Every industry has seen innovation transform it in some way or another, perhaps driven by the need to keep up with changing technologies, to meet the needs of the customer or adhere to changes in legislation. And one thing that’s clear when it comes to innovation is that business needs to adapt or risk losing out. Here I will take a look at what businesses can learn from innovation in the legal sector.

In some industries, innovation happens more naturally than in others. For example, the legal sector has been traditional in its ways for some time with most firms following the typical partnership structure. But over the past few years the sector has experienced various changes, such as the Jackson reforms, which has meant they have had to change and adapt. The firms that have managed to survive and remain successful are the ones that create a positive brand and stay ahead of their competitors by operating more like a business.

What is innovation?

Innovation is a term that relates to changing the way a business operates in order to create a more effective way of working and to increase productivity. For example, innovation does not mean inventing, but refers to implementing new ideas and improving existing products and services to help the business succeed and adapt to the changing marketplace. This may include altering the business model or coming up with better methods of solving problems that its industry is facing – this all leads to innovative thinking and helps to position the business as a market leader that is able to drive success forward in its sector.

How does the legal sector show innovation?

Previously, the legal sector has not really been known for its innovation and it has generally been portrayed as fairly traditional, particularly in terms of how it operates. However, over the past ten years the legal industry has seen some significant changes which have forced firms to either adapt or risk closing down. Perhaps the most considerable change came with the introduction of the Jackson reforms back in 2013. This forced personal injury law firms into rethinking their company structure in order to secure new business, as the dynamic of the ‘no win, no fee’ business model was turned on its head and firms had no choice other than to consider how they receive their work, and how they would secure work in the future. For example, we took the decision to cease reliance on third party companies for our medical negligence work, and instead chose to market ourselves directly to the public. This approach has proven to be a great success, but at the time was quite a bold step to take.

Following this significant change, the law firms that were able to flourish were those that became more business-minded and embraced new strategies in order to promote their services and bring in new clients. A popular method of overcoming these changes and helping a firm achieve its business objectives involved the introduction of non-lawyers or non-executive directors (NED) to the board. Professionals brought in from different industries often approach issues in a different way and can offer expertise and insight to help grow a firm that are not within the training or skill sets of a lawyer. For example, bringing in a NED with strong marketing expertise could help to raise the company’s profile and drive forward the marketing strategy.

Another way law firms have innovated is to gain approval as an Alternative Business Structure (ABS), like Fletchers Solicitors has done. This means that these non-lawyer directors can be officially recognised by Companies House. This helps to further strengthen the breadth of talent and experience that can be brought in-house to create the best possible leadership structure and drive a business forward more effectively.

So what can other businesses learn from innovation in the legal sector?

Taking inspiration from the legal sector, the key to successful innovation is to firstly identify the opportunity and then generate a solution that will help the business overcome the change or improve its productivity, for example. Initially, it’s important to think about how this change will affect the industry, and ultimately the business, in order to then devise a strategic response. Ideas and solutions can come from lots of different places - sometimes they are completely new, but most of the time they have been borrowed, adapted or are based on existing ideas.

In other words, it is useful to investigate what other industries have done in order to innovate. Have any other industries faced similar challenges? If so, how did they overcome them and can this work for your business? Ideas might not be completely mind-blowing, but implemented in the right way, they could revolutionise the industry. This won’t be a quick process and will involve several meetings with senior members of staff, managers and creative people throughout the organisation to come up with ideas, look at how they will work and the impacts they will have.

This is where the testing process comes in. Once the solution has been decided on, it needs to actually work and will probably need tweaking and amending so that it stands up to the challenge. For example, during the testing stage it’s important to look at what will happen if these changes are put into force, particularly with how they will impact clients or customers. It may be that changes to internal processes are needed to increase productivity or drive the company forward, but whatever the adaption is, it will affect the customers so it’s valuable to get their thoughts. Carrying out market research will help to highlight how the strategy will work in the real world and will help to identify what works and what doesn’t.

Finally, the solution needs to be implemented and put into practice. The business needs to ensure that it has the right people on board to do this, and if this is not the case, then it needs to bring in the correct people otherwise the idea is likely to fail. For instance, when law firms identified the need to market themselves better, some took the steps required to bring in marketing experts.

What we’ve learnt in the legal sector is that firms and businesses must not be afraid to break the mould and do things differently. In a constantly evolving society this is crucial to success. As the legal sector has experienced, traditional practices are becoming out-dated and innovation is now essential for businesses to survive in today’s competitive marketplace. The companies that will remain successful, when shifts in the market do occur, are the ones that not only respond to the needs of their customers and the business, but can also anticipate future changes and are able to respond quickly and effectively.

By Ed Fletcher, CEO of Fletchers Solicitors