Avoiding LegalTech Stupidity: The Hidden Curse of Technical Debt

The mandate of this blog is to help people avoid making the same old bad decisions when it comes to legal technology and legal operations. It has been inspired by Charlie Munger’s quote,  “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Imagine you start with an airplane designed years or even decades ago, originally built for carrying cargo over short distances. Back then, it was simple and got the job done. But over time, you need this plane to do much more—long-haul flights, passenger comfort, state-of-the-art navigation. Instead of redesigning it from scratch, you keep bolting on new parts and technologies that were never meant to fit its old frame.

You add new electronics alongside outdated wiring, retrofit extra fuel tanks where cargo used to sit, and squeeze passenger seating into spaces never designed for comfort. Each new addition makes the plane a little heavier, a bit more unbalanced, and harder to maintain. It still flies, but not gracefully—and every time you need to upgrade something, you face layers of old components that don’t play nicely together. This layered complexity and awkward integration reflect the nature of LegalTech technical debt: an aging structure, never intended for modern needs, burdened by a series of quick fixes, poor design choices and hasty accommodations that ultimately limit its agility, reliability and value.

How do you know when you’re struggling with technical debt with products from outside vendors?

Here are some of the telltale signs:

1. Slower Deployment and Upgrade Cycles

• Delayed Updates: Software updates, patches, and new feature releases are infrequent or delayed due to underlying technical challenges.
• Complex Upgrade Processes: Upgrading to new versions requires extensive downtime, manual intervention, or reconfiguration, indicating underlying structural inefficiencies.

2. Poor Integration and Scalability

• Difficult Integration with Existing Systems: APIs or connectors are outdated or poorly documented, making integration with other software time-consuming and expensive.
• Limited Scalability: The software struggles to handle growing data volumes, users, or transaction loads, forcing costly workarounds or infrastructure upgrades.

3. Unreliable Performance

• Frequent Outages or Downtime: The software experiences regular disruptions or crashes, disrupting business operations.
• Inconsistent Performance: Sluggish response times, especially under heavy workloads, reflect inefficiencies in the system design.

4. Higher Support and Maintenance Burden

• Excessive Support Requests: Users frequently encounter bugs or errors, requiring ongoing vendor support and intervention.
• Dependence on Vendor-Specific Expertise: Customizations or fixes often require expensive professional services from the vendor because the system is overly complex or poorly documented.

5. Limited Customization and Adaptability

• Rigid Configuration Options: The software offers limited flexibility to adapt to unique business processes without significant customization efforts.
• High Costs for Modifications: Adding features or tailoring the software to specific needs incurs steep costs due to convoluted architecture or legacy dependencies.

6. Suboptimal User Experience

• Outdated Interfaces: The software has clunky or unintuitive user interfaces that slow down workflows and frustrate users.
• Frequent Errors: Users encounter recurring glitches or errors, indicating underlying code issues.

7. Vendor Transparency and Roadmap Concerns

• Lack of Modernization Plans: The vendor provides vague or non-existent roadmaps for adopting newer technologies or addressing known issues.
• Unsupported or Deprecated Features: Critical features are phased out without viable replacements, forcing costly adjustments.

8. Security and Compliance Risks

• Outdated Security Protocols: The software relies on legacy technologies that no longer meet modern security standards.
• Difficulty Meeting Compliance Standards: Features required for regulatory compliance are missing or incomplete, necessitating additional tools or manual processes.

9. Hidden Costs and Resource Drain

• Unexpected Downtime Costs: Downtime or instability impacts revenue or productivity.
• High Total Cost of Ownership (TCO): Initial costs appear low, but ongoing maintenance, support, and integration costs inflate the overall expense significantly.

10. Poor Support for Future Growth

• Incompatibility with New Technologies: The software cannot integrate with modern cloud platforms, AI tools, or advanced analytics.
• Stagnant Innovation: The vendor’s focus on maintaining legacy components slows down the release of cutting-edge features, limiting the software’s long-term value.

