Calculating the Cost of IT Downtime for Law Firms
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Transcript of Calculating the Cost of IT Downtime for Law Firms
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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
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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”
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Why is the cost of IT downtime increasing?
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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
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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
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Working out the cost of downtime
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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”
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Working out the cost of downtime
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
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Working out the cost of downtime
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
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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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Working out the cost of downtime
What about peripheral costs?
ClosureControl of practiceRebuke
Fine
Losing an average sized customer (small outage)Losing your largest customer (longer outage)
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Working out the cost of downtime
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
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Disaster Recovery as a Service
£30,000
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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