The Missing "E" in Legal Innovation

Innovation talk

Cruise through the business press these days, or any number of legal industry resources, and you’ll find the word “innovation” coming up often. It’s become a theme of our age, and no less in law than in any other discipline.

Especially since the Great Recession, law firm clients, too, have taken up the cause of innovation – demanding that their law firms become radically more innovative in terms of pricing, unbundling, service delivery, and a host of other areas. Indeed, through organizations like the Corporate Legal Operations Consortium (CLOC) and the Association of Corporate Counsel (ACC), clients are banding together precisely to foster innovation in the firms that serve them. They’re “unionizing” around these subjects, trying to accomplish by joint action what individual persuasion has failed to do over the years.

And some firms are listening. Big Law firms have recently been racing to appoint innovation partners or chief innovation officers, to field innovation committees, to feature innovation in their strategic plans, and even to create innovation-focused business units. Mid-sized and small firms, too, have heard the call and are talking up the need to innovate at partner retreats, conferences, and legal network meetings.

But is all the innovation talk inside law firms enough to initiate the wave of innovation that clients seem to want? Are we truly witnessing the advance guard of transformation in how legal services are delivered?

The simple answer is no. Firms are using the words, but even the most vocal are not taking the kinds of concrete, disciplined steps that truly innovative companies in other business sectors undertake on the way to radically innovative solutions.

The shortfall is so profound, so unlike the kind of A-student effort that lawyers typically undertake in the legal sphere, that it’s as though lawyers can’t even spell the word innovation. They are missing the most important letter. The letter “E”.

Apple innovation

To flesh out the point here, we’ll jump industries and talk about innovation in mobile devices – an area in which, over the last decade, we’ve witnessed real transformation at a level that affects each of us personally. And we’ll also need to transport back in time to 2006 – one year before Apple’s iPhone completely altered the market for cell phones and a dozen other portable devices.

The best selling phone in 2006 was the Motorola RAZR, a clamshell device that started out in 2004 as an expensive testament to Motorola’s fashion sense. But, as Motorola dropped the price from $600 (a lot of money back then) to just a few hundred, consumers responded overwhelmingly, and Motorola found themselves with a huge success. They sold 130 million RAZRs over the life of the product. And that was a record.

How did the marketplace respond to RAZR? People marveled at its “thinness” and its “elegance”. And that spawned a number of thin, elegant imitators. Here’s what Avi Greengart, a prominent cellphone analyst for research firm Current Analysis said about all that:

“Fashion and thinness have become an overriding concern. Where in 2005 you might have had one or two phones that either were the RAZR or looked like it, in 2006 we now have a plethora of super-thin clamshell phones, including phones with spectacular feature sets.”

 Among the “spectacular” features just included in the RAZR were a low-end MP3 player and a low-resolution camera. The tacked-on MP3 player was an attempt to take market share away from Apple’s hugely successful iPod.

Then along came Apple.

If we think about the first iPhone, we might mistake its real innovations. After all, its marvelous touch-screen interface and elegantly thin form factor did get mentioned a lot by consumers. They still do. Was Apple’s success attributable simply to the fact that the iPhone out RAZRed the RAZR in terms of thinness and features?

That focus on appearance overlooks something fundamental about Apple’s approach – about Apple’s process for innovation. It was the process that shot the iPhone to the front of the market for mobile devices. Apple pursued a completely different design course from everyone else in the cellular market. In contrast with others, which often used competing design teams, Apple used the very same design team throughout its design of the Newton, the iPod, the iPhone, and succeeding mobile products. Indeed, most of the designers of the original iPhone are still on the Apple design team.

And those designers steeped themselves in Apple’s and Motorola’s customer base. Not only did they poll them, but they engaged them on a much deeper level, conducting focus groups, following users around as they interacted with devices, doing everything short of a Vulcan mind meld to try to put themselves not just in the shoes of their customers, but in their hearts as well. Oh, and Apple was first to implement this requirement: each member of Apple’s design team had to actually use the devices they designed. They became their own user base.

Apple’s design team reported directly to Steve Jobs. In many ways, he was the head of the design team. No marketing or accounting considerations stood between the team and either consumers or Apple leadership. What the design team learned about their customers’ lives got reported directly up to Jobs.

Both by virtue of their long continuity with the team and their intense engagement with customers, Apple’s designers came to understand those customers’ needs on a deeper level than even the customers themselves did. If you had asked RAZR customers what they wanted in a next generation phone, they would have said thinner, or maybe a keyboard. Not an iPhone.

