Innovation in the legal service industry: Examining the roles of human and social capital, and knowledge and technology transfer

Abstract

Business research has rarely explored service innovation for the traditionally conservative legal industry. Using a resource-based and practice-based view blend as its theoretical backbone we develop an understanding of the parameters underpinning law firm innovation as a facilitator of operations management enhancement and possible source of entrepreneurship. The paper presents a survey answered by 106 legal professionals from 19 countries exploring four thematic areas referring to human capital, social capital, knowledge and technology transfer that were hypothesised to define innovation. Ordered probit regression modelling was used. Evidence is presented that cybersecurity threats, inadequate and limited training on IT, excessive paperwork and lack of efficient teamwork, collaboration and communication are key challenges to innovation adoption, which is a pathway to sustainable, inclusive and resilient firm growth. Firm size and internationalisation are innovation-altering factors; SMEs differ from large global firms in their ability to operate ‘outside-the-box’. Our results recommend that legal enterprises need to adopt innovation as a robust transformation-enabling toolkit that could facilitate a performance-enhancing business ethos.