Last week, the Financial Times released its Innovative Lawyers report. I know, I know… I had the same reaction. Innovation in the legal industry? C’mon. As it turns out, however, law firms are doing some pretty cool – and yes, innovative – things.
For example, in the “billing and fees” category, the FT gave top marks to a firm that (at least in one case), has tied its fees to client satisfaction. Moreover, “bonuses are payable if the firm proactively reduces litigation.” In other words, this firm is compensated for helping its client avoid legal woes, rather than racking up billable hours by bogging the client down in endless litigation. Another major law firm now pays its lawyers a percentage of the fees they generate, rather than simply divvying up profits. While pay for performance has become common in many industries, it's rare in the legal world.
And in the “finance” category, the FT points to a law firm that has worked on microfinance securitization. Admittedly, this innovation is perhaps more financial than legal, but it’s nonetheless an important step in reducing global poverty. Muhammad Yunus won the Nobel Peace Prize for his work in microfinance, and asset securitization could spread its impact even further. Other innovations include branding and advertising campaigns, technologies for monitoring client relationships, outsourcing of back-office processes to countries like the Philippines, and more.
In short, it’s a good report, and all the more enjoyable because it examines a stereotypically dreary industry.