Until recently, lawyers were to some degree insulated from market forces. The virtual monopoly law firms had in providing legal services in a buoyant market allowed them to define the reference points of competition. Market dynamics, in particular after the global financial crisis, prised that monopoly open.

The subsequent pressure on clients and the demand to drive down costs and deliver services in a far more efficient way are only some of the well-documented factors that forced lawyers to reappraise what being competitive means.

Put simply, being a highly skilled lawyer and having enough highly skilled lawyers in enough locations to meet demand from a reasonably consistent client base is no longer enough to ensure sustainable competitive advantage.

Given changed market realities, the real question is not why we need to be competitive, but how.

Firms have responded in different ways but rising above the competition by innovating has been a major focus for some time. And in a change-resistant and risk-averse profession, I think most of us concede that, despite all the discussion, it remains an elusive and hard-won prize and we have a long way to go. However, while the industry can be accused of past complacency, the need to adapt and change to ensure not just success but survival is hardly in doubt.

Innovation, of course, means different things to different people. Arguably, at its most basic level it encompasses doing what you are already doing but in a different and improved way, or developing a new form of service or product. For lawyers, the former is probably where more gains have been made. A good example of this is the alternative sourcing models adopted by certain firms, a response not only to increased client demand for efficiency and cost-effectiveness in the delivery of legal services, but also to the emergence of new competitors in the market actually allowing clients to disaggregate services.

Meeting one criterion of competitiveness can also inadvertently and negatively impact upon another. So, for example, could improving efficiency by pursuing a certain form of alternative sourcing compromise quality, legal excellence or brand, all of which are core to competitive identity?

With competitive advantage being driven by innovation, we also need to address certain factors relating to how we operate that can act as barriers. To an outsider, the investment required to be competitive could be impeded by law firms' profit distribution system. And certain metrics against which firms are judged and compensation is awarded can risk promoting a short-termist view. Innovation generally requires collaboration and therefore the internal structures need to foster that. Breeding a competitive culture requires a system of incentives that encourage change rather than reinforce resistance.

The new market realities have inevitably driven change and improvements in service offerings, and the innovation we are seeing today and are likely to see in the future will benefit clients, their lawyers and the industry. Remaining competitive by using innovative strategies to win new clients, markets and, very often, market share, as well as to attract and retain talent, is essential to survival.

Focusing strategically on how our market is changing and having the flexibility and drive to evolve cannot be more important. No one taught me that at law school.

James Collis is managing partner of Ashurst.