What Is Innovation?
Innovation and technology are not the same thing, although technology is often used to implement innovations.
Innovation is about new products, new processes, different methods of great service or improvements in efficiency that create a competitive advantage. There are different types of innovation including radical, disruptive, architectural and incremental. Incremental is the most common.
How Can Law Firms Pursue a Path of Innovation?
A simple approach to innovation is asking clients. During the pandemic, the way clients sought lawyers and delivery of services changed—ask current clients what changes they thought were positive. For example, you may learn that clients prefer videoconferencing, which can be more efficient, less time-consuming and easily recorded. Or, you may find clients appreciated ease of electronic signing. In addition to asking clients about positive changes, ask what was frustrating. Did clients have more difficulty reaching their lawyer? Was any form of electronic delivery of service frustrating rather than simple and efficient?
Ask everyone who works at your law firm. Your firm may have worked part in the office and part out of the office. What processes posed challenges in completing quality work efficiently? Were there customer services issues that arose from remote work? How can processes be improved? How can customer service be improved?
Consider the challenges you experienced during the pandemic. Was it difficult to coordinate transactions with financial institutions? What were the causes of the challenges? How can processes be changed to avoid those challenges in the future?
Pay close attention to legal innovations by the various states. Utah and Arizona have adopted programs to explore nonlawyer ownership of legal services. Can your firm benefit from innovative approaches to practicing law and delivering legal services? Daniel Siegel covers the ethical landscape in detail in a separate article in this issue.
Innovation in Law Firm Models
The virtual multistate law firm. Smaller law firms in various states are creating multistate law firms. Some are focused in a specific practice area. Some have different practice areas in different geographic areas. Typically, the goal is to bring together excellent lawyers practicing in small firms with an eye toward attracting ideal clients. Each small firm remains its own firm but participates in the multistate firm.
The virtual web-based solo law firm. Some think of a virtual law firm as one where the attorney works from home. I refer to virtual in the context of a law firm that provides some services online. Many family law firms that may or may not have an office now allow clients to communicate with attorneys online and to access services online. For example, a client may be able to fill out the information for a divorce filing online and then engage in discussions regarding such documents with an attorney virtually.
High-level service model. Some clients will look for the least expensive way to get something done, while others will pay well to have all details attended to with a high level of service. To address these differences, some law firms are hiring client experience coordinators and client intake coordinators.
Providing a high level of service requires going above and beyond typical good service. Add text reminders of appointments with directions to the office or links to videoconferencing. Designate a contact for each client whose job is to stay in constant communication with the client about any pending projects. Establish portals to facilitate communication. Adopt high-quality, easy-to-use technology. Limit clients to the number that you can effectively serve with the highest possible level of service. If emails are not responded to, this model fails.
Commodity model. Some practice areas involve constant production of similar documents and use of repeatable and predictable processes. Such practice areas lend themselves to a commodity firm where certain services are essentially mass produced. Law firms using this model successfully will be those that effectively automate processes and documents. Limiting attorney time is important, so virtual services will often be a component. The firm that is automated will have the opportunity to use alternative fees in a profitable manner.
Law firm with ancillary services. Traditional examples of law firms providing ancillary services include those that provide real estate consulting, legislative lobbying, tax return preparation and accounting. Some law firms are experimenting with different types of ancillary services. Some estate planning firms are adding care managers to bridge the gap between legal services and senior health care. Other firms have offered services assisting with ownership transition restructuring. There are many opportunities to add services or affiliate with providers who offer services that will assist law firm clients. (Ethical issues must always be considered but are beyond the scope of this article.)
To the extent you have not fully adopted legal technology, get that done. Offer electronic signatures. Be paperless. Use document and process automation. Use customer relationship management software. Train everyone in the office to become experts at using technology. Monitor technology developments. Keep an eye on the evolution of artificial intelligence and incorporate it into your practice. Become an expert at using data in a way to keep your law firm at the forefront of innovation and technology.
Rethink Law Firm Models
Law firms have long been structured so that all associates will move toward and become partners—the partnership model. Other models exist, along with debates about whether traditional ownership models continue to serve clients.
The real issue is likely related to the type of law firm that will thrive in the digital age. It may be that the particular ownership structure won’t matter if the law firms innovate in a way that results in client-centric, technology-driven, collaborative law firms that deliver in a manner that represents that which will thrive in the digital age.