Like all sectors, the legal sector has faced many challenges brought on by the Coronavirus pandemic. It has been proven that business continuity requires faultless planning and continuous technological innovation, and consequently a successful digital transformation.
Almost three quarters (70%) of top law firms now have strategy and innovation roles – up 20% on last year, according to PwC’s 2019 Law Firms’ Survey. This drive for innovation is increasingly led from the top, with many firms employing senior innovation strategists – including Chief Innovation Officers.
While it is tough to find any law firm that doesn’t recognise the need for change, especially now, – from managing client expectations to accessing emerging markets and retaining profitability – progress is haphazard. As the survey results indicate, “Law firms continue to take small steps, but with few developing or implementing market-changing technology programmes.”
Only a handful have a clear and flexible strategy for realising the benefits of innovation, backed up with clear objectives and measurable metrics to monitor success.
- 65% of Top 100 firms feel they have “a clear and flexible strategy for realising the benefits of innovation”,
- 55% of firms have “innovation based objectives” for leadership,
- 42% have clear metrics in place to track progress.
Yet the need for innovation is far from new. As long ago as 2016, a Law Society Insights Community survey found that nearly three quarters of respondents ‘strongly agreed’ (24%) or ‘agreed’ (47%) that ‘innovation is critical to exploit opportunities and differentiate my firm’ and it is largely accepted that firms recognise an imperative to change amidst shifting market conditions.
What is constraining innovation and how can this change?
There is a growing feeling that the driver behind the addition of senior strategic ‘Innovation’ roles within many top firms is simply to meet client expectations for innovation. Clients are increasingly demanding to understand how services are being delivered – from staffing levels to pricing – and to know how firms are embracing technology to improve transparency, reduce costs and improve engagement. As a result, in many markets, the presence of a Chief Innovation Officer or Head of Innovation has become a prerequisite for any client engagement.
This does not, of course, demean the potential value that these individuals can deliver – but true business innovation is about the right business model and strategic partnerships.
Wendy Curtis, Chief Innovation Officer at US law firm Orrick, stated in a recent interview, “Innovation in law firms is growing to meet all of those challenges, but it requires a real commitment by law firms to do so. It may seem easy to an outsider to implement a process to make something better, faster and stronger, but to actually identify, scope, and execute on really meaningful change takes a tremendous amount of work, and it is something that we focus on every day. Innovation at the firm and in law firms is taking on the incredible role and incredible challenge of delivering the highest-quality services to our clients at the metrics and price points that they expect.”
Strategic partnerships can be invaluable in driving change
Innovation isn’t just about implementing new systems or processes, it should be a driver for making the law firm better: more competitive, more profitable and far more future-proof. Intelligent use of technology is essential to remain competitive – but technology by itself will not bring innovation to a firm. It is the combination of business insight and technology expertise that is fundamental to driving effective change.
Outsourcing to an MSP with strong credentials and expertise within the legal marketplace provides a solid technology foundation upon which firms can build innovation strategies. A managed cloud solution removes the burden created by technology complexity and constant change, enabling law firms to focus on the essential business questions, as outlined by the Law Society’s Capturing Technological Innovation Report:
- How will innovation create value for clients?
- How will the firm capture a share of the value its innovations generate?
- What types of innovations will best allow the firm to create and capture value in different operational parts of the business?
Innovation can drive competitive advantage for firms of any size
80% of CIOs are ready to migrate to a cloud-based environment within the next few years so it is now more important than ever that innovation is given the place it deserves.
Law firms don’t all need a head of innovation or Chief Innovation Officer. Mid-market firms with the right approach have the chance to compete with the larger law firms by demonstrating to clients clear and tangible areas of innovation in service delivery and working practices. By embracing a culture of innovation across the business, encouraging everyone to be part of the change and leveraging the technology competence of third-party experience, firms can achieve the innovation required to respond to market disruption and client expectations.