In today’s world, law firm innovation is no longer a nice-to-have. If you want to be competitive and grow your business, especially through digital channels, innovation is a necessity. Like other business sectors, law firms have to be agile and adapt to continuously changing consumer trends, especially during times of unpredictability.
With the likes of Amazon, Apple, and Google constantly providing better products and experiences, clients are demanding more innovation and increased ability to get the service they demand. This is true for all service providers, including law firms.
To keep up with this demand, law firms are increasingly dedicating resources towards a legal innovation officer. Small or solo firms may not be able to afford a dedicated person, but the advantage they have is in being able to implement ideas quicker because often, there is less bureaucracy.
In this guide, we’ll take you through what it means to innovate within the legal industry, and why creating a client-centered law firm is your winning bet.
What is law firm innovation?
Law firm innovation is the practice of breaking from tradition to improve the way legal services are delivered. It encompasses many things, from the client experience to internal processes, to the way a firm markets itself.
It can sometimes be difficult to see the extent of overlap between innovation and the legal industry. Risk aversion and requiring precedence are important factors to consider for practitioners, and with true innovation, this is hard to come by. However, technology has shaken up the modern client experience and the legal industry is being forced to embrace innovation to keep up with demands.
With the introduction of new products, platforms, and technologies, law firms and legal departments are shedding inefficiencies, bureaucratic inertia, and finding new ways to be flexible in their approach to work. New ideas are advocated for, implemented, and improved upon.
Client-centered innovation is key
While the legal industry has always clung to tradition, more law firm professionals are realizing that innovation is key to survival in our changing world. It begins with truly shifting focus to the needs of clients, and providing an end-to-end client-focused experience.
This doesn’t mean you need to wow your clients. Not by a long shot. You simply need to get laser-focused on what clients actually want, and then deliver that in a way that makes their experience effortless. Of course, you’ll need to deliver this service in a way that’s efficient and profitable for your firm as well.
Put yourself in your client’s shoes. Imagine how they go through the process of hiring a lawyer, explaining their legal issue, and proceeding with legal matters. By being able to view the experience with your law firm from their perspective, you’ll be able to build a more client-centered approach to your processes.
Accurately meeting your clients’ needs and providing the effortless experience they seek will help you stand out from the competition. You’ll get more reviews and referrals, and drive more new business for your firm.
Law firm innovation ideas
To do law firm innovation well, you’ll need to identify the overlap between delivering a top-notch client experience while making tasks and processes more efficient for your firm and staff. Below are eight ideas on how to incorporate innovation into your law firm.
1. Explore alternative fee arrangements
Alternative fee arrangements (AFA) enable you to go beyond the billable hour. In many cases, AFAs can help enhance the client experience. Unlike with the billable hour, many AFAs give clients an idea of what their legal case will cost up front. AFAs can also provide more payment predictability for your law firm.
Examples of AFA’s include:
- Fee caps. Hourly billings are capped for a given case, project or service.
- Fixed fee/flat fee menus or for single engagements. Prices are set for select services.
- Full contingencies. Fees are only issued if the law firm wins the case.
- Holdbacks/partial contingencies/success fees. A predetermined amount is paid to the law firm, with the rest contingent on the firm’s success.
- Portfolio fixed fees. Provides clients with a single, fixed price for a large number of services.
- Evergreen retainers. Your client pays up front and tops up the retainer whenever it dips below a certain amount.
- Risk collars. Attorneys receive a bonus if their work is completed under budget while clients receive a discount if the work goes over budget.
2. Find new ways to communicate with your clients
Although many firms believe they interact effectively with their clients and prospects, research from our 2018 Legal Trends Report shows a clear disconnect between the ways lawyers communicate with clients and how clients prefer to communicate. Results show that 55% of clients want to learn about the legal aspects of a case in person while only 2% of lawyers think their clients prefer in-person meetings.
