Why Are Law Firms Building Technology Products? Opportunities, Challenges, and the Path Forward

Opportunities, Challenges, and the Path Forward

I started writing this article about 2 weeks before the announcement that Cleary had acquired Springbok AI.

Cleary isn't the first to try their hand at establishing their own technology offering. Allen & Overy developed aosphere, which was sold to PE firms Inflexion and Endicott Capital for £200m. Kennedys has developed Kennedy’s IQ for their insurance clients to manage claims, and Taylor Wessing developed Outpace to support early-stage technology companies at a time when they are unlikely to afford the hourly rates of their legal teams. 

There are numerous other, interesting examples but this remains a deviation from the norm, as firms have traditionally thrived on a business model centred around high-value expertise, billable hours, and deep client relationships.

However, as technology development cycles accelerate and costs of building continue to decrease, firms are increasingly recognising that they need to evolve beyond their traditional service model. 

Building technology solutions to be used by clients is increasingly becoming a strategy that more firms are looking to adopt., leveraging the knowledge and data often accumulated over years and at great expense.

Notwithstanding the opportunity to create entirely new, recurring revenue streams to future-proof their businesses, the enhancement to the client service; providing faster, more efficient outcomes that are often more robust than those delivered solely by human expertise is clearly a win win. 

But this point of competitive differentiation won’t last for long, and while the opportunity is immense, so are the challenges that stand in the way.

The Existential Threat (and the Opportunity for Those That Recognise It) Evolving Before Disruption Happens

Tech is already disrupting legal services, and the true impact hasn’t been seen…yet.

But if AI reaches PhD-level legal knowledge in three years, the conversation isn’t just about opportunity—it’s about the existential threat of law firms losing significant revenue to tech-first competitors and, more importantly, tech-savvy clients.

However, firms do have key advantages:

1. Expertise and Domain Experience – They already possess deep legal knowledge and industry-specific insight that tech firms lack.

2. Data - firms should already be able to identify the opportunities for technology to deliver a competitive advantage. What work could be productised?

3. Client Relationships – they have long-standing, trusted relationships with clients, which give them a unique opportunity to introduce technology solutions in a way that is both credible and valuable. It’s every tech company's dream to have a pre-built book of business that they could plug into.

4. Resources - in addition to the above, firms also have the resources to invest in building technology solutions without seeking outside investment from VCs and PE firms.  

   
   

In short, firms have everything they need to progress initiatives in this space.

Challenges: Why Law Firms Struggle to Build Technology Ventures

1. The Business Model Problem

The billable hour model has been discussed at length as an obstacle to innovation, but the broader issue is that law firms operate in a structure focused on immediate revenue generation.

Their current model is optimised for winning new clients and delivering advisory services for which they are paid with some degree of immediacy, which is in stark contrast to investing in long-term, scalable products with exponential upside.

There are also the challenges of partnership to contend with. Some firms have utilised a new entity for their technology products, but ironically, this can then present legal challenges around the sharing of client data to the new entity. 

Building technology requires a shift in mindset from short-term revenue to long-term value creation, which can be difficult in a partnership-driven structure where financial returns (and the bonuses and profit sharing they support) are expected annually.

2. Lack of Technology Development and Commercial Expertise

Most law firms don’t have the internal capabilities to build, market or sell technology products effectively. Unlike traditional legal services, selling tech solutions requires:

• A different go-to-market approach – Selling software isn’t the same as selling legal expertise. It requires new sales motions, pricing structures, and the ability to move from relationship-driven sales to scalable distribution models.

• Different marketing strategies – Law firms typically market through thought leadership, events, and leveraging existing relationships, but tech solutions also use scalable customer acquisition methods through digital channels and product-led growth strategies.

• Understanding of product development – Products need to be owned, cared for, and evolved over time to match the changing needs of the market. That means dedicated people with the right skillset to support the evolution. 

3. Lawyers and Law Firms Aren’t Legal Tech Product Owners & Vendors

One of the biggest challenges is that lawyers and their support staff aren’t accustomed to being technology vendors. Marketing and selling a legal technology solution is dramatically different from selling legal services.

But this assumes we have a product developed and ready to sell. In order to get there, we’ll need to engage with clients to ensure that whatever we plan to develop meets their needs and provides value. And that they’ll actually buy it once it’s available.

Having those conversations at such an early stage in a technology products journey is a unique skillset even within the broader technology industry. 

Simply put, law firms need a different approach to ensure that their technology ventures actually succeed.

How Law Firms Can Overcome These Challenges

1. Start Small and Prove the Model

Instead of trying to build a full-fledged technology business from scratch, firms should start with a single opportunity:

1. Identify a pressing problem that you believe a group of clients face.

2. Work collaboratively with clients to explore the problem in detail and validate if it’s viable to create a solution.

3. Understand what the solution will look like and develop a prototype before moving into minimal viable product (MVP) development.

By focusing on a single high-impact opportunity, firms can test and refine their approach without committing significant investment on full-scale product development.

2. Leverage External Expertise Before Scaling

   
   

Instead of trying to build everything in-house, law firms should partner with experienced technology and commercial professionals to help:

• Define and validate problem and the opportunity of solving it

• Create a short “sprint” cycle to get to the point of go / no go quickly and with minimal investment. 

• Develop contained prototypes and MVPs to test and learn.

• Develop a go-to-client strategy before taking the product to the wider market

This approach reduces risk, allows for faster iteration, and ensures that the firm is building something that clients (and other individuals and organisations like them) actually want.

3. Train Lawyers to Support Technology Products
   

Legal professionals and their support teams need training and development to support this new business model. They need to understand the goal and how these new models work, how they can complement legal services and best practices to integrate solutions into their client relationships.

The Future: Is it All Worth It? 

If law firms take the right approach, they can create highly scalable, technology-driven businesses that complement their core legal services.

Let's think about the upside of productising knowledge currently locked up within a firm's walls to:

1. Deliver immediate value to prospective clients by offering simple technology solutions that address common pain points. Think of it as the next evolution of content.

2. Transform low-value, unprofitable tasks into productised solutions, automating work that lawyers typically avoid.

3. Create new service offerings that deliver value but are traditionally cost-prohibitive or inefficient when provided through standard advisory models.

4. Productise entire legal workflows to gain a competitive edge, modernising processes that the broader market still delivers through traditional methods.

   
   

We might not see the demise of big law firms overnight, but it feels like a defining moment in legal history where the choice is either build the future, or someone else might do it for you.

At Legal Tech Collective, we empower individuals and firms to validate, build, and scale legal tech ventures faster and more effectively than any other path.

If you have questions about how to turn your idea into a profitable, scalable business, get in touch.