Technology spending can be frustrating for law firm leaders because it rarely arrives as one simple expense.
There is managed IT support.
Microsoft 365 licensing.
Cybersecurity.
Computers.
Internet service.
Backup and business continuity.
Practice management software.
And then there are the projects that don't happen every month, such as replacing a firewall, refreshing computers, moving offices, or implementing a new application.
So how much should a law firm actually budget for technology?
For a 10- to 50-person Las Vegas law firm, a practical technology budget should account for seven major categories:
- Managed IT services
- Cybersecurity
- Microsoft 365 and cloud services
- Hardware replacement
- Backup and business continuity
- Legal and business applications
- Projects and contingency spending
The exact total will vary considerably based on your firm's technology environment, security requirements, applications, support model, and equipment lifecycle.
The goal of a good IT budget isn't to predict every technology expense perfectly.
It's to make sure the expenses you can predict don't become surprises.
Quick Answer: What Should a Law Firm Include in Its IT Budget?
A useful annual technology budget should include both recurring expenses and planned non-recurring expenses.
| Budget Category | What to Plan For |
| Managed IT | Proactive management, monitoring, maintenance and help desk/support labor |
| Cybersecurity | Endpoint, email, identity, awareness and other security services |
| Microsoft 365 & Cloud | Microsoft licensing and other cloud platforms |
| Hardware | Computers, servers, firewalls, switches, Wi-Fi, UPS equipment and accessories |
| Backup & Continuity | Backup services, recovery capabilities and continuity planning |
| Business Applications | Practice management, document management and other software |
| Projects & Contingency | Migrations, office changes, upgrades and unexpected technology needs |
Some of these costs occur every month.
Others may only occur every three, four, or five years.
Your budget needs to account for both.
That's where many technology budgets fall short.
A firm may know exactly what it spends each month on its IT provider and Microsoft 365 but have no plan for replacing 10 aging laptops next year.
The recurring budget looks predictable right up until the hardware invoice arrives.
The 7-Part Technology Budget for Law Firms
Rather than starting with a percentage of revenue or an arbitrary industry benchmark, we recommend building the budget from the technology your firm actually uses.
Let's look at each category.
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Managed IT Services
For many law firms, managed IT is one of the largest recurring technology expenses.
As we've discussed in our detailed Managed IT Pricing Guide for Las Vegas Law Firms, a useful planning range for managed IT services in Las Vegas is approximately:
$150 to $300 per user per month
That means the managed IT portion of the budget might look roughly like this:
| Firm Size | Monthly Planning Range | Annual Planning Range |
| 10 users | $1,500–$3,000 | $18,000–$36,000 |
| 25 users | $3,750–$7,500 | $45,000–$90,000 |
| 50 users | $7,500–$15,000 | $90,000–$180,000 |
These are planning ranges, not quotes.
The actual cost depends heavily on what the agreement includes.
For example, one provider may bundle proactive maintenance and unlimited reactive support into one recurring fee.
Another may provide proactive management plus a block of support labor.
Another may manage the environment proactively while billing reactive assistance separately.
Cybersecurity may be bundled into the price or provided separately.
That's why comparing two MSP proposals solely by their per-user rate can be misleading.
The better question is:
"What services and labor are we actually receiving for that amount?"
We've covered that issue in much greater detail in our guide to what should be included in a managed IT services agreement.
Don't Budget for IT Support Based Only on Headcount
Per-user pricing is useful for planning, but headcount isn't the only factor that affects your IT costs.
A 25-person firm with a standardized, cloud-based environment may be considerably easier to support than another 25-person firm operating:
- Multiple offices
- Aging servers
- Numerous legacy applications
- Complicated remote-access systems
- Poorly documented technology
- A large number of devices per employee
Your technology environment matters.
So does the way your employees use support.
That's why the $150–$300 range should be treated as a starting point for budgeting, not a formula that determines exactly what every firm should pay.
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Cybersecurity
Cybersecurity deserves its own line in the technology budget.
This is important because managed IT and cybersecurity aren't necessarily the same service.
