publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/550988
ILTA WHITE PAPER: JULY 2015 WWW.ILTANET.ORG 28 Viewed this way, incremental innovation focused on existing customers sits closest to the origin and is the easiest to do. Incremental innovation geared to new customer sets and radical innovation to existing customers are more difficult, while radical innovation for new customer sets is most difficult. Innovation focused on increasing internal efficiency did not even make it onto Benner's matrix. A professor to MBA students, Benner considered that kind of activity to be so basic and integral to business that it does not register as innovation; in fact, she believes it keeps people from innovating. With so much activity in the legal profession focused on process improvement and efficiency, I asked myself whether we are fooling ourselves by thinking of things like legal project management (LPM) as innovative. Merriam-Webster defines innovation as "a new idea, device or method." Does merely doing something new to the firm fall within the scope of that definition? Would rolling out LPM today be considered innovative? I would argue not, because LPM is no longer new. The first law firm that applied project management to legal work was innovating, but all those that followed were just copying. When most of us think of innovative companies, Apple, Google and Tesla spring to mind. We would never consider their internal efficiencies and process improvements to be innovation. We see those as an expected part of running their business. Innovation is witnessed only when we see companies creating something new for their customers or selling to a whole new group of former non-customers. Although we in legal have been doing much that is new to our very traditional profession, most of us are not truly innovating. We are instead keeping up with the competition, as aptly expressed by a recent tweet by @jamesondempsey: "A lot of 'legal innovation' appears to be about teaching attys basic project mgmt. skills. Should just call it legal catchup." LPM and process improvement have been popular topics the past few years, but both are internal efficiency initiatives aimed at maintaining or increasing profitability. They became trends in our industry when firms started offering alternative fee arrangements in response to client demand for cost control and predictability. This necessary step in the right direction might have opened the door for innovation in our profession, but it is not innovation. Firms that move beyond LPM and process improvement to create and offer entirely new services or business models will mature into innovative firms and take their rightful place ahead of the competition. True innovation is out there today, but only in a few law firms. WHY IS INNOVATION SO DIFFICULT? Innovative companies share common characteristics, many of which are diametrically opposed to characteristics common to lawyers and law firms. Most law firms do not have research and development departments tasked with creating and testing new ideas. Here are some other difficulties: A Risk-Averse Environment: The most innovative organizations are known for taking risks. They attempt things no one else has tried. To do this, organizations must be willing to fail, at least sometimes. They must also be willing to dust themselves off and move on to the next idea. However, lawyers are — by nature and training — risk-averse. A good portion of a lawyer's job is minimizing risk for clients. Is it any wonder lawyers have a hard time venturing into the unknown and untested? She placed the four on a two-by-two matrix: THE CHOICE TO INNOVATE IS YOURS RADICAL INCREMENTAL NEW CUSTOMER SETS CURRENT CUSTOMER SETS