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Law Practice Technology Cost Calculator

Totals practice technology, where subscriptions accumulate faster than anyone reviews them.

Your numbers

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Result

Technology cost per year $40,092
Cost per user per year $4,455
Software subscriptions $21,432
Hardware, amortised over the refresh cycle $3,600
IT support $10,260
Server, network and backup $4,800
As a share of revenue 2.2%
Cost per month $3,341
Technology costs $40,092 a year, or $4,455 per user, which is 2.2% of revenue. Software is $21,432 of it, IT support $10,260, and the hardware refresh $3,600 a year even in a year you buy nothing.

Hardware is amortised rather than counted in the year of purchase, because a fleet on a four year cycle means a quarter of it is due every year whether or not you buy any. Treating replacement as an occasional capital surprise is how a practice ends up running machines for seven years. Legal research is charged per fee earner rather than per seat because support staff generally do not need it, and it is frequently the largest single per person line, which makes who actually has access worth reviewing. The three IT models are offered because the cheapest depends entirely on headcount: hourly is cheapest for very small practices and the crossover to managed or in house arrives quickly.

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How the calculation works

Each system's monthly or annual cost, summed and divided by users to give cost per person, with the total shown against revenue. Practice management, document management, time and billing, research, e-signature, email and security tools are the usual lines, and most are priced per user so the total scales with headcount.

What moves the number

  • Per-user pricing, which scales with headcount.
  • Research subscriptions, often the largest single line.
  • Overlapping systems doing the same job.
  • Security and backup, which are not optional.

Where this one goes wrong

The cost that grows unnoticed is overlap: a practice ends up with two systems that both store documents, or a practice management platform whose billing module duplicates a separate billing subscription, because each was adopted to solve one problem and nothing was retired. An annual audit of what is paid for against what is used recovers real money. On the obligation side, client confidentiality duties and, where health information is handled, HIPAA requirements bear on how systems are chosen and secured, so the cheapest option is not always available.

Before you quote

  • Audit subscriptions annually against actual usage.
  • Retire systems when a replacement is adopted.
  • Confirm confidentiality and, where relevant, HIPAA obligations are met.

Where the rules come from

Questions

About this calculator

Where does law practice technology spend leak?

Overlap. A practice accumulates two systems that both store documents, or pays separately for billing that the practice management platform already includes, because each was adopted for one problem and nothing was retired. An annual audit recovers real money.

Does confidentiality affect software choice?

Yes. Client confidentiality duties bear on where data is stored and how it is secured, and where health information is handled HIPAA requirements apply as well. That removes some cheap options from consideration, which is a cost worth planning for rather than discovering.

Why does technology cost rise with headcount?

Because most of it is priced per user, so a practice adding people adds cost in every system simultaneously. Budgeting technology per person rather than as a fixed line is what keeps that visible before the invoices arrive.

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The formula

annual = per seat software x users x 12 + research x fee earners x 12 + fleet cost / refresh years + IT support + infrastructure

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How to use this calculator

  1. Users. Enter your own figure; the page starts at 9.
  2. Practice management software per seat per month ($). Enter your own figure; the page starts at $89.
  3. Document management and email per seat per month ($). Enter your own figure; the page starts at $22.
  4. Legal research per fee earner per month ($). Enter your own figure; the page starts at $125.
  5. Fee earners needing research access. Enter your own figure; the page starts at 5.
  6. Other software per seat per month ($). Enter your own figure; the page starts at $18.

The result updates as you type, so you can try a figure, see what it does to technology cost per year, and change it back. Nothing you enter is sent anywhere or saved.

A worked example

These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.

What goes in

InputValue
Users9
Practice management software per seat per month$89
Document management and email per seat per month$22
Legal research per fee earner per month$125
Fee earners needing research access5
Other software per seat per month$18
Laptop or workstation cost$1,600
Hardware refresh cycle (years)4
Server, network and backup per year$4,800
IT supportManaged provider, per user per month
Managed IT per user per month$95
Annual revenue$1,850,000

What comes out

ResultValue
Technology cost per year main result$40,092
Cost per user per year$4,455
Software subscriptions$21,432
Hardware, amortised over the refresh cycle$3,600
IT support$10,260
Server, network and backup$4,800
As a share of revenue2.2%
Cost per month$3,341

Technology costs $40,092 a year, or $4,455 per user, which is 2.2% of revenue. Software is $21,432 of it, IT support $10,260, and the hardware refresh $3,600 a year even in a year you buy nothing.

How sensitive the answer is

Holding everything else steady and changing only practice management software per seat per month, this is what happens to technology cost per year. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.

Practice management software per seat per month ($)Technology cost per year
$45 $35,340
$67 $37,716
$89 example above $40,092
$134 $44,952
$178 $49,704

Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.

What each figure means

Users
A number, between 1 and 2000, starting at 9.
Practice management software per seat per month ($)
A money amount, between 0 and 2000, starting at $89.
Document management and email per seat per month ($)
A money amount, between 0 and 1000, starting at $22.
Legal research per fee earner per month ($)
A money amount, between 0 and 5000, starting at $125.
Fee earners needing research access
A number, between 0 and 500, starting at 5.
Other software per seat per month ($)
A money amount, between 0 and 1000, starting at $18.
Laptop or workstation cost ($)
A money amount, between 0 and 20000, starting at $1,600.
Hardware refresh cycle (years)
A number, between 1 and 15, starting at 4.
Server, network and backup per year ($)
A money amount, between 0 and 500000, starting at $4,800.
IT support
Choose from Managed provider, per user per month, Ad hoc, billed hourly, In house staff.
Managed IT per user per month ($)
A money amount, between 0 and 2000, starting at $95.
Annual revenue ($)
A money amount, between 0 and 500000000, starting at $1,850,000.

What the results tell you

ResultWhat it is
Technology cost per yearThe headline result. A money figure.
Cost per user per yearA money figure.
Software subscriptionsA money figure.
Hardware, amortised over the refresh cycleA money figure.
IT supportA money figure.
Server, network and backupA money figure.
As a share of revenueA percentage.
Cost per monthA money figure.

Estimating is the easy part

The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.