Law firm innovation. The idea of innovation is lauded, discussed and encouraged. When it happens, either through technological advances, the launch of a start-up alternative service provider, or the unveiling of an approach never thought about before, the legal services industry takes note. In an industry searching for a new stability after 10 years of something less, the idea that new ways are needed for “doing the law” finds little argument. Innovation already has brought a great deal of change-there is no indication it will stop.
For law firms only comfortable with the status quo, the avalanche of innovation can be both unwelcome and threatening. Every mention of an advancement or breakthrough can add to a sense of helplessness. Many firms once successful in the old ways don’t know where to begin when it comes to innovation.
A law firm’s task in tackling innovation is not to change the industry or seek its acclaim. Rather, every law firm can innovate by advancing its delivery of legal services to where clients perceive greater value and law firm owners enjoy better financial stability. Law firm innovation does not need to transform the industry, it only needs to transform the firm. Because most firms have room to become more efficient, more effective in delivering value, and more profitable, innovation is within the grasp of every law firm.
Innovation for a firm stuck in the status quo requires the following five important steps:
Recognizing that Standing Pat is Not the Answer. Law firms worried about falling behind must subscribe to the Zig Ziglar admonition “the first step in solving a problem is to recognize that it does exist.” This is especially true for law firms weighed down by the hide-bound ways of the past and struggling with moving to the future. Once leadership recognizes that change in approach is necessary, innovation is possible. But until that occurs, there is little chance a firm will be able to keep pace with the changing legal services world.
Reflecting on the Firm’s Strengths, its Clients and its Financial Condition. Upon realizing that change is needed, the firm must take stock of itself, its clients, and its financial standing. Understanding what it does well and what it does not will bring into focus its strengths and weaknesses. The firm’s lifeblood, its clients, must also be understood to make progress. Any plan must focus on nurturing and expanding client relationships. The firm’s financial performance must be assessed and dissected before a path to greater financial strength can be created.
Committing to Create a Plan to Improve Value Delivery and Profitability. For a firm to innovate, it must be committed to improving the delivery of legal services. Improved delivery enhances the value clients perceive, improves the firm’s chance for repeat business, and grows the firm’s reputation. Client growth must improve the firm’s profitability or it is counterproductive. For this reason, all client relationships should be looked at holistically to test whether they improve a firm’s financial performance. If any do not, their continuation should be questioned.
Welcoming New Ideas-Be Willing to Be Bold. In its purest form, innovation involves the implementation of new ideas that improve results. A firm thinking about moving its practice to a better place must be ready and willing to consider new ideas. Leadership must create an atmosphere where “outside the box thinking” is welcome. Not all new ideas will be adopted, but freedom to suggest them is essential.
Considering Best Practices of Other Firms or Known Innovators. Worth considering are the best practices of other firms that have moved on from stale to more dynamic practices. Transformative techniques or practices of other businesses not in the legal services industry may also provide useful guidance. In other words, innovation need not be original thought-it just needs to be a way to better results for the firm.
Every law firm is ripe for innovation. Sometimes innovation is dramatic; other times less so. What is your firm doing?