1 00:00:02,201 --> 00:00:04,143 Alex, how are you this afternoon? 2 00:00:05,336 --> 00:00:06,071 Good, thanks, Ty. 3 00:00:06,071 --> 00:00:06,736 Good to be here. 4 00:00:06,736 --> 00:00:07,881 Thanks, Hamil. 5 00:00:08,164 --> 00:00:10,875 Of guess it's afternoon your time. 6 00:00:10,875 --> 00:00:17,239 It's morning here in the US, but um I appreciate you joining, regardless. 7 00:00:17,239 --> 00:00:19,460 And um let's get you introduced. 8 00:00:19,460 --> 00:00:22,521 So you and I got connected on LinkedIn. 9 00:00:22,662 --> 00:00:24,283 We, I think, had some similar. 10 00:00:24,283 --> 00:00:37,870 I wrote an article about the uh Big Law 2.0 blueprint, and you had written an article somewhat similar-ish that we're going to talk more about in just a little bit. 11 00:00:38,379 --> 00:00:43,010 Tell our listeners kind of who you are, what you do, and where you do it. 12 00:00:43,726 --> 00:00:44,567 Yeah, thanks, Ted. 13 00:00:44,567 --> 00:00:55,406 So yeah, I've been working for AI companies for about 15 years and accidentally fell into the legal world in 2018. 14 00:00:55,817 --> 00:01:08,928 Since that point, I've grown a number of legal tech businesses and more recently started working with law firms building products to distribute and sell to their clients. 15 00:01:08,928 --> 00:01:11,606 So most recently, we 16 00:01:11,606 --> 00:01:20,874 as part of the Legal Tech Foundry, a new initiative that we launched at the start of this year, we help lawyers to build productized legal services. 17 00:01:20,874 --> 00:01:32,102 So we provide everything from the commercial expertise and experience to product development capabilities and where required, introductions to capital. 18 00:01:33,062 --> 00:01:39,724 Yeah, which is an option there in the UK with external capital, with the Legal Services Act here in the US. 19 00:01:39,724 --> 00:01:44,605 It's still um an emerging topic. 20 00:01:44,605 --> 00:01:59,409 We've got two states that have adopted alternative business structure rules, but we still have the ABA model rule 5-4 that prevents non-legal ownership of law firms here for 21 00:01:59,409 --> 00:02:02,510 independence, to keep lawyers independent. 22 00:02:03,802 --> 00:02:09,994 so for people listening, have a smirk on my face is as I say that I don't think that's why that rule exists at all. 23 00:02:09,994 --> 00:02:11,845 think it's protectionist. 24 00:02:12,845 --> 00:02:15,266 but anyway, that's neither here nor there. 25 00:02:15,266 --> 00:02:17,076 So, well, that's, that's super interesting. 26 00:02:17,076 --> 00:02:26,690 So, you know, the last time that you and I spoke, we talked about whether or not AI is a threat or an opportunity for legal. 27 00:02:26,690 --> 00:02:28,720 And the answer is it's both. 28 00:02:28,946 --> 00:02:36,257 Um, it really depends on how law firms respond to this transformation. 29 00:02:36,257 --> 00:02:43,968 Um, but we talked about boutique and specialist firms and how they might challenge big law in this transformation. 30 00:02:43,968 --> 00:02:45,570 Share your thoughts on that. 31 00:02:47,544 --> 00:02:56,677 Yeah, I mean, I think personally it is a massive opportunity for firms that can recognise it. 32 00:02:56,677 --> 00:03:12,541 And I think both Big Law and the more specialist firms have ah their own opportunities and challenges in realising uh the potential of this new technology. 33 00:03:12,541 --> 00:03:16,876 Big Law, of course, have the resources if they want to augment 34 00:03:16,876 --> 00:03:22,471 their delivery model to become more tech enabled. 35 00:03:22,471 --> 00:03:34,179 They have the ability, if they wish to pursue it, to be able to start to invest significant resources into building productized solutions. 36 00:03:34,180 --> 00:03:46,772 But through that same lens, they also have the challenges of a partnership model and needing to get consensus to pursue this 37 00:03:46,772 --> 00:03:49,644 new direction of travel, if you will. 38 00:03:50,084 --> 00:04:01,583 And then on the flip side, you know, looking at more specialist, more boutique firms, to a certain extent, if you're a specialist firm, you have already to a certain extent 39 00:04:01,583 --> 00:04:03,634 productized what you do. 40 00:04:03,634 --> 00:04:09,398 You provide a specific service to a specific type of client. 41 00:04:09,939 --> 00:04:15,294 It's just that you're currently providing the service through human capital. 42 00:04:15,294 --> 00:04:21,978 and there's an opportunity to again augment your service into a tech enabled delivery model. 43 00:04:23,319 --> 00:04:32,344 So I think that's obviously an opportunity for the more specialist firms that they have already to a certain extent productized. 44 00:04:33,285 --> 00:04:43,182 But at the same time, capital isn't quite as forthcoming for those organizations that may be turning over five, 10, 50 million, for example. 45 00:04:43,182 --> 00:04:54,940 to be able to invest one or two million into this transformation, it's a much bigger lift for firms that are operating at those sort of revenue numbers as opposed to big loss. 46 00:04:55,516 --> 00:04:56,327 Yeah. 47 00:04:56,327 --> 00:05:07,164 And you you, you, you mentioned the partnership model and I've written quite a bit on the topic and I'm a firm believer that the partnership model is an impediment. 48 00:05:07,164 --> 00:05:18,752 It's a big impediment, possibly the biggest impediment to this future state that we're heading towards that nobody has control over. 49 00:05:18,752 --> 00:05:22,804 Um, we're going there, whether you like it or not, it's happening. 50 00:05:22,885 --> 00:05:24,900 And the challenge with 51 00:05:24,900 --> 00:05:36,744 the partnership model, there are many, you highlighted one, consensus driven decision making really makes things difficult because it's hard to get consensus on certain 52 00:05:36,744 --> 00:05:37,124 matters. 53 00:05:37,124 --> 00:05:42,335 You have uh interests that are not always well aligned. 54 00:05:42,335 --> 00:05:52,238 You have retirement horizons from people who make very logical decisions on their willingness to invest in a long term solution that 55 00:05:52,252 --> 00:05:57,024 They might not be around for the break even um period. 56 00:05:57,024 --> 00:06:11,690 So, you know, those are challenges, but another really big one is the partnership models that operate on a cash basis accounting, prioritize short-term earnings, right? 57 00:06:11,690 --> 00:06:20,594 You're maximizing your year end bottom line in these organizations and 58 00:06:20,738 --> 00:06:30,714 Where we're headed is going to require some capital expense and some R &D and partnership models operating on a cash basis Really aren't set up for that. 59 00:06:30,714 --> 00:06:34,026 The concept of R &D doesn't really exist in law firms. 60 00:06:34,026 --> 00:06:35,146 Do you agree? 61 00:06:37,038 --> 00:06:52,384 ah I mean, you could look at the investment the firms are making into innovation teams, number of firms already building productized solutions. 62 00:06:52,384 --> 00:06:59,327 But I have also a certain amount of sympathy for everything you just mentioned. 63 00:06:59,327 --> 00:07:07,070 It's a big ask if someone is approaching retirement and effectively your ask is 64 00:07:07,304 --> 00:07:18,118 disrupt the entire business model and business that you might have spent your career or perhaps even a decade building. 65 00:07:19,339 --> 00:07:34,155 added to that, if these senior executives within these law firms have earned a uh reasonable income over the last few years that they've been working and contributing to 66 00:07:34,155 --> 00:07:36,898 the firm, it's an even bigger ask. 67 00:07:36,898 --> 00:07:48,344 because there's no monetary driver really that is creating this existential threat that they should go and facilitate and help facilitate this change. 68 00:07:48,344 --> 00:07:59,210 So I do have a certain amount of sympathy for the challenges that those firms and the partners in them face. 69 00:07:59,790 --> 00:08:06,826 I also have a huge amount of sympathy for those that are 70 00:08:06,826 --> 00:08:16,472 new partners in this model and believe that this is the future of law and this is the future of legal. 71 00:08:16,472 --> 00:08:33,292 But they're currently hampered to pursue that vision that they might have around how to deliver a better quality, better client experience to their clients. 72 00:08:34,534 --> 00:08:35,684 I don't disagree with that. 73 00:08:35,684 --> 00:08:38,995 It is a big ask, but a necessary one. 74 00:08:39,236 --> 00:08:52,159 And how firms go about accommodating the scenarios that you describe is going to ultimately be the deciding factor on how much support they get. 75 00:08:52,600 --> 00:09:00,702 Because it's not an easy, just abandoning an existing business model. 76 00:09:01,394 --> 00:09:05,874 that's been very profitable and resilient for decades. 77 00:09:05,874 --> 00:09:11,854 mean, Big Law has withstood so many potential disruptions. 78 00:09:12,454 --> 00:09:21,934 You know, I remember when digital research came online and that was going to completely change everything and e-discovery and the cloud. 79 00:09:21,934 --> 00:09:31,294 And there's been a lot of, there's been a lot of disrupting forces making its way through the legal industry, but nothing like this. 80 00:09:31,294 --> 00:09:47,332 And um it's going to be interesting to see how these firms create a future state, define a future state, and then map out a path to get from where they are today to that future 81 00:09:47,332 --> 00:09:47,713 state. 82 00:09:47,713 --> 00:09:51,217 I think that's where the success or the failure happens. 83 00:09:52,748 --> 00:09:53,358 Agreed. 84 00:09:53,358 --> 00:10:03,681 And going back to what you were saying earlier, it's also to a certain extent how much they recognize that this is an opportunity and how willing they are to take action. 85 00:10:03,681 --> 00:10:11,903 And by take action, I mean invest in building for this future state, this and realizing this opportunity. 86 00:10:12,163 --> 00:10:22,326 And, you know, just to tie this to some of what we've been talking about, if you as an organization, as a firm, 87 00:10:22,326 --> 00:10:26,749 as a full service firm believe in this direction of travel. 88 00:10:26,749 --> 00:10:29,850 Let's just put the partner consensus to one side for a moment. 89 00:10:30,031 --> 00:10:43,188 If you do believe in this direction of travel, you are effectively having to rebuild every practice area and every service that you provide to every different type of client that 90 00:10:43,188 --> 00:10:46,840 you currently service from the ground up. 91 00:10:47,341 --> 00:10:49,702 It's like trying to build 92 00:10:49,870 --> 00:10:55,233 10, 15, 20, 50 startups all at the same time. 93 00:10:55,774 --> 00:10:57,595 Building one is difficult. 94 00:10:58,216 --> 00:11:08,983 Building 50, that's a huge lift, particularly for those that have very little experience in doing so. 95 00:11:09,344 --> 00:11:18,080 So I think this is where there is a potential advantage for the mid-market and SME firms, the specialist firms that 96 00:11:18,178 --> 00:11:20,419 focus on one very specific area. 97 00:11:20,639 --> 00:11:25,821 If you think about like some of the most successful technology companies, I mean, where did they start? 98 00:11:25,821 --> 00:11:32,374 They started in very specific areas before they became the behemoths that they are today. 99 00:11:32,374 --> 00:11:37,256 Think about Airbnb and renting out rooms in San Francisco. 100 00:11:37,256 --> 00:11:40,807 Think about Uber and private limos. 101 00:11:40,807 --> 00:11:42,908 Think about Amazon secondhand books. 102 00:11:42,908 --> 00:11:47,270 know, they're all, they all start in a very focused and specific niche. 103 00:11:47,370 --> 00:11:48,140 So 104 00:11:48,140 --> 00:11:53,456 I think that's one of the challenges that big law faces, perhaps the biggest one. 105 00:11:53,456 --> 00:11:54,086 Yeah. 106 00:11:54,086 --> 00:11:56,317 And you know, there are some very big law firms here. 107 00:11:56,317 --> 00:12:07,350 I don't know if this is true in the UK, but here in the U S there are a few practice areas where you will get am law sized firms that just really practice in one area. 108 00:12:07,350 --> 00:12:13,752 Um, and maybe some very closely aligned adjacent practice areas. 109 00:12:13,752 --> 00:12:16,732 Like a good example is late as labor and employment. 110 00:12:16,732 --> 00:12:23,074 So, um, Eleni here in the U S there's at least five. 111 00:12:23,332 --> 00:12:28,623 or six firms with more than five, 600 attorneys. 112 00:12:28,623 --> 00:12:31,264 Several of them are clients of ours and great clients. 113 00:12:31,264 --> 00:12:39,066 um And I would say there's probably three or four that have over a thousand attorneys that just do L and E work. 114 00:12:39,066 --> 00:12:45,148 um Another area, um intellectual property. 115 00:12:45,148 --> 00:12:52,540 You've got several intellectual property firms that are am law level revenue, and they just really focus on one thing. 