Implementing a hosted practice management system

More than 2,200 UK legal practices and ABSs now use a hosted practice management system (PMS) with their system and data held (hosted) in a secure, remote location, accessed via the internet, in preference to keeping servers and software on-premise in their own offices. That is roughly 20 per cent of all law firms and ABSs, adding up to more than 13,000 seats. In the small and mid-size legal practices where we operate most, legal practices and ABSs using hosted PMSs range from one to more than 500 users, so there are attractive options for all legal practices.

Our current research with UK PMS suppliers and third party hosting companies confirms that only a few suppliers do not yet have a law firm using their PMS in a hosted environment. Even those that don’t mostly have hosting partners lined up. Hosted environments are being provided either by the PMS supplier (at their own data centre) or with specialist hosting companies using either their own data centres or dedicated space in a shared data centre, including Microsoft.

The picture is very different now from just three years ago with many more users of hosted PMSs and many more hosting companies operating in the legal sector. The main suppliers of hosted PMSs and hosting facilities back then are still here now and have learned from their experience, but so have the new entrants as technology has become more capable in this area.

As in other business sectors, there is an inexorable march in this direction, with many more legal practices moving to a secure, hosted environment over time.

Go hosted or not?

You need to evaluate how IT changes could improve your business and cost these changes. This could be a catalyst to drive through new initiatives to enable you to get the best return from the opportunities that a move to a reliable, flexible, up to date, hosted IT platform can create. However, decisions here are generally prompted by negatives:

  • a need to upgrade hardware or software – where spreading costs through monthly payments rather than capital outlay can ease pressure on cash flow
  • concern about disaster recovery and business continuity options with an on-premise solutions, where compliance is now required in this area
  • frustration with current IT systems where it can be difficult to get the right balance between essential system maintenance and effective development of IT systems.

When it comes to comparing costs of hosted and on-premise options, most legal practices are inclined to compare only direct costs; not the value of associated benefits such as reduction in management time, impact of holiday cover or improvements in efficiency as there’s time for more development, when fire-fighting system maintenance has gone.

In a comparison of just direct costs, you are likely to find that you will pay more overall for a hosted solution compared against on-premise but you should want to incorporate a value for the direct and indirect benefits that can be achieved in a business case.

However, if you don’t believe that your practice will achieve or value these improvements, it’s probably the wrong decision. In that situation, we would recommend that a practice stays on-premise to keep the overall IT costs down.

The rest of this article assumes that you have decided that a hosted solution for some or all of your IT applications (but focused on PMS in particular) is a real option for you. You can find more guidance on the pros and cons of this on our site at Some firms should make the move when the time is right. Others should stay on-premise.

What to host

There is a wide variety of options here, starting from moving just some of your applications to a hosted platform ”¦ to everything. That can start with having just your Outlook / email / Exchange services or maybe document backup hosted, relieving your in-house IT team of the burdens associated with managing these critical pieces of your operation. This integrates invisibly in the background with your other applications running on-premise as before, so it makes little difference to fee earner and support staff. If that works and your people are comfortable with it, you can take the next steps.

Or you can move everyone onto their own hosted desktop, which – if you continue to use the same PMS and other applications without upgrading, eg Microsoft Word – can look and feel exactly the same as the desktop they used before on the on-premise setup.

However, I see the move to a hosted provider as an opportunity to extend your IT capability in areas that can improve your efficiency and productivity. Using hosted IT services can give you up-to-date versions of the Microsoft Office suite and affordable access to IT tools to support new initiatives, such as:

  • easier remote working and mobile access to allow more flexibility in how people work
  • centralised management of client relationships, eg with Microsoft CRM
  • improved internal communication, eg Microsoft Lync
  • easier client and fee earner collaboration, eg OneNote and SharePoint

How to access?

Users of a hosted desktop will access it over the internet through either Citrix, Microsoft Remote Desktop Services or similar and you may have some technical preferences on these options where there are differentiators you will want to understand.

