INF_LIS Podcast Full Transcript 126.txt 1 100% INF_LIS Podcast Full Video Episode 126 === [00:00:00] Grace, how are you this afternoon? Great. Good to speak with you, Ted. Yeah. We got postponed by tornadoes, um, on our last scheduled call, but, uh, I appreciate your flexibility in carving out some time for us this afternoon. I know. Well, I feel bad. It's a great day in San Francisco, so I've been blissfully unaware of the Midwest. But great to, to speak with you. Yeah. All is good here. Well, um, you've got a really interesting background. I was looking at your LinkedIn. You've been all over the tech scene, Stanford Law grad. Why don't you tell everybody a little bit about who you are, what you do, and where you do it? Yeah, totally. Uh, so I'm Grace Chidiac. Um, I've lived in California my whole life, which I always feel like is a bad fact, but, um, I love it. And started out working after law school in big law in, um, Latham's M&A group in, in Silicon Valley. Um, after that, pivoted to kind of in-house roles. I've worked kind of both on a two-person legal team [00:01:00] and a thousand-plus person legal team, so I kinda say I've, I've been on both ends of the spectrum with respect to, to in-house roles. Um, but currently am an in-house M&A counsel at, at Google. Um, and yeah, have loved that there, but coming mostly from kind of the in-house legal perspective with a lot of this, 'cause I, I have been in-house for most of the AI kind of, uh, you know, 2022 on, so kind of seen it from, from that angle. Yeah, and what caught my eye was you had a post a couple of months ago about agentic redlining, and, um, you know, that-- So this is l- very late April. Um, not sure exactly when this will get released, but so much has happened just in those two months. Anthropic released a Word add-in just today. Microsoft announced an agentic redlining tool that, that happens in Word. So it- Yeah ... we're in a very fast-moving place it seems like. Yeah, I'm sure by [00:02:00] the time it comes out, there'll be three more. Um, we'll see. But yeah, I mean, obviously been playing around with AI for a while, but I think started playing around with, um, you know, agents, I would say maybe like the end of last year. Um, started working with like Manus and kind of the Chrome Auto Browse, kind of like the light AI agents. Um, and initially was thinking like, you know, wow, the, you can build like an entire business, right, with agents. So one would think you can buy and sell an entire business with agents as well. Um, and that's obviously what I do in mergers and acquisitions. So I was thinking like, wow, this is gonna be super cool. Like, what is the, um, what's the potential here? And initially, yeah, I was thinking like you could just automate redlines, which, you know, as I'm sure a lot of the listeners here are aware, there's this kind of, you know, long ping pong process, right? Where I start a deal, I'll get a first draft, I'll send a [00:03:00] static Word dra- doc across to the other side. Their lawyers will mark it up. It's always quite heavy. Lawyers justify their worth. They send it back to me. It goes back and forth and back and forth, right? Kind of until, um, we reach an alignment Um, and yeah, so initially I was like, well, great, uh, maybe you could just automate the red line process. But then I was thinking, oh no, that's actually probably like a disaster 'cause then you'll just have more red lines. So I was kind of thinking like, well, actually with agents, how can we just make this process like more fundamentally just better, um, and maybe get rid of this ping pong? And was thinking, you know, hey, it would be great i-i- instead of emailing these static Word docs, um, wouldn't it be nice if I could just get the seller's kind of agent access to this live deal dashboard, right? And so the agreement could exist in this, um, deal dashboard as structured data, and I could say like have my agent synthesize our past [00:04:00] kind of deal history, um, and maybe even cross-check it against my outside counsel's kind of market data, and then upload that to the dashboard and then have a seller's agent kind of do the same thing, um, and essentially kind of maybe resolve 90% of the points, um, in seconds, right? And kind of I talk about the zone of possible agreement, right? Like we could have both agents, um, align on that, um, instantaneously and then leave the l- remaining kind of 10% as kind of the fun part that lawyers get to do that I think will never be able to necessarily be resolved instantaneously, but the things that require, you know, um, I don't know, more empathy, more understanding of the context, like just throwing your issues, kind of leave that for the humans and the big law and, um, the lawyers to come in. Um, but ultimately the goal was like, hey, how can we free lawyers from being these kind of highly paid document processors to really being counselors [00:05:00] focusing more on like the strategy risk and relationships? Um, and I should say I have not seen anybody actually doing this yet. It's more just me being excited of like, hey, like I don't wanna automate red lines. I wanna get rid of red lines and just get a better process, like fundamentally. Um, so have loved kind of chatting through with folks on that idea and seeing like, hey, you know, what do you think? Could this work? What would the friction points be? Um, and yeah, it's been fun kind of thinking through that at a high level. So what do you, what do you see as holding us back from moving towards that direction right now? Is the tech there? I think, I mean, a couple things. Uh, the tech probably is there. Do I think the security and the