116 00:12:52,540 --> 00:12:55,393 But that's the exception to your point. 117 00:12:55,393 --> 00:13:01,878 Most of the AMLaw firms have a very wide breadth and they practice in a number of areas. 118 00:13:02,479 --> 00:13:12,207 And to a large extent, that's been part of their selling proposition is, you know, we're a one-stop shop for your legal needs. 119 00:13:12,408 --> 00:13:17,753 And that has, that comes with opportunities and challenges. 120 00:13:17,753 --> 00:13:19,494 Now we're starting to see 121 00:13:20,254 --> 00:13:31,227 to your point, some of the challenges when you have to transform the business and you've got all of these different practice areas that operate just like little businesses on 122 00:13:31,227 --> 00:13:31,897 their own. 123 00:13:31,897 --> 00:13:41,510 And in fact, I'd say even one level below that, the actual attorneys within the practice operate like their own little business on its own. 124 00:13:41,510 --> 00:13:43,740 They kind of have their own conventions. 125 00:13:43,921 --> 00:13:49,662 Many have their own model documents they use as starting points. 126 00:13:49,926 --> 00:14:00,436 They have their own conventions around how or how not they check documents into the DMS, how they write narratives. 127 00:14:00,436 --> 00:14:07,323 I know there's been a lot of attempt in Big Law to kind of standardize some of these things, but I still see a lot of uh variability in that. 128 00:14:07,323 --> 00:14:10,746 So yeah, it definitely presents a challenge. 129 00:14:11,480 --> 00:14:12,915 Yeah, I would agree with that. 130 00:14:15,326 --> 00:14:19,528 It's not to say that Big Law can't move in this direction. 131 00:14:19,528 --> 00:14:33,313 And I think for any full service firms that are thinking about this and thinking about this as an opportunity, you don't have to build all of those 50 startups all at once. 132 00:14:33,474 --> 00:14:44,224 You can dip your toe in the water and look for the lowest hanging fruit in relation to where productization really makes sense. 133 00:14:44,224 --> 00:14:54,300 where can you deliver exponentially more value by bringing technology into this specific practice area or this specific service? 134 00:14:55,382 --> 00:15:04,068 And how does that enable you to capture more of the market or that market in which you're operating already? 135 00:15:04,068 --> 00:15:12,133 Or how does it enable you to provide significantly more value to that type of client for that type of service? 136 00:15:12,133 --> 00:15:14,214 m 137 00:15:14,388 --> 00:15:23,670 That is a good starting point rather than trying to think about this as we've got to eat the entire elephant all at once. 138 00:15:24,912 --> 00:15:26,483 Yeah, great point. 139 00:15:26,483 --> 00:15:40,455 um I had an article, you made a comment on it, so I'm assuming you saw it just this morning about Big Law 2.0, which is essentially future state post AI. 140 00:15:40,595 --> 00:15:51,244 And one of the um items that I outlined is like, all right, so what should firms be thinking about for the future? 141 00:15:51,385 --> 00:15:53,566 And it's really 142 00:15:53,604 --> 00:15:57,615 aligning incentives, I think was the first bullet in that. 143 00:15:57,615 --> 00:16:04,337 that's, you know, reward fee earners for, for documented efficiencies and client facing innovation, not just ours build. 144 00:16:04,337 --> 00:16:17,571 Like let the, this almost has to be, you know, a combination of central expertise, like knowledge management, innovation, and, and, and usually that's where AI lives, at least in 145 00:16:17,571 --> 00:16:21,720 the U S um, those concentrated 146 00:16:21,720 --> 00:16:29,698 centers of excellence and then on the front lines the actual fee earners themselves it's going to be a collaboration. 147 00:16:29,698 --> 00:16:36,565 um The back office functions can't do it on their own and neither can the front line in the practice. 148 00:16:36,565 --> 00:16:45,263 It really has to be a collaboration and a multi-disciplinary effort in order to figure out how to do this effectively. 149 00:16:45,263 --> 00:16:46,414 Would you agree? 150 00:16:47,180 --> 00:16:48,040 Yeah, completely. 151 00:16:48,040 --> 00:16:48,890 there's two things. 152 00:16:48,890 --> 00:16:52,171 I mean, I picked up on something you said about two points on this. 153 00:16:52,171 --> 00:16:54,912 One is like, where does AI live? 154 00:16:55,172 --> 00:17:07,585 And I think, I say, I'm about to use the word historically, but we're talking about the last couple of years, so historically seems a bit grander term, but historically, I think 155 00:17:07,585 --> 00:17:10,676 AI has been looked at across the firm. 156 00:17:11,357 --> 00:17:17,268 What solutions can we procure that is going to help our organization? 157 00:17:17,666 --> 00:17:32,042 But the actual way in which AI is being used and the way that it can create value and the way it gets deployed is going to be dramatically different for an &A practice as it is to 158 00:17:32,042 --> 00:17:33,513 an employment practice. 159 00:17:33,513 --> 00:17:47,148 So this is where I think there's perhaps more ownership that we're going to see from individual practice areas and business owners, business area owners around 160 00:17:47,340 --> 00:17:58,717 how they can utilize and build solutions specifically for the services that they're providing to clients of the firm. 161 00:17:59,138 --> 00:18:14,088 So I think for me, that's one question mark that I have in relation to how we're going to see AI ownership changing, moving forwards. 162 00:18:14,088 --> 00:18:16,790 The other point I was going to say is that 163 00:18:17,400 --> 00:18:28,973 For anyone that is thinking about going on this journey, I think it's really about trying to identify that lowest hanging fruit, right? 164 00:18:28,973 --> 00:18:42,897 So where is there low margin work that is done to a degree of repeatability that ultimately can be productized? 165 00:18:43,317 --> 00:18:46,670 We shouldn't start trying to think about the 166 00:18:46,670 --> 00:18:50,350 most difficult problems to solve. 167 00:18:50,350 --> 00:19:03,870 The technology is capable of doing most of the things that a lawyer does, but the real challenge is trying to define the decision matrix and the judgment that needs to be fed 168 00:19:03,870 --> 00:19:09,110 into a system to be able to replicate the work that a lawyer is doing. 169 00:19:09,430 --> 00:19:12,266 And so if I was 170 00:19:12,266 --> 00:19:24,743 a lawyer at a firm and I was doing something over and over again and there was an element of repeatability and the market that I served, not just the clientele that I have within 171 00:19:24,743 --> 00:19:40,302 my firm, but the market that I served was big and broad enough that there was an opportunity to serve a much wider segment of the market by providing a 172 00:19:40,536 --> 00:19:49,232 tech enabled service that is delivered a much more efficient and effective rate to the end client. 173 00:19:49,774 --> 00:19:54,208 That's where I'd be thinking about where should I be productizing? 174 00:19:54,208 --> 00:19:59,122 Where can I start this journey and then start to move up the value chain from there? 175 00:19:59,856 --> 00:20:13,060 Yeah, you know, it's a good point about the centralization versus, you know, kind of more distributed model here in the U S I don't know what the ratio is, but there are a good 176 00:20:13,060 --> 00:20:18,931 chunk of firms who have KM attorneys aligned specific to certain practice areas. 177 00:20:19,031 --> 00:20:19,358 Right. 178 00:20:19,358 --> 00:20:22,572 So you'll have labor and employment, KM attorneys, right? 179 00:20:22,572 --> 00:20:27,734 They understand how the practice functions at a detailed level. 180 00:20:27,734 --> 00:20:29,494 And I think that model. 181 00:20:30,370 --> 00:20:35,112 works really well because you kind of have your foot, one foot in both areas. 182 00:20:35,112 --> 00:20:48,659 You have one foot in the practice and you have one foot in knowledge management and innovation and bridging that gap is going to be key in figuring out a path forward and 183 00:20:48,659 --> 00:20:54,642 understanding all the nuance that has to be understood in order to have success. 184 00:20:55,746 --> 00:21:08,011 Yeah, I mean, going going back to the article that you wrote earlier today in relation to the investment that's going into KM and innovation versus profitability of the firms. 185 00:21:08,752 --> 00:21:20,977 My comment to this was, is there enough being invested to make a material difference and impact in relation to the size of the firms in question? 186 00:21:20,977 --> 00:21:22,994 I don't know if you've got an opinion on that. 187 00:21:22,994 --> 00:21:24,514 Yeah, that's a really good question. 188 00:21:24,514 --> 00:21:28,234 And I saw you, I saw you post it and I haven't had a chance to respond. 189 00:21:28,234 --> 00:21:29,674 That is a really good question. 190 00:21:29,674 --> 00:21:38,114 So just to be candid, there are a lot of curve balls with this analysis. 191 00:21:38,114 --> 00:21:41,354 Like this was a very quick and dirty. 192 00:21:41,434 --> 00:21:51,574 I basically took the AmLaw 100 list and I had my assistant go in and every firm in Ilta has a unique ID. 193 00:21:51,574 --> 00:21:52,732 I had her 194 00:21:52,732 --> 00:21:54,023 populate those unique IDs. 195 00:21:54,023 --> 00:22:02,086 And then I loaded the Ilta roster up in SQL and searched for any roles that had KM, innovation or knowledge in the title. 196 00:22:02,086 --> 00:22:14,821 And I got a nice little count and then plotted that out on a scatterplot and said, okay, is there a relationship between KM and I investment using headcount as a proxy, which I 197 00:22:14,821 --> 00:22:16,432 think is actually a pretty good proxy. 198 00:22:16,432 --> 00:22:22,684 um Law firms biggest expense is people by a huge margin and yes, 199 00:22:22,684 --> 00:22:36,543 there, there, especially lately, there is systems and platforms that, require investment, but people have to manage and you have to have someone there to help manage and deploy. 200 00:22:36,574 --> 00:22:43,969 I think people are a pretty good proxy for overall, um, KMNI investment. 201 00:22:44,149 --> 00:22:51,314 And there are so many variables to consider, you know, including like sometimes firms 202 00:22:51,546 --> 00:22:54,387 engage in KM activities, but they call it something else. 203 00:22:54,387 --> 00:22:58,769 You know, they'll call it practice innovation instead of KM or knowledge. 204 00:22:58,769 --> 00:23:00,530 There it's, it's so interesting. 205 00:23:00,530 --> 00:23:06,722 There is like a, at some firms, there is a cultural resistance to knowledge management. 206 00:23:06,722 --> 00:23:14,195 Like they don't want it called that, but they, they value the activities that take place in that function. 207 00:23:14,195 --> 00:23:15,696 So they call it something else. 208 00:23:15,696 --> 00:23:18,637 And it's above my pay grade to understand that dynamic. 209 00:23:18,637 --> 00:23:19,378 really don't. 210 00:23:19,378 --> 00:23:20,798 Um, 211 00:23:20,806 --> 00:23:30,230 But it was really interesting to see that there is almost zero relationship between the size of a firm's KM &I team and their profitability. 212 00:23:30,230 --> 00:23:35,592 I naively went into it thinking, there's got to be some correlation. 213 00:23:35,592 --> 00:23:39,394 And then after I saw it and I stared at it, I'm like, why is there not? 214 00:23:39,394 --> 00:23:45,796 It's like, duh, there's all sorts of reasons. 215 00:23:46,897 --> 00:23:48,157 And you just pointed one out. 216 00:23:48,157 --> 00:23:49,418 I mean, that's a very fair. 217 00:23:49,418 --> 00:23:50,610 um 218 00:23:50,610 --> 00:23:51,110 assessment. 219 00:23:51,110 --> 00:23:53,010 mean, all those firms are Amlaw 100. 220 00:23:53,010 --> 00:24:06,450 So they're going to have, so the Amlaw 100 ranges in revenue in the U S from about at the high end at seven, seven and a half billion on the low end. 221 00:24:06,550 --> 00:24:11,330 It's, I would have to say it's probably 700 million U S. 222 00:24:11,370 --> 00:24:18,710 So yeah, there's a 10 X variation in revenue from the top of the Amlaw 100 to the bottom. 223 00:24:19,010 --> 00:24:20,010 Um, 224 00:24:20,156 --> 00:24:23,974 but it's still in the real close to the billions. 225 00:24:23,974 --> 00:24:27,950 um So anyway, yeah, that's a good point. 226 00:24:27,950 --> 00:24:36,021 But I love the framework of the analysis that you've done there. 227 00:24:36,021 --> 00:24:52,767 I think what I started to think about when I read your article was what is it the firms would require in order to capitalize on this opportunity if, again, they get over the 228 00:24:52,767 --> 00:24:56,214 partner consensus piece and they believe that this is 229 00:24:56,214 --> 00:24:58,495 the future of where their firm should be going. 230 00:24:58,656 --> 00:25:09,925 And I think the challenge for most is that they don't have sufficient resource to even dip their toe in the water in many instances, right? 