1 00:00:02,146 --> 00:00:04,593 Debbie Foster, long time no see. 2 00:00:05,409 --> 00:00:08,296 It's been forever, like at least an hour. 3 00:00:09,802 --> 00:00:16,030 And we're going to see each other again at a conference in like a week and a half. 4 00:00:16,030 --> 00:00:19,444 So yeah, you're going to be sick of me by the time this is all said and done. 5 00:00:19,780 --> 00:00:22,575 Yes, probably not, because I love talking to you. 6 00:00:22,575 --> 00:00:28,516 I feel like we just talked about doing something for 20 minutes and decided we could have talked about it for three days. 7 00:00:28,516 --> 00:00:31,595 So I won't be sick of you, I'm sure of it. 8 00:00:31,595 --> 00:00:32,265 Good answer. 9 00:00:32,265 --> 00:00:32,475 Good. 10 00:00:32,475 --> 00:00:33,816 I like to answer. 11 00:00:34,357 --> 00:00:42,443 Well, before we, you and I have known each other for a really long time and I met you at ABA tech show. 12 00:00:42,443 --> 00:00:51,550 We were trying to figure it out the last time we spoke, but it was at least 12 years ago because I remember who was working for me, maybe even 13. 13 00:00:51,550 --> 00:00:52,791 So long time. 14 00:00:52,791 --> 00:00:56,743 And I've seen, you you're the CEO at affinity consulting. 15 00:00:56,743 --> 00:00:57,754 I've seen 16 00:00:57,802 --> 00:01:02,852 you grow that business significantly and it's been fun to watch. 17 00:01:02,852 --> 00:01:08,712 Why don't we, why don't you introduce yourself, tell us who you are, what you do and where you do it. 18 00:01:08,922 --> 00:01:09,332 Sure. 19 00:01:09,332 --> 00:01:12,974 So Debbie Foster, CEO of Affinity Consulting Group. 20 00:01:13,274 --> 00:01:22,438 We are a consulting firm that focuses on helping law firms think differently about how they get their work done, which a lot of times, most of the time involves the technology 21 00:01:22,438 --> 00:01:27,361 that they use, whether they can use what they have better or they're looking for something new. 22 00:01:27,361 --> 00:01:30,762 And we also help firms think differently about how their businesses run. 23 00:01:30,762 --> 00:01:35,074 So we help them with strategic planning and succession planning and leadership and 24 00:01:35,152 --> 00:01:39,533 hiring and attracting and retaining talent and all of that fun stuff. 25 00:01:39,533 --> 00:01:43,375 it's really a, so we started off as a technology firm. 26 00:01:43,375 --> 00:01:50,577 We're focused a lot on implementing new software, but as everyone knows, software does not solve people problems. 27 00:01:50,577 --> 00:01:53,017 It does not help with bad processes. 28 00:01:53,017 --> 00:02:01,700 And our realization of that led us to expand beyond just being focused on a technology implementation. 29 00:02:02,200 --> 00:02:05,377 Yeah, software makes it worse, makes those problems worse. 30 00:02:05,614 --> 00:02:06,427 Right. 31 00:02:06,427 --> 00:02:09,374 Or they have the same problems and then they have 11 new ones. 32 00:02:09,374 --> 00:02:11,238 it, yeah. 33 00:02:11,837 --> 00:02:12,998 Exactly. 34 00:02:12,998 --> 00:02:17,597 Well, so, you and I had kicked around. 35 00:02:17,597 --> 00:02:24,160 We were first, uh, chewing the fat, if you will, on the Big Four entering the market. 36 00:02:24,160 --> 00:02:30,931 And that kind of took us down a path of some of the traditional law firm business model challenges. 37 00:02:30,931 --> 00:02:35,172 And it's something that I talk a lot about in the podcast because I think it's such an important topic. 38 00:02:35,172 --> 00:02:37,998 Uh, there's no easy answers to it, but 39 00:02:37,998 --> 00:02:43,192 you know, we're getting into a place now with new technology developments with Gen. 40 00:02:43,192 --> 00:02:53,110 AI and the Big Four moving in via the alternative business structures in Arizona and soon to be Utah. 41 00:02:53,511 --> 00:03:07,374 And yeah, I think that now zeroing in on these limit, you know, these limitations, whatever you want to call them, nuances with how law firms operate is 42 00:03:07,374 --> 00:03:08,834 It's a timely discussion. 43 00:03:08,834 --> 00:03:18,834 I think the time is right and firms that aren't reevaluating how they're doing business are going to pay the price for that. 44 00:03:18,834 --> 00:03:33,674 As we see new entrants into the market, not just the Big Four, there's smaller accounting firms, Aprio Legal, 3000 employee accounting firm and a Radix Law, 50 attorney law firm 45 00:03:33,674 --> 00:03:36,994 forming a JV and entering, you know, 46 00:03:36,994 --> 00:03:39,156 hanging a shingle in Arizona. 47 00:03:39,156 --> 00:03:44,609 So it doesn't look like this is just going to be a Big, massive, Big Four initiative. 48 00:03:44,609 --> 00:03:50,604 It looks like there are going to be players from different altitudes, if you will. 49 00:03:50,604 --> 00:04:05,334 But what is your take on where we're at today and how important it is that we have this discussion about the current decision making, for example, in law firms? 50 00:04:06,104 --> 00:04:16,948 Yeah, I mean, it's such a fundamental challenge around the business model, because I think that the connection that I always make, and when I'm talking to clients about the flip the 51 00:04:16,948 --> 00:04:20,810 table strategy, like what does the flip the table strategy look like? 52 00:04:21,090 --> 00:04:24,712 The real challenge doesn't just boil down to the business model. 53 00:04:24,712 --> 00:04:29,473 It boils down to the business model and how it is connected to how people get paid. 54 00:04:30,194 --> 00:04:32,375 What we value in a law firm, right? 55 00:04:32,375 --> 00:04:33,375 What do we value? 56 00:04:33,375 --> 00:04:35,268 Origination, bring the business in. 57 00:04:35,268 --> 00:04:37,930 We value it and we reward it financially. 58 00:04:37,930 --> 00:04:39,141 We value production. 59 00:04:39,141 --> 00:04:40,382 How hard are you willing to work? 60 00:04:40,382 --> 00:04:42,333 How many hours are you willing to bill? 61 00:04:42,333 --> 00:04:46,076 How do we measure what you bill versus what gets collected? 62 00:04:46,076 --> 00:04:50,378 And your paycheck ends up being comprised of those things. 63 00:04:50,579 --> 00:04:58,104 And if we were thinking about this very strategically from a high level business perspective, we would be talking about profitability, right? 64 00:04:58,104 --> 00:05:04,488 We would be talking about how do we build a business that generates a profit for its shareholders? 65 00:05:04,804 --> 00:05:09,547 And there's just a Big disconnect in this lawyer business model from that. 66 00:05:09,647 --> 00:05:22,036 And to come up against these ALSPs or the Big Four who are building engines to deliver the products and services that a law firm delivers, right? 67 00:05:22,036 --> 00:05:28,281 That's the heart of the challenge is the law firm isn't building an engine to deliver these products and services. 68 00:05:28,281 --> 00:05:33,824 The law firm is delivering them one at a time with lots of high touch, lots of hands-on. 69 00:05:35,268 --> 00:05:45,033 the Big Four or the other alternative legal service providers are not looking to figure out a better way mimicking the law firm model. 70 00:05:45,034 --> 00:05:46,494 That's not what they did. 71 00:05:46,574 --> 00:05:48,375 They said, we're not gonna do it that way. 72 00:05:48,375 --> 00:05:50,737 We're gonna build something first, right? 73 00:05:50,737 --> 00:05:58,761 And I think that our clients, our law firm clients really struggle with the vision of doing it differently. 74 00:05:58,761 --> 00:06:04,334 Not necessarily just a piece of technology, but the vision for how they would do it differently. 75 00:06:04,750 --> 00:06:15,710 You know, and I don't know if people really truly appreciate the size and scale of the Big Four So they're, they're a partnership model like, like law firms, but a much bigger, more 76 00:06:15,710 --> 00:06:20,570 efficient, like KPMG is 40 billion a year, 40. 77 00:06:20,570 --> 00:06:22,270 And they're the smallest. 78 00:06:22,310 --> 00:06:24,270 They're the smallest of the Big Four. 79 00:06:24,270 --> 00:06:26,670 Deloitte is at the top and they're 70 billion. 80 00:06:26,670 --> 00:06:27,250 Right? 81 00:06:27,250 --> 00:06:29,050 So these are massive organizations. 82 00:06:29,050 --> 00:06:33,528 In fact, Deloitte would be Fortune 100 if they were public. 83 00:06:33,528 --> 00:06:43,206 There's not one firm that would be big enough to be in the Fortune 500, which includes Kirkland and Ellis, which is in the low seven billions in revenue. 84 00:06:43,206 --> 00:06:51,613 So these are massive organizations with massive resources, with all sorts of capabilities, with a global footprint. 85 00:06:51,613 --> 00:06:54,335 KPMG has 4,000 lawyers. 86 00:06:54,376 --> 00:06:58,639 is, this is going to really change the game. 87 00:06:58,639 --> 00:07:02,272 And you know, I had a debate on the last podcast. 88 00:07:02,722 --> 00:07:11,938 with someone who, you know, we were kicking around, all right, well, how does this time differ from last time? 89 00:07:11,938 --> 00:07:16,712 You know, 10 years ago or seven years ago, whenever it was, the Big Four made a Big push. 90 00:07:16,712 --> 00:07:21,845 And in my opinion, what has changed is the means of legal production, right? 91 00:07:21,845 --> 00:07:29,160 We now have a technology that fundamentally, is fundamentally changing how work product gets delivered. 92 00:07:29,160 --> 00:07:32,408 And that didn't exist seven, eight years ago. 93 00:07:32,408 --> 00:07:33,865 So I do think it's different. 94 00:07:33,865 --> 00:07:37,641 Um, which what's your take on then versus now. 95 00:07:39,886 --> 00:07:41,247 think you're right. 96 00:07:41,247 --> 00:07:53,947 the other thing that I would add is those companies and the companies who are thinking about delivering these services differently are technology first. 97 00:07:54,909 --> 00:07:58,671 And law firms are not technology first. 98 00:07:58,692 --> 00:08:03,556 In fact, I regularly start, I do a lot of strategic planning. 99 00:08:03,556 --> 00:08:09,080 And so I have all these equity partners in a room and I say our number one stakeholder. 100 00:08:09,080 --> 00:08:11,165 Sometimes I even have an empty chair. 101 00:08:11,388 --> 00:08:13,565 The person sitting in that chair is the law firm. 102 00:08:13,565 --> 00:08:15,510 That's our number one stakeholder. 103 00:08:17,060 --> 00:08:23,624 When you're thinking about building a business, you can think about building a traditional business. 104 00:08:23,624 --> 00:08:29,446 You can think about your business being the number one stakeholder and figure out how that personally benefits you. 105 00:08:30,167 --> 00:08:32,168 The law firm doesn't do it like that. 106 00:08:32,348 --> 00:08:41,573 And that is another nuance advantage that the willingness to put the business as the number one stakeholder. 107 00:08:42,934 --> 00:08:44,875 I don't see that a lot. 108 00:08:45,195 --> 00:08:46,830 And part of it is, 109 00:08:46,830 --> 00:08:57,800 You might sit in a room with 25 equity partners and five of them are willing to put the business as the number one stakeholder, but 20 of them don't know what that even means. 110 00:08:58,424 --> 00:08:58,994 Yeah. 111 00:08:58,994 --> 00:09:06,979 And there are fundamental truths in the legal industry that make it difficult. 112 00:09:06,979 --> 00:09:20,506 The cash basis nature of law firms and the difficulty getting capital projects through the short retire. 113 00:09:20,666 --> 00:09:27,870 Usually at the most senior levels, their retirement horizons of the XCOMs members are in sight. 114 00:09:28,268 --> 00:09:36,645 the fact that law firm partners can pick up and move to another firm and take their book of business with them. 115 00:09:36,645 --> 00:09:49,966 Many of these, all of the friction that's involved in law firm decision making, this consensus driven model like you allude to really makes things, it's difficult to get 116 00:09:49,966 --> 00:09:51,918 everybody on the same page. 117 00:09:51,918 --> 00:09:56,101 you're right, technology is not, I've always said it's like, 118 00:09:57,068 --> 00:10:03,291 Many law firms look at technology as an expense to be managed rather than an investment opportunity. 119 00:10:03,453 --> 00:10:08,162 And that's not how these other organizations look at things. 120 00:10:09,136 --> 00:10:10,216 for sure. 121 00:10:10,496 --> 00:10:25,236 the expense to be managed is also like good businesses manage their expenses, but the way that they manage the expenses and I see the, I see the wheels turning. 122 00:10:25,236 --> 00:10:26,336 How much is that going to cost? 123 00:10:26,336 --> 00:10:27,176 $100,000. 124 00:10:27,176 --> 00:10:28,076 They look around the room. 125 00:10:28,076 --> 00:10:30,976 They're like, five, six, seven, eight, right? 126 00:10:30,976 --> 00:10:35,616 Like divided by that many divided by $100,000 divided by that many. 127 00:10:35,616 --> 00:10:37,856 That's how much it's going to cost me. 128 00:10:38,362 --> 00:10:40,213 to that happen, right? 129 00:10:40,213 --> 00:10:48,319 So it's even expenses managed in a way that does not make sense for the business. 130 00:10:49,060 --> 00:10:56,965 I think that, I wish that I could say that I don't hear this anymore, but I just heard it at a meeting that I was in last week. 131 00:10:57,806 --> 00:11:00,570 The idea of buying software, you remember? 132 00:11:00,570 --> 00:11:07,546 we were actually reminiscing that you can't go into Office Depot anymore and there isn't an aisle with all the boxes of the software and you could just take it to the checkout and 133 00:11:07,546 --> 00:11:08,566 you can buy it. 134 00:11:08,566 --> 00:11:10,189 Nobody's buying it, that doesn't work like that. 135 00:11:10,189 --> 00:11:11,870 It doesn't work like that anymore. 136 00:11:11,950 --> 00:11:25,172 And so this concept of you got to spend between 250 and $500 per user per month to have a technology stack, just the technology. 137 00:11:25,172 --> 00:11:27,856 That doesn't include services and all the other stuff, but. 138 00:11:27,856 --> 00:11:30,436 between 250 and $500 a month. 139 00:11:30,436 --> 00:11:32,316 That's what I'm telling firms now. 140 00:11:32,316 --> 00:11:43,676 And I think that that number is closer to the 500 side if you're strategically thinking about how you're incorporating AI into your technology stack, right? 141 00:11:43,676 --> 00:11:45,256 And that's not per lawyer. 142 00:11:45,256 --> 00:11:55,296 That is per human being that is sitting in a chair that gets a paycheck from Paychex or ADP or whoever you, however you're paying them, per person. 143 00:11:55,586 --> 00:12:00,978 We're asking them to think about their technology investment completely differently. 