To Build or to Buy? Evaluating business of law tech solutions

The current landscape

In the past, some law firms might have considered building their own practice management systems or timekeeping software, but few would attempt such an endeavour today. The market offers robust, feature-rich options that cater to these needs, making the decision to buy a no-brainer for most firms. Similarly, workflow tools for tasks like working capital management have largely become standardised, with established vendors providing solutions that are tried and tested.

However, an intriguing area remains where many firms continue to entertain the idea of building their own tools: data-led products. These range from bespoke business intelligence toolkits to systems for managing utilisation, matter resourcing, and other operational metrics. The allure of owning a tailored solution is strong, but so are the challenges.

This article explores the pros and cons of building versus buying technology solutions for the business of law, with a particular focus on the data layer.

Arguments against building

1. Resource intensiveness

Building a technology solution from scratch demands significant resources. It’s not just about developing the first iteration; maintaining, updating, and expanding the system can quickly become a long-term commitment. Firms may underestimate the level of technical expertise and time required to deliver a robust, scalable product.

Lawyers are accustomed to delivering perfection to their clients, but software development often involves iterations, trial and error, and an ongoing process of refinement. These expectations can clash, leading to frustration and dissatisfaction with internal development teams.

2. Incremental additions and new requirements

Once the initial build is complete, the work has only just begun. The legal industry evolves, and so do the requirements for business systems. New regulations, client expectations, or internal process changes often necessitate ongoing updates. The incremental demands on resources can snowball, turning what seemed like a one-off project into a perpetual drain on time and finances.

3. Keeping pace with innovation

Technology moves quickly, and law firms rarely operate at the cutting edge of innovation. Competing with external technology providers—whose sole focus is to improve and enhance their products—can be an uphill battle. These providers are staffed by engineers and developers with deep expertise, enabling them to stay ahead of trends, anticipate client needs, and deliver better solutions over time.

4. Security and compliance risks

The legal industry is heavily regulated, with stringent requirements around data security, client confidentiality, and compliance. Building an internal system that meets these evolving standards is no small feat. A misstep in security can have severe reputational and financial consequences, and firms are often ill-equipped to handle such challenges without dedicated, in-house tech expertise.

5. Blame and thanklessness

When an internal system underperforms or fails, the blame often falls squarely on the shoulders of the development team. Yet even when it succeeds, the rewards are limited. Technology solutions, however well-crafted, are often seen as enablers rather than strategic drivers of success. Unlike closing a high-profile deal or winning a complex litigation case, the success of a business technology tool rarely earns accolades.

6. Lack of continuity

By purchasing a solution, firms can tap into the expertise of technology companies whose senior engineers and developers are fully invested in creating the best possible product. These professionals bring a wealth of experience and a commitment to continuous improvement—qualities that are hard to replicate in an internal team within a law firm.

Arguments for building

1. Bespoke solutions

One of the most compelling arguments for building technology is the ability to create solutions tailored precisely to the firm’s unique needs. Off-the-shelf software often caters to a broad audience, which can lead to compromises in functionality or usability. A bespoke solution allows firms to design workflows, reports, and interfaces that align perfectly with their operational goals.

For instance, a firm with highly specialised matter resourcing needs might struggle to find a commercial product that fits seamlessly into its processes. Building a custom tool could deliver unparalleled value by addressing these specific challenges.

2. End-to-end ownership

Building technology internally gives the firm complete control over the product’s development, maintenance, and evolution. This autonomy can be attractive, particularly for firms that prioritise flexibility or have unique compliance requirements. However, as noted earlier, this level of control comes with significant responsibilities and costs.

Key considerations

Cost vs value

The financial investment in building a system can be significant, but the long-term value it delivers must be assessed against the costs of purchasing and customising an off-the-shelf solution. While the upfront cost of buying software is often lower, ongoing licensing fees can add up, particularly for larger firms with extensive needs.

Time to market

Off-the-shelf solutions can be implemented quickly, enabling firms to realise benefits sooner. In contrast, building a system internally often involves longer development timelines, which can delay critical improvements.

Scalability

Commercial products are often designed to scale with a firm’s growth, whether that means adding users, handling larger datasets, or accommodating new functionalities. Custom-built systems may struggle to keep pace without significant additional investment.

Focus on core competencies

Law firms excel at delivering legal expertise, not at developing software. Diverting resources and attention to technology development risks diluting the firm’s focus on its core competencies.

The middle ground: hybrid approaches

For some firms, the best solution might lie somewhere between building and buying. Hybrid approaches can involve customising off-the-shelf solutions to better meet the firm’s needs or partnering with technology vendors to co-develop tools. This approach combines the advantages of bespoke development with the reliability and scalability of commercial products.

For example, a firm might purchase a robust business intelligence platform but work with the vendor to build customised dashboards and reports. Similarly, firms could integrate multiple third-party tools into a unified interface that mimics the benefits of a bespoke system.

Conclusion

The decision to build or buy technology solutions for the business of law is complex, with significant implications for cost, efficiency, and long-term success. While the allure of bespoke, perfectly tailored systems is strong, the challenges of building and maintaining such solutions often outweigh the benefits for most firms. On the other hand, buying commercial solutions offers reliability, scalability, and access to top-tier talent, though it may require compromises in customisation.

Ultimately, the right choice will depend on a firm’s specific needs, resources, and strategic priorities. By carefully evaluating the pros and cons of each approach—and considering hybrid options where appropriate—law firms can make informed decisions that drive long-term success in the ever-evolving world of the business of law.

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