231 00:25:09,925 --> 00:25:21,194 Like all bar the biggest firms on the planet have significant internal development resources from a product development standpoint, right? 232 00:25:21,194 --> 00:25:25,922 Like AI analysts, uh 233 00:25:25,922 --> 00:25:33,225 technology teams that can actually build and develop applications. 234 00:25:33,505 --> 00:25:47,081 They have a marketing function, which is great, but that marketing function is typically skilled and equipped to market a professional services business, not a software business, 235 00:25:47,081 --> 00:25:50,932 which is kind what we're talking about here. 236 00:25:50,933 --> 00:25:54,706 So if firms are going on that journey, 237 00:25:54,706 --> 00:26:09,638 or want to go on that journey, I think there's going to be significant investments that need to be made in order to conduct that, I mean, to your point earlier, R &D required to 238 00:26:09,638 --> 00:26:10,519 get them there. 239 00:26:10,519 --> 00:26:24,524 And once those new service models and products are developed, you then need the expertise to be able to sell those new services to your clients and 240 00:26:24,524 --> 00:26:36,138 beyond your clients to capture more of that market if that's the plan, which it is for most of the firms that are already going down this path. 241 00:26:36,138 --> 00:26:42,220 Yeah, and while we were while you were talking there, I looked and I was off by a couple hundred million. 242 00:26:42,220 --> 00:26:47,222 So at the bottom of the the floor of the AMLO 100, it's about 500 million. 243 00:26:47,222 --> 00:26:58,342 um Things drop off quickly from uh in that bottom quartile of the of the AMLO that goes from it's about a 20 % 30 % drop. 244 00:26:58,396 --> 00:27:08,874 But anyway, your point about um R &D and resources, you know what's interesting is law firms historically have had, it's a foreign concept. 245 00:27:08,874 --> 00:27:24,486 There's not been, like people are generally, um I would have to guess that the KM &I teams at large law firms, their efforts aren't being, 246 00:27:25,222 --> 00:27:32,757 Um, and their expenses aren't being amortized over some useful life of whatever it is that they're working on. 247 00:27:32,757 --> 00:27:34,689 That's how this is how it works in the U S. 248 00:27:34,689 --> 00:27:43,014 So as a product company, anytime that my team spends on product development, I have to bucket that separately. 249 00:27:43,014 --> 00:27:49,859 Then I do when they work on a client engagement where we're implementing or customizing for them. 250 00:27:49,859 --> 00:27:54,704 And that bucket of hours has to get treated as R and D and we have to amortize. 251 00:27:54,704 --> 00:27:55,344 the expense. 252 00:27:55,344 --> 00:28:09,450 So even though we're out of pocket $3 million in labor, I can only deduct, let's say 300,000 of that um each year, which really hurts me from a cashflow perspective because 253 00:28:09,450 --> 00:28:21,536 I'm paying tax on money that I've already spent, which is a real problem in the U S there's a lot of, there's a lot of friction around this and how anti-innovative these 254 00:28:21,536 --> 00:28:22,534 rules are. 255 00:28:22,534 --> 00:28:26,618 Because as a product company, if I spend the money, I should be able to expense it. 256 00:28:26,618 --> 00:28:35,026 And Trump just extended what's called bonus depreciation or expanded bonus depreciation here in the US. 257 00:28:35,026 --> 00:28:37,068 It's called Section 179. 258 00:28:37,068 --> 00:28:40,090 But law firms don't do that. 259 00:28:40,090 --> 00:28:42,513 um I would have to assume. 260 00:28:42,513 --> 00:28:48,368 never seen or heard of a law firm that has allocated 261 00:28:49,174 --> 00:28:50,376 And I could be wrong about this. 262 00:28:50,376 --> 00:29:03,170 And if so, I'd love for my listeners to let me know um where their employees' time is allocated in an R &D capacity where that expense is amortized over some useful life. 263 00:29:03,170 --> 00:29:07,364 It's possible, but it seems counterintuitive to me. 264 00:29:07,948 --> 00:29:18,325 Yeah, well, I'm not going to begin to pretend to understand the intricacies of that and whether or not any firms have gone down that path. 265 00:29:18,325 --> 00:29:33,836 But I think what it does illustrate is an added layer of complexity to pursuing this direction of travel, which only goes to the reason why it is a hard path to go down. 266 00:29:33,836 --> 00:29:37,934 We're talking here about how accounting 267 00:29:37,934 --> 00:29:43,399 for your staff hours is different if you're going to go and build productized services. 268 00:29:43,399 --> 00:29:50,285 We've just talked about how you need to market and sell these new services in a different way. 269 00:29:50,285 --> 00:29:58,191 The need for different skills and expertise and experience to be able to go and create these new services. 270 00:29:58,191 --> 00:30:06,472 So it is a big lift, but that's why we believe that we want to provide that 271 00:30:06,472 --> 00:30:21,233 sandbox that opportunity to dip your toe in the water to make some of those low hanging fruits of success to showcase to the rest of the organization that this is possible. 272 00:30:21,233 --> 00:30:22,913 This can be done. 273 00:30:23,854 --> 00:30:34,302 then our hope is that, like I said, that then opens up more opportunities to start productizing some of the more complex areas of the work that some of these firms are 274 00:30:34,302 --> 00:30:35,066 doing. 275 00:30:35,066 --> 00:30:35,587 Yeah. 276 00:30:35,587 --> 00:30:43,193 And you know, what's interesting is in the world of consulting, they have the same issue, right? 277 00:30:43,193 --> 00:30:50,059 They're under the same threats and they largely operate on a cash basis. 278 00:30:50,520 --> 00:30:57,566 And they also have consensus driven decision making to contend with, and they're also being completely disrupted by AI. 279 00:30:57,566 --> 00:31:01,889 um I think it's been overstated actually. 280 00:31:02,906 --> 00:31:07,149 I bang around on deep research across all the platforms a lot. 281 00:31:07,149 --> 00:31:08,750 It is such a fun. 282 00:31:08,750 --> 00:31:09,611 really enjoy it. 283 00:31:09,611 --> 00:31:19,678 um I use it to help prep for writing articles that, and you know, it does some of the research work for me and I can kind of pull it together. 284 00:31:19,678 --> 00:31:25,782 But um yeah, know, consulting has these same challenges and they're under a similar disruption. 285 00:31:25,782 --> 00:31:31,166 um So it's going to be interesting to see how they approach it. 286 00:31:32,120 --> 00:31:38,752 Well, we are, I we are a consulting business, but we are eating our own dog food. 287 00:31:38,812 --> 00:31:49,955 So one of the things I spent quite a lot of time ah working on with our clients is, is this a commercially viable opportunity? 288 00:31:50,095 --> 00:31:54,176 Should you actually go and build something in this space? 289 00:31:54,256 --> 00:32:00,838 You come up with an idea and there've been a number of firms that I've worked with that have invested uh 290 00:32:00,974 --> 00:32:13,214 not insignificant amount of money in building solutions before they really truly define the problem and the value of the problem and how much of the market is experiencing this 291 00:32:13,214 --> 00:32:27,774 problem and frankly put together a really clear business plan around how we're going to create not just this product but this business because it is a business in its own right 292 00:32:27,774 --> 00:32:29,670 it's a startup within the firm. 293 00:32:31,106 --> 00:32:42,809 And so rather than in the traditional consulting way that this might be done, getting on a call, talking through some of these things, doing some workshops, trying to plan this 294 00:32:42,809 --> 00:32:56,523 stuff out, we're productizing our own knowledge into a platform called Viable, which will enable a lawyer to come in and feed in their ideas, feed in their thinking, and in a 295 00:32:56,523 --> 00:32:59,434 structured way will help get them to a point of 296 00:32:59,596 --> 00:33:14,100 building out a business case in minutes rather than many, many hours of trying to think through and research the market around this particular problem and see whether or not 297 00:33:14,100 --> 00:33:15,890 anyone's already solved it. 298 00:33:15,911 --> 00:33:19,852 I'm still blown away by the number of people that come to us with an idea. 299 00:33:19,852 --> 00:33:26,814 And for a quick Google, you can already show them five or six solutions that already solve the problem for them. 300 00:33:26,814 --> 00:33:28,874 But I mean, back to the original point, 301 00:33:29,410 --> 00:33:31,192 consulting is being impacted. 302 00:33:31,192 --> 00:33:42,546 And that's exactly why we're building our own productized services so that we can make them more accessible to anyone that is thinking about going down this path. 303 00:33:42,640 --> 00:33:42,940 Yeah. 304 00:33:42,940 --> 00:33:44,791 And you're rewarded for that. 305 00:33:45,132 --> 00:33:50,416 former consulting guy here, Acrowire is the predecessor company to InfoDash. 306 00:33:50,416 --> 00:33:53,338 We were a time and materials consulting organization. 307 00:33:53,338 --> 00:34:03,064 And had we sold, we would have sold for three to four times EBITDA, basically net profit. 308 00:34:03,265 --> 00:34:11,600 And as a product company, if we were, you know, this varies based on timing, but right now the multiples are five to eight times revenue. 309 00:34:11,886 --> 00:34:17,570 So to put that in perspective, let's say you're a $10 million company with 20 % EBITDA. 310 00:34:17,570 --> 00:34:22,473 So you make $2 million a year, bottom line, and you're $10 million a year company. 311 00:34:22,473 --> 00:34:27,076 If you're a consulting company, you're going to sell for roughly $6 to $8 million. 312 00:34:27,756 --> 00:34:33,161 If you're a product company, you're going to sell it at $50 to $80 million. 313 00:34:33,161 --> 00:34:36,883 That's quite the delta. 314 00:34:36,883 --> 00:34:39,034 So there is a huge reward. 315 00:34:39,034 --> 00:34:41,616 And the reason is because you can scale. 316 00:34:41,616 --> 00:34:44,114 You can scale product. 317 00:34:44,137 --> 00:34:46,041 It's really hard to scale people. 318 00:34:48,382 --> 00:34:49,202 Absolutely. 319 00:34:49,202 --> 00:34:49,903 Absolutely. 320 00:34:49,903 --> 00:35:04,034 And I think, you know, it starts to make that investment of one, two, three, five million, all the more attractive, right? 321 00:35:04,354 --> 00:35:15,223 If you can multiply the value of your business by five to 10x overnight, quite overnight, but take the point. 322 00:35:16,825 --> 00:35:18,226 Why wouldn't you do that? 323 00:35:19,196 --> 00:35:20,016 Yeah. 324 00:35:20,016 --> 00:35:22,647 And a few million dollars is a drop in the bucket. 325 00:35:22,647 --> 00:35:28,149 mean, you know, that's nothing for to get a startup off the ground. 326 00:35:28,149 --> 00:35:40,252 So, you know, I think it's going to come down to like the, the, the blueprint article I wrote, I kind of just mapped out a, I don't, can't remember if I specified a number, but 327 00:35:40,252 --> 00:35:44,683 the thinking was take your existing legacy model. 328 00:35:44,683 --> 00:35:47,174 And that's what the current, 329 00:35:48,206 --> 00:35:50,486 law firm model is, it's legacy. 330 00:35:50,627 --> 00:35:53,167 Not everybody knows it yet, but it is. 331 00:35:53,167 --> 00:36:11,472 So take that legacy model that's throwing off cash and set a portion aside to fund a completely separate entity, uh a C corp that doesn't have the partnership constraints and 332 00:36:11,472 --> 00:36:17,968 fund the R &D to build the intellectual property needed to 333 00:36:17,968 --> 00:36:20,900 deliver services in a tech enabled way. 334 00:36:21,221 --> 00:36:26,405 And you can leverage your talent from your existing legacy business. 335 00:36:26,405 --> 00:36:35,342 can um leverage your capital and your market presence and your brand, um your existing book of business. 336 00:36:35,342 --> 00:36:36,423 It's a great way. 337 00:36:36,423 --> 00:36:40,617 mean, again, I did it with Acrowire to InfoDash. 338 00:36:40,617 --> 00:36:41,978 I did the same thing. 339 00:36:41,978 --> 00:36:47,571 I essentially transitioned out of consulting and into product. 340 00:36:47,571 --> 00:36:49,276 And it worked out. 341 00:36:49,276 --> 00:36:51,622 um It worked out really well. 342 00:36:51,625 --> 00:36:53,150 So there's a lot of parallels there. 343 00:36:53,150 --> 00:36:54,863 I'm a fan of the approach. 344 00:36:55,864 --> 00:36:58,632 Well, Ted, you obviously have the foresight to do that. 345 00:36:58,632 --> 00:37:03,174 What were some of the challenges you had in making that transition? 