144 00:12:01,619 --> 00:12:07,541 And for me, I want, I tell them, what does success look like? 145 00:12:07,822 --> 00:12:15,865 It looks like you saying to me two years from now, thank you for spending, for asking me to spend that much money. 146 00:12:16,066 --> 00:12:17,947 It's benefited me so much. 147 00:12:17,947 --> 00:12:21,058 Can you think of anything else that I can spend money on? 148 00:12:22,734 --> 00:12:25,196 What are the odds of that conversation happening? 149 00:12:25,196 --> 00:12:26,360 Zero, right? 150 00:12:26,360 --> 00:12:32,676 that, but, you know, if I say to you, Ted, if you give me a dollar, I'll give you $10. 151 00:12:33,742 --> 00:12:34,996 Right, but I gotta give you a dollar. 152 00:12:34,996 --> 00:12:36,569 I don't wanna give you a dollar. 153 00:12:36,656 --> 00:12:37,496 Exactly. 154 00:12:37,496 --> 00:12:41,138 But I'm going to give you $10 like this, right? 155 00:12:41,138 --> 00:12:42,839 It should be a multiplier. 156 00:12:42,839 --> 00:12:47,180 And there's a thousand reasons why it ends up not being a multiplier in a law firm. 157 00:12:47,180 --> 00:12:50,482 But, some of it is related to the business model challenges. 158 00:12:50,482 --> 00:12:58,805 You can change anything you want, as long as you don't ask me to change anything that I'm doing and no consistency in structure around how we get our work done. 159 00:12:58,805 --> 00:13:00,526 It's all connected. 160 00:13:01,146 --> 00:13:05,568 But technology first is the only way out. 161 00:13:06,084 --> 00:13:11,466 and it requires a business model change, which is very hard to imagine. 162 00:13:11,798 --> 00:13:12,818 It is. 163 00:13:12,818 --> 00:13:13,658 It is indeed. 164 00:13:13,658 --> 00:13:14,009 Yeah. 165 00:13:14,009 --> 00:13:18,660 Because it requires cultural change and that's, that's the hardest kind of change. 166 00:13:18,660 --> 00:13:29,563 You and I were talking last time about, measure, uh, profitability measurement versus PPP and some of the challenges that create. 167 00:13:29,563 --> 00:13:31,393 that creates. 168 00:13:31,393 --> 00:13:41,686 in the, is really, this may be a small business concept, but there's something called a SDE, um, shareholder discretionary earnings, which is basically 169 00:13:41,686 --> 00:13:48,432 As a business owner, it's your W2 income plus your distributions and that's your SDE. 170 00:13:48,432 --> 00:13:56,338 And like for &A purposes in the small business world, that's really what you look at when you're looking at the value of a business, right? 171 00:13:56,338 --> 00:14:10,270 If I take a below market salary to inflate my bottom line, that doesn't make the business more valuable because the acquiring party has to replace this role and pay market. 172 00:14:10,370 --> 00:14:16,523 So what are some of the challenges that the way it currently happens creates? 173 00:14:17,562 --> 00:14:24,774 So I'll start with a concept that you're very familiar with because you work with law firms. 174 00:14:24,774 --> 00:14:27,194 Can you tell me how other people are doing it? 175 00:14:27,355 --> 00:14:27,675 Right? 176 00:14:27,675 --> 00:14:30,405 So comparison is a thief, right? 177 00:14:30,405 --> 00:14:31,786 It's just a thief. 178 00:14:31,786 --> 00:14:33,816 We want to know how everybody else is doing it. 179 00:14:33,816 --> 00:14:38,197 So everybody else, everybody else in air quotes is measuring profits per partner. 180 00:14:38,798 --> 00:14:47,244 But if we want to really understand the true profitability story of a client, a matter, 181 00:14:47,244 --> 00:14:51,547 a lawyer, a practice group, a practice group within a practice group. 182 00:14:51,688 --> 00:14:58,373 We have to make sure that everyone's market rate compensation is a factor in that. 183 00:14:58,694 --> 00:15:09,983 The equity partners sitting around a boardroom table are not free to the organization, and profits per partner suggests that they might be, and they're just not. 184 00:15:09,983 --> 00:15:16,708 And so I say all the time, when lawyers that I'm talking to are struggling with that concept, I say, 185 00:15:16,708 --> 00:15:20,192 Let's just pretend that you win the lottery and you're not gonna do this anymore. 186 00:15:20,192 --> 00:15:30,662 And let's pretend that there's an unlimited number of candidates with your skillset, your expertise, your gravitas, your relationships. 187 00:15:30,983 --> 00:15:35,288 I'm going to hire them as an employee because they would not want to be an equity partner. 188 00:15:35,288 --> 00:15:36,018 They're a lawyer. 189 00:15:36,018 --> 00:15:37,791 They do not wanna be an equity partner. 190 00:15:37,791 --> 00:15:39,712 How much do I have to pay them? 191 00:15:41,956 --> 00:15:44,341 How much do I have to, what is my offer letter? 192 00:15:44,341 --> 00:15:46,039 What will it look like? 193 00:15:48,752 --> 00:15:52,032 that is your cost rate. 194 00:15:52,392 --> 00:15:57,612 And so if you really wanna know profitability, we gotta get to that number for everybody. 195 00:15:57,712 --> 00:16:08,172 some firms that I work with have figured that out and have said like every equity partner, I work with a firm in Miami, every equity partner is a $350,000 a year cost rate. 196 00:16:08,172 --> 00:16:12,512 That is factored in when they're doing profitability, that's the number. 197 00:16:12,512 --> 00:16:17,572 But I look around that room and I'm like, if I had to replace you. 198 00:16:17,840 --> 00:16:19,780 It's gonna cost me more than 350. 199 00:16:19,780 --> 00:16:24,420 And I have to replace you, it's gonna cost me less than 350, because you're like a service equity partner. 200 00:16:24,420 --> 00:16:25,960 You don't have a book of business. 201 00:16:26,220 --> 00:16:29,180 You're not kissing babies and shaking hands. 202 00:16:29,960 --> 00:16:32,700 How do we really think about that differently? 203 00:16:32,700 --> 00:16:35,020 And I think that is a Big challenge. 204 00:16:35,020 --> 00:16:38,520 And the bigger law firms get, think the harder that is. 205 00:16:38,520 --> 00:16:40,551 Yeah, that makes a lot of sense. 206 00:16:40,551 --> 00:16:46,742 mean, profit per partner is a vanity metric. 207 00:16:46,742 --> 00:16:48,833 It's public, right? 208 00:16:48,833 --> 00:16:50,713 It's on the AMLaw list. 209 00:16:50,713 --> 00:16:53,374 And you can sort by it. 210 00:16:53,374 --> 00:16:55,694 And you can see who's at the top. 211 00:16:55,735 --> 00:17:02,896 And I would imagine that impacts the ability to lateral folks in. 212 00:17:03,017 --> 00:17:08,268 It's desirable from an outsider perspective. 213 00:17:08,268 --> 00:17:25,042 What about another topic we kicked around, is one I talk about a lot too, is professional management and the business of law and like how they're not always empowered the way that 214 00:17:25,063 --> 00:17:27,744 might maximize effectiveness. 215 00:17:27,744 --> 00:17:34,186 And, you know, we see it in certain roles like, like innovation, which is a Big 216 00:17:34,186 --> 00:17:36,627 Obviously it's in the name of the podcast. 217 00:17:36,627 --> 00:17:44,591 We talk a lot about innovation and sometimes I've seen a whole lot of different approaches. 218 00:17:44,591 --> 00:17:47,232 Sometimes there's a true commitment. 219 00:17:47,312 --> 00:17:52,435 This is probably the least common scenario, but it does happen. 220 00:17:52,435 --> 00:17:57,797 We see a true commitment from firms where they really do want to innovate and not just improve. 221 00:17:57,797 --> 00:18:00,398 The difference is improvement is incremental. 222 00:18:00,886 --> 00:18:07,190 Innovation is foundational and it's disruptive. 223 00:18:07,431 --> 00:18:19,919 Disruptive is not something that you connect dots with with law firms, but sometimes they'll bring in a chief innovation officer from the outside and with an existing strategy 224 00:18:19,919 --> 00:18:21,180 and commitment. 225 00:18:21,180 --> 00:18:30,225 You see great things happen, but a lot of times we see, I've heard CINO referred to as chief in name only. 226 00:18:30,448 --> 00:18:31,343 You 227 00:18:31,343 --> 00:18:44,962 or chief incremental improvement officer, which I think is a total missed opportunity if you've got somebody sitting in that role and there are some incredible thinkers and 228 00:18:44,962 --> 00:18:50,335 innovative thinkers in these roles out there, but they're not always empowered to really make the change. 229 00:18:51,837 --> 00:18:54,218 Do you see the same or do you see differently? 230 00:18:54,576 --> 00:18:55,456 Same. 231 00:18:55,476 --> 00:19:03,283 And so I think starting off by just talking about the definition of small, medium, and large, right? 232 00:19:03,283 --> 00:19:07,286 That's a really challenging conversation to have in legal. 233 00:19:07,326 --> 00:19:11,400 You can easily identify the AmLaw 100 and the AmLaw 200, right? 234 00:19:11,400 --> 00:19:12,911 That's easy to do. 235 00:19:12,911 --> 00:19:19,476 But if you are in Kansas and you have 80 lawyers, your firm is huge. 236 00:19:19,756 --> 00:19:24,440 And if you are in Chicago and you have 80 lawyers, your firm is maybe small, 237 00:19:24,440 --> 00:19:26,681 you might call it mid-size, right? 238 00:19:26,681 --> 00:19:36,768 what I'm about to say is talking about the difference between small and mid-size firms and large firms, understanding that it depends where you live, where you work, what you're 239 00:19:36,768 --> 00:19:41,910 used to, small, medium, large is very hard in legal. 240 00:19:42,251 --> 00:19:50,876 Having said that, my experience, and I do a ton of work with the ALA, the Association of Legal Administrators, and so... 241 00:19:51,210 --> 00:20:07,271 I know a lot of COOs and I've heard a lot of their stories and the larger the firm, generally speaking, the more authority they have around parts of the business. 242 00:20:08,512 --> 00:20:19,650 The smaller the firm, generally speaking, broad breaststroke, they tend to have less authority, but they have the responsibility. 243 00:20:20,420 --> 00:20:31,283 So when I'm talking to a firm about bringing in an executive business leader, and that is, mean, I think one of our ways out of the mess that we're in is an empowered executive 244 00:20:31,283 --> 00:20:36,204 business leader to help to start make those changes. 245 00:20:36,545 --> 00:20:39,485 But how does the firm know that they're ready for that? 246 00:20:39,485 --> 00:20:41,986 And I think that that is step one. 247 00:20:41,986 --> 00:20:45,927 Like if someone calls me and says, can you help us hire a COO? 248 00:20:45,927 --> 00:20:48,938 I say, absolutely, let's talk about if you're ready for that. 249 00:20:50,074 --> 00:20:50,674 What do you mean? 250 00:20:50,674 --> 00:20:52,146 Of course I'm ready for that. 251 00:20:52,146 --> 00:20:52,606 I don't know. 252 00:20:52,606 --> 00:20:54,287 Let me ask you some questions. 253 00:20:54,508 --> 00:20:56,139 What if the wall needs to be painted? 254 00:20:56,139 --> 00:20:59,632 Who is going to get to have a say in what color the wall is, right? 255 00:20:59,632 --> 00:21:16,516 Like you start to go through these ridiculous examples, but I sat in a strategic partner meeting last week with 14 equity partners in a room, a $25 million budget, and there was 256 00:21:16,516 --> 00:21:19,116 an argument about $35,000. 257 00:21:21,006 --> 00:21:22,416 What are we doing? 258 00:21:23,417 --> 00:21:30,319 Why did you, this, can we just talk about how much this room, how much this is costing us right now? 259 00:21:30,639 --> 00:21:48,834 A firm has got to be ready for this and lawyers struggle accepting feedback, direction, process, enforcement from someone who isn't a lawyer. 260 00:21:50,072 --> 00:21:52,634 And that's a cultural challenge. 261 00:21:52,634 --> 00:21:56,557 And what I say when I have my, you ready for this? 262 00:21:56,557 --> 00:22:06,134 I say, are you all willing to let someone else come into this firm and make a decision that you disagree with and support them anyway? 263 00:22:07,818 --> 00:22:09,698 eyes get Big when that happens? 264 00:22:09,698 --> 00:22:18,295 Yeah, because that's, listen, that is hard for anyone who, I mean, I am a self-taught business person. 265 00:22:18,636 --> 00:22:24,821 don't, there is literally nothing that I do today that I went to school to learn how to do. 266 00:22:24,821 --> 00:22:27,422 Not a single thing that I do, right? 267 00:22:28,664 --> 00:22:34,949 You put lawyers in lawyer roles and they are excellent lawyers. 268 00:22:34,949 --> 00:22:36,731 And what do we do with them? 269 00:22:36,731 --> 00:22:38,572 We promote them to... 270 00:22:38,670 --> 00:22:43,963 leading a practice group, to being the managing partner of a firm, throwing them on an executive committee. 271 00:22:43,963 --> 00:22:51,997 And then we say things like, we might have lawyers who are like, I'm gonna stop listening to this woman right now, but that's fine, it's fine. 272 00:22:51,997 --> 00:22:54,109 Not everyone's gonna like what I have to say, it's fine. 273 00:22:54,109 --> 00:22:59,182 But we say things like, no one taught them how to run a business in law school. 274 00:22:59,182 --> 00:23:05,515 And I'm like, it's literally, while your fact might be valid and true, it is also irrelevant. 275 00:23:05,515 --> 00:23:07,416 Anybody learn geometry? 276 00:23:07,436 --> 00:23:08,557 Anyone learn algebra? 277 00:23:08,557 --> 00:23:09,978 Do you still know how to do it? 278 00:23:09,978 --> 00:23:14,380 How do you learn how to do something by doing it? 279 00:23:14,381 --> 00:23:19,484 It's why doctors don't start practicing the minute they finish med school. 280 00:23:19,484 --> 00:23:21,986 You learn how to be a doctor by being a doctor. 281 00:23:21,986 --> 00:23:23,897 You learn how to be a lawyer by being a lawyer. 282 00:23:23,897 --> 00:23:27,050 You learn how to be a business person by being a business person. 283 00:23:27,050 --> 00:23:36,716 And also absorbing, like listening to podcasts, reading books, the way you and I have scratched and clawed our way to where we are, right? 284 00:23:37,026 --> 00:23:40,278 that I don't know about you, but nobody gave me anything along the way. 285 00:23:40,278 --> 00:23:46,523 I have invested my time in becoming a mostly good leader. 286 00:23:46,523 --> 00:23:55,128 Every day is not the same, but a mostly good leader and a mostly good business owner who makes mistakes on the regular, owns them and moves on. 287 00:23:55,289 --> 00:24:05,816 But when we ask these lawyers to step into these, you own a business roles, and then we make excuses that they didn't learn how to do that in law school, 288 00:24:06,976 --> 00:24:19,221 and we don't spend any time training our lawyer leaders to be leaders, it's a little frustrating to see people scratching their heads wondering why this isn't working, right? 289 00:24:19,281 --> 00:24:21,162 So we have to do this differently. 290 00:24:21,162 --> 00:24:24,964 And executive business leaders is one of the ways that we get there. 