5 mistakes that LawTechs make when working with law firms


Anthony Vigneron, Director of Legal Technology Solutions at Clifford Chance, highlights some common mistakes and how startups can address them.

Lack of clarity

Too many LawTechs startups are unclear about what problem they are solving. The industry has become a massive growth area with more than $2bn of investments in 2019 alone and over 1,500 startups competing for clients, funding and partnerships.

This level of activity creates a lot of noise and makes it hard for potential buyers to identify the right opportunities. LawTechs therefore need to be crystal clear about their proposal. We see a lot of startups that might have a great product not getting past the first discussion because they’re not getting this right.

Inadequate research

Failing to understand law firms, and crucially, their clients is a common area where LawTechs underperform. Different firms have different mixes of clients across a variety of industries. LawTechs need to understand not just which sectors are driving revenue for a particular law firm, they must also understand the nature of the legal work that relates to that sector.

LawTechs must look beyond a product’s functionality to see whether it will meet regulatory requirements and address needs around business risk, cyber-security and geographic requirements.

Regulated industries such as banking will have the most complex requirements but they’re also likely to be a firm’s top clients. It’s therefore vital that a new product meets the most complex client requirements, not the simplest. For example, a startup may be tempted to save money by using a data centre in the US but that’s going to be a problem if a law firm has clients that include European banks.

A lack of understanding is also evident when incorrect terminology is used within a product. For example ‘project’, ‘case’ and ‘matter’ are used in different ways by different firms and different sectors. Getting such things right takes hard work but is important as it reduces the friction for firms and their clients. It quickly becomes clear if a startup hasn’t done enough research.

Inefficient development processes

The concepts of iterative testing and development are widely known but we find that LawTech startups frequently don’t follow them. They look too far ahead and get involved in complex development without repeatedly validating hypothesis to ensure they’re moving in the right direction. This not only wastes time but needlessly burns through investment too.

Engaging with law firms early on, even at the wireframe stage, is a much better idea than trying to produce a complete product. It allows for law firms and clients to input into the process and can save a lot of time and money.

Too many rough edges

Later-stage LawTech startups sometimes forget that the look and experience of a product can be vital to its success. Branding, including product names and logos, is important in winning the initial attention of key audiences within a law firm.

UX design is another key factor in ensuring a product is given proper consideration. None of these factors will make up for a lack of content or functionality, but they help reduce the friction of assessment and adoption.

Too much ambition

There are some big plays to be made in the LawTech space but few law firms will be willing or able to create a totally revised ecosystem and tech stack around a new product.

Success is more likely if startups look to build on existing tech products and infrastructure. That may mean integrating with others including established providers. This is especially the case when selling into regulated industries that are naturally risk adverse.

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