Law Firms

Episode 16: Vishal Agnihotri on Knowledge Management for Law Firms and Legal Departments

Our guest this time is Vishal Agnihotri, Chief Knowledge Officer (or “CKO”) for the Chicago based national law firm, Hinshaw & Culbertson. As CKO, Vishal is responsible for the firm’s knowledge management programs. 

What is knowledge management? Vishal has a great way of defining it: the ability to identify critical knowledge within an organization and then leveraging it to serve up at the right time for the right purpose.

Vishal explains that law firms are great candidates for knowledge management and that for law firm KM programs to succeed, CKOs must work closely with the firm’s Chief Information Officers and Chief Marketing Officers (CIO and CMO).

Vishal talks about her many responsibilities as a law firm CKO including keeping up with changes in legal tech, vendor management, making sure tools and software the firm already owns are used effectively and educating others about KM and related tools.

For law firms and legal departments interested in implementing a knowledge management program, Vishal says the first step is determining what constitutes “critical knowledge” and to use tools to organize that critical information. She suggests a good starting point is a collaboration platform to share knowledge and pose questions and to also utilize a good intranet for the organization.

To connect with Vishal, you can find her on LinkedIn.

 

Legal Founder Segment: Jeff Kerr of CaseFleet

We also talk to Jeff Kerr, the CEO of CaseFleet. A case chronology and management tool for lawyers that helps attorneys review evidence, organize facts, and identify trends in legal matters. Jeff also points out that CaseFleet is also used by investigative reporters and expert witnesses.

You can find CaseFleet on Twitter and LinkedIn.

 

Things We Talk About in This Episode:

Peter Drucker Knowledge Workers

 

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

 

 

Podcast Transcript

Chad Main: I’m Chad Main, and this is Technically Legal, a podcast about the intersection of technology and the practice of law, where each week we’ll talk to a different mover or shaker in the legal and technology field. We learn a little about them, what they’ve been up to, and hopefully get some real-world tips that will help lawyers better use technology in their legal practices. You just heard from Vishal Agnihotri. She’s the chief knowledge officer for the law firm of Hinshaw & Culbertson. In this episode we talk to her about knowledge management for law firms and legal departments. We also talk to Jeff Kerr, the CEO and founder of CaseFleet, case chronology software for lawyers.

In this episode we’re talking about knowledge management. What is knowledge management? In short, it’s a way for companies, law firms and legal departments to keep track of the information they collect in their day-to-day business. If ever there is an industry that has a use for knowledge management or KM, for short, it’s the law. The cornerstone of law is knowledge and precedent. Although when many think of lawyers, they might think of a stunning closing argument by a trial lawyer or a shrewd negotiator sitting across the conference table getting the best deal for the client, but as we lawyers know, the vast majority of a lawyer’s time is not spent on exciting verbal activities. In fact, the vast majority of time spent practicing law is doing the mundane, taking a look at the written word, reviewing legal documents, examining contract templates, or looking into laws handed out by governing bodies.

All this information used to be stored in file cabinets and books, but in the digital age, it is stored on computers, and there’s a lot more of it. This is why law is such a perfect profession for knowledge management. Despite what we want to think, not every legal matter cuts new ground or requires lawyers to come up with some new novel legal theory or create a new contract clause. Chances are really good another lawyer somewhere else, probably even in the same law firm or legal department, was hired before to address the same problem. This lawyer has notes, research or document templates that, again, could be put to use. But, often, all that prior knowledge is not that easy to find. It may not be organized, or it may not even be available. That’s where knowledge management comes in.

Our guest today is Vishal Agnihotri. She is the CKO, or chief knowledge officer, for Hinshaw & Culbertson. Although Vishal studied marketing, she got into knowledge management pretty early in her career. Before she made the jump to the legal industry, she worked at consulting and accounting heavyweights like KPMG and Ernst & Young. Vishal has a great way of succinctly describing knowledge management: It’s the ability to identify the critical knowledge within an organization, and then leveraging that information to serve it up at the right time for the right purpose.

Vishal: Knowledge workers, this was a term that Peter Drucker came up with. They’re workers whose main capital is knowledge. When you’re talking about accountants or lawyers or engineers or doctors, they all fall in the same category. Their work involves non-routine problem solving, and it involves convergent and divergent thinking. So, in both capacities, knowledge management is just about raising the corporate IQ, the collective intelligence of the firm itself, and the ability to build on each other’s ideas. So what we sell in a professional services firm is really between our ears. If you’re smart about it, you want to capitalize on what you know, what you’ve done before, so that you can make better margins going forward.

The purpose of a good knowledge management program is really to identify those key critical crown jewels of knowledge, if you will, that, when we leverage correctly, will serve for the firm’s benefit at the right time for the right purpose. Traditionally, this has been a very labor intensive process, so knowledge management was more about curating knowledge, gathering it, painfully, disseminating it for the greater good. We’re finding that that approach is becoming harder to sustain as we live in a world where information has just exploded. There’s an overload, if anything. So it’s giving way to an alternative approach that uses both technology and adaptive behavior to manage knowledge that’s internal to a firm, to manage knowledge that’s external to a firm as well.

 

Technology Begat Knowledge Management and Technology is Needed to Handle Knowledge Management

Chad Main: The interesting thing about knowledge management is that it’s kind of a thing solely because of technology. There has been an explosion of data as a result of the digitization of information, and you need even more technology to get a handle on all this digital information.

Vishal: We create, we curate, and we share digital knowledge in many more forms today than ever before, so firms end up needing a helping hand with managing all of that, in the service of their clients, with well designed systems that everyone understands and that everyone uses. I say uses because sometimes the scale and complexity of interactions between people and content can actually lead to increased business risks, so it is important that people understand how to use the systems, but they also have a fuller understanding of information governance and try to be compliant with that. All of this cannot sit on the shoulders of billable attorneys, and so they do need help with sorting through emerging technologies and evolving regulations around data.

So your point about, yes, somehow the electronic control and management of files of documents has led to some of this issue, and yet we turn back to knowledge. There used to be a time, at least when I started in this discipline 21 years ago, where piecing together information was the larger challenge. These days, that has become lesser of a challenge. What we face now is the challenge of filtering, of accessibility. I think, to some degree, people have started to undervalue information. They think it’s just abundant and it’s at your fingertips, but we know that that’s not the case. We have to make sure that you have integrated your systems well and you’ve employed better search engines, smarter systems, better filtering, and accessibility. Everybody wants it mobile, et cetera. So, yes, some of the problems have been created by technology, and we’re using other forms of technology to now address those.

 

Responsibilities of Law Firm CKO

Chad Main: So now that we have an idea of what knowledge management is, what does a law firm CKO do?

Vishal: As a CKO for a law firm, I straddle the world of business strategy and technology. I work very closely with the firm’s CIO, and my other partner in crime is the CMO. The CKO, like I said, introduces the firm to new tools, new processes, new idea that will enable faster and more effective access to useful, to actionable intelligence. I have a team that oversees all of the research, both legal as well as business research. We manage the vendor relationships for our digital research resources, print collections, et cetera. I’m also responsible for the vendor selection, implementation, training adoption of knowledge tools. This could be a knowledge sharing platform. It could be a smarter search engine, just integrating systems in order to be able to get to answers more effectively.

Even more important than that, while we are looking at surfacing the knowledge we have, because of the exploding legal tech landscape, there are lots of opportunities to automate specific, basic tasks. So what e-discovery tools did for document review, there are now so many other tools in the marketplace that are similarly automating some basic tasks, but changing the game very dramatically. That becomes our role to be sort of a technology purveyor, to go ahead and sort through the tech landscape and make sure that you find the right fits for your organization.

While we’re on that topic, a huge part of the role that I think nobody else necessarily has in the firm, or is at least expected to have, is keeping a lookout for new and interesting technologies. We talk about AI, machine learning, blockchain, et cetera. What are the new tools? What are the new technologies that are popping up? Is any of that relevant to our processes, to our workflows? Do we see them as things that can augment how we do things? Can they be possibilities for new service lines? Are they possibly threats to how we’re doing things? In terms of emerging technologies and both evolving regulations around data privacy, data practices, all of that is also a responsibility that the CKO has.

 

Law Firm CKOs Work Closely With Chief Information Officers and Chief Knowledge Officers

Chad Main: It used to be the only acronyms for business positions was CEO and CFO. Now there are quite a few acronyms hanging around the C-suite. As noted, Vishal is a CKO, or chief knowledge officer. In that role she works closely with the law firm’s CIO and CMO. That’s chief information officer and chief marketing officer.

Vishal: The CIO definitely offers, I would say … I’m going to use anatomical references here. The CIO definitely offers the backbone for the organization, so they’re not only making sure that the lights are kept running and the servers are humming and emails are sent the way they should be, with security and encryption and so on and so forth, and everything they do, in that sense, is mission critical. A lot of their work actually falls on the backend. A lot of times, I think, at the frontend, people don’t even know the extent of the work that’s going on.

In contrast, a CKO, a chief knowledge officer, does everything in the frontend space. So if they’re bringing in a new tool or a new technology, it is almost always to either bring the firm together. So, again, anatomically, if I reference it, it would be more like a nervous system, where you’re gluing everything together. You’re making sure all the connections are made, the dots are connected. Also, you can’t get away without making the main constituents actually use your tools. That’s the whole point. You cannot deploy it and then just hope that they will use it. You need to almost cultivate it, nurture it, make sure that they are paying attention, that they are using it the way it’s meant to.

There’s an element of adoption that is much more stronger, or an element of change management, I feel, that is much more stronger in a CKO’s job description, because you have to ensure that each user, each intended user, is using the new tool or is implementing the new process the way it’s meant to be. They may not get it the first time. There’s a marketing rule that says seven times you have to touch something to have enough brand recall. It’s similar. I think lawyers, paralegals are extremely busy. They have billable pressures. So in order to make a successful implementation, you absolutely need to make sure that they’re grabbing their attention and convincing them of why they should be using something, why they should change the way they’re doing something.

 

CKOs Must Educate Others

Chad Main: You just heard Vishal mention a couple of times that part of her job is educating others at her law firm at the tools and tech available to them. So I asked her to expand on that a little bit.

Vishal: The law firms make excellent cases, no pun intended, for the application of knowledge management. So one of the ways to explain to them how this works out is everybody is learning. Their entire job, their entire role as a professional rests on the idea of what they know, what they’ve learned. I don’t mean just what they learned in law school. Who knows what? Who knows whom? A lot of that is learned. It’s built upon. It’s interpreted in different ways. It’s managed, and it grows exponentially with their career. Some of it is lost to turnover. Not everybody grows up in the firm together forever. Some of it is just wasted, if you don’t capture it in any systematic way. Some will always be impossible to codify and share. But what we can share, and I’ve come to believe that a lot of the just-in-time knowledge that can be shared, can really, really change the game for them.

These are professionals who’ve spent a lifetime perfecting their craft. They get very specialized, very deep in a subject, and now they’re suddenly being challenged for even better service, quicker service, cheaper service, by the client. Knowledge management helps build that ecosystem of … We don’t expect partners to, on their own, take time, or lawyers, on their own, to take time and write down lessons learned from a specific case or some a-ha moment that they had. But as the knowledge officer in the firm, you can now build out the systems and bring them along in a way that makes it easier for them.

Under no circumstance can you build a system or create something for them that makes them cringe at the idea of knowledge sharing. So how do I educate them? A, by showing them that this is how other firms, other professional firms, have been doing it for decades now. By doing so, they’ve achieved better margins. They improve their not just marketplace value, but also wallet share with clients. Because the more you can codify this is what we do, this is what we’re known for, the more you can capitalize on that for future engagements, for future client relationships. In some ways, I think it’s not even rocket science. It can be uncomfortable, I will give you that, for law firms, for lawyers.

Chad Main: How so?

Vishal: So a lot of lawyers of the … I guess, trained many years ago, I think took the line, “Knowledge is power,” very seriously. I think, by that, they meant individual knowledge is power. My idea back to them is it is still power, but collective knowledge is even more powerful. So they are hesitant, sometimes, to put in the time or put in the effort or put in the mind share to help you with your knowledge platform, to endorse it, to participate in it fully themselves, largely because they’ve gotten this far without it, so they feel like they can continue to do so. But we don’t live in the same world that we did 20 years ago. Like I said, client expectations have moved. The marketplace dynamics have changed. So we really want to focus on what the marketplace looks like today and what works and what doesn’t work for today’s marketplace, for today’s client.

 

Legal Founder Segment: Jeff Kerr CEO of CaseFleet

Chad Main: Let’s take five away from our talk with Vishal, because now it’s time for our legal founder segment. This time around, we’re talking to Jeff Kerr. He’s the founder and CEO of CaseFleet, case chronology software for lawyers, and, as we will find out, software that’s used by others outside the legal realm. Jeff, thanks for being here today. Tell us a little bit about CaseFleet.

Jeff Kerr: Thanks, Chad. CaseFleet is a tool for creating chronologies of facts, and it’s designed for litigators and investigators, people who care about the facts and the evidence and who believe that mastering the facts of their case is the best way to win.

Chad Main: What was the inspiration for you to develop CaseFleet?

Jeff Kerr: So it goes back to my former legal practice. I practiced employment law in Atlanta, Georgia in a small firm setting, myself and my partner and a few associates. We didn’t have a whole bunch of paralegals to help us out on our cases, so we tried to leverage technology to do as much as we possibly could and to work our cases as well as we could without having a large team. I found that mastering the facts of my cases and knowing the documents and knowing the events and knowing the witnesses was the best way for me to get a good outcome for my clients [inaudible 00:16:26]. A lot of attorneys were a little bit sloppy about the facts, and if I just knew them well and was very faithful to the evidence, it really helped.

