• Q&A

How to win the competitive race for innovation

In Today’s Q&A on Research.Reveal. Paul Hugh-Jones talks with Anna Collyer, Partner and Head of Innovation at Allens. They explore innovation in the legal market, the strategic drivers for firms and clients, opportunities, challenges, trends and developing an innovation culture.

This is part of an on-going series exploring how professional services firms are future-proofing and innovating their firms.


​Q: Why is innovation such a strategic focus for law firms and clients?

A: As for all sectors of our economy, technological advances have driven both the need for innovation and the opportunity to innovate. Technology has made it significantly easier for customers to compare competitors' offerings of goods and services. It also offers (among many other things) a way for competing suppliers to seek to improve their offerings.

In the Australian legal market where Allens operates, this has occurred alongside a significant change in the competitive landscape, with declining demand for services and an increase in the number and diversity of law firms. Interestingly, with a resurgent market in FY18, innovation is now part of the competitive race to provide the best service to clients.

Comment: So the strategic drivers for innovation are increasing clients’ expectations, competition and transparency enabled by technology.


Q: In beaton’s research on innovation in the legal industry, innovation is not yet a top driver of choice for clients. How do you see the life cycle of innovation – where are we?

A: Clients aren’t necessarily interested in innovation for its own sake. Innovation can result in differentiated client service for example through greater efficiency (services delivered at a lower price and/or in a shorter time frame), a more valuable product (a database which can be manipulated to answer a range of questions), or a more collaborative working relationship.

At the moment all firms are grappling with how and in what parts of their business to innovate. Some are looking at new business lines and new product offerings, others are focussed on innovating within their core business. In five years' time the market for legal services will take another quantum leap in diversity as firms pursue a variety of strategies, some of which will be successful and others which may not.

Comment: I agree that innovation solutions can be broad and varied depending on each client’s pain point. My view is that we are early in the innovation life cycle for both clients and firms and agree that the tipping point is likely to come within the next five years as clients become clear on their needs and firm offerings become more tangible.


Q: What are the opportunities and challenges for successful innovation in the legal profession compared with other professions?

A: It is often suggested that the legal profession will find it more difficult to innovate than other sectors because it is naturally risk averse. However, there are many other sectors (such as pharmaceuticals) where it is necessary to be risk averse in relation to the product or service in question. In fact, lawyers are particularly good at spotting problems and coming up with creative solutions, so provided that a safe environment can be made available for innovation to occur, there is great potential to do so.

An important factor for law firms to grapple with is that they have not been in the habit of developing new products as part of their inherent business model, and so do not necessarily have existing skills or processes to draw on.

Comment: This opportunity is reflected in our beaton research on innovation, which shows that clients place high value on firms who can develop creative solutions delivering better outcomes. More on a safe environment under innovation culture below.


Q: What are your thoughts on developing an innovation culture?

A: A key issue to address is time and how it is valued. Lawyers are used to recording billable time, and so in order to ensure lawyers can devote the time required to innovate that time needs to be measured and highly valued.

Innovation is also a multidisciplinary activity, requiring excellent collaboration across a wide range of different expertise - both within and potentially external to a law firm.

The other big shift is from a mindset of 'do it once and get it right’ to conducting very small experiments to see if an idea is worth pursuing. This is the key to diffusing the risk averseness inherent in the system - reduce the risk as much as possible by trying new things in a small safe way to obtain feedback, pivot approach where required, and then gain the confidence to proceed. It is important for law firms to set up frameworks that allow for this type of iterative development, and support lawyers to move through the framework.

Comment: Spot on Anna – I have nothing to add except that the culture is a more important enabler than technology. Interestingly, culture also came up in our recent conversation with Jon Huxley of Beca. Across professions, innovation and future-proofing begins with investments into a firms’ culture.


Q: Last word: Philosophically, how does Allens think about innovation?

A: Innovation is an integral part of thinking about how to provide great service to clients, and the better we can be at innovating the more likely we will be to drive a competitive advantage in an increasingly diverse and crowded market.

Comment: Thanks for sharing your valuable insights and experience Anna!


In coming months Today’s Q&A on Research.Reveal. will feature the views of other prominent thought-leaders from a cross-section of professional services firms. Each will be asked to explore their views in areas of strategic interest. This month we focus on how they are future-proofing their firms and engaging in innovation.