Peer to Peer Magazine

45 WWW.ILTANET.ORG A Structure That Promotes Innovation FEATURES JOHN ALBER John Alber is retired and currently living aboard the 50-foot trawler Barefoot Lady in southern and southeastern U.S. waters. He chronicles his adventures in the blog A Life Afloat. John also serves in a volunteer capacity as a futurist for the International Legal Technology Association. For the 16 years prior, he served as Bryan Cave's strategic innovation partner. The groups under his leadership developed innovative web-based, client-centric applications and client-facing knowledge management, project management, project estimation and business intelligence systems. Contact John at john@johnalber.com. This is where you come in. When the firm declares innovation as a goal and looks around for who can lead and how to proceed, you will likely be in the crosshairs. How do you innovate when the boss comes calling? Structure is the key. Firms recognized as innovators are multiplying special groups like rabbits in spring. Bryan Cave has received awards for structuring innovation groups focused on client-facing technology, practice economics and legal process insourcing. Efforts like Dentons's Nextlaw Labs and Seyfarth's SeyfarthLean Consulting have received widespread recognition as well. How do you develop a structure that promotes innovation? What groups do you have to build? What reporting lines do you need to establish? Here are the foundation stones you have to lay. Innovation Is About Survival It is worthwhile to begin by asking why we care about innovation. Today's highly dynamic global marketplace grinds through businesses faster now than in the history of business. Some suggest the life span of a company entering the Fortune 500 is now only about 15 years, and smaller businesses die sooner. Smaller businesses like law firms? You would think so. In big law, the principle of stare decisis applies far beyond legal precedent and well into business practice. Lawyers, we oen say, are resistant to change, and perhaps even inimical to it. Status quo forever! As Fortune 500 life spans move from 67 years to as lile as 15, why have we not seen a big law extinction- level event? Perhaps it is the insulating effect of the billable hour. That business model excuses a lot of obliviousness — and obscures mortality. Notwithstanding the billable hour hiatus big law has enjoyed, all businesses begin to die the day they are founded, even law firms. The highest mortality rates arise in those businesses that resolutely stick to their business plans no maer the circumstances –– like big law. Esteemed management theorist Peter Drucker explains this idea in his book "Management Challenges for the 21st Century": "[I]n a period of upheaval, such as the one we are living in, change is the norm. To be sure, it is painful and risky, and above all, it requires a great deal of very hard work. But…[i]n a period of rapid structural change, the only organizations that survive are the 'change leaders.'" Drucker says the lesson for businesses in all sectors is change or die. Adaptation assures survival. We innovate not because clients demand it, not because it is in the strategic plan, but because we need to adapt to changing market conditions that, if ignored, can and will kill us. Seven Sources of Innovation In a seminal article on innovation in the Harvard Business Review, Drucker posits there are seven sources of innovation for organizations: Process needs stand out as a particular concern for the legal sector since law practice is rife with inefficiency. Here again, stare decisis operates to ensure that how we have always done something is how we shall continue to do it. Unless someone identifies process improvement as an opportunity. Legal process outsourcers (LPOs) were the first to exploit the rampant inefficiency and high cost structures inherent in electronic document discovery, and they transformed the economics of e-discovery. Now, firms like Seyfarth that are building brands based on process streamlining have become bellwethers, leading both clients and other firms toward the adoption of Lean process disciplines. Process improvement was a plum waiting to be harvested, but how did the LPOs and others recognize Internal External Unexpected occurrences Demographic changes Incongruities Changes in perception Process needs New knowledge Industry and market changes

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