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Is The Phrase "Innovative Law Firm" An Oxymoron?

In opinion / By Charles Christian / 14 December 2017

An English Law Society report – Capturing Technological Innovation in Legal Services – published earlier this year, concludes that “increasingly firms will need to foster an innovation based culture and develop firm-appropriate innovation processes, techniques and supporting technologies if they are to remain competitive and relevant to clients.”

Good point, well made but how do you foster or introduce an “innovation biased culture” in any organisation, let alone one as inherently conservative as a law firm?

For starters you have the existing “day job” to cope with. The pressure to meet billing targets and cope with existing client demands means partners and fee-earners in modern law firms seldom have the luxury of free time to indulge in blue-sky thinking. You will notice the essence of “start-ups” is the only reason they can focus on new ideas is because they are not bogged down with the exigencies of dealing with day-to-day administration and customer service.

For law firms this is a major issue, with few being able to afford the equivalent of an R&D (research and development) team who can devote their time to new product and service innovation. The lawyers are too busy with fee earning. The IT departments are too busy dealing with existing system maintenance and upgrades plus end-user training and support (Yes, I know, a lot of this could and should be outsourced). And even law firm business development teams actually spend most of their time dealing with marketing and publicity relating to existing services rather than thinking up new stuff.

My own experience of dealing with firms is their most fertile period for thinking about innovation is during the early autumn when lawyers return from their summer holidays brimming with new ideas they’ve dreamt up while sitting on a beach. However that is hardly a viable business model for innovation. Many established law firms therefore find themselves in the invidious position that much as they might want to innovate, their existing business priorities and infrastructures hamstring any such initiatives.

Now I’m sure there are plenty of management consultants, academics, and industry “gurus” out there (people who don’t actually have real jobs other than being management consultants, academics, and gurus) who could, for a very large, fat fee, advise you how to steer around this conundrum but I’ve always been more impressed by the people who can not only talk-the-talk but also walk-the-walk.

Jeff Bezos, the founder of Amazon, has dropped a few suggestions on how to approach innovation and prioritise decision making in some of his letters to shareholders. Here are just two of them…

Type 1 versus Type 2 Decisions

We’ve all heard the phrase “don’t sweat the small stuff” however Bezos divides decisions into two categories:

  • “Type 1” involving high-impact major strategy and policy decisions
  • “Type 2” involving less critical low-impact decisions that can be delegated and usually reversed if necessary

In a law firm context, a clear Type 1 decision, that would require the full attention of the partnership management board or committee would be, say, whether or not to merge with another firm. Whereas a Type 2 would be whether or not to migrate to a new version of Microsoft Word – and which should quite clearly be left to the IT department (obviously subject to the usual budgetary controls etc).

The issue law firms (and the managers of other businesses as well) face is confusing what is important with what is immediate. Fixing a tech issue – ouch, we’ve just been hacked, we need to beef up our cybersecurity – is an immediate problem but while by no means inconsequential, it is not one that need distract management from bigger strategic decisions.

The problem with too many law firm partners however is they are inveterate tinkerers and micromanagers who will insist in being involved in every decision. Or as one IT director commented to me (several years ago now) “We agreed to create a KM portal and then the partnership wasted six months discussing the choice of fonts and background colours.”

The 70 percent solution

This neatly brings us to another of Jeff Bezos’ axioms, namely that you should release new products and services at 70% and then iterate.

By this he means that if you are creating a new product, it is very easy to fall into the trap of endlessly tweaking it until you feel it is perfect – back to the partners debating the choice of fonts for six months. But, the risk attached to this approach is the longer you delay, the greater the risk of a competitor coming along with a similar product and launching it before you, thereby gaining “first mover advantage” and leaving you looking like me-too copycats rather than bold innovators (And even if the competition don’t get in there first, the tinkering is likely to take up far more time than the yield of the potential improvements are worth).

Certainly when Amazon, and Tesco in the UK, first launched their online stores, the back-office systems were relatively primitive and involved lots of people running around warehouses whereas today automation has taken. The point is it didn’t matter what went on in the background as long as the customer had a satisfactory experience. In return they gained first user advantage and generated revenues that could be reinvested in improving the product.

The other aspect of this Bezos is keen to stress is no new product survives the first encounter with the customer and tyou will inevitably have to implement changes, enhancements, and improvements based upon customer/end-user feedback. For example, they may not like the fonts and colour scheme the partner spent all that time discussing! Seriously, we’ve all seen websites that may be aesthetically beautiful but are totally impractical to use because a tasteful grey font on a light grey background is virtually illegible.

Bezos also warns that we shouldn’t get too attached to our choices (those fonts again) because they will inevitably need to be adjusted over time. In other words, trying to make static and perfect choices in a dynamic world is a potential recipe for disaster.

So, rather than striving to make your innovation based upon a perfect solution, launch it when it is good enough – and improve it later.

Charles Christian

Charles Christian

Charles is a former barrister and Reuters correspondent turned writer and the founder of the Legal IT Insider newsletter, website and resource.

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