Fostering a Continuous Innovation Mindset Across Legal

There will be two types of businesses in the next 5 years, those that are on the Internet, and those that are out of business,” Bill Gates predicted in 1995. 

Nowadays, we’d say it like this: There are two types of companies – Those that innovate and those that are out of business.

This applies to any industry. Legal is no exception. 

Currently, there’s a constant demand from customers for more efficiency and cost-effectiveness, as well as better use of technology. This makes it difficult to carry on business as usual as only 33% of organizations are prepared to address the increasing importance of legal technology

If a company wants to thrive, it needs to meet the requirements of the times. If it doesn’t, it’ll be forgotten. 

A prominent example is that of the Sony Walkman: Although listening to music on portable devices is still popular, the Sony Walkman no longer sells 400 million devices. They couldn’t respond to the growing popularity of the Internet and music downloading. So while Sony failed to foresee the impact of technology, Apple took advantage and created the iPod.

Sure, iPods are no longer as popular now, but Apple iPhones are. Like any other company, Apple isn’t immune to the need to innovate, and just like any other company, they have the potential to fail, yet they haven’t (for now). 

Why? That’s because, unlike many other companies, Apple adopts something called a continuous innovation mindset.

What Is a Continuous Innovation Mindset?

Being an innovative company is more than simply implementing new technology. 

In the case of Sony, they successfully switched from cassettes to CDs, but they failed to predict what followed. 

Innovation is a never-ending process that demands the pursuit of new ways to become more efficient and successful while adapting to circumstances and thinking two steps ahead. 

For Legal, here’s a real-life example of how it works:

Once upon a time, there was a lawyer who really loved his job. While working in an international law firm, he racked up achievements and grew his career. Everything seemed okay, but… there was something holding back his love of the legal profession. Namely, it was the exhausting and inconvenient nature of contract management.

He understood that all that was needed to make it better was a bit of magic and automation. So he started AXDRAFT to make contracting easier. And now, AXDRAFT consistently pushes out new products and solutions to meet every user’s desires.

Of course, innovation doesn’t mean a new solution must be created. Rather, it can represent a better way of doing business. 

Sometimes macro-events force companies to innovate, such as the coronavirus pandemic. 

Research from Gartner shows that although legal tech budgets expanded during the pandemic, legal could have been more proactive than reactive. Adopting an innovative mindset would have helped in such situations as individuals would have been more prepared.

Yet, many lawyers still aren’t fond of innovating.

There are five main reasons why those who adopt and use legal technology do so:

  • Improve service quality
  • Improve the efficiency of workflows
  • Allow staff to work more flexibly 
  • Reduce the overall cost of service delivery
  • Increase security and compliance

These reasons are to be expected as they’re also the reasons why innovation exists in the first place.

Still, some companies refuse to implement new technology. Resistance can appear on a team level when a team doesn’t want to innovate even though the company itself is innovative. And if the company relies on the team’s opinion, the company may not always understand how it prevents them from improving their performance. 

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There are three frequent reasons why innovation isn’t pursued: 

  • Existence of uncertainty about the expected business benefits
  • It’s not a strategic priority
  • “It isn’t required at my firm”

Part of this might be due to the profession itself. By nature, lawyers are cautious and risk-averse. Oftentimes, they don’t like trying something new, and they don’t have a lot of time to spend on changing the usual workflow. They don’t like wasting working hours on something they won’t see immediate results from, and they try to avoid things that may negatively affect their efficiency.

The Root of the Problem

Let’s look closer at the three reasons mentioned above. 

Those who are uncertain about the outcome of innovations may have heard something positive or negative about possible results. This can be addressed by doing research into what’s needed to improve your workflow.

Regarding innovation as a strategic priority, research should first be done on possible solutions, how they can be applied in your organization, and how you can benefit. Also, it’s important to calculate the ROI so that you know if the changes are worth it.

Assuming the solutions that are found not only improve work but also yield a positive return on investment, then any organization would be hard-pressed not to make innovation a strategic priority.

As for the reason “My firm doesn’t require it”, that’s almost the same as saying your firm doesn’t need:

  • Better efficiency
  • Better customer service
  • Better security
  • Higher revenues

In business, everything ties back to money. Monetary benefit is good and losses are bad. Also, stagnation and the lack of exponential growth are also bad. 

At the end of the day, innovation should translate into positive revenue, and calculating the ROI helps make a case for the need to innovate for both teams and stakeholders

Experiments with unclear results aren’t what lawyers expect, which makes their caution understandable. However, customers expect a high level of service and that their data is stored safely. That’s why instead of focusing on the risks of innovation, lawyers should focus on the value innovation can provide.

At the very least, smart innovation will allow you to spend less time on administrative tasks, freeing you up to expand your practice, create a better environment, and help you get more clients.

