Vibe Coding Lawyers and the New Economics of Legal Tech

By Shawn Curran, CEO, Jylo.

‘Vibe coding lawyers’ have become the latest talking point in legal tech. And almost on cue, we’re seeing the usual defensive reaction: it won’t be safe, it won’t be secure, it won’t be enterprise-grade.

Some of those concerns are valid. Someone will eventually install a package with a vulnerability, call an unsafe endpoint, or ship something half-baked. But here’s the uncomfortable truth: that already happens when humans code professionally. It always has.

What’s shortsighted is dismissing the idea that someone deeply versed in a process can roll up their sleeves and create the software they need. This shift in who builds software is quietly but fundamentally changing the landscape.

The Squeeze: Heavily Funded SaaS vs. Internal Build

At Jylo, we are sandwiched between two forces.

On one side, there are legal tech companies that have raised billions to build SaaS products targeting addressable markets that, in many cases, are in the low hundreds of millions.

On the other side, there’s a growing cohort of ‘vibe lawyers’ within law firms – senior, actively practicing lawyers who are increasingly comfortable encouraging their firms to move away from external tools and instead build more targeted systems that fit their actual internal workflows.

That second force seems only to be getting stronger – and if that continues, it further restricts the addressable market for Legal Tech and SaaS more broadly.

And we’re already seeing the impact this is having on software stocks.

The uncomfortable math sitting underneath all of this is that private markets are pricing ‘new SaaS’ ‘AI native’ at 60x revenue multiples. Yet today, following the SaaSacre, public markets are valuing ‘old SaaS’ ‘growth at scale’ companies at 3x revenue.

Both can’t be right.

Today the market is drawing a sharp distinction between ‘old SaaS’ and ‘AI-native SaaS,’ often assigning very different multiples. In reality, many of these companies share similar economic foundations.

Jylo sits between those worlds. We are AI-native in how we’re built, but we’re also realistic about how much of the current wave still resembles traditional SaaS. That said, markets often price narratives before fundamentals fully converge. While it’s reasonable for us to think of ourselves in the new SaaS category today – we’re staying disciplined about building a business that remains viable as those multiples start to normalise tomorrow.

History offers a useful parallel – public markets began repricing newspaper stocks years before the industry’s collapse became obvious to everyone else.

The light blue is earnings; the dark blue is the sell-off.

Private markets operate on a different timeline. There’s every incentive to maintain the illusion of peak valuations. But the truth is, even retail investors are rethinking SaaS. They’ve seen the compression, absorbed the losses, and repriced their expectations accordingly.

When public markets have already recalibrated and when lawyers inside firms are building their own tools – private legal tech valuations built on yesterday’s multiples seem to be living on borrowed time.

That doesn’t end well.

The shift from 60x to 3x will eventually show up somewhere. When celebrities start promoting technology sold to traditionally conservative lawyers, it suggests the peak isn’t far away.

The age of throwing money at growth, no matter the cost, seems to be coming to an end. With sustainable business models that can survive and thrive through uncertainty seem more important than ever. Momentum tends to work better in the short term, while value tends to work better in the long term.

Who Is Actually Qualified to Build Legal Tech?

On vibe coding, it’s worth asking an uncomfortable question: who says today’s legal tech founders are more qualified to build legal software than senior lawyers inside top firms?

If you look at recent Y Combinator batches and the broader ecosystem, many legal tech founders:

• Have zero legal domain expertise, or
• Are ex-lawyers with fewer than 5 years PQE who never had to think about the full enterprise tech ecosystem of a law firm.

Compare that to a 20-year PQE partner at a top-tier firm who has lived the workflows, incentives, risk profile, and operational complexity of legal services for decades. If those lawyers end up vibe coding – it’s not obvious who the ‘amateur’ is here.

Law Firms Already Have the Infrastructure

Put IP aside for a moment. Most large law firms already have:

• Internal developers
• Infrastructure and security teams
• Code scanning, deployment, and maintenance capabilities
• A history of building internal systems

The idea that law firms are suddenly incapable of managing software risk doesn’t hold up. What is new is the democratisation of development across the firm – and that’s the real shift. The range of people who can build is expanding rapidly, and that trend isn’t reversing.

