Eight Essentials of Innovating a Law Firm: Getting Started

GeneralFeb 11, 2020

INNOV-8 just launched a few weeks ago, and one of the questions I often get is about our name. The obvious answer is that it speaks to our track record as innovators in our previous jobs - and our commitment to the fusion of law and technology moving forward. But there’s a less-obvious reason (and the reason why there’s a number in our name): we are avid believers in McKinsey's eight essentials of innovation. This list is taken from a 2013 article published by three McKinsey consultants, and it formalizes a lot of the thinking around what innovation really is - and how to innovate in the real world.

The principles are applicable to dozens of industries, but they are especially valuable in the legal field. Let’s be honest: law has never really been ahead of the curve when it comes to innovation. We’ve been slow to adopt technology and to change our business models. The good news is that by applying these eight ideas to their daily lives, decision makers in law firms and in legal departments can think about the future in new ways that will drive success. We’ve assessed the eight essentials and provide eight steps that law firms can follow to structure, organize and encourage innovation to stay competitive in an ever more competitive market. In this post, we will tackle the first four essentials of innovation: aspire, create, discover and evolve.

1. Aspire

Although law firms are often rooted in culture and tradition, this does not mean that they don’t, or can’t, have goals that go beyond, “get clients and win cases.” They may want to expand their services, lower costs, or decrease the time it takes to complete projects. Traditional law firms are profit-driven, and most traditional tasks are directly assigned a dollar value internally and to clients. This means that creating actionable, measurable goals is essential for driving innovation. Legal obligations, client demands and business needs can all be turned into goals to drive innovation.

To maximize the potential for success, firms need to create smaller, attainable objectives to drive real innovation. If the objectives are too simple though, managers and partners may be able to find alternate solutions to meet them without having to place a specific importance on innovation. For example, no one would choose to overhaul an entire billing infrastructure to make tracking more efficient if an app could be integrated into the current system and still achieve the same efficiency.  By breaking the larger goal of innovation into smaller, more attainable items and assigning them to specific team members, progress can be more easily tracked and measured while individuals can be held accountable for contributing to successful innovation.

2. Choose

Encouraging an innovative spirit in all members of internal teams is imperative. Supporting every single new idea, on the other hand, is not. Not every company or firm can or should invest in every innovation project, no matter how excellent it may seem. It needs to be an idea that will help the firm achieve its goals, but it also has to be a project that will fit into the culture of the firm.

Encourage brainstorming throughout teams, but before new ideas are invested in it’s important to ensure that they are scrutinized to determine their viability and scalability. By keeping all projects focused on the firm’s goals and the prefered timeline, the process will create opportunities to look for innovation. It’s also important to make sure that the chosen innovations will be achievable within the firm’s culture. Focus on projects that have a higher chance of success so that resources aren’t spread too thin.

3. Discover

This step is about idea generation. Systematically create innovative ideas by focusing on these three areas: the problem to solve, the technology that enables the solution, and a business model that generates money from it. Insights into the model of the firm and the technology capabilities are pivotal for this step. Involve the team and the firm’s partners, but also involve those who can help build the solutions.

In law practices, a good way to look at this phase is to consider the clients’ and firm’s needs. Understand what clients are doing and what those needs are, and then find what is lacking in the firm to get them there. Then, assess what pressure the legal team is facing. If they are overwhelmed with client work, look for places where the load can be lightened. If the client needs more legal information or help, but the team is swamped, find resources that can help them learn on their own, without burdening an already busy team.

4. Evolve

This is the area with which most law firms struggle: evolving. While the world changes around them and new technologies are released, legal practices tend to stick to what they know because they are unable and/or unwilling to keep up with the pace of evolution. From their perspective, why change a system that doesn’t appear to be broken? But when processes are revamped and the core business model is upended, a strong foundation can be built to ensure that a culture of innovation succeeds and thrives in the firm.

Seek out alternative business models that new, forward-thinking law firms are using and let them act as blueprints for how to change the way things have always been done. Since processes and culture vary greatly by firm, these existing business models may not work perfectly for every practice, but they can serve as a place to start without as much risk.

Shaping Creativity

Although law firms are not the first places where people expect to find creativity, with the number of millennials taking over as the largest share of workers in the industry, traditional law firms are inevitably going to have to change in order to retain new talent. By focusing on the four steps listed above, law firms can approach creativity and innovation strategically and from a place they’ll understand. In part two of this series on the eight fundamentals of innovating in a legal practice, we will tackle how firms can maintain innovation.

The data revolution has changed law. You need a partner that has kept up.