291 00:24:24,964 --> 00:24:26,474 We gotta be ready for it. 292 00:24:26,594 --> 00:24:27,195 Yeah. 293 00:24:27,195 --> 00:24:32,279 You know, and honestly, business school really doesn't teach you how to be an entrepreneur. 294 00:24:32,279 --> 00:24:38,203 I mean, I have an MBA and it wasn't useless, but it was, it's close. 295 00:24:38,324 --> 00:24:41,306 It's close to useless for as being an entrepreneur. 296 00:24:41,306 --> 00:24:48,211 Now, if you want to go work in a investment bank, Oh, I, I learned some great skills for that. 297 00:24:48,692 --> 00:24:56,578 but being an entrepreneur requires, you know, um, experience in risk taking. 298 00:24:56,670 --> 00:25:11,018 in gut feel, developing a Spidey sense, EQ, how to manage people, how to present yourself, how to, you know, there's just all these skills that it's just not teachable in an 299 00:25:11,018 --> 00:25:12,139 academic setting. 300 00:25:12,139 --> 00:25:14,440 You kind of have to get out there and do it. 301 00:25:14,460 --> 00:25:18,823 So, and you know, I always, I often quote Dr. 302 00:25:18,823 --> 00:25:24,906 Larry Richard who wrote lawyer brain and you know, when he outlines the 303 00:25:25,144 --> 00:25:38,371 personality traits that lawyers tend to score higher and lower than the general public in, know, skepticism, autonomy, urgency, abstract reasoning score higher than score lower than 304 00:25:38,371 --> 00:25:41,643 sociability, resilience, empathy, right? 305 00:25:41,643 --> 00:25:42,944 Think about that. 306 00:25:42,944 --> 00:25:48,147 Empathy is one of the key characteristics of effective leadership. 307 00:25:48,267 --> 00:25:53,990 If you are not empathetic, you are very unlikely to be a good leader and 308 00:25:54,008 --> 00:25:57,570 Good leadership is so critical in business. 309 00:25:57,570 --> 00:26:06,173 And I've been under leaders who weren't and couldn't get out of there fast enough. 310 00:26:06,960 --> 00:26:17,040 Well, and without going too far down the generational differences road, it's even more important in 2025 than it was in 1995. 311 00:26:17,040 --> 00:26:18,696 Like it's different now. 312 00:26:19,264 --> 00:26:20,114 It really is. 313 00:26:20,114 --> 00:26:21,255 really is. 314 00:26:21,995 --> 00:26:27,418 Switching gears a little bit around innovation and reality versus hype. 315 00:26:27,418 --> 00:26:44,635 We talked about, I can't remember if I told you the story or not, a friend of mine who recently pushed out an AI product and he's a multi exit founder and he has found himself, 316 00:26:44,635 --> 00:26:46,846 even when he has executive sponsorship, 317 00:26:46,988 --> 00:26:57,041 At a law firm, he gets put into a queue that a prioritization committee manages and is completely out of anyone's control other than that committee. 318 00:26:57,041 --> 00:27:04,853 Cause there's so many POCs and pilots going on with all these AI tools and there's a sick, there's so much fragmentation. 319 00:27:04,853 --> 00:27:09,264 Like as a law firm, how do you know where to put your chips on the table? 320 00:27:09,264 --> 00:27:13,705 Because the first mover isn't always the longterm winner of a market. 321 00:27:13,705 --> 00:27:15,606 So there's a lot of challenges right now. 322 00:27:15,606 --> 00:27:16,920 Um, 323 00:27:16,920 --> 00:27:22,030 You know, I beat up on copilot a lot because it's so it's and I'm a Microsoft partner. 324 00:27:22,030 --> 00:27:23,692 I used to work at Microsoft. 325 00:27:23,692 --> 00:27:26,603 That's how I got started in tech. 326 00:27:26,603 --> 00:27:30,414 I was a develop Microsoft developer before I went to Microsoft, but. 327 00:27:31,494 --> 00:27:38,596 So I'm a Microsoft guy, but you know when I look at the tool, it's it needs work. 328 00:27:38,596 --> 00:27:44,482 What is your take on just like the current state of legal AI and? 329 00:27:44,482 --> 00:27:45,654 I'm throwing copilot in there. 330 00:27:45,654 --> 00:27:49,480 That's not legal specific, but what's your take on where we're at? 331 00:27:51,528 --> 00:27:57,153 so, uh, I think it's a little whack-a-moley right now. 332 00:27:57,153 --> 00:28:01,316 Like I don't think that's a word, but, um, everybody knows what whack-a-mole is. 333 00:28:01,316 --> 00:28:07,160 And, you know, I, I think we're creating a Big mess. 334 00:28:07,160 --> 00:28:11,102 I regularly talk to firms and I say, tell me about your AI strategy. 335 00:28:11,102 --> 00:28:17,317 And they say, well, we own co-pilot and we own co-counsel and we own, and I was like, awesome. 336 00:28:17,317 --> 00:28:17,617 Okay. 337 00:28:17,617 --> 00:28:19,268 So let me just ask the question again. 338 00:28:19,268 --> 00:28:21,299 Tell me a little bit about your AI strategy. 339 00:28:21,299 --> 00:28:24,280 they're like, what do you mean? 340 00:28:24,280 --> 00:28:25,610 Like what, right? 341 00:28:25,610 --> 00:28:32,492 So I think that we are solving problems in a vacuum. 342 00:28:33,513 --> 00:28:39,054 you know, I present a lot and I talk from the stage all the time. 343 00:28:39,054 --> 00:28:44,356 And one of my favorite things to say, and this is not meant to disparage. 344 00:28:44,386 --> 00:28:47,347 a lawyer, this is true for like the universe of humans. 345 00:28:47,347 --> 00:28:48,887 So I only work in law firms. 346 00:28:48,887 --> 00:28:52,398 So my view of the world is pretty jaded because that's where I am. 347 00:28:52,998 --> 00:29:00,900 you know, when I think about what will transform a law firm, I really do think it is a vision for getting work done differently. 348 00:29:01,161 --> 00:29:03,641 That is what I think will transform a law firm. 349 00:29:03,641 --> 00:29:13,764 I don't think a tool is going to do it because I think that lawyers have had the ability to transform how they get their work done by just learning how to use Microsoft Word. 350 00:29:14,510 --> 00:29:21,185 or learning how to use Microsoft Outlook or learning how to use their PDF program in a more efficient way. 351 00:29:21,185 --> 00:29:28,429 That five years ago, before all this Gen.A stuff, that could have transformed how they get the work done. 352 00:29:28,490 --> 00:29:31,752 And then I'm sure you've heard the stories as I have. 353 00:29:31,752 --> 00:29:39,637 I tried that program, Insert AI Tool here, and it didn't work for me because you're just not going to know how to use it. 354 00:29:39,637 --> 00:29:43,448 mean, when I first started using ChatGPT, I was like, 355 00:29:43,448 --> 00:29:45,430 this is amazing, but it's kind of weird. 356 00:29:45,430 --> 00:29:46,641 And then I started learning. 357 00:29:46,641 --> 00:29:47,712 I started reading books. 358 00:29:47,712 --> 00:29:53,056 I started following 15 people and I started like, I don't know for you, it's probably true too. 359 00:29:53,056 --> 00:29:58,241 It's like a tiny little part-time job of mine to stay up to date on what's going on with AI. 360 00:29:58,241 --> 00:30:03,184 Well, every lawyer I talked to is so busy, busier than a one-armed paper hanger. 361 00:30:03,925 --> 00:30:08,259 They're trying to take care of their clients and how do you, it's chicken egg, chicken egg, chicken egg. 362 00:30:08,259 --> 00:30:09,910 How do you make time for this? 363 00:30:09,911 --> 00:30:12,052 So my take is, 364 00:30:12,184 --> 00:30:14,185 I feel the same way that you feel about Copilot. 365 00:30:14,185 --> 00:30:21,208 I was just on a call right before I got on this call with a Microsoft partner who's Big on Copilot. 366 00:30:21,208 --> 00:30:23,189 And she said, well, let me show you how I can help you. 367 00:30:23,189 --> 00:30:27,751 Open up Copilot right now and type in what's on my calendar for next week. 368 00:30:27,751 --> 00:30:31,963 And I was like, all right, not that I would ever manage my next week by asking Copilot. 369 00:30:31,963 --> 00:30:35,694 I would just simply look at my calendar, but I'll humor her for a moment. 370 00:30:35,694 --> 00:30:37,695 I typed that in and it said, 371 00:30:39,564 --> 00:30:48,339 you've got some interesting stuff lined up on your calendar and it talked about a baseball game and it talked about an Asian food festival and it talked about this live performance 372 00:30:48,339 --> 00:30:50,350 going on at the Wellington Arena. 373 00:30:50,350 --> 00:30:57,374 None of those things are on my calendar, but it did figure out where I physically am right now. 374 00:30:57,374 --> 00:31:07,960 So I guess kudos to the location services that are all, you know, working in our browsers, but it did not mention anything that is on my calendar for next week. 375 00:31:08,280 --> 00:31:11,782 And she's like, well, maybe you just don't have copilot configured the right way. 376 00:31:11,782 --> 00:31:12,402 like, I don't know. 377 00:31:12,402 --> 00:31:14,964 It's in every Microsoft 365 application. 378 00:31:14,964 --> 00:31:18,186 I open there's copilot asking me how it can help me. 379 00:31:18,186 --> 00:31:22,428 know, so I also, it's right. 380 00:31:22,428 --> 00:31:23,509 Exactly. 381 00:31:23,509 --> 00:31:35,596 I also, I haven't, but I chat GPT and you could insert Claude or, know, whatever your tool of preference has changed the way that I get work done from a strategy and thought partner 382 00:31:35,596 --> 00:31:36,746 perspective. 383 00:31:37,587 --> 00:31:37,908 100%. 384 00:31:37,908 --> 00:31:42,168 I don't, if you took it away from me, I'd be like, I'm gonna go work at Target. 385 00:31:42,508 --> 00:31:44,191 I don't wanna do this. 386 00:31:44,191 --> 00:31:44,951 Yeah. 387 00:31:44,951 --> 00:31:52,115 Well, so you and I are doing another podcast with Ilta and I swear it was three minutes before the call. 388 00:31:52,115 --> 00:31:53,725 I was like, wow. 389 00:31:53,725 --> 00:31:54,636 What we're talking about. 390 00:31:54,636 --> 00:31:57,817 I just had a conversation and I have the recording. 391 00:31:57,817 --> 00:32:02,930 I downloaded the transcript within three minutes and you saw the output and it was amazing. 392 00:32:02,930 --> 00:32:05,921 I asked Claude, in fact, I still got it up. 393 00:32:05,921 --> 00:32:07,648 Um, I said, 394 00:32:07,648 --> 00:32:13,140 Summarize the points that Keith and I discussed related to the Big foreign KPMG entering the US legal market. 395 00:32:13,140 --> 00:32:14,980 Boom, boom, boom, boom, boom. 396 00:32:14,980 --> 00:32:16,259 Co-pilot. 397 00:32:16,801 --> 00:32:20,302 This is an exercise that is interesting. 398 00:32:20,302 --> 00:32:29,345 If I go to co-pilot half the time and I ask it, summarize or prioritize the unread emails in my inbox. 399 00:32:29,345 --> 00:32:34,256 It gives me like the last 15 and I've always got way more than 15. 400 00:32:34,256 --> 00:32:35,018 Sorry. 401 00:32:35,018 --> 00:32:42,041 I asked it to, I told this story, I presented it a co-pilot symposium, which was hosted by Microsoft. 402 00:32:42,041 --> 00:32:43,121 Awkward. 403 00:32:44,121 --> 00:32:45,218 I told this story. 404 00:32:45,218 --> 00:32:53,265 I block off three 45 minute blocks a day and I call it just thought leadership on my calendar, but it's really just so I can like eat, right? 405 00:32:53,265 --> 00:32:56,866 Like, or go to the bathroom and they, people don't schedule meetings. 406 00:32:56,866 --> 00:33:03,529 So I go into the ad, the outlook, a co-pilot and I said, how many thought leadership meetings do I have on my calendar? 407 00:33:03,529 --> 00:33:04,536 And it said, 408 00:33:04,536 --> 00:33:10,110 you have Well, I had 15, but just to throw it a curve ball, said, I actually have nine. 409 00:33:10,110 --> 00:33:11,691 Why did you tell me 12? 410 00:33:11,691 --> 00:33:13,832 And it goes, you do have nine. 411 00:33:14,253 --> 00:33:18,216 So, so then I was like, okay, this is horrendous. 412 00:33:18,216 --> 00:33:27,322 So I took a screenshot of my calendar and I went with the exact same prompt and Claude and chat GPT and they got it right with a screenshot. 413 00:33:27,322 --> 00:33:33,086 So think about all the metadata that, that copilot has access to. 414 00:33:33,574 --> 00:33:40,649 Um, and chat GPT just OCRs it and figures it out where, you know, yeah, there's a lot of struggles. 415 00:33:40,649 --> 00:33:49,525 I know it's going to get better and it, it, it's not that it has no value because it does, but it's, I try and lower people's expectations. 416 00:33:49,525 --> 00:33:51,506 Otherwise they're going to get frustrated with it. 417 00:33:51,792 --> 00:33:53,957 So can I just, I want to say just one more thing. 418 00:33:53,957 --> 00:33:57,403 Like for me. 419 00:33:59,212 --> 00:34:03,835 If I am working with a firm who's like, how do we flip the table, which is a unicorn firm. 420 00:34:03,835 --> 00:34:05,155 So there's that. 421 00:34:05,816 --> 00:34:08,237 My strategy is going to be really different. 422 00:34:08,517 --> 00:34:12,780 Most of the firms that I'm working with are really looking for the incremental improvement. 423 00:34:12,780 --> 00:34:15,761 And for me, that never ever starts with a tool. 424 00:34:15,761 --> 00:34:18,403 I say, tell me where there's the most friction. 425 00:34:18,403 --> 00:34:20,464 Our corporate team, they're so frustrated. 426 00:34:20,464 --> 00:34:21,844 I'm like, awesome. 427 00:34:21,865 --> 00:34:26,547 Our team goes in there and sits down with their corporate team and says, what's hard? 428 00:34:27,008 --> 00:34:28,046 What's frictiony? 429 00:34:28,046 --> 00:34:28,946 What takes you too long? 430 00:34:28,946 --> 00:34:30,638 What do you do over and over again? 431 00:34:30,638 --> 00:34:36,780 And then we start talking about how we can actually make their work lives better. 432 00:34:37,701 --> 00:34:39,362 Maybe that's AI. 433 00:34:39,362 --> 00:34:41,704 Maybe it's just a word template. 434 00:34:41,704 --> 00:34:47,747 Maybe it's restructuring their team a little bit so seven people aren't getting the same email. 435 00:34:47,887 --> 00:34:54,391 you know, maybe it's some net documents training because they have net documents and they just don't know how to use it. 436 00:34:54,391 --> 00:34:56,962 And they're doing everything the hard way. 437 00:34:57,462 --> 00:35:02,494 I think, and maybe it's, maybe I already said this, but maybe it's also an AI tool. 438 00:35:02,494 --> 00:35:13,099 I think everything has to be on the table, but when it comes to incremental improvement, if that's all a firm can bite off right now, it doesn't start with tool shopping. 439 00:35:13,099 --> 00:35:17,001 That is just the wrong way to do it, in my opinion. 440 00:35:17,001 --> 00:35:19,922 Some might disagree with me, but that is in my opinion. 441 00:35:19,922 --> 00:35:23,914 The right way to do it is find a willing participant. 442 00:35:24,314 --> 00:35:27,706 find someone who's like, can you please help me? 443 00:35:27,706 --> 00:35:29,587 I'm literally drowning. 