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In the recent years, the collision of technology into the legal industry has proven to be unavoidable and ubiquitous. As with any new ‘disruption’ to an industry, this caused people and organizations to respond in different and untested ways. One such response was the wave of law firms looking to develop their own technology in-house. Millions of dollars were poured under the new umbrella of technology and innovation, and for almost every law firm who participated in this exercise, they came out the other end disappointed, burnt and with little to show. Being a software company ourselves and having worked with many law firms on developing software applications and productising legal services on our no code legal automation platform, we thought we would share our reasons for why law firms typically fail at developing software.
Lawyers are trained to be perfect (risk adverse), whilst software development is intrinsic
Software development is about progress over perfection. Having worked with many law firms and lawyers on innovation projects, one of the biggest impediments to success is the over-obsession with getting things perfect before getting it out into the market. Agile, lean start-up methodology is all about the practicality in getting market feedback as quickly and frequently as possible, in order to iterate towards the ‘perfect’ product. Law firms take the opposite approach. They often spend forever building a product that not only loses momentum because the tangible value is so far stretched that people lose interest and confidence, but they end up building a product that doesn’t solve the client’s problem.
Understanding the patience required with a product business model, rather than a service business model
Service businesses are easy to build but difficult to scale. Product businesses are difficult to build but easy to scale. As a law firm, you’re accustomed to ‘quick wins’. Services have a clear return on investment (ROI) between time spent and margin earned. When shifting into building product, law firms are understandably impatient due to the anchored expectations from a services business model as well as not fully understanding what it actually takes to build a product. Law firms pull the plug too early on product initiatives when they don’t see an immediate ROI. This is particularly challenging given the partnership model that underpins law firms which reward shorter term gains than long term investments.
Lack of know-how or expertise in launching software products
This one is simple. You literally just don’t know how. Yes, you can hire in the expertise, but it takes expertise to hire the right expert too. This one is probably the easiest challenge to overcome but still a real reason why so many law firms fail at software development and creating productised legal services. It takes A LOT to build a good product, much more beyond the technology. Besides building the actual product, the success of a product relies on finding proper product-market fit (rather than taking a ‘build and they will come’ mentality), go-to-market strategy, on-going operations for support and training, and a commercial/business model for the product.
Law firms are afraid to ask their clients when they don’t know things
The #1 guiding principle we follow at Checkbox is to always ask questions and listen to our customers. Law firms need to do this if they want to build a good product. But often law firms are too afraid to show vulnerability to their clients and operate on the misconception that their clients expect them to know everything. They focus on giving answers, rather than asking questions. As a result, it is easy for a law firm to fall into the trap of not actually understanding their client’s business. When providing a service, you can mismatch the actual requirements of the client and you’ll still provide a decent experience and a single data point of error in isolation. When providing a product, every decision and action is baked into the product in a way that is difficult to unwind and every mismatch in requirement is scaled. For this reason, having an open and ongoing conversation with your clients is important.
This article isn’t saying that law firms cannot successfully develop software. There is just a lot to learn and a mindset and cultural shift that needs to happen in order to make it work. At Checkbox, we’ve worked with many law firms who have successfully made software development work by leveraging our no-code automation platform, rather than building code from scratch. And often, it does take partnering with the right technology vendor to get you there, to leverage their expertise and embed a bit of their DNA in how you do things.