Disconnect between what law firms think and what they do

Disconnect between what law firms think and what they do

2016 ALPMA/InfoTrack Adapting to the Changing Legal Landscape Research

8 September 2016

The majority of Australasian law firms rate themselves as innovative but there is little evidence to support this claim, according to the results of the 2016 ALPMA/InfoTrack Adapting to the Changing Legal Landscape report released at the 2016 ALPMA Summit in Melbourne today.

Surveying 163 law firms across Australia and New Zealand, 65 percent of survey respondents, across small, medium and large firms believe their firm is innovative or very innovative, with only 6 per cent indicating they were not at all innovative.

“There is a real discrepancy between how innovative firms believe they are and what they are actually doing in terms of their investment in innovation and in people, process and technology initiatives to drive their firm forward,” ALPMA President, Mr Andrew Barnes said.

More than 60 percent of respondents said innovation was part of their strategic plan, yet few have a dedicated innovation budget, have a proactive group responsible or give staff time scheduled for innovation.

The research also highlights significant inconsistency with satisfaction on firm innovation investment levels. While nearly half of the survey respondents believe their firm dedicates sufficient time, people and funds to innovation, one third of respondents are unhappy with the level of innovation investment at their firm.

“There is pressure on partners and practice managers to pursue innovation. They can see the rewards for innovative projects but ‘innovation’ is becoming an over-used word to describe everything from culture and processes to client delivery.”

“The question we need to really ask ourselves is ‘are we innovating or merely adapting to changes thrust upon us?’” he said

Launching the research report at the ALPMA Summit today, InfoTrack CEO Mr John Ahern said customer demand for better value, rapidly evolving technology, increased competition and the staff demand for work/life balance were the key external factors impacting on Australian and New Zealand law firms.

“Interestingly, most respondents were critical of the legal profession’s response to these external drivers, saying the industry was adapting to the changing legal landscape only when necessary and certainly not quickly enough – and this backed-up by other findings,” he said.

Only half (54%) of the respondents believe their firm has an effective blueprint for change.

“The demand for better work/life balance has been addressed by the industry with our research showing that remote and flexible working arrangements and the technology to support this has now been implemented at most firms.”

“Firms that do not offer this for their staff are now lagging well behind the norm,” he said.

Most firms are currently working on implementing workflow automation, electronic settlement, customer relationship management systems and improving their approach to performance management.

“The really innovative firms have already implemented these initiatives and are starting work on things that most firms report are not even in their foreseeable future – artificial intelligence, customer apps, Lean Six Sigma process improvements and legal process outsourcing,” he said.

Cultural Change

“To become truly innovative requires an overhaul of cultural DNA of most firms. This is not easy and not for everyone so advance with caution,” ALPMA President, Mr Andrew Barnes said.

The report found that most firms (78%) were satisfied with their culture. Despite this, 57% are planning cultural change this year (rising to 87% of very large firms).

“Improved productivity, efficiency and profitability are the primary objectives of these cultural change programs,” he said.

Few were planning cultural change to support diversity, personal initiative or entrepreneurship.

The full report is available from ALPMA and InfoTrack’s website.

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