Can specialist firms leapfrog Big Law with tech-enabled services?
- Alex Baker
- Jul 30
- 4 min read
Updated: Sep 1
In the latest episode of Legal Innovation Spotlight, I joined Ted Theodoropoulos to explore the provocative idea that specialist law firms might be better positioned than Big Law to thrive in the AI era. The conversation spanned everything from productisation strategy and structural barriers to client demands and the evolving role of knowledge management. Below, I’ve expanded on the core themes from our discussion - and why this moment presents a defining opportunity for firms willing to act.
Why Boutique Firms Have the Advantage
Specialist firms already operate in a focused way: they deliver repeatable services to a defined client segment. In many cases, they’ve already done a significant portion of the work required to productise what they do, they just haven’t yet built a tech-enabled wrapper around it. This gives them a head start. Where Big Law has to align dozens of practice areas and hundreds of partners, boutiques can move faster, target more effectively, and build deeper expertise in a single vertical. That’s how successful tech companies got started – think Amazon with second-hand books or Airbnb renting out spare rooms in San Francisco.
The Structural Handbrakes in Big Law
Big Law firms face a few challenges
The Partnership Model: Consensus-based decision-making slows innovation. Senior partners nearing retirement often (rationally) deprioritise long-term investments that won’t benefit their personal horizon.
Cash Basis Accounting: With little appetite for deferred ROI or R&D-style investment, capital often flows to the year-end bottom line instead of future-proofing the business.
Incentive Misalignment: Most firms reward billable hours, not documented efficiencies or client-facing innovation – despite clients increasingly demanding it.
As Ted put it:
“Where we’re headed is going to require R&D – and partnership models operating on a cash basis really aren’t set up for that.”
Start with the Lowest-Hanging Fruit
Firms don’t need to reinvent every practice overnight. The smartest starting point is identifying repeatable services with low margins and high volume, areas where AI and automation can create disproportionate value.
Where do we do the same kind of legal work, over and over?
Where is our client base broader than the capacity of our team?
Where could tech deliver the same or better value at scale?
This is about proving a concept, learning fast, and building momentum. One success story can shift the internal conversation and unlock broader appetite for change.
AI Belongs in the Practice – Not Just in the Back Office
Historically, AI and innovation have lived in central teams: KM, IT, and innovation hubs. But as we discussed in the episode, that’s not where the real impact will happen. Every practice area has unique workflows, logic trees, and judgment calls. M&A doesn’t operate like Employment, and IP doesn’t think like Disputes. AI strategies need to reflect that. Firms need to move toward a model where practice group leads take ownership of how AI and automation get embedded into their client delivery – ideally supported by KM professionals aligned to those verticals.
You Already Have the Moat. Now Build the Bridge.
Many lawyers fear disruption but they overlook their structural advantages:
A qualified, regulated profession
A book of clients who trust them
Deep domain expertise
Access to precedent-rich internal knowledge
That’s a powerful foundation. Combine that with a clear product vision, focused execution, and the right technology and you can build a new revenue stream that scales far beyond the billable hour. Firms that do this well will see commercial upside far beyond traditional professional services. A productised legal service can carry 5–10x revenue multiples, compared to 2–3x profit multiples for time-based work.
So What’s Holding You Back?
If you’re a boutique or specialist firm, the question isn’t whether you can productise. It’s whether you’ll prioritise it. You don’t need to go all in on day one. But you do need to start. That might could be as simple as:
Scoping an idea and validating market demand
Building a lightweight prototype or MVP
Talking to clients to test appetite and pricing
Proving the ROI with a narrow use case before expanding
This is exactly what we help law firms do at Legal Tech Foundry – combining commercial strategy and product development to turn legal expertise into scalable businesses.
Final Thought
Technology is already impacting revenue at firms. Clients are using generative AI to self-serve. They’re asking their lawyers how much time and money was saved last quarter through tech. And soon, they’ll start moving their legal spend to providers who can answer that question clearly.
Standing still is no longer safe. For firms willing to take one step forward – to productise, to experiment, to grow, the opportunity is evident, but it won’t stay open forever. Now is the time to move.
If you share Ted and my view on the future of legal and you're looking to build and scale your own tech enabled legal service - get in touch with our team to see how we can help you on your journey.
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