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Staying Frugal
Another major project was upgrading the firm's aging Nortel phone network. Going to a Voice over Internet Protocol (VoIP) network was a natural alternative. But Wong was wary.
"Phone calls are a huge expense for a law firm," Wong says. "Should we invest $5 [million] to $10 million to be a state-of-the-art company? How much money should you invest to save making phone calls? Can we still achieve those VoIP applications with existing technology? In most cases, it doesn't make sense. Taking a hard look is key."
Wong tested Cisco's VoIP technology in a laboratory environment and calculated the total cost of ownership. He didn't like the numbers. Nortel then offered a virtual VoIP conversion with its gateway hardware for a fraction of the cost. Wong was sold.
"I ended up spending less than $500,000 to enable all our existing phone systems without changing a single phone out," Wong says. "It's the same phone we used 10 years ago. The attorney doesn't have to learn a different phone. The ROI was almost instant. Cisco would have taken two years, perhaps even longer, and required investing millions of dollars. I'd have to replace the entire infrastructure, from phone units to cabling. I hear CIOs saying, 'We saved millions upgrading to Cisco phone switches.' They spent about $10 million to do so. I don't know how some CIOs get away with that. You have to change the network for parallel infrastructure. It's a complete turnover of the world you live in. For what? I took a shortcut."
For Smith and the other partners, that was just the kind of solution they were looking for.
"I know two large firms here in Los Angeles," says Smith. "One spent $20 million to go to VoIP; Cisco sales did a fantastic sales job. The other firm spent $10 million."
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