How do non-innovative firms start innovation and build legitimacy? The case of professional service firms

Abstract

As clients’ needs change, firms need to adapt and innovate, but how do firms innovate if they have not done it before? We study law firms as novice innovators. Law firms are generally conservative and averse to exploration-based innovation. We show that law firms face two challenges in starting innovation: developing innovation capacity and gaining legitimacy for innovative behavior. Employing a qualitative comparative analysis approach, we used 50 in-depth interviews with innovating multinational law firms headquartered in the United Kingdom to present six configurations of factors leading to service innovation in law firms. Clients and competitors play a key role both as innovation stimuli and legitimizing actors. We demonstrate that knowledge-based networks are important for service innovation, but legitimizing strategies are important for novice innovators to ensure innovation is recognized, approved, and diffused.