RSG

What Does Innovation Mean in the US Legal Market?
By Reena SenGupta

In the years that we have been researching and writing about innovative lawyers, we have never arrived at a static definition for one. In looking for legal innovation, we have found ourselves charting the rapid evolution of an inherently conservative profession.

The innovative lawyer or law firm has had to keep up with a changing world, which in the past five years has posed complex challenges for the profession as a whole and what it means to be a lawyer. To produce this special report, we completed several hundred interviews with lawyers and their clients, un-picking the deals and cases sent to us for consideration. What is clear from the research is that the demand for legal innovation has not waned post the credit-crisis.

In what Lee Meyerson, a partner at Simpson Thacher calls the “new normal”, lawyers have to see the big picture to be able to achieve successful outcomes for business.  The difference says Mr Meyerson is that “we need to be agile, thoughtful and creative in an environment where things change hourly.” To be ranked in this report, a legal team needs to have exceeded client expectations in a market where those expectations are riding high. Brad Karp, chairman of Paul Weiss notes that post the credit crisis, “there has been a flight to quality and a dramatic divide between those firms that can handle ‘bet the company’ work and those that can’t.” Certainly, much of the work profiled in the 2010 US report can be categorised as company survival work. However, business circumstances do not need to be extreme to produce innovative lawyering.

There are also many instances through the report where lawyers have transcended the traditional parameters of the legal role whilst going about their everyday jobs. For example, John Schmidt, a partner at Mayer Brown was required to attend all the principals’ meetings in the proposed privatisation of Midway airport so valued was his contribution as a strategic business advisor. Equally in the litigation arena, innovative lawyers are not just coming up with new precedents or taking cases to the Supreme Court. They are equally innovative in the way in which they frame and deliver their arguments in the court room. Often, their success is about putting the human face on dry numbers or complex disputes to simplify them for a jury. When this has been done with creativity and imagination as several lawyers who appear in the litigation table have showed, it becomes innovation.

Innovative lawyers come in all shapes and sizes but what they have in common is a set of attributes. Firstly, they have to be excellent technicians and masters in their fields of legal practice. Secondly, they have to be business people. The ability to plait these two skill-sets seamlessly together is the foundation of the innovative lawyer. But to be stand-out in the FT report, they have to go one step further. As can be seen from the top-ranked entries in the tables, the lawyers have slipped on the shoes of actuaries, scientists, ambassadors, artists, historians – they have crossed their own professional constraints and been able to master other disciplines in pursuit of their client’s objectives.

Jeff Rosen, Chairman of Debevoise & Plimpton questions whether we are seeing a return to the generalist lawyer. This view is echoed by Robert Giuffra, a partner at Sullivan & Cromwell who observes that “a generalist approach produces better innovators than a specialist one.” In both the five years of publishing the European report on legal innovation and this inaugural edition in the US, it is clear that the lawyers most able to innovate are those who have a multiplicity of personal and professional experience, or legal teams that can bring together diverse specialists into an integrated whole.

If there is an argument for cognitive diversity in professional life, it is the FT’s special report on legal innovation. Interestingly, this re-emphasis on the benefits of being a generalist is a reversal of the trend towards specialisation that has characterised both the US and European legal professions over the past two decades.

However for lawyers to be able to respond and stay ahead of the challenges of globalisation, active regulators, the rise of alternative legal service providers and muscular  purchasers requires a world view that is characterised by multi-lateral thinking rather than a narrow legal one. The area we have not examined in depth in this report is the business of law. Questions such as: is the market shrinking for ‘Big Law’ firms are not answered by this survey – this year.

However, from the many conversations we have had with clients, it is clear that the requirement for big lawyers is not shrinking. Charles A. Krauss, Assistant General Counsel at C.R Bard Inc says that his main job is to manage lawyers. His definition of an innovative lawyer is one that can figure out how to tell a good story and sell it. “Unfortunately,” he says, “it is unusual in the US market. The lawyers that can do this are too far and few between.” One law firm chairman estimated the number of innovative lawyers at each US firm to be less than 30%. Hopefully, the FT’s investigation into legal innovation will encourage more innovative lawyer stories to be created and told.

(This was the introductory article to the US Innovative Lawyers report, which was published on the 1 December 2010.)