At the recent P3 Conference (P3 stands for Pricing, Project Management and Process Improvement,) Sam Davenport, Business Innovation and Finance Director, DWT/De Novo, DWT and Brian Fanning, Director of Practice Economics at Davis Wright & Tremaine, shared their approaches to how they support and expand a culture of innovation at the 550-lawyer firm that has eight offices in the United States.
One of the challenges with innovation in law firms is that there is a lot of buzz around it but often not a clear understanding of what it is and little structure about how to do it with intentionality. Too often, partners or their operations teams pursue ideas for new technologies or processes without having applied a disciplined approach to evaluate the efficacy, feasibility and cost-effectiveness of developing new tools and strategies, to say nothing of whether the idea was born out of client needs and dialogue.
How Innovation Was Formalized at Davis Wright
In 2013, the firm name a Chief Innovation Partner who was responsible for soliciting new ideas for better process improvement and services delivery from lawyers and staff. Several months later, the firm appointed an innovation team comprised of the CIP, a project manager, an IT representative, and analysts from Marketing, business development, finance, quality control and operations. Soon thereafter, the team was pared down to a core group: the CIP, project managers and a business analyst and was formalized as DWT De Novo, its innovation hub. Since that time, DWT De Novo has received numerous awards and continues “to develop new service delivery solutions for legal work to improve practices and delight clients.”
At Davis Wright, every innovation project must be driven and sponsored by a partner who is willing to be its champion and cheerleader (although they are careful to eliminate the risk to the partner if a project fails by having the innovation team stakes blame/responsibility for failure.) The project also must be urgent to the business. Recognizing that successful innovation requires creativity, discipline, time and reources. At their firm, partners record innovation time in the same “firm investment” category as business development, management, recruiting and other critical non-billable time contributions.
At Davis Wright, rather than trying to solve the billable incentive problem, they take fee earners out of critical execution roles. Staff-side Legal Service Architects (LSAs) who have no billable hour requirements assist partner sponsors with the design and management of innovation projects, using tools that allow partners to focus on the big-picture vision quickly and as efficiently as possible.
Then projects pass through decision gates (see the Solution Idea Canvas below) where the LSA helps the partner sponsor explicitly explore alternatives to make the impact larger and to make the effort smaller. Pre-scheduled reporting keeps the project from running off course or languishing without any progress. Equity partners’ fears of waste are assuaged. Even if a project ultimately fails, the partners can trust that the project was executed as efficiently, and closed as soon, as possible
A Disciplined Approach to Evaluating Innovation Ideas
“Most law firms do not have a CEO or any position in charge of picking the direction and aligning the company. Law firms operate instead through networks of perpetually contingent authority. Any individual initiative can be advanced or killed at any time; power flows unevenly and consolidates in the hands of those that control resources.”
In order to apply a standard review process to each innovation idea, DWT de NOVO, the firm’s innovation office, developed a Solution Ideal Canvas. Using this framework, which is completed by a group of stakeholders, they are able to better ensure organizational alignment as it relates to resource requirements and opportunities.
The Solution Idea Canvas provides a structured methodology to assess the value, feasibility and components of each new innovation. This process entails the following elements:
Description of the Idea: how and by whom it was produced, any former history, who the users/customers will be, the problem that will be solved and its distinctiveness in the market.
Business Case: Why the innovation is great for the firm.
Effort: Will this require new software/tools or existing ones? Will this be used only internally or externally? Has the model been proven previously? What will the staffing requirement be?
Impact: Will this create new revenue or save costs? Will this net in more attorney time or less? Will ROI be short-term or long-term? Is this a renewable tool or one-time transactional? Is the market broad or narrow? What is the customer experience impact?
People: What resources are necessary or available? Lawyers? Subject matter experts? Internal? External?
Process: What needs to be used, improved, developed?
Tools: What systems or software are necessary or available?
Use Cases: are there other application for this innovation?
Value: Can we achieve value more quickly? What could we change to reduce effort? Can we shrink the scope? What could we change to increase value? Can we make the solution more widely applicable and available?
Taking Stock: How Well is the Firm Performing in Innovation?
In order to help ensure that the firm is organizationally aligned with innovation, Sam Davenport and Lawton Penn developed a Service Delivery Innovation Inventory. Groups of important firm stakeholders meet to conduct this evaluation and measure the firm’s progress metrics on a year-to-year basis, allowing them to suggest areas and methods for improvement.
Leadership: On a scale of 1-5, to what extent does the firm’s Leadership:
- make innovation a firm-wide priority in its strategy, mission, and/or vision?
- actively fund innovation projects?
- dedicate personnel to innovation projects?
- create pathways for employees to contribute to innovation?
- create incentives for employees to contribute to innovation?
Strategy: On a scale of 1-5, to what extent does the firm’s Strategy:
- include specific processes designed to understand customer needs?
- tie customer needs to business goals?
- define and communicate goals across the firm?
- tie innovation projects to business goals so that there is focus to the investments?
- suggest where innovation is most needed and why, through activities such as a current state/future-state gap analysis
Culture: On a scale of 1-5, to what extent does the firm’s Culture:
- encourage employees to participate in innovation?
- empower employees to try new ways of working by allocating time toward innovation?
- provide cross-functional workgroups to de-silo information?
- promote and elevate diverse perspectives?
- celebrate its innovators
Innovation Process: On a scale of 1-5, to what extent does the firm’s Innovation Process:
- easily collect, record, and preserve ideas about new ways to work?
- ensure the impact (the wow) of a project is outweighed by the effort (the how)?
- clearly prioritize competing ideas?
- provide accountability for each innovation project?
- provide a system to track and report the actual progress of a project against its estimated outcome?
Innovation Skills Sets: On a scale of 1-5, to what extent does the firm’s Innovation Skills:
- solicit subject matter experts to provide new ideas and guide practitioners through practical considerations of implementation?
- analyze the business requirements for innovation projects using formal methodologies?
- have subject matter expertise or client voice experience in the area of the innovation?
- connect and leverage the wide variety of subject matter experts at the firm?
- evangelize innovation wins to the law firm and the outside world?
Resources: On a scale of 1-5, to what extent does the firm’s Resources:
- scope the effort to not outpace the available resources by, for example, analyzing the availability and competing priorities of everyone on the project team?
- estimate the budget needed to successfully achieve some demonstrable win?
- make it easy for full-time employees to volunteer time to innovation?
- get protected time to engage in innovation efforts?
- routinely and efficiently exchange project-critical information?
Networks: On a scale of 1-5, to what extent does the firm’s Networks:
- solicit client feedback about service needs?
- share use cases with third party suppliers?
- connect staff departments and practice groups together to share relevant information?
- review new innovation ideas from competitors or other industries?
- partner with third parties to solve client problems?
Lessons Learned: On a scale of 1-5, to what extent does the firm’s Lessons Learned:
- happen routinely with input from all stakeholders?
- drive a process to record, analyze, and make available insight?
- get applied to new projects or initiatives?
- receive protected time to be generated?
- get encouraged to be contributed and used by the firm’s compensation system?