LexisNexis’ Mark Smith

Five years ago, LexisNexis asked the University of Cambridge business school a simple question on resistance to change: “Why is it that law firms are not changing as fast as some clients and some partners want?”

The research revealed the most agile firms benefitted from leveraging the voice of the client. Not only was internal enthusiasm needed for innovation, but the client played an all-important role in actually driving change within a firm.

As the Covid-19 crisis has required firms to accelerate digital transformation at an unprecedented pace, this virtual roundtable hosted by LexisNexis and The Lawyer sought to revisit the issue of change through the lens of innovation.

To kick off the conversation, which included partners from 10 UK200 law firms, LexisNexis set out three reasons why innovation remains critical at present.

The author of the current research on innovation in top 50 law firms, Cambridge Judge Business School’s Kishore Sengupta, began by defining innovation: “It must be something new. Not necessarily new to the world but new to the context, i.e. new to the firm, the sector or the client.” It must also provide value that can be articulated clearly, while also serve as a feasible product. Sengupta then outlined an important distinction in the research findings, explaining the difference between evolutionary and transformational change.

Following this introduction, it was then time for delegates to play an active part in the discussion surrounding innovation and they were split into two groups.

Transported from living rooms to the Cambridge Union, delegates were to debate the motion that the gradual evolution of law firms is dead, and that transformation is the only way forward.

The ‘transformation’ group were encouraged to embrace the ‘big step change’ approach and a need for quick, demonstrable results, while the second ‘evolution’ group focused on the benefits of gradual momentum to inspire larger change.

This resulted in some fascinating insight.

Group One argued in support of transformational change, with their spokesperson noting: “As a matter of course, we actually know that evolution on its own doesn’t work and we have the living proof of it. We have hundreds and hundreds of law firms that fundamentally haven’t changed for the last three hundred years.”

“Up until March, all of those things that I was told were either not possible or not practical or in fact would be the end of the world as far as my lawyers were concerned turned out not to be true.”

“Everything that I’d been trying over the last five years, we managed to do in the space of about three days.”

In response, Group 2’s representative put up a fierce defence of the evolutionary approach: “We’d love it to be more about transformation but, in reality, it’s got to be evolution.”

“There are too many structures in our industry that inhibit that transformational journey but really support evolution. Transformation is a strategic bet, evolution works because law firms are very busy, risk-averse, time-poor and they don’t have the appetite or ability to go through that change.

“Equally, they [as lawyers] are not remunerated to take that strategic bet either. So, evolution is the only way that we can really encourage a growing mass of them to do this.

“Also, frankly, what are we transforming to? Where is the Uber in the legal industry? Nobody knows yet. The only way we’re going to find this is through a continuous process of evolution to find that gem that’s going to move the needle. And we don’t doubt that when someone does it, the whole market will move but we’re not there yet.”

LexisNexis’ host Mark Smith was unable to pick a clear winner for the debate but highlighted a key point raised for future consideration: “If we’re aiming for transformation, how do we then reconcile that with changing the culture which takes longer?”

You can download a copy of the report here.