444 00:35:29,608 --> 00:35:31,469 Can you please help our team? 445 00:35:31,469 --> 00:35:34,501 And we come in and we look at everything about how they get work done. 446 00:35:34,501 --> 00:35:36,853 They're like, what if you clicked on that instead of this? 447 00:35:36,853 --> 00:35:38,033 What if you did it this way? 448 00:35:38,033 --> 00:35:39,234 What if you worked like this? 449 00:35:39,234 --> 00:35:43,837 Hey, can we do a session for your whole team on time blocking? 450 00:35:43,837 --> 00:35:47,880 Can we just talk to you about the value of time blocking? 451 00:35:48,040 --> 00:35:51,582 That could revolutionize how you guys get your work done. 452 00:35:52,023 --> 00:35:53,564 And that is... 453 00:35:53,922 --> 00:36:01,916 I am 100 % for innovation and technology implementations and re-imagining and all of that. 454 00:36:02,036 --> 00:36:12,000 But so many of the clients that we work with, we have to start with a willing team, a willing group of participants, and then you go tell the story. 455 00:36:12,001 --> 00:36:16,603 Then you have a case study, you have an experiment, you have something that you did. 456 00:36:16,603 --> 00:36:19,322 You have people that they like and that they trust. 457 00:36:19,322 --> 00:36:28,008 that are saying, my gosh, like it wasn't all tools, but there is this really cool tool that we have, but these six other things were really the key to us thinking differently 458 00:36:28,008 --> 00:36:29,779 about how we get this work done. 459 00:36:29,779 --> 00:36:33,862 And if I had to give someone a piece of advice of like, what will you do next? 460 00:36:33,862 --> 00:36:34,657 I don't even care. 461 00:36:34,657 --> 00:36:36,354 We're like, this can just be a generic. 462 00:36:36,354 --> 00:36:37,825 What should you do next? 463 00:36:37,825 --> 00:36:39,026 That's what you should do. 464 00:36:39,026 --> 00:36:47,131 Find somebody who's willing to innovate, who's willing to be iterative, who's willing to think differently about getting their work done and say, let's sit down and brainstorm. 465 00:36:47,131 --> 00:36:48,982 How do we think about this differently? 466 00:36:49,390 --> 00:36:50,450 interesting. 467 00:36:50,450 --> 00:36:53,650 Yeah, I spent some, I spent 10 years at Bank of America. 468 00:36:53,990 --> 00:37:03,030 So I've been an entrepreneur for 32 years, an operator for 22 of those, nine at Bank of America. 469 00:37:03,030 --> 00:37:09,890 I was at Microsoft for one and yeah, exactly. 470 00:37:10,070 --> 00:37:11,270 Wink, wink. 471 00:37:11,850 --> 00:37:14,470 I'll take, flattery will get you everywhere, Debbie. 472 00:37:15,756 --> 00:37:22,651 But you know, I got a, uh, I got a lot of Six Sigma lean and Six Sigma training at bank of America and became a black belt. 473 00:37:22,651 --> 00:37:32,738 And, in fact, we had a common customer where I went in and with two other black belts and we completely redid their default services process. 474 00:37:32,738 --> 00:37:34,679 So I always think process process. 475 00:37:34,679 --> 00:37:40,844 Some people think tools, some think people think people, um, I always think process. 476 00:37:40,844 --> 00:37:43,205 So that's where my brain goes immediately. 477 00:37:43,205 --> 00:37:44,920 Let's document what you're doing. 478 00:37:44,920 --> 00:37:50,211 Let's take a look at what is your, yeah, what is your highest pain point? 479 00:37:50,211 --> 00:37:53,802 And then let's, let's, let's write it down what you actually do. 480 00:37:53,802 --> 00:37:57,253 And then let's compare it to your neighbor and let's see how they do it. 481 00:37:57,253 --> 00:37:58,634 And then their neighbor. 482 00:37:58,634 --> 00:38:08,907 Um, but yeah, you're right about the willing participants without, without that and without buy-in from leadership, you can have all the willing participants you want, but if 483 00:38:08,907 --> 00:38:14,028 they're not going to fund it or they're not going to support it, you're, you're spinning wheels. 484 00:38:14,448 --> 00:38:15,392 for sure. 485 00:38:15,628 --> 00:38:16,478 Yeah. 486 00:38:16,478 --> 00:38:26,401 Well, we talked a little bit about the Big Four and you know, their entry into the market and what, what that means to the industry. 487 00:38:26,421 --> 00:38:40,215 But with, with the way, the way fortune 500 companies operate typical fortune 500 companies is they have a board of directors that selects management and overseas 488 00:38:40,215 --> 00:38:43,005 management and holds management accountable. 489 00:38:43,186 --> 00:38:45,376 And you know, 490 00:38:45,546 --> 00:38:57,915 Those board of directors are installed by shareholders and there's this line of accountability that creates, that drives certain behaviors. 491 00:38:57,915 --> 00:39:04,700 So for example, when the board places management, it's based on resume. 492 00:39:04,700 --> 00:39:07,732 It's based on ability to fill a role. 493 00:39:07,732 --> 00:39:09,163 It's based on track record. 494 00:39:09,163 --> 00:39:11,764 That's not how it works in law firms typically. 495 00:39:14,008 --> 00:39:21,363 people who are the best at lawyering rise to the XCOM, to the ranks, to the managing partner. 496 00:39:21,443 --> 00:39:33,171 But without that structural framework, how can law firms, because the partnership model is just not going to go away, right? 497 00:39:33,171 --> 00:39:36,253 I mean, even the Big Four, they're a partnership model. 498 00:39:36,253 --> 00:39:43,718 How can law firms bring some of that accountability 499 00:39:44,007 --> 00:39:49,099 and alignment in the model that they're in, because that's not going to change. 500 00:39:49,914 --> 00:39:52,225 So I think that's a great question. 501 00:39:52,225 --> 00:40:02,229 And you and I are both EOS fans and, you know, Traction, the book Traction, which Traction is an excellent book, but it doesn't contemplate that structure. 502 00:40:02,424 --> 00:40:05,350 And so it makes it a little bit hard. 503 00:40:05,491 --> 00:40:15,625 I start off by saying you don't sit in a, like, if we're drawing out an accountability chart, like who's going to do what, you do not get that seat because of your ownership 504 00:40:15,625 --> 00:40:16,005 status. 505 00:40:16,005 --> 00:40:17,976 You get that seat because of your skill. 506 00:40:17,976 --> 00:40:19,177 and your experience, right? 507 00:40:19,177 --> 00:40:22,438 And we decide who should fill a job. 508 00:40:22,438 --> 00:40:27,781 And one of the criteria is not, they own part of this business? 509 00:40:27,781 --> 00:40:31,884 And so, you I get asked a lot, do I think that lawyers should run law firms? 510 00:40:31,884 --> 00:40:34,275 And I say, I don't know, this is not even the right question. 511 00:40:34,275 --> 00:40:38,127 Like, what is the skill set required to run a law firm? 512 00:40:38,127 --> 00:40:39,847 Let's make a list of that. 513 00:40:39,888 --> 00:40:43,750 And then if we're looking for someone to run our law firm, let's go find that person. 514 00:40:43,810 --> 00:40:48,032 If you tell me that that person happens to be a lawyer or have their JD, 515 00:40:48,634 --> 00:40:51,686 Great, but we don't start with that. 516 00:40:51,686 --> 00:40:54,728 And so I think it goes back to what we talked about before. 517 00:40:54,728 --> 00:41:02,574 How do we put executive business leaders in place that have the subject matter expertise to run human resources, business development? 518 00:41:02,574 --> 00:41:09,338 And maybe there is a lawyer in legal operations who's overseeing the services delivery part of the business. 519 00:41:09,338 --> 00:41:15,863 Maybe that is a lawyer, but IT, finance, like how do we have the right people in place? 520 00:41:15,863 --> 00:41:17,986 And then how do we create 521 00:41:17,986 --> 00:41:28,336 or mimic that kind of structure with a, maybe it's with a managing partner, maybe there is an executive committee that serves as like a board of directors with equity partners who 522 00:41:28,336 --> 00:41:30,048 are like the shareholders. 523 00:41:30,048 --> 00:41:37,054 But what's clear then about the equity partners is how do we set the expectations with the ones we have? 524 00:41:37,054 --> 00:41:39,418 And when we bring them in, like, hey, 525 00:41:39,418 --> 00:41:47,035 You're going to be an equity partner because you met these criteria, but just FYI, it doesn't mean they get to hire anybody, fire anybody. 526 00:41:47,035 --> 00:41:54,001 You get to decide if we're going to admit a new partner, if we're going to file for bankruptcy, if we're going to buy a new building, if we're going to take out a loan. 527 00:41:54,001 --> 00:41:56,643 Those are the things that you get to vote on. 528 00:41:57,104 --> 00:42:02,508 The day-to-day business operations are run by our executive leadership team. 529 00:42:02,749 --> 00:42:06,992 And then we figure out the right structure for the law firm based on 530 00:42:07,258 --> 00:42:14,058 how far we can push their culture, which is a little bit like that is the start of how do we flip the business model? 531 00:42:14,668 --> 00:42:20,562 Yeah, I'm smirking because what's popping into my head is we're a profession, not a business. 532 00:42:21,604 --> 00:42:22,164 right. 533 00:42:22,164 --> 00:42:27,068 I know I, that is such a, that holds the industry back. 534 00:42:27,789 --> 00:42:28,940 it re it really does. 535 00:42:28,940 --> 00:42:35,775 I mean, the, the practice informs the business and the business informs the practice. 536 00:42:35,775 --> 00:42:42,400 They are very tightly coupled and hopelessly intertwined and you can't have one without the other. 537 00:42:42,501 --> 00:42:44,238 So to say that it's, 538 00:42:44,238 --> 00:42:45,858 You're not a business. 539 00:42:45,858 --> 00:42:47,658 You're really sticking your head in the sand. 540 00:42:47,658 --> 00:42:53,538 But that mentality manifests itself in other places. 541 00:42:54,458 --> 00:43:06,858 Coming to the realization of what you just described is we need executives in here who are leading and not necessarily us as lawyers. 542 00:43:09,138 --> 00:43:12,098 That belief is very deeply rooted. 543 00:43:12,158 --> 00:43:13,796 You're in Florida, right? 544 00:43:13,796 --> 00:43:14,626 Mm-hmm. 545 00:43:14,626 --> 00:43:19,648 So I did a little research on this for, don't know, I was just going down a rabbit hole. 546 00:43:19,648 --> 00:43:35,855 The Florida Bar wrote a really lengthy article about the distinction between a practice or between a profession and a business and went to great lengths. 547 00:43:35,855 --> 00:43:37,436 It's a really interesting read. 548 00:43:37,436 --> 00:43:43,318 I was just kind of shaking my head as I was reading it about, it's a... 549 00:43:43,342 --> 00:43:56,722 If you want to Google Florida bar profession versus business, um, it'll probably come up, but the bar association is also propagating this distinction that I think doesn't serve 550 00:43:56,722 --> 00:44:06,422 the industry because we got to think about this like a business, especially now, especially now that we have real businesses coming in fortune, 100 businesses that you're 551 00:44:06,422 --> 00:44:08,302 going to be competing with really soon. 552 00:44:08,302 --> 00:44:09,418 You agree? 553 00:44:09,418 --> 00:44:11,169 and I totally agree. 554 00:44:11,169 --> 00:44:13,410 And one last thing I'll say about that. 555 00:44:13,470 --> 00:44:30,370 is so like down to small little things like a HR director or a chief HR officer putting out a policy and a paralegal not liking it and going to their lawyer, the lawyer that they 556 00:44:30,370 --> 00:44:32,061 work for and saying, I don't want to do that. 557 00:44:32,061 --> 00:44:33,532 And the lawyer saying, don't worry about it. 558 00:44:33,532 --> 00:44:35,362 You don't have to follow that rule. 559 00:44:35,463 --> 00:44:38,080 Like it is, it's that 560 00:44:38,080 --> 00:44:40,141 kind of undermining. 561 00:44:40,161 --> 00:44:52,125 And I don't know that most of the lawyers that I work with recognize the paper cut that is that over and over and over and over and over again. 562 00:44:52,166 --> 00:45:03,670 And so the structural challenges that contribute to that culture go down to the relationship that an attorney and a legal secretary or a legal assistant or a paralegal 563 00:45:03,670 --> 00:45:07,712 have and how we have to buy into that structure. 564 00:45:07,712 --> 00:45:15,836 all the way down to policies and procedures that are set for the good of the number one stakeholder, the business. 565 00:45:16,276 --> 00:45:22,238 And even when we don't agree, we commit to following those processes. 566 00:45:22,239 --> 00:45:30,243 It goes down to the smallest little things like that, that makes those executive business leaders feel like they can't make an impact in a law firm. 567 00:45:30,243 --> 00:45:33,964 So it's Big stuff and it's the little stuff. 568 00:45:33,964 --> 00:45:36,956 Yeah, I actually go, I do the opposite. 569 00:45:36,956 --> 00:45:42,820 I go above and beyond the policies to try and set the tone at the top. 570 00:45:42,820 --> 00:45:53,456 Like I go overboard a little bit because just to show my commitment, even when I don't like it, like, you know, I mean, could I get away with not fully when I was at TLTF, part 571 00:45:53,456 --> 00:45:54,637 of that was personal. 572 00:45:54,637 --> 00:46:00,000 Part of it was business and I had to separate it all out and put it in a spreadsheet and 573 00:46:00,000 --> 00:46:06,836 You know, I didn't send it to everybody, but you know, my accounting department said, Hey, you know what Ted's Ted's not throwing his weight around here. 574 00:46:06,836 --> 00:46:10,849 He's, uh, did a damn good job separating this out. 575 00:46:10,849 --> 00:46:12,510 So I think it's important. 576 00:46:12,510 --> 00:46:14,822 The tone at the top is really important. 577 00:46:15,065 --> 00:46:17,322 So important, so important. 578 00:46:17,400 --> 00:46:20,872 Well, this has been a great conversation as always. 579 00:46:20,933 --> 00:46:23,995 And, um, you and I are going to have another one in about a week. 580 00:46:23,995 --> 00:46:33,203 We're going to do, I don't know what the timing, if this will come out before that, but you and I are going to talk about, we're going to dive a little deeper into the 581 00:46:33,203 --> 00:46:37,346 alternative business structures and what the implications are. 582 00:46:37,627 --> 00:46:41,806 the audience can, uh, keep their ear out for that, but 583 00:46:41,806 --> 00:46:43,904 I really appreciate you spending a little bit of time. 584 00:46:43,904 --> 00:46:48,309 It's always a pleasure to talk to you and I look forward to seeing you next week. 585 00:46:48,386 --> 00:46:49,450 Yes, I will see you next week. 586 00:46:49,450 --> 00:46:50,978 Thank you so much for having me. 587 00:46:50,978 --> 00:46:51,444 course. 588 00:46:51,444 --> 00:46:52,710 We'll talk soon. 589 00:46:52,752 --> 00:46:53,573 All right. 