Typically, law firms assume that off the shelf software is cheaper and provides more benefit to their firm than contracting custom development to create a catered solution for their practice. In this post, we will look at some of the hidden factors that need evaluation when making these decisions and how this assumption is often incorrect.
The most common assumption is that off the shelf software is cheaper than custom development. Although the clear majority of off the shelf software is cheaper than the cost of employing or contracting a custom developer to create a catered solution, there exist many hidden costs. Let’s take the following estimated use case based on some common software license costs for a 12 user law firm.
Cost of License.
Based on typical legal practice management cost
|Price per user per month||$89|
|Price per month||$1,068|
|Price per year||$12,816|
|Price for 4-year license||$51,265|
Cost of Install/Deployment.
This cost applies to on premise solutions and ensures the correct installation of software on your devices.
- Traditionally a one-time cost per user
- Can vary based on the complexity of the install
- Most legal software can be installed on a single machine within an hour
- A 12-user firm would likely require 13 installs, one on the server and one on each user’s device
- We will assume a going rate of $140 per hour for trained software consultants to install this software.
We assume a one time fee of $1,820 to install the required software on all devices.
Cost to Configure Software.
This sneaks up on most firms. The core design of off the shelf software will determine this cost. Developers build off the shelf software to be highly customizable so anyone can use it in the legal sector. This sounds great in theory, however, in practice it requires firms spend massive amounts of time learning the product and configuring it to do what they need it to, or to hire a trained software consultant to evaluate the firm’s needs and configure the software. This cost varies enormously from firm to firm based on user count, workflow, areas of practice and other factors.
Example: A firm usually practices two to three areas of law and can assume at minimum two hours consulting per area of practice and an additional two to four hours of configuring the software (per area of practice) to accommodate the needs discovered in this consultation. We’re estimating $2,520 for configuration of software so the firm can use the product.
End User Training.
When purchasing the software, you must also consider the hidden cost of end-user training. This training can vary based on firm user counts, software complexity and general acceptance/participation of staff.
Example: We will assume a high acceptance rate and the 12 users of the firm are quite savvy with technology. Here, we would assume a minimum of 4, two-hour training sessions. (two classes with two hours on beginner level functionality and two hours on advanced features). This adds a one-time fee of $1,120.
Most software requires ongoing technical and end user support. As I referred to earlier, off the shelf software is designed to reach a wide range of users. Because of this, coupled with the custom configurations made to facilitate the law firm’s operational practices, we anticipate issues with general usage support and break fix support (e.g. something entered incorrectly causing problems in the software). Firms have several choices in obtaining and securing support for their products:
- Rely on the vendor’s limited support
- Agree to à la carte billable support (e.g. by the hour pricing)
- Agree to all-inclusive support agreement some consulting firms offer
Speaking from experience, the overwhelming choice is to engage in the all-inclusive agreements. Prices of these will vary greatly based on the consulting firm you are working with. On average the cost assumption is $100 per end user per month (this likely includes support for your entire computing environment). This adds another $57,600 to the cost of off the shelf software over four years!
So far, we have discussed the cost of licensing, deployment, consulting and configuration, end user training, and ongoing support as related to off the shelf software. We have made low- end estimates based on experience deploying software for small law firms. The true estimated cost is *drum roll* ………
Cost of Developing Custom.
The cost of custom developed software varies based on the firm, but can be cheaper and more efficient than purchasing off the shelf software. For example, firms that choose custom development will likely not be required to purchase per seat licenses. This means the firm has $51,265 to spend on developing efficient software. A company like Accellis could provide a firm over 270 hours of consulting and development. Often, that provides enough to build systems that facilitate a very healthy portion of your practice (including case management, document management, and document assembly).
Installment and deployment of a custom solution is traditionally much lower, as custom developed software is normally built on newer technologies that are easier to deploy. Most software solutions we have developed and delivered have required only a single install on the client’s server, and takes 2 hours or less to deploy to the entire firm!
The developer also designs the software to perform what the firm needs, which essentially eliminates configuration costs. Consequently, the firm does not require as much training as the software is built to facilitate the operations of the firm. Between savings on the install, configuration, and training, a firm may shift upwards of another $5,400 into developing the software.
At half the investment, a firm is well on their way to having a nearly complete solution that facilitates the operations and workflows of their staff. The firm is then more profitable since productivity and efficiency of the firm have also been increased with minimal down time. This is where custom developed software can outshine an off the shelf solution.
Custom developed software allows firms to produce deliverables (such as documents, arguments, and invoices) exponentially quicker than previously because it is developed to automate the pain points of the firm and increase productivity.
As we can see, a small firm can save money in the initial cost of obtaining custom developed software opposed to an off the shelf solution and over time can become even more profitable with minimal to no sacrifices in the workflows and practices of the firm.
However, this may not be true for all firms. Some firms have dedicated in house technical staff members that can perform the software install, configuration, support, and maintenance which would drastically change the cost/benefit ratio we describe. Additionally, some firms are open to change and will change the ways they work to fit the software they use. In either event, it could be cheaper and more productive for a firm to obtain off the shelf products.
It is our advice to always seek a professional development firm’s consult prior to making decisions related to software purchases. Happy software hunting!