One of the benefits of cloud based computing is a reduction in cost for network hardware and software infrastructure. In general, SaaS providers consistently tend to over extol these cost savings. The cost comparisons are a defensive posturing on the part of the SaaS providers to minimize the seemingly high cost of their service. More often than not, the SaaS provider's cost comparisons will convey cost savings on hardware, maintenance, training, backup and consulting services.

Hardware Savings
It's hard to imagine an office without hardware. Presumably, the law office needs, at minimum, a network to gain access to the internet, equipment to print and scan documents, and the capacity to store archival data. Virtual offices are the exception to this rule, but in this case we would need to add the costs for a multitude of other SaaS products in addition to the LPM cost.

Training Savings
Training costs are a wash and significantly overestimated as a cost savings for the SaaS provider. It's like comparing the training requirements for Notepad to MS Word. Isn't it true that if the SaaS product had more function it would, in turn, require more training?

Consulting Savings
Again, another wash. Most LPM clients never engage a consultant and when they do, it's to gain an advantage or to tailor their work flow to their practice, which in the long run results in a cost savings. 

Data Migration Savings
This is actually a higher cost for the SaaS vendor. Most desktop applications have far superior import mechanisms than the existing group of SaaS providers. Unless you are using a Salesforce.com application, the current lineup of SaaS products use a proprietary database that prohibits optimal data migration from existing platforms.

Backup
Where is your SaaS data backup saved?  Do you have other data/information to backup besides your LPM data? At best you will want to download your LPM data and make your own backup. No cost savings here.

In Conclusion

To quote top LPM industry consultant Thomas L. Rowe of OTB Consulting:

"LPM is simply one component of the office infrastructure. Unless everything is moved to the cloud, most of the claimed cost savings cannot be fully achieved."

Firms will find that SaaS products will tangentially save cost, especially as they move more of their firm's function to the cloud. For most firms, the savings should be considered proportionate and still apply only to specific aspects of their office infrastructure. Solo practitioners that are completely cloud based will find the greatest level of savings. Significantly larger firms will also find significant cost savings by allowing their firms to reduce spiraling IT costs. The preponderance of firms fall somewhere in between.

For an honest debate on LPM SaaS based vs Legacy Desktop solutions, we have to remain sincere with our evaluations. Let's focus on the functionality and what the cloud offers that legacy desktop software has failed to (or cannot) deliver. To date, most of the press and conversation has focused on Clio and Rocket Matter, the first two arrivals on the LPM cloud. Meanwhile, AdvologixPM, a Force.com based product, is quietly gaining market share and support in the LPM consulting community.

AdvologixPM already has what the pundits are demanding. As the word gets out you can expect to see a lot of attention focused on this product. The Salesforce.com platform offers the underlying function that Clio and Rocket Matter cannot reasonably attain.