For law firms, it is becoming increasingly common to develop technology products of their own. Firms view them as additional services they can provide to their clients and additional streams of revenue they can bring into the firm.

But not every firm has the resources or staff to turn its tech idea into a prototype or to test its viability in the market. What happens when a firm’s tech ideas are bigger than its budget?

Enter the legal technology development and design company Theory and Principle. It has introduced a Law Firm Partner Program that founder Nicole Bradick says enables firms to share the burden and risk of product development.

The idea is simple. The firm works with T&P on prototyping and validating the product to make sure the idea is desirable and viable. If it is, then T&P goes on to create designs and begin development of the minimally viable product. If the product is successful, T&P remains involved to continue to test and iterate on the product over time.

What makes the program different from simply hiring a development company is the fee structure, which Bradick says is designed to apportion risk. Here is how it works:

  • T&P charges a flat fee of $10,000 to create a prototype of the firm’s product idea and test it with the intended users.
  • If that first step validates that the product is desirable and viable, and if the firm has a sound plan for marketing and selling the product, then T&P provides up to one month of design and one month of development work at no cost to build the MVP. (If the MVP requires additional work, then T&P will charge its standard rates.)
  • Once the firm begins to sell the product, the revenue goes to T&P until the firm repays it for that uncompensated design and development work.
  • Thereafter, the firm and T&P split the revenue 75/25, with T&P dedicating up to a third of what it receives to continued improvement of the product.

“This method shifts some risk to T&P to ensure that we’re building something designed to be successful,” Bradick says, “but then creates a long term partnership should the product attract market interest.”

Legal Tech Development

T&P is a legal technology design and development company that Bradick founded in January 2018. One of the products it has developed for a law firm is regUP, which the firm Crowell & Moring created to provide its clients with timely information about regulatory changes in key areas of concern to them.

Other products it has developed include:

  • Florida Law Help, a legal triage site for Florida residents.
  • myPadilla, a product that helps criminal defense attorneys meet their Padilla requirements by advising them on potential immigration consequences of a plea deal or other disposition.
  • Colorado Resource Network, a legal resource site for seniors in Colorado.
  • CLUE, a scraper designed for the Maryland Volunteer Lawyers Service that helps identify legal issues and remedies pertinent to individual clients.
  • Rentervention, a product that helps tenants in Illinois understand and address housing issues.

Anticipating that some firms may be concerned that the revenue split in the final phase of the partnership could be considered fee-splitting in violation of ethics rules, she said that she consulted with ethics counsel and was told that the company’s continuing working on iterating and supporting the product would make the ongoing payments appropriate as fees for services.

Photo of Bob Ambrogi Bob Ambrogi

Bob is a lawyer, veteran legal journalist, and award-winning blogger and podcaster. In 2011, he was named to the inaugural Fastcase 50, honoring “the law’s smartest, most courageous innovators, techies, visionaries and leaders.” Earlier in his career, he was editor-in-chief of several legal publications, including The National Law Journal, and editorial director of ALM’s Litigation Services Division.