The IT Utility for Law Firms

Over the past five years, the concept of an IT Utility for law firms has evolved from an interesting concept to an attractive business strategy. Growth of the IT Utility (off-premise IT services such as Co-location and Managed Services) is fueled by the confluence of increased interest by law firms in outsourcing routine administrative functions with rapidly maturing enabling technology such as security tools and services, affordable high bandwidth data communications, and management tools for large scale data centers. The IT Utility is part of a new model for managing technology infrastructure at law firms.

Here is a typical situation: The ABC law firm has enjoyed significant growth, adding attorneys and support staff. Office space is becoming a scarce commodity. Anticipated growth in the next year or so will put them over the edge and may mean relocation. Technology infrastructure has also expanded to keep up with firm growth. The data center now consumes nearly an entire floor of office space. To compound problems, power requirements for additional equipment in the data center will exceed the building's capacity and requires a significant upgrade to the building's electrical capacity. The firm now faces a decision to: 1) scale back expansion plans; 2) move to new offices, or 3) find a new home for the data center. Option # 3 has become very interesting.

Definitions

Co-location. A scenario in which a service provider is responsible for data center infrastructure ' physical security, power and air handling, servers and network component rack space, network bandwidth, internet connection. The consumer is responsible for equipment ' servers, data storage, network components, operating system and software.

Managed hosting. A scenario in which a service provider is responsible for provision of the IT infrastructure ' facility, physical security, servers, data storage, network components, internet connection ' as well as system level administration and support. The consumer (customer) is responsible for operating systems and applications.

Business Strategy

The concept of off-premise IT services has been around for many years and is commonplace in many business segments. Within the past couple of years, the concept has caught on in the legal market. Today's law firms, from the largest to the smallest, driven by client expectations for service and responsiveness, depend highly on secure, reliable, and constantly available IT services. This requirement for high availability leads to several business drivers that motivate law firms to seriously consider off premise IT services:

1. Risk management/Redundancy. Systems and technology have become the life-blood of the legal practice. Nearly every aspect of the practice, from communications (e-mail, mobile communications, electronic filing, and client extranets) to content management and document production to administrative systems such as time and billing and financial management requires 24×7 reliability. Co-location and managed hosting, once considered primarily for Web sites and e-commerce companies, is now attractive to law firms worried about disaster avoidance, offsite data back up and business continuity. Off premise facilities can offer a significantly higher level of physical security and redundant power, communications links and equipment that is typically available and affordable in traditional office buildings.
2. Office Space Management. Many firms struggle with accommodating growth ' new associates, lateral hires, and corresponding support staff ' along with needs for client facing facilities such as conference rooms and litigation war rooms. Data centers that consume large tracts of 'Class A' office space and require considerable power and air handling facilities are becoming interesting candidates for relocation. Related to the office space management issue, co-location can also offer greater flexibility to expand or contract in the event of merger, acquisition, or firm contraction activities.
3. Energy Costs (going green). Yes, computer technology is getting smaller and hopefully greener (less energy consumption). The offset is that capacity expansion (servers and storage) is outstripping these technological gains. The result is an increasing need for additional floor space, power (both primary and backup) and air handling. In particular, power and air handling requirements for data centers far exceed requirements for office space. The co-location option diminishes the need for augmented power and air handling and through economies of scale, can work to reduce the overall energy consumption.
4. Predictability of cost. With well-defined services agreements in place, infrastructure costs can be well defined and predictable. Spiraling infrastructure costs such as system and network management can be set to predictable levels. The application of IT management standards, such as ITIL, supporting large-scale data center management enables automation of routine processes. The result is that service providers can keep a tight control over costs through economies of scale.
5. Staff productivity. By getting out of the hardware management business (installation, continual upgrades, repair, replacement, etc.), internal staff can focus attention on enhancing and supporting technology for legal services. This strategy supports an increasing desire to focus on core competencies ' helping attorneys leverage technology in their practice. IT staff can focus more attention on more interesting and rewarding work. An important by product of a move to managed services is the IT staff is no longer disrupted by late night calls, and distracted by needing to replace failed network components or servers. Managed service options can also be attractive to firms that find it difficult to attract and retain top technical support talent to manage the IT infrastructure.

