3 ways law firms should be innovating

Over the past two years, the pace of change has dramatically accelerated in the global legal sector. Law firms have upped their game. RSG, as a long-established strategy consultancy and research partner to the FT Innovative Lawyers programme, has a unique knowledge of how law firms innovate. We investigate the innovations of over 200 law firms globally, in-depth, every year.

So what are the most advanced law firms actually doing? We share our top 3 insights into what firms need to do to stay in the game.

  1. Get a legal engineer! It has been notoriously difficult to get lawyers to use technology effectively. However, many firms are now overcoming that problem through a ‘legal engineer’. This is basically a new professional role in firms and can be filled either by a lawyer with deep technology expertise, or a technologist who gathers deep legal domain expertise. They can be partners who are entrepreneurial and with an enthusiasm for delivering services differently. Or young law graduates who eschew formal law firm training to become lawyers in different ways. Or, as is the case with one firm, a theoretical physicist! The important element here is the fusion of knowledge of the firm, law and technology – seamlessly. We see that even one legal engineer can make an inordinate impact on their organisations.
  2. Put the human into the centre of your innovation strategy: Innovation is not just about technology or standardising legal processes. It is often about simple tweaks or step-improvements.  Many European law firms have seen their innovation agendas become more powerful simply by putting the human experience at the centre of the process. Methodologies such as design thinking and the concept of the “Minimum Viable Product” favoured by Silicon Valley entrepreneurs is spreading in law firms. The idea is to start with the human experience first, rapidly develop a product or offering to answer the human challenge, test a beta version of the product and take it to market. It inculcates the idea that experimentation and failure is OK. It represents nothing short of a cultural revolution in law firms. It both engages younger lawyers and makes innovation accessible to older ones.
  3. Wrap up better service delivery into your law firm brand: In the early days of the FT Innovative Lawyers programme, efficient service delivery was considered innovative. No more. Now most firms have efficient service delivery options that combine flexible resourcing, low cost centres, project management and analytical, collaborative or machine learning technology. The next iteration is to integrate these offerings, brand them internally, and then take them to market under the firm’s quality advisory brand. Some firms have made these offerings separate profit centres within the firm, others have made them stand-alone businesses. But whichever route is taken, using the law firm brand to market improved and expanded service delivery options is actually compelling for clients. The good news is that not many law firms are doing it well – as yet.

More about RSGi: How To? Innovation Strategies for Law Firms

 

How to? Innovation Strategies for Law Firms

In a new RSGi resource, we distil our learnings from nearly 30 years of researching and analysing the legal profession. Specifically, we answer this one question: ‘How can you create and maintain a forward-thinking law firm?’

We know the challenge that law firm leaders have in creating – and sustaining – a culture of innovation. Obstacles such as the billable hour, law firm structures, remuneration systems and the very nature of lawyers as professionals mean that the challenges are perennial.

Being a relevant law firm is about far more than knowing the best technologies to use. It is about understanding lawyers’ behaviours and what motivates them. It is about leadership and management. It is about truly hearing the voice of the client. And finally, it is about what works and what doesn’t.

Constructed as a slide deck with case studies, we have created a practical aid and resource for anyone tasked with developing strategies to better lead their firms.

RSG’s learnings and frameworks shared in this resource are drawn from thousands of interviews – with law firms, general counsel and the C-Suite – about how they have created innovative teams and organisations, both for the FT reports and other RSG projects. These are illustrated with concrete examples of how initiatives are conceived, implemented and have an impact in law firms. We compare our insights into how law firms innovate to those of leading innovation scholars and thinkers such as Clayton M. Christensen and Steven Johnson, so that the slides can be used for multiple purposes.

Content

The resource includes the answers to the following questions with our analysis of specific case studies to illustrate the key learnings. The slides can be leveraged by different law firm departments.

