Innovation Aversion
“Are legal professionals simply too risk averse to embrace innovation?”
I was moderating a panel session on “Stimulating a culture of innovation” at the Legal Innovation & Tech Fest conference in Sydney earlier this year when this question came in from a member of the audience.
Legal professionals are expected to be risk averse. It’s pretty much in their job description as clients look to their legal team to keep them out of trouble. Innovation on the other hand, often demands fairly high levels of risk taking. So how do you stimulate an innovation culture within a legal practise and how do you reconcile the higher risk appetite required to innovate within a corporate environment with a risk-averse legal team potentially blocking anything unknown or new?
Earlier in the day, my opening keynote at the event was titled “Igniting Innovation Initiatives” and my aim was to open the audience’s hearts and minds to the broader innovation ecosystem and encourage them to become more involved. During the keynote, I recounted an anecdote that resonated with a large portion of the audience:-
In a previous role, I was responsible for managing the idea flow of new concepts that came out of Technology Research and Development. We established a cross functional “Innovation Council” comprised of subject matter experts and senior leaders representing core functions of the company eg:- Finance, Legal & Compliance, Sales, Marketing, HR, Customer Service and Technology. The aim of the Innovation Council was to provide an opinion on the feasibility of an innovative concept before we invested too much time and resources – the concept will be familiar to anyone whose organisation manages ideas through a “stage-gate” process – something I like to describe as “throwing cold water” over the ideas.
This is certainly a necessary step in the process but we quickly learned a few valuable lessons. The legal professional that initially sat on the council had many years of experience in the industry and their opinion carried a large amount of weight in the decision to proceed with evaluating a concept or not. Our problem was that a large proportion of the concepts were met with a flat out “NO”. They were deemed to be too risky / would potentially increase the liability of the organisation / might lead to brand damage etc etc etc.
We were extremely unhappy with the watered down suggestions that came back – they simply were not innovative enough at a time when startups were disrupting the industry and threatening our business model and potentially our very existence.
One day, a new member of the legal team arrived at the side of my desk to ask me a few questions. He had previously worked for an extremely innovative technology company that regularly registered patents on new ideas and concepts and he was astonished that not only had our company never registered any patents of it’s own but we didn’t even appear to have a process to identify patentable concepts.
I pulled out a raft of proposals previously rejected by the Innovation Council and his eyes lit up – “YES”, he exclaimed, “this is exactly what I’m talking about”.
I then went on to describe the situation we encountered during the Innovation Council sessions and he suggested that he would investigate the possibility of taking the place of the existing legal professional on the Council.
I was pleased to see him at the next Innovation Council meeting but my heart sank when it came time for him to voice his opinion on our latest proposal ... as the first word out of his mouth was “No” ...
Thankfully however, he continued “not as you have currently proposed the concept as that would be flirting dangerously close to the law, BUT – if you made these (somewhat minor) changes to your proposition, it would get the full support of the legal department”.
YES – at last, we had a legal professional on the team that said “no, but ….”. He was extremely comfortable with the need to balance risk and embrace innovation – which is exactly what we needed. His appetite for innovation led to us involving him much earlier in our concept development where he became invaluable in helping us shape and formulate new and innovative products and concepts.
So back to my panel members – who were all senior legal professionals that were driving cultural change within their own organisations – how did they respond to the question from the audience?
The debate got quite animated as each of them bore the scars of repeated failure and frustration that preceded success – very familiar stories when it comes to innovation and cultural change. The key insights that they had to share came down to 5 points:-
“The need to embrace change” – they all recognised that (most) legal professionals are wary of change and the key is to “make the unknown, known” by regularly commmunicating the impacts and implications of the change going on in the world today.”
“Value the past and leverage the future” – they all advocated recognising the strong base on which their companies were built while at the same time looking for opportunities to improve the way they did things and how they could help their own organisations by leveraging new concepts.
“Be prepared to move out of your comfort zone” – they realised that this easier said than done as the fear of failure is the primary reason for not even trying in the first place.
“Identify innovation champions” – like my colleague in the story above, there are always those who are more willing to embrace change and they can be a powerful catalyst within your team and your company at large.
“Apply tenacity and humility in equal parts” – cultural change is difficult and slow. You need to keep at it and celebrate the successes however small they are – and then you need to keep on going.
Now I’d like to hear from you – do you think legal professionals are simply too risk averse to embrace innovation, or do you have what it takes to lead a cultural change across your organisation?
About the author:
Best known for his work as an "Innovation Catalyst”, Andrew Vorster is the former VP of Technology R&D at Visa Europe who now spends the bulk of his time tracking changes in TIPS - Technologies, Innovations, Patents and Startups, contemplating the impacts and implications these will have on society, industry and the individuals within. Weaving these into credible and colourful narratives, he inspires audiences and clients to explore multiple possible futures in order to inform strategy and create their own story of the future before they read about it as history made by someone else.
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