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Why It Matters

Continuous innovation is the momentum that keeps a company moving forward. This constant search for ideas helps companies adjust products to meet customer needs, solve problems, and create value for customers or for the firm.

Companies that rely on old approaches that worked eons ago should know that 52% of Fortune 500 companies have folded within the last 15 years because of their lack of an innovation mindset. Companies that refuse to innovate are usually left behind, even if the previous they were real ‘monsters’. 

For example, Kodak dominated the photography market for most of the 20th century, yet they failed to foresee the rise of digital pictures. What makes this an even harder pill to swallow is that they were the ones who invented digital photography.  

Changes are scary for most people, which is okay. But sticking to old ways of doing your job simply because “it’s what’s always been done before” should scare you more.

Clients and hired professionals will always choose those who are constantly improving. For instance, in the UK, 49% of workers say they will quit their job if their work technology isn’t up to standard.

Nevertheless, innovation shouldn’t be done simply for innovation’s sake. It’s important to remember that the value gained from innovation should be greater than the risks and costs involved. When this value outweighs the investment, it’s time to act.

How to Foster a Continuous Innovation Mindset

In Japanese, there’s the term “Kaizen”, which means continuous improvement. This philosophy is based on involving every employee in improving all business processes, whether it’s the CEO or a regular worker. 

Kaizen also implies that constant positive changes, even the smallest ones, can bring major improvements in the future. 

Here are some steps on how to implement Kaizen in your law firm or in-house legal department.

Involve everyone

If you want to succeed, everyone should be a part of this effort. The focus on improvements can be made through a shared effort at the workplace. 

There are several things you can do to achieve this:

  • Give everybody a role – Set some personal goals for weekly or monthly sprints. Achieving those goals will help them understand what impact they have on the team.
  • Hold periodic meetings – Set a period of time when you have meetings. This will get everyone on the same page. Additionally, giving your employees weekly or monthly reports will show everyone what their work is creating.
  • Ask for feedback – Encourage your employees to provide feedback. They will know that their opinions are valued and that they can influence processes and improve workflows.
  • Conduct joint activities – This will help your employees get to know each other, which will also make it easier and more pleasant to work together.

These steps will help you build a real team that feels like it’s part of something bigger and that’s working towards a common goal.

Encourage

When a team lead starts screaming at employees, they start feeling oppressed. This will also prevent them from thinking about how to make processes better. 

Inspiration and encouragement are much better drivers for high-quality work. Remember, above all, people work with people. If you can inspire them, they would love to find ways to help their company to reach its goals faster. Support them in achieving their personal goals. This is critical for continuous improvement.

Set small goals

Your organization may have some “Napoleonic” plans, and that’s good. But on the level of a regular employee, big goals may be demotivating as employees focus on how much work’s ahead of them. 

A better approach is to divide big goals into smaller, short-term goals. Motivation grows when such milestones are reached. Also, it will help your team see possible improvements that can allow reaching the next milestone easier and faster.

Provide feedback

We may not always comprehend our weak points, which is why giving and receiving feedback is a core part of development. While building your team, coach them to give constructive feedback. People should also know how to ask for relevant feedback, and consider how they can translate feedback into action.

Be transparent

In this case, being transparent means discussing strategies and decisions with your team. It will help you build trust within your organization. In an environment where employees know that nothing’s hidden from them, they feel that their work is meaningful and that they are essential. And this plays a significant role in motivating them.

Role of technology

No matter the geography or area of law you’re operating in, there’s always a constant request for innovation, not only from your clients but from employees as well. 

Technology stands to play a massive role in this. 87% of corporate lawyers and 83% of law firm lawyers say it is extremely or very important for them to work for an organization that fully leverages technology. They expect access to technology that can provide them with flexibility and the ability to work remotely.

The good news is that in 2022, 54% of law companies identified themselves as technology leaders. In 2021, this number was only 40%. Also, 63% of technology-leading law firms reported that their profitability increased over the past year, which was more than other firms. Investing and applying the right technology has proven to be a game-changer.

This is how it works in practice. 

Approximately 23% of a lawyer’s work can be automated. Automation tools can reduce time spent on contracting by up to 80%, and cut costs as lawyers aren’t paid to carry out some administrative routine. Lawyers, in turn, are more satisfied with their job, can process more tasks, and don’t get frustrated by routine.

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Wrapping Up

If you’re looking for software that can improve your workflows, look into CLM systems like AXDRAFT. AXDRAFT is an all-in-one contract management solution with all the functions needed to make your legal ops workflows flow. 

It automates routine, enables the drafting of contracts in less than a minute, and provides safe storage for your data. Our team will gladly guide you through all its capabilities and help you calculate your ROI. Book a demo with our team, and we’ll show you how the value outweighs the investment.

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