I was recently given a new report on the state of innovation in Canadian law firms. Aptly named, The Illusion of Innovation at Canadian Law Firms, (found at: https://jnper.com/lawfirms/) the report suggests that law firms suffer terribly from “a lack of incentives, leadership and structures in which to innovate.”
The report, prepared by Joint Law/MBA student Aly Haji under the supervision of Associate Professor Karl Moore Professor Karl Moore at the University of McGill and with the extensive support of Montreal-based boutique strategy consulting firm, Juniper is the first qualitative, data-based study of innovation at Canadian law firms ever prepared. The study received just over 100 responses to questions revolving around a number of key areas such as, leadership for innovation at law firms, billing practices, incentives, and effective use of technology.
I previously commented in the National Post on the innovation leadership and strategy portions of the report which demonstrated that the story of “innovation” at Canadian law firms was nothing more than a triumph of marketing over substance.
In this piece, I comment on those portions of the report relating to investment in technology and the effective use of technology by Canadian law firms.
When respondents were asked whether, or how much, their firm had invested in new technology over the past 12 months, 39% indicated that they had no idea if any investment had even taken place, while another 39% believed that only minimal investment had taken place ($0 – $1.0 Million). The remaining 22% stated that their firms had made low to moderate investments in new technology. From an operations point of view, if a law firm really had made impressive investments in technology, the rank and file who use that technology would not only know about it, they would celebrate it. The fact that personnel don’t know much about such investments, demonstrates that no impressive investments have actually been made.
And when it comes to the proper use of technology, the story is similarly disappointing. With respect to those respondents who said that their firm had made investments of over $1M in new technology over the past year, only 40% said “most of” the new technology was being used effectively. 40% said that “little” of the technology was being used effectively and the remaining 20% had no idea how this new technology was being used. In a well-oiled technologically innovative law firm, one would expect 100% of employees to be properly trained and incented to use “most of” any new technology.
These responses should send a chill deep into the hearts of law firm management. They reinforce the notion that proper training, incentives, monitoring and follow-up need to be part of every innovation or technology strategy. Technology is not magically absorbed by employees immediately upon installation.
Most disturbing, the report also found that there were no channels at Canadian law firms to “present innovative ideas….[And that the lack of such a channel] may prevent those who use, or are interested in new technologies (particularly at the associate level) from indicating how technological solutions could be implemented and used effectively throughout their firm.” In my view, failure to create such channels squanders the intellectual capital of the firm.
So, despite all the talk about “innovation” and “technology” at Canadian law firms, there is little quantitative data to support it. I suspect the same is likely true among firms in other jurisdictions.
The data does however, give clear direction for law firms that truly wish to be “technologically innovative”: celebrate, train, incent, survey, repeat.
Mitchell Kowalski is the Gowling WLG Visiting Professor in Legal Innovation at the University of Calgary Law School, the Legal Innovation Columnist The National Post, and the Principal Consultant at Cross Pollen Advisory where he advises in-house legal departments and law firms on the redesign of legal service delivery. He is also the author of the critically-acclaimed book, Avoiding Extinction: Reimagining Legal Services for the 21st Century. His new book, The Great Legal Reformation: Notes from the Field will be published in early 2017. Follow him on Twitter @mekowalski or visit his website www.kowalski.ca