  1. Are law firms different from other businesses when it comes to innovation? We have chaired many round-tables where this question arises. There are arguments for and against. Here, we analyse the obstacles to innovation in law firms and present the best approaches we see from firms who have been able to overcome these obstacles and encourage, what initially appear to lawyers to be, counter intuitive behaviours.
  2. What is an innovative law firm today? Since 2016, Europe, in particular, has witnessed more change in its top law firms than it has in the last twelve years. The benchmarks of what is considered innovative are constantly evolving. Here, we analyse the most significant developments globally in 2017 and examine the facets of what currently constitutes law firm innovation.
    • Service delivery models. Most law firms have accepted that their service delivery models need to improve. However, lawyers’ take up of their firms’ alternative delivery options and capacity to see how it applies to their specific practice areas can be slow. This section covers the elements of successful delivery models in law firms. It focuses on how firms can best create new service delivery models; how they can get buy-in within their firms to develop them and how they can bring them to market in a way that complements their advisory work.
    • Technology. Even in the most advanced law firms, becoming tech-enabled is a “minority” sport. But law firms have developed fast over the past three years in terms of integrating technology into their practices. Here we illustrate the best ways we have seen law firms’ enable their lawyers with technology and the thinking behind them. Where are leading law firm adopters of technology employing it today and with what results? How do firms create and implement a successful technology strategy? How does a firm empower its lawyers to use technology effectively?
    • Productising legal services. The trend towards standardising elements of the legal process into products has been underway for over a decade. There is a bifurcation in terms of the types of legal processes being productised: those for business development purposes and those for the provision of legal services. However, although there are many examples of where productising legal processes have been successful there is still an inherent risk – how does a firm balance the benefit of productising its services with the risk of compromising existing revenue streams? This section looks at how firms manage this balance effectively.
    • Data. Law firms increasingly use data to deliver new services to clients or to gain strategic advantage. Although few firms have a formal data strategy, they are beginning to collate their own intelligence and turn it into data to enhance client relationships and management strategies. Clients are getting savvier about collecting their own data on outside law firms and we explore some of the ways in which this is creating change in law firm practices.
  3. What is an innovative lawyer today? The role of a lawyer on a transaction or litigation matter has evolved greatly in the past two decades and continues to evolve. RSG’s new framework as to what makes an innovative lawyer lays out the skill sets, experiences and attitudes partners need to have for the next five years and how best to acquire them. It profiles two core types of innovative lawyers globally who are driving innovation in law firms and exhibit certain characteristics: the change agents who are driving enterprise-wide innovation in their firms and the legal practitioners who are focused on creating new practice areas in their firms and continue to deliver extraordinary value to clients.
  4. How do you teach lawyers to innovate? How are law firms and in-house teams creating innovative mindsets in their people? Many law firms are experimenting and focusing on inculcating innovation in their firms through exercises such as design thinking workshops, internal innovation contests and redefining their purpose as lawyers. They are also being pushed by their clients and new competitors to be more innovative, many of whom work for companies whose core business model is centred around innovation.
  5. Getting true client-centricity: Despite state-of-the-art client listening programmes, top law firms often complain that their partners are still not aligned enough with their clients. We share some of the unique insight we have gained from ranking hundreds of corporate law departments on their innovation and thousands of client interviews for our thought-leadership reports. In this section, we identify and analyse the most critical developments affecting law firm clients. We make the case as to why, for partners, innovation should be a critical pillar of their strategies.
  6. Collaboration: It is a critical driver of innovation, but many law firms struggle to create internal collaborations, let alone external ones. Who should law firms be collaborating with and how? How can smart collaboration entirely alter the innovation profile of a law firm in terms of both legal expertise and business approach?
  7. Balancing innovation and financial performance: Are innovative law firms more successful financially? We have correlated the financial results of the top 50 global law firms with their Financial Times innovation scores over a three-year period to answer that question. In addition, we tackle the question of how you can prove to doubtful partners that innovation does benefit clients and lawyers.

Why should law firms subscribe to RSGi: How To?

  • Trusted Insights. Exposure to RSG Consulting’s core insights drawn from nearly 30 years in the profession for CEO Reena SenGupta, who’s experience includes: a history of creating the research methodology for the Chambers & Partners Guides in the 1990s, producing numerous thought-leadership and strategic projects for law firms at RSG Consulting and being the long-term research partner to the FT Innovative Lawyers programme.
  • Strategic advice. Through case studies and in-depth playbooks, the ‘How To?’ resource gives legal leaders expert insight, analysis and strategic advice on how they can develop an impactful innovation strategy in their firms.
  • A client-centred approach. The resource also includes client perspectives on law firm innovation. It provides unique, contemporary and fresh insight into the evolving role of legal departments within global companies and their requirements from legal suppliers.
  • International perspectives. From the breadth and depth of RSG’s reach into the global centres of legal innovation, we are uniquely able to provide a broad and global perspective into key trends and analyse nuanced changes in direction in the sector.
  • Multiple use cases. How To? can be used by multiple stakeholders within a law firm for different purposes: developing an innovation strategy; training and development; business development and as a resource to build internal platforms to get buy-in to an innovation agenda.

To order or find out more: Contact Yasmin Lamber or Reena SenGupta at RSG Consulting by email or on +44 (0) 20 7831 0300

RSGi: How To? Seminar

Using the RSGi: How To? Resource as a baseline, RSG can run a half-day session for law firms to create or refresh its corporate strategy. The session includes: assessing the firm’s overall innovation capabilities against the market and identifying areas where improvements will have the greatest impact from both a short and long-term perspective and sharing our ideas as to how the firm can innovate better.

Underlying research and analysis

Frameworks and insights are drawn from nearly 30 years analysing the legal profession, including consulting and major research assignments for law firms, corporate law departments and other professional service firms. In particular, analysis on how law firms innovate is compared with academic and scholarly research into how innovation occurs in business and in science.

Case studies are drawn from over 10,000 submissions on innovation received from law firms and legal service providers and over 11,000 research interviews conducted with leading lawyers, law firm managing partners and chairs, company general counsel, CEOs, and other legal industry clients since 2006.

 

FT Innovative Lawyers North America 2017

The FT Innovative Lawyers Report North America 2017 has now been published, and can be accessed in full here. Thank you to all those who submitted this year.

On Monday we held the awards for this report at the Public Library in New York. It was a fantastic evening; the room felt full of energy as we brought together some of America’s finest lawyers.

