Law firms are selling the innovation dream. But when we look beyond the marketing speak, many firms have been slow to change.
Innovation theatre is widespread. And firms are skilled at responding to RFP questions about innovation which makes it difficult to get an accurate picture.
Clients must cut through the propaganda to determine which firms are ahead of the curve.
Getting Under the Hood
How can we tell if a law firm is innovative?
Unlucky for us, no single metric can gauge a firm’s progress. We need to look at the firm from several angles. We should also consider if the relationship remains a good match as the firm evolves. To do this, we must understand our requirements and how these may be changing.
In this article, I set out a framework to help you assess whether a law firm is evolving to serve you better.
Step 1: Understand Your Needs
Before we turn to the firm, we must understand what is important to us.
What are our priorities?
Why are we asking about innovation?
What’s our end goal?
There may be a change to our business that’s prompting us to reconsider our legal support. Perhaps we are under cost pressure. Maybe we want to go faster.
When assessing a service, we generally look at three dimensions:
Quality
Speed
Cost
I recommend exploring these dimensions with your team and listing them in priority to help frame your thinking.
Step 2: Move Beyond the Jargon
Once we are clear on our needs, we should consider our language.
Innovation is an ambiguous term. Framing the assessment around “innovation” opens the door to answers that may sound impressive but lack substance.
Another challenge is the legal industry often construes innovation as technology improvements. But there is more to innovation than rolling out new tools.
Exploring a wide range of innovation-related topics and asking the right questions will help reveal the firm’s progress. Avoid technical terminology. Choose simple language and speak in terms everyone can understand. Your goal should be to start a healthy dialogue about where the firm is at.
Keep in mind that people can be uncomfortable talking about this stuff because it’s new, and it’s easy to feel unqualified. It’s not easy going from legal expert to innovation newbie.
The good news is the legal community is evolving together, and there are no stupid questions.
Step 3: Ask Specific Questions about Things That Matter to You
In the following sections, I will discuss seven topics to explore with the law firm. For each topic, I have included a list of example questions you might ask.
The questions are in plain language and intended to be easy to understand regardless of technical knowledge. Some of the questions may not be relevant to a particular business, and there will be many more possible questions that I haven’t listed. Use my suggestions as inspiration.
It’s important to set clear expectations with the people from the firm who will answer these questions. Tell them you are looking for plain language answers, not marketing speak.
Leadership
Change is never easy. It’s difficult at large law firms because of unique dynamics, including the partnership model, hourly billing and siloed practice areas.
Change management is often left to the “tech people'' at law firms. Leaders send scripted emails and mention projects in town halls, but it’s rare to see change led from the top.
To change, law firms need a strong leader responsible for setting the firm’s technology and change strategy. This needs to be an expert from outside the legal industry or someone from within the legal industry who has meaningful digital transformation experience.
Example questions:
Who sets the firm’s technology and digitisation strategy? What is it?
What’s the firm’s long-term commercial strategy?
What % of revenue is your firm investing in core technology improvements?
How much are you spending on process improvement and new ways of working?
What are the 12-month transformation plans for the parts of the firm we work with?
How Work Gets Done
New (and not-so-new) technologies have created big opportunities for law firms to improve how legal work gets done.
Example questions:
Talk me through the process you will follow for my matter. What technology will you use?
Can you show me the process flow diagram that shows the interactions between humans and systems?
What have you automated?
Who is handles the automation of tasks?
Compare your current working processes with how you worked two years ago.
I’ve heard about [system X]. Have you considered using it?
Matter Management a.k.a. Project Management
Legal matters are projects, and there are long-standing, proven methodologies for managing projects.
The firm should follow a consistent process for your matters which lets you see the status of the work items and timelines. Bonus points if they also provide visibility of costs in real time.
Example questions:
Tell us about the project management approach you follow for our matters.
Will a project manager be assigned to the work you do for me?
Do you have plans to expand your project management capabilities? When will this happen, and how will it impact how we work together?
Have your lawyers received project management training?
Is there a system that allows us to see the status of our matters in real-time?
Technology
Law firm tech stacks are dated. New technology is held back by weak technology and data foundations, so don’t forget to ask about the bits you don’t see.
Remember, if the firm is not operationally efficient, you will help fund that inefficiency.
Example questions:
Can you share your tech stack with us?
Tell us about your core technology infrastructure. What are your upgrade plans?
What new technologies will the firm introduce in the next twelve months? Will the lawyers that I work with use these new tools?
Does the firm use data analytics platforms or resources to provide data-driven legal advice?
Are your systems integrated to allow for data flow and efficiencies across the firm?
Training and Tech Adoption
We shouldn’t assume lawyers are using new tools just because the firm says they have been rolled out. Tech adoption rates remain low at many firms.
Part of the problem is that lawyers are not getting enough tech training. And most tech training is boring.
Example questions:
How many people are using system X? (tailor this question based on your needs)
What are the % adoption rates?
What’s the plan to improve these rates over the next 12 months?
What kind of training do your lawyers receive in new technology?
How is training time accounted for under your billable hour framework? (more below on this)
Lawyer Incentives
People do what they are rewarded for. Lawyer incentives often align with billable hours. This is true even where the client-facing pricing model is fixed. The more hours billed, the better.
New incentives are needed to overcome these challenges. Otherwise, lawyers won't change how they work.
Firms with a successful innovation record have found ways to incentivise lawyers to use new technology.
Example questions:
In what ways are lawyers in your team incentivised to improve their work?
How are their innovation activities recognised in appraisals and bonuses?
Pricing
Standardised work products can and should have a fixed price.
Example questions:
What is the process you follow to assess whether work is suitable for fixed-price billing?
Have you identified the parts of my matter that are standardised work products versus bespoke work products?
Do you regularly evaluate work and whether parts of it can be done by lower-cost resources to keep the costs down? Please provide examples of this.
Talk us through your pricing process. Do you use technology? Or a spreadsheet?
How has this been improved over the past few years?
How will the use of technology affect the pricing on my matters?
Bonus tips
Lawyers don’t have time to improve how they work on top of their normal responsibilities unless they are incentivised and trained to do so.
Nothing changes until it’s someone’s job to make it happen.
If a firm has big plans for change but can’t prove meaningful investment and resourcing, they’re not serious about it.
Conclusion
The topic of innovation can be overwhelming. As you can see from this framework, my advice is to try and keep things simple. Avoid intimidating terminology and ambiguous terms. Ask everyone to speak in easy-to-understand language and focus on what matters to you.
If you think this framework can be improved, or have feedback based on your experiences, I would love to hear from you.
This article was originally published by LegalTechnology hub: https://www.legaltechnologyhub.com/contents/how-to-tell-if-a-law-firm-is-innovative/