trust and all, like, the trappings around it? No. And then I do think it's challenging, right, 'cause you need... There's fundamentally two parties in a deal, so you need both people to be bought into that process, and it's very difficult. If I were to propose that, right, I suspect I'd be met with a little bit of suspicion and doubt and, um, confusion, [00:06:00] frankly, from, from another counterparty who says, "I don't know how to do that. I don't have a seller's agent. How do I spin that up?" So I think unless you can really, um, move it a little bit further, it'd be hard to do that today. I was thinking more like maybe this could be by 2030, maybe 2028. Um, but so I think, to your point, technical barriers and then also, like, psychological ones. I always say, like, lawyers follow precedent by nature. That's, like, literally what we're trained to do. So it's hard to be the first one to be like, "Let me try this totally new process, right, that no one's really proven and kind of stick my neck out there and see if it works," versus kind of the if it ain't broke mentality, let me do what's safe and what's gonna certainly keep me in my job 'cause it's been done, you know, for decades. So yeah, I've negotiated a lot of document, legal documents, uh, throughout my years, and there is a, uh, there's a process, uh, there's a certain amount of horse trading that, that goes on in a contract negotiation. I don't [00:07:00] mean specifically in an M&A context, but like my wife and I own five gyms here in St. Louis, and we've moved one, so we've signed six commercial leases. And- Oh, wow. Yeah. And we always start with the landlord's template, and there's always things in there that are You know, the default position is always landlord, you know, uh, tilted in the landlord's favor, and we, we, uh, there's a, a game of horse trading where, you know, we kinda go back and forth and talk about what's important, you know, to each party and why, and then, you know, eventually we land on a settlement. Um, how, how would agents navigate the, the, the horse trading, um, uh, aspect of it? I mean, it, it sounds like it would be super efficient, but, you know, if I'm a lawyer representing my client, I want to not only be efficient, but get them the [00:08:00] most protection or negotiate the terms in their favor as best I can. Do you lose that ability when you e- enable a process like that? Yeah. No, I mean, it's a good point. I, I guess my hope would be that you still have some degree of horse trading. I think it's inevitable, and people always wanna feel like they've done some work and, like, through their own efforts gotten a good outcome, right? So if I handed you a perfect deal, you wouldn't feel great about it. You'd say, "Wait a minute, I wanna review this. I wanna ask for things and feel like I got some things and feel better." Um, but my hope is that why don't we focus that and have that exist within that 10%, right? Mm. Where hopefully they also are thornier issues, more consequential issues, versus doing it with hundreds of issues that maybe really don't even matter that much and are, are frankly a bit of a waste of a time, a lot of times to, to go through. So I think you could still have that, quote-unquote, "sport" in the, in the land of the, the 10%, um, but hopefully focus it where it [00:09:00] matters the most and not kind of these, like, very obscure minor points that cost people time and money to go back and forth on, where at the end of the day, nobody really wins having gone through that, that dance for, for days or weeks or months, however long. Yeah, that makes sense. So at Info Dash, we sell exclusively to law firms, and you can imagine how interesting it gets negotiating like- That'd be fun to see, yeah. And I've been doing this for, uh, since 2008. What is that? 18 years. Oh, wow. So, uh, yeah, I've seen a lot of, um- Um, grandstanding and interesting dynamics when it comes to certain terms and conditions. And there are certain areas where, where we're willing to give. W- we've actually documented it, it out so that I no longer get involved in the contract negotiation unless there's-- It's, it's-- Once it gets in the hands of the lawyers, it's off to the races. [00:10:00] Um, you know, if there's a concession that we make here and there. But we have certain, um, we have certain areas within, like IP. Like we, we don't compromise on IP at all. And surprisingly, you would think law firms would understand why, but we still have to explain, you know, that, look, we are a software company and the enterprise value of our business is dependent upon clear lines around ownership related to, to- Yeah to the IP. Um, but we still have to have like a extended dialogue in many cases, not all, but around even simple areas of what, what should be a no-brainer, especially to a law firm as to why that's important to our side. But I, you know, I-- my guess is, and I don't know this, we'd have to, we'd have to test it, that their agent and our agent would lock horns on areas where [00:11:00] we Have, you know, very strict standards around what we can accept and what we can't. And, well, and maybe that's the 10%. Um- Right. That's what I was gonna say. I suspect then for you in that scenario, the IP bucket would kind of come up and like, "Hey, this is the 10%." And I do think for what it's worth, like anytime I go into a negotiation, right, you always wanna differentiate between this is like my stated position or the counterparty's stated position, and this is the underlying interest kind of behind that position, right? And I do think it's important, and that's where humans kind of come in a lot of the times as well. I