a physical office server.  Cloud software is hosted on a server, too — but, the physical server is managed and maintained by the vendor, not the law firm.

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The thesis of this series of blog posts is that cloud software is better than on-premise software — which, in many law firms is called ‘legacy software’, since it’s the software that law firms have traditionally used.  Across this series of blog posts, I’ll cover three specific reasons why cloud software beats on-premise software, every time.

1) Dramatically Lower Overhead

Law firms, existing as they do in one of the most competitive business environments in the world, are cost-conscious.  This makes sense — lean law firms make more money by reducing overhead.  And, those law firms reluctant to move to the cloud (in part or in full), in part need to be convinced that cloud-based software is a financially prudent investment.  Many traditional law firms see a continuing subscription cost, and blanch at that option, having been conditioned to pay for software once, and never again. 

But, that presumed premise-based software advantage ignores the fact that most law firms take the notion to its illogical extreme: they don’t pay for the software upgrades required to allow premise-based software to continue to function well past its purchase date.  Paying once for a product that becomes inferior is not a wise decision when the alternative is to pay a subscription fee for daily access to the best version of a software.  Viewed in that light, a subscription to a cloud-based product is a significant value.  This is also true in terms of budgeting. 

2) Predictable Monthly Fee

With a cloud-based software, your monthly or annual costs are flattened.  You know exactly what you’ll pay every month.  With premise-based software, you’ll potentially face a more significant bill at a potentially inopportune time.  Modern business financial management is about predictability.  So, for the same reason, a software company would desire a subscription-based revenue model, your law firm would be desirous of predetermined technology costs.

Not only that, but the above description of costs relates only to the costs of the on-premise software itself.  There are also budgeting hiccups attendant upon the maintenance of the hardware that supports on-premise software. 

3) No Maintenance Required

If a law firm is using a server (or servers) to maintain a premise-based software model, those servers will break down, and said law firm will not be pleased with the replacement cost.  Opting for cloud-based software means that the law firm can push that cost onto its vendor.  Other replacement and maintenance costs circle premise-based software, too — like so many cash-hungry sharks with laser beams on their heads.  You need a physical space for your server. You need fans to cool it.  You acquire energy costs to build and care for that physical world.  Pushing those costs to cloud-based technology vendors should be a no-brainer for savvy lawyers.

In the second part of this series, we’ll address the massive flexibility cloud-based software brings to bear.

About the author

Jared D. Correia, Esq. is the CEO of Red Cave Law Firm Consulting, which offers subscription-based law firm business management consulting and technology services for solo and small law firms. Red Cave also works with legal institutions and legal-facing corporations to develop programming and content. A former practicing attorney, Jared has been advising lawyers and law firms for over a decade. He is a regular presenter at local, regional and national events, including ABA TECHSHOW. He regularly contributes to legal publications, including his column, ‘Managing,’ for Attorney at Work, and his ‘Law Practice Confidential’ advice column for Lawyerist. Jared is the author of the American Bar Association publication ‘Twitter in One Hour for Lawyers’. He is the host of the Legal Toolkit podcast on Legal Talk Network. Jared also teaches for Concord Law School, Suffolk University Law School and Solo Practice University. He loves James Taylor, but respects Ron Swanson; and, he tries to sneak Rolos when no one is looking.

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