Speed of internet access becomes critical so any firm will have to build in the cost of high capacity online communications to carry the increased internet traffic that hosting generates. In my view all firms should be investing in this anyway, but more capacity is needed (and achievable) when moving to a hosted environment – particularly when scanning and digital dictation is added the mix, as these applications use a lot of bandwidth. So be sure that you have a good handle on bandwidth requirements and start talking to reliable providers in this area early on. “Burstable” bandwidth can be helpful as you agree a level of bandwidth and a price at the outset, but with the capacity to handle more at a higher price if the need arises at any stage.

Who should host?

Don’t limit your evaluation to just one supplier as they have different strengths and empathies where the difference matters in what will become a critical, intimate and (potentially) long term relationship. You want to feel sure that the inevitable issues that arise throughout that relationship will be addressed in the right way for you.

The easiest transition to make and also potentially the most price competitive is to go with the existing provider of your practice management system. Most of them will offer you either their own hosted environment (which either they own and operate or which they rent from a data centre) or a third party hosting provider with whom they already have a relationship.

These relationships have been initiated either by the PMS supplier as part of their strategy or by users of the PMS who have taken the initiative themselves to move from the on-premise offering. It’s worth knowing who took the initiative as it gives an indication of the appetite of your PMS provider for building a relationship with the third party providing the hosting service.

A good number of relationships have been established – our current list extends beyond 14 – but these can usefully be your best starting point at this stage. It makes sense to include an established partner of the PMS supplier you currently use or to which you intend to move in your evaluation process.

There are also new providers and new technology solutions developing all the time but an established experience of working with and understanding how lawyers operate is a significant factor – the challenging culture, the complex range of IT applications that are now critical to lawyers and the demand for interaction between products to be able to operate.

The established providers of a hosted solution have to keep pace with providers in other sectors and they must continue to develop the innovative leading edge solutions that lawyers now need to become as competitive as possible. To attract new business, these established providers need to do more than just keep established customers happy or they will fall into the same trap as many legal IT providers in the past – providing only what their existing users demand, rather than the more innovative options that lawyers need going forwards.

Negotiating contractual terms

This is critical as you work your way through the process, but rather than cover this in detail here, I would strongly recommend that you read some excellent guidance: Cloud UK –Contracting Cloud Services, A Guide to Best Practice, produced by The Cloud Industry Forum in association with DMH Stallard, which can be downloaded, free of charge, from This is a concise but very informative 15-page report on research conducted by the growing sector of the IT industry that is promoting hosted and cloud computing as a solution but it is a useful aid to making an informed decision.

Successful implementation?

When moving to a new fully hosted system, the whole environment can be set up and tested to whatever extent you want whilst you are still operating your old on-premise system, without any disruption in the office. That can be very attractive but the following points are critical:

  • The hosting company has to really understand how all the applications you use work and integrate with other applications – particularly digital dictation, PMS, case and document management and any integrated phone systems. Get them fully engaged with each other and working together on testing.
  • Test, test, test while you can before you go live, with as many users as possible using applications simultaneously.
  • Train users on new applications even if their desktop may look much the same and keep that going after the move, so they can continue to develop their ability to use new functions and features – but try to help them become more inquisitive because their new environment will probably be more interesting, user-friendly and resilient.
  • Communicate the potential for niggles and issues to manage expectations on making the move, to make sure people are as tolerant as they can be.
  • Make sure you have significant hands-on support from your hosting company and possibly other key providers of applications present on site on the day of the move to a hosted solution and for a good period thereafter to provide hands on support as this is a big technical transition overnight. There may be no problems at all, but it’s best to be prepared for the worst.
  • Be persistent with plans to maximise use of the system to improve the work environment and performance of the business from day one – don’t lose the momentum with a sigh of relief that it all went well!

Allan Carton is Managing Director of Inpractice UK, specialist advisors to legal practices on all aspects of business development. The Inpractice blog on Legal Practice Management Solutions has many useful articles on building a more profitable legal practice.


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