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Most law firms believe they’re innovative, but …

08 November 2016

Most law firms in New Zealand and Australia 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. The report was released at the 2016 Australasian Legal Practice Management Association (ALPMA) Summit in Melbourne on 9 September.

The survey was open to all law firms in New Zealand and Australia from 1 to 24 July 2016. 163 law firms completed the survey: 19 from New Zealand, 95 from Australia and 49 of unknown country of origin.

65% of survey respondents, across small, medium and large firms believe their firm is innovative or very innovative, with only 6% 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 Andrew Barnes said.

More than 60% 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?’” Mr Barnes said.

At the research report launch, 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 is backed up by other findings,” he said.

Only half (54%) of the respondents believe their firm has an effective blueprint for 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,” Mr 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 programmes,” he said.

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

The full report is available at www.alpma.com.au/Research/new-normal-legal-industry-survey.

Last updated on the 8th November 2016