think humans are very good at kind of feeling out and asking questions to get to like, "Hey, what's the underlying interest you have here?" Or, "Why are you asking for X really?" Like, "What are you worried about?" Um, and I do think there's still a role, role for that, that piece. Um, but I think, yeah, exactly for you that the IP issue might not be the one that's in the 90% that's kind of easily squared away, um, but could be one that you could just cut to the chase and start addressing [00:12:00] immediately versus sorting through other like fluff before you have to get there. Kind of thing. Yeah. Well, and maybe I'm, I'm, I'm pessimistic because, I mean, we do business with a third of the AM Law at this point, right? So it's 60-plus AM Law firms, and it's always- Interesting. Yeah ... it, it is always, uh, it's never straightforward. It's always painful. It's hard. Well, big law, that, that's gonna be a tough one, right? Because there's people who pride... Their whole identities are like, you know, attached to their negotiation skills. So, and they enjoy it. Most people who do negotiation law enjoy the process in some way. So you do get people who like it for the sport, um, and who can't really help themselves, and I don't know if that, that's gonna go away, but... Good point. Um, how could, how could like agentic redlining, how could it make things worse? That's a good question. I mean, my-- Having used a little bit of it, and I should say there's no, like, true agentic redline that I'm doing now. But I do think [00:13:00] I see even in simple agreements, right? It's kind of clear I get a description back on a redline and a comment blurb, and it just feels kind of like an AI blurb, right? Like, I'm getting longer comments sometimes on redlines or explanations where I didn't used to get them, particularly on kind of like lower value NDAs or just, like, not as consequential agreements, right? So, I do think an unfortunate byproduct might be that you have to sort through a lot of fluff, right? Mm. Particularly if you're not having agents kind of help get you to that 90% point as a starting point. Like, if you're, if you're starting sooner than that and you're not doing full agentic, uh, negotiation, and you're actually just doing agentic, quote-unquote, redlining or trading redlines that a chatbot has created, you're gonna have possibly, like, more stuff to sort through, and somebody may not have really thought through that quite carefully, right? And again, going back to, like, the underlying interests, sometimes, you know, sure, it makes sense to ask for a position in [00:14:00] theory, but not when you really think about what you care about. So you might get people asking for things they don't actually really need, right? Or just that are not a good use of time. So, I think the concern would be that you lose some thought and you have to sort through a lot of fluff, um, and that it actually gets much less efficient as a result. Paradoxically, despite thinking like, "Oh, this is great. This will speed it up," it actually slows it down because there's, there's just too much to, to get through, and half of it doesn't make sense really. Yeah. You know, and, and sometimes I have to tell our clients why this act- why what they're asking for actually hurts them, right? Right. Yeah. Like, so, uh, the IP is a great example. So, you know, we've had firms who've said, you know, "We wanna own the IP for any customizations that we build." And we're like, "Okay, let me explain why that's bad for you. If you come up with a new innovation in the product and we can't bake it in, then that means that our other 60-plus clients, when they [00:15:00] come up with innovations, if we, if we negotiate similar terms, it stifles the innovation of the platform itself that you're paying us to build and maintain and enhance and improve." And, you know, if agents are kinda having all these conversations, I don't know how much gets, gets lost. I think to your point, though, there-- that, that really is the minority, where there's, you know, extended dialogue that needs to happen around certain Ts and Cs, and a lot of it, you know, like venue, we give up, um, pretty easily if, you know, we always ask for marketing assets, and I don't wanna give away my playbook here, but, um- it's, you know, there are- I was gonna say all helpful, I'm sure, for listeners who then might negotiate with you, but Yeah, I mean, we, we almost always give on, on the, those items. But, um, you know, it's, uh, it, it would benefit, like, having a more systematic approach on our side to... Like, right now, um, we're going through an exercise. We [00:16:00] don't have a contract. We're not big enough for, like, a contract lifecycle management solution, so we have a spreadsheet, you know, and we have key terms, and it's, it's maintenance. Um, if we had a more automated way to know when we stay, um, in bounds of our playbook and, you know, when there's variation, I think it would make, it would make the ongoing management, and it would allow us to scale much faster. So, um- Yep. Absolutely. I'm wondering, um, a little bit of a pivot here, uh, AI native firms, th-there are firms out there who, like Crosby's a good example. Mm-hmm. That's all they do is, like, master services agreements for, like, large software companies, and they can turn them around in, like, an, you know, an hour or hours. Uh, I'm wondering if, you know... A-and in those scenarios, I, I don't know this, but I have to assume that not everybody on the other side, on the buy side [00:17:00] Um, so on the other side of the Crosby Council has the same technical capabilities. So when they turn