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“Fail fast and move on.” At first, the regularity with which the phrase appeared in lawyers’ submissions for this year’s European FT Innovative Lawyers’ report was unnerving. However, the ubiquity of the idea that learning from mistakes leads ultimately to success, is a sign that European law firms are genuinely starting to behave as businesses.

The idea that failure can have a positive connotation is not easy for lawyers to embrace. To get the law wrong means a professional negligence case rather than a pat on the back. But law firms are being forced to experiment with new technologies, processes and business models to deliver what clients want. Experiments involve failures.

The idea of failing fast and moving on quickly comes from so-called design thinking, a process that aims within a short space of time to turn ideas into prototypes, test them with potential customers and make amendments before launching a new product or service. With the focus on the user, design thinking principles appeal to many law firms — which are, of course, intrinsically client-centred businesses.

In addition, law firms have recognised that their own employees and even clients can crowdsource ideas and try out how they would work in practice. Linklaters in the UK canvassed all its 5,000 or so employees as well as 130 clients and its alumni network for ideas for the firm’s future. Cuatrecasas, the Spanish law firm, used its internal “crowd” to ensure its strategic plan was put into practice.

The firms are recognising that they must “democratise” innovation and put it within each employee’s reach. This means everyone’s ideas have value, at least to start with. This is a big cultural shift for law firms, which traditionally have been highly status-driven workplaces, where staff are categorised by their seniority in the firm and by whether they are fee-earners or “fee-burners”.

Allen & Overy, the overall law firm winner of this year’s award, has adopted such a grassroots approach. Its i2 initiative is designed to empower employees to use technology better in their daily working life. The i2 team comprises software developers and technology analysts who help staff develop their ideas and submit them to a panel that decides whether the firm should adopt the idea. The panel is drawn from all parts of the firm and the process helps create a mindset of continuous improvement.

The firm is also innovating at an institutional level. In a rare step, it has joined forces with Deloitte, one of the big four accountancy firms and a potential rival disrupter in the legal market, to develop machine learning software to do due diligence on big transactions. The firms jointly own the product.

“The smart law firms will certainly all be data businesses. Whether that means they also need to be software businesses is the [big] question,” says Jonathan Brayne, partner and head of innovation at Allen & Overy.

Indeed, more firms are taking on new consulting lines that complement their legal work but involve no lawyering. Hogan Lovells, for instance, has launched a new cyber-risk services consulting business.

The search for new ideas is leading firms to form relationships with legal tech start-ups, whether acting as guinea pigs for products or contributing funds. Mishcon de Reya’s MDR Lab, for example, has started a programme to bring legal tech start-ups into the firm. Even Slaughter and May, better known for its FTSE 100 clients, is starting services to support young technology companies. It is a far cry from 2006, when the FT published its first report on innovative lawyers: Slaughter and May’s tech submission then comprised issuing BlackBerrys to all partners.

However, while terms such as artificial intelligence and machine learning are being bandied about, there is still some way to go before robot lawyers enter the FT rankings. Very few of the legal expertise examples featured in the report involve machine learning.

Instead, the big steps forward are in the ways in which firms are using the technology they already have. From better project management to the latest in data visualisation software, the aim is to improve the experience of their people and their clients.

Copyright The Financial Times Limited 2018. All rights reserved.
About this Special Report

In this edition: — the rule of law, legal equality and political freedom —the top 50 law firms and legal service providers; in-house legal teams ranked for innovation alongside firms; top 10 individual innovators; the rule of law and access to justice; and collaboration as a business model