By learning how to overcome this communication gap, you can build a more efficient, client-centered and profitable law firm. There are numerous ways to blend in-person interactions with technology. Methods for effective client communication include:
- Sending updates via email
- Using receptionist services that answer your business calls and sync all your calls and messages to the appropriate matter
- Texting using your firm’s business number
- Making use of client portals so that clients can access information related to their cases on their own
- Leveraging client intake and client relationship management tools to provide attentiveness during the intake process without extra overhead for your law firm
3. Increase client accessibility
Part of building new revenue channels means making sure you’re able to reach all potential prospects when they’re searching for a lawyer, and existing customers when they need additional services. Making your services more accessible to all will help your firm stand out from the rest, and may help you win new clients.
Four ways to do this include:
- Website accessibility. Ensuring your website meets accessibility standards means embracing coding practices that help create a site that’s usable by all visitors. Your website needs to be developed and designed in accordance with international standards known as the Web Content Accessibility Guidelines, or WCAG 2.0 Level AA.
- Include image descriptions. To make images accessible, make sure to include alternative text, which is the back-end code added to an image. This way, a screen reader can describe the image’s content to someone unable to see it.
- Include captions for videos. Pre-recorded videos should have captions or transcripts available as text alternatives of the audio content.
- Increase hiring lawyers with disabilities. A great way to ensure your communication tools are accessible is to hire lawyers who would be making use of these alternative channels.
4. Leverage legal analytics and artificial intelligence
Legal analytics encompasses tools and/or capabilities powered by artificial intelligence technology capable of sorting through huge amounts of data to find trends of value to attorneys.
For conducting legal research or e-discovery, marketing your firm, and driving business insights, legal analytics and artificial intelligence are game changers in the law profession. Law firms have access to fast amounts of data. And with the use of new technologies, that data can be turned into data insights that help you make better business decisions or even better decisions about how to approach legal cases.
Major benefits to leveraging legal analytics and artificial intelligence include helping you win cases for clients, attracting new client business by quantifying relevant experience, and pricing legal projects.
5. Use cloud-based legal practice management software
As work takes place increasingly out of the office, it’s become absolutely key for attorneys to access their case information from anywhere. By keeping key case details and documentation on cloud-based practice management software, lawyers will be able to:
- Work remotely
- Respond to clients more quickly
- Allow other team members access to necessary information whenever they need it
- Keep automatic back-up files of client information in a secure environment
- Use whichever operating system they want
- Reduce the need for in-house IT specialists
- Scale at lower additional capital costs as your law firm grows
If your law firm has yet to move to the cloud, this is definitely an area of innovation to start with.
6. Build a virtual law firm (if you haven’t already)
Increasingly, law firms are seeing the many advantages of running a virtual law firm over a traditional one. The overhead costs of running a virtual law firm are greatly reduced, as you won’t need to pay rent on office space or purchase large office equipment. Virtual law offices also use cloud-based software, so you’ll have far fewer costs when it comes to storing and maintaining case files.
Another advantage of running a virtual law firm is employee happiness. Lawyers and other staff who work at virtual firms can work from home, or wherever they wish, and can often set their own schedules. Clients benefit from this added flexibility, as well. Overall, operating a virtual law firm can help lawyers manage their relationships with clients in a mutually beneficial way.
7. Automate your client intake process
There are so many different ways that law firm automation can improve and create efficiencies in your client intake process, from enabling e-signatures for legal documents to creating smarter and easier client intake forms.
Firms can create customized forms to suit the needs of each client’s case, so that they only need to fill in relevant data entry fields. This allows clients to save time, and reduces the risk of manual errors made by the law firm. Clients and potential prospects can also fill out these forms right from your firm’s website, creating a more streamlined onboarding experience.
When researching the best tools to automate your client intake process, look for those that integrate seamlessly with your practice management software. As clients fill out their intake form, new contacts and matters are created automatically.
