Innovation in the legal industry with Prof. Bruno Mascello
Summary
TLDRIn this insightful presentation, Professor Bruno Marcello from the University of San Gallen, Switzerland, delves into the concept of innovation, particularly within the legal market. He discusses the evolution of expectations, the necessity for lawyers to become strategic partners, and the importance of value addition. Marcello explores the lifecycle of ideas, the challenges of innovation adoption, and the impact of disruptive innovations. He also addresses the barriers to innovation in the legal sector, such as the billable hours system and risk aversion, while highlighting the potential of technology and other elements in fostering a culture of innovation.
Takeaways
- 😀 The speaker, Bruno Marcello, a professor of legal management, introduces the concept of innovation and its relevance to the legal market.
- 🏁 The historical perspective on innovation is provided, highlighting the transition from horse-drawn carriages to cars and the famous quote by the U.S. Commissioner of Patents, suggesting that innovation was thought to be complete at one point.
- 📈 The importance of general counsels becoming strategic partners and adding value to businesses is emphasized, indicating a shift in expectations from legal expertise to value and strategic thinking.
- 📊 Innovation is defined as an idea that provides value, satisfies a market need, and is executed successfully, leading to valuable sales.
- 💡 The process of innovation involves developing and presenting ideas, facing challenges, and potentially redesigning until the idea can be implemented.
- 📉 The success rate of ideas in the market is low, with less than one percent of 2000 ideas leading to profitable outcomes.
- 🔄 The concept of the S-curve is introduced to illustrate the adoption of new ideas in the market, showing how ideas grow and eventually reach a saturation point.
- 🔄 The 'double S-curve' concept is discussed, suggesting that successful businesses should start a new growth curve before their current one ends to ensure ongoing success.
- 🔧 Ninety percent of business model innovations are recombinations of basic models, indicating that innovation in business models is more about reconfiguration than pure creativity.
- 💥 Disruptive innovation is described as an innovation that changes the entire market, impacting all levels from the bottom to the top firms.
- 🚀 The emotional journey of change is outlined, from initial shock and denial to eventual acceptance, highlighting the human resistance to and adaptation of change.
- 🛑 Barriers to innovation in the legal market are identified, including a retrospective orientation, specialization, risk aversion, and the billable hours system which may discourage efficiency.
- 💼 Recent efforts by law firms to innovate are noted, such as the creation of innovation spaces, labs, and committees, suggesting a growing recognition of the need for innovation.
- 🌐 Technology is presented as one piece of the innovation puzzle in the legal market, but it is not the sole solution; innovation can occur in various areas including products, services, processes, and business models.
Q & A
Who is the speaker of the presentation?
-The speaker is Bruno Marcello, a professor of legal management at the University of San Callan in Switzerland.
What does the speaker suggest about the hourly billing system in the context of innovation?
-The speaker suggests that the hourly billing system could be considered an innovation, and he is going to explain the concept of innovation in the context of the legal market.
What historical example does the speaker use to illustrate the concept of innovation?
-The speaker uses the historical example of the invention of the wheel and the transition from horsepower to cars in New York to illustrate the concept of innovation.
What famous quote from the U.S. Commissioner of Patents is mentioned in the script?
-The famous quote mentioned is that 'everything that can be invented has been invented,' which the speaker uses to highlight the fallacy of such a belief in the face of ongoing innovation.
What role does the speaker say general counsels should play in business today?
-The speaker says that general counsels today are supposed to add value and become strategic partners to business.
What is the significance of the 'S-curve' in the context of innovation presented by the speaker?
-The 'S-curve' signifies the adoption lifecycle of an innovation in the market, showing the gradual increase in the number of adopters over time.
What does the speaker mean by 'double S-curve'?
-The 'double S-curve' refers to the concept of having a successful business model (the first S-curve) and the need to start implementing a second S-curve in advance to ensure continued success and survival in the market.
What is the speaker's view on the role of technology in legal innovation?
-The speaker's view is that while technology is an important piece of the puzzle, innovation in the legal market is not solely about technology. It can happen in various areas including products, services, processes, techniques, organization, and business models.
What barriers to innovation in the legal market does the speaker identify?
-The speaker identifies several barriers to innovation in the legal market, including a retrospective orientation on case law, specialization leading to a mechanistic view, risk aversion, the billable hours system, lack of funding, and professional conduct rules.
What advice does the speaker give for those interested in innovation in the legal field?
-The speaker advises that innovation can be pursued in various aspects of the legal field, not just technology, and encourages individuals to explore new ideas and approaches to improve the legal market.