Apple’s foremost lesson from its deep dive into how customers used mobile devices had nothing to do with customer-favorite feature sets or form factors. It didn’t focus on thinness or fashion. Rather, it learned that the multiplication of devices, features, and functions was imposing a significant data management burden on users. Keeping track of all your music, contacts, appointments, photographs, emails, texts, messages, and other items across a range of devices was difficult for even the most savvy users. And utterly maddening for everyone else.

Thus, it wasn’t Apple’s elegant touch screen or polished case that caused the iPhone to surge to first among all mobile phones in just one year. It was that deep understanding of what users truly needed. Apple vaulted to the forefront in the mobile device market because, more than any other company in the market space, it was able to empathize with its customers and act on that understanding.

Empathy is the E in innovation. And it allowed Apple to sell as many iPhones in a quarter as Motorola sold RAZRs over the entire history of the device. By the way, it’s no accident that Apple’s designers are now attuned to another mobile device: the automobile. That design decision is the product of deep empathy as well.

Design thinking

The techniques that allowed Apple to conceptualize and deliver the iPhone, and that have served other product innovators so well, have been studied and written about extensively. While Apple itself has been unusually guarded about its methods, others who worked closely with Steve Jobs have distilled Apple’s methods and elaborated upon them.

Those techniques, now often referred to under the mantle of “Design Thinking,”,have been exploding out of the design disciplines and into business, even into a small corner of the law, because they can accomplish more than is possible or likely with traditional business – or legal – methodologies.

Tim Brown, CEO of global innovation firm IDEO (with which Apple worked closely on a number of designs) and a leading proponent of Design Thinking, describes the revolution inherent in Design Thinking this way:

“Design Thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology and the requirements for business success.”

Stanford University’s Design School, which has become an open source epicenter for Design Thinking in Silicon Valley and beyond, has distilled the elements of Design Thinking into these five tasks, as illustrated in Figure 1. 

Figure 1: The Stanford d.School Design Thinking process[i]

A business using Design Thinking methods first does the sort of deep dive into customer hearts and minds that Apple did with its users. That is the Empathize phase. Then the problem is defined – as Apple did in identifying data management as a principal concern. Then ideas are spun out. But not one perfect idea at a time. Dozens of them. Even hundreds. Those are prioritized and the best of them go quickly and cheaply to some sort of prototype phase – even to paper prototypes. And those are tested with users. Then the process is repeated. Over and over and over. Iteration is essential to design. Which is to say that mistakes are also essential to design.

If we think about how most businesses, including law, design solutions to problems, we can recognize that most use far fewer than five steps in the process. Indeed, I would argue that the famously ovine legal sector uses just one: buy or try what someone else has bought or tried, and test it to see if it works. That sort of approach is certainly the genesis of many technology failures in the legal sector. They fail because they are purchasing decisions, uninformed by any of the prior design work necessary to assure that purchases are solving real and immediate problems.

It’s not surprising that law firms and others short circuit process in doing service design. Empathy, the most important element of this human-centered approach to innovation, is something utterly outside the toolset given lawyers in law school. Empathy goes beyond simply trying to understand a problem. It asks you to put yourself in the shoes of the person who will use your product or service, and to try to understand that person in ways that transcend logic, that draw upon intuition and emotion as well.

Design Thinking recognizes the first-level importance of the emotional content of a successful design. When we think of traditional value propositions, we often bring to mind some notion of utility. This product or service will accomplish a certain thing. Lawyers think like that. We will provide you with advice, and it will be correct.

But the most successful designs go beyond mere utility. If you buy a Tesla, the automaker promises that you will receive the safest transportation in the world, that you will be transported in a sumptuous surround, that you will feel pampered, affluent, intelligent. In other words, the design of a Tesla is loaded with emotional content. So too with the iPhone. Its design is a response to what was often a visceral frustration with complexity. Its beautiful simplicity is directed at emotion at least as much as at aesthetics.

Clients have been telling us for years that they want more than utility in their law firms. One of the most common complaints in annual surveys about lawyers is that they take no time to understand their clients’ businesses. That complaint certainly relates to the utility of advice – abstract advice is less valuable than that given in a specific business context. But the complaint also has just as much emotional content as a “you don’t pay enough attention to me” statement in any other human relationship.

A new model?

