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Why do law firms find innovation so difficult?

It is no secret that most vendors of legal technology today are focused on delivering one thing for their clients – ‘innovation’.

Yes, innovation is the buzz word of the moment. At every legal conference, and in every book and blog article on the topic, innovation is presented as a magic formula that will ensure your firm doesn’t end up a dinosaur destined for extinction.

Chief information officers (CIOs), chief operating officers (COOs) and innovation officers working in law firms are under considerable pressure to find new ways to compete and innovate in today’s ever-changing legal environment.

I’m all in favour of law firms being innovative. There is little doubt that most of them would benefit from a large dose of innovation. However, the reality is that, even with all the information available, most firms struggle to make successful changes to the way they practise law. As Richard Susskind said recently, ‘Legal practice hasn’t changed since Charles Dickens!’

In its 2014 Global Innovation 1000 Study, PwC surveyed a global cross-section of organisational leaders on how they expected their innovation practices to evolve. Only 27% said they felt they had mastered the elements needed for innovation success over the next 10 years.

So, why is it so difficult for law firms to innovate?

While there are many reasons, it might be helpful to highlight a few areas that I see as being critical to removing bottlenecks in the innovation space.

Lawyers like precedent

Legal thinking is built on the foundation of precedent. Everything a lawyer learns during their studies at university is based around building a legal argument that is supported by case references. So, when they look at how to manage their business, they approach it with the same mindset: they want every task and process to be as efficient and predictable as possible. If it has worked well in the past, why change it? The fondness lawyers have for precedent naturally makes them sceptical of anything that hasn’t been tried and tested.

Lawyers are risk averse

Innovation also requires risk taking that challenges the status quo. Lawyers spend most of their working day identifying risks and advising clients on how to avoid them. As a result, they are uncomfortable with the idea of taking risks with their own business. Most lawyers resist the temptation to innovate, arguing that it makes more sense to see what everyone else does before stepping into the unknown.

Lawyers are pressed for time

Just like the owner of a corner store or a car showroom, the partners in a law firm want to make money. That might sound harsh, but in all reality, they didn’t spend years going to university and then working their way through the ranks just to help you get your property transaction done with a minimum of fuss. When most lawyers are focused on accruing billable hours, they’re not going to have much time to think about making changes, let alone implementing innovative new solutions.

Partnership isn’t a business structure suited to embracing innovation

As business structures go, the partnership is one of the worst for embracing change simply because it is so difficult to get consensus among the owners of the business. Most of the law firms in Australia that could be described as innovative are incorporated legal practices or have adopted a corporate management structure.

Lawyers tend to be intellectual piranhas

Legal training teaches you to find the holes in things, such as the arguments presented by the other side or the terms of an agreement. As a result, lawyers are very good at pointing out the weaknesses in any new idea. This makes implementing new ideas very difficult, as many of them are shredded to pieces before they even get off the ground.

Lawyers are great at talking, but terrible at implementation

Despite the fact that most lawyers are risk-averse intellectual piranhas, they spend a lot of time discussing the ways in which they could be more innovative. Occasionally, there is support for an innovative idea. However, more often than not, it tends to come to nothing, because no one has the time to make the proposed changes or to supervise their implementation.

It may also be that there is too much excitement around the innovation.

At the beginning of the project, everyone is enthusiastic about the idea. But after this creative phase, the passion can dissipate and nothing happens. The challenge is to ensure that at each and every stage of implementing innovations, everyone remains engaged.

What is the solution? How do law firms embrace innovation and avoid becoming victims of innovation fatigue or burnout?

It may be time for law firms to consider taking a completely new approach to embracing innovation.

One answer may be to create an Innovation Team whose purpose is to come up with ways in which your firm can be innovative, and to take responsibility for implementing them.

I spend a lot of time talking to law firms in Australia, New Zealand, the greater Asia Pacific and North America about innovation. As a result, I’m coming to the view that, in most firms, the focus should shift away from creating even more new ideas and towards focusing on smaller projects that can be implemented quickly and effectively while delivering real benefits to the firm and its clients.

As outlined above, lawyers are typically resistant to change. However, they will be more amenable to it if they are provided with evidence that innovations will benefit everyone involved.

If you start with small, manageable projects and then move to larger, more innovative initiatives, you create a culture that embraces change because the process is considered and incremental, rather than disruptive or even destructive. In short, people start to trust and believe in the process.

After all, the kind of firm that I want to be doing my legal work is one that takes an intelligent approach to innovation – one whose lawyers consider the options, focus on what is best practice, and go the extra mile to ensure that any innovative measure they implement will ensure that the client achieves the best outcome as cost effectively as possible.

This post was originally published as a LinkedIn post by James Bible on September 27, 2016.

About the author: James Bible is Sales Manager, Asia Pacific at Big Hand

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