00:00:04,593 Debbie Foster, long time no see. 2 00:00:05,409 --> 00:00:08,296 It's been forever, like at least an hour. 3 00:00:09,802 --> 00:00:16,030 And we're going to see each other again at a conference in like a week and a half. 4 00:00:16,030 --> 00:00:19,444 So yeah, you're going to be sick of me by the time this is all said and done. 5 00:00:19,780 --> 00:00:22,575 Yes, probably not, because I love talking to you. 6 00:00:22,575 --> 00:00:28,516 I feel like we just talked about doing something for 20 minutes and decided we could have talked about it for three days. 7 00:00:28,516 --> 00:00:31,595 So I won't be sick of you, I'm sure of it. 8 00:00:31,595 --> 00:00:32,265 Good answer. 9 00:00:32,265 --> 00:00:32,475 Good. 10 00:00:32,475 --> 00:00:33,816 I like to answer. 11 00:00:34,357 --> 00:00:42,443 Well, before we, you and I have known each other for a really long time and I met you at ABA tech show. 12 00:00:42,443 --> 00:00:51,550 We were trying to figure it out the last time we spoke, but it was at least 12 years ago because I remember who was working for me, maybe even 13. 13 00:00:51,550 --> 00:00:52,791 So long time. 14 00:00:52,791 --> 00:00:56,743 And I've seen, you you're the CEO at affinity consulting. 15 00:00:56,743 --> 00:00:57,754 I've seen 16 00:00:57,802 --> 00:01:02,852 you grow that business significantly and it's been fun to watch. 17 00:01:02,852 --> 00:01:08,712 Why don't we, why don't you introduce yourself, tell us who you are, what you do and where you do it. 18 00:01:08,922 --> 00:01:09,332 Sure. 19 00:01:09,332 --> 00:01:12,974 So Debbie Foster, CEO of Affinity Consulting Group. 20 00:01:13,274 --> 00:01:22,438 We are a consulting firm that focuses on helping law firms think differently about how they get their work done, which a lot of times, most of the time involves the technology 21 00:01:22,438 --> 00:01:27,361 that they use, whether they can use what they have better or they're looking for something new. 22 00:01:27,361 --> 00:01:30,762 And we also help firms think differently about how their businesses run. 23 00:01:30,762 --> 00:01:35,074 So we help them with strategic planning and succession planning and leadership and 24 00:01:35,152 --> 00:01:39,533 hiring and attracting and retaining talent and all of that fun stuff. 25 00:01:39,533 --> 00:01:43,375 it's really a, so we started off as a technology firm. 26 00:01:43,375 --> 00:01:50,577 We're focused a lot on implementing new software, but as everyone knows, software does not solve people problems. 27 00:01:50,577 --> 00:01:53,017 It does not help with bad processes. 28 00:01:53,017 --> 00:02:01,700 And our realization of that led us to expand beyond just being focused on a technology implementation. 29 00:02:02,200 --> 00:02:05,377 Yeah, software makes it worse, makes those problems worse. 30 00:02:05,614 --> 00:02:06,427 Right. 31 00:02:06,427 --> 00:02:09,374 Or they have the same problems and then they have 11 new ones. 32 00:02:09,374 --> 00:02:11,238 it, yeah. 33 00:02:11,837 --> 00:02:12,998 Exactly. 34 00:02:12,998 --> 00:02:17,597 Well, so, you and I had kicked around. 35 00:02:17,597 --> 00:02:24,160 We were first, uh, chewing the fat, if you will, on the Big Four entering the market. 36 00:02:24,160 --> 00:02:30,931 And that kind of took us down a path of some of the traditional law firm business model challenges. 37 00:02:30,931 --> 00:02:35,172 And it's something that I talk a lot about in the podcast because I think it's such an important topic. 38 00:02:35,172 --> 00:02:37,998 Uh, there's no easy answers to it, but 39 00:02:37,998 --> 00:02:43,192 you know, we're getting into a place now with new technology developments with Gen. 40 00:02:43,192 --> 00:02:53,110 AI and the Big Four moving in via the alternative business structures in Arizona and soon to be Utah. 41 00:02:53,511 --> 00:03:07,374 And yeah, I think that now zeroing in on these limit, you know, these limitations, whatever you want to call them, nuances with how law firms operate is 42 00:03:07,374 --> 00:03:08,834 It's a timely discussion. 43 00:03:08,834 --> 00:03:18,834 I think the time is right and firms that aren't reevaluating how they're doing business are going to pay the price for that. 44 00:03:18,834 --> 00:03:33,674 As we see new entrants into the market, not just the Big Four, there's smaller accounting firms, Aprio Legal, 3000 employee accounting firm and a Radix Law, 50 attorney law firm 45 00:03:33,674 --> 00:03:36,994 forming a JV and entering, you know, 46 00:03:36,994 --> 00:03:39,156 hanging a shingle in Arizona. 47 00:03:39,156 --> 00:03:44,609 So it doesn't look like this is just going to be a Big, massive, Big Four initiative. 48 00:03:44,609 --> 00:03:50,604 It looks like there are going to be players from different altitudes, if you will. 49 00:03:50,604 --> 00:04:05,334 But what is your take on where we're at today and how important it is that we have this discussion about the current decision making, for example, in law firms? 50 00:04:06,104 --> 00:04:16,948 Yeah, I mean, it's such a fundamental challenge around the business model, because I think that the connection that I always make, and when I'm talking to clients about the flip the 51 00:04:16,948 --> 00:04:20,810 table strategy, like what does the flip the table strategy look like? 52 00:04:21,090 --> 00:04:24,712 The real challenge doesn't just boil down to the business model. 53 00:04:24,712 --> 00:04:29,473 It boils down to the business model and how it is connected to how people get paid. 54 00:04:30,194 --> 00:04:32,375 What we value in a law firm, right? 55 00:04:32,375 --> 00:04:33,375 What do we value? 56 00:04:33,375 --> 00:04:35,268 Origination, bring the business in. 57 00:04:35,268 --> 00:04:37,930 We value it and we reward it financially. 58 00:04:37,930 --> 00:04:39,141 We value production. 59 00:04:39,141 --> 00:04:40,382 How hard are you willing to work? 60 00:04:40,382 --> 00:04:42,333 How many hours are you willing to bill? 61 00:04:42,333 --> 00:04:46,076 How do we measure what you bill versus what gets collected? 62 00:04:46,076 --> 00:04:50,378 And your paycheck ends up being comprised of those things. 63 00:04:50,579 --> 00:04:58,104 And if we were thinking about this very strategically from a high level business perspective, we would be talking about profitability, right? 64 00:04:58,104 --> 00:05:04,488 We would be talking about how do we build a business that generates a profit for its shareholders? 65 00:05:04,804 --> 00:05:09,547 And there's just a Big disconnect in this lawyer business model from that. 66 00:05:09,647 --> 00:05:22,036 And to come up against these ALSPs or the Big Four who are building engines to deliver the products and services that a law firm delivers, right? 67 00:05:22,036 --> 00:05:28,281 That's the heart of the challenge is the law firm isn't building an engine to deliver these products and services. 68 00:05:28,281 --> 00:05:33,824 The law firm is delivering them one at a time with lots of high touch, lots of hands-on. 69 00:05:35,268 --> 00:05:45,033 the Big Four or the other alternative legal service providers are not looking to figure out a better way mimicking the law firm model. 70 00:05:45,034 --> 00:05:46,494 That's not what they did. 71 00:05:46,574 --> 00:05:48,375 They said, we're not gonna do it that way. 72 00:05:48,375 --> 00:05:50,737 We're gonna build something first, right? 73 00:05:50,737 --> 00:05:58,761 And I think that our clients, our law firm clients really struggle with the vision of doing it differently. 74 00:05:58,761 --> 00:06:04,334 Not necessarily just a piece of technology, but the vision for how they would do it differently. 75 00:06:04,750 --> 00:06:15,710 You know, and I don't know if people really truly appreciate the size and scale of the Big Four So they're, they're a partnership model like, like law firms, but a much bigger, more 76 00:06:15,710 --> 00:06:20,570 efficient, like KPMG is 40 billion a year, 40. 77 00:06:20,570 --> 00:06:22,270 And they're the smallest. 78 00:06:22,310 --> 00:06:24,270 They're the smallest of the Big Four. 79 00:06:24,270 --> 00:06:26,670 Deloitte is at the top and they're 70 billion. 80 00:06:26,670 --> 00:06:27,250 Right? 81 00:06:27,250 --> 00:06:29,050 So these are massive organizations. 82 00:06:29,050 --> 00:06:33,528 In fact, Deloitte would be Fortune 100 if they were public. 83 00:06:33,528 --> 00:06:43,206 There's not one firm that would be big enough to be in the Fortune 500, which includes Kirkland and Ellis, which is in the low seven billions in revenue. 84 00:06:43,206 --> 00:06:51,613 So these are massive organizations with massive resources, with all sorts of capabilities, with a global footprint. 85 00:06:51,613 --> 00:06:54,335 KPMG has 4,000 lawyers. 86 00:06:54,376 --> 00:06:58,639 is, this is going to really change the game. 87 00:06:58,639 --> 00:07:02,272 And you know, I had a debate on the last podcast. 88 00:07:02,722 --> 00:07:11,938 with someone who, you know, we were kicking around, all right, well, how does this time differ from last time? 89 00:07:11,938 --> 00:07:16,712 You know, 10 years ago or seven years ago, whenever it was, the Big Four made a Big push. 90 00:07:16,712 --> 00:07:21,845 And in my opinion, what has changed is the means of legal production, right? 91 00:07:21,845 --> 00:07:29,160 We now have a technology that fundamentally, is fundamentally changing how work product gets delivered. 92 00:07:29,160 --> 00:07:32,408 And that didn't exist seven, eight years ago. 93 00:07:32,408 --> 00:07:33,865 So I do think it's different. 94 00:07:33,865 --> 00:07:37,641 Um, which what's your take on then versus now. 95 00:07:39,886 --> 00:07:41,247 think you're right. 96 00:07:41,247 --> 00:07:53,947 the other thing that I would add is those companies and the companies who are thinking about delivering these services differently are technology first. 97 00:07:54,909 --> 00:07:58,671 And law firms are not technology first. 98 00:07:58,692 --> 00:08:03,556 In fact, I regularly start, I do a lot of strategic planning. 99 00:08:03,556 --> 00:08:09,080 And so I have all these equity partners in a room and I say our number one stakeholder. 100 00:08:09,080 --> 00:08:11,165 Sometimes I even have an empty chair. 101 00:08:11,388 --> 00:08:13,565 The person sitting in that chair is the law firm. 102 00:08:13,565 --> 00:08:15,510 That's our number one stakeholder. 103 00:08:17,060 --> 00:08:23,624 When you're thinking about building a business, you can think about building a traditional business. 104 00:08:23,624 --> 00:08:29,446 You can think about your business being the number one stakeholder and figure out how that personally benefits you. 105 00:08:30,167 --> 00:08:32,168 The law firm doesn't do it like that. 106 00:08:32,348 --> 00:08:41,573 And that is another nuance advantage that the willingness to put the business as the number one stakeholder. 107 00:08:42,934 --> 00:08:44,875 I don't see that a lot. 108 00:08:45,195 --> 00:08:46,830 And part of it is, 109 00:08:46,830 --> 00:08:57,800 You might sit in a room with 25 equity partners and five of them are willing to put the business as the number one stakeholder, but 20 of them don't know what that even means. 110 00:08:58,424 --> 00:08:58,994 Yeah. 111 00:08:58,994 --> 00:09:06,979 And there are fundamental truths in the legal industry that make it difficult. 112 00:09:06,979 --> 00:09:20,506 The cash basis nature of law firms and the difficulty getting capital projects through the short retire. 113 00:09:20,666 --> 00:09:27,870 Usually at the most senior levels, their retirement horizons of the XCOMs members are in sight. 114 00:09:28,268 --> 00:09:36,645 the fact that law firm partners can pick up and move to another firm and take their book of business with them. 115 00:09:36,645 --> 00:09:49,966 Many of these, all of the friction that's involved in law firm decision making, this consensus driven model like you allude to really makes things, it's difficult to get 116 00:09:49,966 --> 00:09:51,918 everybody on the same page. 117 00:09:51,918 --> 00:09:56,101 you're right, technology is not, I've always said it's like, 118 00:09:57,068 --> 00:10:03,291 Many law firms look at technology as an expense to be managed rather than an investment opportunity. 119 00:10:03,453 --> 00:10:08,162 And that's not how these other organizations look at things. 120 00:10:09,136 --> 00:10:10,216 for sure. 121 00:10:10,496 --> 00:10:25,236 the expense to be managed is also like good businesses manage their expenses, but the way that they manage the expenses and I see the, I see the wheels turning. 122 00:10:25,236 --> 00:10:26,336 How much is that going to cost? 123 00:10:26,336 --> 00:10:27,176 $100,000. 124 00:10:27,176 --> 00:10:28,076 They look around the room. 125 00:10:28,076 --> 00:10:30,976 They're like, five, six, seven, eight, right? 126 00:10:30,976 --> 00:10:35,616 Like divided by that many divided by $100,000 divided by that many. 127 00:10:35,616 --> 00:10:37,856 That's how much it's going to cost me. 128 00:10:38,362 --> 00:10:40,213 to that happen, right? 129 00:10:40,213 --> 00:10:48,319 So it's even expenses managed in a way that does not make sense for the business. 130 00:10:49,060 --> 00:10:56,965 I think that, I wish that I could say that I don't hear this anymore, but I just heard it at a meeting that I was in last week. 131 00:10:57,806 --> 00:11:00,570 The idea of buying software, you remember? 132 00:11:00,570 --> 00:11:07,546 we were actually reminiscing that you can't go into Office Depot anymore and there isn't an aisle with all the boxes of the software and you could just take it to the checkout and 133 00:11:07,546 --> 00:11:08,566 you can buy it. 134 00:11:08,566 --> 00:11:10,189 Nobody's buying it, that doesn't work like that. 135 00:11:10,189 --> 00:11:11,870 It doesn't work like that anymore. 136 00:11:11,950 --> 00:11:25,172 And so this concept of you got to spend between 250 and $500 per user per month to have a technology stack, just the technology. 137 00:11:25,172 --> 00:11:27,856 That doesn't include services and all the other stuff, but. 138 00:11:27,856 --> 00:11:30,436 between 250 and $500 a month. 139 00:11:30,436 --> 00:11:32,316 That's what I'm telling firms now. 140 00:11:32,316 --> 00:11:43,676 And I think that that number is closer to the 500 side if you're strategically thinking about how you're incorporating AI into your technology stack, right? 141 00:11:43,676 --> 00:11:45,256 And that's not per lawyer. 142 00:11:45,256 --> 00:11:55,296 That is per human being that is sitting in a chair that gets a paycheck from Paychex or ADP or whoever you, however you're paying them, per person. 143 00:11:55,586 --> 00:12:00,978 We're asking them to think about their technology investment completely differently. 