Some providers bundle cybersecurity tools into their managed IT price.
Others provide them separately.
At ANAX Business Technology, cybersecurity is offered as an add-on bundle, allowing the IT support model and cybersecurity services to be addressed separately.
Depending on your firm's needs, the cybersecurity portion of your budget may account for services such as:
- Endpoint Detection and Response
- Email security
- Security awareness training
- Identity protection
- Vulnerability management
- Microsoft 365 security
- Security monitoring
The appropriate combination will depend on the firm's environment, risk profile, client requirements, insurance requirements, and other considerations.
The mistake is assuming:
"We pay an IT company every month, so cybersecurity must already be covered."
It may be.
It may not be.
Ask.
Why Law Firms Should Separate the Cybersecurity Conversation
Separating cybersecurity in the budgeting process has another advantage.
It makes the investment visible.
Leadership can ask:
- What are we currently spending?
- Which risks are these services designed to reduce?
- What security gaps remain?
- Are client or insurance requirements changing?
- Should we invest more in a particular area next year?
That is a much more useful conversation than treating cybersecurity as an invisible collection of tools buried somewhere inside the IT bill.
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Microsoft 365 and Cloud Services
Microsoft 365 has become fundamental infrastructure for many law firms.
Depending on your environment and licensing, it may provide access to services such as:
- Outlook and Exchange Online
- Word
- Excel
- PowerPoint
- Microsoft Teams
- OneDrive
- SharePoint
- Security and identity capabilities
But Microsoft licensing is only one part of the cloud-services budget.
Your firm may also subscribe to:
- Cloud storage
- Electronic signature platforms
- Password management
- Email archiving
- Collaboration tools
- PDF software
- Other productivity applications
These recurring subscriptions can accumulate quietly.
A $15 or $30 monthly application may seem insignificant when someone approves it.
Multiply that across 25 or 50 employees and then across multiple applications, and the annual expense becomes much more meaningful.
Audit Cloud Licensing at Least Annually
A useful budgeting exercise is to review:
Who has a license?
Which license do they have?
Do they still need it?
Are we paying for duplicate functionality?
Are former employees still consuming licenses?
Are we paying month-to-month for services that should be budgeted annually?
The objective isn't simply to reduce licensing.
It's to make sure your firm is paying intentionally for the cloud services it actually needs.
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Hardware Replacement
Hardware is where a technology budget often becomes lumpy.
Computers don't generate a neat monthly subscription.
You purchase them, use them for several years, and eventually replace them.
That's why hardware should be treated as an annual budget category even in years when you don't expect a major replacement project.
As we covered in our hardware lifecycle guide, useful planning ranges include:
| Equipment | Typical Planning Range |
| Business laptops | 3–5 years |
| Business desktops | 4–5 years |
| Servers | 5–7 years |
| Firewalls | 4–6 years |
| Network switches | 5–7 years |
| Wi-Fi access points | 4–6 years |
| UPS batteries | 3–5 years, depending on conditions |
| Monitors | 5–7+ years |
These aren't expiration dates.
They're planning windows.
A five-year-old laptop that remains reliable, secure, supported, and productive may not need immediate replacement.
But you should know that it's approaching the point where replacement belongs in the conversation.
Turn Computer Replacement Into an Annual Expense
For budgeting purposes, one of the easiest approaches is to stagger computer replacements.
If you're using approximately a five-year lifecycle as a starting point:
10-user firm: plan around 2 computers per year
25-user firm: plan around 5 computers per year
50-user firm: plan around 10 computers per year
The actual number will vary as devices age and your headcount changes.
But this approach is much easier to budget than replacing every computer at once.
It also turns hardware replacement from an emergency into a routine business expense.
Growth and Replacement Are Two Different Hardware Costs
There's another category firms sometimes forget.
Suppose your 25-person law firm plans to replace five aging computers next year.
You also plan to hire four employees.
Your potential computer requirement isn't five.
It's:
5 lifecycle replacements + 4 growth devices = 9 computers
And those new employees may need more than laptops.
