When the world was mostly using on-premise systems, suppliers had the capacity to reduce software costs because this was their IP and was effectively already paid for in terms of development work undertaken. Any such discounting was offset by the income from annual maintenance and services, which were rarely subject to any significant reduction as they reflected time paid to the suppliers’ employees.

However, with the inexorable transition towards cloud-based solutions, the room for manoeuvre on subscription (rather than perpetual licence) costs has been greatly reduced as suppliers have to pay the likes of Amazon and Microsoft to host their customers’ systems and data. There is also an expectation for a continuous flow of updates to be applied to systems, adding to the cost of development. This presents a dilemma for suppliers, especially while we are in the situation where some products are still available as on-premise solutions and therefore retain greater flexibility for software discounts (or where the competition is Microsoft 365, which includes tools like Teams/SharePoint with its licensing). 

The answer, at least in some cases, appears to be discounting or reducing services work, although the overhead of the suppliers’ team is still an issue. This may be the motivation for some suppliers pushing for fewer test migrations (or ‘conversions’) of the customer’s data and for the amount of data to be reduced to, say, just active matters and closing balances.

On the face of it, this is a great outcome as it simplifies the process, reduces timescales and lowers project costs. However, in our experience, firms that transfer a limited subset of data to a new system will have sparsely populated reports with no historic comparison to assess trends and progress year-on-year. These firms may elect to keep hold of legacy systems in order for historical data to be reviewed when needed (for instance, if a client is in dispute with the firm), adding both to internal maintenance costs and to the time for retrieval of such data.

We also think it is important, again based on our experience, to have multiple trial migrations to test data fully before making a permanent switch to a new system. This increases the testing overhead (both in terms of time and resources) and will add costs to the project. However, we see this as an investment in success as properly tested projects tend to have fewer issues at deployment.

Where clients are moving from ‘full’ practice systems, the requirements can be further complicated by the need to migrate to multiple systems (a new PMS, DMS and case/workflow system, for example) along with the need to integrate the separate components that were previously part of a single platform such as Axxia or SOS. 

Firms may also have to move to a new client and matter numbering scheme if replacement products operate in different ways from legacy systems. All of this will add to the total bill for the project, but to avoid it is to bury one’s head in the sand. Major change projects are often large, costly, disruptive and time consuming… but the alternative is to minimise investment in the tools that can make the firm competitive and help to retain staff who are happier with systems based on more current technology.

In short, make sure you challenge suppliers’ working assumptions on the amount of migrated data or the number of data migrations that their services will allow for. This will give you more realistic information to work with while reducing the issues at the point where you go-live. And that will give you good, good, good, good migrations, yeah!

Paul Longhurst is a director of 3Kites. This is the 22nd article in the series Navigating Legaltech. 

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About 3Kites and Kemp IT Law  
3Kites is an independent consultancy, which is to say that we have no ties or arrangements with any suppliers so that we can provide our clients with unfettered advice. We have been operating since 2006 and our consultants include former law firm partners (one a managing partner), a GC, two law firm IT Directors and an owner of a practice management company. This blend of skills and experience puts us in a unique position when providing advice on IT strategy, fractional IT management, knowledge management, product selections, process review (including the legal process) and more besides. 3Kites often works closely with Kemp IT Law (KITL), a boutique law firm offering its clients advice on IT services and related areas such as GDPR. Where relevant (eg when discussing cloud computing in a future article) this column may include content from the team at KITL to provide readers with a broader perspective including any regulatory considerations.