Canadian Lawyer

18 J A N U A R Y 2 0 1 8 w w w . C A N A D I A N L a w y e r m a g . c o m The real threat of disruption for legal services is the impact of that technology on established profit and business models and in creating alternative delivery meth- ods. Entrepreneurs are often advised to find "those who are underserved by estab- lished firms and those who are poorly served by them." By targeting these cli- ents with new technology, new business models and in new markets, innovators threaten the incumbents with the race to adapt and to serve these new demands. And, as delivery and performance of the new legal services improve, the fight for established clients then begins. Organizations across all industries are attempting to avoid this future by dis- rupting themselves. The most innovative companies today are those that are teach- ing themselves to adapt and pivot quickly as they explore new opportunities. Build- ing these internal innovation capabilities needs a change in mindset, however — one that is entrepreneurial and hyper- curious (or "intrapreneurship"). Firms are grappling with how to create the right environment for both intrapreneurs and innovation to flourish on the inside, all without directly attacking the status quo (as it is still working rather well for some). Strategically, it seems there are two main paths: (1) a commitment to drive innovation internally and (2) investing in or acquiring external startups to stay relevant. Internal innovation Internal innovation means infecting the corporate culture with a new mindset. Large organizations are adopting col- laborative arrangements with entrepre- neurs and startups to create a diffusion of innovative ideas and approaches. Such osmosis can spread what it means to be an entrepreneur to internal teams so that more ideas can be harvested and built for clients internally. Firms are beginning to see the value of bringing lawyers, technologists and entre- preneurs together to create cutting-edge solutions. There are a few different models being tested. Some have built internal cor- porate incubators and accelerators that fol- low Christensen's advice in separating the research and development teams from the traditional hierarchies and structures. This allows for different models and processes to flourish that aren't typically available to law firms, such as "failing fast," embracing ambiguity and rapid prototyping. Allen & Overy, Gilbert + Tobin and Akerman LLP (among others) have fol- lowed this model by building internal incubators that bring groups of their law- yers and technologists together to cre- ate and execute ideas. Osler Hoskin & Harcourt LLP, on the other hand, has partnered with Ryerson University's Legal Innovation Zone. LIZ is an external incu- bator of legal startups that "develops solu- tions and technologies to improve legal services and the justice system." The part- nership brings lawyers and legal entre- preneurs together for specific innovation initiatives. "Hackathons" and other inter- nal contests are held to harvest ideas and pick those in which the firm should invest, build and commercialize. Other firms such as Bryan Cave LLP and Simmons & Simmons LLP in the U.K. are bolstering internal expertise and developing intrepreneurial skills among their lawyers to understand what the tech- nology can do and how it can help them deliver exceptional services to their clients. Simmons & Simmons is fostering innova- tion by encouraging its lawyers and busi- ness professionals to take time off from billing to explore their innovative ideas. And, finally, firms such as Dentons (NextLaw Labs) and Mishcon de Reya (MDR Lab) are combining some of the internal accelerator benefits of the legal technology space with early-stage invest- ing, plus legal advice and mentorship for the startups. Established firms launching into this space recognize that their core com- petencies and profit models are not @k8simpson L E G A L I N N O VAT I O N N O W O P I N I O N he incumbent's dilemma is how to drive disruption internally before being disrupted by others. Big firms are building innovation capabili- ties internally in order to compete with the growing upstarts that sur- round them. There have been streams and streams of business writing on the subject of disruption and innovation since Clayton Christensen wrote his seminal book on the subject. The seeming threat in legal is with technological disruption or, as some have it, the Coming of the Robots. But it is not technology alone that will disrupt established firms. New technology requires a lot of effort initially to improve performance; but, at some point, that effort to performance ratio flips and the investment finally pays off (before plateauing; hence the need for constant innovation in the tech industry). Disrupting from within Most law firms won't be technology innovators, but strategic partnerships can help them compete By Kate Simpson T STRATEGICALLY, IT SEEMS THERE ARE TWO MAIN PATHS: (1) A COMMITMENT TO DRIVE INNOVATION INTERNALLY AND (2) INVESTING IN OR ACQUIRING EXTERNAL STARTUPS TO STAY RELEVANT.

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