Over the past decade, law firms have invested heavily in technology. Finance platforms, CRM systems, workflow tools, document management solutions and, more recently, AI have all been positioned as routes to greater efficiency, stronger margins, better decision-making and increased client satisfaction.
On paper, the sector has never been better equipped. Legal technology spending continues to rise, and firms are under constant pressure to modernise in order to remain competitive. Yet when you look beyond the scale of investment and examine the outcomes, a more uncomfortable picture emerges.
Despite decades of spending on technology solutions, commercial performance linked to technology spend has not improved in line with expectations often set in the tech vendor marketing. Lock-up remains stubbornly high. Margins are challenged. Finance teams still work around systems to find reliable numbers. Partners still struggle to access timely, meaningful insight into performance. Business Services Op Model can appear cumbersome and expensive. Onboarding clients is expensive and slow
This disconnect between investment in tech and outcome is what we describe as the performance paradox: firms modernise their technology, but the underlying ways of working remain largely unchanged. As a result, new tools end up supporting old behaviours, and the return on investment consistently falls short.
Many firms recognise this paradox instinctively, even if they don’t articulate it explicitly. After a long and complex implementation, the new system goes live. The organisation breathes a sigh of relief. Performance is expected to improve.
But months later, the lived experience feels surprisingly familiar. Matter teams still encounter avoidable bottlenecks. Performance data still needs manual reconciliation. Billing timelines remain stretched. The technology functions, but productivity does not materially increase.
This is not because the systems are incapable. The tools themselves are powerful and well designed. The problem is the environment they are placed into.
Technology does not operate in isolation. It is embedded within an operating model made up of processes, behaviours, ownership structures and decision rights. When those elements remain unchanged, even the best platforms struggle to deliver meaningful impact.
The assumption behind most technology business cases is straightforward: better, modern systems should lead to better performance. But in practice, the relationship between spend and outcome is far weaker than expected.
Firms continue to experience issues that technology should, in theory, have solved. Matter data remains inconsistent. Onboarding is slow and error-prone. Visibility of work in progress is limited and inaccurate. Client information is fragmented across systems. Working capital comes under increasing strain.
These issues persist not because the tools are wrong, but because technology is often treated as the solution rather than as one component of a broader operating model. When firms say, “Our onboarding is broken, we need new onboarding tech,” the underlying assumption is that the software is the problem. More often, the real causes sit elsewhere: unclear ownership, fragmented handoffs, inconsistent behaviours and processes that were never redesigned.
Without addressing these foundations, new tools simply automate old inefficiencies.
The performance paradox is not just an abstract concept. It has a measurable financial cost.
Lock-up is one of the clearest indicators of operational health, and it continues to rise across the sector. Inconsistent scoping, variable time entry, unclear narratives and delays in billing hygiene all contribute to extended cash cycles. These issues are rooted in behaviour and process, not system capability.
Similarly, data inconsistencies introduced early in the matter lifecycle cascade downstream. Small errors at client onboarding or matter setup affect pricing, billing accuracy, reporting and client experience. Over time, disputes increase, write-offs creep up and teams spend more time correcting information than delivering value.
The paradox shows up on the balance sheet long before it becomes visible elsewhere.
So why does this pattern repeat itself so consistently?
One reason is that technology implementations often focus on configuration and delivery rather than on value realisation. Success is defined by going live, not by whether the organisation actually works differently afterwards.
Another is that law firm operating models are inherently complex. Legal work flows horizontally across multiple functions, but systems are frequently implemented within functional silos. Without redesigning how teams work together, technology reinforces fragmentation rather than resolving it.
Finally, there is a persistent belief that technology can compensate for structural issues. In reality, systems can enable, accelerate and support good practice, but they cannot create alignment, accountability or ownership where these do not already exist.
Until firms address these underlying dynamics, the performance paradox will continue to limit the return on even the most ambitious technology investments.
The firms that thrive will be those that treat technology as part of a broader operating model, not as the solution in its own right. Understand how to bridge the gap between tech investment and performance, in a meaningful and sustainable way. Download your copy today.