Don’t Get Left Behind: The Competitive Edge of Early Cloud Adoption

If you’re a leader at a mid-sized or large law firm, you know you will have to migrate to the cloud at some point: It’s the way forward to modernize and optimize your operations. Moving your financial and practice management systems to the cloud can accelerate critical processes like billing and payment collection, provide greater visibility over your business, and deliver seamless access to up-to-the-minute software solutions that make your firm run better.

By the same token, the longer you delay your cloud migration, the further you fall behind your competitors who have already made the switch. If you are still undecided about adopting a cloud-based financial management solution at your firm, here are some reasons it pays to make the decision sooner rather than later.

You Won’t Get Locked Out of Innovation

Many cutting-edge technologies are only available in the cloud, and it’s likely that future solutions will be increasingly cloud based given the massive sums of money that are being invested in cloud technology. For instance, if you’re considering use cases for artificial intelligence (AI) in your firm—a technology that could automate up to 44% of legal services—you will need to be in the cloud.

What’s more, once you’ve adopted a software-as-a-service (SaaS) cloud solution, the providers will handle all the upgrades so you always have the latest software version with all the newest features.

Your Competitors Won’t Leave You Behind

You may not feel ready to make the switch, but that doesn’t mean your competitors feel the same. Industry surveys regularly find that firms are not only incorporating cloud solutions into their tech stacks, but that they are doing so at an increasing rate. In fact, in the 2023 International Legal Technology Association (ILTA) survey, 98% of firms reported that they use some form of cloud solution.

Firms that are slow to move to cloud solutions should remember that the decision to adopt a cloud solution is only the first step. Before you will see meaningful, tangible benefits, the system still needs to be configured and implemented, employees need to be trained, and you have to ensure that all the employees are actively and properly using the system.

If you still haven’t decided to switch to cloud, you’re likely putting your firm at a serious competitive disadvantage.

You Won’t Leave Money on the Table

We recently conducted a survey across more than 60 large and mid-sized law firms and found that, despite the broad recognition that being in the cloud could provide a distinct competitive advantage, 57% of customers still plan to wait at least three years before moving to cloud.

Unfortunately, each day you’re not in the cloud, you risk leaving money on the table. To take just one example, let’s assume that a cloud solution’s billing process increases an associate’s collection rate from 80% to 81%. If that associate bills 40 hours each week at $300/hr., this relatively minor increase in collection rate equates to an additional $6,240 per year in revenue and $31,200 over the next five years.

Let’s also assume that you have 30 total associates at your firm. If each associate sees a commensurate 1% increase in realization, your firm could reclaim $187,200 per year. Over just five years, this 1% increase generates nearly $1,000,000 in recouped revenue.

You Won’t Miss Out on Vital Intelligence

Cloud-native solutions provide real-time business intelligence by analyzing both your firm’s data and third-party sources. This provides clearer visibility into your matters, clients, and business performance, enabling you to make informed, data-driven decisions about your day-to-day operations and future business strategy.

The best part is that these benefits are mutually reinforcing and can drive positive outcomes in other strategic areas of your firm. Greater efficiency in bill processing can lead to higher client satisfaction, either because the billing process is smoother or because lawyers can devote more personal attention to each client. Higher client satisfaction likely will lead to better client retention and additional referrals, both of which boost revenue even further.

The earlier you make the move to cloud, the more benefits this virtuous circle can produce, so don’t wait.