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Legal Technology Trends

Year in Review: Legal Cloud Computing in 2013

By Larry Port

Legal cloud computing software is no longer new. What I would define as the “modern era” of Internet-based legal systems — heralded by the launch of Rocket Matter (full disclosure, that is my company) and Clio in 2008 — is now five years old.

In computing terms, that’s the Jurassic era.

Legal cloud computing products are now flush with features and are changing the game when it comes to small law firm practice management. In 2013 we witnessed additional state bar ethics committees opining on cloud computing, and how attorneys should think about this new generation of legal software. The following are some of the key developments we saw this year.

1. Tipping Point for Cloud Reached?

From my vantage point, not only as the CEO of a legal cloud computing company but someone who researches, writes and gives CLE on the topic, the cloud tipped over in 2013 or is about to do so. Using Internet-based tools is no longer the domain of the legal tech thought-leaders and trendsetters. Plugged-in or not, lawyers are paying more attention to what can be done with remote computing tools.

Additionally, initial suspicions of the cloud in the legal realm are rapidly dissipating. The economics and convenience of cloud computing for lawyers is simply overpowering the resistance to the idea.

I’ve seen this through the lens of both anecdotal evidence and raw data. This year, I gave several CLE talks on mobile technologies (which require the cloud) and cloud computing ethics. The most interesting of these encounters occurred at the Florida Bar annual convention. I was struck by the level of interest from all sorts of lawyers, not just the technophiles. Approximately 200 attorneys showed up to the talk, and this was not a technology-specific conference. It was the first time in years of speaking on the subject that my audience was so large and diverse: I’ve never seen so many mainstream, non-techie lawyers attend a talk on the cloud.

From a hard-data perspective, the trends point to exponentially growing adoption. The 2013 ABA Legal Technology Survey Report recorded a 10-point jump in percentage of lawyers using cloud-based software (from 21 percent in 2012 to 31 in 2013). That said, the percentage of legal practice management and time and billing cloud adoption is still relatively small, with approximately 4 to 5 percent of the market. However, the number of people using business tools like Dropbox or Evernote is significant (15 and 9 percent, respectively). As a measure of interest in online time and billing, our own data at Rocket Matter suggests a significant uptick in interest, as measured by more inbound leads and sign-ups. When compared to the previous years, some months have seen upwards of 50 percent more interest than in 2012.

2. Cloud Products Mature

If you didn’t hear any mind-blowing product announcements from the leading cloud legal providers in 2013, that’s because most of the major features required by users have already been built. Instead, what you most likely heard was a push into mobile and additions to core functionality. While the maturation of legal cloud software might not make for splashy press releases, the truth of the matter is that legal consumers are now enjoying increasingly rich functionality as existing features get improved and smartphone apps come to market.

That said, legal cloud providers have been hard at work and announced some exciting new offerings, including the following:

  • DirectLaw: DirectLaw, the online client portal and document generation service, integrated with Box, the cloud-based document storage contender. This integration enables DirectLaw subscribers to add secure folders for each matter and store the client’s documents for each matter within the Box environment. The Florida-based company also rolled out the ability to price and sell legal services through their platform.
  • Rocket Matter: Rocket Matter spent most of 2013 with improvements to time and billing functionality, including integration with credit card payments, billing options for Dropbox and Evernote, improved reporting and the first-ever native Android legal time and billing app, to complement the iPhone app.  Rocket Matter also diversified its offerings with an Internet marketing product, Rocket X1.
  • Clio: Clio had an exciting year with its first-ever user conference in September, where it launched a slick-looking native iPhone app. The conference featured legal tech luminaries such as Bob Ambrogi and Richard Granat, along with an “unconference” led by LexThink’s Matt Homann. In addition, the Vancouver-based company celebrated its five-year anniversary and opened an international office in Dublin, Ireland.
  • Nextpoint: Nextpoint was awarded a patent for its cloud-based e-discovery and trial tools. The U.S. patent “awards Nextpoint exclusive rights to the use of virtualized computing resources for storing, processing and accessing electronic data in support of litigation processes.”
  • Fastcase: Internet legal research provider Fastcase and William S. Hein & Co. announced a new partnership in which the companies will share content. Fastcase integrated HeinOnline’s extensive law review and historical state statute collection in search results, with full access available to Fastcase subscribers who additionally subscribe to Hein’s law review database.
3. Florida Joins the Ethics Opinion Bandwagon

Florida joined the growing cadre of state bars that have issued ethics opinions. Like others before it, Florida approved the use of cloud computing as long as lawyers conduct some due diligence on the vendor, specifically vis a vis client confidentiality. The opinion states: “In summary, lawyers may use cloud computing if they take reasonable precautions to ensure that confidentiality of client information is maintained.”

By doing so, Florida joins a long list of states, including California, Pennsylvania, New York, Ohio, North Carolina, Arizona and others, that have expressed a similar opinion. Go ahead and use the cloud, the state bars are saying, as long as you do a little research on the subject and know who you’re dealing with.

4. A Big Year for Box

Cloud storage provider Box is on quite a roll and is making a serious push into the legal vertical. Inc. magazine named Box CEO and co-founder Adam Levie “Entrepreneur of the Year” for 2013. Originally designed for business, Box is similar to Dropbox in that it allows users to synchronize files across devices, but it adds on enterprise-level features such as role-based access controls, versioning and administrative consoles for managing users. Think of Box as Dropbox with more-robust business features.

In 2013 alone, they inked deals with most of the major legal cloud vendors, including many of those listed above. (Bob Ambrogi’s LawSites blog reports the integrations here.) One thing you’ll be seeing a lot of in 2014 is Box and how it compares to other cloud-based file management tools for law firms.

As for what legal cloud computing trends to watch for in 2014? Stay tuned to Attorney at Work for some wild predictions involving wearable tech gear, drones and fire-breathing roller derby teams in the new year.

Larry Port is the Founding Partner and Chief Software Architect of Rocket Matter, a leading web-based legal practice management and time tracking product. 

 

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