Good question: what really is legal innovation? 

I guess for me, I usually start off thinking in terms of basic principles, such as meeting needs and pain points. 

As Marie Bernard, of Dentons/NextLaw Lab, said recently, the cornerstone of innovation is all about listening, watching, talking to the client. They know what their challenges are.

Of course, even if a client can express a challenge they want to meet, can the law firm, or tech start-up, provide an immediate solution? Is there even a solution that can be provided? 


I guess another aspect to innovation that perhaps we don't discuss much in the legal world is that even if the client has a need a firm thinks it can meet, or better service, via legal tech, will the partners at the firm actually want to do this? 

There are fears among lawyers over adopting technology. There is also often a fear of doing things differently, especially if it might shake up remuneration systems, e.g. getting paid for your time. 

And then we get into barriers like overcoming resistance to efficiency....


In short, even if firms listen to a client, can find an innovative solution, will it get implemented....? 

I argued it's many things in this interview. It's more than tech, and tech is more than  doc review.  And for firms there's certainly more to it than buying an AI solution and calling it a day. 

Speaking of firms, David Curle raises some good points regarding the Legal Ops movement here. AI and other tech is a big part of it, but also process, project, spend and knowledge management. Yes, latecomers can catch up quickly by buying tech solutions, but integrating it in the workflow and organization and business model is a different matter.

Firms might resist this (the 2017 Altman Weil survey Law Firms in Transition is out - partners are unsurprisingly reluctant to change), but where does that strategy lead them with multisourcing becoming increasingly common? 68% say they're losing business to inhouse departments, 52% see client use of tech as a potential threat.

We often hear that it's a buyer's market now. In the past it's been said that clients don't really demand change or put pressure on firms to innovate. This year I've seen some evidence this is changing, at least here in Sweden. I'm currently conducting a survey among swedish firms. The report will be published after the summer, but I think it's already safe to say that firms have started to feel pressure to innovate here and that many have taken measures to do so. 

Legal innovation is not just about law firms though. Just a few things that come to mind:

- "Digital courts" & online dispute resolution
- Predictive"/big data policing
- DIY services for contracts and for specific niche purposes such as filing complaints about delayed flights
- E-signatures
- Blockchain and smart contracts
- Transparency, knowledge distribution
- Digital marketplaces for legal services
- Reducing regulatory barriers for legal innovation 
- Incorporating tech and innovation in law school programmes 
Yes I agree on the organisational integration/ cultural challenges you've both mentioned. 

I'm interested in how they can be overcome from within a law firm remembering it's a relationship business with its staff as well as its clients.

Is continuous improvement a precursor to innovation or just watering it down? 

And let's not forget disruption!

Innovation to me is always implementing solutions/services/processes which anticipate clients' or the market's needs (or create new needs that did not exist before) rather than just providing what the market already buys and needs now.


Legal AI is is a new tool in the market, however real innovation will be seen in how legal AI is used, what kind of problems it will be applied to, how it will be applied to clients' work and last but not least how it will be applied in order to improve lawyers' quality of work and working hours (rather than the opposite).  As always the real value of technology is in how it is used.

I agree with you, Richard, that the starting point for legal innovation has to centre around meeting needs. I personally define "innovation" as creative problem solving.  This simply means that you firstly identify a problem and then seek to solve it with a differentiated solution that meets the requisite needs.  


More often than not, however, the true need is not established and solutions are presented in a vacuum - never mind that they often aren't differentiated either! This is particularly true when it comes to technology, which is often relied on to be an off-the-shelf innovation.  However, in my view, a solution cannot truly be innovative unless it takes the people and processes involved in the problem into account, and ensures that the innovation is centred around addressing problems in those areas. 


Conversely, a people and/or process solution does not necessarily require technology in order to be considered innovative! We need to move away from thinking about technology as the innovation and expand our definition.

Those responding have raised great points and of course, I agree with them all!  When trying to get to the nub of this issue - what is legal innovation - I would offer up a few things. 


