It looks at the underlying reasons for innovation and provides a number of examples for you to consider.
Today, most business is conducted in an environment of continuous, dynamic and disruptive change with a laser focus on costs and efficiency gains. There is also often commercial pressure to stay ahead of the competition and differentiate across products and services.
All this drives a constant need for innovation across the entire business landscape. Legal teams are not immune from this. However, on paper they are well placed as cross-functional units to generate and execute innovative ideas in the wider business. They also need to keep up with the pace of change within their own teams.
Why innovate?
Innovation is a primary objective at most organisations. Whether it’s to give their products or services a competitive edge, to cut costs or to streamline processes, many employers reward innovation richly. Innovation can also sometimes go off in unexpected directions. An experiment or innovation that doesn’t necessarily succeed, can be the precursor to something else of value.
With this in mind, it’s tempting to look for ways to innovate within your in-house legal team. However, don’t innovate for its own sake. Think long and hard and work out how you can innovate in ways that support your organisation’s main strategic goals and improve the way that your team operates internally and with other departments. Before you take the plunge, decide why you’re embarking on the project, what and who it involves and what it’ll achieve.
Consider innovation as a way to further a strategic purpose or business objective more efficiently than is currently being achieved. For example, can you make a particular process more efficient? Can you enhance productivity by doing less work? Can you cut costs or put in place a programme of continuous improvement?
All of these are great reasons to innovate, but always align your projects to relevant organisational aims. A good test is "Will it make the team/the business better in ways that the team/the business will appreciate and without making things worse for them or for others?".
Remember too, that organisations and legal teams differ in size, industry sector and culture, so context is important when justifying innovation. What works for one team will not necessarily work for another. For example, key performance indicators (KPIs) designed for a large legal team spread across multiple sites and jurisdictions are unlikely to have any relevance in a small legal team that works together in a single office.
Sometimes one of the successful outcomes of an innovation are learnings that lead to new ideas or refinements to your project. For example, there is currently a lot of focus in using AI to drive innovation. While “learning” is not necessarily the sole reason for an innovation project, it can have real value. Experimenting with AI now can place in-house legal teams into a position of strength to drive real value from AI in the future.
Preparing and executing your innovation project
As with any business venture, prepare a business case and define the return on investment for your proposed innovation project. Factor in all the internal resource costs, predicted spend and efficiency gains. However with innovation and doing something new, there can be costs that are less predictable.
Don't underestimate the resource intensity of an innovation project. Be sure to consider cross-functional support, particularly IT, if your project is technology based. For highly complex projects, you may need to present a formal business case to get approvals across other teams or at executive level. If so, ask your colleagues in finance to help you. You may also need to hire external expertise to input or facilitate aspects of the project.
Engage with your team on ideas for innovation. Thinking and working outside their core specialisms and, eventually, seeing their ideas increase business value will invigorate and motivate them. Tap into younger team members who may be more tech savvy or come to the workplace with less preconceived ideas about the art of the possible. Sometimes you can use their knowledge and mindset to bring fresh perspectives to your innovation project.
Innovation means doing things differently, so leadership is also important. Be prepared to lead any cultural change resulting from innovation at all levels of the organisation. This could involve anything from teaching the CEO to get comfortable with the latest tech to convincing the entire employee population on the merits of a new process. Different people respond in different ways to innovation, yet they all look to leaders to set the tone and lead by example.
Remember also that some of the best forms of innovation are simply applying existing tools, processes or approaches in a new context. Often the most effective way to be an innovator is to find better or different ways to use the things that the company already has – building on ideas and what has gone before is still innovation.
It is also worth noting that innovation does not have to involve technology. Innovation projects often do leverage IT solutions, but a strong idea can be as simple as restructuring your team, which can have a significant impact.
Finally, always remember that innovation is a relative term. It is what is innovative for your environment that is important. What you carry out may not be innovative elsewhere in the business or in other legal teams but if it drives value then it is worth pursuing.
Some ideas on innovation
Opportunities for legal teams to innovate are many and varied. Here are some you may be able to take advantage of:
- Setting up self-service tools for employees such as intranet FAQ and basic self-service contract automation for clients on volume, simple requests like NDA, licensing agreements, consultant contracts etc. There are many simple and cost-effective tools which can help, especially when you price the saved cost of your team members' time. This is also an area where AI and legal chatbots can also provide an effective interface for employees to ask popular questions and get simple answers; in the past, opportunities for this have been limited by capabilities, but generative AI and new products are increasing the potential.
