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Computer Counselor June 2001
Application Service Providers Are Gaining Acceptance

For a new law office starting with little cash, an ASP may be he answer

By Carole Levitt and Thomas B. Fleming

Everyone knows that "ASAP" means "as soon as possible," but what about "ASP"? The Legal Technology Institute at the University of Florida conducted an ASP survey in the summer of 2000 and found that two-thirds of the survey respondents said that they were not familiar with ASPs (although, oddly enough, 40 percent of them were able to define an ASP). ASP stands for "application service provider," which refers to a company that leases Web-based applications. In short, rather than sell software on CDs, ASPs rent it online. If you have not heard of ASPs, you are not alone, and you do not have to worry. The Legal Technology Institute estimates that only 9 percent of the legal market uses ASPs. They offer many advantages, however, over the standard method of using software, so they are worth investigating.

In addition to online applications, ASPs may also provide the hardware and the technical support required to run the applications and to store the data remotely. Most applications found at law firms–such as word processing, document management, and billing–are now offered by ASPs. This means that attorneys can automate (and network) their offices quickly and eliminate the obstacle of a large initial investment in a network and staff. In other words, attorneys working at firms that are not networked can use an ASP to create a network environment without incurring the cost of installing a network in-house. All a firm needs to access ASPs is an Internet connection (preferably high speed), a browser, and (possibly) Windows 2000. Using an ASP and an Internet connection, attorneys who were unable to gain remote access into their office computers can now work on the firm’s software and data anytime and from anywhere. That may not be happy news to all attorneys, but some will appreciate the convenience.

Access to a professionally maintained computer system, a help desk only a phone call away, and software that is up-to-date are some of the benefits of ASPs. Because ASPs are easily scalable, firms that have not yet automated (or have automated only some of their functions) can begin a move to an ASP by automating just one function (e.g., billing) and then adding applications one at a time as time and money permit. Firms that have already automated most of their functions and are considering migrating to ASPs can also take advantage of the scalability by testing the idea one application at a time without having to take a plunge into full service.

The disadvantages of ASPs stem from their location on the Net. If a firm’s Internet connection is down, so is the office, because the firm’s software or data do not reside in-house. Additionally, accessing data via the ASP may take longer than accessing data from software on the firm’s network. Storing data off-site prevents loss of data should disaster strike a law firm, but there is no assurance that disaster will never occur at the ASP’s site. Another question: What if the ASP goes out of business (as Red Gorilla did in the fall of 2000) or if the firm simply wants to switch providers? And who owns the data, and is it easily exportable (to another ASP or back to the firm’s in-house system)? Finally, what if someone breaches the ASP’s security system? How does the ASP’s security regimen affect attorney-client confidentiality? These are some of the issues to consider before contracting with an ASP.

There are actually several types of ASPs geared to the legal market, and they can be grouped under two general headings: specialized and vertical. A specialized ASP provides an application answer for only a single function carried out in a firm. (Many legal professionals have been using specialized ASPs for years–Lexis.com and Westlaw.com.) Two specialized ASPs are Case Central (www.casecentral.com) and Open Air (www.openair.com), both of which focus only on litigation support. These ASPs organize documents and make them available over the Internet. Another new, specialized ASP is American Legal Net (http://www.americanlegalnet.com), which provides over 40,000 legal forms that can be filled out over the Internet and printed on the attorney’s printer.

In contrast to a specialized ASP, a vertical ASP tries to provide all the software programs that a law firm needs to automate its functions. This includes word processing, document management, e-mail, time and billing, docketing, and case management. Originally, these were geared to the small law firms with 25 or fewer attorneys. However, some of the vertical ASPs are pitching their services to larger law firms.

Expanding Market

Not surprisingly, Lexis and West are banking on law firms making a major entry into the ASP market. The two have developed (or are developing) law firm applications other than their well-known research applications, Lexis and Westlaw. Westlaw’s ASP, which it calls West Works (www.westworks.com), is currently in beta test. It includes Microsoft’s Office Outlook, Elite’s Timesolv, Internet access, and Westlaw. In addition, West Works offers document storage at its site. The price to access West Works is expected to be $132 per user per month. Access to Westlaw will be billed separately. Lexis’s Lexis One (www.lexisone .com) started by offering free federal and state case law and statutes as well as legal forms. In January of this year, Lexis and Time Matters (www.timematters .com) announced an alliance to add the word processing, contacts, e-mail, docketing, and time and billing software of Time Matters to Lexis One, creating a vertical ASP. The price has not been established.

There are a number of other significant players in the vertical legal ASP market. Juris Diction USA (www.jdusa.com) and Elite.com (www.elite.com) provide time and billing services, case management, calendaring, e-mail, and research. Serengeti (www.serengetius.com) helps corporate law departments and insurance companies work together with their outside counsels by sharing documents and managing invoices over the Internet. Aspora (http://aspora.com) provides litigation and client relations management systems. For office functions that are common across industries (such as e-mail, Web hosting, or human resources), law firms may also look to ASPs that currently promote their wares to the general marketplace.

Practice Due Diligence

Selecting a good ASP is similar to selecting any outside company. It is important to verify the ASP’s reputation and experience by seeking references from current users. Always require a trial period with your data before signing with an ASP. Additionally, make sure that the ASP has redundant data storage ability and redundant Internet connections. The redundant data storage will ensure that the firm’s data is kept in two separate places, while the redundant Internet connection is needed in case something happens to the ASP’s Internet connection or to the firm’s.

All contracts for ASPs should have a service level agreement that outlines what level of service is expected and provides for penalties if it is not met. For example, a major part of a service level agreement is the amount of guaranteed time that the ASP is available to the firm. This should be between 95 and 99 percent of the time, 24 hours per day, seven days per week. There should also be a guarantee on how many users can access the data at the same time. Usage falling below that level could translate into fee reductions or rebates.

Other points to consider when drafting an ASP agreement can be found at the Information Technology Association of America’s Web site at www.itaa.org/asp. The ITAA, in conjunction with the law firm of McKenna & Cuneo, has promulgated 13 major guidelines for the ASP industry to consider in an ASP service level agreement (www.itaa.org/asp/itaasla.pdf). Some of the guidelines deal with the following areas: security, software upgrades, remedies, disaster recovery, amount of help desk service, termination procedures, and ownership rights to the data. Another organization to look to for guidelines is the ASP industry consortium (www.aspindustry.org/SLABroch.pdf).

The Legal Technology Institute projects that a firm spends between $4,500 and $8,500 per user for an initial turnkey computer system. This figure is obtained by counting hardware, software, networking (cabling and hubs), communication (servers, e-mail, Internet), system integration, training, maintenance, and support, but the figure does not consider IS department salaries or the cost of outsourcing computer support. With an ASP, a firm may not actually need to make a capital outlay–even for desktop computers and printers, which may be leased. To decide whether to use ASPs or install your own system, compare the cost of installing an in-house computer system with the cost of ASPs per user, factoring in your IS staff (or outside service contract) into the cost of an in-house solution. If your firm is not automated, or only partially automated, factor in the efficiency that may be achieved with ASPs versus an in-house system. An ASP may be an attractive option for the sole practitioner, new attorney, or small firm that has not yet invested heavily in computer systems and software and does not have an IS staff. 


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