They may also require:
- Monitors
- Docking stations
- Headsets
- Software licenses
- Microsoft 365 licensing
- Security services
- Phone services
- Additional support capacity
This is why technology budgeting should be connected to the firm's broader business plan.
Your technology partner should know where the business is going.
The First Budgeting Principle: Separate "Run the Business" From "Change the Business"
At this point, we can introduce a simple distinction that makes the rest of the budget much easier to understand.
Your technology spending generally falls into two buckets.
Run the Business
These are expenses required to keep the existing environment operating.
Examples include:
- Managed IT
- Cybersecurity
- Microsoft 365
- Backups
- Routine hardware replacement
- Existing business applications
Change the Business
These are investments that significantly modify or improve the environment.
Examples include:
- Office moves
- Cloud migrations
- New practice management systems
- Major network upgrades
- New office locations
- AI deployments
- Large cybersecurity initiatives
Both belong in the technology budget.
But they shouldn't necessarily be treated the same way.
If you mix routine operating expenses and major strategic projects into one number, leadership has a much harder time understanding why the technology budget changed.
Separating them gives you a clearer picture:
What does it cost to operate our current technology environment?
And:
What are we choosing to invest in to make that environment better?
Those are two very different conversations.
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Backup and Business Continuity
Backups are easy to treat as just another monthly IT expense.
But the real question isn't:
"Are we paying for backups?"
It's:
"What are we capable of recovering, and how quickly can we recover it?"
For a law firm, backup and business continuity planning may need to account for:
- Servers
- Business-critical files
- Microsoft 365 data
- Practice management systems
- Document management systems
- Cloud applications
- Configuration data
- Recovery testing
- Business continuity planning
Not every one of these systems will necessarily require a separate backup product. Some cloud applications provide their own data-protection capabilities, while others may require an additional solution.
The important budgeting principle is to understand what is protected, how it is protected, and what recovery capability you're actually purchasing.
Backup Cost Should Reflect Business Importance
Not all data has the same recovery requirement.
Suppose your firm loses access to an archived folder containing old marketing materials.
That's inconvenient.
Now suppose your attorneys can't access active client documents or the firm's practice management system.
That's a very different business problem.
When budgeting for backup and recovery, identify:
- What systems are critical?
- How much data could the firm tolerate losing?
- How long could the firm reasonably operate without each system?
- How will employees work while recovery is taking place?
- Has the recovery process actually been tested?
Those answers help determine the appropriate backup and business continuity strategy.
A cheaper backup service isn't necessarily less effective.
A more expensive service isn't automatically better.
What matters is whether the recovery capability aligns with the business requirement.
Don't Forget Microsoft 365
There's a common assumption worth addressing:
"Microsoft has our data, so Microsoft 365 is our backup."
Microsoft provides significant resiliency and data-protection capabilities within its services, but firms should still evaluate whether those capabilities meet their own retention and recovery requirements.
Ask your technology partner:
- What happens if an employee accidentally deletes something?
- How long can deleted information be recovered?
- How are SharePoint and OneDrive protected?
- What happens if information is intentionally deleted?
- Do our retention requirements justify a separate backup solution?
- How would we recover data during an actual incident?
The answer may differ based on your Microsoft licensing, configuration, applications, and business requirements.
The point is to make the decision deliberately rather than assume the issue has already been handled.
Business Continuity Is Bigger Than Backup
A backup helps you recover data.
Business continuity addresses a larger question:
"How does our firm continue operating while something is wrong?"
That may involve planning for situations such as:
- Internet outages
- Power interruptions
- Cybersecurity incidents
- Server failures
- Cloud-service disruptions
- Office accessibility problems
- Hardware failures
We've covered this distinction in our separate Business Continuity vs. Disaster Recovery guide.
For budgeting purposes, the important point is that resilience may require investments beyond backup storage.
That could include redundant connectivity, replacement equipment, cloud services, recovery capabilities, or other measures appropriate for your environment.
Your technology budget should reflect the level of resilience your firm actually requires.
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Legal and Business Applications
For many law firms, software can represent a substantial portion of the technology budget.
