The Legal Tech AI Dilemma: Build, Buy, or Both?
Legal Tech Media Group
Helping companies grow with HubSpot implementation, customized strategies, and industry insights | legaltechmg.com
Legal tech companies face a critical inflection point: with 62% of law firm managers making operational changes due to AI, the pressure to deliver AI capabilities is mounting. The key question isn't whether to add AI - it's how.
Hidden Costs of Building
Developing proprietary AI costs far more than most legal tech companies expect. Beyond developer salaries, companies must invest in training infrastructure, data acquisition, and ongoing maintenance. Regulatory compliance and security testing demand constant attention. Documentation, support systems, and implementation resources quickly multiply the initial budget. When these factors combine, most companies find they've underestimated their total costs by half.
The Case for Buying
Third-party AI integration offers clear advantages for legal tech companies. It accelerates market entry, reduces overhead, and includes built-in security compliance. Updates happen automatically, costs stay predictable, and reliability comes pre-tested. For many companies entering the AI space, these benefits make third-party integration the sensible choice.
When to Build
Despite the advantages of buying, building makes sense when:
Your Core Value Proposition Demands It
If AI processing is central to your product's competitive advantage, keeping it in-house may be worth the investment.
You Have Unique Data Requirements
Standard AI solutions might not handle specialized legal data formats or requirements effectively.
Security Requirements Are Exceptional
Some legal tech products require security measures beyond what third-party solutions offer.
The Hybrid Approach
Smart legal tech companies are adopting a hybrid strategy:
Buy for Basics Use existing AI services for:
Build for Differentiation Develop proprietary solutions for:
领英推荐
Implementation Framework
Whether building or buying, follow this sequence:
1. Assessment
2. Pilot
3. Scale
Moving Forward
The build vs. buy decision isn't permanent. Start with third-party solutions while developing internal capabilities. Focus on solving real problems rather than chasing technological sophistication.
Decision Matrix
Consider these factors:
The right choice depends on your specific circumstances, but generally, buy what's common and build what's unique.
If you find this content insightful, consider subscribing to our LinkedIn Newsletter and following our company page for our latest articles!
Helping change how law firms work.
2 周Great article and very true. I reposted it with my thoughts. If you are going to decide to build or buy then one part of that decision has to be where are you going to get the training data from.