Software as a Service (SaaS) is taken over as the go-to model for purchasing software in most industries, including legal. However, legacy vendors offering a subscription model are often mistaken for SaaS vendors, leaving the customer without the critical benefits that define SaaS.
The modern law firm requires many different software platforms and systems to achieve success, from time entry to client relationship management and more. As Software As a Service (SaaS) has started to become the standard, many legacy vendors have simply pivoted to a subscription model. What’s the difference? In this post, we’ll explore the difference between the two and the benefits of a true SaaS model.
The Traditional Software Purchasing Process has Adopted the Subscription Model
Traditionally, when firms purchase software, they install it in-house. For that, they pay a large upfront fee, followed by a smaller maintenance fee—typically between 15-30%—for as long as they license the software. However, current trends are changing the way that money is allocated.
So rather than having firms pay $1 million upfront in the first year, followed by $200,000 for the next five years as maintenance, vendors will instead distribute the total price more evenly. In this model, firms would instead pay, say, $650,000 every year for three years, or $500,000 for five. They end up paying approximately the same amount of money (around $2 million total), but pay it off in a shorter amount of time, and don’t have to worry about ongoing maintenance fees.
This fee structure looks very similar to the alternative, a SaaS subscription. So with an annual subscription fee, the purchase becomes a SaaS subscription, right? Wrong!
On the surface, SaaS and subscription models (paid yearly, quarterly, monthly, etc) may look similar, but they’re still two separate approaches. Vendors that offer subscription models often claim to operate under the SaaS model, but true software as a service is much more than how we pay for the software accepting subscription payments.
Real SaaS is Much More Than Yearly Cash
The SaaS model goes beyond how we paid for software and the subscription model. It’s about the cost of ownership and converting that to a predictable outcome. It’s about developing solutions that can quickly evolve and add continual value.
The primary distinction between real SaaS and the subscription model is everything beyond the subscription payments.
There are four key distinctions of SaaS vs. the subscription model for law firms to understand:
Benefit #1: No Resource Responsibility. With SaaS, the firm is not responsible for the resources needed to run and install the software, such as servers. With a subscription model, you still need your own servers, which must be purchased, installed, maintained, configured, etc. Then they need to be monitored to make sure they’re working properly, and fixed when they’re not. And then when they’re no longer adequate, they need to be upgraded.
Owning your own servers requires a lot of work and resources, which can be a tremendous burden if you’re not a large firm. However, with SaaS, the provider has their own servers, on which the software runs, and they take care of maintenance, upgrades, and all of those other expenses and work.
Benefit #2: End User Support. Imagine the scenario where one of your attorneys is in London on business and they’re trying to close a deal (early in the morning, of course!), but the app they need isn’t working. Who do they call? More importantly, who’s going to answer that call, considering that 9am in London is 4am in New York? When they call for software support, will anyone be on the other end to help the attorney with the software on a variety of different devices that they may be using?
This is particularly relevant when the SaaS product is a mobile application. The purpose of mobility is to allow attorneys to work anywhere, anytime. So, by its very nature, the software could experience issues at any time. If your software is hosted in-house, the responsibility to fix it or solve problems is on your own firm’s IT department—even if those problems come up at 4am. If attorneys are working anywhere, anytime, then they need 24/7 support to go with it. Can you provide that for them in-house?
If the app your attorney in London is having trouble with is implemented as Software as a Service, then it’s not your firm’s responsibility to take the call, but rather that of the vendor. So as long as the vendor provides the tech support, then it doesn’t matter if the call comes in on a weekday or weekend, in the afternoon or at 4am. Your attorneys are free to work mobilely on whatever schedule the job requires. If they need help, they can reach someone to get them through their problem, whenever and wherever they may be. Subscription services don’t offer that kind of support.
Benefit #3: Agility. When doing installation in-house, it can take weeks or even months to get things set up and properly configured. However, with SaaS, all of that is the responsibility of the vendor. Once you commit to the service, you can be up and running in a matter of hours, if not sooner. That's another huge difference between the SaaS and subscription models. You may decide that those few months are an acceptable cost for the software you need. It may take extra time, but once it’s complete, you’re done, right? You never have to go through the implementation process again. Only you do. Which brings us to our next point.
Benefit #4: Escaping Obsolescence. If you choose to do your software installation in-house, and take those extra three or four months to do it, then what happens once it’s complete? By the time the software goes live, it’s already obsolete. The software world moves quickly, particularly when it comes to mobility. There are always new devices, new features, new user interfaces, and new demands from users. What was standard functionality when you started may be sorely lacking by the time you finish the setup, and even if it’s not, it will be soon.
If you want to keep up with the times, your software will need frequent upgrades—upwards of two or three times per year. Some of them may be simple, while others may take an additional three or four months to get up and running. If you don’t make these upgrade, then your software won’t have the functionality that users need—making them less inclined to use it.
With SaaS, keeping your software up to date is another task that falls on the vendor, not on you. The vendor ensures that you will always have the latest features, the most user-friendly interface, and all the necessary upgrades, as soon as they’re available. And, with SaaS’s increased agility, those upgrades, like your initial installation, can be ready to use in hours, rather than months.
In-House vs. SaaS
Of course, if your firm is a large firm with vast resources, then you might be able to do all of these things in-house. You might be able to provide your own servers, 24/7 tech support, and rapid installation and upgrades. But does that mean you should?
Even if you do have the resources to do all that in-house, maintaining servers and paying an IT team will cost significantly more than simply using SaaS. And you’ll never be able to provide the same level of service for yourself that an outside team could. After all, you’re not an IT company. You’re a law firm.
The money and resources that you would spend doing all of these things in-house would be better spent on your core business. Focus your time, personnel, and other resources on doing what you do best, and farm out the software tasks to someone who does that best. A SaaS vendor can provide you with that, scaling your service to meet your needs without using up all of your resources on tasks besides your core business.
When it comes down to it, the decision of SaaS vs. subscription for law firms is an easy one. Software as a Service can offer you the same manageable regular payments that a subscription model does, while also providing you with a variety of other benefits. It takes the burden off of you and, ultimately, helps both your software and your firm as a whole run more smoothly and efficiently. Afterall, isn’t that the reason you got the software platform in the first place?