LegalOrganizing for innovation

10 Innovation Management Dilemmas for Law Firms

For senior management of law firms, here are 10 innovation management dilemmas. Do you know how to address each of them? We will provide hints, but know that some answers will lead to more questions. However, solving these 10 dilemmas will help you build a great and innovative law firm.

Innovation management dilemmas for law firms

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1. Is innovation a one-trick pony or a series of successes in your firm?

Waiting for innovation opportunities to arise, and then letting them mature by themselves, is similar to training a pony for a single trick at a one-time event, which is certainly not the most effective and efficient approach. Manufacturing firms use Research and Development (R&D) units to ensure opportunities emerge and are adequately explored. However, law firms are not manufacturers. Research shows that R&D units may not even be beneficial for innovation in law firms, but research also shows that a structured approach is required to innovate efficiently and effectively. What processes does your firm have in place to drive innovation and new business development?  How many promising opportunities are currently getting lost or lead nowhere despite the best of intentions?

2. Should innovation be planned or enabled?

Does your strategic plan contain areas to be explored and, if so, have you assigned these areas to certain partners and associates? Probably not, which is a good thing. Professionals like to operate autonomously, so enabling and guiding employees who have a drive to act upon their innovative ideas is more effective than imposing ideas upon them in a top-down manner. They will be much more passionate for having conceived of the idea themselves, and committed to following it through as far as possible.

3. Is innovation seen as an opportunity for success or a risk of failure?

The possibility of failure makes many partners hesitant to approve the exploration and development of novel ideas. Indeed, many innovations fail and there is no guarantee of success. In your firm, in the case of failure who will be blamed—the innovation champion or management? If the attempt fails, will the inventor be allowed to try again? Though realistically, how bad a thing can failure be in human or financial terms? Organizations are often unfairly harsh towards innovation failure, even though the damage is truly minor. The financial burden can be easily managed and controlled, since new services in the pilot stage can be discontinued at any time. Ethics committees can be tasked with evaluating the impact of proposed innovations, but will their actions be perceived as roadblocks that prevent the development of other innovative ideas? Or will they take on the role of stimulating critical thinking and challenging inventors to improve their ideas to ensure that the level of risk is an acceptable one to the firm at large? In sum, are your employees given sufficient opportunities to innovate and learn from their failures?

4. Who is innovating in your firm?

Motivated individuals can drive innovation, regardless of their rank. Yet the support they receive will need to depend on their position in the firm. Partners typically have the means it takes to innovate, but may be less motivated as they already have a successful career. Associates may have the motivation, but they are often short of time and resources as they still need to prove themselves. Does your organization have a process and a support framework that are tailored to the needs of both associates and partners?

5. Is innovation a second job?

Who is responsible for creating new business opportunities for your firm? A dedicated few? Or is it everyone’s responsibility? Do your professionals work on innovation proposals on top of their regular job, which consists of generating billable hours? Is there a way of accommodating both innovation and business development within office hours? If so, will everyone get time as well as needed training and information to do so, or will the opportunity be reserved for a select few?

6. Is innovation a career advancement, or a career killer?

The innovations everyone remembers are those that were successful. Yet, as typically only 1 out of 10 attempts is truly successful, most who set out to innovate will not succeed. Who gets rewarded and advanced in their careers in your organization? Only those who are successful, or also those who tried and learned from their mistakes?

7. Plan and execute, or trial and error?

Approving a project plan too early in the innovation trajectory can be counter-productive. Early approval of concepts hampers progress because it impedes further improvements. Even great ideas benefit from extensive exploration in the early stages. Do you allow your employees to keep tinkering with a concept even though you did not like the first versions? Or are employees only allowed to work on ideas approved at the very beginning of the creative process?

8. Track progress, or focus on success?

Which innovations should be encouraged for further development? One can only tell for certain whether an innovation is successful after it has been launched. Market size is often used as a proxy for potential success, however that metric is not very helpful when deciding which efforts should be continued and which not, especially not in the legal context. Much better indicators include the personal drive of the team; the responses obtained from user interviews; how lessons learned are shared and incorporated; how opportunities for market exposure are created; and the novel connections made as a result of the innovation. Which parameters do you use to monitor innovation initiatives and decide which ones should be allowed to continue?

9. Learning, or experiencing how to innovate?

One of the major challenges most professionals have to overcome is figuring out how to pitch ideas in such a way that benefits to the organization’s bottom line are clear. Your firm probably offers career development sessions on creating new business opportunities. Do these sessions teach young professionals how to develop their innovative ideas and build networks that can help turn these ideas into reality? Does it teach them how to build a business case? Is this skill taught as an integral part of your Continuous Legal Education efforts?

10. Focus on development cost, or on the cost of failure?

Do you track the development costs of innovation and new business development initiatives? Typically these costs are a major consideration when selecting which innovation projects to pursue. The development costs of new services, however, are generally low, though they represent unbillable hours. How many of these hours does your firm set aside for new business development? It is also important to look at the potential cost of failure, for example, in terms of a firm’s reputation. Do you assess the cost of failure systematically? Is that cost worthwhile when measured against potential financial and other gains?

The Need for a Structured Approach

Not all innovations are successful. But even if they aren’t, the lessons learned are often invaluable when starting the next new thing. As long as innovation is approached as an opportunity to learn and improve, even failures contribute to overall success. The great inventors know this. Albert Einstein wrote, “You never fail until you stop trying,” while Thomas Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

A structured approach to innovation, also known as an innovation framework, helps to ensure that valuable time is not wasted. It also allows an organization to repeatedly transform ideas into new business opportunities. Finally, it helps track projects to analyze who should be rewarded for their innovation efforts, and provides feedback on where there is room for improvement in the process. With such a structure, your firm’s most valuable assets, your employees, can work to their full potential. The result is a growing organization with a reputation for motivated employees, that attracts the best and the brightest applicants.

Interested in getting the questions raised in this article answered for your organization? Interested in knowing how you can build an innovative firm? Please contact us at info”at”organizing4innovation”dot”com, or visit our website for more information.