As Bruce MacEwen, president of Adam Smith, Esq., points out in his latest book, “Tomorrowland: Scenarios for law firms beyond the horizon,” re-conceiving how legal services are performed (creating a completely different business model) is hard because we find it challenging to “discard assumptions accumulated over the course of a professional career.” This is sometimes true of clients as well. They may recognize the need for best practices at their company and still hold an archaic view of lawyers and law ?rms. Lawyers and their clients alike are trapped in cultural prejudices of how legal services should be performed. It’s likely, then, that Colombian law firms don’t innovate because their clients expect them to be just the way they are, but a little cheaper. There are many exceptions, of course. There are sophisticated local clients and foreign multinationals that are relating to their outside counsel differently. But my point is that, despite the market’s openness, the local legal culture doesn’t foster innovation.
Another significant reason for the lack of innovation may be skepticism about its usefulness, wrapped around misconceptions of what innovation is. Let me explain.
Some leaders at elite law firms may see innovation as “technology” or as something only start-ups do. This narrow (and inaccurate) view leads them to think that innovation is useless for their type of firm. They advise clients in sophisticated, complex legal matters, not commodity “stuff.” Therefore, they think, they don’t need software that helps them create contracts faster or project management tools that help them manage M&A or litigation projects. Clients come to them for their expertise, not for their software. This view is reinforced by their success. “We’ve done very well for ourselves without so-called ‘innovation,’ why should we worry about it now?” Well, the future may bring them ugly truths about the real meaning of innovation (hint: it’s not software), and why it is important to explore today in order to be able to stay ahead tomorrow.
We interviewed some leaders who also said that low local fees may be to blame for the lack of innovation in the Colombian legal market. Because it is such a competitive market, in which legal service providers battle fiercely for clients, rates in Colombia are notably low. With expensive overheads to pay, there is little room for investment in innovation.
Lastly, some respondents said ignorance was the culprit for the lack of innovation. Law ?rm leaders are aware of the need to innovate. They love to talk about innovation. But they don’t know where to start.
These reasons are also evidence that law firm leaders may think of innovation narrowly as “technology” or something that only start-ups do and that requires huge investments.
A broader view of innovation would help them see the many opportunities in the Colombian market and the need to cultivate an innovative culture to maintain their market status.
In Innovation and Entrepreneurship, Drucker wrote of innovation as a tool that is “capable of being learned, capable of being practiced.” He called for entrepreneurs (understood, too, in a broad sense) to approach innovation purposefully and systematically. According to Drucker, “systematic innovation … consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation.” A purposeful, systematic approach to innovation may not require huge monetary investments or knowledge of exotic technologies. And it’s certainly not something only New Law start-ups do. As legal consultant Reena Sengupta said in a recent Thomson Reuters interview, innovation is “… constantly saying: How can I do better for our clients? How can I run our team better? How can we deliver legal advice better?”
Open legal markets alone will not create innovation in the legal industry. Fixed mental habits and cultural traditions of lawyers and their clients alike are an impediment to innovation. Prejudices about what innovation is also blind lawyers to opportunities to create more valuable products or services. Legal entrepreneurs must see past those habits, traditions and prejudices to find and exploit opportunities for innovation even in dynamic legal markets such as Colombia’s. And, they must patiently evangelize about the value of new models. Clients may like the old ways, but once they see the value in new models, they will not want to go back.