around, turn it around in an hour, I'm wondering like how that's, how that would disrupt the workflow if two parties are unevenly tech-enabled, right? So you've got one who I sent, I send you my redlines that I've worked with my lawyer for three days to turn around, and you send it back in 60 minutes. Like I, you know, I-- he, he's moved on to other things. It would be, um, I almost feel like there's a cert- there's like some table stakes technical sophistication if we're really gonna tech-enable negotiations like this. If one party is out of balance with the other, I think we're gonna, it feels like we would run into friction. Do you agree or- Oh, yeah, absolutely. No, and I mean, I think Crosby's really interesting. La- last I checked, they were more like NDAs, MSAs, kind of commercial agreements. I didn't think they had expanded to like more fulsome M&A, for example. But super [00:18:00] helpful to have that service, right? And you could see if you're on a two-person, one-person in-house legal team, absolutely, like a huge value add, relatively low cost, get something back within an hour, um, can send it to the other side. But to your point of like, well, what happens if you send it to some other poor, you know, single solo in-house counsel on the other end of the deal? They've got 100 contracts in their inbox. They don't have time to look at it within an hour. I suspect what will happen, they will slowly get pressure from the sales team or leadership to say, you know, "What the heck? These guys gave us this back in an hour. Why are you taking super long?" And then I suspect ultimately they will get pressure to look at solutions such as Crosby or other, other kind of AI native firms, right, that help them bridge that gap. So I, I do suspect there'll be kind of this like pull, right, that ultimately everybody, whether they like it or not, is gonna get pressure to use, um, AI in some way or the other, whether that be an [00:19:00] AI native firm or maybe for the larger in-house teams, right, just develop that functionality in-house fully. Um, but that's why I do think it's super important, um, particularly for in-house counsels, like everyone needs to be learning this and everyone needs to be experimenting and kind of figuring out what works and what doesn't. Otherwise, you will, you will get forced so willingly or not. Right. Makes sense. Um, you had another post, uh, a while back where you talked about y- you were in retrospect evaluating some arguments you had made a couple years earlier, I'm assuming in the early AI days. Yes. And it, it sounds like you kinda had a realization around, um, general purpose AI versus like legal specific tools. Um, what, what- Yeah ... h- what do you, what are your thoughts on kind of the general models versus like- models that are trained specifically for legal work. Yeah. Well, I would say, so I'm always happy to debate this. Um, but my view, [00:20:00] which, uh, yeah, I posted publicly, is that kind of as it stands in, in 2026, the, the generalist models, you know, think Gemini, think Claude, um, really do most of what you need to do, right? Uh, and it's very, very hard to justify the cost of these kind of niche specialized legal tech tools if you have like a Claude or a Gemini, right? Particularly, um, with younger people, with more AI proficient employees, um, I just don't think you really need to pay any more than you probably already are for the general model you already have, um, to get those specialized tools. Now, that's not to say there isn't still a role, um, for, for some of them, but I think for me personally, um, I'm skeptical that in five years we'll have, you know, an in-house team will have a stack of like five different niche legal tech tools. I don't think so. I think they'll have one probably, and maybe some in-house bespoke internal tools they've created, which is [00:21:00] essentially just your own bespoke specialized legal tech for those like larger in-house, um, groups or companies that have the resources to do that. Um, but I'm happy to be proven wrong too, and I've chatted with a lot of cool legal tech companies and founders who are doing awesome things. So it's not to say there may not be a place for it, but it is to say like, justify to me why we should pay for that and why we can't do it ourselves with what we have kind of already. Yeah. And you know what? I think most, uh, l- most of the big players have, are, are aligned. Like, you know, when Harvey first started out, they w- they were fine-tuning the, the frontier models and quickly came to the realization that it, it, the, the juice wasn't worth the squeeze, and- Yeah ... they've swit- since switched in their focus to really around like UI capabilities, you know, their vault workflows, like value add. They're not, they're not fine-tuning [00:22:00] and pr- providing additional training to existing models because, you know, they, they change so quickly, y- you would be in a constant change management scenario where you'd have to retrain the, the new latest model to, you know- Yeah. Yeah, yeah, yeah ... so, so it seems like I, I, I think most would agree with you Right. Well, I mean, but I still think even like with the Harveys, yeah, like the question is what's the role for Harvey? I don't personally, having used Harvey, think it provides me much value. I think, you know, in theory it was like, well, I can toggle between different models. That should be somewhat valuable. Um, but not really, frankly. And even, like, I think the UI's nice. Um, I think they kind of hold your hand a lot with giving you ideas on workflows if you had kind of no clue how to use AI and you needed to know where to