Expert Opinion: Phil Gunning on Business Continuity for Law Firms
In our 2015 Data Health Check, a survey of over 400 UK IT decision makers, 78% of law firms we talked to had a Business Continuity Plan (BCP) in place, with the remaining 22% planning to implement one in the next 12 months.
Despite this, disaster recovery can still be considered an inconvenience to some law firms. To the uninitiated, business continuity planning can appear a costly and complex process that seems to have little or no immediate business benefit. This is because it is easier to do nothing and hope that nothing happens. But the simple overriding fact remains that business continuity is a common sense approach to managing the unexpected, mitigating loss and recovering the status quo – all of which should be of the utmost importance to the legal sector.
The fact that organisations are now so dependent on their IT systems has meant that the IT department has traditionally led the way in planning how to recover from an unplanned event. However, since the impact of a disaster is felt by potentially any department, the ability to recover business data, quickly, easily and within an acceptable time frame is fundamental to the entire organisation, and planning should be a collaborative process.
The speed and manner in which modern business is transacted means that a disruption of only a few hours can have a catastrophic impact on the profitability and reputation of the affected firm. The internet has introduced many new challenges, with perhaps the biggest being the inflated expectation, or even requirement, that a business is available to customers 24 hours a day, seven days a week. As a result, lengthy downtime normally associated with a disaster is just not acceptable.
While larger organisations generally have more to lose, and more ways to lose, it than smaller organisations, smaller firms often suffer the most devastating results from seemingly minor business interruptions. Small size imposes stricter limits on the ability of an organisation to absorb losses and respond to interruptions. The key to recovery is time. Following an unplanned event, the organisation which recovers in the shortest time will be in the best possible position.
There are certain factors that make business continuity planning in the legal sector even more important. Perhaps most notably, the average legal practice has the highest percentage of revenue generating workers, per company, of any major industry in the world. This results in an even greater need for high productivity and guaranteed uptime due to the hourly billable nature of the legal workplace.
While some smaller firms may consider themselves 'too small' for business continuity planning, a single outage per year carries a significant price tag. Consider as an example an average firm with £10million annual turnover. An hour of downtime for a £10m firm would cost them around £8,000. That works out at employee costs of just over £3,500 per hour and a loss of revenue of nearly £5,000. The cost for an entire day is about £67,300.
Inevitably every firm will experience downtime at some point, so business continuity planning is about mitigating risk and reducing costs. In the past, many disaster recovery plans never really got off the ground due to lack of backing from senior partners and inevitably it became 'something we'll do next year.' Now with more guidance from bodies like the SRA, firms understand that the cost of implementing an effective DR solution is a small price to pay against the cost of an outage.
You can calculate your cost of downtime with our Cost of Downtime Calculator here.
Phil Gunning is channel manager at Databarracks.