Originally published in The Legal Intelligencer on May 12, 2017

Not unlike law firms, large ­companies constantly struggle to drive change within their organizations. When faced with monumental shifts such as the internet boom, iPhone or, more recently, analytics and artificial intelligence, ­several companies have profited—financially and, at times, strategically—through investments in the entrepreneurial, often smaller, ­companies pioneering change. Many, including big brand names Microsoft, Intel, Merck and even General Mills, do this through corporate venture capital arms, or CVCs.

Between 2012 and 2016, the number of CVCs more than doubled, according to CB Insights. In 2016 alone, more than 100 new companies entered the venture funding game and nearly 200 distinct groups invested in 4th quarter 2016 alone. Rather than wait on the sidelines as new ­technologies disrupt their industries, large corporations across a wide variety of sectors have found ways to encourage, explore and integrate game-changing advances into their portfolios. Today, as the pace of change continues to increase, so too does the recognition by large companies that perhaps the fastest way to the top is not to rebut change—or even create it–but to ignite it.

A handful of law firms to date have tiptoed into these waters, housing incubators for startups or acquiring technology upstarts to augment their ability to deliver legal services more efficiently or effectively. Yet there is much to be learned from understanding the history, trials and errors and, more recently, notable successes of CVCs. A fascinating and well-documented history of CVCs from the data gurus at CB Insights offers perspective and some valuable lessons:

• Play the long game—investments made with an eye to the longer-term vision of the company enable savvy CVCs to support their strategic growth while simultaneously withstanding the inevitable market ebbs and flows.

Unfortunately, far too many law firms are wedded to the year-over-year ­micro-movements in profits per equity ­partner and revenue per lawyer; and far too few track comparative performance over longer time horizons, against changes in client spending trends or for alignment with a clearly articulated set of metrics in sync with a strategic vision. The emphasis on short-term gains has long been a struggle for law firms whose partnership and compensation structures stress current year performance.

In the CVC world, Intel was one of the first of its kind to invest in companies with a clear connection to the strategic vision of the whole. The result: it is one of the most successful, long-standing venture groups with a demonstrated capacity to withstand market fluctuations others could not. Law firms choosing to forego current profits for the long-term good will similarly find themselves better situated as technology, analytics and alternative staffing and pricing models transform the way they do business.

• How you deliver matters—providing a distribution channel, operational support and a sophisticated platform to a startup trumps the often time-intensive process of new product development.

Historically, law firms have translated new product ­development as a mandate to acquire laterals or small firms in budding practice areas. And while this may constitute some of what the future holds, the majority of changes in the legal industry will not be tied to the legal services themselves but to the legal service delivery model. How clients find, select and hire law firms is undergoing a shift—a shift that will be accelerated as the legal world becomes even more ­data-rich and transparent.

In this environment, it is not only the talented up-and-coming lawyers who will distinguish one law firm from another but also its business processes, technology, thought-leadership, analytical capabilities and approach to market. In other words, a law firm's business professionals and business savvy will someday trump the skills of the very individuals that make a law firm, well, "legal." In this new world, change must come not just from within but from the external assets a law firm can combine in new and creative ways.

• Invest in what will be, not what is—technological advances such as AI and data analytics will completely transform the capabilities and needs of virtually every industry. Microsoft Ventures, for example, is investing in the companies that will serve as the backbone enabling this shift to take place.

Admittedly, a few law firms are ­dabbling in this space through partnerships or outright acquisitions. The majority, however, shy away from unproven concepts, shunning failure and, thereby, stifling innovation. The opportunity is nigh to replace the age-old demand "show me what the leaders are doing" with "show me what we can do to lead."

Remember, there was a time when CVCs too, were followers, riding the coattails of private investors. Today, they are making strides in pursuing an alternative avenue to infuse innovation and generate short- and long-term gains. Though a capital call to form a $1B venture fund is unlikely (and possibly unwise) at a typical law firm, the mindset, discipline and fortitude of CVCs provide stellar examples of what to strive for and how to accomplish it.