Idea hubs: how do you make innovation sexy?
When it comes to true legal innovation, law firms must think of the ultimate benefit to the client first, writes The Legal 500’s Asia Pacific editor, John van der Luit-Drummond.
Can legal innovate?
John van der Luit Drummond
The Legal 500's
Asia Pacific Editor
'Innovation requires an experimental mindset.
Some of the things we learned from that
inform what we’re doing next,’
– Denise Morrison, former CEO of Campbell Soup Company.
Historically, the words ‘innovation’ and ‘lawyer’ have not sat well together. Ask a cross section of legal service users to describe a typical lawyer or law firm, they’d just as likely conjure up the image of a Dickensian solicitor toiling away by candlelight as they are some brash, quick-witted Hollywood type from Suits whose only claim to innovation would be in how often they can implausibly avoid disbarment. Sure, these are unfair stereotypes, but there must be a reason why they persist.
If their marketing efforts are anything to go by, many major law firms want to shake the idea that lawyers can’t innovate. Indeed, during The Legal 500’s Asia Pacific research process, many partners were keen to stress how their provision of legal services is ‘cutting edge’, ‘disruptive’, or ‘novel’. These claims don’t always stand up to scrutiny, or at least it is hard to really describe the innovations spoken of in the glowing terms seen in submissions and press releases. So, just how do you make supposed legal service innovations – for want of a better word – sexy?
Designed to do exactly what they say on the tin, ‘innovation hubs’ have been all the rage in Europe and the United States for a number of years, and firms seem to have great faith in their ability to solve the most vexing of client problems, either now or in the future. In fact, some firms are so confident in their ability to act as genuine game changers that hubs are starting to spring up across the Asia Pacific region.
In March, Allens and UNSW Sydney officially launched the Allens Hub for Technology, Law & Innovation. Led by UNSW academics, the hub aims to ‘investigate wide-ranging issues, from data as a source of market power, to the concept of legal responsibility for artificial intelligence, to the legal status of synthetic life forms, to legal models governing cooperatives’ use of digital platforms.’
At the time of its launch, Anna Collyer, partner and head of innovation at Allens, said the new hub will play a leadership role in navigating the disruption in Australia’s legal system.
‘The unprecedented pace and scale of technological advancement has meant that our legal system is in many cases no longer fit for purpose,’ she said in a statement.
‘This not only runs the risk of legal uncertainty, but also of hampering Australian businesses’ ability to harness innovation. It is essential that the law strikes the right balance between limiting risk and promoting innovation during this period of disruption.’
Two months later, in May, Clifford Chance announced the launch of its Best Delivery and Innovation Hub. Based in Singapore, the hub is Clifford Chance’s first outside Europe and the US, and will act as the Magic Circle firm’s regional centre to ‘drive more innovative, efficient, effective and robust client service delivery’, as well as ‘identify, develop, test and roll out new legal technology solutions across Asia Pacific and beyond’.
All ideas must align with the firm's core principle of helping clients use lawyers less.
Geraint Hughes, the firm’s regional managing partner, said the hub ‘not only marks our ongoing commitment to Singapore as a global legal hub, but also reflects the rapidly evolving changes affecting our clients and our profession. We aim to combine market leading technology and project management expertise, with the highest quality legal input, to deliver the best service for our clients today and into the future.’
Meanwhile, the likes of Clyde & Co, Baker McKenzie, Linklaters and Rajah & Tann are members of the Singapore government-backed Future Law Innovation Programme (FLIP), a resource established to facilitate lawyers, entrepreneurs, and regulators collaborating on legal technology and innovation projects. As a result of the initiative, Rajah & Tann launched a separate company – Rajah & Tann Technologies – earlier this year, which allows other professionals, such as technologists, as well as policy and cybersecurity experts, to become partners in the business and provide cybersecurity, regulatory and compliance advice to the firm’s clients.
And then there is Kennedys, which is taking its innovation hub global. Launched in the summer of 2017, Kennedys’ Ideas Lab is a platform through which any member of the firm can ‘come forward with innovative ideas about how to create future products’. The only stipulation is that all ideas must align with the firm’s core principle of helping clients use lawyers less. It’s a bold proposition that seems counterintuitive, but Richard West, partner and head of innovations, insists the principle is in the best interests of both the firm and its clients.
‘We have long viewed technology as an enabler of change that can transform legal services for the benefit of both the industry and our clients,’ he says.
‘It’s important to understand that our innovations are aimed at helping clients only to use lawyers when they really need one. This is something we are incredibly strong advocates of.’
It would be easy to assume that helping corporates avoid law firms would reduce the interaction between lawyers and clients, ultimately damaging the hard-built relationships between in-house and external legal teams. West, however, dispels this notion and points to the firm’s development of its virtual lawyer, KLAiM, as an example of how a two-way innovation process between firm and client can work.
‘We have rolled [KLAiM] into some of the UK’s largest insurers and we’re developing it in Hong Kong, Sydney and the East Coast of the US,’ he says.
‘That has involved more, not less, engagement, which has, in turn, built deeper, stronger relationships rather than loosening ties with our clients. We become, in many ways, a 21st-century trusted adviser.’
According to West, this approach has realised instant savings on client costs.
‘They save millions of pounds a year in avoiding the need to instruct a lawyer when they may have otherwise been persuaded to use one. By empowering clients to deal with claims more efficiently and reducing the cost of these claims, we build additional relationships and win new clients because we can demonstrate that we have proven innovations and are trusted advisers – growing market share, while supporting our clients’ business along the way.’
Despite their lofty goals, there is some healthy scepticism surrounding innovation hubs: are they all they’re cracked up to be, or just a clever marketing gimmick designed by law firms to appear more forward-thinking and client-centric?
‘I understand the cynicism that has grown around such hubs, when many of them simply produce ideas intended to benefit the lawyers and not their clients,’ says West.
‘Some improve operational efficiency within their parent organisations. I don’t consider that to be innovative.’
For West, lawyers have to evolve, become more innovative, but also understand what innovation really means.
‘Too many try to define innovation as something that should be internally focused on their own processes to protect their own margins. My view is that innovation should be aimed at clients, and creating solutions for them which either saves them money or makes them money.’
Kennedys’ latest gambit has been the launch of a firm-wide innovation competition, in which staff can pitch their own legal start-ups for development and ‘become their own CEOs’. The Ideas Lab received over 100 proposals, which the firm’s research and development board has narrowed down to six to be turned into prototypes. Their creators range from a senior partner in London to a paralegal in New Jersey, and members of the firm’s Melbourne and Hong Kong offices are also shortlisted.
Just as Denise Morrison muses, lawyers wishing to innovate would be wise to adopt an experimental mindset, even if that experimentation costs them in the short term. The economies of scale enjoyed by global law firms mean that they are best placed to invest in the research and development of future legal products. And with Asia Pacific’s growing reputation as the place to go for tech talent, it makes sense that firms are investing in the region.
The proof, however, is in the pudding. Through their external PR, firms can shout until they are blue in the face about how innovative they really are, but their clients may take a different view unless they can see tangible results before them. So, as with all things in the business of law, law firms should think how the innovation will benefit the client first, rather than how the innovation sounds in a press release or how it will benefit the firm internally. Only then will their endeavours be truly innovative and – dare I say it? – sexy.