I found that the best way to do that was with the help of software of different kinds. Having a database, in particular, is essential if you want to create a real representation of the relationships between the legal elements in a case, the facts that you know, and the evidence that you’ll use to prove those facts. Those are three very important components to every case, and I think people underestimate the number of connections that there are, even in pretty simple cases. A database and a database-backed application is really the best way to organize that kind of information.

I wanted a tool to exist that I could not find anywhere, and I was somewhat proficient with technology myself, and I wanted that tool to exist so badly that I started writing code and developing some prototypes. I had so much fun doing that that I decided to make that my new job, and so I left practice of law in 2015 to work full-time on CaseFleet. That’s what I have been up to since then.

Chad Main: Did you write all the code and develop it yourself? Or did you hire a team of developers?

Jeff Kerr: I did not, by any means, write all of the code for CaseFleet. Throughout the entire history of the company, I’ve been working with developers and our CTO, who’s a computer science graduate from Georgia Tech, who understand best practices, and our professional coders, to create an extremely reliable and high-performing application. But because I have such a clear vision of the way I want certain features in the product to work and the different use cases that there are for a product like ours, it’s been very helpful for our team that I have been able to design and even implement some of the features, particularly on the front end of the application.

Chad Main: That’s cool. So I know CaseFleet’s got a bunch of different features. Can you tell us a little bit about those?

Jeff Kerr: The main feature in CaseFleet is what we call our facts page, and that is the place where you go to see what the facts are in each of your cases and to add new facts. Each fact can be linked to different people and businesses that are involved in the fact. A date can be assigned to it. It can be related to different legal issues that make it important or relevant in the context of the case. You can also attach evidence to the fact.

The second core feature is our document review feature. It really differentiates CaseFleet from a lot of other products that are in this field, in that document review is built in to the software. Our users, everyday, upload a great number of documents, which we index so that they can be searched for keywords, and also we allow those documents to be previewed within the same web browser that you use to access facts page and other parts of CaseFleet. That provides a huge benefit, because, as you review the documents, you’re able to extract facts from them in a very efficient way. So creating the chronology isn’t necessarily something where you’re having to write every single fact in place. You can build it from the documents themselves, such as depositions, interrogatory responses, and other documents that play a role in the case.

Chad Main: So, great. That sounds like a great tool. Who’s it for?

Jeff Kerr: We designed CaseFleet primarily for litigation attorneys, and litigation attorneys are the core of our user base. But we’ve found that it’s also been very useful for paralegals, litigation support folks, and other people on the litigation team, anyone who has in interest in reviewing the documents and ensuring that the facts of the case are mapped out in a really clear way. Another category of users consists of clients of lawyers who sometimes are the first people to buy the software and who want to organize their documents and different facts. We also have a good bit of use among investigators, investigative reporters, and people who provide expert testimonies for attorneys, such as forensic experts, forensic psychologists, medical records review folks. So it’s kind of a broad [inaudible 00:20:59] of uses that can be found for CaseFleet.

Chad Main: That’s interesting. I wouldn’t have thought about that right off the top of my head, investigative reporters and expert witnesses. That is an interesting use of it. Well, great. I appreciate your time today, Jeff. Where can people find out more about CaseFleet?

Jeff Kerr: The best way to learn more is to visit our website, which is www.CaseFleet.com, and, from there, you can sign up for a demo or access a free trial of the software.

 

Do All Law Firms Need a CKO?

Chad Main: Let’s get back to our conversation with Vishal Agnihotri, the CKO for Hinshaw & Culbertson. So do all law firms need a CKO? Not surprisingly, Vishal thought that most firms could use one, or at least could start thinking about formalizing knowledge management protocols. She pointed out that, by doing so, it forces law firms and law departments to examine their internal processes, which in turn might encourage improvement of those processes and boost productivity and client service.

Vishal: Any law firm or any professional service firm should have a CKO, if they are ready to implement the changes that will come with that kind of investment, so it’s a mindset thing. I will say this: Profession firms are very adept at serving clients. They’re very good. They hone the craft of looking externally, whether you’re talking about marketing or in terms of service, service quality. They’re very externally focused. I think what they sometimes neglect to understand is that building out a knowledge management program internally moves some of that focus to our processes internally as well. That could also be very beneficial in the service of the client. It could improve client service quality. It could improve margins and productivity for the firm itself. So, yes, a law firm should hire a CKO or should at least have a knowledge management program led by someone who can bring about both new ideas, improved processes, but also, frankly, raise the base understanding of everybody in the firm of new ways of working.

In a professional service firm, whether it’s a law firm or an accounting firm or an architect’s firm, you will realize that the client expectations are evolving every single year. They keep moving the goal post. Even if we are not willing to share collective knowledge, at a minimum, somebody’s got to be responsible for raising the professional intelligence of the firm itself. I can’t imagine that somebody who’s on a billable track has the time and the wherewithal to do that, so you almost need somebody to come in from a different discipline, like knowledge management.

Knowledge management is a lot about change management, thinking about how this human-computer interaction is going to take place. It’s a lot about looking at the marketplace. Some of it may be even pontificating, like looking at various scenarios. What would work out best? So being a little bit of a futurist, looking out a couple of years at the minimum. So they should have a formal KM program leader, largely because nobody who’s billable will have the bandwidth to do that.

Chad Main: There is also a business case for the implementation of a knowledge management system. It makes clients happy but it makes attorneys more efficient.

Vishal: So you could work on a number of documents and save them on your desktop and never share them with anybody else, and best of luck when you’re looking for something.

Chad Main: So legal documents, contracts-

Vishal: Right.

Chad Main: … pleadings or whatever?

Vishal: Right, client documents, your work product. Now, for example, you have a need where you’re looking for something. It’d be wonderful if you were doing the exact same kind of document for the exact same kind of client for 30 years, but that does not usually happen. So every now and then, you will run into a need where you’re looking for something. You’re looking for a piece of information. You could go back to the phone culture and pick up the phone and call 20 people before you get an answer. Or if you had a system where all of the work product was in one place, you had a very good search system that would search across, you would actually save a lot of time, instead of manually trying to go gather this information. Now you may still end up finding a document or two that you think are worthy, and you may still end up picking up the phone to the partner that created that or that has his or her name on it, but that is much more different and much less compared to the hours upon hours you would spend otherwise piecing together the information.

Clients, I don’t think, want you to have that luxury. They’re not willing to pay for research, that kind that you would do 20, 30 years ago, when they know that there are better tools out there right now. So they’re expectation is that you bring your A game on and you’re finding what you need to find as quickly as possible. In terms of dollars and cents, A, it’s great for your reputation in the marketplace. B, if you’re actually doing it in lesser time, the client understands that you’re very efficient. It may not be billable time, but I doubt if you were to spend six hours finding something whether you would try to bill all of that time anyways. In effect, it makes you more efficient and less burned out, but also you’re keeping true to the essence of client quality, and hopefully you’re improving your margins. So if it is a flat fee arrangement, if it is one of those alternative fee arrangements, then you’ve actually improved margins if you have managed to use a better technology to find something in a shorter period of time, as opposed to going at it with sticks and stones.

 

Where Legal Departments and Law Firms Can Start to Implement Knowledge Management

Chad Main: So we ended our talk with a question I try to ask all my guests. Where can lawyers start to implement the ideas they heard discussed on this podcast?

Vishal: First of all, I think, from a content perspective, you definitely want to understand what qualifies as critical knowledge in a law firm. I mentioned this earlier, that it’s a very laborious process to try to codify every single item, so you do definitely want to just focus on the critical elements. There’s also an element of timeliness. Sometimes you just need an answer to this question. So, right now, a lot of law firms will have pardon the interruption emails, where somebody has a question and they send it around to everybody, and everybody else is popping in to give an answer.

But what you really want to do is employ better tools that can help with that. For example, one of the tools that I had rolled out in my last law firm, and we’re working on it at my current firm as well, is a social collaboration tool where lawyers are able to ask a question. Others who think they have an answer are able to answer, and that Q&A is almost on a Facebook-like or a LinkedIn group kind of interface. It has a picture next to the person who’s replying, and it creates, if you think about it, a searchable repository of question and answers, with zero effort from anybody on the KM team. Of course, we implement the system. We make sure we remind people. We teach people how to use it, et cetera. But once that is done, you’ve now created an auto-building auto-populating … As the day-to-day questions pop up, the Q&A repository is being built. That’s a very good place to get started, because it’s just-in-time kind of learning. It’s just-in-time kinds of Q&A. It is very simple to use. It does not require a ton of training, and it’s relatively inexpensive to actually put into a firm.

Other places to start, for example, the research and library services report in to me. A lot of times you’ll find that the resources that we have that the firm has paid for are not fully utilized. I know it sounds like common sense. Why would they not use something that they’re not already paying for? But a lot of times we do have tool fatigue or training fatigue even. People pay attention for when they need it, and then they forget about it. So one of the roles that I take very seriously is making sure that the awareness level of everything that we have, that we subscribe to, is very high within the firm. So you can do that with your good old fashioned newsletters. If you need to add incentives in there, you can. But a lot of times, people will come back and say, you know what, I had forgotten about that. I’m glad you brought that up. Or, you know what, I attended a training session when it first came out, but it’s been a year since I’ve used it. So even though that may feel like a very small effort, it actually has a lot of returns, because the firm’s already invested in that tool or in that resources.

You want to have a good, strong intranet. You definitely want to have a good portal that … in a very simplified way, a bulletin board that sits, electronically, where you can go hand everything from the firms PTO policy to other firm-wide information, office locations, et cetera, et cetera. But that portal can also be made … It can be more than just a pointer to different applications. Here, I want to schedule a conference room, or here I want to check out the events calendar. It can be more than that. It can be an operations portal. It can have more items on that. It can be an operational dashboard. You can have the lawyers looking at their billable hours, at their WIP, et cetera. You could have more insight on specific clients, on your top clients, et cetera. So there are many ways to use that kind of hub, if you will. That’s important as well, to move people to a central location, especially if you’re operating with a small team.

Most importantly, you want to use all of these tools, also, in the service of building camaraderie and rapport within the firm. I know this sounds a little bit like HR’s role, and it is. I think knowledge management, as I mentioned, works as the glue of bringing people together. You’ll find that people share more or share better or share easier if they trust each other. So in a lot of firms where you have a lot of lateral acquisition, partners being brought in at direct entry level, they may or may not feel comfortable right away. Even though this feels like soft, mushy stuff, believe it or not, putting focus on building the camaraderie within a firm, not just within the office, but within a firm, across practice groups, across offices, is actually key to having a strong knowledge sharing culture.

Chad Main: So that’s all we have for this episode. If you want to get a hold of Vishal, you can catch her on LinkedIn. Her name is spelled V-I-S-H-A-L A-G-N-I-H-O-T-R-I. If you want to get a hold of me, shoot me an email at CMain@Percipient.co. That’s C-M-A-I-N@Percipient.co. We hope you enjoyed this episode, and if you want to subscribe, you can find us on most major podcasting platforms, like iTunes, Google, Stitcher, et cetera. If you like us, I hope you give us a good review. Thanks for listening. Until next time, this has been Technically Legal.

 

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Episode 15: Keith Maziarek on Pricing Legal Services

In Episode 15 of Technically Legal, we sit down with Keith Maziarek, Director of Pricing and Legal Project Management for the Chicago law firm Katten Muchin Rosenman. Keith discusses the evolution of his marketing and business development roles for two of America’s largest law firms into pricing and project management positions.

Keith explains that law firms are adding pricing positions because of economic pressures and client demands. Clients are demanding changes in the way they are billed (AFAs or “alternative fee arrangements”) and also demanding that law firms become more efficient.

Keith also explains how project management and pricing legal services go hand in hand because to properly forecast the cost of a legal project, a thorough understanding of how the work will be done and what resources are needed is necessary.

Keith notes that fixed fees are not the only type of AFA out there. He discusses fee collars and success based legal fees. Keith explains how pricing fits into law firm marketing efforts and why sometimes it is best not to bid on work at all if it is not a good fit for the law firm.

You can contact Keith here: keith.maziarek@kattenlaw.com

Legal Founder Segment: 

In our Legal Founder Segment we talk to Kevin Miller, the CEO of Legal Sifter, an app that uses artificial intelligence to help people negotiate contracts with speed and providing advice from company leaders and lawyers in seconds.

You can check them out on Twitter at @legalsifter.

Things We Talk About in This Episode

American Bar Association

Kellogg School of Management at Northwestern University

Keith’s Article on Law Firm Pricing Techniques

Alternative Fee Arrangements (AFAs)

Fee Collars

Carnegie Mellon Artificial Intelligence Department

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

Background photo above Christine and Hagen Graf

 

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Episode 14: Barry Solomon on Legal Marketing and Technology

Marketing. Not always front and center for lawyers and law firms–but it should be.

In Episode 14 we discuss legal marketing with Barry Solomon, lawyer, former BigLaw CMO (Chief Marketing Officer) and current President of Foundation Software Group. Foundation develops law firm experience management software providing a foundation for other knowledge management applications that need to know what the law firm has done, who did it, who it was done for and who all was involved.

Barry distinguishes legal marketing from business development and explains how the two should work together. Barry says the key to good business development is to really listen to clients about their needs.

Barry also discusses the benefits of using of technology to gather data and track marketing metrics. He points out that much of the data helpful to improve marketing efforts is often found in software law firms already use (such as billing and timekeeping software, matter management software and the like).

Barry’s tip for law firms wanting to get serious about marketing but still testing the waters is to have two programs in place: 1) a program to gather client feedback; and 2) a program in place to train lawyers how to develop business.

