It seems like everywhere you turn today people are asking who is going to lead innovation. People frequently ask me what’s the best way to drive the adoption of project management principles in the legal business, and my answer has invariably been that any real change must be driven by clients (i.e., the corporations shelling out $300 billion annually for legal services). It should not be any different with innovation because law firms are not historically known for innovation.
But first I think it is necessary to take a look at the definition of innovation.
If by innovation we mean technological and software developments that make the lives of lawyers easier, I say don’t hold your breath waiting for law firms. If, however, what we mean is “incremental change that adds value,” which is how one innovative thinker defines it, then I think we can find some common ground.
An Innovator is Born
University of Miami Law School Professor Michele DeStefano, who knows some things about innovation in the legal business, founded a program at UM in 2010 called LawWithoutWalls, which is both an in-person and virtual hackathon bringing together law students, business leaders and coaches from across the globe to solve real-world legal problems. LWOW has forged several team-created “projects of worth” and has become a bit of an incubator for innovation in the legal space. DeStefano also recently penned a new book called Legal Upheaval: A Guide to Creativity, Collaboration, and Innovation in the Law (reviewed by Nicole Black here), in which she outlines a path forward for innovation in the legal industry.
I recently spoke with DeStefano. “The key to innovation is collaboration,” says DeStafano. Corporate GCs don’t want to hear about the latest shiny tech tool that will “artificially” “or “intelligently” do some thing or another; GCs want their problems solved; they want the word “service” put back in client service and they are looking for law firms that can connect with their business issues. “Be a counselor again,” says DeStefano. And in her book, Legal Upheaval, she outlines a recipe for just how to do these things. All practicing lawyers, aspiring lawyers, law professors, even people who work with lawyers need to read this book. It is not a scholarly tome and it’s not overly theoretical. Rather, it is written in a conversational in tone and is practical in its guidance.
Rethinking Legal Practice
But more than the successful LWOW projects, DeStefano wants lawyers and business leaders who hire law firms to understand that innovation is about more than technology. “It’s about changing how we approach lawyering, how we teach young people to be lawyers, and ultimately how lawyers interact with and serve clients to solve business problems. Collaboration and creative problem solving are what lead to innovation,” says DeStefano. “If you’re just lawyering, you won’t have any clients.”
The question remains who is going to inspire and drive innovation in the legal business. Robert Ambrogi, one of a handful of critical thinkers in this space, recently wrote for here that “[a] major inhibitor of innovation within law firms is not the firm’s own culture, but the culture of the legal profession as a whole. It’s not enough to talk about how to ‘kill the company,’ we need to talk about how to kill the system and reinvent it for the 21st Century.” Ambrogi is suggesting that the obstacles to innovation include considerations outside the law firm, like outdated regulations, a justice system desperately in need of change, and a culture that just resists change.
There is some truth to the notion that some the best legal innovation originates from within a law firm. Think back to the origin of Attenex, the clustering technology born out of a law firm. Or consider that the leading e-discovery platform today had its genesis inside a major law firm. But it was not then and is not now law firms that are developing software.
To my knowledge, law firm innovation today is championed by only a handful of big firms that have made investments and have the resources to solve complex issues. Law firms are not, however, turning out commercial products for other firms or legal professionals.
Corporate Legal Ops Has to Lead the Charge
So, if law firms are unable or unwilling to innovate –and in fairness a handful have—then who? It has to fall to the corporations that hire the lawyers.
Corporate legal operations may be a relatively new phenomenon and organizations like the Corporate Legal Operations Consortium (CLOC) are now raising awareness, but it seems to me that legal operations have existed for many years. We just have not called it that. Regardless, corporate legal operations personnel are the folks who understand their organization’s business models; they are the ones who are looking to solve business and legal problems; and they are the ones who understand the impact of and risks associated with litigation and other legal matters.
I’m not suggesting that corporate legal ops people go out and develop the next great software. But I am saying that they must drive the discussion by telling their outside counsel, legal service providers and software companies what they want and need. If it’s a software or automation idea, fine. If it’s better management of costs, fine. Or if it’s just improving client relationship management, that’s fine too. But whatever they do, in an industry resistant to change, it’s important to ask two questions: “Is this a big change?” and “How does this add value.”
The change from the billable hour to alternative or fixed fee arrangements did not strongly take root not because it is not a good idea. The problem, in my opinion, is that it was too big a change too quick. As a result, only a small percentage of matters involve fixed or alternative fees.
Conclusion
So, if you’re in corporate legal operations, ask your outside counsel and your service and software providers to come in and talk with you. And if you’re at a law firm, it would behoove you to pick up the phone and call your clients before they call someone else. Law firms need to start spending more time listening to clients for sure. But corporations should start by identifying “incremental change that adds value.”
(This article originally appeared on Above the Law. Click here to read it there)
