Understanding and Managing the Risks of Cloud Technology for Your Legal Department

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More organizations are beginning to move their data to the cloud in an attempt to take advantage of the benefits provided by the technology. However, there are a number of challenges associated with its use. Specifically, there are unique risks associated with the technology that are especially important within the legal sector, and these are often overlooked by non-lawyers.

Lack of control
One of the main benefits of cloud computing is its centralized data storage, allowing for access from anywhere in the world. However, the centralized servers require upkeep and maintenance, which is usually undertaken by the third-party managing them. This can be a cause for concern among many legal departments because it means they need to trust sensitive data to a third-party to not only store that data but keep it protected as well. As a result, in-house teams should do their research when considering whether to implement cloud technology and deciding on a cloud-computing provider.

Security
Anytime information is accessible via the Internet, security is always front of mind. The potential for data breaches is a legitimate concern not just for legal departments, but organizations as a whole. In-house team should always inquire as to what protections are in place with their cloud provider to prevent external breaches and what steps will be taken should one take place.

Cost escalation
One of the primary advantages of desktop software is its fixed cost. Cloud software, on the other hand, has a monthly fee. The fees for services may be cheaper in the short term, but they have the potential to cost considerably more in the long-term. Since many of these services charge per user, organizational expansion can also significantly increase the costs for use of the technology if more users are added. To prevent surprises, GCs should always carefully examine a provider’s fee agreement.

Ethics considerations
Lawyers must always consider whether new technologies create risks to their ethical responsibilities. Many law firms, as well as legal teams, will wait on an official opinion from their state’s bar association before implementing any new technologies. Currently, 19 state bar associations have rendered an opinion on cloud technology, all of which support its use as long as attorneys follow Reasonable Care standard.

Migration of data
Once a cloud provider has been chosen, data needs to be moved from an organizations database, or even hard copies, onto the cloud. This can often be an arduous process, especially if the company is using older database technology or is switching providers and can often require a lot of man-hours to complete. In-house teams should do extensive research on the process and look for ways to reduce costs – such as document management technologies that can convert paper and digital files rapidly –before settling on a provider.

This legal market briefing was created by the analysts at ShiftCentral and is presented through an exclusive news and analysis partnership with Big Law Business. ShiftCentral’s team helps law firms, practice groups, and legal departments keep up with fast-changing developments in the business of law. Learn more here.