You can contact Barry at barry@foundationsg.com and learn more about Foundation at foundationsg.com.

 

Legal Founder Segment: Daniel Goldstein of Trust & Will

In Episode 14 we also talk with Daniel Goldstein, the Founder of Trust & Will, an online tool to create, edit, store, and share a trust and will. To create a will on the site, users need only answer a few questions and decide what type of estate planning documents are best for them.

Daniel can be contacted at daniel@trustandwill.com.

 

Things We Talk About in This Episode

Interface Software

NITA – National Institute for Trial Advocacy

 

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

 

 

 

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Episode 13: Justine Gottshall on Data Privacy Laws

For Lucky Episode 13, we talk to Justine Gottshall about data privacy laws. Specifically, about the European Union’s General Data Privacy Regulation (GDPR) and, closer to home, California’s Consumer Privacy Act.

Justine is well positioned to talk about data privacy. She is a partner at InfoLaw Group, where she counsels clients on data privacy, technology, information governance, consumer protection, and digital marketing issues. Justine began her career as a Washington D.C. litigator working under a former Federal Trade Commission Commissioner and was involved in the FTC’s first data privacy investigation.

In this podcast, Justine explains to whom the GDPR and CCPA apply and the protections the laws grant consumers. Justine explains that law firms are not immune from data privacy laws and need to be prepared to comply with them.

Justine can be reached at jgottshall@infolawgroup.com.

 

Legal Tech Founder Segment: CourtSolutions Founder Morris Massel

In this episode’s Legal Tech Founder segment, we talk to former bankruptcy attorney Morris Massel about the company he founded, CourtSolutions, The company provides an efficient way for judges and lawyers to make telephonic court appearances.

With the app, judges can manage telephonic court appearances through an easy-to-use visual interface that participants may also access to see who is on the line and who is speaking. To learn more about CourtSolutions, check out the link above or visit judges.court-solutions.com. Morris may also be reached at mmassel@court-solutions.com.

Things We Talk About in This Episode

Federal Trade Commission

DoubleClick Investigation

National Advertising Initiative (NAI) Principles

GDPR

California Consumer Privacy Act

Deidentified Information

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

Episode 12: Jae Um on the New Normal for BigLaw and Calling BS on “Because Lawyers…”

In our twelfth episode, we talk to Jae Um, founder of Six Parsecs, an insights company for participants in the legal industry.  The company uses visuals and analytics to create objective, engaging information about the market for legal services.

The conversation with Jae is wide ranging. We discuss Han Solo, the true distance of a parsec and how she came up with the name for her company.

Jae also talks about her work history in legal, including multiple positions at Seyfarth Shaw, where she last worked as Director of Strategic Planning and Analysis. In her roles at Seyfarth, she learned a great deal about demand for legal services and how law firms can best serve clients and grow their businesses. From her vantage point, Jae concluded that a “new normal” confronts many law firms and how they must now compete for business post-2008 recession.

Jae also talks about how “data viz” (data visualization) helps explain information and why it is not helpful to use the “Because Lawyers” excuse as the reason change does not always come quickly to the legal industry.

You can find Jae on Twitter: @jaesunum and Six Parsecs on LinkedIn.

 

Legal Tech Founder Segment: Ironclad Founder Jason Boehmig

For the legal founder segment in Episode 12, we talk to Jason Boehmig, attorney and founder of Ironclad. A contract management and  automation platform that is customizable and has an open API to connect to other apps used in the contract workflow. You can learn more about Ironclad via email – sales@ironcladapp.com and on LinkedIn.

Things We Talk About in This Episode

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

Kessel Run Clip Lucasfilm Ltd.

Episode 11: Lucy Bassli on The Modern Legal Ecosystem and Unicorn Lawyers

In Episode 11 we talk to Lucy Bassli founder of InnoLegal Services and Chief Legal Strategist at Law Geex.

Lucy started her career in Big Law (at Davis Wright Tremaine) and ultimately landed a job in Microsoft’s legal department where she served as Assistant General Counsel. At Microsoft, Lucy was responsible for, among other things, the legal department’s procurement operations and contract management systems.

Lucy left Microsoft in 2017 and started InnoLegal Services–part law firm and part consultancy–where she helps law firms and law departments develop new ways to deliver and receive legal services.

In her role as Chief Legal Strategist for Law Geex, Lucy advises on the use of artificial intelligence in contracting, helps with product roadmaps, consults with corporate customers, and assists with the development of go-to-market strategies.

During our talk, Lucy explains who the players are in the modern legal ecosystem (regulators, industry groups, service providers, consumers of legal services and educators) and why to be really successful and efficient, all of them should work together.

She also explains what it means to be a unicorn lawyer–a lawyer that knows law, but also loves, understands and values process and technology.

We also talk about the “Big 4” entering the legal market and how law firm associates have a real opportunity to push for change.

Lucy can be found on LinkedIn and at lucy.bassli@innolegalservices.com.

 

Legal Tech Founder Segment: Nehal Madhani of Alt Legal

In our legal founder segment, we talk to Nehal Madhani, founder of Alt Legal. A docketing system for intellectual property matters. You can follow Alt Legal on Twitter or contact Nehal at nehal@altlegal.com.

 

Things We Talk About in This Episode

 
 
 
 
 
Lucy’s Articles on the Legal Ecosystem
 
 
Suffolk Law School’s Legal Tech Certificate Program
 
 

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

 

 

Transcript

Chad Main: For episode 11 we talked to attorney Lucy Basilli about the modern legal ecosystem and what it means to be a unicorn lawyer. Lucy recently left the legal department at Microsoft where she served as Associate General Counsel. When she left she founded a consultancy and law firm called InnoLegal Services. Lucy also splits her time with contract automation company, LawGeex, where she serves as Chief Legal Strategist.

Also in this episode for all you intellectual property lawyers, we talked to Nehal Madhani about the company he founded, Alt Legal, which is a docketing system for intellectual property matters.

Chad Main: I was pretty excited to land Lucy as a guest for the podcast. The first time I heard Lucy speak was last year at the CLOC annual conference. CLOC stands for Corporate Legal Operations Consortium. Among other events, it has an annual meeting once a year. For the last couple of years the annual US meeting has been in Las Vegas.

If you’re in legal operations or just want to learn more about legal ops, I highly recommend you looking into CLOC. When I heard Lucy speak at CLOC last year, she was still in-house at Microsoft where she was responsible for a bunch of things including implementation of the legal department’s contract management system. She was on the panel with a bunch of other legal ops bigwigs and the topic was on how to really change the way the legal industry does its work.

On the panel that day Lucy said something that really resonated with me. She said that for modern lawyers to really do a good job and deliver value to their clients they are going to have to embrace and work with others who are not lawyers, but have other very valuable and important skill sets.

Lucy Basilli [Excerpt from CLOC session] I think there’s another fundamental shift that needs to happen. I think those few practicing attorneys who are in here. Those of you who are recovering attorneys don’t hide it, we need to embrace all of the other professionals that are in this ecosystem, because without them we will not be able to move the dial.

That’s a fact. I did not research. I have no backing, but you’re going to have to trust me on this. It is a fact that we can not continue to function in our “lawyer versus non-lawyer” world … Who hates that word?

LEGAL ECOSYSTEM PLAYER 1: REGULATORS

Chad Main: What is the legal ecosystem? It’s a group of various key players that serve the needs of legal clients. Some of these players provide what we would consider traditional legal services. But others, they provide very important legal related ancillary services.

As in most industries, you gotta have regulations, and that’s where Lucy thinks the legal ecosystem starts. On a side note and by complete coincidence, Lucy is writing a series of article about the various players in the legal ecosystem. I’ll throw up a link to those articles on the episode page for this episode, episode 11, on TLPodcast.com [Links to articles above].

Lucy Basilli: I think there are a number of key players that together make up this ecosystem, which is very gently and sometimes not gently disrupting each other and forcing each other to change and try new things. If you just go along the cycle of ecosystem or spectrum, however you want to look at it, there are certain regulations, of course. There’s a regulatory body or sets of rules by which attorneys have to practice within the US. Let’s just focus on the US because if we go outside it becomes even more complex. But in the US we know we have 50 states and each of those 50 states has their sets of governing rules of how lawyers should practice. It just addresses lawyers. But what it does is create really the boundaries of the practice of law, and at the same time the confinement of the practice of law and keeping others out. That’s one key player.

LEGAL ECOSYSTEM PLAYER 2: INDUSTRY GROUPS

Chad Main: I didn’t really think about it until my conversation with Lucy, but another key group of players in this modern legal ecosystem are industry and trade groups like the one I mentioned before, CLOC.

Lucy Basilli: Another key player that is certainly becoming more and more notable and listened to I think, are the industry groups. Whether it is CLOC, the one you just referenced, or Association of Corporate Counsel. They have a legal operations group now. There’s more and more happening at the ABA and the Law Practice Management Division, or even parts of the Association of Corporate Counsel that aren’t legal operations. Of all of these, whether it’s legal operations as a general umbrella, or law practice management concepts, these professionals, or the attorneys who are taking on these new roles, they’re all coming together at a greater pace than ever before. They’re forcing conversations and sharing practices and ideas that is also overflowing into impacting the service providers that are part of the ecosystem.

LEGAL ECOSYSTEM PLAYER 3: SERVICE PROVIDERS

Chad Main: Now we get to the group of players in the legal ecosystem that are very near and dear to my heart, the service providers. Service providers can be law firms, they can be tech companies, or they can be alternative legal service providers. The first two are probably familiar to you and exactly what you think they are, but the latter, alternative legal service providers are sometimes known as legal process outsourcers or LPOs, are fairly new to the legal industry. They’re companies like the one I founded, Percipient, that work with lawyers and their clients to accomplish important tasks that may or may not be viewed as traditional legal work, but work that is without question, very important and necessary to getting modern legal work done.

Lucy Basilli: Shifting to the service providers there are a couple of key buckets that. One of course are the law firms. Two, will be the legal tech service providers. Three, will be the alternative or legal service providers, or legal process outsourcers, or legal services companies. There’s a lot of names, one of which I will disagree with. I hear law company out there a little bit now, and I don’t think they actually are doing law. I think they’re doing services, but I digress. Then, the last one, I’m kind of giving it its own category, although I’m not sure it does need one, but I think it’s starting to become one, are the Big Four. They are who they are. They don’t need naming or listing and they are a key player right now in the ecosystem.

LEGAL ECOSYSTEM PLAYER 4: LAW SCHOOLS

Chad Main: Last but not least in our tour of the legal ecosystem we run into the legal departments and law schools, the purchasers of legal services, and the educators of lawyers.

Lucy Basilli: Then of course, we have two other key constituents in the ecosystem. One being the corporate legal departments which are the procurers of the services from those groups that we just listed. Finally, we have of course law schools. As you can see this is a chicken and egg cycle. I don’t know where it starts, and we don’t know where it ends. But all of those players are impacting each other. Actually I just launched a series of articles through Thomson Reuters and their legal executive institute that looks a little bit deeper into each one of those, because it is a fascinating time we’re living in and all these new players working together, and some of the old players that are feeling the pressure to change how they play the game.

IMPACT OF BIG FOUR ON LEGAL MARKET

Chad Main: Before I got to Lucy’s take on why it’s important for all members of the legal ecosystem to work together, I wanted to talk to her a little more about the impact that the Big Four will have and are currently having on the legal market. As the Big Four try to claim their piece of the legal services pie, they’re a good example of how and why lawyers must work with other disciplines to provide true value to clients.

Lucy Basilli: They, like the legal services companies, or the alternative legal service providers, whatever is the best name for those growing companies, like them, they’re pushing the envelope on the definition of the practice of law, in the US for sure, because again, we have some boundaries that are pretty clear and finite, on one hand. On the other hand, there is a spectrum of work that lawyers do that many are arguing really isn’t the practice of law and that you don’t need a license to do. If you don’t need a license, you’re probably a lower cost resource, which is why the alternative legal providers have done so well in the last decade plus.

The Big Four have picked up on that very quickly, so they have their own legal services that they’re providing that are again, not the practice of law in the US, but very close. But in addition to that what they have, what their bread and butter has been for so long is fantastic management consulting skills. Something that the ALSPs are now doing and adding and have been developing. But the Big Four, that was inherent in who they are and what they’re good at. They already have contact into all of the major corporations. I do mean all. Every major corporation is using one of the Big Four for something.

Lucy Basilli: In addition to that, the amount of marketing resources that they have, and how they do their marketing goes well beyond any alternative legal service provider or law firm. Layered on top of that, are the resources that they spend on R&D. They have significant budgets for R&D. If you put all of that together, they’re finally approaching the sleeping giant of legal, that they hadn’t approached maybe for some time and it was safe for law firms to have the lion’s share of the work, as the ALSP started to grow and eat away at some of that law firm work. But more so, the ALSPs, alternative providers were really going after the in-house work that was still not being sent to firms but really bearing the in-house lawyers. That was their sweet spot. Law firms continued in their same sweet spot that’s been historic and the same for gosh, decades.

Lucy Basilli: In comes this new entrant that’s bringing in very highly skilled attorneys who actually aren’t practicing law, but have the benefits of being with a very reputable and prestigious firm, one of the Big Four, bringing in a variety of other skill sets from their consulting side of the house, from the solutions architects experts, throwing on top of that R&D resourcing, throwing on top of that good marketing. There’s this whole mix that they have put together that’s very natural to them, but it’s newer to legal. I see them as a really big threat. Their more direct threat in the US as they start to open up these kinds of special relationships with a law firm where they again, aren’t practicing law but they’re engaged with a law firm of some sort, and these other nuanced and creative corporate entities and structures, where they’re still within the rules of not getting into the unauthorized practice of law in the US, but finding ways to deliver a service that is very close. They are a uniquely positioned set of resources, each one, that bring together, I think, the best of what the ALSPs, the law firms and the legal tech providers have.