start, I think they'd be great. Like, for example, my mom might-- who's an attorney as well, um, but a, a few decades older, you know, she might really have a, a much easier [00:23:00] time with Harvey. But I do think, again, as you get law students coming out of law school who all know how to use this technology, they don't really need the fancy UI or to be kind of led to water really to drink, right? That I think you just give them one tool, they'll figure it out. Um, so yeah, I, I'm somewhat skeptical that even like the Harveys would, would really persist in the world of, of Claude and, and, and Gemini and whatnot. But we'll, we'll see, and I'm, I'm curious to see how it shakes out. I mean, there's a lot of debate about this right now and, um, you know, like Freshfields just announced that they were partnering with Anthropic directly. Uh- Mm-hmm. Yep ... I mean, they're a massive 4,000 attorney firm, um, in the UK, and there are others. And so this is a big debate. It's like, okay, is the You know, they don't share their list prices, but, you know, word on the street is it's anywhere from, you know, 12 to $2,500 per month per attorney, you know, whereas- Yeah, crazy ... yeah, where you can get- It's [00:24:00] crazy. You can get a Claude tr- you know, quadruple max for 200 bucks a month and, you know, so yeah, there's a, there's a real question mark, and you look at the valuations that these companies have established and it's like you start to scratch your head and ask, all right, how do you... I really, you know, my personal view on it is the only way that these investors get made whole is if these platforms end up offsetting law firm revenue. Or yes, I mean, whether it's directly by competing or enabling in-house in a way that they can reduce external, you know, counsel legal spend. Um, but to your point, it's like you might be able to do that with the, the frontier models themselves. Yeah, absolutely. And I, I think there's still this, like, bigger open question even with respect to law firms of like, you know, a lot of law firms use [00:25:00] Harvey, but I have a hard time as kind of the underlying client, like, seeing what they're actually doing with Harvey, right? Like, my experience working with outside counsel so far is that, yes, they might say they use AI in marketing materials. Um, and I ask some folks who are friends, they're like, "Hey, how are you using this?" And they might use it to, like, clean up some work product or, you know, kind of some on-the-margin type work streams, but I-I've not really seen this huge fundamental shift, uh, you know, with the, the big law firms that I'm working with in terms of like, "Oh, my turnaround times are cut in half," or like, "Oh, like, this bill is, is so much lower." I'm really not, not seeing that, which is kind of why I'm, you know, from an in-house perspective thinking, well, like, I think the answer a lot of times is just to in-house a lot of this. Like, and for the, the kind of lower-hanging fruit items that you might have asked outside counsel before, like, just do it yourself with the tools that you're building out internally, um, especially if it's a lower risk [00:26:00] work stream, right, and you don't need 100% quality. Um, so I am curious to see how, how that shakes out, um, because I've not really seen, as a client at least, a ton from, from law firms in terms of like how is this translating to time saved, cost saved, better legal service fundamentally. Yeah, I mean, I have chief innovation officers and chief knowledge officers on this show all the time, and I think they're still figuring it out. Um, but you know, there are, there are fundamental items that have to get addressed in order to materially impact a client's bill, it's, you're gonna need to do more, you're gonna need to do some process engineering. You're gonna need to unbundle the legal task, uh, into component parts and automate the pieces that make sense and apply the human in the loop where that makes sense. Yeah. And that, that is hard work. Like, you know, historically, you've worked in a big law [00:27:00] firm. I've been serving, serving them for almost 20 years, and there is a, there is very little standardization. Like the commercial lease agreements is a good example. You know, you can go to two lawyers in the same practice, in the same firm and ask them for a commercial lease template, and you're gonna get different A r- a, a work product. You know, they ha- they each have- Yep ... their own kinda flavor and, you know, i-i- in order to apply, in order to leverage efficiencies from tech, it's really hard to do it on a bespoke basis. You know, the copilot model will reduce, um, or increase efficiencies to a certain extent, but if you're going to make a material impact, I really feel like there's gonna need to be some process engineering, and that is, has just not happened in, in big law, at least not yet. Yeah, no, I think you kind of bring up a, a somewhat related and, and good point too of like people miss with respect to legal work product, uh, actually how hard it is to get alignment on what one answer is [00:28:00] to, right, like w-well, you mentioned before. Um, and I've experienced that in a related fashion trying to build kind of internal tools, right? And you try to get these like gold data sets, quote unquote, of like, what's the right answer that I can use to train this i, you know, tool against, and it's, it's really difficult. Um, and even, you know, we-- I, I, I had like a, you know, external vendor review some contract terms, put together a nice tricks of what the right answer was to help kind of train a tool, and you realize in testing it like, oh, actually