legal IT, Managed IT, SMB IT | 4 February, 2020

Evaluating the true cost of IT for professional service firms

When used effectively, technology can be transformative for any business. It enables automation and can drastically improve efficiency and productivity.

But just like any other investment, its success should be measured. To calculate the ROI for tech, you’ll need to assess the extra revenue earned through improved systems and processes – a task that’s easier said than done.

You’ll also need a clear understanding of what your IT systems are costing your firm - a calculation that’s also far from straightforward.

It’s not just about the capital cost of equipment, deployment and maintenance of IT. What happens if a system fails? What if the technology is buggy or doesn’t run smoothly? What if there is a security breach?

The SRA’s Silver Linings report says downtime can cause losses of up to £10,000 per hour, or up to £1 million for a full day. It could be argued that this is an exaggerated estimate for SME professional service firms, but nonetheless, it shows the potentially catastrophic consequences of poor IT management.

It’s therefore vital that IT systems are set up to enable your staff to be efficient, productive and secure. Where corners are cut this is unlikely to be the case, with issue remediation and downtime impacting your staff’s ability to work, which will ultimately impact your firms growth.

So, to help you understand the value of your technology investment, we’ve outlined all of the considerations you should be making when calculating the true cost of your IT. We look at the potential benefits technology can bring, as well as the potential costs of IT failure.


The benefits of investing in IT

As we’ve mentioned, investing in IT can bring many benefits, not least greater efficiency and productivity from employees.

This directly impacts the cost of labour, as well as the value of services provided to your clients, and their satisfaction.

IT investment benefits working practices in two key ways:


By integrating systems, you can do away with the need for task repetition and re-entry of data. This frees up time for more valuable work.

For example – integration between case management and billing software reduces the hours spent repeating tasks on different platforms.


Using cloud technology, you can adopt more agile working. A lawyer’s work is no longer restricted by time or location.

This not only means more billable hours and greater efficiency, but also flexibility. And we know that this is becoming a key factor for the workforce of the future.

When choosing how to invest in IT, it’s benefits like these that should be central to the decision on what is right for your firm.


The necessary costs of IT operation

These are the obvious costs, often upfront and clearly defined. They’re the things that make sure your IT environment works as intended.

Some of these are capital costs, but it’s also important to understand what’s needed to ensure things run smoothly for the foreseeable future.

These costs will include implementation, deployment, maintenance, system iterations, patching, upgrades and licensing.

Some details to consider are:

User management costs

Who will be managing these operational processes? Whether in-house or through external service providers, someone should be responsible for making sure your IT is live and running as intended.

Training costs

You’ll only reap the expected efficiency and productivity benefits of IT investment if users are able to make the most of the new software and systems.

Investing in people – your most important asset – is therefore just as important as the technology itself.


Technology moves quickly and IT will need regular updates and, eventually, upgrades. This is the only way to make sure legal IT systems and software are fit for purpose.

This can be costly to do all at once, but avoiding the necessary changes can be even worse. A buggy, outdated system is a surefire way to drive up costs that are less easily measured.


The cost of IT failure

Failure to invest in the operational costs mentioned above can have grave consequences, including complete failure. And of course, this can lead to even larger consequential costs:


If major business services shut down, your employees can’t get their work done, and clients won’t get what they expect.

As we touched upon earlier, downtime can have huge financial ramifications - losses of up to (or over) £10,000 per hour.


An IT incident costs money to resolve. You’ll need fault-finding to work out what’s wrong, and somebody to solve the problem and bring services back online. Good technical support and service aren’t cheap.

You’ll also need to allocate time and resources to communicate with staff and customers, manage increased calls, and investigate the knock-on effects. And all of this means more time and money spent.


While not strictly a failure, if the software is unintuitive or training is inadequate, you can bet your bottom dollar people will find their own ways of doing things.

These workarounds can even do the opposite to what’s desired - making processes less efficient and reducing billable hours.

By proactively investing in IT – to pre-empt the kind of failures mentioned above - you’ll minimise the risk of them occurring and the associated costs if they do.


Avoidable costs

Not all costs are measured in monetary terms. There are also some serious and avoidable consequences when IT systems aren’t fit for purpose:

Compliance and Security

If your IT systems suffer a breach, there are obvious costs in handling the immediate problem. But what about the aftermath?

The potential loss of highly sensitive data held by professional service firms can have serious ramifications both financially and to your reputation.

Reputational Damage

Mitigating the impact of downtime is crucial in protecting your reputation. An hour might be intangible, or only affect a small number of clients. If this runs on, you can be sure it’ll cost you more.

Customers may leave, and trust in your services – especially in the case of a security breach – is eroded.

Reputation takes a long time to build but can be very quickly ruined by inadequate IT investment. Again, it’s a case of measuring the cost and minimising the risk.



The true cost of IT extends far beyond the capital costs of a system, licensing and implementation. These additional expenses must be measured and factored in when assessing the return on your investment.

As professional service firms rely more and more on IT, it’s crucial that investment is considered carefully. Planning for all costs and minimising the risk of avoidable ones will prevent any nasty surprises.

Working with an IT provider that can help ensure your systems are maintained and prepared to the required standard will give you (and perhaps more importantly, your customers) peace of mind.

Then you’ll also be best placed to take advantage of the benefits that gave you a reason to invest in new technology in the first place.

Posted by Wayne Barber

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