Are Law Firms Capable of Driving Innovation?

Law firms are creatures of habit. The successful firms that have been around for a long time have figured out a model that allows them to handle a large volume of legal work at a very profitable hourly rate. But what if things change in the future? Are they prepared to evolve? A bigger question is whether some firms are actually capable of driving innovation?

These thoughts come on the heels of the Law 2023 findings. This was a year long investigation that started by asking the simple question, what will the legal industry look like 10 years from now? You can grab a PDF of the report here: Law 2023 Minifesto

The report is concise and worth reading, but just to summarize, here are the 7 key findings or predictions based on research and interviews:

1. Technologies will enable lawyers to bill for real value

2. Firms will develop offerings that transcend jurisdiction

3. Demand for responsive institutions create new markets for accountability

4. Firms will tap new talent and enable new pathways to practice

5. Transparency will push firms to seek hyper-specific markets

6. Firms will launch R&D departments to create new offerings

7. User research and innovation will shape client experience of legal products

You can find interviews for the findings at www.law2023.org

The big question I ask is, how well are law firms currently managing these seven principles and what could potentially change in the near future that would enable firms to radically change their leadership model in a way that would allow them to prepare for the future?

As you look down this list, you can see one or two ideas that certain firms seem to embrace, but then you take this idea of R&D departments that is absolutely standard in every other major technology company. This doesn’t exist in the legal industry. Akerman LLP is looking to change that. They are taking the lead and have formed an R&D Council that is designed to truly function as “skunk work” according to the Akerman press release and will have a high degree of autonomy. This is an exciting step, but it is fraught with challenges. Most truly successful skunkworks, according to Clayton Christensen, author of The Innovator’s Dilemma (think IBM creating a completely separate business unit to create the mini computer in a separate state from where the mainframe computers were built) have to operate by their own rules with complete autonomy. This is not an easy step to take within the structure of a law firm.

I love that Akerman is taking the lead on this and for the sake of the legal industry I hope it is a huge success immediately, but I predict it will be far more expensive  and take longer than Akerman anticipates to see results. The first products or variations to legal services that the R&D Council comes up with may fail, but failure and risk taking must be embraced if this is going to work. Innovation is hard and expensive, but more than either of those things it is a completely different animal for law firms.

I started out by asking the question, are law firms capable of driving innovation? My immediate gut reaction would be to answer that they just aren’t set up for it. Existing operations at most firms seem to go in the opposite direction. Yet, many big law firms today will still be around 10 years from now and a small few of those will be the leaders driving innovation but I’m guessing the majority of the firms that survive will continue to be followers. Unfortunately, firms don’t really like to set a new precedent, but they are all pretty comfortable following it.