The annual FT Innovative Lawyers awards perfectly highlight how innovation means different things to different lawyers. Most of the awards recognise those who come up with innovative tax structures etc, while a few focus on innovative ways for law firms and others to operate. There remains, I think, more professional kudos in the former than the latter.
At Legal Futures we obviously focus on the latter, and indeed produced a special report on innovation at big firms last year (and on the same link you will find the one we published this week on innovation in SME firms).
It would be wrong to say that big firms cannot innovate in the business of law, because the likes of Allen & Overy and Berwin Leighton Paisner clearly have, but the interesting post linked to below from the Adam Smith Esq blog in the US succinctly outlines the difficulties of doing so.
A&O is interesting. A recent report from the US identified the firm as leading the way in attempting to guess the direction of travel in legal services. By turning itself into a hybrid – consisting of the A&O law firm, its Peerpoint contract lawyer service, A&O Consulting, A&O Derivative Services (recently relaunched as aosphere), and the Belfast-based document review business, A&O Legal Services Centre – it said the firm had adopted a strategy reflecting its belief that a multi-disciplinary approach to legal issues would meet future client demands.
A&O’s process of “carefully looking at the way its market was changing and placing strategic bets on the changes it needed to make to remain competitive and successful for the long run” was something every firm should emulate, it said.
So clearly big law firms can innovate. Whether they will, however, is another thing altogether.
Gross starts from the premise that the key functional barrier to large firms’ remaining innovative is the difficulty, nay near-impossibility, of balancing short term performance goals (client satisfaction, employee morale, revenue, profitability) with the long term perspective requiring sacrifice today for the sake of tomorrow. Evidence of how difficult this is is simply how rare it is: Gross cites Steve Jobs and Larry Page, who are iconic exceptions to every rule of conventional organizational management if ever there were. Jobs famously disembowelled the $5-billion/year iPod business by building the entire MP3 player into every iPhone