Office 365 for Law Firms – Benefits, Risks and Alternatives

Office 365 for law firms

Office 365 for Law firms – Should Your Firm Use Office 365?

Cloud computing has transformed the way law firms large and small practice. It gives law firms a new level of mobility, reliability and security–and allows lawyers to get out of the business of managing IT and back into the practice of law. Cloud computing is made up of a number of different cloud platforms, services and applications that law firm leverage to be able to work anywhere and ditch on-premise servers. Microsoft Office 365 is one such service that is gaining a lot of attention in the legal world. Should your law firm use Office 365? What are the benefits? What are the risks? What are the alternatives? In this post we explore Office 365 for law firms.

What is Office 365

Lets explore Office 365 for law firms. First: What exactly is Office 365? As a technology advisor to hundreds of law firms, I get this question a lot (along with a lot of misunderstandings.) First, a quick history lesson.

The Office Suite

Microsoft used to sell its Office product in two license models: Retail (you buy it in a store or from a wholesaler) or OEM (you buy it with a new computer, at a discount but usable only on that computer). Both of these license models use perpetual licensing: That is: You buy it once and own it (theoretically) forever. But you only owned that version. Every few years Microsoft would release an updated version (Office 2010, 2013, 2016, and so forth), and you could either buy a new perpetual license or pay a discounted “upgrade” fee to upgrade your older version to the latest version. The challenge with this long-running model is that it created spikes of cost for a law firm, or any business, every few years as the firm had to buy new licensing every few years. (And–it created irregular, less predictable revenue for Microsoft. Poor Microsoft.)

A fundamental of cloud computing and SaaS (Software-as-a-Service) based software applications is subscription-based-licensing, or SBL. With SBL, meant to replace perpetual licensing, the consumer pays a (typically small) fee per user, per month for the software. They never really own the software, but instead have access to the latest version for a predictable monthly expense. Old-school software consumers aren’t always on board with this model, but on the whole it helps convert larger capital expenditures on software to predictable and salable monthly expenses.

Microsoft Office 365 is, in part, SBL for its Office suite product.

Exchange Email

Separately, Microsoft makes email server software called Exchange Server. Exchange is software that a small or large business could buy and install on its own server, allowing a business to be its on email service provider. In fact, for a long time this was one of the only ways to get business-class email for your business: Buy Exchange server and run it in-house. Later, hosting and IT companies began to host this themselves and, in effect, rent Exchange services out to their client: removing the IT management burden from their clients and delivering an economy of scale.

Much later, Microsoft decided it too wanted to be in the business of not just making software (like Office and Exchange), but of hosting it and delivering the service directly to the consumer (businesses). So it started providing hosting Exchange directly to customers, where before they only licensed it to hosting providers. This makes Microsoft relatively new to the Exchange hosting game, oddly.

Office 365 is essentially a bundle of the Office suite (subscription-based licensing) and Hosted Exchange email. Plus: A few other services that Microsoft adds to the bundle (such as OneDrive, SharePoint and a few other side dishes).

Office 365 for Law Firms – Does it Make Sense?

Okay – now you understand exactly what Office 365 is. Does it make sense for your law firm? Lets dig deeper and do a quick due-diligence checklist:


Office 365 does give you the ability to run the Microsoft Office suite (as well as use your Exchange mailbox) on virtually any device.Check.


Office 365, as we explored, is subscription-based, meaning you pay per-user, per month. Check.

Low Pricing

Office 365 is relatively inexpensive: You get the Office Suite, Exchange email and a few other services (depending on which package you select) for less than $20 / user. Check.

So far so good, right? Let’s dig just a little deeper, and explore some of the requirements of law firms specifically.


Microsoft, as I’ve said, is new to the Exchange hosting game, and not particularly well-known for their tech support. They provide what I’ll describe as “limited” support to their end users, which is why most businesses hire a local IT company to setup and support their Office 365. That’s an added cost. Negative.


If Office docs and email were all your law firm needed to function day-to-day, then Office 365 could, in theory, be a good fit. However, the suite falls short on delivering the specific needs of law firms. The Outlook calendar isn’t sophisticated enough for most law firms. Email Management–tying emails to matters within Outlook–is left to each user with basic folders and nothing more. In short, Office 365 isn’t enough to delivery the legal productivity that today’s law firms require.Negative.

Data Sovereignty

I saved the worst for last. As an attorney you have ethical obligations to your clients, among them: Keeping your client’s data safe and private. The problem? Office 365 saves and replicates your data, and therefor your clients data, to countries outside of the US. Why? Because Office 365 isn’t made for law firms, its made for the masses. And by and large, garden-variety businesses don’t necessarily care if their email inbox or documents are being backed up to South America. Law firms, on the other hand, do care (or should). In this post, a Microsoft engineer describes how it backs up Office 365 data into different countries, outside of the legal jurisdiction of the United States. Negative.

Related: TechCrunch: The Cloud’s Biggest Threat Are Data Sovereignty Laws

So… Office 365 for Law firms – does it make sense? The bottom line here is: no, it definitely does not.

Look, I’m not anti-Office 365. When talking with my business colleagues that do not run law firms: I do recommend it. Just not for law firms–if for no other reason than the significant data sovereignty issues.

What’s a Lawyer to Do?

Now that we’ve established that Office 365 for law firms is not a good idea–what should law firms do? Fear not, there are a number of different solutions that will bring all of the benefits that (presumably) attracted you to Office 365 – mobility, security, reliability – without the non-starters that come with Office 365.

Legal-centric Hosted Exchange

Recall from our history lesson earlier that prior to Office 365, hosted exchange email was provided by third-party cloud hosting providers. These providers are still alive and well, and are often better suited to provide Exchange email to the nuanced needs of one industry or another. I recommend getting Exchange for your law firm from a legal-centric email hosting provider – one that has options required by some law firms (such as email encryption and archive/retention) and one that keeps the data within the continental US.

Private Cloud

A private cloud is a fully-hosted IT platform: A service that will host your law firm’s legal software, documents and email. Private clouds enable businesses to run and access their software without the need for on-premise servers, and often include hosted exchange. A legal-centric private cloud will host your legal software and will include the Office suite and Exchange email–all within the US and alongside support for your legal software

Related: Private Cloud vs Office 365 for Law Firms

Bundled Applications

Some SaaS (web-based) legal applications come bundled with the Microsoft Office suite and Exchange email. Being exclusively for law firms, these implementations of Office and Exchange will (or should) reside within the US and avoid the pitfalls of data sovereignty and ethical issues.

Closing the Loop

Now you understand not only what Office 365 is, but better understand why Office 365 for law firms comes with some serious risks. Keep in mind: others may advise you to use Office 365, like your local IT firm. But remember: Their advise probably comes from the broader technology perspective (such as an IT consultant that services law firms along with many other industries) and may not be aware of the unique requirements of law firms.

The cloud is a great thing: It will liberate your law firm from servers, IT headaches, allow you to work anywhere and with a new level of security and reliability. Just make sure you do it right.

Epilogue – Document and Email Management for Law Firms

Most law firms need more than just the Office suite and email. They need:

  • The ability to store, share and file documents by matter.
  • The ability to manage document versions.
  • The ability to tag, code and categorize documents.
  • The ability to save emails by matter and share with the rest of the firm.
  • The ability to quickly search across all matter documents and email.

These functions are features of a Document & Email Management System. If your firm needs these functions, take a look at LexWorkplace, our cloud-based, matter-centric document and email management solution. LexWorkplace will store, organize and manage your documents in the cloud, by matter.

Cloud-based Document & Email Management