Prioritizing Product Value in Legal Tech

It’s going to take some time to see which legal AI company will win the market. New logos and revenue are positive signs, but increased usage & wallet share over time are probably far more relevant. My experience in the ALSP world suggests that the initial buy decision provides a mixed signal. For example: A legal department may take the first step of “buying” an engagement attorney who’s great at spotting legal issues—but ultimately adds little value to the organization. As it turns out, it’s not enough to be able to merely give good legal answers; you have to also be embedded within the organizational context you operate in. Which requires you to be integrated into all kinds of workflows and processes. You have to truly understand the business you’re operating in. Like how the legal team interacts with the sales/business teams. How quickly you have to respond to stakeholders. Do they use CLM? Which one? You have to live in the same communications and collaboration software as everyone else. I believe the same criteria applies to legal AI. For example, in contracting, a given AI tool may be pretty good at flagging problematic clauses in an agreement. But to maximize the value of that information, it has to be embedded within the workflows, communication channels, and broader context of the organization. Narrow legal “excellence” isn’t going to cut it. No matter how good it looks on a demo or in a pilot. From my vantage point it’s incredibly difficult to tell which of these hot new AI startups meet that standard. Do the startups that are getting the most attention provide tech that's truly embedded within their client/customer organizations? I don’t know. My instinct is to say that the best proxy for that isn't new logo and bookings. Instead, it's whether you're seeing increased usage & wallet share from your buyers over time. And that depends on how things play out *after* the initial buy decision.

For decades, 'legal tech' meant one thing: building complex, expensive software to help big law firms bill more hours, more efficiently. The entire industry was built to serve the lawyer. That era is officially over. The real, multi-trillion dollar opportunity was never about making lawyers slightly more productive, it was about serving the millions of small businesses and individuals who couldn't afford them in the first place. A new wave of startup founders understands that the future isn't about selling software to law firms, but about delivering legal outcomes to everyone else. This shift is happening in real-time so when I met Andrew Guzman at OpenLaw, with a mission of making legal services accessible and on-demand, I was excited to get involved. Their momentum highlights a broader trend we're seeing. Devalued Currency: On-premise enterprise software sold in multi-year contracts to the top 200 law firms. New Currency: On-demand, transparently-priced legal services delivered through a marketplace that empowers both the client and the independent lawyer. Here’s how the next generation of legal tech founders are building: ✔️They Focus on the Client Experience, Not the Lawyer Workflow. The old guard built tools to optimize tasks within a law firm. The next gen are obsessed with the client's journey. They ask: "How can we get a small business a simple, fixed-fee contract review in 24 hours?" This client-centric obsession, rather than lawyer-centric optimization, is the single biggest mindset shift in the industry. ✔️ They Use AI for Access, Not Just Efficiency. First-gen legal tech used AI to help a $1k/hour lawyer find a document 10% faster. The new generation uses AI to automate routine tasks, enabling a marketplace of lawyers to offer services at a price point small businesses can actually afford. AI isn't a tool to enhance the old model, it's a weapon to unlock a completely new market. ✔️ They Sell Predictability First, Legal Services Second. The biggest barrier for a small business isn't a lack of legal documents, it's the paralyzing fear of surprise bills and hiring the wrong expert. Instead the new gen build products that offer fixed-fee packages, transparent reviews and clear project scopes, ensuring a customer knows the exact cost and deliverable upfront. They understand that what they’re really selling is predictability. The future of legal tech doesn't look like a piece of software. It looks like a simple, elegant experience that finally gives businesses and individuals the expert help they really need. A huge congrats to the OpenLaw team for closing $3.5M and leading the charge. Let's go! 🚀 🚀 🚀 The LegalTech Fund, Wisdom Ventures, Mindful Venture Capital, Flint Capital, Slauson & Co., Techstars, Everywhere Ventures

If you are a lawyer, whether in a law firm or an in-house legal department, here are the questions you should be asking about legal tech and innovation: 1) Do you start with the client or business? • For firms: does your tech roadmap improve client experience and value? • For in-house: does it make your business stakeholders’ lives easier, faster, safer? • Can you clearly link each initiative to better service, speed, or risk management? 2) Are people and process ahead of the tech? • Have you fixed the workflow before adding a tool? • Are lawyers and staff trained, incentivized, and supported to change how they work? • Or are solutions gathering dust because the process gap was never addressed? 3) How strong is your adoption muscle? • Who actually uses the tools in daily work? • Do you have structured change management or only isolated pilots? • Have you learned from failed implementations and applied those lessons? 4) Do your leaders role model innovation? • Do they use and talk about technology in delivery or decision-making? • Are they preparing for second order effects like: - Training juniors differently as traditional tasks get automated - Rethinking time based billing or productivity measures - Developing new service lines or risk frameworks - Setting standards for ethical and responsible AI 5) Who are your internal champions? • Which lawyers or professionals are experimenting and sharing wins? • Do you showcase their success to inspire others? • Are you building a pipeline of digitally fluent next generation talent? 6) Can you demonstrate ROI and impact? • For firms: can you show hours saved, revenue protected, client satisfaction gained? • For in-house: can you show faster contract cycles, reduced risk, or business enablement? • Do your stakeholders, internal or external, feel the difference innovation makes? If you cannot answer these questions with confidence, your legal tech strategy may not be working for you. Picture Courtesy - The amazing Leila El Gharbi