Considerations

Migration from an internal data center to an off premise service provider is serious business and will require considerable planning and highly focused management to be successful.

Getting the IT Staff on Board

The move to off premise IT services is not an opportunity to cut staff. Rather, it is an opportunity to redirect staff activity to attend to activities that are a higher value to the firm. You will need the IT staff's full attention and support on the migration to off premise services. A critical first step is a candid discussion on what this move will mean to them.

Project Management

Without a full commitment to strong project management principles, a move to co-location or managed services should not be started, as it would be a guarantee of failure. A commitment to project management starts at the highest levels of the firm as well as the commitment from the service provider. Key aspects of the project plan include:

• Clearly defined roles for every member of the project team, from the service provider and the law firm;
• Detailed understanding and documentation of the application portfolio;
• Comprehensive service agreement that covers:

• Contract with major providers ' to maintain control and flexibility do not subcontract network services through the co-location and managed services provider; and
• Implementation rehearsal plan to confirm timing, sequencing of steps, and the order of bringing up applications.

Looking Ahead

Several trends support continued attractiveness of off premise IT Services:

• Communications ' faster, increasing affordability, wireless;
• Data management/volumes ' data volumes exploding, no sign of abatement;
• Security, Risk Management ' increasing risks of man made and natural disasters (e.g., hurricanes; wild fires; flooding; terrorism); and
• Talent Pool ' challenge to attract and retain.

Conclusion

The IT Utility is a trend with traction ' by 2012, my prediction is this will be the norm rather than exception. Consider co-location and managed services now in planning for office space requirements. Now is the time to get out of the business of managing hardware and focus on managing and using information for true competitive advantage.

Over the past five years, the concept of an IT Utility for law firms has evolved from an interesting concept to an attractive business strategy. Growth of the IT Utility (off-premise IT services such as Co-location and Managed Services) is fueled by the confluence of increased interest by law firms in outsourcing routine administrative functions with rapidly maturing enabling technology such as security tools and services, affordable high bandwidth data communications, and management tools for large scale data centers. The IT Utility is part of a new model for managing technology infrastructure at law firms.

Here is a typical situation: The ABC law firm has enjoyed significant growth, adding attorneys and support staff. Office space is becoming a scarce commodity. Anticipated growth in the next year or so will put them over the edge and may mean relocation. Technology infrastructure has also expanded to keep up with firm growth. The data center now consumes nearly an entire floor of office space. To compound problems, power requirements for additional equipment in the data center will exceed the building's capacity and requires a significant upgrade to the building's electrical capacity. The firm now faces a decision to: 1) scale back expansion plans; 2) move to new offices, or 3) find a new home for the data center. Option # 3 has become very interesting.

Definitions

Co-location. A scenario in which a service provider is responsible for data center infrastructure ' physical security, power and air handling, servers and network component rack space, network bandwidth, internet connection. The consumer is responsible for equipment ' servers, data storage, network components, operating system and software.

Managed hosting. A scenario in which a service provider is responsible for provision of the IT infrastructure ' facility, physical security, servers, data storage, network components, internet connection ' as well as system level administration and support. The consumer (customer) is responsible for operating systems and applications.

