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Innovation has as many definitions as the number of people you ask to define it. Regardless of what you think of as "innovative," the execution needs to permeate the business. Abhijat Saraswat speaks with Allister Spencer on how to make innovation everyone's business.
Interestingly though the in-house counsel have certainly managed to achieve a little more gains in that space during the 2020 pandemic. But we have noticed that the thawing out of law firms, particularly in APAC… ramping back up. We're also seeing markets across EMEA rapidly getting back to normal. And I think that, given the number of months that have passed, just keeping the lights on for the first few months was absolutely critical.
Allister: I always equate a law firm with the profit center and in-house as the cost center. So, they're two very different, strategic alignments as to what makes money and what costs money. And in-house generally run on the smell of an oily rag. Whereas, law firms are very profitable. But, what we found is that given the opportunity they had, they [in-house] cracked on and because they had the structure and governance from the top they were less disrupted.
Ab: That's important and one of my thesis is that the in-house teams, because they are a cost center, naturally work to streamline their processes and systems first, rather than just throw people at the problem as often happens within a law firm. And therefore you do reap the rewards when the resources for everybody else become tighter. It then becomes a more equal playing field.
They’re big-ticket items - they're very expensive processes and implementations. That more firms have to understand that this is a 10-year project, and if you do it incorrectly, it's a 10-year mistake that is very hard to wind back if it's done incorrectly.
Ab: if you look at the law firm as a business, and you're focused on becoming operationally excellent - you're really only trying to achieve only two things:(1) How do you retain the clients you have today (how do you make them stickier); and, (2) how do you get new revenue (how do you attract more clients?) It is literally just those two things. Everything else just feeds into that.
Allister: Yeah, that's right. I'd probably add one more of that and that's the (3) leverage model (actually being more profitable)...So once you've nailed the process and the people within that process, you can leverage down and make it far more profitable? And we work closely with firms, but also with their clients to actually engage in our labs that.
It's slightly controversial and you'll find that the lawyers get quite squirmy when they think of their clients in a lab context with them, showing inefficiencies that they are producing… this is the point to both sides.
What you're trying to do is improve the service delivery of that piece of work to the client, but also hopefully make it more efficient. Hopefully make it more profitable for the firm, but cheaper for the client. So it's a proper win-win
The rhetoric from our perspective is what's above the line and what's below the line. You've got operational costs below the line that you can't control, but you've got leverage model objects out there that are the leavers that you can pull, and you've got to bring senior stakeholders on board and educate them on what leavers they can pull, and what effect that has on their practice group for the entire business.
It's a really important one because you're essentially converting a partner into a business owner… getting them across the line is a difficult one because they don't really want to understand the operations of the business. They just want to do legal work because that's what they've done for 20 years. So bringing them on that journey and engaging with them on ‘yes, you can make 30% profit by doing what you're currently doing, but do you want to make 40%, here's the way you can do it’. So it's a carrot rather than a stick.
Legal meth-lab was spawned from was our ability to have a toolkit to interpret and solicit information from a business in a very empathetic way that engages all manner of the firm. It's surprising what you find, in a particular practice group, a secretary over there that just knows exactly what's going on, but previously wouldn't have been consulted, that can improve the workload for that practice group exponentially, based on correct solicitation methodologies.
We want these methodologies to be systemic within the law firm. They're not held in an ivory tower of wizards in innovation hubs and not pushed outside of the business because it's too scary and lawyers won't get it. The lawyers do get it and lawyers, embrace it. if it's dealt with properly. And with a large dose of empathy around inclusionary problem solving and lateral problem solving, they embrace it with open arms.
The Fringe Legal Podcast is a collection of conversations with legal innovators on how to put ideas into practice. Each episode is a discussion with a change-maker who shares their ideas, insights, and lessons from their journey.