Is cloud computing like e-mail was in 1995?

In the early 20th century, as electricity made its transition from novelty to necessity, many businesses maintained their own generators to power their operations.

“A lot of places had no backup, and eventually people started relying on a grid system when they realized it was much more efficient, cheaper, and you ended up with much less downtime,” says Kevin West, recounting an analogy to cloud computing he heard from a speaker at a New York legal technology conference.

West’s months-old firm, SkyLaw LLP, that he co-founded with fellow ex-Bay Streeter Michael Lee, is firmly on the cloud-computing grid. The pair’s sparse office in midtown Toronto is populated with little more than a couple of laptops and a rarely used printer.

The firm’s document storage system is in the cloud rather than on a shared server or in a series of filing cabinets.

“I remember when we first got e-mail, there were to be no sensitive documents sent because it wasn’t trusted,” says West, turning to a more recent analogy. “Cloud computing is the same way. There aren’t too many doing it, but it’ll soon become the norm and in five or 10 years, it’s not going to be an issue.”

SkyLaw takes a collaborative approach to client matters by establishing a team of lawyers from a variety of firms to work on each corporate transaction depending on the expertise required.

The two founders have a strong web of corporate law contacts having worked together at Davies Ward Phillips & Vineberg LLP in Toronto and having spent time at large international firms abroad.

They say the ease of access to cloud-hosted documents from disparate locations suits their model. Cloud-based services also host client minute books and contracts through secure online access.

Mitch Kowalski, who spoke at the Law Society of Upper Canada’s recent seminar on ethical considerations in an age of technology, suggested to participants that such services may actually help lawyers fulfil their often-forgotten obligation under the Rules of Professional Conduct to “make legal services available to the public in an efficient and convenient way.”

He added that he believes concerns over security in the cloud have been “overhyped.”
“Access and security of your data — that’s their core business,” said Kowalski. “That’s not your core business. Your core business is the practice of law.

Yes, we have an absolute duty to confidentiality but we choose how to best keep that safe and secure. It’s not infallibly secure in your office just because it’s in paper form locked in a filing cabinet.”

Kowalski said lawyers think nothing of sending their paper records away to third parties for storage and noted that firms that look after their own data face the risk of break-ins and accidental loss.

A lapse in back-up practices may spell disaster at a law firm with its own servers, but reputable cloud-service providers may be better able to recover losses, he said.

“We take stuff that we did ourselves previously and we outsource it to someone who presumably is doing it better, faster, cheaper, more efficiently, and more securely,” said Kowalski.

But not everyone is so enthusiastic. Garry Wise, founder of Wise Law Office in Toronto, still has reservations.

“I just think we need to temper our enthusiasm with some sober realities. I see all these benefits but I also see that virtually every major company that’s online, high tech or low tech, has been hacked in the last year. And that includes big Toronto law firms.

The conclusion I come to is it’s probably no more ready for prime time than it was two or three years ago, but I think the marketplace may be becoming sensitized to the reality that this is not foolproof and that there are potential security risks and that they’re not going to go away any time soon.”

However extensive their approach to cloud computing is, Wise suggests lawyers should let their clients know that in the retainer letter.

“What people need to do is go in eyes wide open,” he says. “Make sure they understand the pros and cons and make sure we have consent.”
According to Kowalski, lawyers shouldn’t be afraid to sell clients on the concept.  

“Spin it as an efficiency tool because that’s exactly what it is,” he told participants at the LSUC event. “In order for me to better and effectively and efficiently serve you, I’ve moved my stuff into the cloud and that’s the way I run my business, and you have to accept that as a term of my retainer with you.”

At SkyLaw, Lee says the firm is diligent in checking out the services it uses and notes it’s open about what it’s doing. Few clients are concerned, however.

“Some clients will never be comfortable with it but a lot are embracing it. In many cases, they’re further along in the thinking. There’s a renewed focus on efficiency after the credit crunch withmany downsizing and streamlining, and that puts pressure on the legal industry to do more.”

The LSUC encourages lawyers to call its practice management helpline if they need help interpreting their obligations around cloud computing services.

Its online Knowledge Tree also recommends that lawyers consider the reliability and durability of providers; the provisions in place for the return of the files in the event they do fail; and the cost to retrieve them. Another important consideration is the location of the company’s servers.

U.S.-based servers could present potential problems because of the 2001 Patriot Act, whose far-reaching seizure powers could possibly put confidential client data stored there at risk.

Jack Newton, CEO of Vancouver-based Clio, a web-based software provider for lawyers, says the Patriot Act is part of the reason uptake has been a little slower in Canada than in the United States. Most of his clients are American law firms.

Clio’s service covers almost every aspect of practice management, including client intake, calendaring, invoicing, trust accounting, and document management.

“We’ve seen first-hand that the adoption rate of cloud computing in the U.S. has been very rapid,” says Newton. “You have progressive ethics opinions all the way from [the American Bar Association] to individual states that are encouraging its use.”

The company has co-operated with the Law Society of British Columbia in an effort to make technology more available to smaller firms and reduce ethical violations.

“The general consensus among law societies in terms of the suitability of the cloud is that it’s OK, but you need to perform an adequate amount of due diligence,” says Newton. “Lawyers should examine what data they’re putting into the cloud on a case-by-case basis.

There’s certain information if it’s extremely sensitive that you may not even want to store it electronically anywhere.”

Still, Wise believes law societies could do more to help lawyers who want to make the switch to the cloud.

“It might be nice if the law societies and bar associations could develop some form of accreditation process for software developers so that somebody with expertise that we trust could get out there with some kind of vetting process that we could rely on,” he says.

“Most of us don’t really have the expertise to check out these companies and see how sophisticated they are with security practices. We don’t get to do credit checks on these companies to see if they’re going to be there tomorrow.”

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