Over the last 12 months, we have seen a dramatic escalation in the noise made by many across the legal industry to innovate and be seen as innovative. In fact, you could say that innovation is trending.
The recently published report from the Solicitor’s Regulatory Authority (SRA) states that practices are indeed becoming more innovative. However, this thirst for even greater levels of practice innovation (and let’s be quite clear, the primary driver behind this demand is so that practices can get ahead of their competition) could ultimately contribute to their downfall. So why is this and what solution might there be? Well, to me there are clearly a number of factors in play.
First, innovation should focus primarily on the client. Practices are in the people business, and it is the clients that pay the bills. Yet, in reality, so much is made of innovative solutions that do not improve a practice’s relationship with its clients. In their quest to differentiate themselves from their competitors, some practices have started to use any recently made innovation they can point a finger at (along with the innovations they plan to make) as a useful enticement for customers to buy their services.
In my view, innovation should be practice wide. My biggest problem with innovation is that we are constantly and inexorably searching for more. However, all this leaves us with is a series of expensive solutions that have not been utilized across the entire organization. Rather, they are often only really used within specific silos or territories within the practice. This isn’t really a criticism of law firms though, as by the very nature of our hierarchical structure, it is easy to see why something, which is used well in Mergers & Acquisitions, never makes its way to the Clinical Negligence team on a different floor, in a different office, or even in a different country.
This is primarily because innovation is perceived as expensive, and for this reason there is often a reluctance to roll it out across the entire organization (or at least as many departments as one can). However, the real benefits of many technology solutions are attained where they are used as an enterprise wide solution. However, this rollout approach is just not happening nearly fast enough in the practice sector. To ensure technology is used effectively across the enterprise, practices need to invoke effective collaboration between teams or offices. The problem is that if collaboration hasn’t already happened in other areas of practice management, you can see the difficulties of expecting it to happen at all with something new – such as an innovative piece of technology.
It’s not as if innovation needs to be high tech or ground-breaking. Often, too much practice time is spent searching for and assessing the latest technological breakthroughs. I don’t deny that if we suddenly find a way to utilize Oculus Rift to enhance electronic document bundling, then we are going to do it. However, the reality is that using newer technology in an innovative enterprise wide way and spreading the benefits broader and deeper, is a far more effective way of being truly innovative. So innovation doesn’t have to be a trailblazing high tech monster. It can be a delicate and simple process that benefits everyone in the practice and indeed beyond this, with the benefits extending to the clients themselves.
It is the collaboration factor that is the golden ticket to the successful deployment of innovation. However, to ensure this within practices, there needs to be some force for collaboration. This does seem to be happening in the public sector, where local authorities are driving innovation more widely. We have already seen examples where bundling software used by a local authority legal services department is being taken up by the local coroner’s office. However, in the practice world, there is an all too present risk and danger that effective innovation can be easily stymied by a silo mentality between departments and offices. But why buy a high performance bicycle just to peddle it around the yard and not even let your neighbour try it out?
Well, as ever, I guess the wake up call will come from the competition. There are already numerous accounting practices, which have already been forced down the enterprise technology route through ERP (Enterprise Resource Planning) systems. These guys would love to add on the comparatively higher earnings available in the legal sector. They are no doubt using or planning to use innovation across their enterprise to gain real commercial advantage for both themselves and their clients. Ultimately, it might well be the perception of this competitive threat that will sound a clarion wake up call to practices. Worryingly, that call might be “collaborate or die!”