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Financial Management: Boosting client value

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Cite as: September 2012 86 (09) LIJ, p.74

Practical innovation is a necessity in legal practice.

Infusing innovation into the culture of a legal practice has moved from a rare possibility to an absolute necessity in order to sustain competitiveness and relevance to the marketplace. Innovation is essentially competitiveness; to compete effectively is to innovate effectively. Innovation can drive client value not only in our own professional practices but also within our clients’ businesses.

Innovation can appear in many forms in your legal practice including new ideas, continual improvement, experimentation, learning, new experiences, broadening horizons and simple curiosity. Innovation is reflective of a certain character or culture that is driven by the following aspects – human ingenuity, strength of spirit, perseverance, determination, individuality, non-conformity or a simple sense of purpose. The question for professional services firms is how to create the culture that will give birth to and nurture these aspects to produce innovation and therefore competitiveness.

There are sometimes warning signs, or red flags, that innovation has very little chance of occurring. This is not a bad place to start as innovation is really about creating the right ecosystem. These red flags can be:

  • trading on past glories rather than focusing on the future;
  • an absence of youth and vitality in the practice;
  • a naysayer attitude where the answer is always no;
  • a lack of passion where no one is really singing the praises of the practice or the great things being done for clients; and
  • a leadership team focused on self-interest.

There are many good examples of companies whose DNA speaks innovation. Consider Google and the way that the right ecosystem was created there:

  • with a mission that makes sense and means something to the people who work there;
  • by thinking big and starting small;
  • continuously innovating, not instant perfection;
  • actively having failures but reiterating continuous improvement;
  • looking for ideas everywhere and striving to be open;
  • enabling and empowering people;
  • sharing everything;
  • making decisions by data;
  • failing quickly; and
  • knowing that a happy workplace is an innovative workplace.

Many legal practices struggle with the idea of having a happy workplace and might consider it unprofessional but isn’t it better to have happy employees than those who are simply there for the pay cheque? Professional practices tend to be environments where control, rules, structure and regulation are paramount and unfortunately these traits do not create an innovative environment. Firms must actively create a climate of passion, learning and development. This is not an easy transition for many firms but in a world where the conditions are continuously changing, the ability to think and innovate is paramount.

So how do legal practices innovate in a practical and relevant way? There are three basic rules that must be followed: create movement; set goals; ensure continuity.

Competitiveness requires change, change requires movement and movement is the initiator of innovation. Often professional practices simply repeat the same process, when they could try changing by looking at what they did last time and improving on it.

For innovation to be effective it must have a focus. In a legal practice the focus is usually client need. Goalposts for innovation should be set firmly on exceeding client expectations. All staff should focus on improving the value delivered to clients. A good starting point as to client needs would be the following:

  • timeliness, accuracy and quality of information;
  • technically competent; and
  • understanding the business.

The third basic rule of innovation is continuity; a culture of never-ending improvement should be established. Innovation should not be an isolated event but an ongoing focus on improving practice and client value. Remember that everything, including the structure of the firm, the systems and process adopted, the management style, the people employed and promoted, the reward system, skills developed, and the market strategy impacts the ecosystem in a legal practice and therefore innovation.

Practical innovation in professional practices can best be described as simply a better way of doing things. Each and every day, you want every one of your employees to be thinking about a better way of working. If you can embed this trait into your firm, then you have sown the seeds for a highly competitive and profitable practice.

Dr RICHARD SHRAPNEL is an executive director in Pitcher Partners’ Consulting division in Melbourne. He can be contacted at 8610 5507 or


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