the vendor was not correct for some of these answers, right? Like A, humans are wrong sometimes, you know, actually quite frequently. B, they don't agree. Like good lawyers can often do disagree, so it's really hard to get y-right, like one precise legal answer. And I do think a lot of folks that aren't as familiar with law think, you know, oh, there's just some book and you check the rules and then you articulate the rule, um, and it's very clear. And it's just not, not that way, right? And so that translates kind of into [00:29:00] the tooling and to, I think, some of the challenges you've mentioned here of like really getting this to, to, to translate. A-and again, to be able even just to break something down into little bespoke pieces is hard because people have their own ways of breaking it down, and that's not even, you know, all agreed either. So it's a, a little bit of a can of worms in that, in that way. And lawyers aren't known as being the most agreeable bunch, uh, to begin with. No, probably not. Right? I think their disagreeableness is part of what makes them good lawyers. Uh, you know, you need to, you need to debate, you need to negotiate, and- Right. Yep ... um, and you need to get the best outcome for your client. Uh, so let's talk a little bit about, because I don't always get inside, uh, legal folks here, and it's such a treat when I do. Um, I'm curious how, how you see the outside legal market in terms of h- differentiation. Like today, when I think about how law firms [00:30:00] differentiate, it's brand, it's people, it's practice depth, it's footprint Um, you know, and capabilities. But what is not in that equation today largely is tech, right? Yep. Yep. It-- And, and I think that is going to change very soon. Um, I have a little pie chart I've showed on the podcast before where, you know, I think that a, the client service model is going to occupy a disproportionate slice of the pie chart as we progress and we tech enable, uh, legal, the legal practice. Um, but you know, I'm curious what, from an inside buyers, from the buy side, like what the take is on, you know, when are you expecting like firms to be able to articulate how they're tech [00:31:00] enabling the work that they're delivering for you? Yeah. No, it's a really good question, right? Because on the one hand, just taking a step back as a member of the legal profession, it, there's probably some ethical responsibility we all have. In fact, I think it's in, like, the MPRE or the legal ethics code, right? Regardless of the business model, we should be innovating and using relevant technology. And I guess to use the email example, like, you know, if, if you are the one attorney not using email when everybody else pivoted to email, like, at a certain point, like, what are you doing? Like, the, we've all moved forward, time to move forward with us. Um, but at the same time, like, I don't really know, like, with respect to, for example, the way I think of outside counsel, um, and I, I'm an M&A counsel primarily, right? So I work on, uh, for the most part, mergers and acquisitions. Um, but when I'm working on these, like, really big or, or larger material transactions, like, I'm certainly always gonna wanna go probably to a big law firm. Um, and frankly, the reason why I'm going to [00:32:00] them is their ability, um, to kind of look me in the eye and say, like, "Hey, I've reviewed this. I, I've seen the details here, and this makes sense, and you're not missing anything giant." And that's not really tech, right? Like, a-actually now what I'm asking for is, like, institutional insurance and a stamp of validation and, like, a double check that I'm not missing something. Um, those are the big things, right, that I, would keep me up at night. Um, I can do a lot of the other stuff myself, having come up from the kind of, you know, being a big law attorney myself. Um, so I don't know in that model, right, like, well, as a big law firm then, you know, I don't wanna be charged for things like summaries, and I certainly see that, like, on bills. Um, like, don't charge me for that because AI should be doing that or I should be doing it myself, frankly. Um, but at the same time, the real value for me in the big law firm is a little bit less the pure play tech and is that, like, human experience judgment piece. Um, at the same time, I think the way I think [00:33:00] about these, like, smaller kind of lower risk deals, um, it's, it's getting to the point where I absolutely can just insource a lot of that, right, and just skip the firm entirely. And I think most in-house folks should be doing that. Um, so in some ways, like, the tech is really more enabling me and enabling in-house lawyers than something I think is, like, moving the needle a ton for outside counsel, um, i-if that makes sense. But, uh, uh, it's interesting to see, and again, my experience has not really been that the bill or the timing or just my anecdotal experience working with big law is any different today with AI, even though there's this giant fundamental shift, and I know folks are using it in some ways, right, because you see it all the time at least behind the scenes. Yeah. So I'm curious, there's a lot of talk about what impact AI is going to have to the whole supply and demand dynamic. [00:34:00] And, you know, Jevons paradox gets thrown around quite a bit where, you know, basically the cheaper something is, the more demand i-is created for it. And that, of course, assumes that there is more unmet demand available. So, uh, which clearly there is, like globally and, um... But I'm curious, like in the big corporate world, are you thinking that with the tech, you're