Moving Your Firm to the Cloud

Dec 20, 2022 | Business Planning, General Estate Planning, Podcasts, Technology Recommendations

“Moving Your Firm to the Cloud in 2022,” that’s the subject of today’s ACTEC Trust and Estate Talk.

Transcript/Show Notes

This is Toni Ann Kruse, ACTEC Fellow from New York. IT and cloud data may not be in the wheelhouse of many estate planning attorneys, but understanding how it works is critical to firm partners. What do firms need to understand to keep in mind?  ACTEC Fellow Tom Overbey of Fayetteville, Arkansas, shared his thoughts on this everchanging topic in a podcast called Migrating a Law Firm’s Software and Data to the Cloud. Today, he is joined by ACTEC Fellow Mike Deege from Des Moines, Iowa. Welcome, Mike and Tom.

Mike: Thank you, Toni Ann. Happy to talk to you today. Tom Overbey and I’ll deal with some of the ethical considerations you need to be aware of before you embark on a move to the cloud. And Tom wants to talk a little bit, too, about how to actually go about the process of moving your data and software to the cloud. So, who are we? Well, Tom is a past Chairman of the Technology Committee of ACTEC and I’m the current Chair of the Technology Committee. My firm of five estate planning attorneys made the move to the cloud approximately nine years ago, and Tom took his firm to the cloud more recently.

Moving to The Cloud: Experiences Compared

Tom: Yes, more recently, like about two years ago, four lawyers, two staff, and we’ve been at it for a couple of years now.

Mike: Okay. So, what is the cloud that we’re talking about? Well, we’re talking about moving all of your firm’s client data and all of your software applications to someone else’s off-premise server and shutting down your existing server where all of your data and software currently reside. However, this process does not prevent you from utilizing a vendor’s cloud-based software on their cloud-based server. So, what caused our firm to take a peek at the cloud nine years ago? We had experienced a hard drive failure and it took about two days to get us back up and running and loading all of the programs and all of the data that needed to be loaded.

Although we lost no data, it was just downtime that took its toll not only on the attorneys but our clients. Also, our IT costs kept going up with each new patch that had to be placed on our server. It seemed like this was turning into a weekly exercise. We then decided to look at other options for storing data and software and we hired an outside IT consultant to help us through the process, as none of the in-house attorneys had the time or the skill or expertise to be able to effectively evaluate each of the options. While most large firms may have their own IT staff, solo and small to medium-sized firms cannot afford that luxury.

Tom: That’s right, Mike. And our experience was slightly different but very parallel in a way. About 10 years ago, we had an ice storm, and our building was locked out for three days. The process for the uninterruptable power supply was not set up correctly. Our server crashed and the fellow who didn’t set it up correctly came in and spent about four days rebuilding the server. Well, that was bad enough, and we didn’t learn well enough from that experience.

So, then later, as we were approaching several years of use of the replacement server, we had a double drive failure. We had the four-drive system with RAID 5, etc., but it still crashed and we lost data and had to get a new server. It was all backed up, fortunately, but we had to go through the process of ordering a new server, getting it installed, moving the data in, and coming back up. It was about a two-day process. Wasn’t horrible. But it happened so quickly that we didn’t get a chance to evaluate the possibility of moving to what we call a cloud server, today. We, instead, bought another large in-house server. Well, once you do that and spend those thousands of dollars, you don’t want to immediately replace it.

So, we ran another five years, maybe six years. And this time, when it started coming up where the server was aging out, we moved to the cloud, like I said, a couple of years ago. So, whatever the reasons are timing can be important, and you’ve got to plan ahead rather than trying to do it on a crash-and-burn basis.

Why Law Firms Look to The Cloud?

Mike: So, question is, why would someone look to the cloud today? Well, COVID-19 forced many firms to evaluate how they were conducting their business. Clients were used to coming to the office to discuss in face-to-face meetings with the attorney and gather information and discuss what they wanted to accomplish in their estate plan.