Outlines
📚 Introduction to Innovation in the Legal Market
Bruno Marcello, a professor of legal management, introduces the concept of innovation in the context of the legal market. He begins by questioning the traditional hourly billing system and its potential as an innovation. Marcello takes the audience on a historical journey, highlighting the evolution of transportation from horses to cars, and the famous statement by the U.S. Commissioner of Patents about the end of invention. He emphasizes the changing expectations of businesses towards lawyers and the need for general counsels to become strategic partners, focusing on value addition, partnerships, and strategic thinking. Marcello outlines the key trends in the legal market and the strategy development process, which includes SWOT analysis, vision, strategy, implementation measures, and annual control. He connects these trends to the external environment analysis in strategy development.
💡 Understanding the Essence of Innovation
The paragraph delves into the definition and components of innovation. Marcello explains that innovation starts with an idea, which must satisfy a market need and be executable to be considered innovative. He points out that even brilliant ideas are not enough; they must be developed, presented, and often redesigned to meet challenges and ultimately be implemented. The success rate of ideas in the market is highlighted, with less than one percent leading to profitable outcomes. Marcello discusses the importance of the s-curve in the adoption of new ideas and introduces the concept of the double s-curve, which represents the transition from a successful business model to a new one before the old one becomes obsolete. He also presents research findings on business models, suggesting that most innovations are recombination of basic models.
🚀 The Challenge of Disruptive Innovation
Marcello discusses the concept of disruptive innovation, which is an innovation that changes the entire market landscape. He emphasizes that the impact of such an innovation is not limited to specific segments but is felt across all levels of the market. Disruptive innovations are not determined by a single idea but are validated by the market's acceptance and implementation. Marcello also touches on the emotional journey associated with change, which includes shock, denial, anger, negotiation, depression, and eventual acceptance. He provides an overview of the legal market's response to innovation, noting that while the term has gained traction, there are barriers to innovation, such as specialization, risk aversion, and the billable hours system. Despite these challenges, there are positive developments, such as the establishment of innovation spaces and committees within law firms.
🌐 Innovation Beyond Technology in the Legal Sector
In the final paragraph, Marcello addresses the misconception that innovation in the legal market is solely about technology. He argues that innovation can occur in various aspects, including products, services, processes, techniques, organization, and business models. Marcello encourages the audience to consider innovation more broadly and not to limit it to technological advancements. He also highlights the importance of innovation in the legal startup activity and the role of legal tech suppliers. The paragraph concludes with Marcello's hope to inspire the audience to embark on their innovation journey and offers ways to stay in touch for further discussion.
Mindmap
Keywords
💡Innovation
💡Hourly Billing System
💡Value
💡General Counsels
💡Strategic Partner
💡SWOT Analysis
💡Disruptive Innovation
💡S-Curve
💡Business Models
💡Legal Tech
💡Change Management
Highlights
Introduction to the concept of innovation and its relevance to the legal market by Professor Bruno Marcello.
The historical perspective on innovation, from the invention of the wheel to the transition from horsepower to cars in New York.
The famous statement by the U.S. Commissioner of Patents and the subsequent realization of the continuous nature of innovation.
The changing expectations of businesses towards lawyers and general counsels to add value and become strategic partners.
The importance of strategy in the legal market, including SWOT analysis and the development process.
The definition of innovation as starting with an idea that provides value and satisfies a market need.
The execution of ideas and the necessity of demand and valuable sales for an innovation to be successful.
The process of developing and presenting ideas, facing challenges, and the potential for redesign.
The low success rate of ideas in the market, with less than one percent leading to profitable outcomes.
The S-curve model illustrating the adoption of new ideas in the market and the potential for early or late adoption.
The concept of the double S-curve and the importance of starting a new business model before the current one ends.
Research findings on middle business models and the recombinations of basic models in innovation.
The characteristics of disruptive innovation and its impact on the entire market, not just specific segments.
The emotional journey of change management associated with innovation and its challenges.
Barriers to innovation in the legal market, including specialization, risk aversion, and the billable hours system.
Recent efforts by law firms to embrace innovation, such as innovation spaces, labs, and crowdsourcing platforms.
The misconception that innovation is solely about technology, when in fact it encompasses a broader range of elements.
The call to action for more innovation in the legal market and the encouragement to think beyond traditional boundaries.
Closing remarks and an invitation for further engagement with Professor Marcello through LinkedIn or email.