And this category extends far beyond Microsoft 365.
Depending on the firm, applications may include:
- Practice management
- Document management
- Time and billing
- Accounting
- Legal research
- E-discovery
- PDF software
- Electronic signatures
- Document comparison
- Dictation
- Client portals
- Phone systems
- Password management
- AI tools
Many of these services are now subscription-based.
That makes them predictable individually but surprisingly easy to lose track of collectively.
Build a Software Inventory
At least once per year, create a list containing:
| Application | Users | Billing Cycle | Business Owner | Renewal Date | Still Needed? |
| Microsoft 365 | ___ | Monthly/Annual | ___ | ___ | Yes/No |
| Practice Management | ___ | Monthly/Annual | ___ | ___ | Yes/No |
| PDF Software | ___ | Monthly/Annual | ___ | ___ | Yes/No |
| E-Signature | ___ | Monthly/Annual | ___ | ___ | Yes/No |
| Other | ___ | Monthly/Annual | ___ | ___ | Yes/No |
This simple exercise can uncover:
- Licenses assigned to former employees
- Multiple applications performing similar functions
- Products nobody is actively using
- Subscription increases nobody budgeted for
- Renewal dates leadership wasn't tracking
It can also identify the opposite problem.
Perhaps employees are using inexpensive consumer tools because the firm hasn't provided an approved business solution.
That can create security, compliance, and information-management concerns.
The goal isn't simply to reduce software spending.
It's to understand it.
Watch for "Shadow IT"
An employee needs to solve a problem.
They find an online service.
They enter a credit card.
Problem solved.
Except the firm may now have client or business information stored in an application nobody evaluated.
This is often called shadow IT.
The budgeting lesson is important.
If employees genuinely need a particular capability, eliminating an unauthorized $20-per-month application doesn't necessarily eliminate the business requirement.
You may need to replace it with an approved solution.
Technology budgeting should therefore consider not only:
"What software are we paying for?"
but also:
"What technology are employees actually using?"
Those aren't always the same list.
Budget for Software Growth When You Budget for Hiring
Remember our earlier example of a 25-person firm adding four employees?
Those employees don't just require computers.
They may require additional licenses for:
- Microsoft 365
- Practice management
- Document management
- PDF software
- Phone service
- Security tools
- Backup services
- Other per-user applications
If your firm expects meaningful growth next year, calculate the technology impact before hiring begins.
A new employee's technology cost is more than the price of a laptop.
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Projects and Strategic Technology Investments
The first six categories largely describe technology your firm already depends on.
The seventh category is about change.
Examples include:
- Moving offices
- Opening another location
- Replacing a server
- Migrating applications to the cloud
- Implementing a new practice management system
- Redesigning the network
- Improving conference rooms
- Deploying new cybersecurity capabilities
- Introducing AI tools
- Major Microsoft 365 projects
These expenses shouldn't be hidden inside the normal operating budget.
Create a separate project list.
For every proposed project, identify:
What are we doing?
Why are we doing it?
When do we expect to do it?
What should we budget?
What other costs will the project create?
That last question is particularly important.
Look Beyond the Project's Initial Price
Suppose your law firm decides to implement a new cloud application.
The software itself may cost $X per user per month.
But the project could also involve:
- Implementation labor
- Data migration
- Employee training
- Integration work
- Security configuration
- Additional Microsoft licensing
- Ongoing administration
- Changes to other applications
The subscription price isn't necessarily the project price.
Similarly, moving offices doesn't just mean paying an internet provider.
You may need:
- Cabling
- Network equipment
- Wi-Fi design
- Internet installation
- Equipment relocation
- Conference-room technology
- Onsite IT labor
- Temporary connectivity
Good technology budgeting looks at the whole project, not merely the most obvious invoice.
Add a Technology Contingency
Even with excellent planning, something unexpected will happen.
A laptop gets damaged.
A network device fails earlier than anticipated.
A critical employee suddenly needs additional equipment.
A vendor changes its licensing.
A client introduces a new technology requirement.
