Image [cc] Vyperx1

We very often hear from bloggers on this site regarding the struggles associated with change and innovation.  Fear of failure, lack of inertia, protecting territories—all seem to be stumbling blocks that many firms face when initiating change.  It seems, however, some organizations have found a way to successfully encourage and nurture new ideas internally. 

I had the pleasure of speaking to Karl Florida, Managing Director of Small Law Firm Business Segments and Innovation Champion, at Thomson Reuters, about a new innovation program the company has instituted.

For many years (as many of us are well aware), the Thomson Reuters model has been to acquire business units and manage their growing portfolio.  More recently, the model has shifted, with a focus on knitting the units together to drive more organic growth between them. 

One way Thomson Reuters is accomplishing this is by establishing a cross-unit Innovation Task Force (ITF) and a Catalyst Fund to support new ideas.  Thomson is looking for great ideas from within and establishing a system that rewards creative thinking to further serve their business goals.  How it works is this:  On a monthly basis, ideas can be informally submitted across the company via a home-grown tracking system (no business plan is required, but there is a template to gather certain information).  There are a small number of administrators who collect the proposals and submit them to the ITF.  The ITF prioritizes the ideas, develops Proof of Concept (POCs) and sends the top 5 to a C-level suite of decision-makers. They, in turn, determine if any will move forward into the funding stage.   The appropriate business units and a business sponsor are chosen, and a prototype is created and tested in-house and in the market.  If successful, the product goes to market based on a timeline.  The entire process is tracked through each stage of the pipeline process. 

While the program is only a few months old, it is already gaining in popularity.  Some of the areas where ideas are being generated are Big Data analytics in relation to law, scientific, tax and financial sectors, data visualization tools, regulatory compliance and (wait for it), wearable tech! 

Karl tells me Thomson Reuters is finding the most opportunity in the space between units.  He compared this to the genius of a Reese’s Peanut Butter Cup.  You have chocolate, which is awesome on its own, and you also have peanut butter, equally wonderful.  But put them together, and well, then that is where the magic happens. 

While Thomson Reuter’s program appears mostly devoted to product development, law firms could certainly take advantage of this sort of model to solicit and promote ideas from within regarding client service and delivery, along with development of administrative efficiencies.  The model, along with variations, allows and in fact, encourages a small, but safe space (with funding!) to experiment with new ideas without the associated pressure and demands to be “the right” solution out of the gate.

FYI, if you want to learn more about innovation tournaments, I highly recommend the book, Innovation Tournaments:  Creating and Selecting Exceptional Opportunities, by Christian Terwiesch and Karl Ulrich (hat tip to CCH, for giving me the opportunity to see Karl Ulrich in action).  Because don’t we all need some more peanut butter cups?

When Dewey & LeBouef filed for Chapter 11 protection, the firm listed the unsecured creditors, and three of the biggest losers on the list were Thomson Reuters (owed $2.3 million), LexisNexis (owed $1.4 million.), and CCH (owed $650K.)

Although the total amount of legal research to debt is something like 1.7% of the total, it still shows the amount of money that firms pay year in and year out for legal research products. I hadn’t thought about the fact that Westlaw/Lexis/CCH, etc. contracts are unsecured debts before, but I guess there’s not really a lot that Wexis can get from the firms they serve to secure the services they provide.

Does the exposure of this information give us any “insider” information on Dewey’s existing contracts with their legal vendors? Could we make some broad assumptions and say that if we calculate out the remaining amount owed by the number of months left in the year, does this come out to mean that Dewey was paying $3.45 million a year for Westlaw (or roughly $260 per month per lawyer… assuming 1100 lawyers)?? Let’s keep on making these “very assumptive” mathematical calculations:

Lexis — $2.1 million annual – $175 per month per lawyer
CCH — $975,000 – $74 per month per lawyer

In an industry where we are always trying to figure out where we are on our contracts versus our peers, there could be some interesting information coming out in the Dewey bankruptcy. Perhaps those Competitive Intelligence experts could find some even more interesting tidbits.

[NOTE: My friend Don Cruse reminded me that “rest of the year” payments would be avoided in bankruptcy, so my calculations are most likely inaccurate. If Dewey just owes, say the five months of this year, then the totals for subscription costs would jump up about 38% higher than these numbers. Of course, I haven’t seen anything specific, so this is just me applying assumptions to come up with these amounts!! – GL (added @11:47 AM]