We are living in the pregnant pause of a post-Brexit UK. The recurrent question is: ‘What next?’ And it is a feeling that does not mix well with an urge to strike out and do something new. The fear in this market is that the pause turns into stagnation.
 
The fact is, though, that innovation in the legal market did not come out of a boom period. When so much work is rolling in that you cannot help but double your profits year on year, you do not start rewriting the rules. It is when the hard times hit that creativity becomes critical.
 
Take the Financial Times (FT)’s Innovative Lawyers Reports, launched ten years ago in 2006, and it is clear that this has been a truly transformative decade for law. Whether it has been the launch of entirely new law firms based on a different kind of legal service delivery model, low-cost service/delivery centres, new technology-enabled offerings, contract lawyer businesses, consulting subsidiary services, or rapid internationalisation, law firms have changed massively.
 
And they have done so because competition and consistent financial pressures have forced them to think differently. As the FT said in October 2015: ‘Innovation is now a value to which law firms and in-house lawyers aspire.’
 

Cultural shift

 
 
We have seen this too in the monumental growth of business services functions in law firms in recent years. Firms have realised that gaining an edge in a difficult market means investing in new skills and fresh ideas that enable them to adapt quickly to changing markets.
 
And this has caused a fundamental shift in thinking that puts innovation first. In our Market Perception Survey 2016, for example, we asked firms to nominate one firm (other than their own) that they most admire, giving one chief reason why. Respondents cited brand presence as the top explanation for nominations. But innovation came in second, even beating client service and quality of client base.
 
Firms were nominated for breaking the mould, being creative, thinking differently and being entrepreneurial. Several of the firms nominated were relatively new businesses too – Riverview Law, Axiom, Keystone Law, PwC Legal and Radiant Law. These were cited as being the opposite of the stuffy law firm, making a virtue out of their willingness to challenge the norm and change perception.
 

Indicators for the future

 
 
So what now for the legal industry? Well, going backwards will not be an option. We have just recruited an Innovation Hub manager who will head up what is a new function within the knowledge management team of a global law firm. The aim of the Innovation Hub is to bring together new ideas from across the firm and help develop them, from internal, efficiency focused improvements to new product/service lines. The Innovation Hub manager will act as facilitator and conduit, helping to write business cases and building relationships with the right people across the firm to turn ideas into action.
 
Nor is this firm alone. It joins a growing list of firms with resources dedicated to facilitating firm-wide innovation. We have spoken to one or two firms that feel that a named innovation unit, hub or network feels too forced. And, for sure, there is a balance to be struck. Creativity and imagination are fragile forces, easily stifled by heavy-handed process.
 
But roles dedicated to innovation send a strong message: this firm is open to new ideas, will explore possibilities and is willing to change. It gives busy lawyers and others an avenue for ideas that would otherwise disappear into the maelstrom of daily business and, not only that, but lawyers know their ideas will be followed up and developed. What better incentive to let the creative juices flow?
 
It is a message to the outside world too. Clients know that this is a firm willing to pay more than lip service to the innovation in legal services that they want to see. There are lots of firms that like to say that they think differently. This is about proving that such values translate into something tangible.
 

The impact on law

 
 
And does this all have an impact, beyond perception (important though that may be)? In our view, absolutely, but not always in the way that makes headlines. The change is often incremental, but it is no less transformational for that.
 
Take our most recent research – into how law firms approach request for proposals (RFPs). According to our poll of UK firms, 36% of UK respondent firms are now winning 51-70% of their new client proposals, while nearly a quarter (23%) are enjoying a win rate as high as 71-90%.
 
Some of this is down to the huge amount of time firms are dedicating to their pitches – as much as 20 hours a month in 19% of respondent firms. But it is also the breadth of resources UK firms are using, from RFP databases and design templates, to dedicated RFP teams and pricing specialists. These are new ideas, from new people using new tools. And it is all making a real difference to the way firms are bringing in work.
 
Innovation suggests sudden radical improvement. But it is something else too – when innovation becomes a cultural imperative, it inspires many steps that result in profound change. We see both forms of innovation in law firms today. It is this spirit that will drive the UK’s legal profession forwards through the challenges and opportunities ahead.
 

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