Then, when the documents were prepared, another face-to-face meeting was held to review and sign their documents. Suddenly, when COVID-19 was running rampant, many offices just, frankly, had to close, and firms were scrambling to try and find ways to work remotely. Some of the larger firms were able to move to the cloud, but other smaller and medium-sized firms did not make the move then but are looking to, maybe, move to the cloud now. Our goal is basically to set forth what some of the ethical considerations are that firms need to examine before making the move to the cloud and then to discuss how to make the actual move to the cloud.

Tom: That’s right, Mike. And the other thing that COVID did is it expanded everyone’s horizons as to how to operate. We were slowly making the transitions from an in-house process to being more adaptable before COVID, but COVID put a big emphasis, particularly, where you couldn’t go into your office or you were working from home by choice or whatever your current situation was. People have learned how to use Zoom and all the other video conferencing programs and procedures that are out there.

They’ve learned how to meet with clients in those settings, how to more extensively use email, how to transport documents, etc., which is all good, but it is immensely easier when everything you’ve got is in a cloud where your information is protected and encrypted and you have tools that are helpful in terms of interfacing electronically with clients in a restricted environment. And even though we are technically post-COVID at this point, the legal world and the client world has moved towards more interface on an electronic digital video conference-type basis. And we have seen, certainly, a large reduction in face-to-face meetings, which having your stuff in the cloud is helpful, particularly when you’re outside the office, you’re at home, or you’re in Timbuktu either working or traveling or vacationing. Having the cloud accessible away from the physical server is immensely helpful in being adaptive in this environment.

Cloud Consideration Factor #1: Cost of Moving IT to the Cloud

Mike: The question is, what are some of the factors that you need to consider before moving to the cloud? Well, I think one of the first ones is probably cost. Cost is always a compelling factor when you consider any change to a firm’s operating procedures. If the anticipated cost is going to be substantially more than your current cost, you may want to stop your search immediately and see if other alternatives might be available.

However, one of the discussed advantages, sometimes, of moving to the cloud is that many firms are not only able to reduce their current cost but to fix them for the future. You no longer have to count and pay for each of the numerous patches to an in-house IT system that both Tom and I experienced. It generally is all included in the contract you sign with your system vendor.

Tom: Again, Mike, you’re absolutely on the money. When we were looking at our move, we spent a lot of time and energy worrying about cost, analyzing fixed server costs and all the things associated with it compared to going to a cloud vendor. And after several exercises in doing so, we finally concluded, no, it’s not a cost factor. It’s a timing factor because, when you have your own equipment, you have to pay several thousand dollars for a new server, at some point, or additions to your software that come up annually or however often they come up.

Those are large at the time, but when paid, are done. Whereas the cloud is always a monthly bill, except for certain software upgrades that you may do yourself. So, it evens out. And, at the end of the day, if you take the long view, which is, if you have your own hardware and how long is this going to last and compare that on a monthly basis to the life of the equipment, the two wash out. We don’t see cost as a factor, period.

Cloud Consideration Factor #2: Data Security

Mike: Well, and another big factor we found was security. You want to be able to control who gets your information and what information they get. You want to determine whether or not certain information needs to be encrypted. And if it’s encrypted, what’s the strength of the encryption method that you’re using? You’ll also want to have your data backed up and perhaps backed up in multiple geographical locations in case of either a hard drive failure or, like what’s recently happened in Florida, weather-related types of catastrophes.

Tom: Absolutely, Mike. And here, the cloud wins 10 to 1 or 100 to 1, depending on how you want to measure it, because, if you have your own equipment, you have got to have an IT consultant, or however you get that type of advice, come in, look at your situation, tell you what the setup, help you set it up, monitor it, update it as needed, and so forth, which you can do a fairly good job at.

But you cannot do what the cloud services do because, on a large-scale basis, they have so much more sophisticated approaches. It’s automatic. They have to have this to really provide this kind of service to law firms. And the ones who particularly specialize in law firms know this very, very well. And they are able on such a large scale to provide so much better encryption and protection than you can unless you’re a 5,000-man firm around the world. So, to me, the cloud, particularly for a small firm, is very, very important in this particular area.

