For law departments, first-adopter advantages and disadvantages and the follower’s dilemma

New management practices can boost the pioneering law department or can hobble it. We tend to think that the first-mover gains a competitive advantage: if you are the first to pay firms by credit card or the first to beta test software or the first to do anything, that boldness and creatively brings rewards of differentiation, knowledge, reputation, and advantage. Sadly, all is not rosy. “Research has shown, however, that first mover firms in fact may be as likely to suffer from competitive disadvantages as to obtain competitive advantages” (emphasis in original, Acad. Mgt. J., Oct. 2010 at 1175).

Somewhat similarly, the less-well known “follower’s dilemma” applies to law departments. Whether to mimic a publicized success or to choose to bypass the innovation can be a tough call. For a general counsel, the decision comes from the heart of managerial decision-making.

In my consulting projects I usually urge law department clients to try something new, but monitor it closely, prepare to make mid-course changes, alter whatever seems to make the new way of working fit better with the department, and be ready to jettison if it goes off course. All common sense, you may say, but the advice is premised on exploring constantly for improvements.

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