No longer a cutting-edge topic, the conversation surrounding legal Software as a Service (SaaS) has evolved from feasibility to capability, and 2010 will mark the beginning of the third year that Web-based legal practice management has existed.

Over the past two years, legal SaaS products have emerged as significant contenders in the practice management field. In 2008, an initial “getting-to-know-you” conversation began, exploring security, data safety and other online concerns. In 2009, the term “cloud computing” rather than SaaS became a more commonplace term, and consequently we have seen more acceptance of Web-based applications and substantial growth in customers using these applications rather than investing in software.

As time progresses, it appears inevitable that software in general, and law firm software specifically, will be cloud-based. In the legal vertical, we are starting to see age-related issues with the older generation of desktop software. Bugs, stability issues, slowness and upgrade problems are significant challenges facing customers of some of these products. In addition, desktop software cannot compete with inherent Web-based advantages, such as cross-platform availability, ubiquitous access, and zero-installation and upgrade. If and when traditional legal software providers choose to modernize, they will be forced to entertain the notion of Web technologies.

So how will 2010 be different for online legal practice management? Here are five predictions.

1. More Choices

Now that SaaS products have proven their viability in the practice management space over the course of the past few years, expect other similar products to enter the marketplace. Even since February 2008, we have seen a number of cloud-based practice management products emerge.

Competition is a good thing for both software providers and the consumers. For the providers, it legitimizes and strengthens the industry as a whole. For consumers, it provides more choices, and it forces the providers to supply better, more compelling products.

Look for a spectrum of choices in 2010 for legal SaaS. On the lower-price point end of the spectrum, you may see basic, commoditized time and billing applications with little support and training. At the richer end of the spectrum, look for more full-featured, differentiated applications with a full support and training experience, but at higher price points.

2. More Disconnected Functionality

Legal SaaS applications have already come up with sophisticated ways to access data while offline. However, software developers have more tools at their hands than ever before to go beyond the Web browser, blending online and offline access seamlessly. Adobe’s Air platform, Microsoft Silverlight, Google Gears and browsers supporting the HTML 5 standard all have changed the fundamental capabilities of the Web experience.

All of these technical tools mean good news for consumers. Richer Internet applications will allow them to perform key functions, whether connected or disconnected. Watch for broad-based adoption of such technologies in 2010, both in legal Web-based applications and in the more general software market as well.

3. Mass Migration Away From Desktop Solutions

More and more law practices are abandoning their existing desktop solutions in favor of the SaaS model, often with war wounds and sad stories to tell. Certain applications with arm-twisting upgrade policies, buggy releases and no clear product vision see more departures than others.

The ability to have cross-platform, universal access to applications with lower up-front costs resounds with modern lawyers, who want to be able to practice anywhere, anytime, on any device or machine. Web applications are better able to respond to change and update themselves, thereby adapting to the rapidly changing business of law.

Something that you will see a lot of in legal publications and online forums will be discussions focusing on how to export data out of desktop applications so they can be imported to a next-generation Web application, as well as facilities in SaaS applications that effortlessly import that data.

4. Change to Existing Distribution Channels

Currently, legal-specific applications such as Time Matters or Amicus Attorney are provided to law firms in large part via vendors designated as Certified Independent Consultants, or CICs. The direct-to-consumer and simple nature of Web applications may threaten CIC revenues generated from installing, upgrading and training for desktop legal specialty applications.

CICs will be economically affected by law office migration away from desktop apps to Web apps. 2010 will be the year in which consultants will have to figure out how, with shifting distribution, they can capitalize on the growing legal SaaS market and not be left out entirely. Partnership or affiliate programs, certifications, training courses and data migration will be some of the tools used as consultants begin working with SaaS companies.

5. Increased Hardware Choices

With Web applications eliminating the hardware lock on PCs and Blackberrys, look for firms to explore new freedom in hardware choices. Mac OS X will continue to gain market share as users faced with a Windows 7 upgrade may make the transition now that online practice management applications further enhance the Mac’s standing as a legal business platform.

Mobile devices with modern browsers and fast connectivity, such as the iPhone, Android and Palm Pre, are as viable as Blackberrys since the richness of Web applications is starting to achieve the functionality of platform-native applications. Because of the cross-platform nature of cloud applications, individuals can embrace their own hardware preferences, which is an attractive development in a smaller firm setting.

Watch for More Transformation Yet to Come

Another year of innovation and excitement has rolled by, and 2010 promises to be one of more explosive growth for providers of legal SaaS applications. Even though legal SaaS adoption rates have skyrocketed in 2008 and 2009, they will continue to do so in 2010. However, we’re still in the beginning stages of a major transformation to cloud-based computing for law firms that will start accelerating even more rapidly in years to come. Law firms will continually have access to more and better technology choices, enabling them to achieve increasingly efficient performance.

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