Whether it’s electronic signatures, virtual data rooms, or robotic process automation, most law firms have embraced technology to make team and client processes more efficient. However, when your company wants to deliver a new feature, many teams wonder whether they should purchase the technology through an “off the shelf” offering or work with software developers to develop the technology instead.
It’s never an easy decision. There are costs, timelines and internal capabilities to consider.
The main thing is to make the right decision for the company, because taking the wrong path can be costly. Industry figures vary, but a single hour of IT downtime can cost anywhere from $1 million to more than $5 million, according to Information Technology Intelligence Consulting. Gartner puts this figure between $100,000 and $540,000 per hour.
To make the decision easier, here are three questions you and your team should consider before deciding which route to take.
1. Can off-the-shelf technology really align with our business processes and needs?
Going for an out-of-the-box solution often seems like the easiest option and sometimes it can be. However, with out-of-the-box solutions, you have to fit your workflow around the software, instead of building the software around your workflow.
The problem is, as Ironclad co-founder and CEO Jason Boehmig says in his interview with the FT, “Technologists, when they created software for lawyers, didn’t understand it – and lawyers didn’t really use the technology because it wasn’t what they wanted”.
The main thing is to make the right decision for the company, because taking the wrong path can be costly.
The good news is that, according to a recent report by LawtechUK, over the past three years, investment in lawtech startups and scale-ups has increased by 101%. However, LawtechUK estimates that internal lawtech development by legal service providers will still account for up to 20% of total industry activity in 2026.
The challenge for you and your team if you decide to go with an off-the-shelf solution will be finding the right specialist vendor whose solution integrates with your existing systems and meets your needs.
2. Are we looking to market our offering in the future?
This is an important question to ask at the start of a project. If there are even remote plans to commercialize the designed, developed and tested IT solution, then having intellectual property rights will have many benefits – in addition to becoming a revenue opportunity. Building a solution yourself means you can design it around your existing business processes. It also puts you ahead of your competition, who will likely all be using the same out-of-the-box solutions.
However, if you don’t plan to bring the solution to market, the next question you need to ask yourself is, “Can we afford to invest the time, resources, IT infrastructure and more to develop this?”
A report by Synopsis and the Consortium for Information & Software Quality estimated the cost of failed development projects in 2020 to be $260 billion. Similarly, Couchbase research found that nearly four out of five digital transformation projects faced failures, delays, or reduced plans, bringing the cost of failing to launch on the first attempt to 5. $5 million per company.
Developing your software in-house can be risky business unless you and your team have the necessary experience and skills. Risks include software failures, legacy system issues, and cybercrime. You need the right skills – or the right partner – in place to avoid such risks.
3. Do we have the internal capabilities to build it ourselves or do we need to outsource?
According to our recent survey of 300 IT leaders, 63% of respondents reported difficulty finding and hiring strong talent, while 54% said access to talent was an important reason for deciding to outsource, followed by the need to save costs and gain knowledge. and experience.
Over the past three years, investments in legal start-ups and scale-ups have increased by 101%.
It is unlikely that many internal teams will have the skills and expertise required to create their new software solution. For this reason, outsourcing can be hugely beneficial as it allows businesses to access a wider pool of tech talent from markets outside the UK, such as tech hubs in Eastern Europe. These specialists are ready to start projects quickly, without the delays caused by lengthy internal recruitment processes. The flexibility of outsourcing also means you avoid HR hassles and only need to hire talent for the duration of your project.
As the challenge is not only to find new technology talent, but also to help develop and improve your existing internal digital skills, outsourcing can support this by providing experts to train and work alongside your teams. internal. 74% of the organizations we surveyed said they view outsourcing as a way to help them improve and adopt better software development practices, such as agile delivery and quality auditing.
Legal businesses have three options when it comes to lawtech: they can try to buy the software they need off-the-shelf, they can try to build a solution themselves in-house, or they can partner with a contractor. and bring in additional skills and expertise. to help.
Of these three options, the last offers the most rewards. Not only does this ensure that the software solution you create seamlessly integrates with your internal processes and solves your business problems today, but it allows you to market your offering in the future. Through outsourcing, your internal team will gain development knowledge and training, which will also add value to your business.
Ultimately, this decision will come down to the scale of your ambition. To be a leader in legal technology, you can’t just use the same off-the-shelf software solutions as your competitors. Instead, innovative and personalized technology is the way to go if you want to get ahead.
Leanne Aldrich, Software Solutions Consultant
Tel: +44 01179 353344
Leanne Aldrich earned a degree in marketing and began her career as a public relations professional before specializing in events for the oil and gas industry. In 2014, she took on her first technical role as the director of a technology start-up, developing a portfolio of workforce management systems and leading the growth strategy through to a successful buyout. Leanne then joined Amdaris in 2021 as a Software Solutions Consultant to help develop a selection of areas of the business, namely Amdaris’ legal practice client portfolio.
amdaris is a Bristol-based digital transformation specialist. Their team enables companies to upgrade and digitize their systems and scale quickly. Amdaris was also recognized as “Business of the Year – 51+ Employees” by Business Leader in its 2022 South West Awards.