Direct Answer
A law firm’s IT budget should include both recurring technology expenses and larger expenses that occur periodically.
These typically include:
- IT support and management
- Cybersecurity and compliance
- Microsoft 365 and other software
- Computers and other equipment
- Internet and communications
- Backup and recovery
- Planned technology projects and upgrades
The budget should also anticipate the replacement of aging hardware before it fails.
Why This Matters
Without an IT budget, technology spending tends to become reactive.
Computers fail. Hardware needs replacement. Cybersecurity and compliance requirements change. The firm hires employees, adds software, or undertakes a new technology project.
Planning these expenses in advance avoids unexpected IT bills.
Editor’s Insight
Planning allows the firm to make informed decisions about its technology while avoiding surprises.
What Should a Law Firm Include in Its IT Budget?
1. Recurring IT and Technology Expenses
Start with the technology expenses the firm already pays monthly or annually.
Depending on the firm, these may include:
- Managed IT and support
- Microsoft 365
- Practice management and document management software
- Cybersecurity services
- Backup
- Internet
- Telephone and VoIP
- Other cloud applications and subscriptions
These expenses establish the baseline cost of operating the firm’s technology.
2. Cybersecurity and Compliance Requirements
Cybersecurity and compliance should be included in the firm’s technology budget.
The budget should account for the regulatory safeguards the firm is required to comply with.
Depending on the regulatory framework, these may include:
- Multi-Factor Authentication (MFA)
- Endpoint Detection and Response (EDR)
- Email security
- Security Information and Event Management (SIEM)
- Cybersecurity awareness training
- Cybersecurity risk assessments
- Backup and recovery
Planning for these requirements helps prevent cybersecurity and compliance expenses from becoming unexpected costs.
3. Replacement of Aging Computers and Equipment
Computers and other hardware should be replaced on a planned schedule rather than waiting for them to fail.
Avenue M recommends using five years as the maximum replacement cycle for hardware. Equipment may need to be replaced sooner because of reliability, performance, security, or support requirements.
The firm should know the age of its computers and other important equipment and budget for upcoming replacements.
This allows hardware costs to be anticipated and, where appropriate, spread over multiple budget years.
4. Upcoming Changes in the Firm
The IT budget should also reflect what the firm expects to do in the future.
That may include:
- Hiring employees
- Adding attorneys
- Opening or moving an office
- Expanding remote or hybrid work
- Implementing new software
- Moving systems to the cloud
- Replacing a server or another major system
Planning for these changes helps avoid surprise bills.
5. A Plan for Unexpected Technology Expenses
Not every technology expense can be predicted.
Equipment can fail unexpectedly. A vendor may change its pricing. A security issue may require action. New regulatory or cyber-insurance requirements may create additional costs.
The IT budget should leave room for expenses that cannot be anticipated precisely.
Two Questions We Hear
How much should a law firm budget for IT?
There is no single amount that is right for every law firm.
The appropriate budget depends on the number of employees, technology already in place, age of the equipment, software the firm uses, cybersecurity and compliance requirements, and upcoming projects.
The firm should budget based on what it actually needs rather than relying on a generic percentage of revenue.
What IT expenses should we plan for that we aren’t paying for today?
Look beyond the firm’s current monthly bills.
Future expenses may include replacing aging computers and equipment, adding employees, implementing new software, meeting new cybersecurity or compliance requirements, moving or expanding an office, and undertaking major technology projects.
Identifying these expenses early gives the firm time to plan for them.
How Avenue M Helps
Avenue M Computers has provided IT and cybersecurity services to law firms in New York since 2010.
We help law firms understand their current technology needs and identify expenses that are likely to be coming.
By planning for equipment replacement, cybersecurity, software, and future technology needs, firms can budget for those expenses instead of addressing them only when they become urgent.
Three Key Takeaways
- Planning IT expenses in advance avoids unexpected bills.
- Hardware should be replaced on a planned schedule, with five years as the maximum replacement cycle.
- Technology planning should account for where the firm is going, not only what it uses today.
Related Articles
- How Much Does Managed IT Cost for a 10-25 Employee Law Firm in New York or New Jersey?
- How Should a Law Firm Choose an IT Company?
- What Happens During a Cybersecurity Risk Assessment?
- What Technology Does a Law Firm Need to Support Remote and Hybrid Work?
- What Is Disaster Recovery, and Why Does a Law Firm Need It?
Technology should help your law firm practice law more securely, efficiently, and confidently, not become another distraction.
