Innovating in a Law Firm: Eight Considerations for a Successful innovation Program

Caroline Sweeney, Director, Knowledge Management and Innovation, Dorsey & Whitney

Over the course of the last few years, the pandemic has driven innovation in companies around the world and in all sorts of industries. The pandemic, as I wrote in a previous article, also spurred law firm and legal department technology innovation. But, even before the pandemic, the rise of the legal operations manager role in organizations was creating momentum for law firm innovation as legal operations personnel sought to manage legal spend and realize savings. To maintain a competitive edge, we saw law firms investing in and adopting a variety of innovation tools and approaches. As we have seen the legal operations role become more commonplace in corporations, we are seeing the adoption of the Law Firm Innovation role.

One could argue that law firms have been innovating for some time. Indeed, back in the 1980’s law firms were using data bases to help manage large-scale litigation. Around that same time, law firms were exploring use of innovative tools such as document automation to assist with routine document drafting and generation. With the advent of e-discovery in the 2000’s we eventually saw law firms adopt predictive analytic tools and new business models to handle the large volumes of e-discovery. Indeed, in addition to “predictive coding” we saw the adoption of a new role – the contract attorney - to conduct document review, driving down the costs of e-discovery review, from where it was frequently stated 50-70 percentof litigation costs derived. More recently, we have seen the use of “AI”, or artificial intelligence, to more efficiently conduct contract review and drafting. Document automation is evolving into process automation. Data analytic tools are helping to drive not just litigation strategy but strategic initiatives (diversity and inclusion, for example) and business decisions, as firms seek to understand where the opportunities for business development are most ripe. In addition to Directors of Innovation – or Chief Innovation Officers – we are seeing law firms hire data analysts to support innovation efforts. These are exciting – and innovative - times!

What makes a law firm innovation effort successful? I recommend considering the following:

1. Obtain management support: Like any initiative in any organization, support of key management personnel is critical to success.

Support usually comes in the way of budget allocation to enable the development and/or implementation of innovative solutions. As a result of budget allocation, for example, we have been able to bring in a low-code technology solution that has allowed us to develop several applications. Keep in mind, though, not all innovation efforts need to involve technology. Sometimes a new role within a firm can be innovative!

2. Document the goal of your innovation program and where you can add value: Will you be seeking to support clients by developing innovative solutions that solve business problems and support client relationships? Consider whether a solution developed for a specific client can be offered to other clients, thereby adding value to multiple client relationships. Or, will you be focusing on internal efficiencies to increase productivity and drive profitability? If your innovation effort is focused internally, look to practice areas that have tighter profit margins or involve routine tasks that would benefit from automation, thereby improving the bottom line. Or, might you be striving to balance the two objectives? In our case, we have tried to balance the two objectives, with success. However, client-facing solutions are often prioritized.

3. Offer opportunities for people to share their innovative ideas: Innovative ideas come from everywhere. We have invited clients to speak to us about business problems for which we can potentially provide solutions. We have posted internal challenges within the firm to solicit ideas and used crowd-sourcing techniques to identify ideas with traction. We have hosted Design Thinking events where teams from across our platform work collaboratively to devise potential solutions to client business problems or internal initiatives. We have had success with each of these approaches. Be open to hearing from all.

4. Implement an innovation process: It can be very easy to want to adopt every innovative idea that you hear, but that is not typically realistic. Having a process in place to help you ascertain ideas with momentum – and potential for a return on your investment - is important. We formed a committee to evaluate ideas and recommend which to pursue. The committee helps to identify the champions of ideas, determine if we have the bandwidth and resources – people and technology – necessary to develop a solution relatively quickly, and helps to define how success will ultimately be measured.

5. Manage the innovation effort: An innovation effort is a project and project management principles apply. Identify the project manager and establish a project schedule, budget, and corresponding deadlines. Monitor and communicate progress to stakeholders to avoid surprises. Pilot initiatives before full roll-out, providing a chance to tweak your innovation and position it for maximum success.

6. Measure the impact of your innovation effort: It is critical to measure the return on your investment. Measurement may be different for different projects. For example, a new client-facing application might be measured by additional revenue that is generated or by new business that is brought into the firm. Internal innovation efforts might be measured by the time savings and increased productivity that is realized.

7. Communicate: In my experience, sharing successful innovation efforts begets new innovation opportunities. Regular communication via newsletters or presentations is important to spurring new ideas, new use cases, and engagement of new people in the innovation process. Communicating success is critical.

8. Learn from unsuccessful efforts: This may be the most difficult consideration of all, especially in a law firm where the lack of success on a case or a deal is not necessarily viewed positively. But, innovation means trying new things and acknowledging that every new thing may not work out. In those cases, it is important to understand why an initiative failed, while keeping in mind that failure is part of innovation. Unsuccessful initiatives on our part have cemented concepts such as the importance of involvement of subject matter experts in developing applications and the importance of project management in innovation.

Innovation is critical to the on-going success of any organization. Don’t stop looking for opportunities for your organization and for your own professional growth. Be sure to consider innovation best practices.