Software solutions - cutting costs or making false economies?

Along with staff salaries, professional indemnity cover and office accommodation, technology is now one of the single largest items of expenditure that the average law firm makes - on average between 4% and 5.5% of its annual fee income.

Or, to put it another way, some firms are spending the equivalent of their entire partnership profits each year on IT systems.

Given the enormity of this expense, it is not surprising that most firms try to trim their IT budgets to the absolute bone - but is this financial prudence or a false economy?

For example, the typical law office system comprises three elements: the legal applications software, the PC hardware it runs on and the network infrastructure that channels the software and data from terminal to terminal around the office.

In an attempt to cut costs, some firms will opt out of signing for the annual support and maintenance contracts most software vendors offer.

Because of the economics of the PC hardware distribution market, you will probably also find you can source PCs from a mail-order operation such as Dell, or a high-street store, such as Dixons or PC World, for less than the price quoted by a specialist legal systems supplier.

And, if you look through the telephone directory, you will almost certainly find a local network specialist which can handle the technology infrastructure.

Add all these elements together and you may be able to cut the overall price-tag by 20% or more - which is all well and good, providing nothing goes wrong.

Unfortunately, if problems do arise, you may find yourself in the middle of a three-way demarcation dispute.

Does the problem stem from an inherent bug in the software? Or, is it because you are running the wrong hardware - perhaps because the PCs you have purchased run a version of the Windows operating system that is not compatible with the applications software? Or, is it because the network has been incorrectly configured?

Add in the fact that if you do not have a maintenance contract with a software supplier, that supplier is unlikely to offer you more than minimal assistance.

There is also the fact that many high-street hardware vendors do not offer on-site maintenance, which means you have to pack your PCs and send them back to a central repair depot for examination.

And you could be facing the complete shutdown of your IT facilities while a relatively minor problem is fixed.

In other words, unless you have your own in-house IT expertise or a local specialist whom you can rely on, it may be a false economy to opt for the cheapest possible deal.

Charles Christian is an independent adviser to the Law Society's software solutions guide