346 00:37:03,482 --> 00:37:10,544 Yeah, so you know what the biggest challenge working with law firms was their willingness to assign the IP. 347 00:37:10,544 --> 00:37:20,347 So what we did was um we started with a few of our existing clients and said, look, we're going to build a product out of what we're doing for you. 348 00:37:20,347 --> 00:37:22,747 And we're going to give you a discounted rate to do it. 349 00:37:22,747 --> 00:37:26,248 But in return, you got to give us ownership rights over the IP. 350 00:37:26,248 --> 00:37:28,329 And that was such a hard sell. 351 00:37:28,689 --> 00:37:29,889 you know why? 352 00:37:29,889 --> 00:37:31,790 Because this is what lawyers are trained to do. 353 00:37:31,790 --> 00:37:33,230 They're trained to 354 00:37:33,244 --> 00:37:34,995 There's a certain amount of chips on the table. 355 00:37:34,995 --> 00:37:37,877 I want as many of those chips on my side. 356 00:37:37,877 --> 00:37:40,998 And if I have more than you at the end, then that's a win. 357 00:37:40,998 --> 00:37:43,910 And the reality is I really had to appeal to logic. 358 00:37:43,910 --> 00:37:46,421 Like the GCs, they didn't get it. 359 00:37:46,421 --> 00:37:51,324 I had to appeal to my stakeholders on the inside and say, look, here's the advantage for you. 360 00:37:51,324 --> 00:37:54,756 Instead of starting, I'm going to use an American football analogy. 361 00:37:54,756 --> 00:37:55,656 Maybe it makes sense. 362 00:37:55,656 --> 00:37:56,907 Maybe it doesn't. 363 00:37:56,987 --> 00:38:03,170 Instead of starting two yards deep in your own end zone, I'm going to start you off on your opponent's 20 yard line. 364 00:38:03,334 --> 00:38:05,936 So you're going to get tremendous benefit from that. 365 00:38:05,936 --> 00:38:07,701 And you're to help me shape the product. 366 00:38:07,701 --> 00:38:11,808 But you have to transfer ownership rights to me. 367 00:38:11,808 --> 00:38:13,040 That was the biggest challenge. 368 00:38:13,040 --> 00:38:14,052 And it was a big one. 369 00:38:14,052 --> 00:38:15,884 um But we got through it. 370 00:38:17,518 --> 00:38:25,051 Great, any tips to anyone that's thinking about pursuing the same path as to how to navigate that? 371 00:38:25,051 --> 00:38:26,471 that's a really good question. 372 00:38:26,471 --> 00:38:46,136 um I would say that do things incrementally and have a really good plan on how you don't turn the lights off on your revenue hose too soon before your new business becomes revenue 373 00:38:46,136 --> 00:38:49,017 generating and can stand on its own. 374 00:38:49,017 --> 00:38:52,272 That is a tricky thing uh to do. 375 00:38:52,272 --> 00:39:01,426 Like we had legacy clients who weren't like in our wheelhouse, you know, maybe smaller law firms or law firms that didn't want to want our new product. 376 00:39:01,426 --> 00:39:09,189 Um, for whatever reason, um, they love the custom dev stuff that we built for them, let's say. 377 00:39:09,269 --> 00:39:16,957 And we had, but eventually we did have to turn them off and just say, Hey, we can't, if you're not leveraging our product, it doesn't make sense. 378 00:39:16,957 --> 00:39:20,324 It doesn't align with our, our current state and 379 00:39:20,656 --> 00:39:23,555 But doing that too soon will really bite you. 380 00:39:26,104 --> 00:39:33,406 Yeah, I think you've touched on yet another challenge for lawyers, right? 381 00:39:33,406 --> 00:39:48,961 If you're busy working a 60 to 80 hour week and you've been trained throughout your career to avoid risk and you've got this idea but you're also aware of the fact that A, you've 382 00:39:48,961 --> 00:39:53,402 got no bandwidth because you're continuously delivering on 383 00:39:53,487 --> 00:39:57,087 the existing services that you're currently providing. 384 00:39:57,527 --> 00:40:02,647 But secondarily to that, startups are risky. 385 00:40:03,087 --> 00:40:05,867 They're a risky space to play in, right? 386 00:40:05,867 --> 00:40:10,847 I think it's something like less than 5 % of startups actually succeed. 387 00:40:11,007 --> 00:40:23,687 So you've now got a time poor risk averse individual that is looking at the opportunity of building a tech enabled service, effectively a startup. 388 00:40:24,020 --> 00:40:28,453 And scratching their heads about, I really be doing this? 389 00:40:29,194 --> 00:40:32,096 Is this really where I should be playing? 390 00:40:32,137 --> 00:40:46,128 And I think we're to see more and more people starting to recognize that the threat of inaction is greater than that of the risk of trying to pursue this new direction of 391 00:40:46,128 --> 00:40:46,498 travel. 392 00:40:46,498 --> 00:40:47,429 Maybe it will work out. 393 00:40:47,429 --> 00:40:48,650 Maybe it won't. 394 00:40:48,650 --> 00:40:54,214 But even if it doesn't, you'll learn so much along the way that um 395 00:40:54,584 --> 00:41:05,517 frankly, for me, you have to go and explore even to the smallest extent, the smallest degree. 396 00:41:05,937 --> 00:41:23,152 And I think if you are thinking about this as an opportunity, you don't have to invest hundreds of thousands of dollars or millions of dollars to go and explore what a new 397 00:41:23,152 --> 00:41:24,588 business might look like. 398 00:41:24,588 --> 00:41:34,490 You can do it far cheaper than that by talking to your clients about this idea, about this productized service and take it from there. 399 00:41:34,490 --> 00:41:41,728 You'll get some great learnings just from having those conversations about whether or not this is something that you should go to. 400 00:41:41,874 --> 00:41:45,214 Yeah, you know, it's interesting. 401 00:41:45,274 --> 00:41:48,354 I don't think law firms have a choice. 402 00:41:49,314 --> 00:41:54,394 I think that, and I'll tell you why, I talked to folks in the pricing world. 403 00:41:54,594 --> 00:42:00,034 I talked to a guy, a 20, 25 year, God, maybe even 30 year vet. 404 00:42:00,034 --> 00:42:02,214 This guy's been around for a while. 405 00:42:03,054 --> 00:42:07,514 And he was telling me in law firm pricing, 406 00:42:07,910 --> 00:42:15,704 He was telling me how clients are now asking for, and I put it in the article about, they want a number. 407 00:42:15,704 --> 00:42:24,068 They want to know how much did you save, how much time did you save working on my matters through the use of generative AI last quarter? 408 00:42:24,378 --> 00:42:31,085 And it's just like, how do you answer that question without at least starting to venture down the path that you just described? 409 00:42:31,085 --> 00:42:32,726 You can't stay still. 410 00:42:32,726 --> 00:42:35,069 If you stay still, you can't answer that question. 411 00:42:35,069 --> 00:42:41,554 And if you can't answer that question, you don't get the next batch of legal work from that client. 412 00:42:41,595 --> 00:42:45,368 I think they kind of have to start pushing in that direction. 413 00:42:46,252 --> 00:42:47,903 Yeah, I would agree. 414 00:42:47,903 --> 00:42:48,503 I would agree. 415 00:42:48,503 --> 00:43:02,335 And I think for me, it's about at least like taking one step forward in that direction, because, you know, technology is eating lawyers lunch. 416 00:43:02,856 --> 00:43:13,424 You know, already, clients are using generic AI applications to draft letters, draft contracts, sending them over to their lawyers saying, Hey, is this okay? 417 00:43:13,765 --> 00:43:15,756 And so 418 00:43:15,756 --> 00:43:20,129 Technology is already starting to erode revenue streams. 419 00:43:20,450 --> 00:43:34,101 But the lawyers, they've got a number of things that are advantageous for them that most uh startups in other industries don't have. 420 00:43:34,242 --> 00:43:37,164 They've already got a book of clients. 421 00:43:37,284 --> 00:43:43,109 They've got the domain expertise in a regulated and 422 00:43:44,714 --> 00:43:49,237 walled garden industry, right, but you've to be qualified in order to practice. 423 00:43:49,278 --> 00:43:51,840 So not anyone can come and do this. 424 00:43:52,100 --> 00:44:04,730 Or you've really got to exactly barriers to entry, you've got a moat already there, you just got to take one step forward, start exploring what this can look like. 425 00:44:04,811 --> 00:44:11,876 And, you know, all of the barriers that we've been talking about, they're not insurmountable. 426 00:44:12,117 --> 00:44:13,390 If you don't have the 427 00:44:13,390 --> 00:44:16,570 expertise and experience and skills on your team. 428 00:44:16,570 --> 00:44:22,930 You can go and work with and find people that do come to us and we'll help you with this. 429 00:44:22,930 --> 00:44:23,270 Right. 430 00:44:23,270 --> 00:44:30,250 So that's one contained way of being able to take a step in this direction. 431 00:44:30,950 --> 00:44:32,490 Partner consensus. 432 00:44:32,510 --> 00:44:41,592 Again, it's not about getting consensus for the entire organization to completely rebuild itself and suddenly invest 50 or 100 million and 433 00:44:41,592 --> 00:44:44,223 building these 50 product high solutions. 434 00:44:44,423 --> 00:44:56,258 It's about trying to find the lowest barriers to entry, the biggest opportunities, the lowest hanging fruit to be able to just put one foot forward in this direction, prove that 435 00:44:56,258 --> 00:44:58,789 it can be done, prove that you can make a success with this. 436 00:44:58,789 --> 00:45:03,972 um Because if you don't do that, your competitors will. 437 00:45:03,972 --> 00:45:10,144 And your competitors are no longer just other law firms that currently deliver the services that you deliver. 438 00:45:10,592 --> 00:45:14,225 It's those specialist firms that are thinking about productizing. 439 00:45:14,225 --> 00:45:26,195 It's other technology companies that are starting to move into this space because technologists have got a sniff of the fact that AI can come and do this work that lawyers 440 00:45:26,195 --> 00:45:27,396 currently do. 441 00:45:27,396 --> 00:45:34,982 And they're partnering with lawyers to be able to build these new productized solutions outside of the firm's environment. 442 00:45:35,062 --> 00:45:36,934 So I completely agree with you. 443 00:45:36,934 --> 00:45:38,465 You can't stand still. 444 00:45:38,465 --> 00:45:40,240 You're just moving backwards if you do. 445 00:45:40,240 --> 00:45:43,111 Yeah, it's uh extremely risky. 446 00:45:43,672 --> 00:45:48,390 I do think too, and I know we're almost out of time, but I want to throw this one point out there. 447 00:45:48,390 --> 00:45:54,176 I am of the belief that um off the shelf tools are great as a starting point. 448 00:45:54,296 --> 00:45:58,798 And they're a necessary step in the process. 449 00:45:58,798 --> 00:46:04,000 But in most scenarios, off the shelf tools, you're bringing your data to AI. 450 00:46:04,720 --> 00:46:08,802 And the reality is you have so much data as a law firm. 451 00:46:09,305 --> 00:46:11,905 you're going to need to bring AI to your data. 452 00:46:12,005 --> 00:46:19,767 And that's going to have to happen through tech investment and leveraging solutions like Azure OpenAI. 453 00:46:19,767 --> 00:46:25,828 um I don't think that firms are going to be able to differentiate themselves with off the shelf tools. 454 00:46:25,828 --> 00:46:26,598 think they got it. 455 00:46:26,598 --> 00:46:28,408 They're secret sauce. 456 00:46:28,408 --> 00:46:31,509 It's all those successful contracts you negotiated. 457 00:46:31,809 --> 00:46:38,550 It's the terms and the deals that made your clients successful. 458 00:46:38,638 --> 00:46:43,127 on the other side of a transaction, that's your, that's going to be your moat. 459 00:46:43,127 --> 00:46:48,878 It's no longer going to just be your people and your brand um and your breath. 460 00:46:48,878 --> 00:46:49,678 Yeah. 461 00:46:50,574 --> 00:46:51,836 Couldn't agree more. 462 00:46:52,210 --> 00:47:00,277 um Well good, it's how do you, as we wrap up here before we do, how do people find out more about what you do? 463 00:47:01,902 --> 00:47:03,122 Ah, great question. 464 00:47:03,122 --> 00:47:04,122 Thanks Ted. 465 00:47:04,862 --> 00:47:06,622 So you can follow me on LinkedIn. 466 00:47:06,722 --> 00:47:12,502 I put out some content around some of the stuff that we've been talking about today. 467 00:47:14,102 --> 00:47:20,422 Equally, if you want to drop me an email, I'm alex at legaltechcollective.com. 468 00:47:20,782 --> 00:47:30,324 And the foundry that I mentioned earlier, which is the service that enables lawyers to productize their 469 00:47:30,324 --> 00:47:32,243 own expertise and services. 470 00:47:32,243 --> 00:47:36,318 That's at LTCFoundry.com. 471 00:47:37,222 --> 00:47:44,274 I think you're going to be a busy guy here soon because I don't know anyone who's doing what you're doing and there's a real need. 472 00:47:44,274 --> 00:47:48,912 Firms need help with this and it's not an easy task as you point out. 473 00:47:48,912 --> 00:47:51,105 So I wish you the best of luck. 474 00:47:52,398 --> 00:47:58,128 Thank you Ted and thank you for having me on today and looking forward to coming back again at some point in the future. 475 00:47:58,128 --> 00:47:59,200 Yeah, absolutely. 476 00:47:59,200 --> 00:48:00,704 All right, it was great talking to you. 477 00:48:00,704 --> 00:48:01,965 Thanks, Alex. 478 00:48:02,167 --> 00:48:03,769 All right, bye-bye. 00:00:04,143 Alex, how are you this afternoon? 