Calculating the Cost of IT Downtime for Law Firms

Working out the cost of downtime for law firmsPeter Groucutt, Managing Director

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Who we are• Providing backup and disaster recovery in the UK since

2003• Ex-military data centres and fully managed services

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Who we work with


How much does IT downtime actually cost? “downtime can cause business

losses of up to £10,000 per hour and up to £1million if a full business day is lost…”

SRA report “Silver Linings: cloud computing, law firms and risk”

Why is the cost of IT downtime increasing?


Why is the cost of IT downtime increasing?

•Digitisation of the professional services• IT increases automation and productivity• Increased reliance on technology• Increased expectation from clients


Who is responsible for your Business Continuity Planning?

Gold: Strategic Control Group (SCG)• Managing Partner/Head of Legal• Chief Operating Officer• Finance Director• Head of HR• Head of Facilities Management• All department/team heads

Gold: Strategic Control Group

Legal departmen

tsIT Facilities HR Finance

Working out the cost of downtime


How much does IT downtime actually cost? “downtime can cause business

losses of up to £10,000 per hour and up to £1million if a full business day is lost…”

SRA report “Silver Linings: cloud computing, law firms and risk”



Very simple calculation:

Turnover of firm/number of hours in the year = Cost per hour

Cost per working hour:

Turnover of firm/number of working hours in the year = Cost per hour

Staff costs?

Cost of staff/number of working hours in the year = Cost of staff per hour



We may want to be slightly more nuanced:

• Per fee earner?• Per partner or senior fee earners?• Per team or department?• Per site?• Per IT system?

*For any of these distinctions we can work out costs by loss of income and the cost of staff


Working out the cost of downtime For a £10 million turnover firm:

• Loss of revenue = £4,808 per hour

•Employee salary costs: £3,606 per hour

(based on salary costs of £7,500,000)

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What about peripheral costs?

ClosureControl of practiceRebuke

Fine

Losing an average sized customer (small outage)Losing your largest customer (longer outage)



1 day 1 week 2 weeksLoss of revenue

£38,450 £192,000 £384,000

Salary costs £28,850 £144,000 £288,000

Peripheral costs

£100,000 £500,000

Total £67,300 £436,000 £1,172,000


Disaster Recovery as a Service

£30,000


How long would it currently take for you to recover IT systems from a disaster? 45% want to recover in less than 1 hour (up from 34% in 2008)21% can recover in less than 1 hour Actual RTOIdeal RTO

Calculating the Cost of IT Downtime for Law Firms

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