Cloud Consideration Factor #3: Ease of Use

Mike: Another factor, I think too, is the ease of use. Whatever system you move to, it’s got to be easy to operate if you want the move to be successful. The term I think I hear used most often about systems is whether it’s an intuitive system. Supposedly, the more intuitive it is, the easier it is to learn and operate. If you adopt any system that’s difficult and complex to learn and operate, it will not be learned or operated by staff and others in the firm, and you’ll have wasted basically your time and money.

Cloud Consideration Factor #4: Stakeholder Buy-In

Tom: Yes. We had a partner who was scared of clouds. He questioned those of us working on it – two of us – over and over and over again. His son was working for a large firm in another state and kept telling his dad, “This is the way to do it. It’s okay.” But we still had to convince him, and, of course, as soon as it started working, he started loving it, particularly the ability to work anywhere, any time because he travels quite a bit. And now, you couldn’t get him to go back for anything.

Cloud Consideration Factor #5: Cloud IT Vendor Support

Mike: Well, and another factor, too, I think, that we looked at was, how strong of support is the vendor going to give to us? We wanted a vendor who is continually updating their delivery system and look for a vendor that has a good response time to a question or a problem that you might be running into. It may be worthwhile, when you’re doing the search process, to speak with other users of the current system to see what they have to say about the level and usefulness of support before making a final vendor selection.

Tom: Yes and getting comments from others is important. I agree 100 percent on that. And asking how they operate is important when you’re interviewing, hopefully, more than one firm that provides cloud services. All of them have a help desk function, though, which you find to be immediately great because anybody in the firm that’s got any problem can turn in a problem and it gets addressed that day, usually within a couple of hours. So, that is a plus for cloud services.

Cloud Consideration Factor #6: Ethical Obligations

Mike: You bet. Ethics are the other thing that I think a lot of firms don’t necessarily think a great deal about in terms of moving to the cloud. You’ve got a tremendous amount of estate planning information and it’s personal information about your clients. So, it’s imperative that you know what your ethical obligations are with regard to the protection and disclosure of that information. There’ve been a lot of well-publicized law firm hacks and the number of them continues to rise. So, one of our goals, I think, will be to discuss what ethical obligations you need to think about when you move to the cloud.

Tom: Yes, Mike, no question. We worried for years about getting hacked. And obviously, in the estate planning arena, if you collect asset information on clients in order to properly advise them, you’ve got billions of dollars’ worth of assets sitting on your server. And protecting it is a worrisome thing when you are on a server-based system in your office and you worry about the maid’s boyfriend breaking in or whatever other things you can conjure up. When you move to the cloud, you solve a lot of those problems.

Mike: What are some of the, I guess, maybe most significant either ethical rules or opinions or comments we need to be aware of? And when we say rules, we’re really talking about the ABA Model Rules of Professional Conduct. And some of the more important ones you need to think about with regard to moving to the cloud is ABA Model Rule 1.1 which deals with competence. And there’s a comment 8 to that rule, which will be extremely important to deal with as well. ABA Model Rule 1.6 deals with the confidentiality of information.

We get comment 18 to that rule, which would apply. We’ve got responsibilities that a partner in a law firm would have with regard to other lawyers in the firm that they might supervise. And we also, then, will look at another ABA rule that deals with, what degree of supervision do you need to exert with regard to non-attorney staff in the office. And then there are probably a number of opinions that deal with technology and those should all be looked at as well when considering the move. So, Tom, any ethical issues that you ran into or found troublesome in your move?

Tom: No, you’ve covered them. These days all your malpractice renewals, each year, require you to confirm and state what you’ve done with respect to your data and the effect of these rules. So, you not only have to worry about ethical issues. You got to worry about having malpractice insurance that you can get issued. You’ve got to keep up with the world, or you may not get covered with malpractice insurance.

Mike: You bet, and none of us want to have that happen. Okay, well, that kind of wraps it up.

