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28 P E E R T O P E E R : I L T A ' S Q U A R T E R L Y M A G A Z I N E | S U M M E R 2 0 2 1 A Law Firm Innovation can be defined a thousand different ways, depending on who you ask. For purposes of this article, the short definition of "staying relevant" works well. And staying relevant first requires a self-awareness that you might not be. Admitting this requires humility, collaboration, and a willingness to take risks — values not often applauded in a law firm's mission statement. Lawyers are trained to rely on precedent, sink the competition, and rise to the top alone. Based on our experience, we've seen three primary obstacles that stifle law firm innovation. Legal DNA. From day one, law students face intense pressure in the hyper-competitive, individualistic culture of most law schools. These three years relentlessly shape the student into fearing uncertainty, avoiding risks, and no longer asking questions out of curiosity. The path continues with entry- level lawyers at firms that reward those who follow established practices. Any hope of creating an innovative law firm demands that law schools take the first steps, which actually aren't that complex. If law schools required students to participate in collaborative projects that are graded interdependently and taught their students how to give and receive feedback in a spirit of generosity, law firms would evolve to a much more collaborative culture. Collaboration is always the precursor to innovation. Also, if law students were given a taste of what it's like to have a legal career today outside of a traditional law firm (as is the case with most other business disciplines), we would be a different industry today. Perceived risk. Law firms are managed by lawyers, and lawyers have difficulty separating professional risk from operational risk. Yes, they absolutely must be risk averse when it comes to providing counsel to clients. But while there are countless opportunities to bring their clients better results, many firms don't pursue them because of the perceived consequences of those risks. For example, openness to a flexible pricing model does not conflict with a firm's ability to extend legal expertise but leaving behind the billable hour may seem too risky, even if a client is asking for it. This perceived risk stops the firm from providing meaningful value to a client who ends up leaving and going elsewhere anyway. Resistance to new technology. Humans are creatures of routine, especially lawyers. They are under constant pressure to maximize their billable time, and many are wary (and weary) of devoting precious hours to understand new technology when their current processes serve them well individually. Furthermore, most law firms are playing the short game, and the cost of new technology both with time and money does not fit into their business model. Until law firms learn to scale from 1:1 to 1:many and incentivize accordingly, this resistance will only get stronger.. Characteristics of innovative organizations Innovative organizations foster a curious, learning mindset. Their employees are not afraid of admitting, "I don't know" if asked a question They are hungry for staff and market feedback— good or bad. They ask and invite questions and create systems that prove they are open to improvement. For example, we hold an internal after- action review for every project team at completion. We follow a proven process, gathering specific data points designed to improve. Colleagues give feedback to each other and to their project lead in written and verbal forms, all within the framework of improvement. Our employees are rewarded for their strength as a team, which has contributed to a culture of watching each other's backs, sharing information rather than hoarding, and cheering on each other's success. Innovative cultures also make it clear that they are not afraid to fail. In fact, if you aren't failing, you're not playing hard enough. The concept of "fail fast and fix" establishes trust with clients and deepens engagement. Innovative organizations embrace humility, admit mistakes, and act quickly to overcome setbacks. For innovators, the practice of law is an ongoing path to becoming a better advisor to our clients. We believe that pathway includes cultivating a more human approach to our work and adopting a generous attitude. The path to change Even for these regional and Big Law firms committed to cultural transformation and F E A T U R E S 1 2 3

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