publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/550988
ILTA WHITE PAPER: JULY 2015 WWW.ILTANET.ORG 30 Siloed Workspaces: The workspace setup of most law firms also inhibits innovation. Practice groups usually are clustered together, fostering silos. People have little opportunity to interact with others from disparate areas to cross-pollinate ideas. Innovative companies design their physical space to increase opportunities for unexpected and interesting conversations. When people with different backgrounds, interests and knowledge discuss their daily challenges and stumble upon something new, innovation happens. When one group tries another group's way of thinking or doing something, innovation occurs. Operational departments are getting better at this already, but most attorneys still stick to the lawyer/non-lawyer divide. That barrier needs to be broken to generate creative solutions to clients' problems. The Wrong Incentives: The primary incentive in most law firms remains the billable hour. Every timekeeper has a billable hour target, pushing non- billable work to the back burner, absent pressure from above. Most compensation and bonus structures are tied to billable hours. Companies that value innovation reward people for taking chances and trying new things. In a technology company like 3M, scientists are rewarded for filing invention disclosure statements. A portion of their time is devoted to work on projects they choose, allowing them to follow hunches and explore ideas. Once per quarter, the software company Atlassian lets employees work on anything related to Atlassian's business for 24 hours as part of their ShipIt program. These kinds of programs give people permission to experiment and fail without fear. As long as law firms maintain strict billable hour targets, innovation will suffer. WHAT ARE INNOVATIVE FIRMS DOING? Despite the obstacles, some firms have found ways to innovate. Employment and labor law firm Littler Mendelson has developed several innovative client-facing products in recent years. For example, the Littler CaseSmart case management solution combines a Littler-developed proprietary technology platform with rigorous quality assurance measures that control how the firm structures and deploys client service teams to achieve optimal results cost effectively. The sophisticated technology platform enhances efficiency and gives clients a real-time view of key data and critical metrics. Fish & Richardson, an intellectual property firm, launched FISHstep to enable startup companies to protect their intellectual property early in their formation — often before the first round of seed funding — without diverting cash from the core business. Interested startups complete an online application that is reviewed by a panel of startup experts, including angel investors, founders, business leaders and intellectual property attorneys. Companies selected for the program engage Fish to prepare and file a patent application with billing deferred until the company is funded, in exchange for one percent of the startup company's equity. Allen & Overy, as noted in an April 2015 article in The Lawyer, has launched an experimental group that will focus on developing technology- related opportunities in new areas, such as artificial intelligence. They intend to respond to rapid technological changes within the legal market. Dentons has launched NextLaw Labs, a wholly owned subsidiary focused on developing technologies to allow attorneys to deliver services to their clients better, cheaper and faster. According to a May 2015 article in The American Lawyer, NextLaw will not only develop internally and sell to its own clients, it will also co-develop products with outside companies and eventually sell some services to other law firms. Alternative law firm models, such as Cognition LLP, are challenging the status quo. Founded on the principle that most startups and small companies cannot afford typical law firm rates, Cognition charges lower rates by keeping its overhead very low and using cloud-based technology liberally, as explained by co-founder Joe Milstone in the February 2015 Lexpert magazine. In the United Kingdom and Australia, alternative business structures formed with venture capital funding and technology partners are changing the entire business model for providing legal services. For example, Riverview Law offers clients budget certainty through fixed-price, long-term service contracts. They target the 60-70 percent of legal THE CHOICE TO INNOVATE IS YOURS