What would law practice look like if it began to incorporate Design Thinking principles? What has come to be called NewLaw certainly furnishes some examples. Rocket Lawyer and Legal Zoom have recognized and responded to the deep frustration inherent in constituencies that have been priced out of traditional legal markets. Their services are easy to use, inexpensive, and for simple transactions often at least as accurate as the services provided by Main Street generalists. A legal consumer’s reaction to the extensive document automation at the heart of those services might approximate that of the first iPhone users: “You mean I can do all this in one place? And it’s easy?”

The lawyer response to such enthusiasm is often to say those tools are meant for consumer-grade legal problems. They can’t possibly apply to more complex legal issues. That, unfortunately, is a typical problem-focused lawyer analysis – the kind Design Thinking circumvents. But a deeper dive into the client psyche would reveal that easier and cheaper are two of the foremost desires of clients – even sophisticated corporate clients. Lawyers are hard to reach, often unresponsive, and impose high costs on every second of interaction. Design Thinking starts with desires like that. NewLaw Design Thinking has in fact extended well beyond consumer legal transactions. For example, we tend to think of “contract automation” solutions as manifestations of AI or machine intelligence simply being redirected towards legal problems. AI may be the technology that underlies the latest contract automation products, but the fact that the problem – which has been sitting under lawyers’ noses for decades – was identified at all is a clue to the existence of Design Thinking. Someone plumbed deeply the frustration and complexity inherent in managing the large numbers of contracts a global company enters into annually.

And we see, as a consequence of that inquiry, the kind of iterative design/redesign cycles in the marketplace that are the markers of real Design Thinking. As with the iPhone, when the empathy phase is done correctly, market uptake can be dramatic. And that has happened in the contract automation market.

Perhaps the most fundamental example of Design Thinking in law occurs almost completely outside the legal sector. Blockchain technology – the peer-to-peer network infrastructure that made possible cryptocurrencies like Bitcoin – was designed to support “smart contracts”. These enable the tracking and transfer of digitals assets in ways that almost completely circumvent traditional legal processes. Smart contracts exist in code, not on paper, are self-enforcing without need for courts or other trusted intermediaries, and operate with orders of magnitude more efficiency, and less cost, than traditional contracting processes. They are a redefinition of both money and law and an attempt at solving frustrations and inefficiencies that have long plagued traditional contracting processes. The only one who could love a traditional asset transfer – one that depended on reams of paper, inscrutable prose, antediluvian court systems, and curmudgeonly, expensive, and fussy guild workers – would be someone paid by the hour for all that trouble. No one else loves it. And blockchain is the result.

Those, such as lawyer/computer scientist Nick Szabo, who did the early work on blockchain and smart contracting, were doing a classic Design Thinking deep dive into the problems of digital commerce. What has emerged is just as iterative as the iPhone. Blockchain is certainly still in early prototype and testing stages. But billions of dollars of our clients’ money are being invested to multiply the iterations until contracting is as unrecognizable to us as iPhones would have been to early 2000s cell phone users.

How many other components of our legal infrastructure are susceptible to the kind of redesign undertaken by blockchain? Certainly more than most lawyers imagine. But the threat of being designed out of existence has some firms taking a harder look at Design Thinking, and incorporating its principles into service redesign. For example, King Wood Mallesons has instituted annual ‘design weeks’ during which lawyers, staff, and clients take the kind of deep empathy dive contemplated by Design Thinking and try to arrive at radical new ways of delivering legal services. Other firms are beginning to send lawyers and staff off to Design Thinking “bootcamps” such as those offered by the Stanford d.School.

But can firms do enough, soon enough, to participate in the revolution that seems certain to transform the law in coming decades? Here’s a key differentiator between lawyer thinking and Design Thinking. Lawyers and business people want answers to questions like this. But there is no one answer to these problems. To arrive at something optimal – to an iPhone-like solution – we will have to dive deep, define goals, spin out ideas, and then prototype. And fail, then revise, then cycle through the whole process again.

Empathy, coupled with a disposition to experiment and a tolerance for failure, are the hallmarks of Design Thinking. Those are disciplines designers take for granted. But they are disciplines yet to be added to the lawyer toolkit.

It may be that enough lawyers can begin to master these disciplines, can take a real hand in the redesign of legal services that is already underway, so as to have real impact on the result. Or it may be that redesign will be left to others. In the end, we can’t say what a redesigned law practice will look like. We can only say that the best answers will have been designed in all the best senses of the word. And good design is always a surprise.

[i] Resources created by Hasso Plattner Institute of Design at Stanford and licensed under a Creative Commons Attribution-Non-Commercial-ShareAlike 3.0 Unported License. For more information, see: https://dschool-old.stanford.edu/groups/dresources/.