This year’s report for North America comes at a time when long-established tenets of democracy – the rule of law, legal equality and political freedom – are under stress, and we consider the role of lawyers to be more crucial than ever. Consequently, we have introduced a new category on the rule of law and access to justice to cast a spotlight on the important work lawyers are doing to protect and extend the rule of law across the region and around the globe.

We have also dramatically increased our coverage of in-house legal teams to match private practice. The report provides a comparison of how in-house and private practice lawyers are innovating, as well as how lawyers are collaborating in new and exciting ways.

Our sincere congratulations to the winners, and all those who received a ranking this year. With over 530 submissions (an increase of almost 50% on 2016), competition was tougher than ever and it’s encouraging to see so many firms and in-house teams committed to driving change in the legal sphere.

We hope the report continues to be a platform to showcase innovation in the legal sector and look forward to some outstanding submissions in 2018.

Our submissions will open for the FT Innovative Lawyers Asia Pacific 2018 tomorrow and can be accessed here. The submissions deadline for this report is 27th January 2018 and, following exciting and successful coverage of the rule of law in Europe and North America, we will be extending this category to Innovative Lawyers Asia Pacific 2018, and inviting submissions in “the rule of law and access to justice” to highlight the critical lawyers are playing in society.

We will also be expanding our coverage of the Australian legal market to introduce a separate chapter covering Australia in the Asia Pacific report together with a full day summit in Sydney on 5th June after which we will present three distinct awards for work undertaken within the Australian legal market.

Another key date for your diaries is our annual global summit which we will once again be holding in London in June. Further information will be released in due course but if you would like to register your interest, do get in touch.

Other new additions to Innovative Lawyers will include a new report, “Tomorrow’s Law”, covering legal tech, alternative legal services providers and other active disruptors of the legal industry.

For further information on any of the reports or events mentioned above please contact us.

The Lawyer-Client Disconnect

For the legal expertise sections of the FT Innovative Lawyers reports, RSG Consulting interviews hundreds of lawyers each year about the the most complex, successful, and high profile deals and cases they have worked on during their careers. We also speak to their clients about their experiences during what are often bet-the-company, and sometimes save-the-company moments of transformation.

The nature of these deals means there is usually agreement that the lawyers played an important and highly valuable role. But there is surprisingly little agreement on just where or how they delivered the most value. This disconnect between lawyers and their clients exists in every region and segment of the market we examine, although the patterns vary between them.

We have mapped the 20 areas most frequently named by clients, ranging from their lawyers’ creativity, proactivity, understanding of the industry to project management, communication skills, or ability to persuade key stakeholders.

Against this we compare where the lawyers believe they made the most important contribution. While the lawyers often have a different view to their clients, there is a great deal of commonality between them. Lawyers frequently focus on the legal solutions they create. On the other hand, clients are far more likely to value the lawyers’ broader skills and comment on how the legal service or advice was delivered. For example, the way lawyers communicate with their clients – how frequently and proactively, how concise they are, how able they are to speak in the language of the business – is highly prized by clients, yet barely mentioned by the lawyers themselves.

We chart the disconnect across all 20 areas of service and delivery in our What Next? Innovation Strategy for Law Firms report which draws together our analysis and benchmarks of innovation in the legal sector. The report will be published in the weeks following the publication of the FT Innovative Lawyers Report for Europe, out with the FT on the 5th of October. For more information, or to be added to our mailing list for updates when the report is launched, please email us at information@rsgconsulting.com.

Diversity – What Next?


Is there a link between innovation and diversity?

Over the past ten years, diversity and inclusion (D&I) has become important across the legal sector. Though strides have been made with respect to D&I, many not the rate of progress is slowing.

As a result, many have asked us at RSG: What next for diversity and inclusion?

We see that clients have played an important role in driving the diversity agenda forward within the legal sector. An important part of the business case for diversity in law firms is to field teams who reflect the apparently more diverse workforce of in-house legal teams. Anecdotally, we have also seen that more diverse legal teams at the client tend to be more innovative.
However, whilst law firms are relatively transparent with respect to D&I, we know little about actual diversity of the client.

Better knowledge about the composition of client legal teams will help us build a better business case for diversity across the legal profession. It will provide an opportunity of clients and their advisers to talk about diversity more collaboratively. This may include discussion on the shared barriers to progress, but also how to jointly facilitate more rapid and substantive change.

THE STUDY
This study has emerged from the work RSG Consulting does on the FT Innovative Lawyers programme. We are seeking to explore some of our anecdotal observations from our research on the relationship between diversity and innovation. However, we would also like to gather hard data on client-side diversity to stimulate new debates around D&I within the legal sector and effect further change.

THE QUESTIONS
What is the perceived relationship between diversity and innovation within these in-house legal teams? In other words, how do members of the in-house legal department understand the relationship, if any, between diversity and innovation? Do in-house legal teams believe that diversity impacts upon innovative and successful decision making and if so, how and why? What do they feel is important to an innovative outcome? How do participants perceive the way in which they work and what contributes to optimum working patterns?