WHY ALL MEMBERS OF THE LEGAL ECOSYSTEM MUST WORK TOGETHER

Chad Main: Now that we’ve discussed all the various players in the legal ecosystem we get to the “Why”. Why they should all want to and why they should work together. As Lucy explains, it boils down to increasing the value lawyers provide their clients, bettering the client experience, helping clients further business goals based on the legal advice they receive from their lawyers, and also it helps lawyers and clients actually implement the legal advice they receive from lawyers. It’s this latter part, the implementation where a lot of other players for legal ecosystem can really help attorneys.

Lucy Basilli: Law firm lawyers, they need to expand their horizons of the value that they’re offering. At the end of the day, the value can’t continue to be, that I’m the best litigator, or I’m the best negotiator of contracts, or you name it, regulatory expert, because there’s more needed from the in-house corporate legal departments than that anymore. The complexities that companies are dealing with and the complexities of then the legal teams in-house are dealing with require different sets of skill beyond just the traditional legal subject matter experts.

Lucy Basilli: Receiving legal advice alone isn’t enough to solve the problem that the in-house legal team is dealing with. For example, in a regulatory environment, simply saying, yes, GDPR is coming and here it is, and here’s an 80 page memo on GDPR. That gets handed off from a law firm at a very high price point to an in-house legal team. The in-house legal team then has to figure out, what does this mean for their business, for their corporation, who’s their main and only client?

That disconnect is no longer going to be acceptable going forward as the pressure on the in-house team to move at a faster pace, where they’re not going to have necessarily the time to continue to assess and debate the pure legal concepts, but really, it’s all about applying it to a business goal. It’s the business that needs to accomplish something, and without the help of the business and all of the different skill sets that business brings with them, for the lawyer, it’s going to be very hard to really connect between the great legal advice, expensive legal advice they receive from a law firm, and then the business goal, that they’re there to serve at the company at which they work.

Lucy Basilli: Why are these other professionals necessary? Two reasons. One, other types of skill sets are needed to help the engagement between the law firms and the in-house legal departments be more effective. That’s the how. That is moving away from the “ping-pong” of: I have a question. I’m going to send it to a firm. The firm’s going to answer my question, and they’ll send me a bill. I’m going to pay the bill and then we’re done.

That engagement, that back and forth can only be improved with the help of people who understand how to use smarter, better, collaboration tools, with people who can really dive into that process of engaging each other and help optimize the process to move faster, to move smoother, to access information and data more readily so that you’re not waiting. To acknowledge that you can play a big role, but again, you need people who can bring to light some of these different options, because the attorney’s job is still to deliver that legal advice from the law firm.

Lucy Basilli: They don’t need to be process experts. They don’t need to be green belts in Six Sigma. They don’t need to know how to architect solutions, but they need to know when to bring in all those people who know how to do that other stuff. Let’s just call it “other stuff” for lack of a better word because that’s the only way they will improve and enhance the engagement experience with the in-house team that’s moving at a faster pace than every before, and that pace will only get faster. The pace is never as slow as it is today because it’ll always continue to get faster. That’s one main reason that you need all these other professionals, is the how of the engagement has got to evolve and become more modern, faster, more efficient, more immediate access to information, and immediate access to data and answers.

Lucy Basilli: The other end of the spectrum, why you need these other professionals is really, goes to the core of what is being delivered. That legal advice then needs to be consumed in a business setting. Engaging people who have experience with the running of the business itself, of the company, of the corporation, of that client can really help move that advice from again, a nice piece of legal theory, and accurate legal theory into something actionable. Often times it’s then the lawyers in-house that are finding that they need to engage other professionals, and maybe it’s from their “client group” in the business or maybe there are people within the legal department that have now been brought in who are more closely connected to the business itself.

HOW TO GET BUY IN FOR CHANGING THE WAY LEGAL WORK IS DONE

Chad Main: Let’s move away from the why and talk about a different how. How you get buy-in, either at your law firm, or at your corporate law department. You were at Microsoft for a longtime. You instituted some of these changes there. How did you do it? What was your experience there?

Lucy Basilli: I’m a big fan of small wins along the way. It’s great to get supporters, sponsors and fans along the way. In my case, my experience was that when I could demonstrate a value for that attorney for whose job I’m trying to change, or impact, influence, in a positive way I hope, it’s to work with them in a way that they see that value and then become part of the solution. My specific experience was in contracting. Every company has contracts. Every company has too many. This is a job security for every transactional lawyer. There’s always going to be contracts. How do we, as a company, no matter where you are in-house, how do you do them a little bit faster, a little bit more efficient? How do you take some smart risks?

Lucy Basilli: What I realized is, to the extent of course I had control of that work, it was very easy, because I just had to convince myself. But to the extent that I was working with and collaborating with other attorneys across the department, it was critical to show them the value and the benefits of embracing the change. They weren’t the ones that had to engage with different professionals and incorporate different skill sets into their day job. I was doing that on their behalf. I just needed to get their buy-in. The best way is to show real value. Usually the value for most attorneys is of course, time savings. Everybody’s buried. That’s the first complaint you hear. What we underestimate is the quiet wave of resistance from those attorneys who like being buried. They like having the work they have on their desk. They feel comfortable with it. Changing it by encouraging them to move to more complicated work actually may not be perceived as a value-add.

Lucy Basilli: On the one hand, you’re working to demonstrate the value and get people to come along. On the other hand, you have to really understand and be certain that what you perceive as value is also perceived as value by the person with whom you’re trying to convince. I think that functioning on assumptions or presumptions can be a little bit dangerous. That’s the flip side of that coin. But that’s it. he best answer is get sponsors and believers to come along with you, early on by identifying wins, by demonstrating the change, by demonstrating the value of using these alternative sets of skills that are out there and available.

LEGAL FOUNDER SEGMENT: NEHAL MADHANI OF ALT LEGAL

Chad Main: We’re going to step away from our chat with Lucy for just a few minutes. It’s now time for the segment where we sit down and talk with a legal founder. Today we’re talking to Nehal Madhani, the founder of Alt Legal. If you work in a legal practice that does anything with intellectual property, like with trademarks or patents, Alt Legal just may be an app you want to check out.

Nehal, thanks for being with us today. Tell us a little bit about Alt Legal.

Nehal Madhani: Sure. Alt Legal is cloud-based IP docketing software. For those who aren’t IP lawyers, what we do is we help law firms and in-house legal departments create new IP filings by getting all their information needed for them, automatically create them on government filing websites, and then the worst and most tedious part for any IP lawyer is tracking these deadlines. Our software will automatically connect to government databases, identify their filings and then calculate their filing deadlines for them, so they don’t have to do things manually anymore.

Chad Main: It connects directly to the attorney’s calendars, is that right?

Nehal Madhani: That’s right. It will take all that information, once we calculate these deadlines, we’ll send them alerts automatically by email. We’ll tell them about any changes that happened to their IP filings, and then we’ll take all that information and plug it into their calendars as well. For a lot of IP professionals, whether your in-house or at a law firm, it essentially provides some of the functionality that would traditionally be done by a docketing clerk or IP paralegal. For the docketing clerks and IP paralegals, they don’t have to do input data manually and worry about mistyping a four, when it was supposed to be a three, anything like that. It’s something that’s made possible with data, electronic filings and then smart algorithms.

Chad Main: I know in a prior life you were actually a practicing attorney, but before we started today we were talking a little bit. Come to find out, the inspiration for Alt Legal was not from your practice of law but something else. Can you tell us a little bit about that?

Nehal Madhani: Yeah, absolutely. I started my legal career at Kirkland & Ellis in the New York City office, and having graduated law school in 2009, there weren’t too many other opportunities available, so I started in the restructuring group at Kirkland. I did Chapter 11 reorgs, and in 2009 there was plenty of it to go around. Did that for about five years. I last started building one tech business which was at the time a marketplace connecting lawyers and businesses together so that they could find each other and work together with less friction in that transition.

Along the way I ended up doing my own IP work, and I found that whole process to be so cumbersome, so manual, so rife with errors, that I shutdown the legal marketplace, recruited the IP paralegal to join me, and the two of us started building IP docketing software. It wasn’t something I’d traditionally known about, but once I saw how things were being done it just seemed ripe for automation, and ripe for using data.

Chad Main: I think I saw something too that you actually taught yourself to code. Is the right?

Nehal Madhani: I did. Back in 2013, [the movie] The Social Network had just come out. Everyone with any kind of business mindset thought all they needed was a technical guy or gal and they could just build the next Facebook or any billion dollar business. I wasn’t able to really recruit anyone, so more out of necessity I just said, if I’m going to be building a tech business I have to know the fundamentals. I have to be able to do this myself, so read a lot of online tutorials, and just started building, and probably hit my head on the desk quite a few times. Eventually it all came together.

Chad Main: Kudos to you. That’s great. Tell us, who is Alt Legal for? It looks like it’s for pretty much any IP attorney out there. Is that right?

Nehal Madhani: That’s right. Our customers today range from solos to AmLaw firms from privately held companies to some of the largest publicly traded corporations in the country. We’ve been able to serve all ends of the market, but for us, a lot of our outreach, a lot of our focus is on small organizations just because it’s an easier sales process. But really, any IP attorney that is managing a good number of trademarks would really benefit from our software, make sure that they don’t miss any deadlines, subject themselves to malpractice, or worse, lose the trademark.

Chad Main: Last but not least, tell everybody where they can learn more about Alt Legal.

Nehal Madhani: You can find us at www.AltLegal.com. You can engage with our team right there through our live chat. You can also find us on Twitter @AltLegalHQ, and reach me at Nahal@altlegal.com.

INNOLEGAL SERVICES

Chad Main: Okay. Let’s get back to our conversation with Lucy Basilli.

As noted at the beginning of the podcast, Lucy recently left her position in the legal department of Microsoft and launched InnoLegal Services. To use modern parlance, she pivoted from one position in legal ecosystem to another, from in-house lawyer or consumer legal services to an advisor to legal departments and lawyers in how they should deliver and consume legal services.

Lucy Basilli: It’s a law firm and consultancy. Interestingly enough, the reaction is quite different depending on who I say that to. On the one hand attorneys are immediately perplexed. Well, which one is it? I say, both. Well, how? Very simple. Under the umbrella of a law firm I could provide all the consulting services I want, but the reverse is absolutely not true, number one. Number two, perception. In dealing with attorneys it’s very important that they understand that I am not a recovering lawyer who’s moved from the practice of law into legal operations. Because the minute in an attorney’s mind that shift has happened, I am now outside of the box. I’m in a different bucket. That goes back to my original concept of this whole lawyer, non lawyer. It’s interesting and that is a 100% proven reaction that attorneys go through.

Lucy Basilli: As I was thinking about the work I want to do, which is definitely consulting with law firms and legal departments on how they either deliver or receive legal services, there is an aspect of it where I want to provide what is a traditional kind of legal advisory role, legal advice, especially when it comes to risk. So much of change in the legal ecosystem has to do with attorneys accepting risk, understanding risk, taking risks, being comfortable with risks, and that is a very bright line for most attorneys of whom they’ll entrust to provide them guidance on that. By continuing to be a practicing attorney with a law firm, I can provide legal advice to the extent it enables a better consultancy experience for the client I’m dealing with.

Chad Main: I had to ask Lucy, what was her motivation for leaving the security of a very coveted position in the legal department of one of the world’s largest tech companies for the great unknown of entrepreneurship? She had a great answer. It’s because she’s a unicorn lawyer.

Lucy Basilli: At a metaphysical level it was wow, I’ve been doing this thing for a long time. I’m super comfortable. I love what I do. I love my company. But, is there another calling for me? It was very kind of go through this thing in your career stage in life, on the one hand. On the other hand I was seeing a need in the industry for people like me. I’m going to say it. These freakish lawyers, where I’m going to loving refer to us as unicorns. We’re these mystical lawyer creatures who love the practice of law, love being an attorney, but really appreciate and enjoy the operational aspects. Again, the how of being an attorney. If I’m tasked with handling hundreds or thousands of contracts, as a lawyer, negotiating them, having a team of people who negotiate those, why wouldn’t I want to do it in a more creative, efficient way, where I optimize on process and I use technology, and I think about systems? I think for me that combination of both is what I enjoyed the most in my job. At some point it felt like others needed that same help.

LawGeex

Chad Main: After leaving Microsoft, Lucy actually only spends part of her time on InnoLegal Services. Another reason she left Microsoft is because she wanted to get involved in the excitement and challenges of working for a startup. When she’s not consulting others on legal ops, she serves as Chief Legal Strategist for LawGeex, a legal tech company that helps out with contract review automation.

Lucy Basilli: As part of my metaphysical, or philosophical search for the next career move, I really had those desires to work in the startup environment. I felt like that was an energy that I was missing and really needed to experience in my career, at some point. So, enter LawGeex that was just right up my alley, using the latest artificial intelligence and automating contract review, which is my day job, reviewing contracts and managing a team of humans that did that. It just seemed, what an amazing, logical connection for me. Then, in talking with them, we realized that was the right combination of time and skills was for me to help them at this more higher level, strategic role where I can help influence their marketing strategy, their sales strategy, their product roadmap, help engage with customers. Help really consult with customers too because as we’re noticing, and as you know, I’m sure all the unicorn lawyers know, gotta understand your people and your processes before you start getting into technology. I liked being able to play that role as well, and help provide some best practice and tips to their customer.