8. Challenge traditional law firm culture norms
Cultural change is the biggest challenge law firms face in keeping up with innovation and technology. The legal industry is at a tipping point as law firms struggle to stay relevant in the eyes of consumers seeking the degree of personalization and digital experience they receive from other industries. There is an urgent need for law firms to consider the longer-term impact of technological change on their organization’s business strategy.
The culture of law itself is a major barrier to successfully adopting technology, since law is structured around rules and regulations. This makes it difficult for technologists to understand clearly what the firm needs and how to integrate solutions successfully. To implement technology is to embark on a new path away from the norm of law, which makes firms reluctant to take the first step until they have seen other firms do it successfully.
An example of a law firm that proves the risk of technological innovation pays off is Vanst Law. Using Clio’s suite of products, owner Cynthia Morgan-Reed was able to create a virtual law firm with low overhead that increased the work and life satisfaction of its employees.
How to apply these legal innovation ideas
When it comes to true legal innovation, law firms must think of the ultimate benefit to the client first. Given the circumstances, clients may be in very stressful or time-sensitive situations, so using innovation to deliver the best possible client experience should be the focus.
That said, the goal is to be client-centered, not client-first. Your firm must consider the efficiency and profitability of any new, innovative processes.
If executed well, innovation will lead to revenue growth and opportunities for business development.
Keep these points in mind to successfully apply innovation ideas within the legal environment.
- Commit to innovation as a business strategy. Innovation is key to your law firm’s success, but you’ll never cross a finish line. Incremental change is the key to achieving goals related to law firm Innovation. You’ll need to commit to continuous innovation long term.
- Appoint a person or department to manage legal innovation. In a small firm, this may be a lawyer or office manager. If you have room in your budget, also consider outsourcing innovation consultants or strategists.
- Prioritize each legal innovation idea. Develop a set of criteria that will help you determine which ideas are most needed, feasible, and applicable to your firm. Also, consider how much of your client base a new idea will impact.
- Develop a plan. Implementing your legal innovation ideas is often the most difficult part of innovation. Many projects risk failing if project managers and teams aren’t able to develop a realistic work-back schedule. We recommend creating a SMART plan that includes the tools, timelines, and budget needed. More importantly, we recommend clearly communicating with staff and clients, and soliciting feedback often.
- Put your plan into action. Innovation ideas are only as good as your firm’s adoption of them. Hiring a project manager, or outsourcing this role to a qualified, trusted partner, will help ensure the project moves forward and lawyers and staff adopt changes.
Legal innovation resources
For keeping up-to-date with the latest industry trends, here are a few resources that you can explore:
- The Client-Centered Law Firm by Jack Newton
- Clio’s legal resource library, offering white papers, success stories, webinars, and more.
- The Clio Cloud Conference – The world’s largest legal conference
- The Top 11 Legal Podcasts to Listen to in 2020
- The Daily Matters podcast, made in-house by Clio
- LawSites, a technology and innovation blog by Bob Ambrogi
- Legal Technology Today, a publication by the ABA Legal Technology Resource Center that provides the legal community with practical guidance for the present and sensible strategies for the future.
- ABA Center for Innovation, a place for collaborative and creative thinking about transforming the US justice system
- The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard and Daniel Susskind
- The LegalTech Book: The Legal Technology Handbook for Investors, Entrepreneurs and FinTech Visionaries
Innovation can be intimidating for an industry that prides itself on tradition and safety. However, as the world changes and new technologies begin to enter the market, client expectations are changing. Flexibility, accessibility, and personalization are no longer optional for law firms that wish to remain current and competitive for new client business.
But you don’t need to implement everything at once. Workplace innovation is an ongoing process. By taking a step-by-step approach to implementing new tech-driven approaches, you’ll be able to improve everything from new client intake, to case file management, to even employee morale.
Note: The information in this article applies only to US practices. This post is provided for informational purposes only. It does not constitute legal, business, or accounting advice.
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