A recent Forbes article by Mark A. Cohen pointed out several interesting points about legal innovation including drivers and impediments. The article stressed that especially corporate clients are drivers behind legal innovation for several reasons:
- an increasing willingness to procure services from providers with delivery models different than the traditional law firm partnership model;
- taking more work in-house;
- sourcing work—either internally or externally—to providers that are better aligned than law firms with the company’s risk tolerance and enterprise objectives;
- utilizing technology, process, and ‘the right person for the right task’ to promote efficiency, mitigate risk, and reduce cost; and
- rejecting the longstanding myth that only law firms—and lawyers—must perform all ‘legal’ tasks. Legal problems are increasingly viewed as business challenges raising legal issues.
On the flip side, there are – according to Mark A. Cohen – also several reasons why law firms haven not taken more aggressive steps to innovate and protect market share:
- there was little need to innovate until the global financial crisis of 2008 changed the way business is conducted—even law;
- law firm senior partners lack the financial incentive to invest in the firm’s future because their ‘equity’ is not residual;
- law firms were able to prop up profits by internal cost-cutting measures rather than client-centric innovation—no more;
- firms lack the investment capital to make long-term investments in innovation and there is a generational/economic divide between older and younger partners; and
- rather than innovate, many firms have tried to ‘reinvent’ their brands by merger.
The article concludes with the following predictions:
- The pace of innovation in legal delivery will continue to accelerate during the next few years.
- Disruption in legal delivery will not be a ‘one-size-fits-all’ approach. Clients assign different values to different tasks, functions, matters, and portfolios. Value is derived from context. The value of a matter drives the election of resources most appropriate to meeting the client’s objective. The disruptive legal delivery model will be one that provides a scalable array of solution tools—human and technological; legal and business; embedded and agile– that produce efficient, cost-effective, and risk-appropriate resolutions to client challenges.