The 60 second interview: Why law firms shouldn’t build their own tech

Elevate co-founder and president John Croft talks to The Lawyer about why it doesn’t make sense for law firms to build their own technology and the top trends to watch out for in the next couple of years. John is one of the 30 or more experts speaking at this year’s Business Leadership Summit in association with Propero.

I am clearly biased with my answer here, as Elevate has built our own legal technology (Cael), which we sell to law firms and law departments. But even so, it staggers me that law firms continue to feel the need to develop their own technology in-house. Just like running their own back office, this is of no value to their customers. The largest ten law firms in the world do not add up to a rounding error on one percent of the largest companies in the world. They also distribute all their profits at the end of each year, so finding capital for long term projects such as building software, is challenging. And finally, they are not software companies… they are law firms! Plus it is vital for law firms to be somewhat agnostic when it comes to technology. So by all means have a view (and a third-party tool in house that you are trained on and will use in the absence of anything else). But to build your own software as a law firm makes no sense to me.

The answer to this depends (pretty much) on how old the ‘people’ are. Lawyers coming in to the legal ecosystem (Millennials) have grown up using technology for every single aspect of their life, so cannot think of life without it and would therefore ask why not use technology at work? But the lawyers at the top of the PEP table (who tend to be in their 50s and 60s) are the ones who tend to be less comfortable with technology and the pace of change, and it is they whose voices are heard more loudly than those of their younger and more junior colleagues.

Nothing dramatic is going to explode in the legal ecosystem this coming year and big law firms are going to carry on delivering legal services to their customers. But the change will be happening around the edges, it will not happen in law firms (but interestingly it is all driven by their customers): The first trend will be a more extensive use of law companies as well as law firms for the delivery of those legal services. Secondly will be the improvement in the unbundling of legal projects and the use of technology to deliver more and more elements of the overall engagement (regardless of who does them). And thirdly, companies will be outsourcing their entire law departments – see United Lex’s deal with DXC and Elevate’s own deal with Univar.

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