gonna actually reduce your external legal spend, or are you thinking, "I'll probably spend the same, but I can get a lot more done"? Ideally both, right? But I think for me, um, certainly spend less is, is probably the, the bigger goal of mine, just because, again, when I'm thinking through these smaller, lower risk deals, I can just eliminate outside counsel entirely for a large proportion of the work stream. And I guess [00:35:00] just to take a step back, because I'm not sure this is always totally obvious to folks who haven't worked in big law, um, but, like, my objective as an in-house attorney is super different than a big law attorney. Um, A, I'm not selling units of my time, right? Which is what a big law attorney does fundamentally. Uh, and B, like in big law, really your goal is just to give like 100% quality text all the time at all cost, right? You know, you make jokes about you miss a, miss a comma and it's like shame upon your whole family type. Like, but that's the level of quality that's expected, right? So when you're in a big law role, um, again, selling units of time, high quality in all output, like that is, that is your objective. Um, whereas for me in the in-house role, again, not selling units of time, and my, my job is actually not to give 100% quality text all the time. Um, it's to use my judgment, right? To determine, hey, when is delivering this [00:36:00] 80% quality text actually best because I can do it immediately and cheaply? What is actually the value maximizing decision for the business in this case? Is it 80% text, fast, immediate? Is it, hey, actually this needs to be 90, 100, this is a really consequential thing, and I'm kind of using my judgment, um, for that. So if that makes sense, like th- that's why it's such a difference in terms of like how I view, um, even AI and all this technology, right? Because I'm thinking AI isn't really changing my objective at all, but it's just giving me another tool to use in kind of making the same judgment calls I was already making really on a day-to-day basis. If you were, if you were able to... If you had a magic wand and you could like eliminate or automate 30, let's say 30% of the current workload, um, and you don't have to use you specifically, but inside teams in general. Yeah. If you could, if you could take 30% off the top, is there enough [00:37:00] unmet need or would that allow the business to move faster such that there are more M&A deals and it would kind of backfill that, that work that was offset by automation? Or is it, is it fairly finite and it's like you take 30% off and I, I need, you know, two less people i- i- on my team? Or is it like, no, there is an endless amount of new work that, to, to keep us busy? Yeah. Well, and it's a super interesting question because I think in theory, m- my intuition was like, oh, like if you reduce 30%, you should be able to have fewer people or do more work. Like pretty simple, right? That seems really straightforward. But my experience with it is actually more that if I have less work or let's say I free up time, I just end up filling it by answering questions or digging deeper into a deal in ways that I wouldn't have had time before. So what actually happens with me a lot is, you know, I will have answered the, the 10 basic questions I n- I typically would answer, [00:38:00] but then maybe I have an extra hour that I've freed up, um, and I actually just tend to spend it like, let me double-check this. Let me actually validate this other piece on the side. Like, let me go check with this other internal stakeholder that I maybe wouldn't have double-checked with if I, you know, didn't have this time. But, but I do have this time, so let me just actually like make sure I, I iron this out. Um, so I have found in practice that you actually do fill the, the freed up time, not always with new deals, but y- you just go deeper into the ones you were doing already. And so in a way, you're actually just giving higher quality service, um, at the end of the day, but not necessarily a higher volume. But I do think that's not to say one couldn't, right? Like I could see f- If you really held yourself accountable, been like, "Well, I'm not gonna fill the time and I'm truly gonna just have the discipline to move on," um, it theoretically makes sense. But again, I just, I don't find people doing that in practice. I actually find, and at least for myself, that I'll just ask a few more extra questions [00:39:00] and run down a few more extra points that I maybe wouldn't have, um, kind of not having the time before. Yeah, I mean, this is arguably one of the most important questions for the industry as a whole, right? If there is enough latent demand to backfill what is offset through automation, then we stay stable or grow. If- Yeah ... you know, if not, then we're gonna have some contraction within, you know, the, the law firm world at least, maybe on the inside legal team as well. Um, so it's a really important question, and of course, nobody has the answer. We only have signals that we can kind of read and, and over time we'll see, kind of see how this plays out. But I spent- Yeah. Yeah ... I, I spent 10 years at Bank of America, and during that time- Awesome ... I, I was in, I was in very regulatory focused roles. I was in anti-money laundering, compliance, uh, operational risk. And our ability to engage, especially when I was in [00:40:00] AML, um, our ability to engage the internal legal team, there was an absolute firewall. I mean, they had-- We had to engage through a portal. You know? Oh, yeah. When I was at, like, when I was on the two-person legal team, like, we have a whole system. Like, you