Innovation has become increasingly important in the legal market as firms face competitive pressures and changing client demands. Law firms that have embraced innovation through new service models, technology, and business functions have seen significant transformation over the past decade. While innovation often occurs during difficult economic times, many firms are now dedicating resources like innovation hubs and managers to foster creativity and new ideas. This focus on innovation signals to clients that firms are willing to change and improves firms' ability to win new business through more competitive proposals.

1. September 2016 Legal Business 57
We are living in the pregnant pause of a post-
Brexit UK. The recurrent question is: ‘What
next?’ And it is a feeling that does not mix well
with an urge to strike out and do something
new. The fear in this market is that the pause
turns into stagnation.
The fact is, though, that innovation in
the legal market did not come out of a boom
period. When so much work is rolling in that
you cannot help but double your profits year
on year, you do not start rewriting the rules.
It is when the hard times hit that creativity
becomes critical.
Take the Financial Times (FT)’s Innovative
Lawyers Reports, launched ten years ago in
2006, and it is clear that this has been a truly
transformative decade for law. Whether it has
been the launch of entirely new law firms based
on a different kind of legal service delivery
model, low-cost service/delivery centres, new
technology-enabled offerings, contract lawyer
businesses, consulting subsidiary services,
or rapid internationalisation, law firms have
changed massively.
And they have done so because
competition and consistent financial pressures
have forced them to think differently. As the
FT said in October 2015: ‘Innovation is now
a value to which law firms and in-house
lawyers aspire.’
CULTURAL SHIFT
We have seen this too in the monumental
growth of business services functions in law
firms in recent years. Firms have realised
that gaining an edge in a difficult market
means investing in new skills and fresh
ideas that enable them to adapt quickly to
changing markets.
And this has caused a fundamental shift
in thinking that puts innovation first. In our
Market Perception Survey 2016, for example,
we asked firms to nominate one firm (other
than their own) that they most admire, giving
one chief reason why. Respondents cited
brand presence as the top explanation for
nominations. But innovation came in second,
even beating client service and quality of
client base.
Firms were nominated for breaking the
mould, being creative, thinking differently
and being entrepreneurial. Several of the firms
nominated were relatively new businesses
too – Riverview Law, Axiom, Keystone Law,
PwC Legal and Radiant Law. These were cited
as being the opposite of the stuffy law firm,
making a virtue out of their willingness to
challenge the norm and change perception.
INDICATORS FOR THE FUTURE
So what now for the legal industry? Well, going
backwards will not be an option. We have just
recruited an Innovation Hub manager who
will head up what is a new function within the
knowledge management team of a global law
firm. The aim of the Innovation Hub is to bring
together new ideas from across the firm and
help develop them, from internal, efficiency-
focused improvements to new product/service
lines. The Innovation Hub manager will act as
facilitator and conduit, helping to write business
cases and building relationships with the right
people across the firm to turn ideas into action.
Nor is this firm alone. It joins a growing list
of firms with resources dedicated to facilitating
firm-wide innovation. We have spoken to one
or two firms that feel that a named innovation
unit, hub or network feels too forced. And, for
sure, there is a balance to be struck. Creativity
and imagination are fragile forces, easily stifled
by heavy-handed process.
But roles dedicated to innovation send
a strong message: this firm is open to new
ideas, will explore possibilities and is willing
to change. It gives busy lawyers and others
an avenue for ideas that would otherwise
disappear into the maelstrom of daily business
and, not only that, but lawyers know their ideas
will be followed up and developed. What better
incentive to let the creative juices flow?
It is a message to the outside world too.
Clients know that this is a firm willing to pay
more than lip service to the innovation in legal
services that they want to see. There are lots of
firms that like to say that they think differently.
This is about proving that such values translate
into something tangible.
THE IMPACT ON LAW
And does this all have an impact, beyond
perception (important though that may be)?
In our view, absolutely, but not always in the
way that makes headlines. The change is often
incremental, but it is no less transformational for
that. Take our most recent research – into how
law firms approach request for proposals (RFPs).
According to our poll of UK firms, 36% of
UK respondent firms are now winning 51-70%
of their new client proposals, while nearly a
quarter (23%) are enjoying a win rate as high
as 71-90%. Some of this is down to the huge
amount of time firms are dedicating to their
pitches – as much as 20 hours a month in 19% of
respondent firms.
But it is also the breadth of resources UK
firms are using, from RFP databases and
design templates, to dedicated RFP teams
and pricing specialists. These are new ideas,
from new people using new tools. And it is all
making a real difference to the way firms are
bringing in work.
Innovation suggests sudden radical
improvement. But it is something else too –
when innovation becomes a cultural imperative,
it inspires many steps that result in profound
change. We see both forms of innovation in law
firms today.
It is this spirit that will drive the UK’s legal
profession forwards through the challenges and
opportunities ahead.
Innovation and the future of the legal market
Totum’s Deborah Gray on the increasing value of creativity in law firms
For more information, please contact:
Deborah Gray, director
Totum
6th Floor, Augustine House
6A Austin Friars
London EC2N 2HA
T: 020 7332 6331
E: deborah.gray@totumpartners.com
www.totumpartners.com
INNOVATIONIN ASSOCIATION WITH
Sponsored briefing
‘Lots of firms say they
think differently. This
is about proving such
values translate into
something tangible.’
Deborah Gray, Totum