IDEO: A visit to the heart of Innovation

Last month I had the opportunity to visit IDEO´s offices in San Francisco to meet with Rochael Soper Adranly, its General Counsel, and Tara Safaie. For those who haven´t heard of IDEO, it is a global design company considered to be at the forefront of innovation design in the world. I heard and read a lot about IDEO during my days of organizational studies and was thrilled to be able to meet with them. Rochael and Tara have been working lately on topics related to the legal industry. They find this both challenging and fascinating, given that law firms has been resisting the wave of innovation that changed so much other industries.

During my visit I had the opportunity to watch how they work as a consultancy company and also to discuss their views about the legal industry and the main challenges that lay ahead. My main observations and conclusions follow below:

1. Everything affects behaviour. When you walk around IDEO´s offices you can see how much the office design is thought to help people do their job and promote the behaviours the company believes are important for their culture and working environment. For instance, details like bycicles from employees hanging from the seiling through a system of ropes or a special cue for bathroom use in the middle of the working area that would force people to meet and have casual chatting about what they are doing, all of these concepts impressed me as a place that is really different. More importantly, they strongly believe that people need to interact in order to be creative and productive, and they think and design every detail in the office to enhance that objective.
2. The Prototyping Approach. Another thing I found interesting is the way they try to solve problems and find solutions for their clients. Instead of working for a long time on potential solutions and test them once they feel they have found the right answer, they test them early on in the process once they have a couple of ideas that make sense. So they build basic prototypes and test them. They don´t have to be perfect; in fact they know many of them won´t be. But the point is that the learning experience is much more fruitful when you can experience in real life (and not just in your head) how your ideas look like. When you test ideas early on, different people can supply their own views and perspectives and improve –or discard- them. If you can only expose ideas when they are finalized, you run the risk of loosing time and efforts in an initiative that was doomed to failure from the beggining. Learning by doing is a much more solid process of innovation because it allows a sense-making attitude to your work (which relates to Karl Weick´s phrase “How can I know what I think until I see what I say”). But that requires a culture that embraces risks and failures as a natural path to success and excellence. This method of solving problems and creating solutions is quite different from those used by lawyers, where nobody will dare to propose anything unless it is bullet-proof (at least in theory). The risk of affecting one´s reputation, both by peers and clients does not allow a more open “prototyping approach”, although it would probably be more creative and innovative.
3. 3. The Billable Hour. As I expected from persons with that backround, they do not consider the billable hour system as a productive way to bring value to the client and make law firms more efficient. Billable hours create a bunch of wrong incentives that need to be closely managed if you want to avoid troubles both inside and outside the office. This system is already changing since most clients do not accept hours face value. Anything that cannot be related to value received by clients (as they interpret “value”) is likely to be rejected by means of reducing fees or hiring other lawyers. So the model will have to evolve to something more flexible and creative, where service and client´s needs stand in front of law firms expectations and desires.
4. Changes and biggest threats to law firms. The legal industry is in the midst of a big change similar to that experienced by the newspaper industry in 1997. Those changes did not kill the newspapers (many of them are still there and successful) but their business changed dramatically, and only those who understood that and were willing to adjust have been able to retain a leadership role. In Rochael´s view, the biggest threat to law firms in the future will not come from technology itself (although that is a big challenge) but from the in-house departments. The way many law firms work, with several layers of lawyers giving opinions and solutions to clients and certain hierarquical culture, is not compatible with clients´ needs in this complex world. So what a lot of clients are doing is enhancing their own internal legal department and getting the neccesary talent to provide agile and prompt solutions to their needs. In-house lawyers are closer to the client and undertand the business issues better. In the past, the better talent usually could be found in the law firms, so clients needed to go there for their most complex and important matters. But that is changing fast.
5. Where opportunity lies. But in their view there is also a big opportunity if law firms can find a way to change and take a “human approach” (or client-friendly, if you like). That means to try a less intellectual and legal stance to matters raised by clients and be open to other ideas and appreciate interaction with clients and peers. Issues have become more complex and ambiguous (meaning that more than one answer can be plausible), and solutions are rarely a 100% right or wrong. So lawyers have to accept that they may not always own the truth and that they need to dwell in disconfort and ambiguity to be able to provide creative ideas and solutions. Law firms can still be a major source of knowledge and solutions for clients, as long as they adapt to the way things have changed.

Are there any lessons for law firms in Latin America to learn from IDEO? I think all of the five major conclusions are worthwhile exploring and think about. The “internal design” approach, where the office is thought in close connection with the objectives the firm wants to achieve would be a significant change from what most law firms do. The “Propotyping method” is a much richer and productive approach than the typical definitive solution that lawyers like to stick to. And all the market views regarding billing hours, in-house departments and the need for a more “human-like” approach to service are, from my perspective, completely applicable to our region´s reality and future challenges. I hope we will be able to deal with them effectively in the years ahead. Please find a link with more information about IDEO and Rochael Soper´s perspectives Modern Counsel