Your firm doesn't need to know exactly what the unexpected expense will be.
That's the purpose of a contingency.
Rather than pretending every dollar of next year's technology spending can be predicted, establish an amount leadership is comfortable reserving for unplanned needs.
The appropriate amount will vary by firm.
A newer, standardized environment may require less contingency than an organization operating older equipment and several legacy systems.
The important thing is simply to acknowledge:
Unexpected technology spending is itself predictable.
You may not know what the expense will be.
You know there eventually will be one.
Build Your Budget in Four Buckets
We now have seven technology categories, but for financial planning I recommend grouping them into four budget buckets.
Bucket 1: Recurring Technology
Expenses that occur monthly or annually.
Examples:
- Managed IT
- Cybersecurity
- Microsoft 365
- Backup services
- Practice management software
- Other cloud applications
These are usually the easiest costs to forecast.
Bucket 2: Lifecycle Replacement
Equipment you expect to replace because of age, condition, warranty, or supportability.
Examples:
- Computers
- Servers
- Firewalls
- Switches
- Wi-Fi
- UPS equipment
These expenses aren't monthly, but they are predictable.
Bucket 3: Strategic Projects
Planned changes or improvements.
Examples:
- Office moves
- Cloud migrations
- New applications
- Major infrastructure upgrades
- AI initiatives
These should be separately visible so leadership understands which expenses are maintaining the existing environment and which are investments in change.
Bucket 4: Contingency
Money reserved for technology needs that weren't specifically anticipated.
That gives leadership a much clearer framework:
Recurring + Lifecycle + Projects + Contingency = Annual Technology Budget
A Simple Annual Technology Budget Worksheet
You don't need sophisticated financial software to begin.
A spreadsheet with these categories is enough:
| Budget Category | Monthly Cost | Annual Cost | Planned One-Time Cost | Next-Year Budget |
| Managed IT | $___ | $___ | $___ | $___ |
| Cybersecurity | $___ | $___ | $___ | $___ |
| Microsoft 365 & Cloud | $___ | $___ | $___ | $___ |
| Legal & Business Software | $___ | $___ | $___ | $___ |
| Backup & Continuity | $___ | $___ | $___ | $___ |
| Hardware Lifecycle | N/A | N/A | $___ | $___ |
| Strategic Projects | N/A | N/A | $___ | $___ |
| Contingency | N/A | N/A | $___ | $___ |
| TOTAL | $___ |
Once you fill in those numbers, something important happens.
Technology stops looking like one mysterious expense.
Leadership can see exactly where the money is going.
Build a Three-Year View, Not Just a One-Year Budget
I'd take the exercise one step further.
After building next year's budget, add two more columns:
Year 1 | Year 2 | Year 3
Why?
Because some of the largest technology expenses are visible well in advance.
You may already know:
- Eight laptops will reach their replacement window in Year 2.
- Your firewall will approach its replacement window in Year 3.
- A server warranty expires next year.
- The firm expects to move offices in two years.
- A software contract renews next year.
- The firm expects to add five employees.
None of these should be surprises.
A three-year technology forecast won't be perfectly accurate.
It doesn't need to be.
The purpose is visibility.
Review the Budget With Your Technology Partner
Your managed IT provider should be able to help with more than next month's support tickets.
At least annually, leadership and its technology partner should discuss:
- What equipment needs replacement?
- What can reasonably remain in service?
- Which warranties are expiring?
- Are licensing costs changing?
- Are there redundant subscriptions?
- Are cybersecurity requirements changing?
- Does the firm anticipate hiring?
- Are any office changes planned?
- Are there major technology projects on the horizon?
- What should leadership expect to spend over the next one to three years?
A useful technology partner should help you see expenses before they become invoices.
That's an important part of strategic IT planning.
Your IT Budget Should Tell a Story
When leadership looks at next year's technology budget and sees that spending is increasing, there should be an explanation.
Perhaps:
$12,000 is increased recurring cost because the firm added employees.
$18,000 is lifecycle spending because several computers are being replaced.
$10,000 is a planned network upgrade.