First, it amazes me that a profession that prides itself on being able to think up the most amazingly creative arguments or solutions to legal problems can be so out of touch with the power of their great big innovative brains when considering the method or manner by which they provide service. There's a disturbing disconnect between how lawyers innovate when they're cooking up a legal solution and how they don't innovate when contemplating how they could best - from the client's or a business perspective - improve the way they work or the value of the results their counsel is intended to drive.  Maybe it's in part because for centuries they've been allowed to percolate in their own insular professional environment (boy, is that changing!), or maybe it's that damnable arrogance that proclaims that professionalism requires lawyers to deliver their services as the profession dictates; others, including clients, should have no say.


Whatever it is, the inevitable day has finally arrived - legal services is entering the 21st century, even if legal professionals decide not to re-invent themselves and their practices and are thus left behind. 


As lawyers, law firms, legal support staff, legal executives and law departments all contemplate what kinds of legal innovations they will lead or adopt, I usually drop their decisions into one of two rough categories - sustaining and disruptive change.  


Sustaining changes are those innovations that lawyers adopt to help them do better/faster/cheaper that which they have always done.  So, for instance, the adoption of technologies that help lawyers manage matters, communicate and collaborate, or technologies that allow them to analyze legal spend so that they can minimize inefficiencies or speed up processes: these can help lawyers do what they've always done, only better.  And that's good and an important step toward moving to more aggressive change. 


But the really interesting innovation in law comes when lawyers engage in disruptive innovation: when somebody decides to adopt new ways to work that will actually change what it is that lawyers do, or in many cases, suggest what it is that lawyers should no longer do.  These kinds of changes involve more than improvements to standard workflows (the better/faster/cheaper stuff); they instead focus on things like mining data or developing algorithms that can assess risk and suggest which course might most likely lead to the best or better result. Applying disruptive innovative thinking might lead to a conclusion that lawyers should no longer perform X kind of work but instead should focus on creating an automation flow that allows them to push that work back to the clients who need it done so that they can self-serve their own needs.  Imagine "un-lawyering" a whole bunch of "legal" work: it's like that old saying in corporate practice: clients don't have legal problems, they have business problems.  


Disruptive innovation might even allow lawyers, especially those I work with in law departments, to spend less time on remedial matters (cleaning up failures or looking backward for guidance to go forward, following the same ruts in the road) and more time on thinking about ways to pre-empt or avoid problems (which is far more difficult than "compliance").  Even better, it might allow them more time to advance their clients' progressive business objectives, partnering with them to move the company toward its strategic goals.


That, to me, would be the true sign of legal innovation: lawyers working on that which would make lawyering as we've always known it obsolete.  There will always be a need for brilliant specialists to help their clients' navigate their most urgent needs; the question is whether lawyers will figure out how to remain relevant in that paradigm, and what their distinguishing value will be. 

What law firms (and their clients) actually want is to do things better. ‘Innovation’ is a means of achieving that, rather than an end in itself. Innovation itself isn’t the point.


We should certainly applaud firms that take any step in innovating, big or small. By committing their time, energy and resources to trying new ways of doing things (whether that means more streamlined processes, more powerful technology or something else altogether), these firms have a much better chance of ultimately doing things better. And that is the point.


So the benchmark for firms must be “Did we do things better?”. Did we manage to do things better for our clients, for the firm and for our team by innovating?

Susan Hackett - interesting point about the insular professional environment. Culture matters, just look at the sociolect of lawyers (which is also evolving). I delved into legal writing a while back, and found that students eager to become part of the profession, rather than professors and other seniors, often are the strongest proponents of 'legalese'.


Law schools that try to innovate - such as these - don't just teach tech skills, they (or at least some of them) also let students work in projects with engineers, data scientists, business students and sometimes even with entrepreneurs and startups. Maybe they're onto something. 

Fredrik - I agree.  Whether it's in law school or in practice, it's critical for lawyers to be exposed to other disciplines and to respect what they bring to the table ... The greater the diversity of perspectives that can be brought to bear on a problem, the better the resulting solution is likely to be. 


