The innovation game
You’ve read the books, gone to the seminars and accepted the inevitable: If your firm wants to stay competitive and attract the best people, it has to develop a business strategy to deal with changing client demands, new technology and a shifting regulatory landscape.
So now what?
You’re already ahead of the game if you recognize that business as usual isn’t viable in the long-term, says Mike Ross, founder of Juniper, a Montreal-based strategy consulting boutique. Now you have to get your partners on board and start rethinking how to deliver client services.
That’s not going to be easy: in law firms where money is still rolling in, partners don’t have much incentive to change and there’s a succession crisis brewing; in 63 per cent of U.S. law firms, for example, partners age 60 or over control at least a quarter of total firm revenue but only 31 per cent of firms have a formal succession planning process, according to an Altman Weil study released last year.
Ross recalls a conversation with a managing partner from a large Canadian law firm who proudly said his firm was tackling innovation – by forming a committee comprised of three senior partners from across the country. “I said: ‘You’ve got to be smart enough to realize how stupid that sounds. The people least incentivized to create change are deciding what’s needed.’” The partner replied that he was retiring in a few years anyway.
Even firms that believe they’re on top of innovation are lagging. A recent McGill University study found 89 per cent of partners agreed that innovation was one of the firm’s highest strategic priorities; 58 per cent of associates either disagreed or were neutral. The same percentage of associates also felt there was “either no leadership for innovation or no awareness of any innovation leadership at their firm.”
The stakes are high. Ross believes the radical reinvention of the marketplace that has shaken up the newspaper, hotel and taxi industries is inevitable in the legal market. The risk for law firms: “One of their competitors will crack this problem and destroy everyone else.”
This deep structural change involves more than the use of legal technology. That’s not radical at all, Ross says. In fact, it’s one of the reasons that partners aren’t scared; legal tech has been a good thing that allows firm to do research and manage files and costs better. But he sees change coming in fundamentals like how legal relationships are brokered.
What if a group of buyers and suppliers in the construction industry, for example, could use a template product to govern their contractual relationship with a built-in rating structure to ‘punish’ individuals who break agreements? “That type of re-conception of legal relationships facilitated by technology will come,” he says.