$5,000 is contingency.
Those numbers tell a much more useful story than:
"IT is going up $45,000 next year."
The objective isn't necessarily to keep technology spending flat.
It's to understand why you're spending the money and what business outcome you're purchasing.
What Does an IT Budget Look Like for a 10-, 25-, or 50-Person Law Firm?
Now let's put the framework into practice.
One of the most common questions law firm leaders ask is:
"Just tell me what we should budget for IT."
It would be convenient to provide one number per employee and call it done.
It would also be misleading.
Two 25-person law firms can have dramatically different technology expenses based on:
- Their managed IT support model
- Cybersecurity requirements
- Microsoft 365 licensing
- Practice management software
- Other legal applications
- Number and age of computers
- Servers and network infrastructure
- Backup requirements
- Planned technology projects
Instead of pretending every law firm should spend the same amount, let's look at how a 10-, 25-, and 50-user firm can build a realistic budget.
Example 1: Technology Budget for a 10-User Law Firm
Start with the recurring managed IT expense.
Using the $150 to $300 per-user monthly planning range discussed earlier:
10 users × $150–$300 = $1,500–$3,000 per month
That produces an annual managed IT planning range of:
$18,000–$36,000 per year
But that's only the first line of the technology budget.
A 10-user firm might build its annual forecast like this:
| Category | Planning Method |
| Managed IT | $18,000–$36,000/year planning range |
| Cybersecurity | Actual annual cost of selected security services |
| Microsoft 365 & Cloud | Actual licenses × 10 users |
| Legal Applications | Actual subscriptions × applicable users |
| Backup & Continuity | Actual annual service cost |
| Computers | Plan for approximately 2 replacements/year on a 5-year cycle |
| Network Infrastructure | Add equipment reaching its replacement window |
| Strategic Projects | Add separately based on planned initiatives |
| Contingency | Establish an amount appropriate for the environment |
Notice that we aren't estimating the other categories with arbitrary percentages.
We can calculate them.
If the firm knows what Microsoft licenses it uses, what its practice management system costs, which security services it purchases, and which computers need replacement, those amounts should be inserted directly.
That's more useful than relying on an industry-average technology percentage that may have little relationship to the firm's actual environment.
Example 2: Technology Budget for a 25-User Law Firm
Now consider a 25-person Las Vegas law firm.
Using the same managed IT planning range:
25 users × $150–$300 = $3,750–$7,500 per month
Annualized:
$45,000–$90,000 per year
Then build around it.
| Category | Planning Method |
| Managed IT | $45,000–$90,000/year planning range |
| Cybersecurity | Actual annual cost of selected security services |
| Microsoft 365 & Cloud | Actual licenses × 25 users |
| Legal Applications | Actual subscriptions × applicable users |
| Backup & Continuity | Actual annual service cost |
| Computers | Plan for approximately 5 replacements/year on a 5-year cycle |
| Network Infrastructure | Add firewall, switch, Wi-Fi and UPS lifecycle expenses |
| Strategic Projects | Add separately based on planned initiatives |
| Contingency | Establish an amount appropriate for the environment |
At 25 employees, lifecycle planning becomes increasingly important.
Suppose the firm has:
- Five computers approaching replacement
- A firewall entering its replacement window
- Three new employees planned for next year
- A practice management renewal
- A conference-room upgrade under consideration
Those aren't unexpected IT expenses.
They're known future expenses that belong in the budget.
Example 3: Technology Budget for a 50-User Law Firm
At 50 employees, the recurring managed IT planning range becomes:
50 users × $150–$300 = $7,500–$15,000 per month
Annualized:
$90,000–$180,000 per year
Again, that is the managed IT portion, not the entire technology budget.
| Category | Planning Method |
| Managed IT | $90,000–$180,000/year planning range |
| Cybersecurity | Actual annual cost of selected security services |
| Microsoft 365 & Cloud | Actual licenses × 50 users |
| Legal Applications | Actual subscriptions × applicable users |
| Backup & Continuity | Actual annual service cost |
| Computers | Plan for approximately 10 replacements/year on a 5-year cycle |
| Network Infrastructure | Forecast infrastructure by lifecycle and support status |
| Strategic Projects | Budget separately for planned changes |
| Contingency | Establish an amount appropriate for the environment |
At this size, relying on memory to manage technology expenses becomes increasingly difficult.
