As AI-driven tools and other new technologies promise unprecedented capabilities, law firms and organizations are increasingly replacing incumbent solutions. However, these transitions often lead to a financial double-dip—paying for both the old and new systems simultaneously. This strain can delay much-needed innovation or, worse, derail budgets entirely.

So, is there a way to manage these transitions without busting the bank? The answer is yes. Here’s how.

Be Transparent

Buyers and sellers of technology can often create a win-win situation by bringing creativity and collaboration to the table. Sure, it might take more transparency than you’re used to, but treating your vendor as a trusted partner lays the groundwork for long-term success.

Be upfront about the budget challenges of overlapping contracts. Vendors love nothing more than dethroning an incumbent—it’s their Super Bowl moment. This drive makes them willing to structure flexible deals. When both sides collaborate creatively, you’ll be surprised how much can be negotiated.

It’s About Time to Value—Not Discounts

Before committing to a new solution, get clear on the terms of your current contracts. Evergreen or auto-renewal clauses often require notice 90 days or more before the contract ends. Miss the deadline, and you could find yourself locked into another costly term.

Start by reviewing your agreement and documenting the exit requirements, including notice periods and penalties. Then, confirm these details with your vendor rep in writing to avoid misunderstandings. Finally, don’t sign a new contract until you’re certain you can exit the old one smoothly. A small oversight here can lead to massive, avoidable costs.

Sign Now, Pay Later

This strategy might sound familiar—it’s a concept you’ve likely encountered in consumer deals, but it’s highly effective in enterprise tech transitions, too. Here’s the situation: your current contract expires in November, but you decide on a new solution in August. Typically, this means paying for the first year of your new contract alongside the last few months of your old one, resulting in double payments within a single budget year. For many organizations, this financial overlap can mean forgoing other critical budgeted spend.

This is the perfect opportunity to get creative.

If the issue is simply timing, ask your new vendor to allow you to start implementing and rolling out their solution immediately but defer payments until January. This "sign now, pay later" approach is essentially deferred billing and is usually an easy win for the salesperson to get approved—especially if they’re unseating an incumbent solution. To avoid repeating the issue down the line, ensure that subsequent years of the contract will also align with January billing. This way, you’ll never pay for two tools in the same category within a single fiscal year.

A Few Practical Tips:

• Implementation Fees: Vendors may ask for upfront payment of implementation fees. Since this cost is typically a small fraction of the overall contract, it’s a reasonable concession to make in exchange for deferred billing.
• Timing Matters: Don’t bring up deferred payments too early in the negotiation process. Finalize core terms first—pricing, scope, and discounts. Otherwise, the vendor may spread the deferred months across the entire agreement, effectively raising your total cost.
• Competition Rules: Remember, vendors love dethroning an incumbent. Use this leverage to negotiate not just deferred billing but also other favorable terms like stronger discounts or additional support services.

Go Long(er)

When the overlap between your old and new solution stretches beyond a few months—think 3-6 months—deferred billing offers fewer benefits in the long term. Instead of a standard 24-month contract, ask for a 30-month deal with the first 6 months free. This gives you the breathing room to implement, train, and ensure success before payments kick in.

Vendors love a longer commitment, and many will trade a cost-free implementation period for the chance to lock in your business. For you, it’s a straightforward way to avoid paying for two systems at once while giving your team the time they need to make the transition stick.

Timing Matters

For most legal tech vendors, the third quarter (July–September) tends to be slower, meaning sales teams are under pressure to close deals. This creates the perfect window to negotiate. During Q3, you’ll often find the best incentives—discounts, flexible terms, and added support—on the table.

But don’t wait too long. If the agreement isn’t signed by September 30th, those perks may disappear. Why? It’s not about salespeople shifting focus; it’s about leadership clamping down on concessions when demand spikes in Q4. With higher sales activity, the need to offer sweeteners diminishes, and vendors stop making deals as attractive. It’s supply and demand 101.

Conclusion

Transitions to new technology can be daunting, but they don’t have to be financially crippling. With the right strategies—whether it’s deferred billing, extended agreements, or smart timing—you can minimize costs and set your organization up for long-term success. Remember, transparency and creativity are your best tools for navigating these transitions, and vendors are often more flexible than you think when you approach negotiations as a partnership.

Where to Find Help

Need help mapping out your requirements or finding the perfect solution? Legaltech Hub leverages its deep knowledge of legal tech and experience as legal buyers to consult directly with law firms and corporate legal teams to identify, vet, and select technologies. From replacing CRMs to testing legal AI assistants, we’re helping clients tackle projects of all sizes. Want to learn more?