The legal technology landscape is evolving rapidly, with tools like HarveyAI promising to revolutionise the way law firms operate. These tools are designed to streamline workflows, automate routine tasks, and enhance decision-making processes within law firms. However, based on firsthand experience, I believe these tools face significant challenges that could make their widespread adoption difficult in both the short and long term. Let’s delve into why this might be the case.

Customisation challenges

Legal tech providers often find themselves overwhelmed by the need to tailor their products to the unique requirements of each client. This tailoring isn’t just technical—it extends to functionality, workflows, and the nuanced preferences of individual law firms. Each office, department, and team operates differently, creating an intricate web of needs that’s almost impossible to standardise.

For example, within a single firm, the private equity team may have a completely different workflow to the mergers and acquisitions (M&A) team. Even within M&A, the processes for energy-focused transactions could differ drastically from general M&A practices. This variability makes it incredibly challenging for legal tech companies to deliver a one-size-fits-all product, forcing them into a constant state of customisation.

Adoption hurdles in partnership structures

Another significant challenge stems from how law firms are structured. Many operate as partnerships, where decision-making is decentralised. This structure creates an uphill battle for tech providers. Even if you convince one department or team to adopt a tool, it doesn’t guarantee buy-in across the entire firm.

It’s comparable to trying to sell a new product to a single stall owner at a market. Even if they’re on board, you then have to persuade all the other stall owners to adopt the product to make it truly effective. Without uniform adoption, a legal tech tool often loses its utility and efficiency, making it harder to justify its value.

The rise of in-house solutions

Because of these challenges, many law firms are beginning to explore the idea of building their own tech solutions in-house. This approach allows firms to design tools that align precisely with their specific workflows, rather than trying to adapt a generic tool to fit their unique needs.

In the long term, this trend could significantly impact external legal tech providers. If more firms invest in bespoke in-house solutions, the demand for off-the-shelf products like HarveyAI may diminish. Firms could also retain greater control over their tech, making it easier to update and integrate into existing processes.

Conclusion

While legal tech tools like HarveyAI have great potential, the inherent diversity in law firm operations, coupled with the complexities of partnership structures, presents significant barriers to adoption. Furthermore, the increasing trend of law firms developing their own bespoke tools may pose a long-term challenge to external legal tech providers.

For those in the legal tech industry, it’s crucial to consider these dynamics and focus on creating products that can adapt to the unique needs of law firms while also demonstrating firm-wide value.

But don't take my word for it - the FT has written an article highlighting the same.