YOUNG LAWYERS MUST DRIVE CHANGE

Chad Main: As I was preparing for my interview with Lucy I read a bunch of articles she wrote and listened to a couple of other podcasts she did. In one of those podcasts, she discussed her belief that if legal is really going to change, it’s incumbent on younger lawyers to help drive this change. I wanted to ask her about it.

Lucy Basilli: The change that is happening in the legal industry, has got to come from the up and coming future leaders of legal. There are a lot of current leaders who understand that something’s brewing around them, but they’re also quite comfortable. They’re comfortable financially. We see their reports, right? We see the Am Law reports. The incentive to change is certainly not a financial incentive. The only incentive to change right now is really coming from the clients, and to the extent the clients are demanding change. For anybody who’s looking at the future coming their way, the associates, the junior partners are the ones who are going to be carrying this, their firm, their organizations. The demand of change from their clients plus with just the evolution of the legal services market, because of all these other players that I mentioned before, the law firm is going to have to look different.

Lucy Basilli: I am looking to these associates who are also graduating at a time they’re used to instant access to information. They’re used to different work-life balance. They have different career goals than becoming the next big partner in the big corner office. They’re used to of course, technology. It’s in every part of their lives. They get to a law firm, and it just feels like a step back in time still. I really do feel like it’s going to be the future leaders, let’s call them, because I don’t like calling it generational. But it’s really the future leaders of the firms that I think need to show that initiative. It’s hard, but they need to share their ideas. They have them. I just hope they’re not shying away from sharing them.

Chad Main: I don’t want to sound too cynical, but they will receive pushback from other lawyers, other partners, other lawyers at the firm. You and I both practiced in law firms. What is your advice to an associate that has an idea. Hey, let’s improve our process to handle discovery, or handle this transactional matter? What is your advice to them to try to change people’s minds?

Lucy Basilli: My advice is simple. It’s find the partner who’s going to listen. Find the one that when you mention this, don’t roll their eyes, don’t blow you off, don’t ignore you. They’re out there. I promise that at every firm there is somebody like that, and maybe a group of people like that, so you have to find them. Don’t waste your breath trying to convince somebody who isn’t interested. You can tell pretty quickly. They’re out there. You just have to do a little bit of homework and it may not be in your own practice group. It may not be the people you engage with on a daily basis, but once you find somebody like that, turn them into a champion, and pitch something. Pitch an idea. Even better so, and this is a harder one for associates to do, but to the extent they have really good direct client engagement and client contact, talk about it with a client.

SUFFOLK LAW SCHOOL LEGAL TECH CERTIFICATE PROGRAM

Chad Main: If you haven’t figured out by now, Lucy has vast knowledge and experience with legal service delivery, and is more than willing to share it with others. In fact, I’ve got good news for you if you want her to share it with you directly. She’s an instructor at the Institute on Legal Innovation and Technology at Suffolk University Law School. A couple episodes ago I talked to the head of that program at Suffolk, Gabriel Teninbaum, about all the cool stuff they’re doing there. If you want to learn more about this school and the program, I highly recommend you give that interview a listen. Anyways, let’s hear from Lucy about what she’ll be teaching there.

Lucy Basilli: I’m teaching an overview of legal operations. What that means is really dissecting it into … It’s 10 modules and each module addresses one of the key capabilities, or functions that really are all under the umbrella of legal ops. Legal ops is such a big topic and it gets confused where yes, it’s a profession or a career, but really it’s just such a combination of so many different pieces. At every company it looks different, because it depends on what they’re interested in. For example, one module is on spend management. Another module will be on project management. It’s a high level overview of each one. It’s intended really for people who aren’t in legal ops, but hopefully for some of the curious lawyers out there who are wondering, what is all this about, because they’re hearing about it, I’m sure in the legal news.

Chad Main: Well, it sounds like it would be well worth taking the class. Lucy, appreciate your time. If people want to get a hold of you, how do they do so?

Lucy Basilli: The easiest thing is probably to look me up on LinkedIn, or shoot me an email, Lucy.Basilli@Innolegalservices.com, or LinkedIn is always great as well.

Chad Main: Well, that’s a wrap. We hope you liked it. If you want to subscribe, you can check us out on pretty much any major podcasting platform such as iTunes, Google Play, Stitcher, iHeartRadio, etcetera, etcetera. If you like us enough, maybe even give us a five star rating. If you want to get ahold of me, you can shoot me an email at cmain@Percipient.co. That’s cmain@Percipient.co. Thanks again for listening. We hope you tune in next time. This has been another episode of Technically Legal.

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Episode 10: Zach Abramowitz on Legal Tech Trends & Law Firms as Incubators

For Episode 10, we connected with Zach Abramowitz in Las Vegas during the Corporate Legal Operations Consortium (CLOC) conference. Zach is a lawyer, legal technology writer and entrepreneur. Zach handled mergers and acquisitions before he left the practice of law to launch ReplyAll.me, a tool that lets users have dynamic, live conversations (similar to a chat) and embed the conversation on a website as it unfolds.  You can check out a cool example from Bloomberg Big Law Business when Zach talked to Mary O’Carroll, head of Legal Operations at Google.

Zach also writes about legal tech for several outlets, including Above the Law. So, we talked to him about trends in legal tech (including the gaining popularity of contract analysis and automation tools) and how lessons learned by e-discovery software companies helped pave the way for other legal tech applications. We also talked to Zach about whether the next generation of legal tech companies may very well be hatched in law firms.

You can find Zach on LinkedIn, on Twitter @zachabramowitz or by email zach@replyall.me.

Legal Tech Founder Segment: Catherine Krow of Digitory Legal

We were also lucky enough to snag an interview with Catherine Krow, also an attorney and the founder of Digitory Legal, a cloud based legal budgeting and resource management platform. Digitory Legal is a great tool to help lawyers and their clients craft realistic and more accurate budgets for their legal matters.

You can learn more about Catherine and Digitory Legal on LinkedIn, Twitter (@cmkrow or @digitorylegal) or by email (support@digitorylegal.com) or phone (888-811-7211).

Things We Talk About in This Episode

Max Kellerman

Reply All

Above the Law

Kira

Doxly

Y Combinator

Gravity Stack

Zach’s Article in Bloomberg Big Law Business on Law Firms Developing Software

Episode Credits

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

Background Photo Above by Markus Spisk

 

Transcript

Chad Main: In this episode of Technically Legal, we sit down with Zach Abramowitz, lawyer, entrepreneur, writer, and generally a guy very dialed into the legal tech world. We also sit down with Catherine Krow. She’s the founder of Digitory Legal, an app that helps lawyers put together realistic budgets. One of the best things about doing this podcast is that I get to meet so many of these smart and interesting people, and every time, I learn something about them totally cool and totally out of left field, like this great nugget I got from Zach.

 

Zach The Legal Intern at ESPN Radio

Zach Abramowitz: I worked at ESPN Radio when I was in law school. I used to go every day to Madison Square Garden, and I worked on the Max Kellerman Show. At the time, I really just wanted to get into sports. I went to law school wanting to become the next Billy Beane, the next GM. I looked for every opening in sports possible, and I emailed Max Kellerman, and I was like, “Listen, you need a legal intern.” He said, “Why do I need a legal intern?” I’m like, “Well, I’ve heard you a bunch of times on your show, and you’ll talk about some issues in law, and you’ll say, ‘Well, if I had a lawyer here, then we’d know the answer to this, but since I don’t, it’s not really worth talking about. Let’s move on.'” I was like, “I’m going to be that guy. Any time you have some legal issue in sports at all, anything you want researched, I’ll do that legwork, and I can put it together very quickly,” and again, I had no interest in researching legal issues for Max Kellerman, but I just wanted an in somehow, in something that made me stand out. I became Zach the legal intern for about two semesters.

 

Reply All

Chad Main: I asked Zach to come on the podcast for a bunch of reasons. One of them is that he’s a lawyer. He did M&A work for a New York law firm. Another reason I wanted him on the podcast is because he writes a lot about legal tech, and is in the know about it.

 

He writes for a bunch of websites, including Above the Law, but another big reason I wanted to get him on the podcast is because Zach is also an entrepreneur. He and a buddy created an app called ReplyAll. You can find it at ReplyAll.me. Using ReplyAll, you can have text-based conversations, and then embed those conversations on a website.

Zach Abramowitz: A good friend of mine and I just used to have these debates, and I said to him, “Wouldn’t it be great if you and I could take these conversations and publish them, and allow the rest of the world to follow along like a fly on the wall?”

He was like, “Wouldn’t it be better if actually interesting people could publish these conversations? We could follow them.”

We built a tool that websites use to host conversations with experts that they publish as dynamic content, so instead of going to the Wall Street Journal and reading an op-ed that’s written by one person, with ReplyAll, you’re reading a back and forth between multiple authors, multiple perspectives, multiple opinions, and you’re getting to see that interaction, and you get to see it unfold in real time as the conversation actually happens.

We’ve taken that tool and the first big site we worked with was Above the Law, but we’ve also worked with Sports Illustrated, and TechCrunch, and Bloomberg, and Huffington Post. That was the reason, our goal at the time. This was in the early Facebook and Twitter years. We felt that conversation online, when it involved everyone, was not as interesting.

A conversation that anyone can get into is not really a conversation. That’s a conference, and I wanted to be able to create these sort of intimate conversations, and the goal was that you’d get Warren Buffet and Bill Gates having an exchange about strategic charity or giving. That was the real impetus. The fact that we got into legal was totally an accident. I joke all the time. If you had told me that I was leaving law to start a legal tech company, I probably would have never left law in the first place.

I was working at Schulte for two years. I left because I thought I was never going to have any contact with attorneys again, which was part of my goal in starting ReplyAll. What we’ve found so far is there’s so much interesting going on inside of legal right now that we as a company have really honed in and focused on legal, and not just ways to make business in terms of advertising revenue and getting sponsors on our content, but also to help move the conversation forward, if you will, in legal. That’s a lot of the work that we’re doing right now, is helping and getting more involved, very specifically, in legal technology, because I think for the last year, year and a half, I’ve been looking around at all the interesting things going on inside of legal tech and thinking, “Listen. I’ve got the startup skills. I’ve got a really good network in legal.

I’ve been meeting more and more GCs, more and more startups. I know the scene very well. What more can we do here that’s not specifically advertising related? How else can we help companies in this space?” I think that’s what we’re focusing on right now, and I think in that respect, we’ve become very, very obsessed with legal, and other ways to sort of monetize an online asset, which is really what we’re doing.

We’re a publisher. We are just not completely dependent on advertising revenue for our business model. I think that ultimately, we are going to go back. We’ve been pitching deals to big Fortune 500 companies on being sponsors. We were very close to a deal with Sports Illustrated earlier this year, and then Sports Illustrated got acquired, so we’re having to wait out that acquisition, but we’re not specifically a legal tech company. We’ve very much accidentally become a company that is very involved in legal technology.

 

The Next Big Thing In Legal Tech

Chad Main: Because Zach has his finger on the pulse of legal tech, and talks to a lot of people in the industry, I asked him what seems to be the next type of legal tech that’s gaining some traction and notoriety. He mentioned two companies, Kira and Doxly, two companies that have developed software to analyze and automate contractual workflows. As a side note, I was lucky enough to talk to Haley Altman, the founder of Doxly, in episode six.

Zach Abramowitz: First of all, the idea of legal tech … Legal tech’s been around for a long time. No law firm could exist without SAP, Oracle, IBM, one of these huge companies coming in and building systems for them that could allow them to be a 1,500 attorney firm with offices all around the world. That does not exist without technology.

What’s changed in the last four years, since you and I have gotten into the space, I think what’s changed more than anything is that the technology that’s being built now doesn’t, let’s say prima facie, support the growth and scalability of a law firm. What it seems to say is, “Hey, listen. You don’t need lawyers for that anymore. Now we have an automated solution.” I think that’s been very threatening to attorneys over the last few years, since I’ve started writing about it anyway.

The whole question of, “Are robots here to take our jobs?” I don’t think robots are here to take our jobs, but any time there’s change, there’s uncertainty, and just because industrialization in the past has led to more business and more jobs doesn’t mean it’ll do that in the future. I think that’s my starting place for legal technology right now. The example that I give, I love two companies. Kira Systems was the first technology company I ever wrote about, and the reason I wrote about them was this is exactly what I did in the law firm. I remember talking with other lawyers and saying, “Why do we have people on this? Why can’t this be done by a monkey?” But if I had been as smart as Noah, I would have said, “Why can’t this be done by software?” Noah, that was his concept.

What Kira was doing in those days, when it was Due Diligence Engine, was reviewing an agreement, pulling out a clause, and populating a diligence memo, the templates in a diligence memo.

This was the work that I did at law firms, and I was like, “Holy cow. This is being totally automated right now. Isn’t that something?”

The other company I like to use as an example is Doxly. If you think about what Doxly does, it’s like every deal, I used to say, has two junior attorneys, a monkey and an associate. Monkey reviews documents, just reviews, reviews, reviews, reviews, but there was also an associate in every deal who was the deal babysitter.

They were the ones making sure that, “Okay, what agreements, what papers do we need as a result of our diligence? What do we need to paper this agreement so that we’re covered on all bases?”

There’s a lot of paper that comes in. There’s a lot of signatures that comes in. Consent agreements, all kinds of stuff. Who knows? Every single corporate transaction has to be papered to death, and making sure that all those agreements come in, what we used to do is, we would create a Microsoft Word checklist, which we would continue to version up and send around as new things came up, and it updated. We would check it off automatically, and every once in a while, the partner would say, “Send around the updated checklist.” This is how we really did these deals, and the agreements came in manually, and we populated them, we printed them out, we put them in folders in the closing room. This was a substantial amount of work.