Business Strategy

The concept of off-premise IT services has been around for many years and is commonplace in many business segments. Within the past couple of years, the concept has caught on in the legal market. Today's law firms, from the largest to the smallest, driven by client expectations for service and responsiveness, depend highly on secure, reliable, and constantly available IT services. This requirement for high availability leads to several business drivers that motivate law firms to seriously consider off premise IT services:

1. Risk management/Redundancy. Systems and technology have become the life-blood of the legal practice. Nearly every aspect of the practice, from communications (e-mail, mobile communications, electronic filing, and client extranets) to content management and document production to administrative systems such as time and billing and financial management requires 24×7 reliability. Co-location and managed hosting, once considered primarily for Web sites and e-commerce companies, is now attractive to law firms worried about disaster avoidance, offsite data back up and business continuity. Off premise facilities can offer a significantly higher level of physical security and redundant power, communications links and equipment that is typically available and affordable in traditional office buildings.
2. Office Space Management. Many firms struggle with accommodating growth ' new associates, lateral hires, and corresponding support staff ' along with needs for client facing facilities such as conference rooms and litigation war rooms. Data centers that consume large tracts of 'Class A' office space and require considerable power and air handling facilities are becoming interesting candidates for relocation. Related to the office space management issue, co-location can also offer greater flexibility to expand or contract in the event of merger, acquisition, or firm contraction activities.
3. Energy Costs (going green). Yes, computer technology is getting smaller and hopefully greener (less energy consumption). The offset is that capacity expansion (servers and storage) is outstripping these technological gains. The result is an increasing need for additional floor space, power (both primary and backup) and air handling. In particular, power and air handling requirements for data centers far exceed requirements for office space. The co-location option diminishes the need for augmented power and air handling and through economies of scale, can work to reduce the overall energy consumption.
4. Predictability of cost. With well-defined services agreements in place, infrastructure costs can be well defined and predictable. Spiraling infrastructure costs such as system and network management can be set to predictable levels. The application of IT management standards, such as ITIL, supporting large-scale data center management enables automation of routine processes. The result is that service providers can keep a tight control over costs through economies of scale.
5. Staff productivity. By getting out of the hardware management business (installation, continual upgrades, repair, replacement, etc.), internal staff can focus attention on enhancing and supporting technology for legal services. This strategy supports an increasing desire to focus on core competencies ' helping attorneys leverage technology in their practice. IT staff can focus more attention on more interesting and rewarding work. An important by product of a move to managed services is the IT staff is no longer disrupted by late night calls, and distracted by needing to replace failed network components or servers. Managed service options can also be attractive to firms that find it difficult to attract and retain top technical support talent to manage the IT infrastructure.

Considerations

Migration from an internal data center to an off premise service provider is serious business and will require considerable planning and highly focused management to be successful.

Getting the IT Staff on Board

The move to off premise IT services is not an opportunity to cut staff. Rather, it is an opportunity to redirect staff activity to attend to activities that are a higher value to the firm. You will need the IT staff's full attention and support on the migration to off premise services. A critical first step is a candid discussion on what this move will mean to them.

Project Management

Without a full commitment to strong project management principles, a move to co-location or managed services should not be started, as it would be a guarantee of failure. A commitment to project management starts at the highest levels of the firm as well as the commitment from the service provider. Key aspects of the project plan include:

• Clearly defined roles for every member of the project team, from the service provider and the law firm;
• Detailed understanding and documentation of the application portfolio;
• Comprehensive service agreement that covers:

• Contract with major providers ' to maintain control and flexibility do not subcontract network services through the co-location and managed services provider; and
• Implementation rehearsal plan to confirm timing, sequencing of steps, and the order of bringing up applications.

Looking Ahead

Several trends support continued attractiveness of off premise IT Services:

• Communications ' faster, increasing affordability, wireless;
• Data management/volumes ' data volumes exploding, no sign of abatement;
• Security, Risk Management ' increasing risks of man made and natural disasters (e.g., hurricanes; wild fires; flooding; terrorism); and
• Talent Pool ' challenge to attract and retain.

Conclusion

The IT Utility is a trend with traction ' by 2012, my prediction is this will be the norm rather than exception. Consider co-location and managed services now in planning for office space requirements. Now is the time to get out of the business of managing hardware and focus on managing and using information for true competitive advantage.