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While the cost savings associated with outsourcing may seem immediately appealing, however, this is not quite the whole story. Deals naturally involve lengthy sales cycles and payback periods can seem very long too. While the long-term savings may swing this for the likes of a top-20 firm, for smaller firms struggling through a recession the short-term cost could deter them from the required commitment.

This is certainly the conclusion drawn by ex Eversheds IT head Malcolm Simms, who has just launched new venture K-Cloud.

In late 2008, and having played a key role in Eversheds' 2007 decision to outsource datacentre hosting and IT desk support to ComputaCenter Services, Simms and a colleague launched managed-services business Konetica. Simms and Konetica were to use their practical legal technology expertise to set up and support optimised contracts with an array of vendors for their clients, thereby freeing IT directors themselves to focus on more strategic matters. The advantage of the equation was upheld by research commissioned from Cranfield School of Management, where Professor Joe Peppard, holder of the chair in information systems, said that the legal sector still "trails behind" other businesses in its approach to outsourcing. CIOs are consequently "frustrated as they have been forced to focus on IT operations".

Although this theory may still hold up, Simms has since modified the practicalities of his proposition somewhat. "We spoke to numerous law firms of varying sizes, but many perceived that the potential disruption involved in moving from where they were to an outsourced situation would outweigh any savings they might achieve in the mid-term. They just weren't buying IT outsourcing per se," he says.

Now Simms has joined forces with large IT services business 2e2 to launch K-Cloud, which will offer IT services, based on internet-accessed ‘Cloud Computing', on an even more flexible monthly basis. A suite of well-known products such as Mimecast (e-mail management), BigHand (digital dictation) and Microsoft's Outlook and Exchange are being pre-built onto the 2e2 platform, which users will then be able to access in various combinations over the internet.

"Law firms will be able to buy any of their IT from us to support any number of users. They could buy all of their IT for all of their people, but equally they could take a selection of systems on day one, and then add to them as they get more confident in the effectiveness," Simms explains.

Importantly, however, there will not be the upfront and transformation costs associated with outsourcing. He continues: "If a client buys a three-year contract, for example, we would look to spread all the costs over 36 monthly instalments, which is clearly better for those with little or no capital budget to fund the projects from. Smaller and mid-sized firms will be able to access systems of a quality they couldn't afford to integrate and update on their own."

First client into the K-Cloud will be London-based legal-aid practice Scott-Moncrieff, Harbour & Sinclair.

"Law firms really want to buy the end result, which is why LPO is also particularly appealing. I think they're struggling to see that with the traditional outsourcing model," Simms concludes.

The whole article in Managing Partner can be viewed on the link below:

http://www.mpmagazine.com/xq/asp/sid.50EE386A-4102-4D18-8435-468E8B3ABAEC/articleid.4C4024C9-77C5-4571-A85D-760FFCD30D7E/eTitle.Out_of_sight/qx/display.htm

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