There is no denying the fundamental shift that is underway in the legal industry. Both law firms and corporate law departments are examining new metrics to track outcomes and report on success, leadership roles and responsibilities are expanding to keep pace with fluctuating market demand and law firm service delivery models are evolving to keep pace with corporate client demands. Cutting-edge law firms and law departments understand that in order to keep pace with change, they must actively draw and learn from clients, competitors and other thriving industries.
To explore the significant and pressing issues facing the legal vertical today, HBR Consulting created Legal Lab, an intimate forum for c-level executives and legal industry leaders to collaborate and share ideas on how to spur innovation and drive real change in the industry.
As an outcome of this year’s event, we produced the Legal Lab Executive Summary that captures key themes and discussion takeaways, including: new ways to define and achieve value, alternative methods for providing legal services and using changing conditions to motivate innovative solutions.
Rooted in traditional processes, law firms are known for being risk-averse. But navigating an evolving legal market calls for law firm leaders that are willing to change the mindsets and culture of their firms to effectively meet client needs – a shift that requires embracing change and taking more calculated levels of risk. Law firms can foster innovation by creating climates that approach mistakes, or failed projects, as internal learning and growth opportunities.
To keep pace with internal and external pressures, corporate law departments are rapidly changing. The General Counsel role has evolved beyond risk and compliance advice – GCs are now acting as strategic advisors to the board and are helping to shape the overall business strategy. Law department leaders are shaping the future by boosting efficiency, demanding transparency and predictability and improving communication with outside counsel. With data-driven analytics and new metrics driving decision-making, law departments are pursuing new, innovative technologies to align internal and external legal resources.
While perceived as being on two different pages, there are many shared learnings and opportunities for law firm and law department leaders.
- High performance is a byproduct of culture. Organizations that foster cultures of innovation – encourage employees to think big, develop creative ideas and learn from mistakes – achieve higher performance.
- There is no “fairy dust” for Innovation. As Legal Lab’s opening speaker, Matthew Syed discussed, innovation is not a singular, “magical” event. Instead, significant and innovative efforts focused on solving specific problems can be advanced through a series of marginal, incremental gains that have a transformative effect over longer periods of time.
- Transparency is high in demand. Legal Lab attendees explored the disconnect between what law firms think they are demonstrating to clients and what clients actually believe they are getting from outside counsel. Employing closed-loop feedback – the process of identifying key touchpoints throughout the lifecycle of a matter and seeking feedback at each critical point of the process – will help support the transparency and predictability that law departments expect from outside counsel.
- Metrics should align to value. While both law firms and law departments are currently focused on client satisfaction evaluations, the focus of their metrics differ. Law firm metrics focus on internal profit, while law department metrics focus on value of outcomes. An opportunity exists to better align metrics to streamline efficiencies and maximize value provided across the legal industry.
To learn more about Legal Lab and best practices for leading your own organization through the rapidly changing legal landscape, please contact us.