The Law Innovators’ Dilemma

by Deb Baker /

When the financial crisis triggered the legal market’s first major disruption in 70 years, many were convinced it would be the wake-up call that forced lawyers to rethink an antiquated approach to serving clients. In the decade since, some amazing progress has been made across all aspects of the legal market—from Big Law to small law, from legal tech to legal services, from in-house legal operations to outsourced legal staffing.

But despite pockets of positive change, legal innovation remains a struggle. According to a recent Altman Weil study, only five percent of managing partners have a high degree of confidence in their firm’s ability to adapt to change. The number-one reason, cited by 68.6 percent of leaders, is that partners resist efforts to change. In all, the report showed that only about a third of firms are truly committed to pursuing new ideas despite a rapidly changing market with innovations widely available to firms of all sizes.

A key finding of the report is that there is a false sense of security and misdirection of focus in many law firms as they continue to focus on the short term and defer addressing the big problem.

The statistics are alarming but not surprising. Ask anyone who works in or around lawyers and they will tell you innovation is a struggle. A subset of lawyers sees the potential for transforming the profession, but too many see it as a passing fad or, worse yet, as fake news.

So, what is the difference between lawyers and legal organizations that are able to adapt to change and those who get stuck in the status quo? Can we predict the law innovation formula, or is the definition of law innovation too subjective to serve as a goal?

That’s the question a forthcoming study has set out to answer.

Studying the “how” of innovation
The Law Innovation Study has engaged more than 50 innovation-minded lawyers and legal professionals from law firms, in-house legal departments and legal services/technology providers around the country to study how their natural growth competencies compare to the legal profession as a whole. The results of the study are expected to be released in September, but the motivation that underpins it has already taught us a great deal.

Unlike much of the work in the innovation field, this study does not focus on what law firms should do to innovate. Rather, it is looking underneath the surface at how firms can successfully define, approach and engage its people in an innovation strategy that will work for the unique needs of their own organizations. Specifically, the study seeks to do three things:

  1. Provide an innovation framework to engage legal organizations in innovation conversations.
  2. Identify the cultural mindset necessary to approach distinct types of innovation initiatives.
  3. Define the natural strengths required to drive change initiatives and enable a way to build more collaborative teams.

What do we mean by “innovation”?
For the innovation study, the primary theme coming out of conversations with the study participants is that innovation can be a loaded term because of the lack of clarity around what law innovation looks like.

One general counsel noted, “Five years ago, innovation meant implementing technology to make us more efficient; today technology optimization is a requirement of our business. Yet we haven’t done a good job of defining what’s next and why.”

The Law Innovation Study defines innovation as finding new approaches to solving problems that should be solved. For innovation to be meaningful, the problem must be something that has been defined by a client—internal or external—so voice of the client is an imperative. This study also recognizes that innovation is not a one-size-fits-all undertaking. Instead, it approaches innovation as a continuum:

The Law Innovation Study articulates four ways of approaching innovation:

  • Sustaining: Innovation focused on institutionalizing the pockets of best practices that exist inside every organization for the purpose of strengthening the client experience incrementally.
  • Optimizing: Innovation focused on using technology and process improvement to improve the efficiency and effectiveness of the organization.
  • Activating/Creating: Innovation focused around capturing knowledge, either through collecting the insights of its attorneys or leveraging technology to mine internal data to uncover insights that can be used to create new markets or services.
  • Disrupting: Innovation focused on creating new business models that change the way lawyers do business.

By recognizing that there are multiple paths to successful innovation, we can open the doors to have more conversations about what type of innovation approaches will work best for them.

The distinctions are important because each type of innovation requires a different approach, so the competencies around leadership mindset look different. For example, a participant may be a best fit as an innovation sustainer and yet not be naturally wired to be a creator.

GrowthPlay’s history of helping firms innovate

GrowthPlay’s interest in legal transformation and growth effectiveness runs deep. Founders of two of its acquired entities, Akina and Law Leaders Lab, have been working with lawyers for nearly two decades to help improve the client experience, master business development, and build actionable growth strategies to create more predictability and sustainability in their businesses.

Out of this work GrowthPlay identified six hallmarks of high-performing organizations and has developed proven methodologies to accelerate growth in each area. Innovation, the sixth pillar, is the most challenging for clients. For most, their approaches have been far more art than science.

The Law Innovation Study is designed to change that by applying talent analytics to the unique dynamics of the legal business model and the market factors of innovation economics to make an evidentiary case about how to successfully drive innovation inside law.

At the center of the study is GrowthPlay’s Talent Effectiveness Survey (formerly known as the Chally Assessment). With roots working with the U.S. Department of Justice, the assessment has been used over the last 45 years to predict the success of over 750,000 managers, leaders, sales people and business professionals using 140 statistically validated competencies.

More recently GrowthPlay started applying the assessment to the unique environment of law firms, where roles affiliated with service delivery, account management, sales, R&D, and strategic leadership are often interchangeable and far more interdependent as compared to the B2B world.

Recognizing that lawyers, particularly those in matrix vs. hierarchical business environments sell differently than sales people in corporate environments, the company identified five sales profiles for professional services—a new business developer, a client relationship developer, a cross-seller, a new service developer, and a subject matter expert/brand builder. GrowthPlay calls them “doer-seller” role profiles to recognize the competing demands on lawyers’ time.

Since 2016, more than 400 lawyers have been assessed. A key, albeit not surprising, finding of the early research is that lawyers indeed are wired differently than the typical sales person. And yet they have many talents that lend themselves to revenue generation.

For example:

  • Over 98 percent of lawyers assessed to date match at least one of the five “doer-seller” role profiles, meaning that the vast majority of lawyers have the natural capacity to be successful sellers.
  • Not surprisingly, the vast majority of lawyers, 88 percent, are a match with the Client Relationship Developer profile. What is interesting is that the data suggests lawyers are more naturally wired to this role as only 30 percent of the broader database is predicted to be successful in this role.
  • Another interesting finding is that 77 percent of lawyers match the New Service Developer profile, which indicates natural strengths toward anticipating change and being able to spot how it will impact clients.

On the other side of the spectrum, two essential sales-related competencies—Opportunistic (the ability to be spontaneous and flexible) and Effective Networking (comfortable meeting new people and stimulating conversation)—are rare. Although it is worth noting that networking is a highly coachable skill even to those who aren’t naturally wired to do it.

Change management: How to sell innovation internally
In addition to matching competencies to types of innovation, the study also focuses in on change management roles. Building on the work it has done with the “doer-seller” role profiles, GrowthPlay is looking at distinct profiles to help predict success when it comes to selling transformation internally.

These roles include:

  • Growth Generators: Innovators who use energy and excitement to engage people to buy and buy in.
  • Trust Builders: Innovators who seek to understand rather than persuade individuals to participate in change initiatives through trust and confidence building.
  • Dot Connectors: Innovators naturally wired to build alliances across teams, organizations, and communities to create win-win outcomes.
  • Growth Educators: Innovators who draw on their subject matter expertise to provide insight and wisdom about what success looks like and traps to avoid.
  • Change Anticipators: Innovators who see trends and changing market conditions coming and help create services, initiatives and programs to adapt and respond to those changes.

A difficult reality for many lawyers is that being the smartest person in the room is no longer a guarantee of success. Quality and technical expertise are table stakes for clients. Innovation offers the opportunity to add more value to the clients they serve, to attract and retain the best talent, and to  build more sustainable businesses. An added bonus: it might make the practice of law more interesting and, if done right, even more fun. The Law Innovation Study will provide crucial information when its findings are released in September and, armed with this data, firms can take a meaningful step forward.