From advising #legaltech and AI founders, I’ve seen a lot of pitches land, and a lot of good ideas stall. The difference is rarely the technology. A few critical things I wish more founders understood about law firms: ➡️ You’re not just selling a product; you’re selling a change in workflow. Partners don’t wake up wanting another platform to work in. They want: - Faster turnaround for high-volume work - Better margins on fixed-fee matters - Happier associates and fewer mistakes - Higher quality outputs and better outcomes If your demo doesn’t clearly map to a specific workflow and outcome, it will struggle. ➡️ Governance and implementation support are features, not after-thoughts Firms are not just comparing feature lists; they’re asking: - “Will this pass internal InfoSec reviews?” - “How much change fatigue will this create?” - “Who will own this day-to-day?” - "What governance will this product require?" - "Does this product respect ethical walls and permissioning?" Having a credible story around implementation, training, and governance is a competitive advantage. ➡️ Proof of value beats proof of concept Pilots that live in a sandbox and never hit real matters tend to die quietly, unless the product being piloted is expressly for the purpose of R&D. The strongest vendors: - Co-design a pilot around a real matter type - Define success metrics upfront - Share learnings transparently with stakeholders If you're building AI for legal, your real product is trust + outcomes, packaged inside software. For those on the vendor or firm side: curious to know what’s the best (or worst) experience you’ve had with an AI pilot so far? #legaltech #legal #law #changemanagement

The legal tech world is debating the wrong metrics. Last week's discussion about Harvey's user numbers and utilization rates perfectly illustrates the problem - we're measuring vendor success, not client value. Law firm tech tracks billable hours, seat licenses, and utilization rates. But in-house teams need completely different metrics. We need to know how much we reduced outside counsel spend, how fast we can turn around contracts, and what capacity we created for strategic work. At Coherent, we've achieved a 78% reduction in contract review time. We're on track for 50%+ reduction in outside counsel dependency and have eliminated 30% of manual tasks, freeing our team for higher-value work. Unless we require accountability to the metrics that matter for us, tech built for law firms will never measure what matters to in-house teams. In-house teams need tech built specifically for in-house priorities. We need vendors (including law firms) who measure what actually matters to the business. And we need radical transparency about real outcomes, not vanity metrics. To my fellow CLOs - Start demanding the metrics that matter. Ask your vendors how their AI creates efficiency gains, not how many licenses they've sold. The conversation needs to shift from vendor success to customer value. Until then, we're having the wrong conversation about legal technology. I explore this further in my latest piece for Legal IT Insider--> https://lnkd.in/eieDEgvM

I’ve been thinking a lot about this lately because almost every conversation I’ve had in the last few weeks in #legaltech eventually comes back to the same thing: no one really wants to "revolutionize their entire practice.” Most lawyers just want less pain. Less friction. Less chaos between how work gets done and how it’s supposed to get done. It’s funny because for all our talk about value, legal has never really defined it in a way that’s accessible, shared, or even human. We’ve defined it through billable hours, utilization rates, realization percentages—all the objective stuff that makes sense on a spreadsheet but tells you absolutely nothing about whether anyone’s life got easier in the process. Objective measures might tell us what’s profitable, but they rarely tell us what’s valuable. When you start peeling that apart, you realize people aren’t buying technology for transformation. They’re buying comfort, predictability, and control. They want AI to understand them, not replace them. They want the tool to fit into their existing mental model, not demand that they abandon it. They want it to help with the work they don’t want to do: not because they’re lazy or allergic to effort, but because that work sits in the space between meaningful and mind-numbing. The research, the formatting, the context-switching, the chasing of precedent is all the invisible admin that makes you feel like you’re drowning even when you’re technically “efficient.” That’s the gap everyone’s trying to close: not the gap between lawyers and technology, but the one between work and peace of mind. When I ask people what they actually want from AI tools, the answers are surprisingly consistent. They want it to make them more accurate—not perfect, but confident. They want it to free them from the repetitive stuff that eats their time but adds nothing to their brain. And they want it to meet them where they are, to work in their ecosystem, understand their documents, and align with the way they already think about risk and output. All of that, every single one of those things, ladders up to one core idea: less pain. Because value in legal isn’t just about outcomes, and it’s definitely not about effort. It’s about how much friction sits between where you are and where you want to be. When we reduce that friction whether through AI, better scoping, or clearer communication we make space for the work that actually feels like lawyering. So maybe the next time we talk about “value,” we should stop pretending it’s a metric and start acknowledging it’s a feeling. The feeling of work flowing instead of fighting back. The feeling of trust in your tools, your team, and your time. And if that’s what AI helps deliver, then no, clients don’t buy AI. They buy less pain.