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Incubation in the legal vertical seen from a practical and European perspective

August 31, 2017

Incubation plays a major role in the legal ecosystem

The market is pushing legal services to be better, faster and cheaper. Recent advances in new technologies are enabling these expectations to be met, but there are certainly other elements to consider for this revolution to be successful.

 

Corporate venture, incubation and acceleration techniques can meet the legal industry specifics. They are powerful tools that foster the creation of 'creativity spaces,' which are essential for the innovation and the adoption of ideas. These safe zones enable law firms to mitigate the risks while leveraging the effect that innovation has on the business model and on the bottom line.

 

Nextlaw Labs is the embodiment of these incubation and acceleration techniques. A subsidiary of Dentons, launched in May 2015, it was specifically designed to bridge the innovation gap in the legal sector. With an exclusive focus on the legal vertical, Nextlaw Labs swiftly navigates the deep waters of its parent Dentons, and accelerates its portfolio companies as well as offers a virtual incubation space for Dentons’ internal ideas.

 

At the Innovation Department of Dentons Europe, our mission is complex. On one hand, we consider local specificities to achieve meaningful project delivery, especially for IT integration or development of local functionalities. On the other hand, we must quickly move across the multiple countries, harmonize the approach, and eventually roll out and scale innovative legal technology solutions.

Many aspects, such as language, local processes, regulatory framework, market flexibility, and individual client needs significantly influence the pace, direction and strategy of product development. Incubation programs instill change at the appropriate pace and help integrating the environment's feedback. Incubating helps to mitigate risks of failure, to preserve the core daily business and to avoid frustration from clients, legal and business professionals. 

 

Incubation, a powerful tool to foster innovation

The incubation programs connect dedicated professional teams to the legal talent pool, entrepreneurs, experts, advisors and internal sponsors. To eventually operationalize and commercialize the solutions, we need input from clients, lawyers, startups, IT teams, knowledge managers, marketing, risk teams, peers and so on. Strategic partnerships, generating more open-ended marketplace or community initiatives, are also adding value to the collective wisdom.

 

Ideally, the whole development timeline of each product is collectively designed up front and readjusted as progress is made; but out in the field we want to avoid over-engineering processes, paralyzing the project or bringing in frustration. Therefore, a core team of lawyers, with input from clients, takes ownership of the concepts, drives and champions them. The incubation team makes sure the road is clean for the core team to operate at a risk-free rate. They streamline the project management process, set milestones and provide the core team with the right expertise and guidance. The different stages of the process allow different experts, legal and business professionals to interact at the relevant moments.

 

Accelerating and incubating is not limited to startups. Internal and bottom-up approaches are very powerful innovation drivers. They attract lawyers willing and eager to experiment; they create and generate new ideas. This approach produces great projects, and sends positive messages internally and externally. 

 

Incubation beyond the hype

Incubation is only as powerful as it serves a law firm’s strategic objectives. Does the firm favour strategic partnerships over in-house solutions? Is the firm more focused on short-term commercial benefits or long-term positioning?  Internal clarity about target market and target technologies allows for the mapping of the 

areas where the law firm could fully benefit from an incubation process. By failing to do this, there is a risk that incubation is artificially plugged in within the law firm. 

 

Does the firm want to incubate short-term projects (e.g. add on features) – typically within a year or less? Does it want to focus on cutting edge technologies – one to three years? Or does it want to incubate longer term solutions and invest in a three to five year horizon?

 

Human, operational, functional, structural implications and adjustments

The team setting up the incubation or acceleration programs should start extensively scoping the possibilities before aligning and executing a plan against its resources. The type of vehicle structuring, the availability and needs of funding, resources, adjustment of corporate policies and incentives, creation of a virtual or a physical space, and so on, are among the questions to be answered.

 

To start with, the human factor is the center piece. When selecting the team, the lawyers’ level of seniorities must be balanced. Experienced lawyers are costly and have less availability although their great experience is a value-add for the team. Partners will sponsor the project and provide guidance. They can advocate the idea internally or externally. On the other hand, engaging with the younger generation is critical to stay sustainable, obtain new perspectives and to keep junior lawyers and business professionals inspired.

 

Lawyers are not necessarily prepared for these kinds of projects. They must stretch their own comfort zone. Additionally, the high-achievement culture at law firms can instill fear of failure which can work against the incubation. The incubation programs should therefore challenge the professionals and feed their inclination for questioning the way things are done. Working with external consultants to provide specific training and workshops, or organizing networking events to involve clients and younger generations will surely nurture a positive mindset. 

 

Another aspect is the implications towards operations. Internal resources can be scarce, and consulting the risk, knowledge, IT or marketing departments can be costly or slow. We should therefore make sure that the required efforts don’t clash with the short and medium-term strategic plans of the firm. The incubator is entwined with the corporate structure. Its independence preserves its swiftness and agility. At the same time, this connection with the parent company opens up channels for acceleration tapping into the corporate talent pool and leveraging the client network.

 

Technology often comes first to mind when vetting and investing in legal tech but the projects have to be planned and project-managed from a market, financial, product, and human viewpoint. Consulting subject matter experts and relevant stakeholders will help to positively challenge our positions and plans.

Ultimately and incrementally, incubation may support a shift in the client value proposition, which will deliver additional and other services than only legal. External strategic partnerships with tech providers will help distribute risks and responsibilities and drive a smooth transition to the next generation of legal services.

 

Julien is supporting and coordinating numerous projects with and for Nextlaw Labs, a global collaborative innovation platform and accelerator focused on developing, deploying, and investing in new technologies and processes to transform the practice of law around the world. 

 

Closely working with Dentons and Nextlaw Labs, having primary focus on the European market, Julien reviews and meets with startups, assesses investment opportunities and assists in product developments.

Having started to work at Dentons within the Europe Talent department, Julien has integrated Marie Bernard’s team to help building a stronger European and Berlin based innovation hub dedicated to legal tech and focusing on bridging the gap between North America and continental Europe. Being junior on the field, he doesn’t only bring a fresh perspective on the industry, he also brings his energy to buttress the disruption of the European legal ecosystem.

 

Julien also strongly engages with the legal tech community and strives to bring innovation to the heart of the legal world. In 2017, he was jury member for the Berlin Legal Tech Hackathon; speaker at the Legal Tech Kyiv, International Conference of Legal Tech Innovations; took part at the panel discussion Accelerators/Incubators in the Legal Market – A European Approach, during ELTA’s first international conference; and more recently engaged with startups across continental Europe during the first Legal Geek Road Trip which covered over 3000 km in a VW camper van and stopped at major hubs such as Amsterdam, Brussels, Berlin, Paris and London.

Contact Julien: julien.lasala@dentons.com

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