Lawyers Are Not the Weak Link

There’s also a persistent myth that lawyers somehow aren’t suited to this. Having worked at top tier law firms for over two decades – I’ve seen the opposite.

Three observations stand out:

1. Lawyers work harder than almost anyone.
   I still remember a litigation partner at one firm walking the corridor at 11pm asking the Associates to focus because he ‘wanted to get out early tonight.’
2. Their attention to detail is exceptional.
   Lawyers are insecure overachievers with an eye for quality. That matters enormously when building systems that encode process.
3. The lawyer–engineer translation gap is real.
   Product requirements get lost. Output drifts. Quality degrades unless the engineers are exceptional. At Jylo, we deliberately run a very small team of exceptional engineers because average simply wouldn’t do.

So, when VCs talk about the difficulty getting startups to follow the ‘9-9-6 (hours) culture’ while handing them hundreds of millions with no domain expertise to ‘disrupt legal’ – it’s hard not to notice the irony.

Software Engineering Has Always Been About Abstraction

Engineering has always been abstraction.

• C developers thought C++ developers were amateurs
• C++ developers thought C# developers were amateurs
• C# developers thought Python developers were amateurs

Abstraction means people who come later benefit from those who came before.

When we talk about ‘lawyers vibe coding,’ let’s be honest about what’s happening. You’re rarely writing custom algorithms from scratch. You’re making type-safe calls into well-documented APIs. (for the non-technical reader, think readymade meal versus measuring the ingredients).  Lawyers are not starting from zero. They’re starting from a very strong foundation.

The key point being – good precedents do most of the heavy lifting – whether you’re filling in deal points on a legal template or vibe coding on top of a well-built software framework. You don’t need to be an expert to get lucky when the starting point is so strong.

Price, IP, and Incentives Matter More Than Fear

Where this really gets interesting is price and intellectual property.

• If software is too expensive firms will build.
• Partners of law firms will prefer to buy – but only with strong IP assurances.
• No training on customer data. No reuse. No ambiguity.

We offer unlimited liability on misuse of customer data, while most vendors cap breach of confidentiality liability at 2x fees – we think our customer’s business is worth more than two times a line item on the IT budget.

We also support private-cloud deployment where Jylo has no access at all.

Pricing matters, too. Your license fees must thread the needle between supporting a sustainable business, during a period of multiples contraction, whilst being priced in a way that discourages firms from opting for internal build.

Perhaps the future of SaaS is one where companies don’t chase headcount or inflated multiples but run lean and prioritise delivering steady value that compounds. People didn’t consume less content after the internet, monopolies just got eroded with a lower cost to serve.

Why This Matters to Jylo

At Jylo, we’re less concerned about competitors pursuing monopolisation, particularly as the SaaS ecosystem enters a period of pronounced fragmentation, record-low barriers to entry, and unprecedented competition. Like the public markets, we believe the bigger long-term threat to our business is the falling cost of building software itself – whether that comes from new entrants benefiting from advances in cloud infrastructure and vibe coding, or from customers increasingly building internally.

That makes the price of software more important than ever. If SaaS multiples compress from 10x to 3x over time, the economics of the industry will have to reset. For the last decade, software companies have been able to burn significant capital on the assumption that durable ARR would eventually justify the spend. But if switching costs fall and new products can be built faster and cheaper, those assumptions become far less reliable.

In that world, the hard truth is that funding must be used far more carefully. If the outcome is a business valued at 3x rather than 10x, you need to spend relative to the exit value – otherwise investors end up underwater.

New SaaS companies that endure will be the ones that can compete with internal build on price, provide the security and IP guarantees enterprises require – including private-cloud isolation – and embed safe, secure vibe-coding capabilities directly into how their products are used.

The future isn’t law firms versus software vendors; it’s law firms building – through software or legal engineering – alongside vendors that help them do it safely, securely, and at scale.

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To learn more about what Jylo can do, see here.

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[ This is a sponsored thought leadership article by Jylo for Artificial Lawyer. ]