A documented three-year technology roadmap becomes valuable because several expenses may overlap.
You could have 10 computers scheduled for replacement while a network switch reaches end of support and a major software renewal occurs during the same year.
Knowing that 12 or 24 months in advance gives leadership options.
Discovering it when invoices arrive doesn't.
Why We Aren't Giving You One "IT Budget Per Employee" Number
You may notice that we've been willing to provide a planning range for managed IT services but haven't claimed:
"Every law firm should spend $X per employee per year on technology."
That's intentional.
A per-user estimate works reasonably well for certain recurring services.
It becomes much less useful when you combine everything.
Consider two 25-person firms.
Firm A
- Cloud-based applications
- Newer computers
- No onsite servers
- Standardized equipment
- Stable headcount
- No major projects planned
Firm B
- Aging computers
- An onsite server approaching replacement
- Multiple legacy applications
- An upcoming office move
- Significant hiring planned
- A major software migration next year
They have the same number of employees.
They should not have the same technology budget.
A useful budget reflects your actual technology environment and business plan, not simply your employee count.
A Better Formula for Building Your IT Budget
Instead of using one arbitrary per-user benchmark, use this formula:
Recurring Technology Costs
+ Lifecycle Replacements
+ Strategic Projects
+ Contingency
= Annual Technology Budget
Let's break that down.
Recurring Technology Costs
Add your annual spending for:
- Managed IT
- Cybersecurity
- Microsoft 365
- Backup
- Practice management
- Other business applications
- Other recurring technology services
Lifecycle Replacements
Add equipment expected to require replacement during the budget year:
- Computers
- Servers
- Firewalls
- Switches
- Wi-Fi
- UPS equipment
- Other business-critical hardware
Strategic Projects
Add projects leadership intends to undertake:
- Office moves
- Cloud migrations
- Application implementations
- Network upgrades
- AI initiatives
- Other significant technology changes
Contingency
Finally, reserve an amount appropriate for unplanned technology needs.
Now you have a budget built around your firm's actual environment.
Don't Forget the Cost of Adding an Employee
Growth deserves special attention because technology costs often scale with headcount.
Suppose your firm hires a new attorney.
The technology expense may include:
One-Time Costs
- Laptop or desktop
- Monitors
- Docking station
- Accessories
- Setup labor
Recurring Costs
- Managed IT
- Cybersecurity
- Microsoft 365
- Practice management
- Document management
- Phone service
- Other licensed applications
This means leadership should ask a technology question during workforce planning:
"What is our technology cost for adding another employee?"
Your IT partner should be able to help answer that based on your actual environment.
Budget for Departures Too
Employee departures can also affect technology spending.
When someone leaves:
- Accounts need to be secured
- Access should be removed
- Licenses should be reviewed
- Equipment should be recovered
- Data may need to be retained or transferred
- Computers may need to be prepared for reassignment
Some recurring licenses can be eliminated.
Others may need to remain temporarily for retention or operational reasons.
A disciplined onboarding and offboarding process helps prevent the firm from accumulating unused licenses indefinitely.
When Should Your Law Firm Build Its IT Budget?
Ideally, technology planning should happen before the firm's overall annual budget is finalized.
That gives your technology partner time to identify:
- Equipment approaching replacement
- Expiring warranties
- Licensing changes
- Infrastructure concerns
- Cybersecurity priorities
- Planned projects
- Growth-related expenses
Leadership can then make decisions while there is still time to prioritize.
Perhaps a project should happen this year.
Perhaps it can wait until next year.
Perhaps five computers should be replaced now while three can reasonably remain in service another year.
That's strategic planning.
A 10-Question Annual IT Budget Review
At least once each year, law firm leadership should sit down with its technology partner and answer these 10 questions:
- What are our current recurring technology costs?
