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A consultant who helps law firms decide which software to buy explains why legal tech is in trouble
- Fears of a bubble in AI legal tech are growing as law firms test various products, driving sector revenue higher.
- Concerns are rising that legal tech revenue surge may indicate an impending bubble.
- Zach Abramowitz, a consultant at Killer Whale Strategies, warns of a surge in legal tech revenue signaling a potential bubble.
- Many law firms are testing legal tech products through paid trials, boosting the revenues of software companies.
- Legal tech revenue is being booked as recurring revenue, but it mostly consists of pilot programs.
- In the next 12 to 18 months, law firms will decide on long-term commitments to specific vendors, impacting market dynamics.
- The legal industry is expected to favor top tech performers while other vendors may experience revenue decline.
- Industry experts foresee a potential 'reckoning' in the legal tech sector due to unrealistic expectations and product performance issues.
- Legal tech market faces challenges from long sales cycles, customer churn, and competition from AI tools like ChatGPT.
- ChatGPT is gaining popularity among lawyers for its research capabilities, surpassing traditional legal research tools.
- The future of legal tech market may hinge on factors such as AI tool adoption and evolving user preferences.
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