The Importance of Law Firm Innovation
March 4, 2017
McGill University recently released a study which we think confirms our theory that the legal services industry is ripe for disruption. According to the study, very little innovation is taking place at traditional Canadian law firms. And that innovation is desperately needed.
Here are some more specific takeaways from the study:
- Significant changes in technology, client sophistication and a general resistance to change have brought the tenuous viability and effectiveness of the traditional law firm business model into sharp relief. It is thus becoming increasingly clear, from a legal perspective and the perspective of business strategy that traditional law firms must change and innovate to remain viable.
- Use of technology in new ways promotes increased competition in the legal services industry, with smaller firms able to compete with their larger counterparts. This challenges the viability of the large law firm. Traditional law firms face a high chance of being undercut by smaller, more cost-effective competitors.
- Clients want a new model of service. The billable hour has been increasingly under fire in recent years. Clients are searching out new billing models that favor their interests and budgets.
- A failure to innovate will likely have significant adverse impacts for the law firm as an institution and, more importantly, for the legal profession and justice system as a whole.
- The data shows a serious divide between associates and partners on their firms’ efforts to innovate. Partners might think their firms are innovating, but associates generally disagree.
- As noted by the Legal Post, traditional Canadian law firms in 2017 are still designed as change-resistant, rather than change-receptive. We think this presents tremendous opportunities for smaller and more disruptive firms like ours to truly drive change.
You can read the full study here.