Norton Rose's Chicago Office and the Proxy Tool: A Cautionary Tale
In 2022, Norton Rose opened a Chicago office with a bold goal: to introduce 150 clients to a new legal workflow tool called Proxy, created by a tech company owned by a newly hired partner. Three years later, not a single firm customer had adopted the product. The fallout is now playing out in lawsuits filed by both Norton Rose and NMBL Technologies, the company behind Proxy, led by former partner Daniel Farris.
This case highlights the challenges law firms face when shifting from selling traditional legal services to marketing tech-enabled products. Many firms are investing heavily in tech, especially AI, but success requires more than enthusiasm—it demands a different sales approach.
Why Selling Products Is Different
“Partners excel at selling legal services, but selling products is not in their DNA,” says Jeroen Plink, COO of LegalTech Hub. Unlike typical legal services, product sales usually require dedicated salespeople with specific expertise. Most law firms lack this specialized sales force, making it difficult to succeed.
The Norton Rose-Proxy saga offers a rare glimpse into what can go wrong when a firm tries to bridge that gap without the right structure or commitment.
Setting the Stage: Innovation and Ambition
Recruiting Daniel Farris from K&L Gates was a key part of Norton Rose’s Chicago launch. Farris was prominently featured in firm announcements and marketing as a leader of their so-called “innovation hub” in the trendy Fulton Market district.
Managing partner Jeff Cody emphasized the need to differentiate Norton Rose’s Chicago office, calling it the firm’s “most innovative, forward-thinking office” focused on how services are delivered. The move was designed to capture a unique vibe in Chicago and challenge the status quo.
Where the Partnership Faltered
Despite the hype, tensions emerged quickly. According to NMBL’s lawsuit, Norton Rose’s leadership never fully committed to promoting Proxy. Negotiations dragged on for nearly a year, especially over the clause requiring Norton Rose to introduce 150 clients to Proxy. The law firm pushed back against a hard target, settling on a softer language that only required “commercially reasonable good faith efforts.”
NMBL claims Norton Rose didn’t even meet this lighter standard. The firm never hired a “client success manager” as agreed, and only a small fraction of lawyers engaged with Proxy training materials. The subsidiary set up to manage the product, branded LX, reportedly operated with minimal funding and no active bank account, described by NMBL as a “sham entity.”
From NMBL’s perspective, Norton Rose used the partnership mainly to recruit Farris and maintain traditional practices, not to truly back Proxy’s success. Meanwhile, Norton Rose points to client disinterest, noting that an email campaign offering free trials failed to generate any responses. The firm is seeking up to $250,000, claiming it would not have invested if it had known Proxy’s market reception.
Legal Tech Investments: The Bigger Picture
Law firms are spending more than ever on technology, especially AI tools. Thomson Reuters recently reported an 8.5% inflation-adjusted increase in law firm spending on knowledge management in Q2, hitting record levels.
However, many AI initiatives fail to reach production. A survey by S&P Global showed that 42% of companies abandoned most of their AI projects, up from 17% the year before. This indicates a broader challenge in turning tech ideas into market-ready products.
Ron Friedmann, a Gartner analyst, notes skepticism about law firms’ ability to build and sell their own products. It’s a different business model than traditional legal services.
Successful Models Outside Norton Rose
Some firms have found a better path by creating independent subsidiaries focused solely on selling legal tech products. Wilson Sonsini’s SixFifty is a prime example. It developed automated employment law services and recently sold for $70 to $85 million, operating with a dedicated sales team outside the traditional law firm structure.
In contrast, Norton Rose’s attempt to manage Proxy through the LX subsidiary failed to establish this independence or operational strength.
Key Takeaways for Sales Professionals
- Product sales require dedicated sales expertise. Relying on partners skilled in service sales is not enough.
- Clear commitments and realistic targets matter. Vague promises or soft goals can doom a product rollout.
- Organizational support is crucial. Without proper staffing and investment, even promising products can fail.
- Client interest drives success. Marketing efforts must connect with actual client needs and generate engagement.
- Independent subsidiaries can help. Separating product sales from traditional legal practices creates room for focused growth.
For sales teams working in professional services or tech-enabled offerings, this story underscores the importance of aligning strategy, resources, and sales approach. Success demands more than innovation talk—it requires execution that matches the product’s unique demands.
To sharpen skills relevant to selling AI and tech products, consider exploring targeted courses on Complete AI Training which offers practical learning paths for sales professionals in tech-driven markets.
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