The Can This article begins a journey, one that begins to look at the
concept of innovation in the field of providing legal services. The
field that I explore is that in which the liability lawyer is
camped. The article poses some questions for debate. I offer no
single answer but hope that readers will be patient and understand
why that is the case. My inspiration for this discussion is three-fold. Firstly I have
a sense of growing unease at the way in which lawyers and their
clients discuss innovation. Secondly, the content of a lecture I
attended, given by Richard Susskind the well-known legal
"future-thinker", and finally, a developing belief that
lawyers need to radically change and that the best law firms will
lead that change. I hope that by the end of this article I will have been able to
spark some interest in just what innovation within our professional
world can realistically mean, the probable speed of development and
to look beyond the next five years in a way that most lawyers seem
frightened to do. "Innovation and Innovative Legal Services" will be the
topic of Kennedys' Liability Division's Annual Event this
year at The Magic Circle on 24 September - and so I hope that those
of you who find this article interesting will also be encouraged to
attend that event and take part in the discussions at that
time. Other than that, I promise no hard sell - just (I hope) a brief
and reasoned discussion of innovation and the legal world that we
may all inhabit from 2015. The Worms There are two principal and obvious risks of setting out my
thoughts and suggestions. First, competitors may decide to adopt my arguments for
themselves and strive to advance their own case. For that reason I
hope the reader will understand that I put into this article my own
original thought - but not by any means all of it. Second, clients and potential clients may decide that the future
should be advanced more rapidly and that the status quo should
indeed be undone as quickly as possible. That, to my mind, is to be
encouraged. I don't doubt that the best lawyers in the best
firms will always survive - as long as they place their
clients' interests first and can provide a service that clients
want. Before moving on, I should say here that I come to explore the
fact that there are some who instruct lawyers who do not seem to
know what it is that they want. It surely can't just be the
same product but delivered more cheaply? That is product
development and not innovation. Such product development of course
is to be welcomed and indeed expected. However, what is it that
each client really wants from the legal process? Some Susskind Thoughts Every year Kennedys, like many large law firms, holds a
partners' retreat. In 2008 our guest speaker was Richard
Susskind, who gave a fascinating talk. He outlined some areas
covered in his latest book, "The End of Lawyers?" -
particularly emphasising that the question mark in the title was
key. In his book Susskind explores how the future of legal services
and professional advice may look as a result of developments in the
areas of Information Technology and the delivery of Knowledge
Management. His book is aimed fairly widely across a commercial
legal world. He suggests that change will be necessary and gives
some thought to how that may happen. I make no secret of the fact that I was inspired and excited but
equally depressed by what he had to say. The problem for any liability lawyer to wrestle with (assuming
of course that Susskind's warnings are not just ignored), is
how to translate his portents into the wheels and cogs of a legal
service for insurers and their customers that fits with the 21st
century - and above all, one that creates a "product"
that is actually wanted by those buying the legal services. Susskind points out that lawyers have no inherent right to
profit from the law. He draws parallels with the ancient Guilds of
London, who centuries ago held huge power and wealth and, at the
time, no doubt seemed eternal. The Guild of Wheelwrights (the
builders of wheels) was one such organisation. We still need wheels and indeed need more of them than we ever
have done, but, as Susskind points out, technology and a changing
world have done for the wheelwright. There is no longer any need for one man to routinely provide a
bespoke handmade wheel and therefore no future in being a
wheelwright. But there is still a need for wheels to be built and a
thriving industry in the engineering, manufacturing, production and
delivery of low cost, high volume wheels for all manner of diverse
needs. I am sure readers will appreciate that there is no longer any
need for your lawyers, generally, to provide you with a truly hand
built legal product. We are as a profession, I would suggest, some distance along the
road already ridden by the wheelwrights. Innovation Very often insurers and their procurement teams will ask lawyers
to be "innovative" or to highlight their
"innovations". I have become increasingly uneasy about such terms. I fear that
both insurers and lawyers are missing a golden opportunity by
continuing to misunderstand the term "innovation". If we take innovation to mean the creation of something entirely
new - we can see the problem. Creating a slicker, faster, cheaper or more transparent way of
selling the same legal product is not, I suggest, truly innovative.
