Innovation in legal services: The practices that influence ideation and codification activities

Abstract

This study examines how firms' innovation practices affect ideation and knowledge codification. Building on previous studies of service innovation, we develop a hierarchic framework comprising firms’ innovation ‘activities’ and related ‘practices’. Using survey data on UK legal services firms, we then identify the individual practices that contribute to successful ideation and codification. Our study contributes to our understanding of how a structured and organised approach to innovation benefits professional services firms. Beneficial practices include multifunctional working, promoting effective team-working, developing in-house research capability, having a leadership team committed to innovation and having strong external relationships. Firms with owners from outside the focal services sector, in the present case legal services, prove more effective at both ideation and knowledge codification. We find little evidence that competition affects innovation, suggesting that de-regulation initiatives in the legal services sector have to improve if market forces are to operate effectively.