It may be easiest for in-house counsel to see the value of learning how other professionals approach problems or practice since they end up working in companies where, as lawyers, they are the minority and the disciplines/skill sets responsible for creating the company and its wealth, as well as keeping it moving forward, are almost everything but traditional legal skill sets. So lawyers who don't understand how to collaborate with and learn from other disciplines or professionals are not as likely to either succeed or enjoy their practice in the company. 


I hope that greater value assigned to broader skills and disciplines in sophisticated corporate practices will continue to encourage a "reverse engineering" and broadening of the law school curriculum.  And going back to our subject, I think it's also likely to encourage and reward more innovative thinking in the next generations of lawyers.

What I find interesting is the degree to which people, not just in legal, but generally, fail to understand that innovation and improvement are not necessarily the same thing.


Improvement is only part of innovation.


Improvement by itself would be an enormous victory for legal clients.


Faster, priced cheaper and performed at lower cost are all improvements. For the most part, legal as an industry is playing catch up to all other disciplines.


To be innovative –there must be value added and a unique outcome, which in most cases, can not be replicated easily.


Using technology to perform research faster is not an innovation. It is an improvement—so when we talk about technology reducing the number of hours that a task used to take – we are still conducting legal research, just with different tools. 


Getting to the answer faster is amazing! But it is still the same output. Does the advice change?


It’s an old and tired cliché, but equally, true and on point to highlight that clients are not concerned with better drills. They are buying round holes. 


Innovation would be getting them to see the value in trapezoids. Trapezoids rock!


Faster and more accurate diligence using technology — and fewer lawyers on the file? Great. But this is still in the service of a transaction which brought me in the door in the first place. Different method. Same desired result. Complete my transaction please.


I don’t get excited as a consumer when Pepsi comes up with a better bottling system, even when it is faster, cheaper, better for the environment and light years ahead of Coke’s operations. It still tastes like Pepsi and the price had better not be increased because of the company’s need to catch up to its investment toward inputs.


Are firms passing savings on to their clients in respect of their improvements? 


If it takes you less time because you have a better drill or your headcount is now lower in providing the same outputs — the client should benefit — and that has to mean an abatement in price. Only in the event of an innovation should price remain static or increase — assuming more value is being added (and is desired).


When other firms are adopting the same technologies, it is not innovation. It is a fleeting competitive advantage that is an improvement. The market standard still prevails as everyone catches up.


One should not confuse evolution with revolution.


True innovation eliminates the need for clients to seriously consider other legitimate alternatives.


As Mark Cohen recently pointed out in Forbes, not only is Legal Zoom improving access and reducing legal costs, it is bringing entirely new clients into the market and allowing them to choose how much they process on their own versus what goes to a lawyer.


In 2011 alone, in the state of California, 20 percent of all newly formed limited-liability corporations utilized LegalZoom. That is innovation – not readily replicated – and often the first model that comes to mind for that respective user persona.


So curiously, in some instances where amazing and new technology is being utilized – it is not technically innovation. The drill is better. The hole is the same. And the price and quality are perhaps unmoved.


To me, none of this matters. Improvement. Innovation. Who cares? Let’s just have a measure of “better" that delights the client. Right now, they are not happy with their providers and almost all empirical studies have demonstrated this as a fact.


As I’ve pointed out elsewhere, the real value of innovation is not shiny objects.

Jason - I agree with your innovate / improvement distinction - although, I think there is a tendency to downplay what introducting time-savings can have on a transaction and what value can be added to a client.

By example, implementing an AI product into corporate diligence reviews is clearly a way of freeing up thousands of hours of trainee lawyer review time. This is certainly an improvement - the AI product is principally doing more of the same. 

However, 'doing more of the same' can be transformative - most corporate transactions are limited by (i) time to signing / completion and (ii) budget, which will dictate the scale of the diligence exercise on a target's contracts. 