Transcripts
ladies and gentlemen
hello from switzerland have you ever
considered that the hourly billing
system could be qualified
as an innovation and what is this term
innovation all about i would like to
take you on a short journey
on innovation and explain a little bit
on a general term what it means and then
adapt it
to the legal market i am bruno marcello
i am a professor of legal management at
the university
of san callan in switzerland and now i
will
share the presentation i will go through
with you in a second
let's have a look and go back many years
when the wheel
was invented well maybe not everybody
was surprised
or saw the value in this invention
when we go back only 100 years more or
less
you see in this picture which was taken
in new york
that horsepower was changed how you move
on the road you had the classic
horses still here circled in red
but the majority now was driving with
cars
and at that time the u.s commissioner of
patents
also said this famous sentence that
everything that can be invented has been
invented well we know it better
and when we take for example this only
we realize
that something has changed in the market
of inventions
and keep that in mind because i would
like to remind you on the smartphone
a little bit later again
now why do i want to show you this
with these inventions because also in
the legal market
there has been a change expectations
have changed of business
when they look to lawyers and in
particular when they also look to
general counsels
because general accountants today are
supposed to add value
they have actually to become strategic
partner to business
and only with this short title you
realize that there are three terms in it
which didn't look familiar in the past
like
value not legal expertise it's value
then we talk about partnerships and we
talk about strategy
but what is strategy all about and i
would like to give you
a short overview on one slide which we
won't go through in detail you can have
a look into that a little bit later
now you have on the left hand side the
yellow pyramid
which shows you the key trends in the
legal market
on the right hand side you have the
green
strategy development process which
starts with a swot analysis
on top goes into a vision
from there into strategy and then you
decide
only then on the measures to take to
implement the strategy
and of course you control it every year
and how
are these two connected well the
trends are actually the ones which need
to be considered
when you analyze the external
environment now coming back to
innovation
let's put it a little bit into context
with all the key terms you hear
sometimes in this regard let's start
with risk management
risk is actually an umbrella term and it
stands for opportunities on the one hand
side
but also for threats
then we have the term of idea sometimes
also in connection with invention
we have the term improvement
which is still not considered an
innovation and when we talk about
innovation
it has become well actually standard
not to talk about normal innovations
anymore everything
has become a disruptive innovation today
all together with them you need to keep
in mind that once
you do something you want to move the
needle
somewhere it will always have to do with
change management
and we will look into that and the
consequences also
a little bit later but let's stay now
for a moment with the term
innovation what does innovation mean
innovation of course starts with an idea
maybe even a brilliant
idea and i'm sure you have every day
hundreds of ideas when you drive in the
car
when you have a cup of coffee maybe even
on the shower
now but this is not sufficient yet
it does not lead to an innovation
already
because this idea
needs to provide a value that means
it needs to satisfy a need
in the market maybe you have been
on an inventor um place already where
you have
all these kind of nice in
inventions i'm sorry
and where you think this is really cool
but at the end they don't satisfy really
a need in the market so what comes on
top
is point number three it means
you need to execute on the idea
and the need you have that means
the demand must be there and with a
little bit
of success also a big demand which leads
to valuable sales now all these three
elements
need to be in place to complete this
term
of innovation and let's go back again
to the first element the idea
i said that even you have a brilliant
idea
it won't be the end state of the
innovation you implement in the market
because an idea is often just simply
the starting point only and you have to
continue to
develop this idea you have to present it
maybe to a steering committee
or to your manager or to whomever to
to get through and you will for sure be
challenged
which you won't find very attractive
maybe
but it will motivate you to go into a
redesign and go on and go on
and only at the very end you will
hopefully
finally be able to implement this very
first idea
you had well how many ideas are
successful
in the market unfortunately
only a few let's look into this idea
further
you will see that from approximately
2000 ideas
only 11 are a success which means they
have
created some profit it's
less than one percent of success
and why is this the case because maybe
over time
even brilliant ideas may die too early
and i promise you that i come back to
the example
of the smartphone and i would like to
ask you one question
when did you buy your first
smartphone do you recall have you been
one of these
early adopters because you are a kind of
nerd taking nerd and you would like to
have the tools always at the very
beginning
or were you hesitant even suspicious i
said yeah
i will wait to see what happens here so
you were
maybe even a laggard in this regard
well combining all this demand here you
will get
this s-shape in the market where you
have
more and more and more which adopt
this new idea which has been implemented
in the market
and i would like to stay with this
s-curve because
it helps me to lead ideally to the next
idea
and the next idea is about this double
s-curve
what does it mean you may have today a
successful business model
here is red s and you know
this will come to an end somewhere and