2 00:00:05,336 --> 00:00:06,071 Good, thanks, Ty. 3 00:00:06,071 --> 00:00:06,736 Good to be here. 4 00:00:06,736 --> 00:00:07,881 Thanks, Hamil. 5 00:00:08,164 --> 00:00:10,875 Of guess it's afternoon your time. 6 00:00:10,875 --> 00:00:17,239 It's morning here in the US, but um I appreciate you joining, regardless. 7 00:00:17,239 --> 00:00:19,460 And um let's get you introduced. 8 00:00:19,460 --> 00:00:22,521 So you and I got connected on LinkedIn. 9 00:00:22,662 --> 00:00:24,283 We, I think, had some similar. 10 00:00:24,283 --> 00:00:37,870 I wrote an article about the uh Big Law 2.0 blueprint, and you had written an article somewhat similar-ish that we're going to talk more about in just a little bit. 11 00:00:38,379 --> 00:00:43,010 Tell our listeners kind of who you are, what you do, and where you do it. 12 00:00:43,726 --> 00:00:44,567 Yeah, thanks, Ted. 13 00:00:44,567 --> 00:00:55,406 So yeah, I've been working for AI companies for about 15 years and accidentally fell into the legal world in 2018. 14 00:00:55,817 --> 00:01:08,928 Since that point, I've grown a number of legal tech businesses and more recently started working with law firms building products to distribute and sell to their clients. 15 00:01:08,928 --> 00:01:11,606 So most recently, we 16 00:01:11,606 --> 00:01:20,874 as part of the Legal Tech Foundry, a new initiative that we launched at the start of this year, we help lawyers to build productized legal services. 17 00:01:20,874 --> 00:01:32,102 So we provide everything from the commercial expertise and experience to product development capabilities and where required, introductions to capital. 18 00:01:33,062 --> 00:01:39,724 Yeah, which is an option there in the UK with external capital, with the Legal Services Act here in the US. 19 00:01:39,724 --> 00:01:44,605 It's still um an emerging topic. 20 00:01:44,605 --> 00:01:59,409 We've got two states that have adopted alternative business structure rules, but we still have the ABA model rule 5-4 that prevents non-legal ownership of law firms here for 21 00:01:59,409 --> 00:02:02,510 independence, to keep lawyers independent. 22 00:02:03,802 --> 00:02:09,994 so for people listening, have a smirk on my face is as I say that I don't think that's why that rule exists at all. 23 00:02:09,994 --> 00:02:11,845 think it's protectionist. 24 00:02:12,845 --> 00:02:15,266 but anyway, that's neither here nor there. 25 00:02:15,266 --> 00:02:17,076 So, well, that's, that's super interesting. 26 00:02:17,076 --> 00:02:26,690 So, you know, the last time that you and I spoke, we talked about whether or not AI is a threat or an opportunity for legal. 27 00:02:26,690 --> 00:02:28,720 And the answer is it's both. 28 00:02:28,946 --> 00:02:36,257 Um, it really depends on how law firms respond to this transformation. 29 00:02:36,257 --> 00:02:43,968 Um, but we talked about boutique and specialist firms and how they might challenge big law in this transformation. 30 00:02:43,968 --> 00:02:45,570 Share your thoughts on that. 31 00:02:47,544 --> 00:02:56,677 Yeah, I mean, I think personally it is a massive opportunity for firms that can recognise it. 32 00:02:56,677 --> 00:03:12,541 And I think both Big Law and the more specialist firms have ah their own opportunities and challenges in realising uh the potential of this new technology. 33 00:03:12,541 --> 00:03:16,876 Big Law, of course, have the resources if they want to augment 34 00:03:16,876 --> 00:03:22,471 their delivery model to become more tech enabled. 35 00:03:22,471 --> 00:03:34,179 They have the ability, if they wish to pursue it, to be able to start to invest significant resources into building productized solutions. 36 00:03:34,180 --> 00:03:46,772 But through that same lens, they also have the challenges of a partnership model and needing to get consensus to pursue this 37 00:03:46,772 --> 00:03:49,644 new direction of travel, if you will. 38 00:03:50,084 --> 00:04:01,583 And then on the flip side, you know, looking at more specialist, more boutique firms, to a certain extent, if you're a specialist firm, you have already to a certain extent 39 00:04:01,583 --> 00:04:03,634 productized what you do. 40 00:04:03,634 --> 00:04:09,398 You provide a specific service to a specific type of client. 41 00:04:09,939 --> 00:04:15,294 It's just that you're currently providing the service through human capital. 42 00:04:15,294 --> 00:04:21,978 and there's an opportunity to again augment your service into a tech enabled delivery model. 43 00:04:23,319 --> 00:04:32,344 So I think that's obviously an opportunity for the more specialist firms that they have already to a certain extent productized. 44 00:04:33,285 --> 00:04:43,182 But at the same time, capital isn't quite as forthcoming for those organizations that may be turning over five, 10, 50 million, for example. 45 00:04:43,182 --> 00:04:54,940 to be able to invest one or two million into this transformation, it's a much bigger lift for firms that are operating at those sort of revenue numbers as opposed to big loss. 46 00:04:55,516 --> 00:04:56,327 Yeah. 47 00:04:56,327 --> 00:05:07,164 And you you, you, you mentioned the partnership model and I've written quite a bit on the topic and I'm a firm believer that the partnership model is an impediment. 48 00:05:07,164 --> 00:05:18,752 It's a big impediment, possibly the biggest impediment to this future state that we're heading towards that nobody has control over. 49 00:05:18,752 --> 00:05:22,804 Um, we're going there, whether you like it or not, it's happening. 50 00:05:22,885 --> 00:05:24,900 And the challenge with 51 00:05:24,900 --> 00:05:36,744 the partnership model, there are many, you highlighted one, consensus driven decision making really makes things difficult because it's hard to get consensus on certain 52 00:05:36,744 --> 00:05:37,124 matters. 53 00:05:37,124 --> 00:05:42,335 You have uh interests that are not always well aligned. 54 00:05:42,335 --> 00:05:52,238 You have retirement horizons from people who make very logical decisions on their willingness to invest in a long term solution that 55 00:05:52,252 --> 00:05:57,024 They might not be around for the break even um period. 56 00:05:57,024 --> 00:06:11,690 So, you know, those are challenges, but another really big one is the partnership models that operate on a cash basis accounting, prioritize short-term earnings, right? 57 00:06:11,690 --> 00:06:20,594 You're maximizing your year end bottom line in these organizations and 58 00:06:20,738 --> 00:06:30,714 Where we're headed is going to require some capital expense and some R &D and partnership models operating on a cash basis Really aren't set up for that. 59 00:06:30,714 --> 00:06:34,026 The concept of R &D doesn't really exist in law firms. 60 00:06:34,026 --> 00:06:35,146 Do you agree? 61 00:06:37,038 --> 00:06:52,384 ah I mean, you could look at the investment the firms are making into innovation teams, number of firms already building productized solutions. 62 00:06:52,384 --> 00:06:59,327 But I have also a certain amount of sympathy for everything you just mentioned. 63 00:06:59,327 --> 00:07:07,070 It's a big ask if someone is approaching retirement and effectively your ask is 64 00:07:07,304 --> 00:07:18,118 disrupt the entire business model and business that you might have spent your career or perhaps even a decade building. 65 00:07:19,339 --> 00:07:34,155 added to that, if these senior executives within these law firms have earned a uh reasonable income over the last few years that they've been working and contributing to 66 00:07:34,155 --> 00:07:36,898 the firm, it's an even bigger ask. 67 00:07:36,898 --> 00:07:48,344 because there's no monetary driver really that is creating this existential threat that they should go and facilitate and help facilitate this change. 68 00:07:48,344 --> 00:07:59,210 So I do have a certain amount of sympathy for the challenges that those firms and the partners in them face. 69 00:07:59,790 --> 00:08:06,826 I also have a huge amount of sympathy for those that are 70 00:08:06,826 --> 00:08:16,472 new partners in this model and believe that this is the future of law and this is the future of legal. 71 00:08:16,472 --> 00:08:33,292 But they're currently hampered to pursue that vision that they might have around how to deliver a better quality, better client experience to their clients. 72 00:08:34,534 --> 00:08:35,684 I don't disagree with that. 73 00:08:35,684 --> 00:08:38,995 It is a big ask, but a necessary one. 74 00:08:39,236 --> 00:08:52,159 And how firms go about accommodating the scenarios that you describe is going to ultimately be the deciding factor on how much support they get. 75 00:08:52,600 --> 00:09:00,702 Because it's not an easy, just abandoning an existing business model. 76 00:09:01,394 --> 00:09:05,874 that's been very profitable and resilient for decades. 77 00:09:05,874 --> 00:09:11,854 mean, Big Law has withstood so many potential disruptions. 78 00:09:12,454 --> 00:09:21,934 You know, I remember when digital research came online and that was going to completely change everything and e-discovery and the cloud. 79 00:09:21,934 --> 00:09:31,294 And there's been a lot of, there's been a lot of disrupting forces making its way through the legal industry, but nothing like this. 80 00:09:31,294 --> 00:09:47,332 And um it's going to be interesting to see how these firms create a future state, define a future state, and then map out a path to get from where they are today to that future 81 00:09:47,332 --> 00:09:47,713 state. 82 00:09:47,713 --> 00:09:51,217 I think that's where the success or the failure happens. 83 00:09:52,748 --> 00:09:53,358 Agreed. 84 00:09:53,358 --> 00:10:03,681 And going back to what you were saying earlier, it's also to a certain extent how much they recognize that this is an opportunity and how willing they are to take action. 85 00:10:03,681 --> 00:10:11,903 And by take action, I mean invest in building for this future state, this and realizing this opportunity. 86 00:10:12,163 --> 00:10:22,326 And, you know, just to tie this to some of what we've been talking about, if you as an organization, as a firm, 87 00:10:22,326 --> 00:10:26,749 as a full service firm believe in this direction of travel. 88 00:10:26,749 --> 00:10:29,850 Let's just put the partner consensus to one side for a moment. 89 00:10:30,031 --> 00:10:43,188 If you do believe in this direction of travel, you are effectively having to rebuild every practice area and every service that you provide to every different type of client that 90 00:10:43,188 --> 00:10:46,840 you currently service from the ground up. 91 00:10:47,341 --> 00:10:49,702 It's like trying to build 92 00:10:49,870 --> 00:10:55,233 10, 15, 20, 50 startups all at the same time. 93 00:10:55,774 --> 00:10:57,595 Building one is difficult. 94 00:10:58,216 --> 00:11:08,983 Building 50, that's a huge lift, particularly for those that have very little experience in doing so. 95 00:11:09,344 --> 00:11:18,080 So I think this is where there is a potential advantage for the mid-market and SME firms, the specialist firms that 96 00:11:18,178 --> 00:11:20,419 focus on one very specific area. 97 00:11:20,639 --> 00:11:25,821 If you think about like some of the most successful technology companies, I mean, where did they start? 98 00:11:25,821 --> 00:11:32,374 They started in very specific areas before they became the behemoths that they are today. 99 00:11:32,374 --> 00:11:37,256 Think about Airbnb and renting out rooms in San Francisco. 100 00:11:37,256 --> 00:11:40,807 Think about Uber and private limos. 101 00:11:40,807 --> 00:11:42,908 Think about Amazon secondhand books. 102 00:11:42,908 --> 00:11:47,270 know, they're all, they all start in a very focused and specific niche. 103 00:11:47,370 --> 00:11:48,140 So 104 00:11:48,140 --> 00:11:53,456 I think that's one of the challenges that big law faces, perhaps the biggest one. 105 00:11:53,456 --> 00:11:54,086 Yeah. 106 00:11:54,086 --> 00:11:56,317 And you know, there are some very big law firms here. 107 00:11:56,317 --> 00:12:07,350 I don't know if this is true in the UK, but here in the U S there are a few practice areas where you will get am law sized firms that just really practice in one area. 108 00:12:07,350 --> 00:12:13,752 Um, and maybe some very closely aligned adjacent practice areas. 109 00:12:13,752 --> 00:12:16,732 Like a good example is late as labor and employment. 110 00:12:16,732 --> 00:12:23,074 So, um, Eleni here in the U S there's at least five. 111 00:12:23,332 --> 00:12:28,623 or six firms with more than five, 600 attorneys. 112 00:12:28,623 --> 00:12:31,264 Several of them are clients of ours and great clients. 113 00:12:31,264 --> 00:12:39,066 um And I would say there's probably three or four that have over a thousand attorneys that just do L and E work. 114 00:12:39,066 --> 00:12:45,148 um Another area, um intellectual property. 115 00:12:45,148 --> 00:12:52,540 You've got several intellectual property firms that are am law level revenue, and they just really focus on one thing. 