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The cost of licensing and staffing a matter management system

A report on two studies of the District of Columbia’s Office of Corporation Counsel mentioned that Nashville’s Legal Department had licensed a matter management system, paid for some hardware to support it, and hired a staff person to run it. The base numbers are now at least five years old, but probably not much older than that.

The initial fee for the software came to $170,000 plus $15,000 for hardware. Nashville committed to paying maintenance fees of $15,000 per year. The employee’s annual compensation amounted to $35,000.

If we assume the department would depreciate its investment for the software and hardware over a ten-year life cycle, after which both would need to be upgraded or replaced, then those two components added to maintenance fees equal $43,500 per year. If the employee has benefits of 30 percent on top of salary, the annual investment in the system reaches approximately $90,000. Next, top off that annual cost for five-plus years of inflation, and the annual cost over the decade for what is probably a 10-20 lawyer municipal law office nears $100,000.

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