How Productizing Legal Services Can Help Firm Profitability

How Productizing Legal Services Can Help Firm Profitability

Caveat Venditor, let the seller beware. As states change regulations the legal services industry is being primed to become a buyers’ market. Law firms need to be prepared to adapt their business model to changing times. But adopting an entrepreneurial mindset doesn’t necessarily come naturally.

Kory Kelly is a tech entrepreneur and founder of Legal Karma. His document drafting automation and client collaboration platform gives lawyers the tools they need to innovate their business model. He sat down to talk through how firms can productize their services to compete with disruptive tech companies amidst regulatory upheaval.

Kory tackles the following questions in this blog:

What Happened in Arizona and Will It Happen Elsewhere?

At the beginning of 2021 Arizona passed new legislation which expands who can own a law firm and represent clients in court. The primary goal was to reduce cost and increase access to counsel. However, it also allows innovative companies to zoom in and expand their business model into actual legal representation.

Arizona is just the start.

Utah has already passed similar legislation. California, New York, Illinois, and Florida are also exploring their own regulatory changes. This is a trend which we will see spread across the country. Firms need to strategically prepare, or they’ll get left behind.

How Does What Happened in Arizona Show the Importance of Planning Ahead and Creating a Profitable Law Firm?

Law has been a privileged industry. Over the last few decades, almost every other profession has experienced major disruption at the hands of innovative companies. Thanks to government regulation, lawyers have been largely insulated from disruption. This relative security has allowed some lawyers to become complacent in their business model.

When there isn’t a real competition between business models, things tend to stagnate.

The Arizona legislation has opened the door for entrepreneurial companies to innovate how pricing and customer acquisition work in the legal industry. From an economic perspective, it’s a healthy change. 

But it’s also a tectonic shift that places some firms on shaky ground.  

The market in Arizona is about to become much more customer centric. Older business models are going to struggle to compete in a market where the customer has more power. Now is the time for firms across the country to take a long hard look at whether or not they’re prepared to face a new kind of competition.

How Can I Use Common Legal Services to Create a Profitable Flow of Customers?

Productization. Over the last few years, tech platforms that serve law firms have increasingly improved.  Effectively leveraging the latest software can fundamentally change how your firm handles common lower-value services. 

Things like filing for divorce, resolving a DUI, handling a ticket, filing an LLC, or creating an NDA are time-consuming for the firm and comparatively low value. Document drafting automation software can turn that mundane paperwork into an opportunity for lead generation. This kind of automation is part of how dozens of large brands have been built while giving many initial documents away almost for free.

Why Should I Consider Doing NDAs and Other Common Services for Free … or Really Cheap?

Free, is a word that lawyers tend to find foreign. Productizing and then giving away services you’ve always charged for probably seems counterintuitive. But the customer acquisition benefit is massive. 

What “free” really means is the marketing budget paid for clients to have a positive first interaction with your firm. By giving away a valuable first-time offer without a huge bill attached to it – you build goodwill. There is an entire market of people who don’t want to pay inflated prices for a piece of paper. You should be capitalizing on them.

The real money doesn’t come from document drafting anyway. Lawyers don’t make their money off of filing for divorce. Big profits come from fights and mitigation which happen long after the initial paperwork. Smart firms are doing everything they can to lower the barrier to entry. Once you own the relationship, it creates a natural pipeline of high-value work.

Your first-time offer of document drafting makes it easy to get customers in the door. Starting the client relationship with a gift sets you up to funnel them into high-value work. Productized document drafting is already being done by dozens of big companies and firms. They’ve successfully turned the paperwork for Taxes, Divorces, Trademarks and hundreds of other documents into a powerful lead gen engine.

What Are the Things I Need to Put in Place to Profitably Productize My Services?

Embrace technology.

Modernizing your business model starts with a shift of mindset. Practice management software is the first step. Another step could be integrating document drafting automation on top of your practice management tool. These applications will help your staff scale up their bandwidth by automating lower-value tasks. If nothing else, adopting the latest software will reduce the number of hours you spend on routine work and improve your profit margins. But if you stop there, your firm would be missing out on a big opportunity.

Document drafting software is the real key to productizing lower-value services. Prospective clients get to log into a user-friendly online portal and answer detailed preset questions about their matter. Then the software sends the finished document to you for review. From the client’s perspective, it’s similar to the software they probably already use to file their taxes. They get a great first customer experience, and you get to start building a pipeline of loyal clients who appreciate your tech forward approach. Plus, in many cases, you’ll be making money in your sleep as the software is handling the paperwork.

How Does Moving Away from the Billable Hour Help Me Make More Money?

In the legal industry, offering to handle things like LLCs for little to no cost is phenomenally strange in the best way possible. These positive early interactions lead directly to word-of-mouth marketing. 

Reducing the hours you spend on routine documents and client onboarding means your team gets to focus on moving clients down the funnel toward higher-value work. Maybe only 20% of the documents you give away turn into billing clients. But, by optimizing your onboarding process to find that 20%, you build a robust long-term list of high-value clients.

It’s not about leaving the billable hour model behind. It’s about shifting your focus to the most valuable hours to bill.

Do I Need to Change Everything at Once? What’s a Shrewd Way to Test These Changes?

Take a stepped approach.

Pick 5-10 documents and fully automate them. Use a pilot program to test out how the new process for client acquisition works in your firm’s specific context. 

Use document drafting software to scale your team’s capacity and give a few of these documents away for little to no cost.

Each firm, Area of Practice and geographic location are unique. So, it’s important to implement some testing as you create a system that works for you and your firm.

Wrapping Up

Changes are coming to the legal industry. Small law firms are being thrust into direct competition with tech companies who live off of innovating their business model. Firms who don’t adapt will see customer acquisition become much more difficult.

The good news is, there are tools available that can help. Use document drafting and automation software to access an untapped pipeline of clients. Build high-value relationships with the human touch while keeping the cost to the clients low. The tech innovators and big-box stores may match the price. But they’ll struggle with the human touch.

Related Resources

Changes in Arizona May Be Coming to a State Near You and What This Means for  Your Law Practice


Kory Kelly is the Founder and CEO at Legal Karma, President of the Legal Karma Foundation, and a lecturer for the Department of Communication Studies at Texas State University.

Legal Karma was named top 5 most innovative legal technology companies at the ABA TECHSHOW, voted on by thousands of investors, legal professionals, and techies. Legal Karma began with the intention of democratizing the law for under-served communities. Legal Karma is working with dozens of law firms to help them improve their client experience and increase revenue through productized services.  

When Kory isn’t at Legal Karma, he lectures rhetoric and communication at Texas State University, reads fantasy books, trains for triathlons, and hangs out with his dog, Sully.


Daniels-Head Insurance Agency (DHIA) seeks thoughts and insights from a variety of individuals and organizations in the industry. The guest content on this blog represents the individual opinion of the author and not that of DHIA. Nor is it the opinion of DHIA’s underwriters and business partners. Neither DHIA nor DHIA’s business partners are recommending, endorsing, or sponsoring any companies, or third parties mentioned in this blog.