What this means is law firms usually agree with the client that a sampling exercise will occur on the documentation. Sampling brings with it all the usual health warnings on a diligence report stating that the review is only 'representative', which, conversely, means there is a chance the sample does not reflect what's lurking in the rest of the contracts. Ultimately, that risk will be priced into the transaction value (which can work both ways: if the buyer knows there are more worrying contracts, they can push for better reps and warranties, or the seller can demand a higher price). It gets even more important when a financing bank is part of the deal - if they're funding the purchase of the target company off the basis of a sample, they'll be pricing that risk into the finance, which ultimately hurts the purchaser. Remove the sample and it's likely better terms will follow.

So, I think there's an argument that the introduction of a time improvement (machine diligence) can drive transformative - the client should be getting a deal they could never have hoped for when real-world constraints are considered in the context of a transaction (and the trainees might manage to get some sleep!).


So many great inputs. Thought I'd try and highlight some of the key points from the group so far:

- legal innovation covers a broad range of tech, legal situations and types of provider, not just what law firms do in terms of innovating how they do transactional work, for example. 

- is a culture of continuous improvement needed first before we get to real innovation?

- tech is great, but it has to take the people involved with it, 'innovation as tech alone' cannot really work, need buy-in from all who use/connect to the changes in how things are done.

- maybe we are getting too complex here on innovation, isn't the real foundation of this discussion about just doing things 'better' for clients? (And clients will know what better looks like.)

- lawyers are great at innovating specific legal advisory responses for clients, but are often detached from innovation related to how work is produced for clients as a whole.

- The focus may need to be on innovation that will remove the process or remedial work from lawyers' desks so they can get back to being real lawyers again. 

- law schools (at least in many countries) just aren't preparing young lawyers for the future. Law is too insular a profession and that hurts innovation. 

- Faster, cheaper etc is only one side of innovation. Great innovation also creates additional value that may not have been possible without the use of this technology. 

- And, echoing Laura's point above, Jason adds: Let’s just have a measure of “better" that delights the client.


Having recently come out of "Big Law" I would agree with @susanhackett "that a profession that prides itself on being able to think up the most amazingly creative arguments or solutions to legal problems can be so out of touch with the power of their great big innovative brains when considering the method or manner by which they provide service", however this is not limited to the legal profession.


In my previous life I worked for the R&D; division of Pfizer, here I also saw a similar disconnect between medics and PhD scientists. I've rationalised this as 'cannot teach an old dog new tricks'. You learn the process of your profession early on during your apprenticeship. It then takes time and energy to learn/reinvent a process, this is there for a low priority unless there is clear value or pressing need. I'd much prefer to be working on the next case than improving a process, particularly when I have some junior who does the grunt work and feels pain. This is a human failing, part of our innate ability to rationalise why we need to do the things we enjoy and justify why we can ignore thing we find tedious. We can only chip away, make our arguments and build pressure for change. It is happening but driven by client need.

A second factor to consider is the culture that does not tolerate failure, or more politely values perfection. This is a big problem because innovation requires failure. Couple this with a partnership model that does not reinvest revenue in R&D; and you have an environment where the odds are truly stacked against anyone trying to innovate.

Finally coming back to the question 'What is legal innovation?'. I agree with the sentiment that a big chunk is improving the 'value' to the client, be that cost or added value. However it cannot be only driven by client benefit, there has to be 'value' on both sides of the relationship. Also it should be noted that disruption in established markets will require creation of new legal product. Here is the where innovation can more readily occur. Where new processes are being defined or new capabilities are required to meet the challenges. I see this in areas like retail bank ring-fencing where regulation have resulted in an exponential increases in the volume of checks beyond that which can be solved with people. Here the pressure from the regulator on the bank has created the space where lawyers have had to innovate to scale or re-invent process.

Right in the midst of this discussion, I read this piece by John Grant, who's a really great guy. It's a snapshot of the reality of a person who's living this conversation about innovation, entrenched human behaviors, the difficulty of changing set practices and systems, and all that. His story isn't a debate theory; it's flesh.  And what makes us all want to move this issue forward so badly is our combined interest in the future of the profession, and the livelihoods and well-being of people we know and respect and are friends with. 