This required a junior associate on every deal who was solely responsible for this. You might have an associate who was doing that who wasn’t actually doing any of the review work. All they were doing was let’s say drafting and deal babysitting. Doxly does that. Doxly’s a smart checklist, and instead of having this archaic process that’s fragmented, it’s streamlined in one place. It’s very simple. It’s very easy to use. It really negates the need to have a full-time junior associate on these deals.

The reason I mention Doxly, I mention Kira going to the trends conversation is both of those are jobs that I did manually that are now being done better with the help of software, and you might even say makes the 2012 version of me totally irrelevant on a law firm deal.

 

Silicon Valley is Noticing Legal Tech

Chad Main: Contract analysis and automation might be the next type of legal tech software gaining traction, but there are some other great apps bubbling up out there in Silicon Valley, as Zach points out, is starting to notice.

Zach Abramowitz: I like just about any company that comes out of Y Combinator. Two of the most important people who you’ll never hear mentioned are Jon and Carolynn Levy, a husband-wife tandem that are partners at Y Combinator. They were Wilson Sonsini attorneys who have basically hand-picked all the legal tech companies that you know about. ROSS Intel, YC. Casetext, YC. Ironclad, SimpleLegal. Lawyaw just came out of them. They’re a new company. Cognition IP, Atrium, Justin Kan, the founder of Twitch’s company. I’m leaving out some. They have funded a lot of really good companies.

 

Legal Tech Founder Segment: Catherine Krow of Digitory Legal

Chad Main: We’re going to step away from our talk with Zach for a few minutes, because now it’s time in the podcast for our legal tech founders segment. This is a time where we sit down and talk to a legal tech founder about the apps they’re developing.

This week we talked to a person so nice, she did this interview twice because we ran into some technical difficulties. We talked to Catherine Krow, the founder of Digitory Legal, another one of these apps that I wish would have been around when I was still practicing.

Digitory Legal permits lawyers to put together realistic budgets for their clients and pulls from real world data. It also permits clients to put together real world budgets for their lawyers. All right, Catherine. Thanks for being here today. Tell us a little bit about Digitory.

Catherine Krow: Digitory Legal is a cost management and analytics platform for law firms and clients that was built to help them succeed in the modern legal market. What I mean by that is a market that is moving more and more to alternative fee arrangements and budget based pricing, even for the most complex matters.

Chad Main: Tell me specifically, what does it do?

Catherine Krow: What Digitory Legal does is deliver a deep understanding of cost, how customers focus on resource management, and provides really clear communications, both internally and externally, around expectations. Internally, it can be used to understand costs at a task and time keeper level, set price benchmarks, create accurate budgets and well scoped alternative fee arrangements, and manage to those numbers, and it can also be used collaboratively, with law firms providing budgets, bids, and forecasts to clients through the platform.

Chad Main: You were formerly in legal practice, correct?

Catherine Krow: I practiced law for 17 years, and was a partner at Orrick Herrington for many of those.

Chad Main: What was the inspiration to create Digitory Legal and leave the practice?

Catherine Krow: A few years ago, while I was practicing law, I came to the realization that the legal profession really needed to evolve, and what was happening was law departments were and still are under enormous pressure to do more with less, and you could see that pressure in the meteoric rise of legal operations and legal procurement.

These are job descriptions that barely existed a few years ago, and now are some of the most powerful forces for change in the legal industry. What was happening is an unprecedented level of business discipline has started to be applied to the legal industry, and if you’re going to succeed in this market, I realized that law firms were going to need to examine their processes, adopt new technology, and make some significant changes to really better meet the business needs of their clients.

That was the inspiration, and it was a moment for me, a decision point where I could try something new and try to solve these business challenges in ways that would bring lawyers and clients together, or continue doing the same thing. I decided to take the leap and focus on the business of law instead of the practice of law.

Chad Main: That’s great. Who’s Digitory best suited for?

Catherine Krow: Our target market is the Global 2000 and the law firms that work with them. We focus on the Global 2000 because I feel like the movement to alternative fees for complex matters is being driven by some of these companies, and the need to respond by the law firms that work with them is very, very powerful. It can be used by anyone doing complex legal work, but we are focused on that target market.

Chad Main: Where can people find you and learn more about the product if they want to?

Catherine Krow: You’re welcome to visit us on the web at DigitoryLegal.com, and on Twitter at @digitorylegal, or follow me personally @cmkrow, and you can also reach out to us at support@digitorylegal.com.

 

E-Discovery Companies Paved the Way for  Legal Technology Companies

Chad Main: Let’s get back to our talk with Zach Abramowitz. Before we left, Zach was talking about trends in legal tech, and how players in Silicon Valley like Y Combinator are starting to take notice of legal technology companies. But Zach also points out something interesting, that newer legal tech companies might have e-discovery companies to thank for paving the way.

Zach Abramowitz: E-discovery, it’s true, it’s becoming a more mature space, but a lot of the people that you see now at legal tech companies, or at some of the alternative legal service providers are veterans of e-discovery.

Relativity Ventures is investing in startups. I think a lot of the players that you’ve seen come from e-discovery, they learned how to build technology and market it to law firms, and sell it to law firms, and work with law firms, and their model is not necessarily the same model that companies in the finance world use. It’s specific.

They learned how to sell into the legal industry. They learned how to design software for the legal industry, and I think they’ve now paved the way for other technology to come in. Again, e-discovery wasn’t necessarily the place you would have thought legal tech got started, but I think if you look hard, you see that a lot of the roots for legal technology are in e-discovery, even if the company is not doing anything related in e-discovery.

 

Is Legal Tech a Tough Sell to Venture Capital?

Chad Main: Despite all the advancement in legal tech, and all the new great tools that are being developed, and despite the fact that Silicon Valley players like Y Combinator are now starting to take notice, to many VCs, legal tech still may be a hard sell because, as Zach aptly points out, legal tech companies are not rocket ships like a Google, like a Facebook, like an Uber.

Zach Abramowitz: In order to get the investment that it takes to build a technology company, you’ve got to go to VCs. You’ve got to essentially go to Wall Street and tell Wall Street, because again, VCs in Silicon Valley, their boss is Wall Street. Their boss is the Illinois Pension Fund, or T. Rowe Price. That’s who’s investing in VCs, so you’ve got to go and make the case to Wall Street that you’re a billion dollar company, because the VCs, in order to give the 30% return on risky assets to their investors, they’ve got to invest in billion dollar companies.

You can do the numbers anyway you want.It doesn’t work unless a VC builds and hits on a rocket ship. If you think about the original venture capitalists, go back in time, Ferdinand and Isabella funding Columbus, or if you’ve seen The Greatest Showman recently, funding P.T. Barnum. You had to go into huge rocket ship-like ventures in order to make the returns pan out, and most solutions for legal are not billion dollar solutions. Relativity is the outlier. Most great solutions for legal are not going to be billion dollar exits, and because they’re not going to be rocket ships, VCs won’t typically invest in them.

Chad Main: If legal tech is not always an easy sell to venture capital firms, where should people with good ideas look for resources in investment?

Zach Abramowitz: I’ve got a piece up on Bloomberg now, you can go check it out, where I’m going to explain why I think that law firms have the best position, or why they have a very strong position. Before I do that, let’s just acknowledge that this is happening right now. Go downstairs right now. GravityStack, and that’s the company that we’ve worked with, GravityStack is a wholly owned subsidiary of Reed Smith, which is building and licensing technology, and they’ve got products out.

We helped them rebuild … Periscope was the technology they built in-house four years ago, but they’re down there. Orrick is showing off products. Before we get into why this makes sense, let’s just first point out that it’s happening. Luminance is an example. 5% stake of Luminance is held by Slaughter and May, the British law firm, because it was developed out of the firm, so they have a stake in it.

More and more law firms are investing in legal technology, not just in other companies, but in building their own solutions. First point is, it’s happening. Whether or not it’s the best solution, we can now debate, but I think it’s really critical to understand right now that this isn’t some pie in the sky, “Hey, what if law firms developed their own technology?”

No, it’s happening, and I can tell you, I’m talking to law departments that are talking about it too. What makes sense about it? If you’re the law firm, I feel like in some ways you can relate to this, especially from Percipient’s perspective as well, because in some ways, you were sort of like a law firm. You’re not a law firm, but sort of. And by the way, let’s add to that list, Atrium, Justin Kan’s company, Cognition IP was another one, these are essentially tech companies that are masquerading as law firms in order to build the next generation of legal technology. Again, it’s happening now.

Why is the law firm in the best position? The law firm has the best access to the pain points. They know what’s wrong. They know what doesn’t make sense. All they need to do is get in the habit of, “If you see something, say something.” “Hey, we’re doing this in a totally bogus way that’s inefficient to our client and is a terrible process internally. We need to fix this.” They’ve got the access to the pain points.

Second of all, they’ve got the trust of their clients already. You know how hard it was for some of the companies that we’ve mentioned to build a brand and gain trust with law firms and law departments? Axiom has spent 10 years getting into this space and building a brand with clients. It’s not like building trust in other verticals. Building trust with legal, where you’re talking about risk and bet the farm, and screw-ups that could cost the company even more money, building trust is a huge issue in legal, but the law firms already have the trust of their clients.

Third, what law firms have more than anything else is resources. They’ve got money. Maybe it’s tough to get the partners to part with some of that money. That’s definitely an issue, but at a very basic level, they do have resources. If a law firm builds a technology solution, right now I think GravityStack, which is again, Reed Smith’s wholly owned entity, has built a product called Periscope that I believe could easily amount to five to 10 million in annual revenue for them a year. I don’t know about more than that.

We’ll see, but the point is, if I go to a venture capitalist and I say, “We’re five to $10 million in revenue. We can build a company that has five to 10 million in annual revenue,” they’re like, “Good luck with all that. Sounds like a nice lifestyle business,” but the point is, for a VC, five to 10 million in annual revenue is really not anything that gets them excited. But if you’re a law firm, and I’ve come up with a way for you to have five to 10 million more in annual revenue, that’s like hiring three rainmakers who don’t need a corner office, and who won’t lateral.

Chad Main: And if it is truly tech driven, you don’t need the associates and the support staff.

Zach Abramowitz: And you don’t need the associates and the support staff. I think that what you’re seeing, and I’ll give the example before we wrap, I’ll give the example of Periscope and the reason that I think law firms, and again, this goes to the pain point more than the trust and the resources, it was Periscope, this product that Reed Smith and now GravityStack is releasing, was born out of an actual business use case. They were doing their own review, because they’ve got their own internal review team, the Red Team. It’s a $40 million annual business for them, but they were having an issue that reporting on data to their clients took an extraordinary amount of time in terms of inputting into spreadsheets and handling it manually.

It was taking like five days of overtime per month, and they were only able to report on it like once or twice a month, not any way that could be actionable. They would get to the end of the month, and the bill that should have been 40,000 was now 60,000, which they hadn’t caught earlier because they were not reporting on data that frequently. This was requiring partners eating bills. It was something that was causing an issue for them in terms of having their own internal review team, so they built Periscope as essentially to tie into other data sources, pull that information, and allow you to get at the end of every single business day, so that you knew you could budget. You could predict. You could see what was going on inside your review every single day. They knew this was an issue because it was their issue, and for the last four years, they’ve been using this product internally and differentiating their service.

Now they’ve effectively said, “Listen, why don’t we make this available for others to use? If it’s been such a win for us, for our clients, saving 25 to 40% off review, for us, becoming a more efficient and a more profitable group, why are we not giving this to the rest of the industry?”

I think that this is a question you’re going to see a lot of firms asking now, because I think a lot of firms, not only ones that I know about, have built something internally that they then say, like, “Are we the only firm in the world that has this issue? Couldn’t be. It couldn’t be.” Really, really long way of answering. The reason the technology has sucked in legal is that number one, it’s hard to make a business case for the billion dollar rocket ship, and on the other hand, having expensive consultancies develop this software tailor-made is not really a good solution, especially in an era where building Cloud-based technology has never been so inexpensive, so what I think that law firms getting involved may actually fix that.

Chad Main: That’s it for this installment of Technically Legal. We hope you liked it. If you want to learn more about anything we talked about with Zach or Catherine, you can go to the episode page on TLPodcast.com. If you want to subscribe, which we hope you do, you can find us on most major podcast platforms, such as Stitcher, Google, iTunes, et cetera. If you want to get a hold of me, you can email me at cmain@percipient.co. That’s C-M-A-I-N@percipient.co. Thanks for listening, and hope you’ll tune in next time.

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Episode 8: Angie Hickey on the Benefits of Business People Holding Law Firm Leadership Roles

In Episode 8, we talk to Angie Hickey, CEO of the Chicago based law firm Levenfeld Pearlstein. Angie discusses the benefits of business people holding leadership positions in law firms. Angie is well positioned to talk about this topic because she is a CPA, has an MBA and has worked most of her professional life in law firms.

Angie explains that one of the main benefits of hiring business people to help run law firms is that it permits lawyers to focus less on business and governance issues and spend more time doing what they are trained to do–practice law.

Angie also points out that when law firms implement business strategies and systems, the client experience is improved. In fact to ensure their clients’ experience is the best it can be, Levenfeld Pearlstein created the “LP Way“, a five step structure the firm follows to deliver a consistent client experience.

Angie also discusses why collecting feedback is a must for improvement and that when business minded people get involved with law firms, they might have to push for change lawyers may not always want to make.

