illustration by Martin O’Neill of a person having ideas
© Martin O’Neill
illustration by Martin O’Neill of a person having ideas
© Martin O’Neill

The FT’s innovation rankings for law firms in the US have shifted up a gear this year. With 100 extra submissions and most of the top firms in the Am Law 100 putting their best work forward, to be included has meant more than doing something original and delivering a different order of service. It has also meant being able to inspire eulogies from clients. The FT 40 reflects those firms that have been able to do that consistently and effectively across their businesses.

So what does it take to inspire client eulogy, when quality is a given and the stakes are so high that a positive commercial and legal outcome for any lawyer will result in immense gratitude?

Jamie O’Connell, managing director at Blackstone Group, calls White & Case’s work for Roust Trading on its acquisition of CEDC, the spirits manufacturer, “off-the-charts”. In creating the world’s second-largest vodka company, the firm had to work closely with the financier but took a leadership role throughout, coming up with ideas, creating consensus and delivering a complex but creative solution. Key to success was its global footprint, internal collaborations and the ability to show what the client considered unusual behaviour. Tom Lauria, the White & Case partner on the deal, was described as an “atypical” lawyer.

Throughout the FT report, in private practice or in-house, lawyers are noted for their innovation when they display skills or behaviours beyond the ordinary. In early FT Innovative Lawyer reports, atypical behaviour meant anticipating instructions as well as being commercial and intensely committed; in effect, being in the driving seat of the car. But as the bar to entry rises, it has begun to mean having a key role in designing that car.

For in-house lawyers, this shift to becoming an intrinsic part of the creative process is even more pronounced this year. Eric Schmidt, executive chairman of Google, says his lawyers can articulate the detail of their products like engineers. “Every lawyer wants to be a business enabler. The difference in our case is that we are inventing this stuff. So the lawyers have to be doing it, too.”

The 10 lawyers profiled in the innovative individuals section personify the traits of legal innovators. They show creativity, leadership and a restless mindset. In many cases, they started their professional lives from a non-legal background. Max Grant, the intellectual property partner at Latham & Watkins, was a Navy SEAL; Erika Rottenberg, the general counsel at LinkedIn, used to be a schoolteacher. Both say their early experiences helped them make a wider interpretation of what it means to be a lawyer.

Mike Goodman at Nike shows a different type of innovation. His approach has been to rethink the commercial contracting process, taking it back to basics and re-engineering it. His innovations are bearing fruit for Nike but could also have broader applications. Brett Miller, director of sourcing execution, says, “Mike has the process mindset that sets him apart but he is bumping his head against the cultural norms of the legal profession.”

These norms, however, are changing. While in-house lawyers are leading the shift, those in private practice are not immune. Professor Jeffrey E. Garten from the Yale School of Management said in a recent address to 150 law firm managing partners at an International Bar Association meeting that he believes the US is going through a third industrial revolution. He pointed to levels of industrial collaboration in the US unparalleled anywhere else in the world.

These collaborations underpin many of the examples of innovative lawyering in the 2013 FT report. They represent an opportunity for lawyers but also a challenge as both the law and lawyers have to keep up with the pace of change.

Ninety per cent of ranked entries in the corporate law ranking involved some form of collaboration not only internally among practice groups but externally with clients, opposing law firms and other stakeholders. More than 50 per cent of entries in corporate and finance law involved cross-border work and the standout entries in corporate are all international.

It is difficult for lawyers working in these multidisciplinary teams for different client combinations and in new jurisdictions to hang on to old silo mindsets or traditional approaches to risk.

The other key driver of change in the profession continues to be the environment. Despite the uptick in the US economy and several firms in the FT 40 reporting 10 per cent growth this year, the US legal market remains challenging. Brad Karp, chairman of Paul Weiss, says, “We had another record-breaking year but we understand that we cannot be complacent in this market. The stakes are higher, the problems more intractable but the opportunities are more transformative.”

Most law firm leaders in the FT 40 agree that the changes in the market since the credit crisis are here to stay. Greg Nitzkowski, managing partner of Paul Hastings, says: “Until 2008, we had uninterrupted upward ramping in a statistical sense for 60 years. We saw failures but people tended to attribute them to leadership and management rather than failures of change and innovation.”

Being able to innovate, he believes, will be the only way premium law firms can protect their franchises and garner those all-important client eulogies.

Rather than innovate around pricing, which would be what most clients would welcome, top firms have chosen to focus on adding value to their services. As the business of law ranking reveals, some US law firms are beginning to make some of their services into standardised products, a process that has been common in the UK legal market for some years.

The majority of US firms, though, are responding by increasing focus on talent management, in an attempt to make their lawyers more relevant to business.

Eric Friedman, chairman of Skadden, the top-scoring firm in the FT 40 this year, says the firm is focused on the development of its attorneys worldwide. He says, “One of the most rewarding changes I have seen this year is the increased interconnectivity of our offices coming to life.”

That underlines how important a multifaceted outlook has become to innovation.

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