it will come to an
end even though you do improvements
all the time however
to survive and to be successful in the
market as a company
you should start early in advance to
implement the second s-curve
which maybe in this green middle part
you see it cause also some tension
maybe you cannibalize each other even
and i would like to refer you to these
famous example which everybody of us
knows already with kodak
where it was about deciding should we
stay with analog cameras
and or move to digital cameras
already history has proven
already what would have been the right
approach
now talking about these business models
let me show you
here a little bit of research we have
done in some calendar
in sangalan we have drawn this map which
shows you all the middle business models
we have found
and indeed it is about 55
business models not more or less
and we have found out that
90 percent of all the innovations we
find
with regard to business models are
simple
recombinations of these basic
business models that means
at the end when you talk about
innovating
some business model it's not about art
but it's more about handicraft
and yes this applies even
to these famous examples we know in the
market
here which we consider
a brilliant idea but nevertheless it has
been
actually built on these basic models
as well
now next point innovation
so far you are set but what is a
disruptive innovation
we talk about an innovation which is
already a challenge enough as we have
seen
to achieve we talk about disruptive
innovations
when an innovation changes the entire
market that means for the legal market
here for example
that you have an impact on all the
levels
so you have the entrance
not only working on the lower level
with high commas in the legal market but
they go
also to the top law firms and they have
changes and impacts there as well so
a disruptive innovation will always
apply to the
entire market and not just to be bitter
pieces only
how do you do a disruptive innovation
well i would say
this you can't decide with your idea
because the market will have decided
only afterwards
whether to implement it throughout all
the levels only
well and now we come to this last
point which we discussed and addressed
already it's about change
every thing you change be it by
improvement be it by an innovation
it will lead you all through
this journey here of emotions
we are all human beings we don't as a
principal don't like
so much changes and as we see
and we are actually actually exposed to
change
we go through these emotional
valley and mountain uh journey here so
you start
you are shocked maybe you deny and say
this is all
nonsense you shouldn't do it you get
angry because they continue
you start to negotiate you fall into
depression and then you approach
again and accept it finally the good
news is
if you meet somebody who is really
denying a good idea
he's or she is even angry and starts to
negotiate
it's a good sign because this person is
already on the journey
let's have a look now quickly into the
legal market
and what innovation means we have
realized that some five to ten years ago
the term innovation got tracked into the
market
we have seen indices and rankings we
have even
talked about top 50 innovators in the
legal market
and we have started to list all these
innovations so innovation
became important
also for lawyers and in the legal market
when we look now in a recent survey
which has been done in the u.s
we see however that compared for example
to
corporate legal departments law firms
seem to have more barriers
to innovation it's about the idea that
they provide services
and not um it's not an industry that
there are other profession
and not the business even though they
are called the firm
they are retrospectively oriented on
case law
they look into specialization which move
them
into a corner of becoming a mechanic and
less
a strategic person maybe combined with a
little bit
of risk aversion this leads
that you get into a view of a tunnel
unless
on a broad generalized area the billable
hours
system which actually punishes you to
become
more efficient
investments funding we see it also here
in this chart
that there is no funding available
because everything is distributed at the
end of the year
so partners today need to decide whether
they would like to invest today
so that partners tomorrow can benefit of
it
then we have terms about independence
rules of professional conduct
and also self-regulation in the market
which may
hinder innovation in the legal market
now there is also
a flip side to it because in the last
years
i have read headlines where law firms
talk about
an innovation space they launch legal
innovation labs
they launch innovation crowdsourcing
platforms
across the entire firm they even claim
to spend 20 of the billable hours on
innovation
and they set up global innovation
committees to act as a focal point
for legal tank now is innovation
is it all about technology is this
actually the result and the solution
for innovation in the legal market well
we could look
for example into
the legal startup activity and see how
many new
startup companies have been funded and
entered into the market could be one
view
here in particular often you see these
legal tech
suppliers or you could go into
this chart which i love very much
actually of clock
and you will see that technology also is
one of the pieces of these core 12
elements they address but it's not
all about technology
you can do innovation in all
these places so that means
innovations happens everywhere on
products and services on processes
and techniques in organization business
models you name it
you can innovate everywhere
said that i hope i have provided some
new food for thought for you
maybe you are even a little bit
incentivized now
to try to do a little bit more of
innovation then
i would have achieved my goal with you
and i would like to wish you now
good luck on your innovation journey if
you if you would like to stay in touch
with me
please connect with me over linkedin
send me an email
or maybe we meet someone in the future
in person thanks for watching this video
and bye bye from switzerland
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