Know what you're already committed to spending.
- Which computers should be replaced next year?
Review age, condition, warranty, performance, and supportability.
- Which servers or network devices are approaching replacement?
Don't forget the equipment employees don't see.
- Which warranties or manufacturer support periods are expiring?
An operating device isn't necessarily a supported device.
- Are our software licenses still appropriate?
Look for unused, redundant, or incorrectly assigned subscriptions.
- Are our cybersecurity requirements changing?
Consider changes in risk, insurance requirements, client expectations, and the firm's environment.
- How much do we expect to grow?
Translate hiring plans into hardware, licensing, security, and support requirements.
- What major projects are planned?
Office moves, application changes, cloud migrations, and other initiatives should be visible separately.
- What could reasonably be deferred?
Not every recommendation has to happen immediately. Prioritize based on risk and business value.
- What should we expect over the next three years?
Don't stop at next year's budget.
Look further ahead.
What Should Your IT Partner Bring to the Budget Meeting?
Your technology provider shouldn't arrive at an annual planning meeting and ask:
"So, what do you want to buy next year?"
They should bring information.
Ideally, your technology partner should be able to discuss:
- Hardware inventory
- Device ages
- Warranty status
- Equipment approaching end of support
- Recurring technology services
- Licensing considerations
- Security priorities
- Known infrastructure needs
- Business initiatives that may affect technology
Then the conversation can focus on decisions.
What needs to happen?
What should happen?
What can wait?
What will it cost?
What should we prepare for next?
That's much more valuable than reacting to technology expenses one invoice at a time.
How ANAX Business Technology Approaches Technology Budgeting
At ANAX Business Technology, we believe technology planning should help clients make informed business decisions, not simply produce a list of things to purchase.
That means looking beyond today's support tickets.
We want clients to understand what's coming.
Which computers are aging?
Which warranties are expiring?
What infrastructure needs attention?
How will hiring affect technology costs?
What projects should leadership begin planning for?
Which investments can reasonably wait?
The objective is to turn technology spending into a planned business expense wherever possible.
Need Help Building Your Law Firm's Technology Budget?
If technology expenses seem to appear without warning, or your firm doesn't have a clear picture of what it may need to spend over the next one to three years, ANAX Business Technology can help.
We can review your existing environment, identify upcoming technology needs, and help you build a practical roadmap around your firm's priorities.
Schedule a consultation with ANAX Business Technology.
Related Resources for Las Vegas Law Firms
Technology budgeting becomes much easier when you understand the individual expenses behind the total.
How Much Do Managed IT Services Cost for Law Firms in Las Vegas?
This guide takes a deeper look at our $150–$300 per-user monthly planning range and the factors that affect managed IT pricing.
How Often Should Law Firms Replace Computers, Servers, and Network Equipment?
Use our hardware lifecycle guide to plan computer, server, firewall, switch, Wi-Fi, and UPS replacements before equipment failures force the decision.
Business Continuity vs. Disaster Recovery: What's the Difference for Law Firms?
Learn how backup, recovery, and continuity planning fit into a broader technology strategy.
Final Thoughts
A useful technology budget isn't one number somebody pulled from an industry benchmark.
It's a plan.
For a Las Vegas law firm, start with these seven categories:
- Managed IT
- Cybersecurity
- Microsoft 365 and cloud services
- Hardware replacement
- Backup and business continuity
- Legal and business applications
- Projects and contingency
Then organize the spending into four buckets:
Recurring + Lifecycle + Projects + Contingency
Build next year's budget.
Look three years ahead.
Update it annually.
And connect the technology plan to the firm's hiring, growth, and strategic plans.
The goal isn't to predict every technology expense perfectly.
It's to eliminate as many surprises as possible.
When your law firm knows what it's spending today, what equipment is aging, what projects are coming, and what the business plans to do next, technology becomes much easier to budget.
And that's when IT spending starts functioning less like a series of unexpected expenses and more like what it should be:
A planned investment in the firm's ability to operate, protect its information, and serve its clients.