116 00:12:52,540 --> 00:12:55,393 But that's the exception to your point. 117 00:12:55,393 --> 00:13:01,878 Most of the AMLaw firms have a very wide breadth and they practice in a number of areas. 118 00:13:02,479 --> 00:13:12,207 And to a large extent, that's been part of their selling proposition is, you know, we're a one-stop shop for your legal needs. 119 00:13:12,408 --> 00:13:17,753 And that has, that comes with opportunities and challenges. 120 00:13:17,753 --> 00:13:19,494 Now we're starting to see 121 00:13:20,254 --> 00:13:31,227 to your point, some of the challenges when you have to transform the business and you've got all of these different practice areas that operate just like little businesses on 122 00:13:31,227 --> 00:13:31,897 their own. 123 00:13:31,897 --> 00:13:41,510 And in fact, I'd say even one level below that, the actual attorneys within the practice operate like their own little business on its own. 124 00:13:41,510 --> 00:13:43,740 They kind of have their own conventions. 125 00:13:43,921 --> 00:13:49,662 Many have their own model documents they use as starting points. 126 00:13:49,926 --> 00:14:00,436 They have their own conventions around how or how not they check documents into the DMS, how they write narratives. 127 00:14:00,436 --> 00:14:07,323 I know there's been a lot of attempt in Big Law to kind of standardize some of these things, but I still see a lot of uh variability in that. 128 00:14:07,323 --> 00:14:10,746 So yeah, it definitely presents a challenge. 129 00:14:11,480 --> 00:14:12,915 Yeah, I would agree with that. 130 00:14:15,326 --> 00:14:19,528 It's not to say that Big Law can't move in this direction. 131 00:14:19,528 --> 00:14:33,313 And I think for any full service firms that are thinking about this and thinking about this as an opportunity, you don't have to build all of those 50 startups all at once. 132 00:14:33,474 --> 00:14:44,224 You can dip your toe in the water and look for the lowest hanging fruit in relation to where productization really makes sense. 133 00:14:44,224 --> 00:14:54,300 where can you deliver exponentially more value by bringing technology into this specific practice area or this specific service? 134 00:14:55,382 --> 00:15:04,068 And how does that enable you to capture more of the market or that market in which you're operating already? 135 00:15:04,068 --> 00:15:12,133 Or how does it enable you to provide significantly more value to that type of client for that type of service? 136 00:15:12,133 --> 00:15:14,214 m 137 00:15:14,388 --> 00:15:23,670 That is a good starting point rather than trying to think about this as we've got to eat the entire elephant all at once. 138 00:15:24,912 --> 00:15:26,483 Yeah, great point. 139 00:15:26,483 --> 00:15:40,455 um I had an article, you made a comment on it, so I'm assuming you saw it just this morning about Big Law 2.0, which is essentially future state post AI. 140 00:15:40,595 --> 00:15:51,244 And one of the um items that I outlined is like, all right, so what should firms be thinking about for the future? 141 00:15:51,385 --> 00:15:53,566 And it's really 142 00:15:53,604 --> 00:15:57,615 aligning incentives, I think was the first bullet in that. 143 00:15:57,615 --> 00:16:04,337 that's, you know, reward fee earners for, for documented efficiencies and client facing innovation, not just ours build. 144 00:16:04,337 --> 00:16:17,571 Like let the, this almost has to be, you know, a combination of central expertise, like knowledge management, innovation, and, and, and usually that's where AI lives, at least in 145 00:16:17,571 --> 00:16:21,720 the U S um, those concentrated 146 00:16:21,720 --> 00:16:29,698 centers of excellence and then on the front lines the actual fee earners themselves it's going to be a collaboration. 147 00:16:29,698 --> 00:16:36,565 um The back office functions can't do it on their own and neither can the front line in the practice. 148 00:16:36,565 --> 00:16:45,263 It really has to be a collaboration and a multi-disciplinary effort in order to figure out how to do this effectively. 149 00:16:45,263 --> 00:16:46,414 Would you agree? 150 00:16:47,180 --> 00:16:48,040 Yeah, completely. 151 00:16:48,040 --> 00:16:48,890 there's two things. 152 00:16:48,890 --> 00:16:52,171 I mean, I picked up on something you said about two points on this. 153 00:16:52,171 --> 00:16:54,912 One is like, where does AI live? 154 00:16:55,172 --> 00:17:07,585 And I think, I say, I'm about to use the word historically, but we're talking about the last couple of years, so historically seems a bit grander term, but historically, I think 155 00:17:07,585 --> 00:17:10,676 AI has been looked at across the firm. 156 00:17:11,357 --> 00:17:17,268 What solutions can we procure that is going to help our organization? 157 00:17:17,666 --> 00:17:32,042 But the actual way in which AI is being used and the way that it can create value and the way it gets deployed is going to be dramatically different for an &A practice as it is to 158 00:17:32,042 --> 00:17:33,513 an employment practice. 159 00:17:33,513 --> 00:17:47,148 So this is where I think there's perhaps more ownership that we're going to see from individual practice areas and business owners, business area owners around 160 00:17:47,340 --> 00:17:58,717 how they can utilize and build solutions specifically for the services that they're providing to clients of the firm. 161 00:17:59,138 --> 00:18:14,088 So I think for me, that's one question mark that I have in relation to how we're going to see AI ownership changing, moving forwards. 162 00:18:14,088 --> 00:18:16,790 The other point I was going to say is that 163 00:18:17,400 --> 00:18:28,973 For anyone that is thinking about going on this journey, I think it's really about trying to identify that lowest hanging fruit, right? 164 00:18:28,973 --> 00:18:42,897 So where is there low margin work that is done to a degree of repeatability that ultimately can be productized? 165 00:18:43,317 --> 00:18:46,670 We shouldn't start trying to think about the 166 00:18:46,670 --> 00:18:50,350 most difficult problems to solve. 167 00:18:50,350 --> 00:19:03,870 The technology is capable of doing most of the things that a lawyer does, but the real challenge is trying to define the decision matrix and the judgment that needs to be fed 168 00:19:03,870 --> 00:19:09,110 into a system to be able to replicate the work that a lawyer is doing. 169 00:19:09,430 --> 00:19:12,266 And so if I was 170 00:19:12,266 --> 00:19:24,743 a lawyer at a firm and I was doing something over and over again and there was an element of repeatability and the market that I served, not just the clientele that I have within 171 00:19:24,743 --> 00:19:40,302 my firm, but the market that I served was big and broad enough that there was an opportunity to serve a much wider segment of the market by providing a 172 00:19:40,536 --> 00:19:49,232 tech enabled service that is delivered a much more efficient and effective rate to the end client. 173 00:19:49,774 --> 00:19:54,208 That's where I'd be thinking about where should I be productizing? 174 00:19:54,208 --> 00:19:59,122 Where can I start this journey and then start to move up the value chain from there? 175 00:19:59,856 --> 00:20:13,060 Yeah, you know, it's a good point about the centralization versus, you know, kind of more distributed model here in the U S I don't know what the ratio is, but there are a good 176 00:20:13,060 --> 00:20:18,931 chunk of firms who have KM attorneys aligned specific to certain practice areas. 177 00:20:19,031 --> 00:20:19,358 Right. 178 00:20:19,358 --> 00:20:22,572 So you'll have labor and employment, KM attorneys, right? 179 00:20:22,572 --> 00:20:27,734 They understand how the practice functions at a detailed level. 180 00:20:27,734 --> 00:20:29,494 And I think that model. 181 00:20:30,370 --> 00:20:35,112 works really well because you kind of have your foot, one foot in both areas. 182 00:20:35,112 --> 00:20:48,659 You have one foot in the practice and you have one foot in knowledge management and innovation and bridging that gap is going to be key in figuring out a path forward and 183 00:20:48,659 --> 00:20:54,642 understanding all the nuance that has to be understood in order to have success. 184 00:20:55,746 --> 00:21:08,011 Yeah, I mean, going going back to the article that you wrote earlier today in relation to the investment that's going into KM and innovation versus profitability of the firms. 185 00:21:08,752 --> 00:21:20,977 My comment to this was, is there enough being invested to make a material difference and impact in relation to the size of the firms in question? 186 00:21:20,977 --> 00:21:22,994 I don't know if you've got an opinion on that. 187 00:21:22,994 --> 00:21:24,514 Yeah, that's a really good question. 188 00:21:24,514 --> 00:21:28,234 And I saw you, I saw you post it and I haven't had a chance to respond. 189 00:21:28,234 --> 00:21:29,674 That is a really good question. 190 00:21:29,674 --> 00:21:38,114 So just to be candid, there are a lot of curve balls with this analysis. 191 00:21:38,114 --> 00:21:41,354 Like this was a very quick and dirty. 192 00:21:41,434 --> 00:21:51,574 I basically took the AmLaw 100 list and I had my assistant go in and every firm in Ilta has a unique ID. 193 00:21:51,574 --> 00:21:52,732 I had her 194 00:21:52,732 --> 00:21:54,023 populate those unique IDs. 195 00:21:54,023 --> 00:22:02,086 And then I loaded the Ilta roster up in SQL and searched for any roles that had KM, innovation or knowledge in the title. 196 00:22:02,086 --> 00:22:14,821 And I got a nice little count and then plotted that out on a scatterplot and said, okay, is there a relationship between KM and I investment using headcount as a proxy, which I 197 00:22:14,821 --> 00:22:16,432 think is actually a pretty good proxy. 198 00:22:16,432 --> 00:22:22,684 um Law firms biggest expense is people by a huge margin and yes, 199 00:22:22,684 --> 00:22:36,543 there, there, especially lately, there is systems and platforms that, require investment, but people have to manage and you have to have someone there to help manage and deploy. 200 00:22:36,574 --> 00:22:43,969 I think people are a pretty good proxy for overall, um, KMNI investment. 201 00:22:44,149 --> 00:22:51,314 And there are so many variables to consider, you know, including like sometimes firms 202 00:22:51,546 --> 00:22:54,387 engage in KM activities, but they call it something else. 203 00:22:54,387 --> 00:22:58,769 You know, they'll call it practice innovation instead of KM or knowledge. 204 00:22:58,769 --> 00:23:00,530 There it's, it's so interesting. 205 00:23:00,530 --> 00:23:06,722 There is like a, at some firms, there is a cultural resistance to knowledge management. 206 00:23:06,722 --> 00:23:14,195 Like they don't want it called that, but they, they value the activities that take place in that function. 207 00:23:14,195 --> 00:23:15,696 So they call it something else. 208 00:23:15,696 --> 00:23:18,637 And it's above my pay grade to understand that dynamic. 209 00:23:18,637 --> 00:23:19,378 really don't. 210 00:23:19,378 --> 00:23:20,798 Um, 211 00:23:20,806 --> 00:23:30,230 But it was really interesting to see that there is almost zero relationship between the size of a firm's KM &I team and their profitability. 212 00:23:30,230 --> 00:23:35,592 I naively went into it thinking, there's got to be some correlation. 213 00:23:35,592 --> 00:23:39,394 And then after I saw it and I stared at it, I'm like, why is there not? 214 00:23:39,394 --> 00:23:45,796 It's like, duh, there's all sorts of reasons. 215 00:23:46,897 --> 00:23:48,157 And you just pointed one out. 216 00:23:48,157 --> 00:23:49,418 I mean, that's a very fair. 217 00:23:49,418 --> 00:23:50,610 um 218 00:23:50,610 --> 00:23:51,110 assessment. 219 00:23:51,110 --> 00:23:53,010 mean, all those firms are Amlaw 100. 220 00:23:53,010 --> 00:24:06,450 So they're going to have, so the Amlaw 100 ranges in revenue in the U S from about at the high end at seven, seven and a half billion on the low end. 221 00:24:06,550 --> 00:24:11,330 It's, I would have to say it's probably 700 million U S. 222 00:24:11,370 --> 00:24:18,710 So yeah, there's a 10 X variation in revenue from the top of the Amlaw 100 to the bottom. 223 00:24:19,010 --> 00:24:20,010 Um, 224 00:24:20,156 --> 00:24:23,974 but it's still in the real close to the billions. 225 00:24:23,974 --> 00:24:27,950 um So anyway, yeah, that's a good point. 226 00:24:27,950 --> 00:24:36,021 But I love the framework of the analysis that you've done there. 227 00:24:36,021 --> 00:24:52,767 I think what I started to think about when I read your article was what is it the firms would require in order to capitalize on this opportunity if, again, they get over the 228 00:24:52,767 --> 00:24:56,214 partner consensus piece and they believe that this is 229 00:24:56,214 --> 00:24:58,495 the future of where their firm should be going. 230 00:24:58,656 --> 00:25:09,925 And I think the challenge for most is that they don't have sufficient resource to even dip their toe in the water in many instances, right? 