The Chief Innovation Officer of one of Canada’s largest law firms is calling for the term “legal innovation” to be banned.
“The legal industry seems to have fallen into the trap of focusing on innovation for innovation’s sake. Instead, we should focus on creative ways to create value for our customers,” Judith McKay, McCarthy Tétrault’s chief customer and innovation officer, and her colleague David Cohen, senior director of customer service delivery, wrote on their company blog.
It’s time to banish the buzzwords and get back to what innovation really means: creating value for customers, the two men said.
In an interview with Law.com International, McKay said the pandemic has made the legal community much more open to change, so it’s time to “step away” and “get back to basics.”
Whether it’s driving change through technology adoption or process improvements, everything law firms do needs to be viewed through the lens of “how can we make life easier for our clients ? How can we help them solve their toughest problems? McKay said.
Beyond that, creating value for customers should include new products, services, and approaches as well as the continuous improvement of existing products and services, McKay and Cohen wrote.
The McCarthy Tétrault duo is not the only one to be of this opinion. Chris Bentley, a former provincial attorney general who is now chief executive of the Legal Innovation Zone (LIZ), an incubator at the new Metropolitan University of Toronto, doesn’t see the term “legal innovation” as negative, but he agrees. that the attention of legal tech is misdirected.
“We should be focusing on innovation, or new ways, new approaches that help those who need legal services get them faster, easier and cheaper,” he said.
Technology is a big part of that at LIZ, but Bentley stresses that not all innovation is complex – sometimes all that’s needed is a simple solution.
As an example, he cites a company called Notice Connect which was later acquired by Canadian legal technology company Dye & Durham and is used by many of the country’s largest companies. It doesn’t use cutting-edge artificial intelligence, but it “revolutionized the notices that executors must provide to potential creditors” by putting them online rather than in newspapers for three consecutive weeks, Bentley said.
Another example is web conferencing, which he noted was certainly not new, but suddenly had a massive impact on the legal profession once the COVID-19 pandemic hit, forcing lawyers to use it to do their job.
Indeed, Bentley, McKay and Cohen agree that true innovation is bringing new products, services and approaches to customers in ways previously unanticipated. Incremental improvements to existing products are what deliver value to customers, such as optimizing processes like dispute management or automating commoditized work, they said.
Why Law Firms Can’t Innovate
But law firms are not places that foster the development of breakthrough innovations, Bentley said. Their traditional approach to profit sharing means they are less likely to use revenues for research and development.
“You are not going to revolutionize a lot at all if you don’t put money aside for R&D,” he said.
Moreover, great innovation is stifled in places like Canada where the regulatory structure only allows lawyers to have an equity stake in companies offering legal services, he said.
“You can’t share the profits in a meaningful way with those who aren’t lawyers. And that just limits the amount of expertise you can access,” he added.
McCarthy Tétrault, McKay’s firm, got around these hurdles by launching “MT>Divisions,” ancillary businesses separate from the law firm and offering technology solutions to deliver services to clients.
It’s a way for law firms to get around Canada’s restrictive ownership rules, but few do it. said Bentley.
McKay and Bentley said another possible scenario that would help foster more legal innovation is where law firms collaborate with the big four professional services firms. “Certainly we have complementary skill sets,” McKay said.
But Bentley says it will take more than those few options to achieve the kind of innovation needed. Even the so-called legal sandboxes that the law societies of a few Canadian provinces have launched are “not about encouraging innovation, but about managing innovation,” he said.
Recent moves in the U.S. states of Arizona and Utah that open law firm ownership to non-lawyers, and rules in England and Wales that do the same, are integral legal innovation that will bring value and services to clients, he said.
“Give lawyers the opportunity to be competitive and look where that takes us,” he said. “I think the profession would be much better off.”