144 00:12:01,619 --> 00:12:07,541 And for me, I want, I tell them, what does success look like? 145 00:12:07,822 --> 00:12:15,865 It looks like you saying to me two years from now, thank you for spending, for asking me to spend that much money. 146 00:12:16,066 --> 00:12:17,947 It's benefited me so much. 147 00:12:17,947 --> 00:12:21,058 Can you think of anything else that I can spend money on? 148 00:12:22,734 --> 00:12:25,196 What are the odds of that conversation happening? 149 00:12:25,196 --> 00:12:26,360 Zero, right? 150 00:12:26,360 --> 00:12:32,676 that, but, you know, if I say to you, Ted, if you give me a dollar, I'll give you $10. 151 00:12:33,742 --> 00:12:34,996 Right, but I gotta give you a dollar. 152 00:12:34,996 --> 00:12:36,569 I don't wanna give you a dollar. 153 00:12:36,656 --> 00:12:37,496 Exactly. 154 00:12:37,496 --> 00:12:41,138 But I'm going to give you $10 like this, right? 155 00:12:41,138 --> 00:12:42,839 It should be a multiplier. 156 00:12:42,839 --> 00:12:47,180 And there's a thousand reasons why it ends up not being a multiplier in a law firm. 157 00:12:47,180 --> 00:12:50,482 But, some of it is related to the business model challenges. 158 00:12:50,482 --> 00:12:58,805 You can change anything you want, as long as you don't ask me to change anything that I'm doing and no consistency in structure around how we get our work done. 159 00:12:58,805 --> 00:13:00,526 It's all connected. 160 00:13:01,146 --> 00:13:05,568 But technology first is the only way out. 161 00:13:06,084 --> 00:13:11,466 and it requires a business model change, which is very hard to imagine. 162 00:13:11,798 --> 00:13:12,818 It is. 163 00:13:12,818 --> 00:13:13,658 It is indeed. 164 00:13:13,658 --> 00:13:14,009 Yeah. 165 00:13:14,009 --> 00:13:18,660 Because it requires cultural change and that's, that's the hardest kind of change. 166 00:13:18,660 --> 00:13:29,563 You and I were talking last time about, measure, uh, profitability measurement versus PPP and some of the challenges that create. 167 00:13:29,563 --> 00:13:31,393 that creates. 168 00:13:31,393 --> 00:13:41,686 in the, is really, this may be a small business concept, but there's something called a SDE, um, shareholder discretionary earnings, which is basically 169 00:13:41,686 --> 00:13:48,432 As a business owner, it's your W2 income plus your distributions and that's your SDE. 170 00:13:48,432 --> 00:13:56,338 And like for &A purposes in the small business world, that's really what you look at when you're looking at the value of a business, right? 171 00:13:56,338 --> 00:14:10,270 If I take a below market salary to inflate my bottom line, that doesn't make the business more valuable because the acquiring party has to replace this role and pay market. 172 00:14:10,370 --> 00:14:16,523 So what are some of the challenges that the way it currently happens creates? 173 00:14:17,562 --> 00:14:24,774 So I'll start with a concept that you're very familiar with because you work with law firms. 174 00:14:24,774 --> 00:14:27,194 Can you tell me how other people are doing it? 175 00:14:27,355 --> 00:14:27,675 Right? 176 00:14:27,675 --> 00:14:30,405 So comparison is a thief, right? 177 00:14:30,405 --> 00:14:31,786 It's just a thief. 178 00:14:31,786 --> 00:14:33,816 We want to know how everybody else is doing it. 179 00:14:33,816 --> 00:14:38,197 So everybody else, everybody else in air quotes is measuring profits per partner. 180 00:14:38,798 --> 00:14:47,244 But if we want to really understand the true profitability story of a client, a matter, 181 00:14:47,244 --> 00:14:51,547 a lawyer, a practice group, a practice group within a practice group. 182 00:14:51,688 --> 00:14:58,373 We have to make sure that everyone's market rate compensation is a factor in that. 183 00:14:58,694 --> 00:15:09,983 The equity partners sitting around a boardroom table are not free to the organization, and profits per partner suggests that they might be, and they're just not. 184 00:15:09,983 --> 00:15:16,708 And so I say all the time, when lawyers that I'm talking to are struggling with that concept, I say, 185 00:15:16,708 --> 00:15:20,192 Let's just pretend that you win the lottery and you're not gonna do this anymore. 186 00:15:20,192 --> 00:15:30,662 And let's pretend that there's an unlimited number of candidates with your skillset, your expertise, your gravitas, your relationships. 187 00:15:30,983 --> 00:15:35,288 I'm going to hire them as an employee because they would not want to be an equity partner. 188 00:15:35,288 --> 00:15:36,018 They're a lawyer. 189 00:15:36,018 --> 00:15:37,791 They do not wanna be an equity partner. 190 00:15:37,791 --> 00:15:39,712 How much do I have to pay them? 191 00:15:41,956 --> 00:15:44,341 How much do I have to, what is my offer letter? 192 00:15:44,341 --> 00:15:46,039 What will it look like? 193 00:15:48,752 --> 00:15:52,032 that is your cost rate. 194 00:15:52,392 --> 00:15:57,612 And so if you really wanna know profitability, we gotta get to that number for everybody. 195 00:15:57,712 --> 00:16:08,172 some firms that I work with have figured that out and have said like every equity partner, I work with a firm in Miami, every equity partner is a $350,000 a year cost rate. 196 00:16:08,172 --> 00:16:12,512 That is factored in when they're doing profitability, that's the number. 197 00:16:12,512 --> 00:16:17,572 But I look around that room and I'm like, if I had to replace you. 198 00:16:17,840 --> 00:16:19,780 It's gonna cost me more than 350. 199 00:16:19,780 --> 00:16:24,420 And I have to replace you, it's gonna cost me less than 350, because you're like a service equity partner. 200 00:16:24,420 --> 00:16:25,960 You don't have a book of business. 201 00:16:26,220 --> 00:16:29,180 You're not kissing babies and shaking hands. 202 00:16:29,960 --> 00:16:32,700 How do we really think about that differently? 203 00:16:32,700 --> 00:16:35,020 And I think that is a Big challenge. 204 00:16:35,020 --> 00:16:38,520 And the bigger law firms get, think the harder that is. 205 00:16:38,520 --> 00:16:40,551 Yeah, that makes a lot of sense. 206 00:16:40,551 --> 00:16:46,742 mean, profit per partner is a vanity metric. 207 00:16:46,742 --> 00:16:48,833 It's public, right? 208 00:16:48,833 --> 00:16:50,713 It's on the AMLaw list. 209 00:16:50,713 --> 00:16:53,374 And you can sort by it. 210 00:16:53,374 --> 00:16:55,694 And you can see who's at the top. 211 00:16:55,735 --> 00:17:02,896 And I would imagine that impacts the ability to lateral folks in. 212 00:17:03,017 --> 00:17:08,268 It's desirable from an outsider perspective. 213 00:17:08,268 --> 00:17:25,042 What about another topic we kicked around, is one I talk about a lot too, is professional management and the business of law and like how they're not always empowered the way that 214 00:17:25,063 --> 00:17:27,744 might maximize effectiveness. 215 00:17:27,744 --> 00:17:34,186 And, you know, we see it in certain roles like, like innovation, which is a Big 216 00:17:34,186 --> 00:17:36,627 Obviously it's in the name of the podcast. 217 00:17:36,627 --> 00:17:44,591 We talk a lot about innovation and sometimes I've seen a whole lot of different approaches. 218 00:17:44,591 --> 00:17:47,232 Sometimes there's a true commitment. 219 00:17:47,312 --> 00:17:52,435 This is probably the least common scenario, but it does happen. 220 00:17:52,435 --> 00:17:57,797 We see a true commitment from firms where they really do want to innovate and not just improve. 221 00:17:57,797 --> 00:18:00,398 The difference is improvement is incremental. 222 00:18:00,886 --> 00:18:07,190 Innovation is foundational and it's disruptive. 223 00:18:07,431 --> 00:18:19,919 Disruptive is not something that you connect dots with with law firms, but sometimes they'll bring in a chief innovation officer from the outside and with an existing strategy 224 00:18:19,919 --> 00:18:21,180 and commitment. 225 00:18:21,180 --> 00:18:30,225 You see great things happen, but a lot of times we see, I've heard CINO referred to as chief in name only. 226 00:18:30,448 --> 00:18:31,343 You 227 00:18:31,343 --> 00:18:44,962 or chief incremental improvement officer, which I think is a total missed opportunity if you've got somebody sitting in that role and there are some incredible thinkers and 228 00:18:44,962 --> 00:18:50,335 innovative thinkers in these roles out there, but they're not always empowered to really make the change. 229 00:18:51,837 --> 00:18:54,218 Do you see the same or do you see differently? 230 00:18:54,576 --> 00:18:55,456 Same. 231 00:18:55,476 --> 00:19:03,283 And so I think starting off by just talking about the definition of small, medium, and large, right? 232 00:19:03,283 --> 00:19:07,286 That's a really challenging conversation to have in legal. 233 00:19:07,326 --> 00:19:11,400 You can easily identify the AmLaw 100 and the AmLaw 200, right? 234 00:19:11,400 --> 00:19:12,911 That's easy to do. 235 00:19:12,911 --> 00:19:19,476 But if you are in Kansas and you have 80 lawyers, your firm is huge. 236 00:19:19,756 --> 00:19:24,440 And if you are in Chicago and you have 80 lawyers, your firm is maybe small, 237 00:19:24,440 --> 00:19:26,681 you might call it mid-size, right? 238 00:19:26,681 --> 00:19:36,768 what I'm about to say is talking about the difference between small and mid-size firms and large firms, understanding that it depends where you live, where you work, what you're 239 00:19:36,768 --> 00:19:41,910 used to, small, medium, large is very hard in legal. 240 00:19:42,251 --> 00:19:50,876 Having said that, my experience, and I do a ton of work with the ALA, the Association of Legal Administrators, and so... 241 00:19:51,210 --> 00:20:07,271 I know a lot of COOs and I've heard a lot of their stories and the larger the firm, generally speaking, the more authority they have around parts of the business. 242 00:20:08,512 --> 00:20:19,650 The smaller the firm, generally speaking, broad breaststroke, they tend to have less authority, but they have the responsibility. 243 00:20:20,420 --> 00:20:31,283 So when I'm talking to a firm about bringing in an executive business leader, and that is, mean, I think one of our ways out of the mess that we're in is an empowered executive 244 00:20:31,283 --> 00:20:36,204 business leader to help to start make those changes. 245 00:20:36,545 --> 00:20:39,485 But how does the firm know that they're ready for that? 246 00:20:39,485 --> 00:20:41,986 And I think that that is step one. 247 00:20:41,986 --> 00:20:45,927 Like if someone calls me and says, can you help us hire a COO? 248 00:20:45,927 --> 00:20:48,938 I say, absolutely, let's talk about if you're ready for that. 249 00:20:50,074 --> 00:20:50,674 What do you mean? 250 00:20:50,674 --> 00:20:52,146 Of course I'm ready for that. 251 00:20:52,146 --> 00:20:52,606 I don't know. 252 00:20:52,606 --> 00:20:54,287 Let me ask you some questions. 253 00:20:54,508 --> 00:20:56,139 What if the wall needs to be painted? 254 00:20:56,139 --> 00:20:59,632 Who is going to get to have a say in what color the wall is, right? 255 00:20:59,632 --> 00:21:16,516 Like you start to go through these ridiculous examples, but I sat in a strategic partner meeting last week with 14 equity partners in a room, a $25 million budget, and there was 256 00:21:16,516 --> 00:21:19,116 an argument about $35,000. 257 00:21:21,006 --> 00:21:22,416 What are we doing? 258 00:21:23,417 --> 00:21:30,319 Why did you, this, can we just talk about how much this room, how much this is costing us right now? 259 00:21:30,639 --> 00:21:48,834 A firm has got to be ready for this and lawyers struggle accepting feedback, direction, process, enforcement from someone who isn't a lawyer. 260 00:21:50,072 --> 00:21:52,634 And that's a cultural challenge. 261 00:21:52,634 --> 00:21:56,557 And what I say when I have my, you ready for this? 262 00:21:56,557 --> 00:22:06,134 I say, are you all willing to let someone else come into this firm and make a decision that you disagree with and support them anyway? 263 00:22:07,818 --> 00:22:09,698 eyes get Big when that happens? 264 00:22:09,698 --> 00:22:18,295 Yeah, because that's, listen, that is hard for anyone who, I mean, I am a self-taught business person. 265 00:22:18,636 --> 00:22:24,821 don't, there is literally nothing that I do today that I went to school to learn how to do. 266 00:22:24,821 --> 00:22:27,422 Not a single thing that I do, right? 267 00:22:28,664 --> 00:22:34,949 You put lawyers in lawyer roles and they are excellent lawyers. 268 00:22:34,949 --> 00:22:36,731 And what do we do with them? 269 00:22:36,731 --> 00:22:38,572 We promote them to... 270 00:22:38,670 --> 00:22:43,963 leading a practice group, to being the managing partner of a firm, throwing them on an executive committee. 271 00:22:43,963 --> 00:22:51,997 And then we say things like, we might have lawyers who are like, I'm gonna stop listening to this woman right now, but that's fine, it's fine. 272 00:22:51,997 --> 00:22:54,109 Not everyone's gonna like what I have to say, it's fine. 273 00:22:54,109 --> 00:22:59,182 But we say things like, no one taught them how to run a business in law school. 274 00:22:59,182 --> 00:23:05,515 And I'm like, it's literally, while your fact might be valid and true, it is also irrelevant. 275 00:23:05,515 --> 00:23:07,416 Anybody learn geometry? 276 00:23:07,436 --> 00:23:08,557 Anyone learn algebra? 277 00:23:08,557 --> 00:23:09,978 Do you still know how to do it? 278 00:23:09,978 --> 00:23:14,380 How do you learn how to do something by doing it? 279 00:23:14,381 --> 00:23:19,484 It's why doctors don't start practicing the minute they finish med school. 280 00:23:19,484 --> 00:23:21,986 You learn how to be a doctor by being a doctor. 281 00:23:21,986 --> 00:23:23,897 You learn how to be a lawyer by being a lawyer. 282 00:23:23,897 --> 00:23:27,050 You learn how to be a business person by being a business person. 283 00:23:27,050 --> 00:23:36,716 And also absorbing, like listening to podcasts, reading books, the way you and I have scratched and clawed our way to where we are, right? 284 00:23:37,026 --> 00:23:40,278 that I don't know about you, but nobody gave me anything along the way. 285 00:23:40,278 --> 00:23:46,523 I have invested my time in becoming a mostly good leader. 286 00:23:46,523 --> 00:23:55,128 Every day is not the same, but a mostly good leader and a mostly good business owner who makes mistakes on the regular, owns them and moves on. 287 00:23:55,289 --> 00:24:05,816 But when we ask these lawyers to step into these, you own a business roles, and then we make excuses that they didn't learn how to do that in law school, 288 00:24:06,976 --> 00:24:19,221 and we don't spend any time training our lawyer leaders to be leaders, it's a little frustrating to see people scratching their heads wondering why this isn't working, right? 289 00:24:19,281 --> 00:24:21,162 So we have to do this differently. 290 00:24:21,162 --> 00:24:24,964 And executive business leaders is one of the ways that we get there. 