How to Build a Culture of Innovation at a Law Firm...Seriously


Steve Glaveski

Over the past few years, we’ve seen the proliferation of legal hackathons and accelerator programs, as law firms scramble to at least show that they’ve got some kind of innovation agenda, and they’re trying to keep up with the pace of change outside their walls.

Heck, we’ve overseen such programs ourselves, namely with the Mills Oakley Accelerator, and the Allens Auctus programs. And while such programs, if run correctly, can add a lot of value in terms of commercial outcomes, driving attitude shifts, and attracting high caliber talent to a firm, such programs do little to create a systemic culture of innovation at a law firm.

Culture and behaviour is ultimately a reflection of processes, systems, resources, values, and incentives in place at a firm, and until these pillars of culture are addressed, then most bold proclamations by legal services leaders that they are “building a culture of innovation” will amount to little more than lip service, and could do more harm than good.

So, how do you go about building a truly innovative culture at a law firm?

According to the late and iconic HBS professor and author of The Innovator’s Dilemma, Clayton Christensen, some of the key characteristics that contribute to the make-up of an innovator include:

  • challenging the status quo
  • taking calculated risks (manage risk by doing)
  • asking questions
  • taking many small bets quickly
  • seeing failure as a necessary way to learn
  • seeing threats as opportunities

Contrast this with the attributes that have made lawyers successful:

  • avoiding risk (manage risk by analysis)
  • “failure is not an option”
  • compliance with policy and procedure
  • taking few large bets slowly
  • looking backwards towards precedent, instead of anticipating a different future

Try as they might, law firms tend to fail at their innovation efforts because it takes more to drive culture change than simply throwing money at token innovation events.

Innovation must be holistic, ongoing and more than an isolated one off event.

It requires the union of processes, systems, and values, to drive behaviours.

Key processes: How assets are created

Patterns of interaction, coordination, communication, and decision-making through which resources are transformed into products and services of greater worth.

Some common processes and metrics that inhibit innovation:

  • Hourly billing
  • Gross Margin
  • Opportunity Size
  • Time to breakeven
  • End-product quality
  • Owned versus outsourced
  • Channels
  • Pricing
  • Performance Demands
  • Brand Parameters

Key values: Culture and how decisions are made

Just some of the ways that values can be a thorn in the side of disruptive innovation:

  • Short-term, incentive based mindsets
  • Risk mitigation by analysis as opposed to managing risk by doing
  • “The way things have always been done around here”
  • Threats are seen as something to defend against as opposed to opportunities to explore
  • Efficiency and predictability take precedent

Key resources: Assets, tangible and intangible, that contribute to what an organisation can accomplish.

Resources include:

  • People
  • Equipment
  • Technology
  • Product designs
  • Brands
  • Information
  • Cash
  • Relationships with suppliers, distributors, and customers.

It is imperative that the processes, values and resources of any innovation initiative are perfectly aligned to support innovation. Otherwise, they are doomed to fail despite best intentions.

Finally, if our values only support projects that generate X$ in revenue within the first 12 months based on existing product lines and markets, chances are if we do select a potentially disruptive innovation for exploration, we are likely to pull the plug because it doesn’t generate an increase in 5% of revenues within the first 12 months.

It may seem like a Herculean task to redesign a law firm and its culture to support innovation, and it may also seem like suicide given that the majority of revenues rely on existing processes, values and resources - which is why they were put in place in the first place. 

However, there’s a number of things that law firms can do to help align processes, resources and values without turning the mothership on its head, because after all, while we must not lose sight of where the puck is today, unless we have leg skating to where the puck will be tomorrow we will find ourselves trapped under ice.

about the author

Steve Glaveski is a Harvard Business Review contributor on all things high-performance at work. He is the author of Employee to Entrepreneur (Wiley, 2019), and co-founder of Collective Campus, the boutique consultancy behind FutureLaw Academy that has generated millions of dollars selling discretionary services to many of the biggest organizations in the world - without the benefit of an established brand,pre-existing relationships, a corporate card, or a large team. Steve previously consulted to the likes of King & Wood Mallesons, Mills Oakley, and Cornwalls, and worked in consulting for EY and KPMG.