231 00:25:09,925 --> 00:25:21,194 Like all bar the biggest firms on the planet have significant internal development resources from a product development standpoint, right? 232 00:25:21,194 --> 00:25:25,922 Like AI analysts, uh 233 00:25:25,922 --> 00:25:33,225 technology teams that can actually build and develop applications. 234 00:25:33,505 --> 00:25:47,081 They have a marketing function, which is great, but that marketing function is typically skilled and equipped to market a professional services business, not a software business, 235 00:25:47,081 --> 00:25:50,932 which is kind what we're talking about here. 236 00:25:50,933 --> 00:25:54,706 So if firms are going on that journey, 237 00:25:54,706 --> 00:26:09,638 or want to go on that journey, I think there's going to be significant investments that need to be made in order to conduct that, I mean, to your point earlier, R &D required to 238 00:26:09,638 --> 00:26:10,519 get them there. 239 00:26:10,519 --> 00:26:24,524 And once those new service models and products are developed, you then need the expertise to be able to sell those new services to your clients and 240 00:26:24,524 --> 00:26:36,138 beyond your clients to capture more of that market if that's the plan, which it is for most of the firms that are already going down this path. 241 00:26:36,138 --> 00:26:42,220 Yeah, and while we were while you were talking there, I looked and I was off by a couple hundred million. 242 00:26:42,220 --> 00:26:47,222 So at the bottom of the the floor of the AMLO 100, it's about 500 million. 243 00:26:47,222 --> 00:26:58,342 um Things drop off quickly from uh in that bottom quartile of the of the AMLO that goes from it's about a 20 % 30 % drop. 244 00:26:58,396 --> 00:27:08,874 But anyway, your point about um R &D and resources, you know what's interesting is law firms historically have had, it's a foreign concept. 245 00:27:08,874 --> 00:27:24,486 There's not been, like people are generally, um I would have to guess that the KM &I teams at large law firms, their efforts aren't being, 246 00:27:25,222 --> 00:27:32,757 Um, and their expenses aren't being amortized over some useful life of whatever it is that they're working on. 247 00:27:32,757 --> 00:27:34,689 That's how this is how it works in the U S. 248 00:27:34,689 --> 00:27:43,014 So as a product company, anytime that my team spends on product development, I have to bucket that separately. 249 00:27:43,014 --> 00:27:49,859 Then I do when they work on a client engagement where we're implementing or customizing for them. 250 00:27:49,859 --> 00:27:54,704 And that bucket of hours has to get treated as R and D and we have to amortize. 251 00:27:54,704 --> 00:27:55,344 the expense. 252 00:27:55,344 --> 00:28:09,450 So even though we're out of pocket $3 million in labor, I can only deduct, let's say 300,000 of that um each year, which really hurts me from a cashflow perspective because 253 00:28:09,450 --> 00:28:21,536 I'm paying tax on money that I've already spent, which is a real problem in the U S there's a lot of, there's a lot of friction around this and how anti-innovative these 254 00:28:21,536 --> 00:28:22,534 rules are. 255 00:28:22,534 --> 00:28:26,618 Because as a product company, if I spend the money, I should be able to expense it. 256 00:28:26,618 --> 00:28:35,026 And Trump just extended what's called bonus depreciation or expanded bonus depreciation here in the US. 257 00:28:35,026 --> 00:28:37,068 It's called Section 179. 258 00:28:37,068 --> 00:28:40,090 But law firms don't do that. 259 00:28:40,090 --> 00:28:42,513 um I would have to assume. 260 00:28:42,513 --> 00:28:48,368 never seen or heard of a law firm that has allocated 261 00:28:49,174 --> 00:28:50,376 And I could be wrong about this. 262 00:28:50,376 --> 00:29:03,170 And if so, I'd love for my listeners to let me know um where their employees' time is allocated in an R &D capacity where that expense is amortized over some useful life. 263 00:29:03,170 --> 00:29:07,364 It's possible, but it seems counterintuitive to me. 264 00:29:07,948 --> 00:29:18,325 Yeah, well, I'm not going to begin to pretend to understand the intricacies of that and whether or not any firms have gone down that path. 265 00:29:18,325 --> 00:29:33,836 But I think what it does illustrate is an added layer of complexity to pursuing this direction of travel, which only goes to the reason why it is a hard path to go down. 266 00:29:33,836 --> 00:29:37,934 We're talking here about how accounting 267 00:29:37,934 --> 00:29:43,399 for your staff hours is different if you're going to go and build productized services. 268 00:29:43,399 --> 00:29:50,285 We've just talked about how you need to market and sell these new services in a different way. 269 00:29:50,285 --> 00:29:58,191 The need for different skills and expertise and experience to be able to go and create these new services. 270 00:29:58,191 --> 00:30:06,472 So it is a big lift, but that's why we believe that we want to provide that 271 00:30:06,472 --> 00:30:21,233 sandbox that opportunity to dip your toe in the water to make some of those low hanging fruits of success to showcase to the rest of the organization that this is possible. 272 00:30:21,233 --> 00:30:22,913 This can be done. 273 00:30:23,854 --> 00:30:34,302 then our hope is that, like I said, that then opens up more opportunities to start productizing some of the more complex areas of the work that some of these firms are 274 00:30:34,302 --> 00:30:35,066 doing. 275 00:30:35,066 --> 00:30:35,587 Yeah. 276 00:30:35,587 --> 00:30:43,193 And you know, what's interesting is in the world of consulting, they have the same issue, right? 277 00:30:43,193 --> 00:30:50,059 They're under the same threats and they largely operate on a cash basis. 278 00:30:50,520 --> 00:30:57,566 And they also have consensus driven decision making to contend with, and they're also being completely disrupted by AI. 279 00:30:57,566 --> 00:31:01,889 um I think it's been overstated actually. 280 00:31:02,906 --> 00:31:07,149 I bang around on deep research across all the platforms a lot. 281 00:31:07,149 --> 00:31:08,750 It is such a fun. 282 00:31:08,750 --> 00:31:09,611 really enjoy it. 283 00:31:09,611 --> 00:31:19,678 um I use it to help prep for writing articles that, and you know, it does some of the research work for me and I can kind of pull it together. 284 00:31:19,678 --> 00:31:25,782 But um yeah, know, consulting has these same challenges and they're under a similar disruption. 285 00:31:25,782 --> 00:31:31,166 um So it's going to be interesting to see how they approach it. 286 00:31:32,120 --> 00:31:38,752 Well, we are, I we are a consulting business, but we are eating our own dog food. 287 00:31:38,812 --> 00:31:49,955 So one of the things I spent quite a lot of time ah working on with our clients is, is this a commercially viable opportunity? 288 00:31:50,095 --> 00:31:54,176 Should you actually go and build something in this space? 289 00:31:54,256 --> 00:32:00,838 You come up with an idea and there've been a number of firms that I've worked with that have invested uh 290 00:32:00,974 --> 00:32:13,214 not insignificant amount of money in building solutions before they really truly define the problem and the value of the problem and how much of the market is experiencing this 291 00:32:13,214 --> 00:32:27,774 problem and frankly put together a really clear business plan around how we're going to create not just this product but this business because it is a business in its own right 292 00:32:27,774 --> 00:32:29,670 it's a startup within the firm. 293 00:32:31,106 --> 00:32:42,809 And so rather than in the traditional consulting way that this might be done, getting on a call, talking through some of these things, doing some workshops, trying to plan this 294 00:32:42,809 --> 00:32:56,523 stuff out, we're productizing our own knowledge into a platform called Viable, which will enable a lawyer to come in and feed in their ideas, feed in their thinking, and in a 295 00:32:56,523 --> 00:32:59,434 structured way will help get them to a point of 296 00:32:59,596 --> 00:33:14,100 building out a business case in minutes rather than many, many hours of trying to think through and research the market around this particular problem and see whether or not 297 00:33:14,100 --> 00:33:15,890 anyone's already solved it. 298 00:33:15,911 --> 00:33:19,852 I'm still blown away by the number of people that come to us with an idea. 299 00:33:19,852 --> 00:33:26,814 And for a quick Google, you can already show them five or six solutions that already solve the problem for them. 300 00:33:26,814 --> 00:33:28,874 But I mean, back to the original point, 301 00:33:29,410 --> 00:33:31,192 consulting is being impacted. 302 00:33:31,192 --> 00:33:42,546 And that's exactly why we're building our own productized services so that we can make them more accessible to anyone that is thinking about going down this path. 303 00:33:42,640 --> 00:33:42,940 Yeah. 304 00:33:42,940 --> 00:33:44,791 And you're rewarded for that. 305 00:33:45,132 --> 00:33:50,416 former consulting guy here, Acrowire is the predecessor company to InfoDash. 306 00:33:50,416 --> 00:33:53,338 We were a time and materials consulting organization. 307 00:33:53,338 --> 00:34:03,064 And had we sold, we would have sold for three to four times EBITDA, basically net profit. 308 00:34:03,265 --> 00:34:11,600 And as a product company, if we were, you know, this varies based on timing, but right now the multiples are five to eight times revenue. 309 00:34:11,886 --> 00:34:17,570 So to put that in perspective, let's say you're a $10 million company with 20 % EBITDA. 310 00:34:17,570 --> 00:34:22,473 So you make $2 million a year, bottom line, and you're $10 million a year company. 311 00:34:22,473 --> 00:34:27,076 If you're a consulting company, you're going to sell for roughly $6 to $8 million. 312 00:34:27,756 --> 00:34:33,161 If you're a product company, you're going to sell it at $50 to $80 million. 313 00:34:33,161 --> 00:34:36,883 That's quite the delta. 314 00:34:36,883 --> 00:34:39,034 So there is a huge reward. 315 00:34:39,034 --> 00:34:41,616 And the reason is because you can scale. 316 00:34:41,616 --> 00:34:44,114 You can scale product. 317 00:34:44,137 --> 00:34:46,041 It's really hard to scale people. 318 00:34:48,382 --> 00:34:49,202 Absolutely. 319 00:34:49,202 --> 00:34:49,903 Absolutely. 320 00:34:49,903 --> 00:35:04,034 And I think, you know, it starts to make that investment of one, two, three, five million, all the more attractive, right? 321 00:35:04,354 --> 00:35:15,223 If you can multiply the value of your business by five to 10x overnight, quite overnight, but take the point. 322 00:35:16,825 --> 00:35:18,226 Why wouldn't you do that? 323 00:35:19,196 --> 00:35:20,016 Yeah. 324 00:35:20,016 --> 00:35:22,647 And a few million dollars is a drop in the bucket. 325 00:35:22,647 --> 00:35:28,149 mean, you know, that's nothing for to get a startup off the ground. 326 00:35:28,149 --> 00:35:40,252 So, you know, I think it's going to come down to like the, the, the blueprint article I wrote, I kind of just mapped out a, I don't, can't remember if I specified a number, but 327 00:35:40,252 --> 00:35:44,683 the thinking was take your existing legacy model. 328 00:35:44,683 --> 00:35:47,174 And that's what the current, 329 00:35:48,206 --> 00:35:50,486 law firm model is, it's legacy. 330 00:35:50,627 --> 00:35:53,167 Not everybody knows it yet, but it is. 331 00:35:53,167 --> 00:36:11,472 So take that legacy model that's throwing off cash and set a portion aside to fund a completely separate entity, uh a C corp that doesn't have the partnership constraints and 332 00:36:11,472 --> 00:36:17,968 fund the R &D to build the intellectual property needed to 333 00:36:17,968 --> 00:36:20,900 deliver services in a tech enabled way. 334 00:36:21,221 --> 00:36:26,405 And you can leverage your talent from your existing legacy business. 335 00:36:26,405 --> 00:36:35,342 can um leverage your capital and your market presence and your brand, um your existing book of business. 336 00:36:35,342 --> 00:36:36,423 It's a great way. 337 00:36:36,423 --> 00:36:40,617 mean, again, I did it with Acrowire to InfoDash. 338 00:36:40,617 --> 00:36:41,978 I did the same thing. 339 00:36:41,978 --> 00:36:47,571 I essentially transitioned out of consulting and into product. 340 00:36:47,571 --> 00:36:49,276 And it worked out. 341 00:36:49,276 --> 00:36:51,622 um It worked out really well. 342 00:36:51,625 --> 00:36:53,150 So there's a lot of parallels there. 343 00:36:53,150 --> 00:36:54,863 I'm a fan of the approach. 344 00:36:55,864 --> 00:36:58,632 Well, Ted, you obviously have the foresight to do that. 345 00:36:58,632 --> 00:37:03,174 What were some of the challenges you had in making that transition? 