We also talk to legal tech founder Michael Chasin about Lexicata, a CRM (customer relationship management) and client intake app designed specifically for law firms. Lexicata helps lawyers stay on top of leads, automate client intake forms and provides analytics and insight into marketing efforts and referral sources so law firms can make better business decisions.

You can find Michael on LinkedIn and Lexicata on Twitter @lexicata.

 

Things We Talk About in This Episode:

Bloomberg Big Law Business Article: Law Firms Tap Business Acumen in Competitive Legal Market

The LP Way

The McKinsey 7S Framework

 

Episode Highlights

1:07    Angie started in finance, but ultimately took the CEO position.

2:15   The LP CEO position has real decision making authority–including over compensation.

4:03    Levenfeld Pearlstein was ahead of the curve on putting business people in leadership roles.

5:47    Smart law firms provide business professionals with the right tools and get out of the way.

7:25     What business people really bring to the table are systems and structure to enhance client experience.

9:12     The LP Way

13:16    Interview with Micheal Chasin of Lexicata

18:51    How LP gets client feedback.

19:47    They also collect internal feedback from lawyers and employees.

23:11    How LP has used tech to better the client experience.

 

Episode Credits:

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI1

Episode 7: Atrium’s Augie Rakow & Max Cantor on Technology First Law Firms

For episode 7 we visited the San Francisco office of legal tech start-up Atrium and talked to Augie Rakow and Max Cantor. Augie is one of Atrium’s founders and Max heads up Atrium’s artificial intelligence efforts.

Atrium is actually two companies: Atrium LLP, a law firm focused on providing legal services to start-ups, and Atrium LTS (Legal Technology Services), the company providing operational and technological support to Atrium LLP.

Augie hatched the idea to launch Atrium with Justin Kan, a serial entrepreneur, angel investor and former partner at Y Combinator (a premier Silicon Valley incubator/accelerator that helped launch a few successful businesses like Dropbox, Airbnb and Stripe). Justin’s desire to create a legal tech start-up was at least partly fueled by his experience as a “power user of legal services.”

The talk with Augie and Max is wide ranging: Augie’s studies at divinity school, Max’s hobby of flying planes, why Atrium was founded and how it differs from the conventional law firm model. Augie and Max also discuss the tech Atrium is developing and their future plans.

In this episode we also talk to Jeremiah Kelman of Everchron, a great collaborative case management platform for litigators. If you want to learn more about Everchron, you can contact Jeremiah and his team at info@everchron.com.

 

Things we talk about in this Episode:

Nobuyoshi Ashibe the “Laurence Tribe of Japan”

Y Combinator

Twitch.tv

Article: What Should You Do With Your Crappy Little Services Business?

 

Episode Highlights:

1:14    How Atrium LLP & LTS is Structured

2:22    Augie Talks About His Experience at Divinity School

4:20    Max Discusses His Hobby – Flying Planes and His Tech Background

8:39    Augie Meets Justin Kan and Starts to Develop the Idea for Atrium

10:45  Interview With Jeremiah Kelman of Everchron

15:23   How Atrium Raised Money From Tech Investors

18:33   Augie Discusses Why it is Hard for Law Firms to Attract Professional Talent

19:54   Max Discusses the Atrium LTS Legal Tech Platform

21:47   Augie Learns Business Concepts from Atrium LTS

24:29   The Legal Products and Areas of Law on Which Atrium is Focused

25:35   Atrium’s Subscription Based Pricing Model

27:05   Max Discusses the Future of Atrium LTS Technology Development

 

Episode Credits:

Editing and Production: Grant Blackstock

Theme Music: Home Base (Instrumental Version) by TA2MI

 

Episode Transcript:

Chad Main: I’m Chad Main, and this is Technically Legal. A podcast about the intersection of technology and the practice of law. In this episode, I talk to Augie Rakow, and Max Cantor of Atrium LLP and Atrium LTS respectively.

We just heard from Augie. The Justin he’s referring to is Justin Kan, a silicon valley angel investor and serial entrepreneur. Augie founded Atrium with Justin, and Max was recently hired to head up Atrium’s artificial intelligence efforts. As you’ll hear, Atrium’s working on some pretty cool stuff and just might be on their way to building the law firm of the future.

Chad Main: Before we get to my talk with Augie and Max, some background on how Atrium is structured is important. Atrium is two business entities. Atrium LLP is a law firm, and Atrium LTS is a separate corporation.

Atrium is two companies for a couple reasons. One is for the sake of process efficiency, which is very important to the Atrium crew, but just as important to them and another reason that Atrium is two companies, is that because it is also designed to comply with the regulatory framework that governs law firms. Which, I might add, is not without detractors, and is a whole other topic for another podcast.

In short Atrium LLP provides legal services like any other law firm, but it utilizes the services of Atrium LTS for operational and technical support.

Before we get to the nitty gritty about what Atrium is up to, if you need any evidence that they’re coming at law from a different angle, you only need to talk to Augie and Max for about five minutes to figure that out. Before Augie helped launch Atrium, he was a patent lawyer and did legal work for startups for about 10 years. Most recently he was at Orrick Herrington, but most interestingly, before he began the practice of law, he went to divinity school.

 

Augie Goes to Divinity School

Augie Rakow: Yeah, so coming out of college, I ended up going to divinity school. Actually divinity school has a couple different tracks. There’s a professional track where you’re really going to become a preacher. That’s really what people think of with divinity school. You think of MLK having a Mdiv and stuff like that, that’s that track.

Also within divinity school there’s a religious studies cohort, I was in that group. I had always really been very interested in pretty rigorous, systematic, discourse about how we live and how society is set up and what’s the good life. Stuff like that.

That’s the connection between divinity and law firm for me. Those are really the two disciplines, where I think the core tools of the discipline consist of making sense of statements about how we should live.

Using fairly abstract concepts that capture human and social values about fairness, if they’re religious, things like mercy and love and forgiveness. If it’s legal stuff it’s things like is a patent obvious? Concepts of whether a patent is obvious or whether it’s a sin to do something, are these concepts that are totally made by humans, and both divinity and law, try to take these concepts and apply them systematically and rigorously, to solve day to day problems. If a couple splits up, who should get the house? To me those are really the commonality between them.

Chad Main: How do you make the jump from intellectual history to law?

Augie Rakow: To law, yeah. I was in a bookstore in Tokyo, I was just browsing through the bookstore, and I came across a law section, and I had had no interaction with law, I didn’t have any lawyers in my family, except a great-grandfather who I didn’t know.

We didn’t have it in undergraduate curriculums at the time, in the US. In Japan and most other countries, it’s a much more widely studied thing at the undergraduate level, and you have sections in bookstores about law and all that. I just picked up a book on constitutional law, written by a Japanese law professor, basically the Lawrence Tribe of Japan writing in Japanese about constitutional law issues in Japan for Japanese law students, and just totally fell in love with it.

 

Max Takes Flight

Chad Main: Not to be outdone by Augie’s cool story about going to divinity school, Max has a hobby, flies planes.

Max Cantor: So, personal hobbies, I’m also a private pilot. I got my pilot’s license in 2013. It’s always been one of my dreams. It’s tons of fun. That has probably been my greatest exposure to the law. When you start training, you get a three inch thick book on federal aviation regulations. When you say, “What do I have to read?” And the answer comes back, “All of it.”

Chad Main: What do you fly?

Max Cantor: Mostly single engine planes. Diamonds, Cessnas, Cirrus’.

Chad Main: I guess when Atrium blows up, they won’t have to look far to find a pilot to fly the company jet, but in the meantime, Max is responsible for Atrium LTS’ AI efforts.

Max’s background provides some good insight into how Atrium is approaching its legal services. Max is not a lawyer, and before Atrium, had never worked in the legal services industry. He has a computer science background and he himself, is a tech company founder. Coincidentally, he, like Augie, spent some time in Japan.

Max Cantor: Went to school originally for political science and international relations, but just became fascinated with computer science after taking a breadth requirement.

I graduated with a Bachelor’s and Master’s in Computer Science and was offered a job in Tokyo. That’s where Augie and I, like ships in the night, crossed paths, not knowing each other. I was working in Tokyo for few years, notably at Jane Street Capital, running a small trading desk.

Responsibilities as a trader but spending six hours trading, seven hours trading and then another seven or eight hours coding or writing up models and all that and I loved it. After that, I moved to Singapore, where I was running another slightly larger book on another trading desk, and then started feeling the bug of technology more.

This was around 2010, we just had the financial crisis, and some really interesting stuff was happening, so I tried my hand at a startup in Singapore, not entirely successfully. Learned a great object lesson in founder market fit, and that going off and building a consumer loyalty product for a quick service retail, when you have no experience in quick service retail, consumer loyalty or marketing, is probably not the optimal strategy for success.

I moved back to San Francisco and reconnected with a good friend of mine from college, and we launched a startup called DocMunch, whose product was focused on extracting tabular and textual data from PDF’s.

The eventual tie-in to Atrium, years later, was this focus on data extraction and processing semi-structured or unstructured data. DocMunch was acquired by a company called Nitro, that makes an Adobe Acrobat competitor. It’s PDF processing software. I was running a machine learning group at Nitro for about a year and a half before I left to pursue other options.

Actually, Mike my Co-Founder, connected me with Bebe, who was one of the company-founders of Atrium. At the time I wasn’t quite looking for a job. I had some projects going I was really excited about. What sold me, on Atrium, was the combination of what I saw … It was a pretty innovative model. They combine both, really solid legal chops. Orrick was actually our representation for DocMunch, we love them, they’re a great Silcon Valley law firm. Knowing Augie left that to come to Atrium, was a pretty significant signal to me that they were on to something real.

On the other side, they also had Justin Kan, who is pretty much about as far away from a straight laced lawyer, that you can get. He does define himself as a power user of legal services. Much like someone who flies a lot, you can probably spot a lot of things wrong with the Aviation industry, I think he had a lot of insights into law.

The combination of that founding team, their early success, and the opportunities that present themselves, from a machine learning, natural language processing perspective, would you have access to these clients, to these documents, to the legal markup on those documents, was fascinating to me. That was something I just could not say no to.

 

Augie Meets Justin Kan and the Seeds for Atrium are Planted

Chad Main: As mentioned at the beginning of the podcast, the Justin Max is referring to is Justin Kan, a Silicon Valley serial entrepreneur who’s been involved in several startups, including a live video feed website called Twitch and another called JustinTV, which was a 24/7 live video feed of his life.

Amazon ultimately acquired Twitch. Justin ultimately became a part of Y Combinator, a premiere Silicon valley incubator. Around 2017 Augie and Justin connected. It was at this time, that they started to sow the seeds to what would ultimately become Atrium.

Augie Rakow: I represented Justin’s brother’s company, in a pretty big transaction. I didn’t meet him at that point, we actually met on Facebook, asking his followers how much they pay for their financings and a woman I had hired at Atrium, I’m sorry at Orrick, to help me to stay connected to the community and people like Justin, spotted that and sent me the link.

I didn’t know Justin at the time so I wasn’t connected with him on Facebook. She sent me the link and I responded to his post, saying. “Here’s how you manage the cost and financings. Here are the main two techniques, but that’s just how you do it today. Justin if you’re interested in a more radically new way of doing things, I’d love to talk.”

We met up and talked for four hours, and met up a couple days later and talked for another four hours. Our first three meetings were four and half hours each. We just had so much to share on this. Over the course of the next few months we got to know each other better. It was one of these decisions that sort of happened. The momentum just kind of took over.

Chad Main: You and Justin keep talking and you just decide together, “Hey, I’m going to leave the practice of law, and we’re going to do this.” Is that what happened?

Augie Rakow: Yeah, there were two or three things that really … I came back from that meeting, the first weekend I met him, and I went back to the three biggest rainmakers in my group at Orrick, I said, “Hey I just met this guy, he’s a big deal. I think there’s a 50% chance he launches something that in the next two years will take 30% of our business. That’s my assessment.”

I got different responses. One said, “Oh yeah people have been trying to do this with law firms forever.” Kind of dismissive. “Investors aren’t interested in the kinds of law firms types of profits.” Another one said, “I’m jealous. That sounds cool.” Another one said, “Keep Justin close.”

 

Founder Segment – Everchron Founder Jeremiah Kelman

Chad Main: We’ll get back to my talk with the Atrium guys in just minute, but now it’s time in the podcast for the segment where I sit down with the Legal Tech founder and talk about their company. Today we’re talking to Jeremiah Kelman of Everchron. That’s a collaborative case management platform for litigators. Pretty cool product. Here’s what Jeremiah had to say about it.

Jeremiah Kelman: Everchron is essentially a collaborative litigation management analysis platform. A software that brings together all the key information on a legal case, and really meant to allow litigators and their team to collaborate effectively. Do analysis, and organize the most important documents in their case.

Chad Main: What’s the motivation? What’s the story behind Everchron? What inspired you to create the product?

Jeremiah Kelman: Sure. Both my company-founder and I were lawyers at firm, Irell & Manella in Los Angeles. We were doing a lot of large scale litigation and that sort of thing.

We were both there for about six or seven years before we left, and founded Everchron. What we were experiencing at the time was just a lot of frustration around working together as a team and being able to organize everything and understand the facts and documents in our cases. Really the way this is done, even today, often it’s just a little crazy and frustrating.

Using essentially Word documents and Excel to organize information. Then a whole host of different systems and tools where everything is all separated out. My company-founder and I, were basically just putting our heads together on what better ways could we bring together newer technologies and software to make the process of litigation a lot easier and more efficient and effective. That was the Genesis of Everchron really, to build a better collaborative way of working with litigation information.

Chad Main: Before the call today, I was checking out the website, it’s got some cool features. Tell us about a few of those.