Additional Guidance on Moving to The Cloud: Phase 1 – Preparation and Planning

Tom: Well, and let me add, Mike, a little bit of what I have dealt with in prior presentations to the Technology Committee for ACTEC, and that is: how do you approach this? And, to me, there are three phases. The first one is thinking about the practical considerations of moving to the cloud. What do you have now, in terms of on-site versus what do you get in the cloud? You’ve got to learn a little bit about the terminology if you’re going to investigate this. You need to look at providers. Look, particularly, for a provider that specializes in law firms. Try to figure out user experience from other firms. Make yourself a list of the pros and cons that fit your law firm. Do a little initial analysis and so forth in thinking about it. That’s step one.

Additional Guidance on Moving to The Cloud: Phase 2 – Making the Move

Step two is actually moving your firm server to the cloud. You’ve got to assess your law firm, its needs, growth, the ability of someone that’s a partner or a staff person or whatever to be involved and manage this. You’re managing it now if you have a physical server it’s no different from a cloud, except you got somebody else doing all the work. But you still have to have, in my view, an internal lawyer and an internal staff person to be involved to help the rest of the firm know what to do.

Very, very tiny firms can, maybe, get away without a cloud, but that’s basically less than three people. A one-person firm doesn’t really need a cloud server, exactly. But anyway, that’s a different issue. You need to look at your IT management. Who are you using now? How will that be changed if you go to the cloud? How do you pick a cloud provider? Go through your software and do a punch list. Go through your hardware, do a punch list. So you know exactly what you’ve got.

So, when you start talking to a cloud provider, you can answer their questions in your interview phase accurately rather than just kind of stating broad things that may not actually be true. It’s very important to get an accurate assessment from a cloud provider for them to know what your firm has currently.

Additional Guidance on Moving to The Cloud: Phase 3 – Landing in The Cloud

Tom: And then, finally in phase three, landing in the cloud. Once you’ve decided to do it and once you’ve interviewed and you’ve selected a provider, then you got to go through the process. Well, how does this work? Well, this is the point that your cloud provider you selected is going to guide you and help you. It’s about an eight-week process. Your new cloud buddy will give you a punch list as to what’s going to happen…timelines. You got to go through all your licenses again. You’ve already done it for preparing for the interviews, but now you got to be tighter because they have to make sure to protect themselves that you’ve got proper licenses. They’ll go through and look at everything on your system, currently, and make a plan. They’ll build and prep your new cloud on their system. They’ll gather data. They’ll send you a physical device to download, on a particular day, all of your data. You’ll overnight it to them. They’ll put it up on your new server, and then they’ll cut over the next day.

You’ll understand all this more if you do this. The help desk is very helpful for the process. There are a few things you got to learn, like, how you access files when you’re outside the cloud. Virtual meetings generally cannot be run on your cloud because of capacity. So, you shift down to your C drive for Zoom meetings and so forth, but that’s no big deal. There are a few things like that to learn. But essentially, the process is very workable. We’ve been very happy with our experience. I know, Mike, you’re happy with yours. So, Mike and I both certainly recommend it.

Mike: Thanks, Tom, for your input. Toni Ann, I think we’ll throw it back to you at this point.

Thank you, Mike and Tom, for this discussion on moving your firm to the cloud in 2022, a topic that many of us lawyers may understand, but need to know. Thank you for your time. 

You may also be interested in  Migrating a Law Firm’s Software and Data to the Cloud

This podcast was produced by The American College of Trust and Estate Counsel, ACTEC. Listeners, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. The material in this podcast is for information purposes only and is not intended to and should not be treated as legal advice or tax advice. The views expressed are those of speakers as of the date noted and not necessarily those of ACTEC or any speaker’s employer or firm. The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. The entire contents and design of this Podcast, are the property of ACTEC, or used by ACTEC with permission, and are protected under U.S. and international copyright and trademark laws. Except as otherwise provided herein, users of this Podcast may save and use information contained in the Podcast only for personal or other non-commercial, educational purposes. No other use, including, without limitation, reproduction, retransmission or editing, of this Podcast may be made without the prior written permission of The American College of Trust and Estate Counsel.

If you have ideas for a future ACTEC Trust & Estate Talk topic, please contact us at ACTECpodcast@ACTEC.org.

© 2018 – 2024 The American College of Trust and Estate Counsel. All rights reserved.

Latest ACTEC Trust and Estate Talk Podcasts