346 00:37:03,482 --> 00:37:10,544 Yeah, so you know what the biggest challenge working with law firms was their willingness to assign the IP. 347 00:37:10,544 --> 00:37:20,347 So what we did was um we started with a few of our existing clients and said, look, we're going to build a product out of what we're doing for you. 348 00:37:20,347 --> 00:37:22,747 And we're going to give you a discounted rate to do it. 349 00:37:22,747 --> 00:37:26,248 But in return, you got to give us ownership rights over the IP. 350 00:37:26,248 --> 00:37:28,329 And that was such a hard sell. 351 00:37:28,689 --> 00:37:29,889 you know why? 352 00:37:29,889 --> 00:37:31,790 Because this is what lawyers are trained to do. 353 00:37:31,790 --> 00:37:33,230 They're trained to 354 00:37:33,244 --> 00:37:34,995 There's a certain amount of chips on the table. 355 00:37:34,995 --> 00:37:37,877 I want as many of those chips on my side. 356 00:37:37,877 --> 00:37:40,998 And if I have more than you at the end, then that's a win. 357 00:37:40,998 --> 00:37:43,910 And the reality is I really had to appeal to logic. 358 00:37:43,910 --> 00:37:46,421 Like the GCs, they didn't get it. 359 00:37:46,421 --> 00:37:51,324 I had to appeal to my stakeholders on the inside and say, look, here's the advantage for you. 360 00:37:51,324 --> 00:37:54,756 Instead of starting, I'm going to use an American football analogy. 361 00:37:54,756 --> 00:37:55,656 Maybe it makes sense. 362 00:37:55,656 --> 00:37:56,907 Maybe it doesn't. 363 00:37:56,987 --> 00:38:03,170 Instead of starting two yards deep in your own end zone, I'm going to start you off on your opponent's 20 yard line. 364 00:38:03,334 --> 00:38:05,936 So you're going to get tremendous benefit from that. 365 00:38:05,936 --> 00:38:07,701 And you're to help me shape the product. 366 00:38:07,701 --> 00:38:11,808 But you have to transfer ownership rights to me. 367 00:38:11,808 --> 00:38:13,040 That was the biggest challenge. 368 00:38:13,040 --> 00:38:14,052 And it was a big one. 369 00:38:14,052 --> 00:38:15,884 um But we got through it. 370 00:38:17,518 --> 00:38:25,051 Great, any tips to anyone that's thinking about pursuing the same path as to how to navigate that? 371 00:38:25,051 --> 00:38:26,471 that's a really good question. 372 00:38:26,471 --> 00:38:46,136 um I would say that do things incrementally and have a really good plan on how you don't turn the lights off on your revenue hose too soon before your new business becomes revenue 373 00:38:46,136 --> 00:38:49,017 generating and can stand on its own. 374 00:38:49,017 --> 00:38:52,272 That is a tricky thing uh to do. 375 00:38:52,272 --> 00:39:01,426 Like we had legacy clients who weren't like in our wheelhouse, you know, maybe smaller law firms or law firms that didn't want to want our new product. 376 00:39:01,426 --> 00:39:09,189 Um, for whatever reason, um, they love the custom dev stuff that we built for them, let's say. 377 00:39:09,269 --> 00:39:16,957 And we had, but eventually we did have to turn them off and just say, Hey, we can't, if you're not leveraging our product, it doesn't make sense. 378 00:39:16,957 --> 00:39:20,324 It doesn't align with our, our current state and 379 00:39:20,656 --> 00:39:23,555 But doing that too soon will really bite you. 380 00:39:26,104 --> 00:39:33,406 Yeah, I think you've touched on yet another challenge for lawyers, right? 381 00:39:33,406 --> 00:39:48,961 If you're busy working a 60 to 80 hour week and you've been trained throughout your career to avoid risk and you've got this idea but you're also aware of the fact that A, you've 382 00:39:48,961 --> 00:39:53,402 got no bandwidth because you're continuously delivering on 383 00:39:53,487 --> 00:39:57,087 the existing services that you're currently providing. 384 00:39:57,527 --> 00:40:02,647 But secondarily to that, startups are risky. 385 00:40:03,087 --> 00:40:05,867 They're a risky space to play in, right? 386 00:40:05,867 --> 00:40:10,847 I think it's something like less than 5 % of startups actually succeed. 387 00:40:11,007 --> 00:40:23,687 So you've now got a time poor risk averse individual that is looking at the opportunity of building a tech enabled service, effectively a startup. 388 00:40:24,020 --> 00:40:28,453 And scratching their heads about, I really be doing this? 389 00:40:29,194 --> 00:40:32,096 Is this really where I should be playing? 390 00:40:32,137 --> 00:40:46,128 And I think we're to see more and more people starting to recognize that the threat of inaction is greater than that of the risk of trying to pursue this new direction of 391 00:40:46,128 --> 00:40:46,498 travel. 392 00:40:46,498 --> 00:40:47,429 Maybe it will work out. 393 00:40:47,429 --> 00:40:48,650 Maybe it won't. 394 00:40:48,650 --> 00:40:54,214 But even if it doesn't, you'll learn so much along the way that um 395 00:40:54,584 --> 00:41:05,517 frankly, for me, you have to go and explore even to the smallest extent, the smallest degree. 396 00:41:05,937 --> 00:41:23,152 And I think if you are thinking about this as an opportunity, you don't have to invest hundreds of thousands of dollars or millions of dollars to go and explore what a new 397 00:41:23,152 --> 00:41:24,588 business might look like. 398 00:41:24,588 --> 00:41:34,490 You can do it far cheaper than that by talking to your clients about this idea, about this productized service and take it from there. 399 00:41:34,490 --> 00:41:41,728 You'll get some great learnings just from having those conversations about whether or not this is something that you should go to. 400 00:41:41,874 --> 00:41:45,214 Yeah, you know, it's interesting. 401 00:41:45,274 --> 00:41:48,354 I don't think law firms have a choice. 402 00:41:49,314 --> 00:41:54,394 I think that, and I'll tell you why, I talked to folks in the pricing world. 403 00:41:54,594 --> 00:42:00,034 I talked to a guy, a 20, 25 year, God, maybe even 30 year vet. 404 00:42:00,034 --> 00:42:02,214 This guy's been around for a while. 405 00:42:03,054 --> 00:42:07,514 And he was telling me in law firm pricing, 406 00:42:07,910 --> 00:42:15,704 He was telling me how clients are now asking for, and I put it in the article about, they want a number. 407 00:42:15,704 --> 00:42:24,068 They want to know how much did you save, how much time did you save working on my matters through the use of generative AI last quarter? 408 00:42:24,378 --> 00:42:31,085 And it's just like, how do you answer that question without at least starting to venture down the path that you just described? 409 00:42:31,085 --> 00:42:32,726 You can't stay still. 410 00:42:32,726 --> 00:42:35,069 If you stay still, you can't answer that question. 411 00:42:35,069 --> 00:42:41,554 And if you can't answer that question, you don't get the next batch of legal work from that client. 412 00:42:41,595 --> 00:42:45,368 I think they kind of have to start pushing in that direction. 413 00:42:46,252 --> 00:42:47,903 Yeah, I would agree. 414 00:42:47,903 --> 00:42:48,503 I would agree. 415 00:42:48,503 --> 00:43:02,335 And I think for me, it's about at least like taking one step forward in that direction, because, you know, technology is eating lawyers lunch. 416 00:43:02,856 --> 00:43:13,424 You know, already, clients are using generic AI applications to draft letters, draft contracts, sending them over to their lawyers saying, Hey, is this okay? 417 00:43:13,765 --> 00:43:15,756 And so 418 00:43:15,756 --> 00:43:20,129 Technology is already starting to erode revenue streams. 419 00:43:20,450 --> 00:43:34,101 But the lawyers, they've got a number of things that are advantageous for them that most uh startups in other industries don't have. 420 00:43:34,242 --> 00:43:37,164 They've already got a book of clients. 421 00:43:37,284 --> 00:43:43,109 They've got the domain expertise in a regulated and 422 00:43:44,714 --> 00:43:49,237 walled garden industry, right, but you've to be qualified in order to practice. 423 00:43:49,278 --> 00:43:51,840 So not anyone can come and do this. 424 00:43:52,100 --> 00:44:04,730 Or you've really got to exactly barriers to entry, you've got a moat already there, you just got to take one step forward, start exploring what this can look like. 425 00:44:04,811 --> 00:44:11,876 And, you know, all of the barriers that we've been talking about, they're not insurmountable. 426 00:44:12,117 --> 00:44:13,390 If you don't have the 427 00:44:13,390 --> 00:44:16,570 expertise and experience and skills on your team. 428 00:44:16,570 --> 00:44:22,930 You can go and work with and find people that do come to us and we'll help you with this. 429 00:44:22,930 --> 00:44:23,270 Right. 430 00:44:23,270 --> 00:44:30,250 So that's one contained way of being able to take a step in this direction. 431 00:44:30,950 --> 00:44:32,490 Partner consensus. 432 00:44:32,510 --> 00:44:41,592 Again, it's not about getting consensus for the entire organization to completely rebuild itself and suddenly invest 50 or 100 million and 433 00:44:41,592 --> 00:44:44,223 building these 50 product high solutions. 434 00:44:44,423 --> 00:44:56,258 It's about trying to find the lowest barriers to entry, the biggest opportunities, the lowest hanging fruit to be able to just put one foot forward in this direction, prove that 435 00:44:56,258 --> 00:44:58,789 it can be done, prove that you can make a success with this. 436 00:44:58,789 --> 00:45:03,972 um Because if you don't do that, your competitors will. 437 00:45:03,972 --> 00:45:10,144 And your competitors are no longer just other law firms that currently deliver the services that you deliver. 438 00:45:10,592 --> 00:45:14,225 It's those specialist firms that are thinking about productizing. 439 00:45:14,225 --> 00:45:26,195 It's other technology companies that are starting to move into this space because technologists have got a sniff of the fact that AI can come and do this work that lawyers 440 00:45:26,195 --> 00:45:27,396 currently do. 441 00:45:27,396 --> 00:45:34,982 And they're partnering with lawyers to be able to build these new productized solutions outside of the firm's environment. 442 00:45:35,062 --> 00:45:36,934 So I completely agree with you. 443 00:45:36,934 --> 00:45:38,465 You can't stand still. 444 00:45:38,465 --> 00:45:40,240 You're just moving backwards if you do. 445 00:45:40,240 --> 00:45:43,111 Yeah, it's uh extremely risky. 446 00:45:43,672 --> 00:45:48,390 I do think too, and I know we're almost out of time, but I want to throw this one point out there. 447 00:45:48,390 --> 00:45:54,176 I am of the belief that um off the shelf tools are great as a starting point. 448 00:45:54,296 --> 00:45:58,798 And they're a necessary step in the process. 449 00:45:58,798 --> 00:46:04,000 But in most scenarios, off the shelf tools, you're bringing your data to AI. 450 00:46:04,720 --> 00:46:08,802 And the reality is you have so much data as a law firm. 451 00:46:09,305 --> 00:46:11,905 you're going to need to bring AI to your data. 452 00:46:12,005 --> 00:46:19,767 And that's going to have to happen through tech investment and leveraging solutions like Azure OpenAI. 453 00:46:19,767 --> 00:46:25,828 um I don't think that firms are going to be able to differentiate themselves with off the shelf tools. 454 00:46:25,828 --> 00:46:26,598 think they got it. 455 00:46:26,598 --> 00:46:28,408 They're secret sauce. 456 00:46:28,408 --> 00:46:31,509 It's all those successful contracts you negotiated. 457 00:46:31,809 --> 00:46:38,550 It's the terms and the deals that made your clients successful. 458 00:46:38,638 --> 00:46:43,127 on the other side of a transaction, that's your, that's going to be your moat. 459 00:46:43,127 --> 00:46:48,878 It's no longer going to just be your people and your brand um and your breath. 460 00:46:48,878 --> 00:46:49,678 Yeah. 461 00:46:50,574 --> 00:46:51,836 Couldn't agree more. 462 00:46:52,210 --> 00:47:00,277 um Well good, it's how do you, as we wrap up here before we do, how do people find out more about what you do? 463 00:47:01,902 --> 00:47:03,122 Ah, great question. 464 00:47:03,122 --> 00:47:04,122 Thanks Ted. 465 00:47:04,862 --> 00:47:06,622 So you can follow me on LinkedIn. 466 00:47:06,722 --> 00:47:12,502 I put out some content around some of the stuff that we've been talking about today. 467 00:47:14,102 --> 00:47:20,422 Equally, if you want to drop me an email, I'm alex at legaltechcollective.com. 468 00:47:20,782 --> 00:47:30,324 And the foundry that I mentioned earlier, which is the service that enables lawyers to productize their 469 00:47:30,324 --> 00:47:32,243 own expertise and services. 470 00:47:32,243 --> 00:47:36,318 That's at LTCFoundry.com. 471 00:47:37,222 --> 00:47:44,274 I think you're going to be a busy guy here soon because I don't know anyone who's doing what you're doing and there's a real need. 472 00:47:44,274 --> 00:47:48,912 Firms need help with this and it's not an easy task as you point out. 473 00:47:48,912 --> 00:47:51,105 So I wish you the best of luck. 474 00:47:52,398 --> 00:47:58,128 Thank you Ted and thank you for having me on today and looking forward to coming back again at some point in the future. 475 00:47:58,128 --> 00:47:59,200 Yeah, absolutely. 476 00:47:59,200 --> 00:48:00,704 All right, it was great talking to you. 477 00:48:00,704 --> 00:48:01,965 Thanks, Alex. 478 00:48:02,167 --> 00:48:03,769 All right, bye-bye. -->