Thanks for creating this forum. It helps to see different perspectives on power-words like innovation. We must rescue our cliches. 


The theme I was most drawn to: 'Let’s just have a measure of “better" that delights the client'.  In most areas of law (life?), I believe this is innovative. Measuring intangibles is hard, but that's why it would be an innovation.


I looked up the relative frequency of certain words in Google's scanned books (chart below). It reminded me that technology, innovation and/or invention must be kept in context. Also, that our technology emphasis may indeed be flattening versus a more sustained focus on business and law. I am clearly over-interpreting the data, but I do it to provoke reflection.


Relative frequency of word use (1900-2000, source: link)


What's my point? Law is important. I am a cheerleader for all innovations/inventions in the business/technology of law that make it more measurable, understandable and accessible. But hope the emphasis on innovation remains on the "What", not the "How".


I love the examples offered by @FredrikSvärd. I would add litigation funding to his list, an area we are involved in and excited about. With the right emphasis on ethical diligence, I think it could deliver legal innovation in all three areas I mention above.


-Kripa

Not sure what else I can add to the superb discussion and analysis above. My only observation would be that the point of any innovation is to move the end user closer to a position of maximum value and satisfaction -- to remove some barrier or shorten some distance between where the user is now and where she wishes she could be. (That's also a pretty good definition of leadership, I think.)

So any "innovation" proposed within the context of legal services should at least be able to answer two questions:

(a) To precisely whose benefit are the effects of this innovation intended to flow?
(b) How, precisely, will the effects of this innovation move that beneficiary closer to a point of maximum value and satisfaction?

If you can answer these two questions clearly and fulsomely, then I think you've got an innovation worth pursuing.

Thanks for the great new angle to the discussion, Jordan. I really like the way that you connect innovation to leadership. 


That makes a lot of sense. The fact that several posters above have noted that this is often a people process or change management issue, (thanks Christie), rather than a technology one, supports this idea. I.e. innovation happens when leaders in an organisation, whether the client or the service provider, take on the responsibility of making something change for the better (rather than allowing the status quo to continue unchecked). 

And trying to change things involves risk, obstacles and a degree of vision, hence => leadership. 

Hence, no leadership on this issue = no real innovation. 


---


One other question that I've been pondering over the last day or so is this:


'Law firms are sellers, clients are buyers. 

In which case, does innovation operate differently for buyers and sellers? Are the drivers of innovation working in different ways depending upon which side of the equation you are on?'

Good pondering Richard!

 

For businesses it's our favourite word efficiencies or more fundamentally remaining competitive/surviving. There's also an element of attracting/retaining talent & 3rd party relationships too. This in turn can develop into new areas of client services and revenue.

 

On the flip side clients desire convenience, speed, ease of use but they also seek confidence, trust and certainty. That last set of objectives can be the real challenge to the delivery of an innovative experience they keep returning to.

Apologies for joining the conversation so late. I've seen some excellent points made so far, and certainly agree that innovation is far beyond just Technology.


Continuing on from the recent question about whether innovation operates differently for buyers and sellers, I certainly think it does.


For the buyer, the drivers are readily there - the requirement for value, transparency and experience.


For the seller (looking at Law Firms in particular), those drivers may take a while to eventuate. Innovation starts with an attitude, an attitude to taking risks, and accepting that the innovation you're currently undertaking may even result in the client deciding against using your services. Take the example of using AI to predict case outcomes based on historic data from similar cases, because if you're telling the client they're not likely to win from the outset, then why would they continue to spend with you?


The fact of the matter is innovation will occur whether the seller embraces it or not. A real world example of this is Uber. Taxi firms needed to innovate beyond their own processes a lot sooner, but did not. Automated text messages and the ability to accept card payments were great technology improvements, but the demands for transparency, value and availability were ignored for far too long. Now, it may very well be too late for the taxi firms to innovate.

Thanks! We'll send you an update as soon as a new conversation starts.