Peter Groucutt explores some of the methods you can use to calculate the cost of downtime for your firm.

1. Working out the
cost of downtime
for law firms
Peter 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”

5. 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
departments
IT Facilities HR Finance

8. 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?
Closure
Control of practice
Rebuke
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 weeks
Loss 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