How to reward in-house innovation

This year’s In-house Counsel as Business Partner conference in association with EY kicks off with a panel discussion focused on innovation. 

EY head of law for UK&I Philip Goodstone, National Grid global head of legal operational excellence Mohammed Ajaz, Wolseley UK general counsel Vanessa French and Dixons Carphone general counsel and company secretary Nigel Paterson share their thoughts on innovation, technology and the future of legal services.

Do companies and teams only innovate when they are under pressure?

Vanessa French
Vanessa French

Wolseley UK general counsel Vanessa French: Innovation can be driven by necessity or come from mindset – it may be driven by risk or opportunity. My team seeks to innovate because we value innovation and creativity and our purpose embraces lawyers doing the right thing. Plus we have the benefit of an agile and tight (for which read small) legal team. However, some financial as well as resource pressure can also focus the mind.

Dixons Carphone general counsel and company secretary Nigel Paterson: Whilst it is a truism that ‘necessity is the mother of invention’ and often, when teams come under pressure from their external environment, innovation is the result, a proactive approach to innovation is also needed.

There are two key reasons for proactivity: the need to improve incrementally is both a business requirement in the race for organisations to remain competitive and, at a team and individual level, a sense of progress and of getting better helps to energise and motivate.

Philip Goodstone
Philip Goodstone

EY UK and Ireland head of law Philip Goodstone: Great businesses and teams innovate continuously, it is part of the culture of the organisation. There are inevitably times when short term pressures and external factors force change and those pressures can sometimes help overcome resistance to change, but creativity and innovation are continuous processes.

Sometimes it is also necessary to set up parallel structures and teams that focus on nothing but innovation. One example we have of this at EY is EYX – a dedicated innovation and disruption team, established to catalyse, provoke and support the rest of EY and its clients in preparing for the impact of technological disruption.

National Grid global head of legal operational excellence Mohammed Ajaz: The “more for less” challenge is certainly driving innovation across the Legal function and companies and functions are responding to this pressure. Companies and functions that already have a culture of Performance Excellence programmes and approaches and involvement within Peer networks will tend to show a more proactive approach to innovation due to their ways of working.

These ways of working will include continuous improvement and ‘lessons learnt’ reviews and activities. Innovation is also proactively driven by the sharing and implementation of best practice and new ways of working both internally, externally and across industries.

What does legal services innovation look like?

French: Innovation in legal services means new ways of providing legal services, including someone – or something – other than lawyers providing them. It’s about challenging what we do, asking why it needs us or who/what else could provide the service. But in legal teams, I believe we are still playing catch up on other industries.

Nigel Paterson

Paterson: Being innovative is founded on a mindset which constantly evaluates whether there is a more efficient or effective, better, cheaper or quicker way of the Legal team supporting the achievement of organisational objectives. It is a sense of not being satisfied with staying still and doing things as they have always been done, of not accepting the status quo.

Goodstone: When it comes to innovation in legal services, I think there are several different strands including the type of services provided, the resources used to deliver services and the technology and processes deployed in delivery. So for us, we innovate by using our multidisciplinary model, developing new integrated services in which our law team works our other teams, developing new services for example in relation to GDPR readiness. Likewise we combine technologies such as AI with a flexible workforce model. Ultimately though, innovation must be focused on enhancing the services we offer to clients, the experience of our clients and at the same time making the roles of our people more interesting, stimulating and rewarding.

Mohammed Ajaz

Ajaz: Innovation within legal services, to me, refers to optimising your service delivery. This could be through people, process or technology improvements. In turn, these could be improvements to current ways of working, the implementation of market best practice / lessons learnt or a completely new innovation.

How do you reward lawyers in your team for being innovative?

Paterson: To foster innovation, individual lawyers need to be encouraged, rewarded and recognised for being bold and pace-setting and be given the space to think radically beyond the fulfilment of busy workloads. Managers should be clear that time spent on innovating is valued equally with task completion: the latter should not be pursued at the expense of the former. In doing so legal teams are reflecting the trade-offs their organisations are also making writ large.

Ajaz: Innovation is rewarded in the same way that benefits, going above and beyond and team working are recognised. For us, internally, this is via our reward and recognition system that can be used to “gift” monetary and non-financial rewards for work undertaken. In addition to this innovation and successes are highlighted and shared at our internal team meetings (Hubs) and at Off-sites to share best practice and thank/reward the individual for their work.

French: The question might assume innovation is a net cost on time. It isn’t necessarily. The return on the investment is the freedom generated to do higher value work – which is more interesting/challenging/rewarding.

What do the lawyers of the future look like? Will there be a significant change in the way they work?

French: Does a lawyer have to be a human being? If yes, they’ll be a “new breed” working on higher complexity work only. The rest of the work will be done by technology.

Paterson: The ability of lawyers to know and understand the impact of communications and information technology is increasing in importance exponentially. Lawyers need to understand these technologies better, to advise their organisations on the risks and opportunities to be faced, to think about how they can be utilised to improve legal practice and, in the case of artificial intelligence, to learn to work in a seamless way with a new technology.

Goodstone: Technology and the so-called fourth industrial revolution are disrupting many industries, and the legal profession will be no exception. Artificial intelligence and robotics have the ability to automate a lot of knowledge gathering, freeing up personnel to focus on higher-value strategic work and providing more fulfilling responsibilities. Likewise, the macro economic environment is changing and the aims and ambitions of the lawyer of the future will undoubtedly be different to those of my generation.

There will also be huge opportunities. One of these I see is for those who develop strong relationships of mutual trust, get a real understanding of client needs and are prepared to help clients source those needs from a multitude of providers. So for those who develop a broader skill set and are able to take a more holistic view of a client’s business the future could be very bright.

Ajaz: In the future, lawyers will have to be more tech savvy and make use of these available technologies in their day to day activities. Flexible resourcing will also change the landscape for legal professionals with flexible resources bidding for available work. With these changes to the day to day role, lawyers may have more time to focus on the processes of law, to optimise service delivery and to play a more strategic, improvement driven role.

Tell us one big prediction about the future of legal services:

Goodstone: What we can be certain of is that change is on its way. The pace of technological change is continuing to accelerate and the impact is likely to be more significant than any us can currently imagine. I by no means think that we will see R2D2 or ‘Johnny 5’ walking down the corridors. However, the profession will need to continue to evolve and embrace new tech developments.

French: A differing role for both in-house teams and external advisers. In-house, teams will sit at the top/centre of a wider team of providers. As to external providers, we may see a shift towards law as a specialism within professional services, and certainly to more work than most can imagine being done by machine.

Ajaz: With the current rate of evolution in the legal market there are many anticipated changes that will affect legal services. However, in terms of the “one big one” I think it will be the role and shape of the in-house function.

In house functions will look different and will have flexible resources that scale up and down dependent on workload. In addition, key roles such as legal operations and technical engineers will deliver many aspects that are currently undertaken by GCs.