291 00:24:24,964 --> 00:24:26,474 We gotta be ready for it. 292 00:24:26,594 --> 00:24:27,195 Yeah. 293 00:24:27,195 --> 00:24:32,279 You know, and honestly, business school really doesn't teach you how to be an entrepreneur. 294 00:24:32,279 --> 00:24:38,203 I mean, I have an MBA and it wasn't useless, but it was, it's close. 295 00:24:38,324 --> 00:24:41,306 It's close to useless for as being an entrepreneur. 296 00:24:41,306 --> 00:24:48,211 Now, if you want to go work in a investment bank, Oh, I, I learned some great skills for that. 297 00:24:48,692 --> 00:24:56,578 but being an entrepreneur requires, you know, um, experience in risk taking. 298 00:24:56,670 --> 00:25:11,018 in gut feel, developing a Spidey sense, EQ, how to manage people, how to present yourself, how to, you know, there's just all these skills that it's just not teachable in an 299 00:25:11,018 --> 00:25:12,139 academic setting. 300 00:25:12,139 --> 00:25:14,440 You kind of have to get out there and do it. 301 00:25:14,460 --> 00:25:18,823 So, and you know, I always, I often quote Dr. 302 00:25:18,823 --> 00:25:24,906 Larry Richard who wrote lawyer brain and you know, when he outlines the 303 00:25:25,144 --> 00:25:38,371 personality traits that lawyers tend to score higher and lower than the general public in, know, skepticism, autonomy, urgency, abstract reasoning score higher than score lower than 304 00:25:38,371 --> 00:25:41,643 sociability, resilience, empathy, right? 305 00:25:41,643 --> 00:25:42,944 Think about that. 306 00:25:42,944 --> 00:25:48,147 Empathy is one of the key characteristics of effective leadership. 307 00:25:48,267 --> 00:25:53,990 If you are not empathetic, you are very unlikely to be a good leader and 308 00:25:54,008 --> 00:25:57,570 Good leadership is so critical in business. 309 00:25:57,570 --> 00:26:06,173 And I've been under leaders who weren't and couldn't get out of there fast enough. 310 00:26:06,960 --> 00:26:17,040 Well, and without going too far down the generational differences road, it's even more important in 2025 than it was in 1995. 311 00:26:17,040 --> 00:26:18,696 Like it's different now. 312 00:26:19,264 --> 00:26:20,114 It really is. 313 00:26:20,114 --> 00:26:21,255 really is. 314 00:26:21,995 --> 00:26:27,418 Switching gears a little bit around innovation and reality versus hype. 315 00:26:27,418 --> 00:26:44,635 We talked about, I can't remember if I told you the story or not, a friend of mine who recently pushed out an AI product and he's a multi exit founder and he has found himself, 316 00:26:44,635 --> 00:26:46,846 even when he has executive sponsorship, 317 00:26:46,988 --> 00:26:57,041 At a law firm, he gets put into a queue that a prioritization committee manages and is completely out of anyone's control other than that committee. 318 00:26:57,041 --> 00:27:04,853 Cause there's so many POCs and pilots going on with all these AI tools and there's a sick, there's so much fragmentation. 319 00:27:04,853 --> 00:27:09,264 Like as a law firm, how do you know where to put your chips on the table? 320 00:27:09,264 --> 00:27:13,705 Because the first mover isn't always the longterm winner of a market. 321 00:27:13,705 --> 00:27:15,606 So there's a lot of challenges right now. 322 00:27:15,606 --> 00:27:16,920 Um, 323 00:27:16,920 --> 00:27:22,030 You know, I beat up on copilot a lot because it's so it's and I'm a Microsoft partner. 324 00:27:22,030 --> 00:27:23,692 I used to work at Microsoft. 325 00:27:23,692 --> 00:27:26,603 That's how I got started in tech. 326 00:27:26,603 --> 00:27:30,414 I was a develop Microsoft developer before I went to Microsoft, but. 327 00:27:31,494 --> 00:27:38,596 So I'm a Microsoft guy, but you know when I look at the tool, it's it needs work. 328 00:27:38,596 --> 00:27:44,482 What is your take on just like the current state of legal AI and? 329 00:27:44,482 --> 00:27:45,654 I'm throwing copilot in there. 330 00:27:45,654 --> 00:27:49,480 That's not legal specific, but what's your take on where we're at? 331 00:27:51,528 --> 00:27:57,153 so, uh, I think it's a little whack-a-moley right now. 332 00:27:57,153 --> 00:28:01,316 Like I don't think that's a word, but, um, everybody knows what whack-a-mole is. 333 00:28:01,316 --> 00:28:07,160 And, you know, I, I think we're creating a Big mess. 334 00:28:07,160 --> 00:28:11,102 I regularly talk to firms and I say, tell me about your AI strategy. 335 00:28:11,102 --> 00:28:17,317 And they say, well, we own co-pilot and we own co-counsel and we own, and I was like, awesome. 336 00:28:17,317 --> 00:28:17,617 Okay. 337 00:28:17,617 --> 00:28:19,268 So let me just ask the question again. 338 00:28:19,268 --> 00:28:21,299 Tell me a little bit about your AI strategy. 339 00:28:21,299 --> 00:28:24,280 they're like, what do you mean? 340 00:28:24,280 --> 00:28:25,610 Like what, right? 341 00:28:25,610 --> 00:28:32,492 So I think that we are solving problems in a vacuum. 342 00:28:33,513 --> 00:28:39,054 you know, I present a lot and I talk from the stage all the time. 343 00:28:39,054 --> 00:28:44,356 And one of my favorite things to say, and this is not meant to disparage. 344 00:28:44,386 --> 00:28:47,347 a lawyer, this is true for like the universe of humans. 345 00:28:47,347 --> 00:28:48,887 So I only work in law firms. 346 00:28:48,887 --> 00:28:52,398 So my view of the world is pretty jaded because that's where I am. 347 00:28:52,998 --> 00:29:00,900 you know, when I think about what will transform a law firm, I really do think it is a vision for getting work done differently. 348 00:29:01,161 --> 00:29:03,641 That is what I think will transform a law firm. 349 00:29:03,641 --> 00:29:13,764 I don't think a tool is going to do it because I think that lawyers have had the ability to transform how they get their work done by just learning how to use Microsoft Word. 350 00:29:14,510 --> 00:29:21,185 or learning how to use Microsoft Outlook or learning how to use their PDF program in a more efficient way. 351 00:29:21,185 --> 00:29:28,429 That five years ago, before all this Gen.A stuff, that could have transformed how they get the work done. 352 00:29:28,490 --> 00:29:31,752 And then I'm sure you've heard the stories as I have. 353 00:29:31,752 --> 00:29:39,637 I tried that program, Insert AI Tool here, and it didn't work for me because you're just not going to know how to use it. 354 00:29:39,637 --> 00:29:43,448 mean, when I first started using ChatGPT, I was like, 355 00:29:43,448 --> 00:29:45,430 this is amazing, but it's kind of weird. 356 00:29:45,430 --> 00:29:46,641 And then I started learning. 357 00:29:46,641 --> 00:29:47,712 I started reading books. 358 00:29:47,712 --> 00:29:53,056 I started following 15 people and I started like, I don't know for you, it's probably true too. 359 00:29:53,056 --> 00:29:58,241 It's like a tiny little part-time job of mine to stay up to date on what's going on with AI. 360 00:29:58,241 --> 00:30:03,184 Well, every lawyer I talked to is so busy, busier than a one-armed paper hanger. 361 00:30:03,925 --> 00:30:08,259 They're trying to take care of their clients and how do you, it's chicken egg, chicken egg, chicken egg. 362 00:30:08,259 --> 00:30:09,910 How do you make time for this? 363 00:30:09,911 --> 00:30:12,052 So my take is, 364 00:30:12,184 --> 00:30:14,185 I feel the same way that you feel about Copilot. 365 00:30:14,185 --> 00:30:21,208 I was just on a call right before I got on this call with a Microsoft partner who's Big on Copilot. 366 00:30:21,208 --> 00:30:23,189 And she said, well, let me show you how I can help you. 367 00:30:23,189 --> 00:30:27,751 Open up Copilot right now and type in what's on my calendar for next week. 368 00:30:27,751 --> 00:30:31,963 And I was like, all right, not that I would ever manage my next week by asking Copilot. 369 00:30:31,963 --> 00:30:35,694 I would just simply look at my calendar, but I'll humor her for a moment. 370 00:30:35,694 --> 00:30:37,695 I typed that in and it said, 371 00:30:39,564 --> 00:30:48,339 you've got some interesting stuff lined up on your calendar and it talked about a baseball game and it talked about an Asian food festival and it talked about this live performance 372 00:30:48,339 --> 00:30:50,350 going on at the Wellington Arena. 373 00:30:50,350 --> 00:30:57,374 None of those things are on my calendar, but it did figure out where I physically am right now. 374 00:30:57,374 --> 00:31:07,960 So I guess kudos to the location services that are all, you know, working in our browsers, but it did not mention anything that is on my calendar for next week. 375 00:31:08,280 --> 00:31:11,782 And she's like, well, maybe you just don't have copilot configured the right way. 376 00:31:11,782 --> 00:31:12,402 like, I don't know. 377 00:31:12,402 --> 00:31:14,964 It's in every Microsoft 365 application. 378 00:31:14,964 --> 00:31:18,186 I open there's copilot asking me how it can help me. 379 00:31:18,186 --> 00:31:22,428 know, so I also, it's right. 380 00:31:22,428 --> 00:31:23,509 Exactly. 381 00:31:23,509 --> 00:31:35,596 I also, I haven't, but I chat GPT and you could insert Claude or, know, whatever your tool of preference has changed the way that I get work done from a strategy and thought partner 382 00:31:35,596 --> 00:31:36,746 perspective. 383 00:31:37,587 --> 00:31:37,908 100%. 384 00:31:37,908 --> 00:31:42,168 I don't, if you took it away from me, I'd be like, I'm gonna go work at Target. 385 00:31:42,508 --> 00:31:44,191 I don't wanna do this. 386 00:31:44,191 --> 00:31:44,951 Yeah. 387 00:31:44,951 --> 00:31:52,115 Well, so you and I are doing another podcast with Ilta and I swear it was three minutes before the call. 388 00:31:52,115 --> 00:31:53,725 I was like, wow. 389 00:31:53,725 --> 00:31:54,636 What we're talking about. 390 00:31:54,636 --> 00:31:57,817 I just had a conversation and I have the recording. 391 00:31:57,817 --> 00:32:02,930 I downloaded the transcript within three minutes and you saw the output and it was amazing. 392 00:32:02,930 --> 00:32:05,921 I asked Claude, in fact, I still got it up. 393 00:32:05,921 --> 00:32:07,648 Um, I said, 394 00:32:07,648 --> 00:32:13,140 Summarize the points that Keith and I discussed related to the Big foreign KPMG entering the US legal market. 395 00:32:13,140 --> 00:32:14,980 Boom, boom, boom, boom, boom. 396 00:32:14,980 --> 00:32:16,259 Co-pilot. 397 00:32:16,801 --> 00:32:20,302 This is an exercise that is interesting. 398 00:32:20,302 --> 00:32:29,345 If I go to co-pilot half the time and I ask it, summarize or prioritize the unread emails in my inbox. 399 00:32:29,345 --> 00:32:34,256 It gives me like the last 15 and I've always got way more than 15. 400 00:32:34,256 --> 00:32:35,018 Sorry. 401 00:32:35,018 --> 00:32:42,041 I asked it to, I told this story, I presented it a co-pilot symposium, which was hosted by Microsoft. 402 00:32:42,041 --> 00:32:43,121 Awkward. 403 00:32:44,121 --> 00:32:45,218 I told this story. 404 00:32:45,218 --> 00:32:53,265 I block off three 45 minute blocks a day and I call it just thought leadership on my calendar, but it's really just so I can like eat, right? 405 00:32:53,265 --> 00:32:56,866 Like, or go to the bathroom and they, people don't schedule meetings. 406 00:32:56,866 --> 00:33:03,529 So I go into the ad, the outlook, a co-pilot and I said, how many thought leadership meetings do I have on my calendar? 407 00:33:03,529 --> 00:33:04,536 And it said, 408 00:33:04,536 --> 00:33:10,110 you have Well, I had 15, but just to throw it a curve ball, said, I actually have nine. 409 00:33:10,110 --> 00:33:11,691 Why did you tell me 12? 410 00:33:11,691 --> 00:33:13,832 And it goes, you do have nine. 411 00:33:14,253 --> 00:33:18,216 So, so then I was like, okay, this is horrendous. 412 00:33:18,216 --> 00:33:27,322 So I took a screenshot of my calendar and I went with the exact same prompt and Claude and chat GPT and they got it right with a screenshot. 413 00:33:27,322 --> 00:33:33,086 So think about all the metadata that, that copilot has access to. 414 00:33:33,574 --> 00:33:40,649 Um, and chat GPT just OCRs it and figures it out where, you know, yeah, there's a lot of struggles. 415 00:33:40,649 --> 00:33:49,525 I know it's going to get better and it, it, it's not that it has no value because it does, but it's, I try and lower people's expectations. 416 00:33:49,525 --> 00:33:51,506 Otherwise they're going to get frustrated with it. 417 00:33:51,792 --> 00:33:53,957 So can I just, I want to say just one more thing. 418 00:33:53,957 --> 00:33:57,403 Like for me. 419 00:33:59,212 --> 00:34:03,835 If I am working with a firm who's like, how do we flip the table, which is a unicorn firm. 420 00:34:03,835 --> 00:34:05,155 So there's that. 421 00:34:05,816 --> 00:34:08,237 My strategy is going to be really different. 422 00:34:08,517 --> 00:34:12,780 Most of the firms that I'm working with are really looking for the incremental improvement. 423 00:34:12,780 --> 00:34:15,761 And for me, that never ever starts with a tool. 424 00:34:15,761 --> 00:34:18,403 I say, tell me where there's the most friction. 425 00:34:18,403 --> 00:34:20,464 Our corporate team, they're so frustrated. 426 00:34:20,464 --> 00:34:21,844 I'm like, awesome. 427 00:34:21,865 --> 00:34:26,547 Our team goes in there and sits down with their corporate team and says, what's hard? 428 00:34:27,008 --> 00:34:28,046 What's frictiony? 429 00:34:28,046 --> 00:34:28,946 What takes you too long? 430 00:34:28,946 --> 00:34:30,638 What do you do over and over again? 431 00:34:30,638 --> 00:34:36,780 And then we start talking about how we can actually make their work lives better. 432 00:34:37,701 --> 00:34:39,362 Maybe that's AI. 433 00:34:39,362 --> 00:34:41,704 Maybe it's just a word template. 434 00:34:41,704 --> 00:34:47,747 Maybe it's restructuring their team a little bit so seven people aren't getting the same email. 435 00:34:47,887 --> 00:34:54,391 you know, maybe it's some net documents training because they have net documents and they just don't know how to use it. 436 00:34:54,391 --> 00:34:56,962 And they're doing everything the hard way. 437 00:34:57,462 --> 00:35:02,494 I think, and maybe it's, maybe I already said this, but maybe it's also an AI tool. 438 00:35:02,494 --> 00:35:13,099 I think everything has to be on the table, but when it comes to incremental improvement, if that's all a firm can bite off right now, it doesn't start with tool shopping. 439 00:35:13,099 --> 00:35:17,001 That is just the wrong way to do it, in my opinion. 440 00:35:17,001 --> 00:35:19,922 Some might disagree with me, but that is in my opinion. 441 00:35:19,922 --> 00:35:23,914 The right way to do it is find a willing participant. 442 00:35:24,314 --> 00:35:27,706 find someone who's like, can you please help me? 443 00:35:27,706 --> 00:35:29,587 I'm literally drowning. 