Innovation in Law Firms… It’s Not Just Tech

Topics: Business Development & Marketing Blog Posts, Client Relations, Efficiency, Law Firm Profitability, Law Firms, Legal Innovation, Midsize Law Firms Blog Posts

innovation

“Innovation” is a popular buzzword for all industries these days, and the legal industry is no exception. Yet with all the hype about innovation, we seem to have developed some misconceptions about it. One such misconception is that innovation is always about technology.

Ask most people to name something innovative, and they’ll usually refer to some technology, such as Apple’s latest iPhone, SpaceX’s Hyperloop, or (inevitably) artificial intelligence. Rarely will anyone, including lawyers, mention a new legal service delivery model, let alone anything related to the legal industry. This association between technology and innovation is based on a couple of things. First, advances in technology do, by their nature, tend to be innovative. And second, people mistakenly equate the idea of innovation with things that are cool or exciting.

What is innovation really about?

Fundamentally innovation is about newness and originality. In a business context, some stress a more strategic view of innovation and see it as “the creation and capture of new value in new ways” in addition to the “successful introduction of new product, service, business model or process”. So, while innovations can (and often do) involve technology, it is not a fundamental component.

It’s also important to remember that innovation is a means to an end and not an end itself. Businesses, including law firms, should seek to innovate because they believe that introducing something new, or coming up with fresh ideas, methods, or processes will lead to improved business — usually in the form of growing revenues and profits. Some, in the legal field and elsewhere, suffer from “shiny object syndrome” and pursue the cool new thing without fully understanding how it will help their business and actually result in a return on investment. Just because something is innovative doesn’t mean that it’s right for your business.

Where does innovation come from?

Another misconception about innovation is that it only comes from a few select people who are inherently innovative. In truth, innovative ideas come from many sources; thus, it is important to embrace diversity of perspective and seek out multiple points of view when seeking to develop innovative ideas.

The most innovative companies, like Google and Amazon, for example, seek ideas from all corners of their organizations. One of the best examples is Google’s famed “20% time”, which encouraged employees to spend one day a week working on side projects that are outside the scope of their normal duties. Key Google products, like Gmail and AdSense grew out of this program.

Another great example comes from the investment management firm, Bridgewater Associates, which was founded by Ray Dalio. One of the ways that Bridgewater innovates — and is innovative in its industry — is to operate under a principle that Dalio calls “idea meritocracy.” Rather than blindly following the HiPPO (highest paid person’s opinion), an idea meritocracy puts innovation above position and hierarchy. This creates an environment “where the best ideas win out, regardless of where they come from.

Seek the voice of the client

Not surprisingly, one of the best sources of innovative ideas comes from your clients. Listening to the “voice of the client” is the best way to know and understand what they need. It may, in fact, turn out that your client needs something that your firm already provides, but that the client just wasn’t aware of — no innovation required.

Seeking the voice of the client also gives your lawyers and your business development team a proactive reason to engage with them. What client wouldn’t love to hear that their attorney wants to set aside some time to listen to their needs? When you meet with clients, it would be a good idea to keep a few sample questions ready that might get clients thinking about how you can innovate on their behalf:

  • What are you biggest complaints about law firms, in general, and about our firm, in particular?
  • What are your biggest challenges or pain points when it comes to supporting your business? How can we help alleviate those pain points?
  • What services do we not provide that we should provide?
  • What does innovation mean to you in general, and as it relates to legal service delivery?

The answers might focus on technology-based solutions, but more often than not, you’ll likely find that any technology component is simply incidental to the underlying needs, such as improved communication, price predictability or matter management.

Set aside time for innovation

A final recommendation is that you create time to think about and take action on innovative ideas. Successful innovation cannot be an afterthought. If you believe that innovative ideas will help your clients and your business, then you must dedicate the appropriate time and effort to focus on it.

Creating a formal innovation group is a great way to do this. Within our firm, we created an internal innovation team called the Research & Development Council that meets quarterly to ensure the firm dedicates time to focus on client needs, pain points, and new ways that we can help develop solutions to these and other issues. Those four meetings, however, are not the extent of our focus on innovation. Members of the R&D Council are constantly collaborating with each other, with clients, and with other legal professionals at the firm to brainstorm, prioritize and execute on ideas.

In addition to the R&D Council, we make time for innovation discussions directly with our clients. This happens at our many client conferences, in everyday interactions with clients about their matters, and in dedicated client feedback interviews. Finally, we conduct a facilitated annual Innovation Summit in which clients interact with each other and a small team from the firm to provide big-picture guidance. None of this is “high tech” — it’s simply about communicating effectively with the goal of serving our clients better.