Adaptive Innovation

Volume 5 • Issue 2 • January/February 2019
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The Law Firm Chief Innovation Officer

Separating aspiration from reality in an emerging role

In her recent research paper “The Law Firm Chief Innovation Officer: Goals, Roles, and Holes” (also published in part in Modern Legal Practice), Michele DeStefano explores the burgeoning chief innovation officer (CINO) role within law firms. Building on years of wider research also recently published in her book Legal Upheaval: A Guide to Creativity, Collaboration, and Innovation in the Law, DeStefano examines what the CINO role is intended to do, what it actually does, and what explains the gap between the two. Based on interviews with more than 100 general counsel, law firm partners, and, most crucially, CINOs, DeStefano’s research offers a snapshot of how firms understand innovation. Below, we briefly summarize DeStefano’s findings.

Goals

Differentiate the law firm. One of the key benefits of creating a CINO role from the law firm’s perspective is to stand out to clients and potential clients, many of whom are demanding innovation. From this point of view, having a CINO sends a signal to clients. The differentiation factor, however, is not always purely about marketing. Many firms are adding the position because they truly want to walk the walk, and they hope having a dedicated CINO will lead them to actually be a more innovative firm.

Develop a culture of innovation at the law firm. Through her interviews, DeStefano found that creating a culture more inclined toward innovation tended to be a top priority. Said one interviewee: “It’s about driving change in the way the firm functions and delivers services.” Thus, one major goal of the CINO role is to get lawyers on board with innovation as a concept as well as innovation initiatives the firm wants to pursue.

Delight clients to derive business. By way of satisfying the first two goals, CINOs are also charged with exceeding the expectations of their clients. To do this, DeStefano notes, lawyers must internalize tenets of innovative thinking—solving problems creatively, collaborating, developing empathy, asking the right questions, and overcoming aversion to risk. At the same time, they must be able to connect these skills to the work they do for clients.

Roles

Who. The background, training, and experience of CINOs range from senior lawyers currently practicing law to outsiders with no legal training whatsoever and everywhere in between. In many cases, DeStefano found, the CINOs created their role themselves. “I was managing partner of our Sydney office and a member of the board,” said one interviewee. “In 2014, I created this role, conceptually and it took me six months to design and now I’m executing it. The word ‘journey’ is a terrible metaphor, but it really is a journey of development. I’m not practicing any more. I phased that down and out.”

Why. Across all of DeStefano’s interviewees, she noted common themes. They all expressed a passion for transforming how their firms and colleagues work with clients and think about innovation. “I am passionate about all the things that can help us help our lawyers transition from the guy with the quill pen to the modern-day service delivery provider,” said one interviewee. Setting aside each firm’s intention behind sanctioning the role—whether hiring a CINO is a gimmick to appease clients or a long-term strategic play—the people occupying that role seem to be overwhelmingly on board with its professed goals.

What. DeStefano identifies six sets of tasks that tend to cross CINOs’ desks:

  • Curating ideas and facilitating innovation processes and execution
  • Analyzing technology available for lawyers that is or can be used by the firm to enhance transparency, increase access, create efficiencies, and please clients
  • Analyzing, unbundling, and reconfiguring processes to enhance transparency and to create efficiencies inside the firm to improve client service
  • Aiding in new business pitches, responses to RFPs, and panel reviews
  • Engaging with clients to better understand their needs, develop relationships, and collaborate to provide more client-centric, effective, and efficient services
  • Networking with legal innovation communities across the globe

Holes

Confidence. One issue DeStefano points to is a general lack of confidence to execute the type of change CINOs want to see. While some would conclude that this is where lawyers’ risk aversion emerges as a serious obstacle, DeStefano suggests that it also comes down to a lack of confidence on the part of partnerships in what the CINO role does and is capable of doing. As one interviewee put it, “When you suggest doing something differently, a classic thing to be said in a law firm is: ‘Who else is doing it?’ In every law firm, every colleague hears: ‘Which other law firm is doing this?’”

Competence (and capital). Law firms jumping headlong into innovation initiatives without clarity around core goals are often unhappy with the results. Innovation is a process, and firms need to know what they want and how to achieve it, argues DeStefano. While there is something to be said for taking decisive action to make progress—as DeStefano writes, “overplanning can be the death knell of innovation”—that action needs to be considered and under the direction of an innovation-competent leader. In her article, DeStefano explores examples of horror stories that stem from failing to set expectations, jumping to solutions before understanding the problem, considering a problem from the law firm’s perspective instead of the client’s, and lacking a truly innovative mindset.

Commitment. DeStefano identifies a third gap between the ideal and reality of CINOs: firms often lack commitment, in terms of both culture and compensation. For instance, without a change in culture and behavior, even the best innovation initiatives will find success illusive. Relatedly, CINOs are generally not rewarded for their efforts unless they produce results. “As to reward, I’m measured in the same way as all partners, and there is no different analysis of my contribution because of my innovation role,” explained one interviewee. “It’s primarily about the fees I bring in through fee earning, my clients, and running the client connection team.” And, as DeStefano concludes, “If innovation is not compensated (or rewarded), then it will not be ingrained in the culture of the firm.”

In light of these holes. DeStefano offers a few potential solutions for firms to try depending on their own organizational context:

  • If you don’t have a CINO, get one and support the work they do.
  • Put them in front of clients—a lot.
  • Celebrate their successes—and the success of innovative methods—for all in the firm to see.

Operationalizing innovation

DeStefano’s work with CINOs links up with the Harvard Law School Center on the Legal Profession’s systematic survey project of innovation heads of companies and law firms. On the in-house side, these individuals are often called “heads of legal operations.” On the law firm side, they are often called “chief innovation partners.” To systematically investigate who these individuals are, the Center on the Legal Profession designed a survey starting in 2018 that asks participants a set of questions around who makes up their innovation teams and what those teams are charged with doing within their organization. Other questions focus on leaders’ educational credentials and career backgrounds as well as team budgets and composition. Still others turn to each team’s charter and what “innovation” meant to their organization, such as whether the team was focused on advancing artificial intelligence, knowledge management, or cybersecurity systems. The survey concludes by asking questions around the key sources of support and resistance to innovation.

The survey itself is part of a larger project aimed at better understanding how legal organizations are “operationalizing innovation.” Professor Wilkins notes, “While innovation is often talked about in theory, the Center is focused on understanding it from the bottom-up based on how it is operationalized in practice. Core to this process are increasingly empowered legal innovators within companies and law firms.” To help get at these operational issues, the Center has brought together chief innovation officers and heads of legal operations twice over the past eight months—once in the Bay Area (see write up here) and once in New York City—to collaborate on how the legal profession can innovative to solve critical joint problems. This research continues and will appear in a future issue of The Practice.

Adaptive Innovation Volume 5 • Issue 2 • January/February 2019

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