Star Wars has done CG droids before; Rogue One featured K2-S0, which was voiced by Alan Tudyk but made completely digitally by ILM. L3-37, on the other hand, was a hybrid. Actress Phoebe Waller-Bridge was the voice of L3 and played the droid in a partial suit on set. She'd wear, say, just a head-piece, or have arm, chest, hip, and leg robot parts, while the rest of her body was covered in a green-screen stocking.
"We'd use that costume wherever we could," says Bredow, "and then replace the rest with a digital version of L3. It was just very careful paintwork and very careful 'matchmoving' work to follow exactly how Phoebe was moving. What you see in the final movie is a real combination between a practical suit and a digital character, and that performance is 100% Phoebe."