Business Model Innovation Through Legaltech, law firms
By Using Tech tools to make work easier in law firms


Legaltech and the impact on law firms has been discussed in terms of the functional benefits that can accrue, most recently in our whitepaper titled “Embracing technology for law firm operations – a 2021 perspective”. The benefits are clearly identified as time & cost savings, among others. It is these functional savings that create the atmosphere & provide the catalysts for furthering innovation in the law firm. In this article, we propose to examine this hypothesis to arrive at some learnings from the above.

Understanding Innovation

Innovation, in its simplest version, means finding newer better ways of doing existing activities. The dictionary meaning from Merriam Webster refers to innovation as being the process or method of introducing new ideas, methods or devices. In simplified words, innovation isn’t always about fascinating new ideas or pathbreaking inventions. That is the highest end of the innovation spectrum. At a mundane business level, innovation means something entirely different.

The excellent paper by Girotra and Netessine in HBR Top-10 on Business Model Innovation offers a simple look at innovation within the business context; to paraphrase them – “At its simplest, innovation is about neither new technologies nor the creation of brand-new markets; it's about delivering existing products produced by existing technologies to existing markets”. In the same volume, Kavadias, Ladas and Loch state “Although new technologies are major factors, they have never transformed an industry on their own. What does achieve a transformation is a business model that can link a new technology to an emerging market need”.

Central Hypotheses

Legaltech and a great business model need to combine as one to unlock innovative forces.

Law Firms and Innovation

This brings us to the current context of the discussion – innovation and law firms in the light of legal technology.

For a law firm, innovation can arise in any of the three broad areas that comprise the law firm – client touchpoints, the legal teams & cases, and the back-end operations. These are the broad subdivisions of a law firm. Any new way of doing the same thing, or an entirely new solution in these areas– all comes in the field of innovation. Question is, what can a Law Firm do in these areas that can be called innovative?

Client Touchpoints – These refer to how a client finds your law firm, gets in touch, and communicates with your firm, and these touchpoints range from the Marketing function to the Legal operations sections of your firm, right up to how your lawyers communicate with their allocated clients. Any changes – like an integrated Legal CRM - that speed up, add value, or simplify these processes are also innovation.

Legal Teams & Cases – This deals with attorney/lawyer-client communications, case preparation, research, documentation, and more. This is the core of the law firm, and this is the area where process simplification meets innovative ideas to make a massive difference.

Backend Operations – This is the fundamental base of the business, dealing with data security, databases, invoicing, expense management, HR, etc. This may seem to be the unglamorous part of the business – but this is the domain where even small innovative differences can yield silent but long-term benefits that are sustainable. It is these benefits that quickly become structural to the operations of the firm.

Legaltech – Unlocking Innovation Potential

Innovation, fundamentally, does not need technology. Yet, paradoxically, it is equally true that one of the most pertinent triggers for innovation is the deployment of technology. How can technology in and of itself be a trigger for innovation? The answer lies in time & cost savings and process simplification that arises from technology usage. To achieve innovative potentiality, in addition to these aspects, we must also add the specter of Knowledge and Information Management.

Time and Cost Savings

Legaltech implementation in law firms create many zones where the firm realizes these savings – a digital marketing connect facility frees time and other resources within the marketing teams for other more productive work; AI-enabled research tools help the legal teams in preparing their cases; auto-update features enable lawyers to be updated with the latest development in-laws, case status, dates, etc. – all of these free up time, and inevitably result in hard cash savings as well. Billing automation, for example, results in faster more accurate billing. All of these require lesser resources than other comparative methods.

Process Simplification

Legaltech in law firms, for example, simplifies billing processes as shown above. Billing hours are more accurately captured; the entire process of accounts and finances, case research, case preparation, etc. are simplified due to automation; this list is by no means exhaustive.


Hausmann & Dominguez in a Harvard article on “Knowledge, Technology and Economic Growth” cover this quite succinctly – “In economics, it is widely accepted that technology is the key driver of economic growth of countries, regions, and cities. Technological progress allows for the more efficient production of more and better goods and services, which is what prosperity depends on.” Increased flows of knowledge, such as we are now seeing, lead to defined benefits as described above

Summing it all up – Innovation and Legaltech

The objective is not just the benefits directly or indirectly attributable to Legaltech implementation in any law firm. Time, Cost, and Knowledge are all valuable resources – the point is what is being done with these savings or benefits. Simpler more effective processes such as those described above make the work of lawyers, for example, easier; allowing them to spend more time & effort on value additions to the clients or cases they are responsible for. This works across functions, freeing up organizational resources and catalyzing intent to fruitfully utilize these newly freed resources in experimentation, thought experiments, etc.

In the client interface, a proper technology solution makes it easier for clients to find, evaluate and connect with the law firm; it also enables deep data capture of visitors/prospects. The resources freed can then be diverted to more productive client-centric tasks and discovering new linkages. They can also be useful in finding more efficient processes to analyze the collated data; for example, discovering trends in the client or prospect profile, identifying and honing specialties, improved client feedback, etc.

Perhaps the most powerful is the arena of knowledge, a subject on which books can be and have been written. Improved data capture, knowledge management, and information communication serve to break down the internal silos that exist, enabling the free flow of information. And in a law firm, information is the absolute key to success. It is technology, as an example, that has simplified the search for legal precedents and briefs for case research.

Thus, in conclusion, it can be stated that Legaltech implementation’s link with innovation has to do with the nature of legal technology itself, plus the strategy of the concerned law firm. It is when firms find the sweet spot combining these two that one sees innovation being unlocked and begin to gather momentum. There can be many examples - deeper richer client communication and feedback that helps improve the firm, or AI-based information database around legal research, to name a few. It is thus, a combination of technology and intent that is key!