- Redesigning governance processes. Contract approval and signature processes are fertile ground for innovation. As an in-house lawyer, you’ll probably be part of your organisation’s governance process. And with little, or no, conflict of interest, you’re ideally placed to provide recommendations on making the process more efficient. Consider software applications and intranet tools to streamline process flows. Any changes will require an investment in training and education across the business.
- Managing risk. Like its governance processes, your organisation’s risk management system is another area that you can help make more efficient. Risk reports could also give you a rich seam of data for further innovation. For example, you may be able to use this information to align your precedent documents and playbooks and ensure your legal resources are doing everything possible to mitigate key risk areas.
- Optimising end-to-end contract lifecycles. A high-volume contracting environment provides numerous opportunities for innovation, particularly from a technology perspective. Advanced document automation with a generous dollop of AI provides opportunities to generate contracts based on some standardised data.
- Training and education. Internal education and training can free up your resources by self-training the business, especially on quasi-legal tasks. There are a multitude of tools, apps and formats that provide fresh ways to create and deliver training.
- Engaging external firms and managing a panel of suppliers. Most external firms will help you with your innovation project and a formal panel procurement process will help you identify those who’ll do it best.
- Using flexible resourcing options. One of the most significant changes in the in-house legal marketplace in the last few years is the rise of flexible resourcing solutions. Shop around for providers able to provide innovative ways to resolve your resourcing issues, particularly for short term and project-based shortages.
- Outsourcing. Can third parties, including offshore providers, carry out any processes or tasks that you’re performing in-house better or more cost-effectively? Outsourcing certain tasks may free up your team to concentrate on premium work. Always consider the added management time of supervising external providers.
- Creating playbooks. Documenting your organisation’s baseline negotiation strategy on key contracts, on a clause-by-clause basis with relevant commentary, can create significant value, especially across large and diverse teams. Also document the details of the business owner who makes the decisions on the clause because they own the underlying business activity that will also have to be varied in line with the clause. However, don't underestimate the time and effort needed to put a playbook in place, the need for cross-business ownership of various items or the importance of version control. Playbooks need continuous updating with strict confidentiality controls.
- Legal and predictive analytics. You can use technology to derive a rich set of analytics that can cover multiple areas such as performance, the likelihood of the outcome of cases, levels of risk and more. These can be used to both predict working patterns and improve performance. Dashboarding tools like Tableau and PowerBI also offer opportunities to visualise data and bring together different sources together into one view to deliver insights and support decision-making.
- Chatbots and digital assistants. As already mentioned, chatbots and digital assistants are improving and provide an interface for legal innovation and automation. They can answer questions or gather data to create a document, all through a natural language interface. Don’t underestimate the amount of work involved in setting this up.
- Horizon scanning. Helping you keep in touch of what is happening across the legal and regulatory landscape – perhaps using AI to filter the right information to the right expert or giving warning when something needs to be changed – is another area ripe for innovation.
- Document review and analysis. AI has the power to analyse huge volumes of content at great speed and this could be used to provide new insights.
- Incorporating artificial intelligence (AI). Many of the solutions above are now driven or made more compelling through AI and machine learning. The possibilities here are a mixture of mind-boggling, exciting and scary and there are a multitude of ways to innovate, including some ways we probably don’t realise yet. The opportunities to streamline current practices are significant, although it is important never to lose sight to what we are trying to achieve and the importance of human oversight.
- Structuring your team. Not all innovation requires technology. Think about structuring your team in an innovative way. For example, you could transfer your lawyers across (or even outside of) the organisation for short periods to experience the operational coalface. Alternatively, you could structure your team so that lawyers work in business units or have the equivalent of external client relationships with unit heads. This may not sound particularly innovative, but it can be within the context of a particular organisation.
All the above are just a few ideas. There are many more ways to do things differently in smart and transformative ways.
Conclusion
Most businesses provide significant opportunities for legal teams to innovate. Technology is available and AI is leading the pack in terms of delivering innovation. Focus on processes you can streamline and ask yourself if you can use business critical data in a different way. Could third parties or external providers make your life easier or save you money? Are you exploiting or optimising the value of your team's knowledge or know-how? The opportunities for innovation are endless.
Before diving in the deep end, plan your innovation projects so they add value to the business or enhance its strategic objectives. Preparing a business case is a useful and important process to flush out the time and costs involved. Don't underestimate this, especially if you depend on others in the business to achieve your success. Start with small innovations while you are learning how to do it and then grow the scope of your ambition! It’s also worth remembering that a project that doesn’t quite succeed could deliver the learning or form the basis for a new project that does.
Finally, shout out loud about any successful innovation you introduce. Lawyers are not known for being innovative or for singing their own praises. Your bosses will appreciate your success stories, as will your organisation’s communications team.