Here's an interesting article in which Armin Cuyvers suggests there might be 'two legal tools to avoid hard brexit' - (1) a delayed exit (delexit?); and (2) phased exit (phexit?).
'Delexit' is the suggestion that, in the withdrawal agreement entered into under article 50, the UK's exit day is set at some point in the future (i.e. however many years its estimated it will take for the UK and EU to get things sorted), and that in the meantime the UK remains, to all intents and purposes, a full EU member. I think a deal of this nature is almost inevitable, given the current state of the negotiations, and the forecast consequences of the UK leaving without any sort of trade deal. It might be politically unpalatable for Brexiteers but it would allow the PM to maintain 'Brexit means Brexit (it's just not happening until 2023 ...)'
'Phexit', on the other hand, seems so difficult as to be impossible. It would require the negotiation of a whole series of fixed 'intermediary positions', and the UK and EU will find it difficult enough to establish a single post-exit position, given how long the EU's FTAs with Canada, for example, have taken.
'Delexit' is also what the PM meant in her Florence speech when she asked for an ‘implementation period’ during which ‘access to one another’s markets should continue on existing terms …’ In case there was any doubt what ‘existing terms’ meant, the PM explained that ‘the framework for this strictly time-limited period … would be the existing structure of EU rules and regulations.’ (What else could it be, given the purpose of the period is to allow a replacement framework to be developed?). The PM added that the length of the implementation period ‘should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin that future partnership.’
Let’s not beat about the bush. The PM has abandoned ‘no deal is better than a bad deal’. The UK may formally leave the EU on 29 March 2019, but it is now asking the EU27 if it can ‘stay in’ in all practical senses until a mutually satisfactory future arrangement is negotiated and implemented. And it is a request – as Michel Barnier has confirmed, there is nothing in the article 50 process which would require the EU27 to agree to it. The UK therefore has no control over whether that period is granted or on what terms it will be given – the EU27 are in the driving seat.
There's further analysis on this from me here: https://www.bdb-law.co.uk/blogs/great-repeal-bill/24-great-repeal-bill-give-just-little-time/
I believe two legal tools may jointly help to avoid a hard Brexit: delayed exit and decreasing membership. Jointly, these legal solutions allow a controlled, phased exit by providing a legal set of steps down the Brexit cliff. Such a phased exit, or phexit to add to the growing stable of exit terms, would buy the necessary time and avoid the impossible task of designing a completely new interim regime from scratch, and having it ratified by all national and regional parliaments, within the next year.