Innovation must be nine-tenths of the law

The Brief
In the face of stagnation within their industry, enterprising lawyers are making the case for innovation by looking for ideas outside their sector and working collaboratively within firms.

??“You can’t make people change. You can’t really make people do anything, short of using a weapon, a court order, or post-hypnotic suggestion.” In a recent blog post entitled “Why lawyers don’t innovate,” Canadian lawyer and analyst Jordan Furlong offered a litany of obstacles that stand in the way of innovation in the legal industry. At heart, though, the problem is a lack of wanting to change, brought on by extreme pressure to produce billable hours, resistance to work with future competitors within and outside one’s firm and a learned-but-“near-pathological” aversion to risk, which prevents trust.?

Furlong, of course, is not the first one to express frustration at such intransigence. The status-quo bias may be nowhere more strongly evident than in legal practices. But law firm managers increasingly feel pressure to innovate, both to exploit opportunities (ignored markets for legal services) and address problems (an economy that leads young stars to choose business and finance rather than law). 

So how can smart firms change from within? 
Ironically, one way is to look for solutions outside the legal sector. Exhibit A: medicine. In a recent post for TechCrunch, VC attorney Sarah Reed made an impassioned plea for innovation while outlining how lawyers could tap into a huge market of lower-income, underserved clients by setting up attorney-supervised clinics that provide “high-volume, low-margin” services (think: real-estate closings and small business loans) by the legal equivalent of licensed nurse-practitioners. It’s a strategy recently leveraged with success in the UK (and litigation has started in New York to overhaul state bar rules forbidding non-lawyers from having an ownership stake in firms.)

Collaboration, even in the face of stiff interoffice competition, is another way to achieve innovation. Consider the case of Greenberg Traurig, LLP: A couple years ago, the firm, like many, struggled with hiring young associates right out of law school. Traditionally, inexperienced first-year associates sat on client accounts, billing at exorbitant rates, while contributing next to nothing. Hit by the economic downswing, clients began to balk at the practice. “Some clients even wrote into their contract that they would not have a first-year on their account,” says Jennifer Bluestein, GT’s director of attorney professional development.

A few firms addressed the problem by paying associates to not work in the practice, giving them a year to do pro bono work to rack up experience. Others stopped hiring recent graduates altogether. But GT, which prized collaboration among colleagues and therefore was able to extract itself from the quagmire of rabid competition and mistrust in which many other firms were stuck, believed in the long-term value of a continuously refreshed, not to mention trained, associates pool. Looking across industries, Bluestein and a team at GT worked together for two years to devise a new hiring program modeled off the medical field, which they then presented to 100 firm leaders and department managers to get feedback and buy-in.

The plan that emerged: Rather than hire inexperienced associates at sky-high salaries, GT hires “residents” at a more reasonable cost, and caps their billable hours at 1,900 for the year, a third of which must be devoted to no-cost-to-the-client training. After a year, the residents become associates, assume a non-shareholder position in the firm—or are let go.

Although the program is optional, at least a third of GT’s 29 firm locations have adopted the residencies. But the significant achievement was summoning the will to change in the face of long-established habits and traditions. And providing value to all parties—clients and recent grads, along with current partners and associates—Bluestein and her team created a wellspring of buy-in.

The takeaway: Effective change is often produced through adaptive borrowing from other fields—and rarely produced without a process of collaboration and consensus.

Deanna Cioppa is a freelance writer who has written for AARP, ESPN The Magazine and Fodor’s, and is a frequent contributor to this blog.

RelSci is a technology platform that helps create competitive advantage for legal, nonprofit, corporate and financial organizations through a crucial yet vastly underutilized asset: relationship capital with influential decision makers.

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