444 00:35:29,608 --> 00:35:31,469 Can you please help our team? 445 00:35:31,469 --> 00:35:34,501 And we come in and we look at everything about how they get work done. 446 00:35:34,501 --> 00:35:36,853 They're like, what if you clicked on that instead of this? 447 00:35:36,853 --> 00:35:38,033 What if you did it this way? 448 00:35:38,033 --> 00:35:39,234 What if you worked like this? 449 00:35:39,234 --> 00:35:43,837 Hey, can we do a session for your whole team on time blocking? 450 00:35:43,837 --> 00:35:47,880 Can we just talk to you about the value of time blocking? 451 00:35:48,040 --> 00:35:51,582 That could revolutionize how you guys get your work done. 452 00:35:52,023 --> 00:35:53,564 And that is... 453 00:35:53,922 --> 00:36:01,916 I am 100 % for innovation and technology implementations and re-imagining and all of that. 454 00:36:02,036 --> 00:36:12,000 But so many of the clients that we work with, we have to start with a willing team, a willing group of participants, and then you go tell the story. 455 00:36:12,001 --> 00:36:16,603 Then you have a case study, you have an experiment, you have something that you did. 456 00:36:16,603 --> 00:36:19,322 You have people that they like and that they trust. 457 00:36:19,322 --> 00:36:28,008 that are saying, my gosh, like it wasn't all tools, but there is this really cool tool that we have, but these six other things were really the key to us thinking differently 458 00:36:28,008 --> 00:36:29,779 about how we get this work done. 459 00:36:29,779 --> 00:36:33,862 And if I had to give someone a piece of advice of like, what will you do next? 460 00:36:33,862 --> 00:36:34,657 I don't even care. 461 00:36:34,657 --> 00:36:36,354 We're like, this can just be a generic. 462 00:36:36,354 --> 00:36:37,825 What should you do next? 463 00:36:37,825 --> 00:36:39,026 That's what you should do. 464 00:36:39,026 --> 00:36:47,131 Find somebody who's willing to innovate, who's willing to be iterative, who's willing to think differently about getting their work done and say, let's sit down and brainstorm. 465 00:36:47,131 --> 00:36:48,982 How do we think about this differently? 466 00:36:49,390 --> 00:36:50,450 interesting. 467 00:36:50,450 --> 00:36:53,650 Yeah, I spent some, I spent 10 years at Bank of America. 468 00:36:53,990 --> 00:37:03,030 So I've been an entrepreneur for 32 years, an operator for 22 of those, nine at Bank of America. 469 00:37:03,030 --> 00:37:09,890 I was at Microsoft for one and yeah, exactly. 470 00:37:10,070 --> 00:37:11,270 Wink, wink. 471 00:37:11,850 --> 00:37:14,470 I'll take, flattery will get you everywhere, Debbie. 472 00:37:15,756 --> 00:37:22,651 But you know, I got a, uh, I got a lot of Six Sigma lean and Six Sigma training at bank of America and became a black belt. 473 00:37:22,651 --> 00:37:32,738 And, in fact, we had a common customer where I went in and with two other black belts and we completely redid their default services process. 474 00:37:32,738 --> 00:37:34,679 So I always think process process. 475 00:37:34,679 --> 00:37:40,844 Some people think tools, some think people think people, um, I always think process. 476 00:37:40,844 --> 00:37:43,205 So that's where my brain goes immediately. 477 00:37:43,205 --> 00:37:44,920 Let's document what you're doing. 478 00:37:44,920 --> 00:37:50,211 Let's take a look at what is your, yeah, what is your highest pain point? 479 00:37:50,211 --> 00:37:53,802 And then let's, let's, let's write it down what you actually do. 480 00:37:53,802 --> 00:37:57,253 And then let's compare it to your neighbor and let's see how they do it. 481 00:37:57,253 --> 00:37:58,634 And then their neighbor. 482 00:37:58,634 --> 00:38:08,907 Um, but yeah, you're right about the willing participants without, without that and without buy-in from leadership, you can have all the willing participants you want, but if 483 00:38:08,907 --> 00:38:14,028 they're not going to fund it or they're not going to support it, you're, you're spinning wheels. 484 00:38:14,448 --> 00:38:15,392 for sure. 485 00:38:15,628 --> 00:38:16,478 Yeah. 486 00:38:16,478 --> 00:38:26,401 Well, we talked a little bit about the Big Four and you know, their entry into the market and what, what that means to the industry. 487 00:38:26,421 --> 00:38:40,215 But with, with the way, the way fortune 500 companies operate typical fortune 500 companies is they have a board of directors that selects management and overseas 488 00:38:40,215 --> 00:38:43,005 management and holds management accountable. 489 00:38:43,186 --> 00:38:45,376 And you know, 490 00:38:45,546 --> 00:38:57,915 Those board of directors are installed by shareholders and there's this line of accountability that creates, that drives certain behaviors. 491 00:38:57,915 --> 00:39:04,700 So for example, when the board places management, it's based on resume. 492 00:39:04,700 --> 00:39:07,732 It's based on ability to fill a role. 493 00:39:07,732 --> 00:39:09,163 It's based on track record. 494 00:39:09,163 --> 00:39:11,764 That's not how it works in law firms typically. 495 00:39:14,008 --> 00:39:21,363 people who are the best at lawyering rise to the XCOM, to the ranks, to the managing partner. 496 00:39:21,443 --> 00:39:33,171 But without that structural framework, how can law firms, because the partnership model is just not going to go away, right? 497 00:39:33,171 --> 00:39:36,253 I mean, even the Big Four, they're a partnership model. 498 00:39:36,253 --> 00:39:43,718 How can law firms bring some of that accountability 499 00:39:44,007 --> 00:39:49,099 and alignment in the model that they're in, because that's not going to change. 500 00:39:49,914 --> 00:39:52,225 So I think that's a great question. 501 00:39:52,225 --> 00:40:02,229 And you and I are both EOS fans and, you know, Traction, the book Traction, which Traction is an excellent book, but it doesn't contemplate that structure. 502 00:40:02,424 --> 00:40:05,350 And so it makes it a little bit hard. 503 00:40:05,491 --> 00:40:15,625 I start off by saying you don't sit in a, like, if we're drawing out an accountability chart, like who's going to do what, you do not get that seat because of your ownership 504 00:40:15,625 --> 00:40:16,005 status. 505 00:40:16,005 --> 00:40:17,976 You get that seat because of your skill. 506 00:40:17,976 --> 00:40:19,177 and your experience, right? 507 00:40:19,177 --> 00:40:22,438 And we decide who should fill a job. 508 00:40:22,438 --> 00:40:27,781 And one of the criteria is not, they own part of this business? 509 00:40:27,781 --> 00:40:31,884 And so, you I get asked a lot, do I think that lawyers should run law firms? 510 00:40:31,884 --> 00:40:34,275 And I say, I don't know, this is not even the right question. 511 00:40:34,275 --> 00:40:38,127 Like, what is the skill set required to run a law firm? 512 00:40:38,127 --> 00:40:39,847 Let's make a list of that. 513 00:40:39,888 --> 00:40:43,750 And then if we're looking for someone to run our law firm, let's go find that person. 514 00:40:43,810 --> 00:40:48,032 If you tell me that that person happens to be a lawyer or have their JD, 515 00:40:48,634 --> 00:40:51,686 Great, but we don't start with that. 516 00:40:51,686 --> 00:40:54,728 And so I think it goes back to what we talked about before. 517 00:40:54,728 --> 00:41:02,574 How do we put executive business leaders in place that have the subject matter expertise to run human resources, business development? 518 00:41:02,574 --> 00:41:09,338 And maybe there is a lawyer in legal operations who's overseeing the services delivery part of the business. 519 00:41:09,338 --> 00:41:15,863 Maybe that is a lawyer, but IT, finance, like how do we have the right people in place? 520 00:41:15,863 --> 00:41:17,986 And then how do we create 521 00:41:17,986 --> 00:41:28,336 or mimic that kind of structure with a, maybe it's with a managing partner, maybe there is an executive committee that serves as like a board of directors with equity partners who 522 00:41:28,336 --> 00:41:30,048 are like the shareholders. 523 00:41:30,048 --> 00:41:37,054 But what's clear then about the equity partners is how do we set the expectations with the ones we have? 524 00:41:37,054 --> 00:41:39,418 And when we bring them in, like, hey, 525 00:41:39,418 --> 00:41:47,035 You're going to be an equity partner because you met these criteria, but just FYI, it doesn't mean they get to hire anybody, fire anybody. 526 00:41:47,035 --> 00:41:54,001 You get to decide if we're going to admit a new partner, if we're going to file for bankruptcy, if we're going to buy a new building, if we're going to take out a loan. 527 00:41:54,001 --> 00:41:56,643 Those are the things that you get to vote on. 528 00:41:57,104 --> 00:42:02,508 The day-to-day business operations are run by our executive leadership team. 529 00:42:02,749 --> 00:42:06,992 And then we figure out the right structure for the law firm based on 530 00:42:07,258 --> 00:42:14,058 how far we can push their culture, which is a little bit like that is the start of how do we flip the business model? 531 00:42:14,668 --> 00:42:20,562 Yeah, I'm smirking because what's popping into my head is we're a profession, not a business. 532 00:42:21,604 --> 00:42:22,164 right. 533 00:42:22,164 --> 00:42:27,068 I know I, that is such a, that holds the industry back. 534 00:42:27,789 --> 00:42:28,940 it re it really does. 535 00:42:28,940 --> 00:42:35,775 I mean, the, the practice informs the business and the business informs the practice. 536 00:42:35,775 --> 00:42:42,400 They are very tightly coupled and hopelessly intertwined and you can't have one without the other. 537 00:42:42,501 --> 00:42:44,238 So to say that it's, 538 00:42:44,238 --> 00:42:45,858 You're not a business. 539 00:42:45,858 --> 00:42:47,658 You're really sticking your head in the sand. 540 00:42:47,658 --> 00:42:53,538 But that mentality manifests itself in other places. 541 00:42:54,458 --> 00:43:06,858 Coming to the realization of what you just described is we need executives in here who are leading and not necessarily us as lawyers. 542 00:43:09,138 --> 00:43:12,098 That belief is very deeply rooted. 543 00:43:12,158 --> 00:43:13,796 You're in Florida, right? 544 00:43:13,796 --> 00:43:14,626 Mm-hmm. 545 00:43:14,626 --> 00:43:19,648 So I did a little research on this for, don't know, I was just going down a rabbit hole. 546 00:43:19,648 --> 00:43:35,855 The Florida Bar wrote a really lengthy article about the distinction between a practice or between a profession and a business and went to great lengths. 547 00:43:35,855 --> 00:43:37,436 It's a really interesting read. 548 00:43:37,436 --> 00:43:43,318 I was just kind of shaking my head as I was reading it about, it's a... 549 00:43:43,342 --> 00:43:56,722 If you want to Google Florida bar profession versus business, um, it'll probably come up, but the bar association is also propagating this distinction that I think doesn't serve 550 00:43:56,722 --> 00:44:06,422 the industry because we got to think about this like a business, especially now, especially now that we have real businesses coming in fortune, 100 businesses that you're 551 00:44:06,422 --> 00:44:08,302 going to be competing with really soon. 552 00:44:08,302 --> 00:44:09,418 You agree? 553 00:44:09,418 --> 00:44:11,169 and I totally agree. 554 00:44:11,169 --> 00:44:13,410 And one last thing I'll say about that. 555 00:44:13,470 --> 00:44:30,370 is so like down to small little things like a HR director or a chief HR officer putting out a policy and a paralegal not liking it and going to their lawyer, the lawyer that they 556 00:44:30,370 --> 00:44:32,061 work for and saying, I don't want to do that. 557 00:44:32,061 --> 00:44:33,532 And the lawyer saying, don't worry about it. 558 00:44:33,532 --> 00:44:35,362 You don't have to follow that rule. 559 00:44:35,463 --> 00:44:38,080 Like it is, it's that 560 00:44:38,080 --> 00:44:40,141 kind of undermining. 561 00:44:40,161 --> 00:44:52,125 And I don't know that most of the lawyers that I work with recognize the paper cut that is that over and over and over and over and over again. 562 00:44:52,166 --> 00:45:03,670 And so the structural challenges that contribute to that culture go down to the relationship that an attorney and a legal secretary or a legal assistant or a paralegal 563 00:45:03,670 --> 00:45:07,712 have and how we have to buy into that structure. 564 00:45:07,712 --> 00:45:15,836 all the way down to policies and procedures that are set for the good of the number one stakeholder, the business. 565 00:45:16,276 --> 00:45:22,238 And even when we don't agree, we commit to following those processes. 566 00:45:22,239 --> 00:45:30,243 It goes down to the smallest little things like that, that makes those executive business leaders feel like they can't make an impact in a law firm. 567 00:45:30,243 --> 00:45:33,964 So it's Big stuff and it's the little stuff. 568 00:45:33,964 --> 00:45:36,956 Yeah, I actually go, I do the opposite. 569 00:45:36,956 --> 00:45:42,820 I go above and beyond the policies to try and set the tone at the top. 570 00:45:42,820 --> 00:45:53,456 Like I go overboard a little bit because just to show my commitment, even when I don't like it, like, you know, I mean, could I get away with not fully when I was at TLTF, part 571 00:45:53,456 --> 00:45:54,637 of that was personal. 572 00:45:54,637 --> 00:46:00,000 Part of it was business and I had to separate it all out and put it in a spreadsheet and 573 00:46:00,000 --> 00:46:06,836 You know, I didn't send it to everybody, but you know, my accounting department said, Hey, you know what Ted's Ted's not throwing his weight around here. 574 00:46:06,836 --> 00:46:10,849 He's, uh, did a damn good job separating this out. 575 00:46:10,849 --> 00:46:12,510 So I think it's important. 576 00:46:12,510 --> 00:46:14,822 The tone at the top is really important. 577 00:46:15,065 --> 00:46:17,322 So important, so important. 578 00:46:17,400 --> 00:46:20,872 Well, this has been a great conversation as always. 579 00:46:20,933 --> 00:46:23,995 And, um, you and I are going to have another one in about a week. 580 00:46:23,995 --> 00:46:33,203 We're going to do, I don't know what the timing, if this will come out before that, but you and I are going to talk about, we're going to dive a little deeper into the 581 00:46:33,203 --> 00:46:37,346 alternative business structures and what the implications are. 582 00:46:37,627 --> 00:46:41,806 the audience can, uh, keep their ear out for that, but 583 00:46:41,806 --> 00:46:43,904 I really appreciate you spending a little bit of time. 584 00:46:43,904 --> 00:46:48,309 It's always a pleasure to talk to you and I look forward to seeing you next week. 585 00:46:48,386 --> 00:46:49,450 Yes, I will see you next week. 586 00:46:49,450 --> 00:46:50,978 Thank you so much for having me. 587 00:46:50,978 --> 00:46:51,444 course. 588 00:46:51,444 --> 00:46:52,710 We'll talk soon. 589 00:46:52,752 --> 00:46:53,573 All right. -->