Matter Management Software: Should You Build or Buy?

A vast majority – 74 percent – of Legal Departments say their current legal technology infrastructure does not meet their needs, according to The Consero Group. It’s no surprise, then, that 80 percent of Legal Departments said “legal technology management” was their top priority for the next 12 months, beating out cost control, cybersecurity, and litigation management.

As in-house corporate legal teams start shopping around for LegalTech solutions, one question may surface from cost-conscious CFOs or well-meaning IT staff: “Could we just build this ourselves?”

It's important to fully understand the rationale behind “Build vs. Buy” and to know how to make an informed, effective decision.

How should we evaluate the 'build vs buy' decision for matter management software?

Entrepreneur Massimo Chieruzzi developed a six-step framework to evaluate the “Build vs. Buy” consideration. The six questions he asks are very helpful for framing the modern matter management decision. 

1. How core is this?

In essence, does the legal software support the company’s core purpose? For most legal teams, the answer is no. Legal is there to advance company strategy and drive risk, but it is not on the front lines of product and service delivery.

Builder beware: Remember that IT, like Legal, is often overworked. If the project does not support the core operations, it may be a low priority (and treated as such).

2. Does it provide a competitive advantage?

Will this software project help us dominate our market or hobble our competitors? Again, for most Legal Departments, the answer is no. Internal tech resources can be better spent expediting the sales process or refining the company’s products.

3. What option preserves simplicity?

A bespoke solution can necessitate vast amounts of custom coding for IT, vast amounts of toggling between applications for Legal, or a combination of the two.

Modern legal matter management systems are built to be as streamlined as possible, from single sign-on to concise data capture to automatically generated reports. Out-of-the-box integrations make it quick and easy to connect matter management and other legal technology tools.

Think outside the company to your law firm network, too: Given security and complexity, a homegrown solution cannot hook into the legal ecosystem of law firms and legal service providers for easy invoicing or collaboration.

4. What's the fastest go-live way?

This may be the most straightforward consideration. With some matter management software, you can sign up and start online immediately. With an internal buildout, it will take weeks, if not months, just to map out the workflows, let alone build the thing.

5. Do we have the core competency to build this?

Your company may very well have highly skilled developers on staff. Your company does not have developers who are experienced in building matter management systems for corporate legal departments. (Moreover, it’s highly unlikely your sharpest developers have a lot of capacity to spend on projects that are not central to the core business – see No. 1.)

For global teams, there also can be language barriers; an in-house developer is unlikely to have the ability to support multiple languages. A LegalTech vendor should be able to configure your software in more than one language, such as English, Japanese, Spanish, French, Danish, Dutch, and Portuguese, so your lawyers and business clients can use their language of choice.

Finally, a solution built just for one team does not benefit from hacks, ideas, and best practices from other Legal Departments using modern matter management – either in its development or its upkeep and updates. A cloud based legal management software used by hundreds of teams is consistently evolving thanks to client feedback and customizations.

6. What’s the cost of building and buying? 

While a “Build” option may seem cheaper, think about your most valuable resource: time.

Modern matter management tools start at US$55 per month per user. For a Legal Department of 10 users, on the high end, that would be US$6,600 per year – out-of-the-box and ready to go.

Meanwhile, according to the Association of Corporate Counsel, the median cost per lawyer hour is US$131 per hour for midsize companies. According to ZipRecruiter, the average software engineer is paid US$48 per hour.

If an in-house option required 25 hours of lawyer time for planning, meetings, testing, and training, and 100 hours of development, that’s US$8,075. (And that’s before any need to adjust or scale as your business and Legal Department grow.)

In addition to the cost of your time, consider also the opportunity cost. Altman Weil reports that workloads are up for 76.7 percent of Legal Departments after COVID-19. Do you have the bandwidth to plan, advise, develop and test a custom application?

We would add one consideration to Chieruzzi’s framework: risk management. (We’re lawyers, after all.)

What if the legal matter software doesn't meet your needs?

With a SaaS (Software as a Service) legal matter management software, you can try out the product via a free pilot, or cancel your subscription at any time, or both. In contrast, if you, your legal team, and the IT Department have sunk hours upon hours into a custom application, you may be stuck with it – no matter how clunky the end result.

If you are considering new legal technology, it's critical to know the terrain. Our e-book, Modern Matter Management, is a field guide that provides an overview of key features, a checklist for scouting options, a calculator to evaluate ROI, and sample project implementation plans. Download it now to get started.

If you would like to learn more about Xakia's matter management software, get in touch with the team for a demo today.