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A recent survey of over 100 e-discovery groups, alternative legal service providers and other legal technology companies found that 97 percent of those polled lacked a “go-to-market strategy,” essentially a plan to sell its services to the market.

Ken Gary, partner at marketing group Baretz+Brunelle and co-author of the report, said the marketing group went into the study expecting a fair amount of confusion from legal technology companies about how to best structure their business plans. The data they gathered, however, suggested that nearly all of the legal technology market is struggling to find a best market fit.

Baretz+Brunelle has extensive roots in the legal technology space. Both Gary and managing director Erin Harrison previously held executive positions at Legaltech News parent group ALM, and the company represents legal technology companies like Gavelytics and Casetext. Even so, Gary and his colleagues were surprised by the number of companies lacking a specific market strategy. “We didn't expect it to be quite that high,” he said.

The report found that only 44 percent of those polled both understood the value of their services and regularly surveyed their top clients for feedback.

“We've noticed that there is a general disconnect with sales and marketing and go-to-market strategy in this world,” Gary said of the legal technology space. Indeed, 55 percent of those polled reported misalignment between their sales and marketing teams.

The report found that many legal technology companies are catering their services to more than a few different legal industry players: 63 percent aimed to serve in-house counsel, 55 percent targeted corporate legal operations staff, 48 percent targeted law firms, 37 percent targeted law firm information governance staff, 37 percent targeted law firm executive staff, and 27 percent targeted corporate procurement departments, among others.

“The overall number of different people that companies are selling to is a little staggering,” Gary said of the findings. “It's almost as if some legal tech companies don't have a firm grasp of who to sell to yet,” he later added.

Gary credits some of this uncertainty to the period of transition the legal industry seems to be in as a whole. Law firms are under increasing pressure to update business practices to look more like corporate entities, while corporate legal departments are increasingly adopting operations processes and systems to reduce cost. This landscape creates a lot of potential opportunity for legal technologists to capitalize on, but it also creates a lot of confusion around where the best market opportunities exist.

There are a few key factors to consider in designing a go-to-market strategy, Gary noted. “Timing, testing a product, having a clear message and strategy around what that product is intended to do, and understanding who you're selling to. That seems from the survey results to be missing” for legal tech companies.

Gary has seen two broad approaches in legal technology to finding product-market fit. Some use a “shotgun approach,” pushing a product to market, tracking its successes or failures and iterating future product updates from there, while others rely more heavily on market research and testing prior to product launches. The latter, he said, seems to appear more “in the legal research applications and AI platforms, certainly on a lot of these dashboard products for corporate legal departments.”

Between the two strategies, Gary sees a clearly superior route. “I think sometime it makes sense to, rather than seize an immediate opportunity for a thing your company thinks it can do, to take a step back [and] hone a solid go-to-market strategy in advance of selling just because you can. I think the shotgun approach is no longer effective in the legal tech market,” he said.

“I do think that the more strategic, the more focused, those that understand their buyer personas, are going to win,” Gary added.