In today’s unstable economic environment, Canadian businesses will look to cut costs where they can. Law firms, big or small, will be no different. Most law firms fall into the small business category of less than 99 employees, which make up 97.8 per cent of all businesses operating in Canada, according to StatsCan.
Smaller enterprises that run leaner than their larger competitors often miss the opportunity to think strategically about cost-cutting in a tough economy. When there isn’t a lot of fat to cut, smaller firms tend to hold back on new investments as a way to control expense.
For this recession in the 21st century, putting off investments in new technology may not only mean missed opportunity for improved productivity, which is a form of cost reduction, it can also cause the legal professional not to invest in protecting one of their most important assets and liabilities in the digital age — client and practice information.
Technology is even more essential for high-capacity performance in troubled times, but upgrades can be daunting for business owners due to the capital cost investment involved. Tough economic times mean pressure on partners to maximize profitability, often by eliminating processes that take time away from billable work.
Lawyers today are well advised to consider technology as a means to achieving greater efficiencies and client data security, but are often overwhelmed with managing the complexity of their computers, especially in smaller firms. But new methods of simplified technology ownership should be considered. Web-based application services on a pay-per-use basis, as well as all-in-one secure computing solutions are an example of these.
New and upgraded technology is more important than ever before for a firm’s success — the changing legal landscape dictates that not just speed but also data security are crucial in maintaining a competitive edge. In addition to private client and case information, legal professionals will now be carrying more and more critical electronic documents around on their computers. As an example, with the Supreme Court of Canada’s new requirement that counsel may now only file appeals electronically to accommodate new electronic equipment in courtrooms, it is clear that legal practitioners will have to step up data security measures to protect the increasing amount of sensitive information housed on their notebook PCs.
Data security is essential when considering technology use, but not inconsistent with productivity gains. In fact, if you want to consider a potential major drag on your productivity in the challenging year ahead, what would happen to your business if you didn’t make that technology upgrade you were planning to, or didn’t implement those new security measures and the hard drive failed on your computer, or your notebook was lost and not properly secured? How much time would unsecure or poorly stored data cost you in this event?
Tough economic times or not, what happens when a lawyer’s notebook, now containing more client data than ever before, is stolen on the subway? Or breached through one of the Trojan-type viruses that now permeate the Internet? The growing level of confidential data being stored on PCs by lawyers means that lost or stolen devices containing unencrypted client or practice information would be a catastrophic loss. Negligence in protecting electronic data could result in grave implications for a law practitioner, not the least of which being the disclosure of sensitive client information leading to malpractice claims and complaints to the Law Society of Upper Canada.
Information Protection now a Critical Business Requirement
Beyond losing competitive intelligence and potentially violating client confidentialities, IDC reported in 2007 that 70 per cent of small businesses that experience a major data loss go “belly up” within one year. This seems like a shocking statistic, but when you consider what we are packing into our computers today, and that this may be the only place we store it, it is plausible. A changing reality of the digital age has crept up on us. The Federal Judicial Center in the U.S. reports that approximately 97 per cent of corporate information is now stored electronically and less than 10 per cent of it will ever be printed. Good for the trees, however, not so good if your computer fails and you just didn’t get around to putting that new backup system in place.
Research from AMI Partners Inc. also indicates that 70 per cent of Canadian small businesses feel data security is a high or very high priority to their business. Data security was ranked as the highest business priority among other necessary business tools such as client relationship management, business insurance, business mobility, and accounting. Such numbers suggest that it is fast becoming no longer acceptable to walk around with unprotected data on your computer — particularly for lawyers.
Protecting your data is now a necessary means in protecting your business. And the only way to protect your firm from inadvertent loss or malicious theft of client or practice data is to secure your information with the right technology. But how can firms adopt the seemingly costly, high-tech solutions they need in a time where capital budgets are constrained?
Financing Options in a Cash-Strapped Economy
Partners in firms across Canada can attest that maximizing billable hours is more important than ever in this tough recessionary time and because of this most lawyers do not have the time or expertise to worry about data security or information technology investment. In fact, with overheads for sole practitioners and small firms rising, there often doesn’t seem to be a justifiable way to spend on new secure technology solutions.
As such, in the face of a challenging economy, many information technology companies have begun offering financing options such as leasing programs so businesses can still make the technology purchases they need while tightening budgets. And the recent federal budget announcement permits from now until February 2011 that IT purchases can be fully expensed in the first year of ownership, a significant encouragement and benefit for companies wise enough to make the choice of investing in improved operations and security in 2009.
Financing options such as leasing are now available for everything from mobile technology solutions and enhanced support to fully managed, secure, encrypted notebooks that include set-up, security management, and help desk support. This purchasing strategy eases the financial strain on smaller firms, who can then use the time they would normally spend on maintaining their computers and convert it into more billable hours.
This purchase methodology means that all lawyers, whether sole practitioners or partners of large firms, can still make data security and productivity a priority, while preserving capital. And why bother buying, managing, and disposing of technology when someone else will do it for you at a fraction of your billable rate.
IT leasing makes sense for firms who are more comfortable adopting a “pay-as-you-go” approach to new computing products. Without committing to a large lump-sum payment, leases offer firms the choice of new technology as a manageable operating expense that is not considered an asset, unlike purchased/owned equipment.
Save Money by Staying Current
The investment in new technology can be a no-brainer for law firms, given the various IT leasing options available and the importance of data security and productivity gains available in today’s changing legal landscape. A firm’s competitive edge is sharpened with access to current technology, while the welcome result of savings is something all firms can appreciate in this gloomy economic period.
Whether a firm uses their technology to grow their Web 2.0 presence or simply to improve their level of operating efficiency, having the latest tools are a must in keeping up with the competition, particularly in this cash-starved time where the competition will be stiffer than ever. And given the new processes set by Canadian courts, data security is a must and should be seen as a mandate for all practising law professionals.
Larry Keating is president and chief executive officer of No Panic Computing (NPC) that has partnered with HP, Intel, and Iron Mountain and brought to market the world’s first fully secure and supported “notebook-as-a-service” for small business professionals. To learn more about NPC’s data security options and their leasing model, visit www.nopaniccomputing.com