Legal innovation: visionary, realist or just process improvement?  

Jack Shepherd examines different ways of adopting innovation in a firm.

‘Innovation’ is a hot topic in the legal industry – particularly in law firms. The larger firms have dedicated legal innovation teams. Many have introduced legal innovation partners, and chief innovation officers.

Yet there appears to be confusion around what is meant by the word ‘innovation’ and what the roles and responsibilities of legal innovation personnel are. What do legal innovators actually do, and what should they do? Is innovation the right word to describe their activities? What value are they delivering to firms and clients?

Talk to a variety of people in legal innovation roles and you will likely find them divided into two camps.

The visionaries

First, there are the people who model themselves after Steve Jobs. They are the visionaries, those who prioritise radical change over incremental improvements. They want to fundamentally re-think how things are done, and believe that the way to deliver true change is to rip up the rule book and think about things from a fresh perspective.

One example of the rule book being ripped up in the legal industry is the DoNotPay app, marketing itself as “The World’s First Robot Lawyer”. This app lets consumers with everyday problems, such as how to get refunds for parking tickets or Uber Eats orders that have gone cold. It is ripping up the rulebook, because consumers no longer need to go through these stressful processes themselves. Instead, they are delegating this responsibility to an app.

Nonetheless, examples of rule book-ripping in the legal industry are few and far between. Even the DoNotPay example is arguably merely tearing some pages out of the rule book, rather than ripping it up completely.

Those who adopt the visionary position in firms have a huge task on their hands. They have to instil fundamental change in an industry that is notoriously slow to change and, let’s face it, is doing quite well in today’s market conditions.

They have to secure buy-in to their new and radical ideas from lawyers, who are generally high-achieving, proud and risk averse. Getting these individuals to change is tough. Getting these individuals to radically change is tougher. Getting these individuals to radically change immediately is probably impossible.

Visionaries who are trying to instil radical change, ripping up the rule book, without laying out a series of incremental improvements that build rapport, are arguably wasting their time. They risk living in PowerPoint decks, with none of their ideas coming to realisation. They might consider rejecting possible solutions because they are ‘not innovative enough’, or do not fundamentally change anything. In doing so, they lose out on huge opportunities.

The realists

Second, there are the people who are, at least right now, focused on incremental process improvements. They are the ‘realists’. Their end-goal might be radical change and true innovation, but they also believe that to achieve that, you have to first deliver things that might not constitute ‘true’ innovation.

Rather than prioritise a high-level vision that changes things at a fundamental level, the realists focus on: (1) establishing problems faced by lawyers and clients, and (2) providing the right solution to those problems. They are mostly inward facing.

They do not care about the means they use to fix those problems. Whereas a visionary might turn their nose up at using something like mail merge to fix a problem, a realist will embrace this as a cheap and effective solution that solves an identified problem.

It is true, however, that continuous process fixes will not fundamentally shift the dial in the longer term, as lawyers will continue to do the same things, just in different ways.

Therefore, it is necessary for realists to be doing things with a view to a higher-level vision. They should have some sort of end goal in sight. They share visions with the visionaries, but they accept that incremental changes have to occur to get to there.

Who wins, the realists or the visionaries?

There is an often-cited ‘rule’ that innovation should be split into three parts: 70 per cent on core innovation (existing processes), 20 per cent on adjacent innovation (new markets) and 10 per cent disruptive innovation (reshaping the market). The realists will play in the core innovation space, and the visionaries will play in the disruptive and adjacent innovation spaces.

In a survey conducted by Bloomberg Law, 49 per cent of the lawyers consulted said that they were “not sure” whether their organisation had an innovation roadmap in place, with 37 per cent saying their firm did not have one. The 49 per cent statistic of ‘not sure’ is the more interesting statistic here, as it illustrates the extent of apathy many lawyers have about innovation.

The likelihood is that a fair cut of the lawyers in that 49 per cent bracket worked for firms that actually did have an innovation road map. Google the name of any large firm and add the keyword ‘legal innovation’. I bet you find something about what that firm is doing with innovation.

The fact is that the vast majority of lawyers are currently too busy to care about anything other than their day jobs and billing their hours. On the whole, lawyers care less about technology than those who work in the technology space think they do – especially when new things are introduced, and the lawyers do not think anything needs ‘fixing’.

All of this means that firms have some way to go before they can start to seriously get widespread business buy-in to adjacent or disruptive innovation categories. But firms should, of course, not forget about those categories. It’s just that the percentages might be quite low right now. So, what should firms do in the meantime?                                                        

Process improvement

Reading much of the legal press, it is easy to assume that most law firms are ‘AI-enabled’ and using cutting-edge technology. In reality, most are not. Evidence of this is found in lawyers’ lukewarm adoption even of seemingly ‘no-brainer’ software such as instant messaging, e-signatures and project management tools.

The bar for improvement in the legal industry is still very low. Many lawyers are so disillusioned with the basic tools they use in their job, that talk of things like artificial intelligence or ‘rule book-ripping’ tend to alienate them. This makes achieving visionary goals even harder.

As a result, the current nature of processes in the legal industry mean that law firms would be wise to prioritise realists over visionaries and focus on process improvement and fixing the basics. Law firms need to ask themselves what is more important, setting up a new innovation lab or making people’s computers take fewer than five minutes to start up in the morning?

Innovation: process improvement?

This is where legal innovation teams have naturally started to gravitate anyway. New technologies traditionally sitting under the ‘innovation’ barrier, such as legal transaction management, legal document collaboration and document automation, basically boil down to modernisation of existing working practices. They are not innovative in the sense that they are ripping up the rule-book. However, they are much-needed and should be prioritised by law firms – not least because not doing so will impede a law firm’s ability to move into the adjacent and disruptive areas of innovation.

As a result, ‘innovation’ is probably the wrong term to use for many legal innovation teams operating in law firms. They could be described more accurately as ‘process improvement’ teams.

Many people believe the innovation label carries pride and do not want to part ways with it. More and more, however, people are realising that innovation is not really an accurate description of the work they do. Instead, they should explain and label their functions in plain terms that achieve essential business goals – i.e., empowering lawyers to deliver better results for their clients.

Jack Shepherd is legal practice lead at iManage imanage.com