Jeremiah Kelman: Really what Everchron does, is it gets you a centralized workspace to put together a lot of information today lives in a lit of different places.

For example, you might have all of your case filings and discovery responses and that sort of thing, organized on a file share, or in document management system, and on the other hand you might have a lot of discussion in your emails, you might have some stuff living in Word documents, you might have a whole host of documents in a large e-discovery review database.

Everchron brings in the best of these sources of information, puts it in a central space and then you can do things like, for example, very easily organize your information, your case documents, your key documents, into chronology of key facts and documents.

Our core focus is ease of use. We’ve realized that the idea is to get a whole host of different types of people in here. Could be a senior partner, could be a client, paralegal, so it’s very important to us to make it extremely easy and fast for this collaborating around this information. Very easy to search, very easy to create reports.

The other core functionality of Everchron is our master file, which is the filing system that would keep everything that would be exchanged between the parties, filed with the court. We have a unique filing system that shows relationships of documents to each other.

Finally, really in tune with our philosophy, which is, “A Little In, A Lot Out”, if you’re going to put work into the system, it better give you back a lot. We have automatically generated player profiles, or witness profiles. Just by working in the system, just by putting your documents in here, we automatically give you analysis, and pull together all that different information on a witness by witness basis.

Chad Main: Well cool. I appreciate your time today. It’s a cool product and where can people find you?

Jeremiah Kelman: Sure. You can find us online at Everchron.com or you can reach out to us by email at info@everchron.com and we’d be happy to help you get started in learning more about Everchron.

 

Atrium Attracts Investors Right Out of the Gate

Chad Main: Alright, lets get back to my talk with Augie Rakow and Max Cantor of Atrium. When we left off, Augie had just told us about meeting Justin Kan, and hatching the idea for Atrium. Now the next step was for them to raise money. When the Atrium team went out and raised money, they raised more than 10 million bucks, which is a nice chunk of change for any business, but it’s an especially nice sum for a legal tech business that includes a service based offering as part of its business plan.

As I can tell you from experience, venture capitalists do not get that excited about service based businesses. If you don’t believe me, Google, “What should you do with your crappy little service business”, and check out the first article that comes up.

I asked Augie what was it that they were able to do to get technology investors excited about Atrium?

Augie Rakow: I think the thing that Justin did, at that phase, the kind of thing that he is uniquely talented to do … There’s a lot of stuff where he’s uniquely positioned. He’s well known, he has access to capital-you know access to all that kind of stuff.

What he did that was so unique, I think, was to articulate in extraordinary simple terms, two or three principles that have really broad ranging effects. The two or three principles he came up are really powerful. They’re kinds of things, the more you think about them, the more things start to make sense, and it really pointed a way forward.

I think other people probably would have not hit on those principles; that would be me, or would have made them … I don’t mean to throw myself under the bus here, or would have made them too complex, which also would have been me. They were extraordinarily deep, and they were extraordinarily simple. The value of them was just undeniable.

Chad Main: What are these principles?

Augie Rakow: The most fundamental one, was the insight that explains why so many legal tech startups fail.

It really is an explanation of why law firms don’t buy legal tech. The thing about the billable hour is part of it, I think, but I think the deeper reason is that there is no vehicle to capture …

In a law firm, there’s much less economic incentive to invest in the operations and it’s in addition to the billable hour. There’s an additional factor, and that is there’s no market for your law firm equity.

If you think of McDonald’s investing in developing a new hamburger, that might get more people in the door and you have greater revenue, but it also drives up the value of the McDonald’s stock.

That second part is completely missing in law firms because there’s no market for equity. It leads to all kind of incrementalism and conservatism. It also leads to short-term planning.

Another way to put it is that, I think there are very few people who are in a position to materially influence a law firm’s investment decisions, who are you enough and early enough in their practice to benefit from those investments 10 years out. For contrast, every time I see …

Think of Bill Gates, it’s been years since he was actively involved in Microsoft. He still personally benefits I’d imagine, still personally benefits, every time Microsoft decides to invest in its longer term growth. He personally benefits, right? It drives up the value of the stock, he can take financing against it. He’s beyond needing that, but to this day, he still personally benefits from long-term investments and his kids will continue to benefit, or his foundations will continue to benefit from it. Totally absent in a law firm.

 

Atrium is Two Companies

Chad Main: Another thing Atrium pointed out to investors when they went out to raise money, was that it’s sometimes hard for law firms to hire high-level non-lawyer talent to support the business. No small part of this difficulty is regulatory.

Specifically, regulations that prevent non-lawyers from having an ownership interest in law firms. By creating LTS as a separate non law firm entity, Atrium is better suited to go out and hire talented developers. Marketers. Business development people, that might otherwise go to bigger name tech companies, rather than a law firm.

Augie Rakow: One of these other principles that I mentioned, that were Justin’s insight into how to fix what’s broken here, is that traditional law firms don’t have very differentiated staffing.

It’s really only been in the last 1- to 20 years that they even started to have marketing teams, and things like that. Our experience is that that’s the specialized professional talent, non-legal professional talent, that law firms attract … Law firms don’t even compete with the Google’s and the Facebook’s and places like that, for that sort of talent.

It’s for obvious reasons that there’s a glass ceiling in most law firms, because of the regulatory rules. They can’t become owners of their law firm. They can take administrative or executive roles within the law firm, but they can’t become owners. This creates a sort of second class citizenship within the law firms. They tend not to be … There’s not the equity upside potential in a law firm. They tend not to attract a lot of the talent.

 

Atrium’s Tech

Chad Main: As noted earlier, Atrium LTS, the business side, provides operational support to Atrium LLP, the law firm side. However, outside of and beyond operational support, another reason Atrium LTS was founded, was to develop technology that the law firm could use, that his clients could use, and ultimately that other law firms could use.

Max Cantor: Within the technology services, which I’ll assume includes the operation support that Augie mentioned, we have the technology group.

In technology, we have client facing products, which our clients can log on like a portal. They can see certain things. Internal facing products. Those would be tool that for example, our paralegals will use to load up a set of documents from a new client from prior counsel and markup, “This is a counter-party for this contract. This is the effective date for this contract, etc.”

We store that all on our custom document management system. Then we also have another layer behind all that, called the data platform. That’s really where things get interesting. With the data platform, what we’re doing is keeping track of every step in a workflow that our paralegals and attorneys undertake.

When our paralegal needs to markup a document and say this is the counter-party or this is the effective date, those actions are stored. Those actions are stored in a way that our algorithms can be trained against.

What we’re doing, while we’re building these front-end platforms for our paralegals, our attorneys, and our clients, on the backend, we’re training machine learning algorithms to make predictions based on what they’ve seen so far.

In some cases, our paralegals don’t need to manually type in counter-parties anymore. The system will automatically suggest counter-parties. They will suggest effective dates. That’s the approach that I’m trying to take. We’re not trying to replace anyone in the immediate future. We’re just trying to eliminate the manual repetitive tasks that dominate much of legal workflows.

 

Business People are Key to Atrium

Chad Main: Interestingly, a side effect of having an affiliation with a technology company that was founded by business people, run by business people, and staffed by business people, is that lawyers at Atrium LLP get to learn business concepts that aren’t always normally taught at conventional law firms. Concepts like how to manage subordinates.

Augie Rakow: One of the things I spend the most time thinking about, that I learned from LTS, or get from the LTS side, is really management coaching.Management advice.

I’ve learned a lot from Justin and Bebe in particular, about how to manage a report. It’s new thing for me. I’ve had teams. I’ve led many teams. I’ve sent out invoices to clients where there’s more than 50 … 100 timekeepers listed on the invoice. I’ve been responsible for the work of many people, but I have never been a manger to someone. In a sense of setting their goals, reviewing their goals, being responsible for their career progression, making sure that they … Never done that before.

 

Fast Growth

Chad Main: Since opening it’s doors in June of 2017, Atrium’s already landed more than 100 clients and they employ a business development team.

Augie Rakow: We just celebrated getting our 100th client. Been in business since June 1. It’s eight months or so. 100 clients or so, actually about 120 to 125 now.

Gotten them through various different ways. A pretty large influx of companies have just reached out to the website when they seen the various press releases.

We also have a fantastic growth team here. We have three or four, five members on the growth team at the moment. Any how you divide it up, they’re all folks that have built businesses or have professional sales careers where they’ve done extraordinarily well, consistent with the ethical rules. The lawyers supervise them. There’s a lot of rules around that, that are very important to follow, but we have a professional sales team, and I think that’s really the difference.

We actually think of the services that we’re providing as products, and so we don’t just do … No law firm would say that they’ll just do anything that comes in the door, but even work that I would have done at my prior firm, we may pass on it. Not because it’s not good work, not good work to do, or not good clients, but we may pass on it because we’re just not providing that service quite yet.

By constraining ourselves, we can streamline our operations and we can be more strategic about how we do try to sell the services that we do sell. It’s that combination of more specifically defining the product. We call it productizing our services and then working with an extraordinarily talented sales team and marketing team to tell the community about those services and guide the sales funnel.

 

Atrium is Focused on the Startup Community

Chad Main: Like any good Silicon Valley startup, Atrium is laser focused on product market fit. This means, in the near-term, they’re limiting the legal services they offer just to those needed by startup companies. As they refine their processes and grow, they plan to organically move into other areas like M&A and litigation.

However, as Augie points out, that doesn’t mean that Atrium’s structure and MO can’t be applied to non-business related areas of the law.

Augie Rakow: The work we’re doing now, tracks the kind of work that startups get from the leading law firms in this space right now. The Wilson Sosinis, Cooley’s, The Gunderson’s, or a handful of others. Goodwin, Fenwick.

It’s basically that same model. That’s the same menu. There’s already product market fit there, we know that clients consume those services, we know that they’ll pay well for it, and we know there’s talent out there to provide those services. Let’s not screw with something that works.

Over time, we expect to expand. We’ll most likely follow similar growth patterns to the other law firms that have done well in this space. You represent a lot of venture act startups, pretty soon you start selling them to Google. Start selling them Salesforce. Soon it becomes an M&A practice, then you may turn that M&A practice into a buy side M&A practice and gradually expand out from there. We will mostly be a business law firm. I think these principles apply to everybody in our industry.

 

Innovative Pricing

Chad Main: Not surprisingly, Atrium’s pricing structure’s a little bit different than a conventional law firm. Instead of maximizing billable hours, much of the way Atrium builds clients is subscription based.

Augie Rakow: This market segment of clients really want to use legal, and they want it to be fast, transparent, and price predictable. The fast speaks for itself.

Transparent means they want to know the status of things. They want it to be price predictable. Not necessarily cheap. A lot of times, as long as it’s predictable, they’re willing to pay well for it. Especially if they feel like they’re getting something really good for it.

The subscription really speaks to that price predictability. There’s going to be some variants. A client may need a lawyer’s time for four hours one month, then two hours another month, and ten hours the next month. If you are striving to be unit profitable at the task by task level, then you really do need to track hour by hour, or six minutes by six minutes.

If you only need to be profitable at a client by client level, or at a quarter by quarter level, that gives you a lot more freedom to absorb the variants. We really put that on ourselves to accurately price in aggregate, much like the insurance company might. What’s going to be the likely cost of this? That’s how we absorb the variants on our side.

The clients we’re taking on now … The subscription price varies a little bit. We’re rolling out new pricing in the next couple weeks. Mostly, clients are paying 11500 to 3000 a month.

 

The Future of Atrium’s Tech

Chad Main: So I closed out this great conversation with Augie and Max with a question to Max about what the future holds to the tech development at Atrium LTS.

Max Cantor: In the short-term future, our goal is to just capture more of the workflows that the LLP attorneys and paralegals are performing. The idea being, that they have to spend less time in Word, less time in Outlook, more time on our systems. That gives them higher value and it’s more holistic.

We can also report back, or give them the ability to generate better metrics. Augie can turn around and say, “This is where our bottlenecks are.” When we’re on a subscription business, in a way we’re arbitrizing that difference and it’s absolutely vital for us to know what we’re spending time on, so that we can then fix that. On the data platform side, our goal is just improving predictions, eliminating more and more tasks.

One of the distinctions that I like to think about, for machine learning, is what I call auto-complete versus Siri. Auto-complete type machine learning tools are tools that have incremental value. If I’m using Google auto-complete, and it’s wrong 75% of the time, I just keep typing. I still get 25% of the value out of that.

If I’m using Siri, and it’s wrong 75% of the time, I get no value out of it, because now I just wasted my time talking to my phone, like someone who might have some issues. Now I gotta go do whatever I was going to do myself. My interest here, has always been to build the auto-complete. To build the auto-complete tools for attorneys.

Not zero touch automation that has to be perfect, but something that helps our attorneys and paralegals 75% of the time, and that is useful 75% of the time. If our engineering team can make tech that makes the attorneys as happy as … Having Augie cover their backs makes them happy, that’s my goal.

Our goal, in a sense, is attorney retention. Make it so much more pleasant to do legal work here, because we have amazing legal tools, that if you go work at another law firm, you lose. If we have that product loyalty to our internal product then that’s a huge win for us.

Chad Main: That’s a wrap for this episode. If you want to learn more about Augie and Max, or find links and more information about anything we talked about, you can check out their page on our website, TLPodcast.com.

If you want to subscribe, you can find us on most major podcasting platforms such as iTunes, Stitcher, and GooglePlay.

If you want to get a hold of me, my email address is cmain@percipient.co. That’s cmain@percipient.co.

Hope you’ll tune in next time, where I talk to Angie Hickey of Chicago based Levenfeld Pearlstein. She’s the CEO of that firm and she talks about what it’s really like to run a law firm like a business. Until next time, this has been Technically Legal.

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