Overcoming the barriers to innovation in the legal sector

Whether you love or loathe the term, innovation is currently a hot topic in the legal industry. Given that the legal sector is generally considered to be slow in embracing new technologies and ideas (whether justified or not) it is significant that innovation is the word of the moment.

Charlie de Rusett
by Charlie de Rusett
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It is clear that we are getting better at talking about innovation but conversation isn’t enough. Actionable insight and implementation incentives are necessary to fuel the innovation fire.

“In 2015, only 28 per cent of in-house legal clients surveyed for the Best Legal Adviser Report said innovation in their law firms was important whereas in 2016 this rose hugely to 62 per cent.”
– Bond Dickinson

Following the release of several notable reports on innovation in the legal sector, now is the perfect time to discuss the outlook and next steps. There is no doubt that innovation is crucial for the legal sector to stay relevant and progressive, now more than ever. Unprecedented advances in new technologies are piling on the pressure for firms to remain current and up-to-date.

“Our most recent law firm survey shows that most firms recognize this with over 80% of the top 50 firms ranking ‘Improving the use of technology’ as a top 3 priority, but it does beg a question regarding the other 20%”
– Alyson Reeves, PwC

Furthermore, with Brexit set to prompt huge changes to the legal industry as rules and laws are changed and disrupted, law firms will have no choice but to embrace change.

Barriers to innovation in the legal sector

To understand how law firms can better embrace a comprehensive innovation strategy, it is first important to consider the barriers. We often talk about the proliferation of too many rules and rigid processes as a key obstacle in the creative process. This is particularly prevalent in traditional sectors like legal and there needs to be more support for workers to overcome these issues.

With innovation comes disruptive change and innovators will inevitably face a myriad of dismissals in pursuit of an ideation strategy. Often caused by a disconnect between the idea generators and decision makers, innovation can never truly thrive unless every person within a law firm is onboarded. This issue is intrinsically linked to a lack of awareness and confidence surrounding the innovation process.

Another barrier is the perception that innovation is not measurable. Generating ideas is all very well but the difficulty lies in commercialising the innovation process to justify the level of input. Where genuine returns can be proven, the incentive for innovation will be considerably higher.

“And if proof of the returns of innovation isn’t a challenge enough, the timing of these returns makes gaining buy-in within a partnership model particularly difficult. If returns aren’t demonstrable near term, the well-established remuneration models will discourage support. Further, to truly embrace innovation, one must accept a degree of failure is inevitable, in fact, essential. Law firms’ cultures are traditionally risk-averse and consensus-driven making it difficult to embrace failure. The ‘fail fast, learn fast’ culture of many innovators will be a stretch for most law firms”
– Alyson Reeves, PwC

How to increase innovation in your law firm

Establish a clear strategy

Never underestimate the importance of a mission statement and clear values. Providing clarity of objectives across a law firm will ensure that all employees are aligned to the same goals, therefore establishing a clear vision for the future. It will also aid the decision-making process, helping senior staff to prioritise, move forward and drive the organisation towards its primary business objectives.

“More than having a clear strategy, law firms need to re-imagine their operating model of the future enabled by technology, in particular artificial intelligence (AI) and blockchain. When significant aspects of a knowledge workers role can either be enhanced or replaced by AI, firms need to rethink their model for creating value; the services they provide to clients; and the shape, size and capabilities of their workforce.” Alyson Reeves, PwC

A comprehensive set of values can also be used to educate customers and potential clients about the company. They can be key to employee retention, as younger employees tend to pay more attention to the values at the heart of a company. With structured goals in place and a clear strategy for innovation, a law firm will be in a far better position to curate ideas, develop and flourish.

Encourage a perspective shift

We are great believers that innovation is mind over money. Of course, a surplus budget can help but ultimately it is about initiating a company-wide perspective shift. Some workplace environments, particularly in the legal sector, can suffocate creativity with too many structures and a tunnel vision to the future.

It is also important not to become trapped within your own industry bubble; look outside of the legal sector for solutions to problems and new ideas. Just because the products and services are different does not mean that the systems and processes cannot be adapted to your own needs. This is particularly apt for popular concepts like flexible working arrangements and cloud-based platforms. Consider what has worked in other industries and introduce into your law firm.

Focus on creating value

There are two sides to innovation in the legal sector. One is about providing a better working experience for employees and the other is about offering a better client experience. In many cases, the former will naturally lead to the latter. This focus on creating value should sit at the heart of any innovation strategy and should be an ongoing process.

Throughout the implementation of a new idea, it is crucial to monitor, analyse and review the progress in a fluid and agile manner. Far too many businesses invest in the wrong ideas because they are not measuring what is successful and what is not. Measuring innovation is not easy but it is necessary. Constant referral back to the firm’s goals and objectives will help to keep the focus on creating value throughout the process.

Get feedback from co-workers and clients

Gain different perspectives on new ideas to avoid individuals becoming blinded by their own lightbulb moment. Approach the process with an agile mindset and be prepared to refine and adjust in the face of criticism or rejection. Don’t forget that improving client experience is the ultimate end goal; so talk to the client and generate ideas from them. It will help to get opinions from outside your law firm, as it helps to open up different perspectives.

“Innovation at Linklaters means doing things differently – identifying and prioritising ideas to deliver new values to our clients today while feeling empowered to shape the future. What we’ve learned so far is that working together with our clients is key to establish new and efficient ways.”
– Christian Storck, Global Co-Head of Innovation, Linklaters

Achieving successful innovation can feel like an uphill battle, particularly in an industry that is so rooted in tradition. Despite this, there has been a notable shift in the way that law firms are starting to embrace innovation. There is an increasingly strong appetite amongst companies in the legal sector to start pursuing an innovation strategy, heightened by a sense of urgency to act now, not later.

Innovation needn’t be a seemingly unreachable goal; it’s a case of raising awareness, creating an effective strategy and establishing parameters for measuring innovation. These, in turn, will make the whole process more justifiable. There is no doubt that innovation is key to the future of the legal sector. It’s an exciting time for the industry and law firms must learn not to shun change but embrace, adapt and drive forwards with it.

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