Law firms aren’t widely known as big innovators. Unsurprisingly, traditional partnership models often favour risk-averse strategies, where the phrase ‘legal innovation’ generally comes below ‘profit margins’. However, alternative business structures and the ever-changing world of legal tech are putting firms under increasing pressure and demanding they adapt.
Gaining new perspectives is necessary to do this. Larger firms are increasingly introducing ‘legal tech incubators’. Firms, such a Slaughters, offer a set amount of investment, office space and resources and invite legal tech startups to compete for this. Startups then get the chance to become successful businesses and work with large players. In turn, firms can pick and choose from a variety of entrepreneurs and disruptive thinkers and, if they’re successful, benefit financially.
However, startups offer more than business opportunities. While law firms tend to stick to the trodden path, startups follow riskier strategies and tend to be more successful the more unique they are. Introducing this type of innovative thinking and giving them adequate resources to chase new ideas immediately injects a firm with more innovative thinkers.
How firms then integrate incubators into their operations is key. There shouldn’t be a hard line between new legal tech and legal business–startups need to know what lawyers want and lawyers need to know how the legal sector is changing. Instead, incubators should be integrated into the firm. This can be as simple as surrounding startups with lawyers in open place offices. Simply by interacting on a daily basis, lawyers gain insight into ongoing innovative projects and how new technologies are impacting clients. They can not only share specialised knowledge to improve the development of new legal technologies, but gain new perspectives and modes of work. Simple integration leads to new discussions which, in turn, leads to new solutions and innovation.
For smaller firms, external hires from the startup sector into support roles also offer similar benefits for a fraction of the cost. But, understanding emerging market trends should also be a top priority. Tools such as LexisNexis Newsdesk offer the ability to monitor news on specific topics to learn what competitors are doing and how your firm is viewed. In turn, this knowledge can help lawyers understand emerging trends without doing time-consuming research.
Once lawyers are aware of what startups are working on and how this impacts them, it’s more likely they have new ideas for improving their own work flows. This could be through adopting existing legal tech or developing fresh ideas. But, these ideas offer no benefit to the firm if they aren’t acted on.
Embracing a culture of innovation isn’t just about having great ideas. It’s about getting these new ideas to the right people to act on them. This means firms need to adopt new internal systems to feed ideas through to management.
As people begin to move away from email – the information black hole that it is – start ups, like Ideawake, are popping up to offer idea management software. In practice, this involves lawyers submitting ideas to the platform. Everyone can leave comments, offer input and collaborate to develop solutions. Ideas are then voted on, with the most valuable becoming more popular and gaining more attention. Popular – and therefore the most likely to be useful – ideas can then be picked up by in-house development teams.
But, to ensure innovative ideas become a reality, firms also need buy-in from strategic decision-makers. Increasingly, law firms of all sizes are introducing directors of innovation or giving responsibilities to a key partner. Linklaters’ appointment of Shilpa Bhandarker, a former solicitor that built and sold her own app company, last year showed a willingness to embrace startup attitudes.
A dedicated director or managing partner can present a case for innovation at board level. They can help others understand how investing in innovation and legal tech not only makes the firm more efficient but gives clients more value for money. This means ideas aren’t left on the backburner and, instead, innovation is seen as a business strategy – not just a buzzword.
Once lawyers see internal ideas are being showcased at board-level and enacted, they are more likely to look for areas that the firm can be improved, working on projects outside of their core functions. Simply, creating a conduit for ideas snowballs into more participation, more innovation and, ultimately, more to offer clients. Investing in innovation and fostering disruptive thinking should become a top priority for any firm.
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