How do you avoid selecting solutions that are already struggling with Technical Debt issues? Take these steps when assessing your LegalTech options:

1. Conduct In-Depth Vendor and Product Due Diligence

1. Review Product History and Evolution:
   
   
   • Examine the release notes and version history to ensure the software is consistently updated.
   • Look for evidence of incremental improvements, such as better scalability or modernized integrations, rather than frequent patches for recurring issues.
2. Ask About the Technology Stack:
   
   
   • Ensure the software is built using current, well-supported technologies, frameworks, and libraries.
   • Avoid solutions heavily reliant on niche or legacy technologies that may limit future adaptability.
     
     
3. Investigate the Vendor’s Development Practices:
   
   
   • Ask about their approach to testing, code reviews, and technical debt management.
   • Look for evidence of modern practices, such as automated testing, continuous integration, and modular design.

2. Evaluate Architecture and Scalability

1. Request Architectural Diagrams and Technical Documentation:
   
   
   • Review how the software is structured, focusing on modularity, scalability, and flexibility for future growth.
   • Ensure APIs, integrations, and data pipelines are well-documented and use industry standards.
2. Assess Scalability and Performance:
   
   
   • Confirm the software can scale to meet your organization’s needs.
   • Ask about performance under high transaction loads or with large datasets to gauge how well the architecture supports growth.

3. Analyze Product Support and Maintenance

1. Talk to Current Customers:
   
   
   • Ask about the software’s reliability, ease of integration, and upgrade experiences.
   • Inquire about ongoing maintenance costs and the vendor’s responsiveness to support requests.
2. Evaluate Maintenance Practices:
   
   
   • Understand the vendor’s policy on updates, patches, and backward compatibility.
   • Avoid software that requires frequent manual interventions during updates or upgrades.

4. Review the Vendor’s Roadmap and Commitment to Innovation

1. Ask for a Transparent Product Roadmap:
   
   
   • Look for evidence of planned improvements addressing technical debt, such as modernization of the tech stack or enhanced performance.
   • Avoid vendors who cannot articulate a clear plan for keeping the software current.
2. Assess the Vendor’s Investment in R&D:
   
   
   • Determine how much the vendor invests in research and development.
   • Vendors with a strong commitment to R&D are more likely to address technical debt proactively.

5. Conduct Proof-of-Concept and Technical Validation

1. Run a Proof of Concept (PoC):
   
   
   • Test the software in a controlled environment to evaluate performance, reliability, and ease of integration with your existing systems.
2. Evaluate Key Metrics During the Trial:
   
   
   • Measure load times, response times, and overall system stability under real-world scenarios.
   • Identify areas where customizations or integrations become complex or expensive.

6. Investigate Integration and Future Compatibility

1. Check for Standards Compliance:
   
   
   • Ensure the software adheres to open standards, making it easier to integrate with other tools and platforms.
2. Ask About Future Compatibility:
   
   
   • Confirm the vendor’s plan to support emerging technologies, such as cloud-native architectures, AI, or advanced analytics.

7. Look for Transparency and Trust

1. Ask Tough Questions About Technical Debt:
   
   
   • Directly inquire how the vendor identifies, tracks, and addresses technical debt in their software.
   • Look for honesty and openness—vendors who deny the existence of technical debt or downplay it may not be managing it effectively.
2. Evaluate Vendor Responsiveness:
   
   
   • Pay attention to how quickly and thoroughly the vendor addresses your technical concerns during the purchasing process.

8. Assess Total Cost of Ownership (TCO) and Long-Term Viability

1. Factor in Long-Term Costs:
   
   
   • Calculate the TCO, including initial licensing, support fees, integration costs, and ongoing maintenance expenses.
   • Avoid solutions with low upfront costs but hidden long-term expenses due to technical debt.
2. Gauge Vendor Stability:
   
   
   • Research the vendor’s financial health and market presence to ensure they can support and improve the software over the long term.

By thoroughly vetting vendors and software using these steps, prospective buyers can minimize the risk of investing in enterprise LegalTech solutions plagued by technical debt, ensuring better long-term value and reliability.