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The Mad Clientist

Law Firms Missing Best Source of Innovation

By August 17, 2016April 16th, 2020No Comments

Innovation has a long and a short game. The long game is the sexy part. Few can argue how the ability to forever change, disrupt or even reinvent an industry isn’t a little exciting. But, as we wait for the long game to play out, we are all forced to play the short game. Today, we face clients who want new and never before seen ideas and approaches. Your clients love the long game, but earn their bonuses in the short game.

In the short game the only clear, constant source of innovation is your ability to bring truly new and original thinking to clients. This means you bring a continuing stream of new approaches to the previously unseen situations your clients currently face.

20% Higher Profits from the Short Game

The innovation short game is a client-by-client process. Each client offers you their own set of unique challenges in which you can invest your time and energy. Outside counsel delivering the newest, most novel and valuable approaches to client problems report 20% higher profits per partner than other firms.

Corporate counsel believe innovation will get them a better outcome. These better outcomes for clients translate into better outcomes for law firms, too, including:

New Business: Innovation is one of the few activities proven to attract new business. New and existing clients will seek you out once they learn you are doing something other firms don’t.

Premium Pricing: Clients are paying premiums for these innovative services. The value of your new approach or offering justifies a higher price tag.

Better Pricing across the Board: Your innovation creates a value umbrella. The innovation makes everything you do worth more to clients.

Clients Changing Definition of Innovation

Our 27 years of carefully listening to client feedback tells us innovation has become dramatically more important to clients than ever before. Today, client education—meaning customized for your specific client’s situation and delivered in person—dominates innovation. The top innovators also design continuing legal education sessions for their clients’ staff and provide tools—both online and offline—for clients to educate themselves. Client appetite for learning relevant information is insatiable.

4 years ago clients crowed about Alternative Fee Arrangements (AFAs). While still considered innovative, they don’t bring the same bang for the innovation buck as custom education.

Corporate counsel also value technological innovation centering on eDiscovery, document sharing, and project management—but not as much as they value education.

Finding the Best Sources of Innovation

There are few better sources of innovation than your clients—especially for the short game. Clients report the most impressive are client specific and designed for them. This makes talking to your clients one of the high-speed conduits to high-impact innovation. Probing clients for their needs and for the tools they would like to see developed or have developed themselves is a long-proven strategy for finding opportunities to innovate. The best-run firms bring this data together to find trends across the client base and help a large number of partners innovate—and inform their long game.

Industries and professions outside law are well known for reaching out to their customers and clients for sources of innovation. You can find numerous studies and statistics to drive this point home. Two of the more compelling examples include:

1.       A study of 1,193 commercially successful innovations across 9 industries, where 737 (60%) came from customers. (Users as Service Innovators: The Case of Banking Service by Pedro Oliveira and Eric von Hippel)

In their paper, Oliveira and von Hippel explore the histories of 47 functionally novel and important commercial and retail banking services. They find that, in 85% of these cases, users self-provided the service before any bank offered it. For example: “sweep” accounts (automatically transfer money between checking and savings accounts for max interest). Assets in such accounts grew from $20 billion in 1991 to $368 billion in 2005 and allowed banks to reduce their required reserves.

2.       “3M’s poorly performing Medical-Surgical Markets Division was looking for a way to kick start its lackluster innovation record in the 90s. Instead of taking the standard route (relying on internal, employee backed ideas), a separate team was formed to search for breakthrough innovation that consisted of the “lead users” (read: customers).

When the results of these two groups (users vs. employees) were compared side-by-side in terms of revenue generated, the differences were quite drastic:

        User-lead innovations had an average revenue of $146 million dollars (in 5 years).
        Internally generated innovations had an average revenue of $18 million (for the same span of time).

The results were clear: Customers were coming up with the winning ideas more often than not.”
(Courtesy of

Client feedback will make your short game more potent. Your skill in the short game will drive success in your long game, and reduce the time you need to develop your long game. Your ability to blend your long game and short game demands diligence and practice—just like any other sport. And, the more you and your partners practice, the higher your profits will go. Just ask the law firms getting the 20% premium now.



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