Reducing shelf life, claims experience and being more open may all
be welcomed (and indeed expected) by a client - but is that all
that the client really wants? Such an approach I believe is simply
an enhancement of an existing product. It is not the creation of
something new. Once litigation has commenced, can lawyers be truly innovative
if they, their clients and the other parties' lawyers are all
bound by the same framework of procedure, court rules and
timetable? I believe passionately that they can be. Some thoughts to take forward The description of lawyers and their clients "working in
partnership" has become a clichéd phrase in the last 5
years, not as a result of the expression being meaningless but
rather because it is misused. It is absolutely the ideal and should
be the goal - but how many such arrangements truly exist in the
liability field? To be able to truly work together in partnership, insurers,
their customers and claims handlers will need to have a better
understanding of what it is that their lawyers can do for them over
the next 10 years, and then work towards that goal. Lawyers will
need to stop telling clients what it is that they can deliver and
start asking what it is that their clients want. Lawyers will need
to fully engage with their clients' businesses and work
alongside them in order to develop particularly focused legal
products. By "particularly focused" I don't mean
enhancements of more of the same, for example, by just being
"in-house" or by virtue of a slicker delegated authority
scheme. I mean a truly integrated legal solution. Such an approach
needn't be geographically proximate. It is far more important
that the ideals, values and attitudes of the partnering
organisations are harmonised. Businesses that share common core
values and objectives will be far more likely to succeed together.
Innovation will flow much more freely from such harmony. I can imagine that at this point that readers will want me to
place some flesh on the bones of this hypothetical discussion. I
attempt to do so below, but these comments are only the slightest
exploration into the more obvious areas for discussion. Information Technology and Knowledge
Management Are new on-line products of interest? If so, to what end? Who
will fund their development? What should they contain - just
guidance, knowledge management, legal content or far more? Risk and reward Charging by the hour is, in my view, going to become
anachronistic within the next five years. However, my experience is
that potential clients can be slow to respond to suggestions of
annual retainers, delegated authority products or of structuring
reward for lawyers based upon quantifiable risk management results
and Key Performance Indicators. Why should the insurance world not
follow lawyers' other commercial clients and seek certainty and
eschew the hourly rate? Product Development These are exciting times. The Legal Services Act will allow
non-lawyers to invest in legal businesses. However, why would they
want to? Would now be a perfect opportunity for a forward thinking
organisation to partner with a forward thinking law firm and create
a truly innovative 21st century product? The two together could
generate true innovation. No other organisations will be better
placed to understand their market. It would be a bold step. Could
that product then be sold to others in the market place? Can the legal profession truly innovate if clients do not know
what they want? Are our clients truly receptive to innovation, and
how can that take place within a litigation structure that exists
as it does today? Can leopards change their spots? You may assume here that I am going to explore whether lawyers
are ready for the tectonic changes that will be necessary in the
next 5 -10 years. It's true that, for example, asking lawyers
to give up billing by the hour will be embraced about as
enthusiastically as the Woolf reforms were by some and the Fast
Track costs regime by others. The more progressive and more
innovative lawyers will however embrace such changes and see them
as opportunities to work more closely with clients and provide a
proper service; not just a service of last resort. However, the leopards that I refer to are those providers giving
their work to the lawyers. Insurers and their customers I hope will
understand that innovation comes about as a result of an exchange
of ideas, an understanding primarily of what is truly wanted - and
not by starting with the question, "what is it that our
lawyers can do for us?" The Holy Grail I suggest is to eliminate all claims in the first
place. That will probably never be a realistic goal for anyone
other than the smallest customer or more specialist insurer. A more
realistic goal would be to deal efficiently with the claims that do
arise, and perhaps even the litigation that arises from it; but to
do so with significantly reduced legal input and legal cost. To achieve such a solution, an insurer would need to work with
its lawyers to find new ways of dealing with litigation, reducing
legal spend and reducing the numbers of instructions to the very
lawyers helping to design the new approach. To find a lawyer brave enough to work with an insurer in order
to square that circle would be a wonderful thing. Is it possible? I hope to see you at The Magic Circle in September. The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
ARTICLE
2 June 2009
Innovation - Opening a Can of Worms
This article begins a journey, one that begins to look at the concept of innovation in the field of providing legal services. The field that I explore is that in which the liability lawyer is camped. The article poses some questions for debate. I offer no single answer but hope, reader that you will be patient and understand why that is the case.