A rising number of video conferencing applications uses software codecs for video compression. This allows to support several compression schemes without the necessity for expensive dedicated hardware for every new standard. Using inexpensive framegrabber boards, it is possible to support several different compression schemes as H.261 or H.263. But the computing power of today's desktop system does usually not allow for the simultaneous compression and decompression of high quality video. One solution is to equip these systems with dedicated hardware, trading off the above mentioned flexibility and introducing considerable costs per machine. This paper presents an approach for the distributed compression of live video, exploiting cheap LAN capacity and thus dividing the compression process into a short preprocessing on the desktop and a second stage performing the more complex operations on a dedicated compression server, that may be shared by a workgroup or even more people.