can't just email. Like, there's a lot of, uh, barriers to, uh, to access that are intentionally put there. Right. Yeah. Right. Do those barri- barriers lower if we automate a lot, uh, where, where the lawyers can actually be engaged with th- the business in a more meaningful way and, and, and derive or create value, um, in a more consultant- consultative capacity? Yeah. Well, I guess so my hope is yes. And my hope is that by taking away some of the unglamorous low-value tasks, think like summarizing stuff again, or like describing a contract, um, just g- you know, giving basic terms. Like ho- hopefully if we could use AI to [00:41:00] kind of have that, let that take me two minutes instead of an hour that it would've taken to check, then theoretically, yeah, I should be more available to advise on some of the, like, more complex issues, and I should have more availability. And I do think that the, the in-house counsel people who are able to capitalize on that will be more in demand and frankly will be more effective in-house counsels. Um, at the same time, what I'm seeing happening too is that a lot of times, um, yes, there's more access, but you actually aren't accessing a human. The salesperson just has access to a, you know, a, a nice little, uh, interface where they can ask questions and an AI gives them an answer based on something that an in-house attorney has prepared in advance or trained in advance. So I think I see both of those happening, right? This kind of self-help portal for the underlying clients in the business. And at the same time, hopefully, if you're taking away the slop, at least of the, my job, so take the summarization, take the document processing, copying, pasting [00:42:00] stuff, I actually am more available to think through these higher level strategic issues. And that's what I hope, like, I think legal could be really, really fun in the next decade, right? Because we'll move beyond, um, some of this work that frankly wasn't something a lawyer needed to do, again, i.e., the document processing type work, and we can focus on these thornier interesting issues and really advise. I, I think for me, that's the most part, that's the most fun part of the job, right? Is having these discussions with, with the people in the business of like, what should we do? What are the pros and cons? Like, how is this gonna play out? What are we, you know, worried about? What should we do? Like tho- that's what's really fun in terms of being an in-house lawyer. Um, so I, I still think the future's pretty exciting and, you know, I, I think it'll be a great time to practice law. But cur- you know, still TBD on how it fully shakes out. Yeah. Right. We gotta figure out that kind of supply and demand equation, and it's gonna be a moving target, right? I, I feel that, um, as the technical complexity of our economy [00:43:00] grows, which it undeniably is, there's also gonna need to be more regulations and, and, and law- Yeah ... and so, you know, how, how this, how these scales end up tilting is kind of TBD. Um, one thing I wanted to ask you from, 'cause again, we don't always get, um, inside legal folks here, is, you know, there is a big disconnect in how inside legal teams, especially in the enterprise, buy legal services Um, it's a disproportionate amount goes to big law. And, you know, I've seen stats and there's no really hard numbers around this, but I've seen stats that 80% of legal matters are operate the company, blocking and tackling. That's 80% of legal work. Yep. 20% is- The internal plumbing type, yeah. Exactly. 20% is like strategic, like bet the company. Um, however, so that makes sense. If you look at how, what, [00:44:00] um, what percentage of the market like ALSPs own that could very well service a lot of that operate the company work versus big law, most estimates I've seen are in the mid-single digits for ALSPs. So you got 80% of the work and only 5%, 5 to 7% numbers that I've seen go to ALSPs who are really kind of geared with that- Yeah ... pro- process mentality. Like why, why is there such a big disconnect there? Well, I think it's hard, right? A- and for that 80% work, again, like if you're a good in-house counsel or if you have, uh, you know, a team maybe beyond one person, two people, you know, the early stages, like you should just be doing that internally with your internal folks. That's why, you know, you're there. A- a- and that's not to say when they're, when companies are young, right, you only have one, a one-man band, like they don't have the capacity to, to take on 80 jobs, right? 'Cause you're employment counsel, you're litigation counsel, you're commercial counsel, you're [00:45:00] all these things often one. So you have to go, um, either you'll go to an AI native firm, or you'll go to like a lower cost firm, or you'll go to a, a solo practitioner and those kind of fill the gaps in, in the spend. Um, but in terms of the total dollar spend, it's still low, low dollar, right? 'Cause all that work is just not something that you should be spending a lot of, a lot of money on. Um, so it, it's hard. I mean, the, the value for a law firm is doing that 20, the 20% work, to me, right? That's j- that's where you get the bang for your buck. It's quite simple. You almost get a blank check in some situations, fortunately or unfortunately, um, because if it's super important and you have to move very fast, right, there's almost like no option for the business sometimes. Um, but like the reality of being an in-house counsel, particularly when you're more of a generalist role, you have a smaller legal team, is most of your job is at 80% work. And so in terms of where you can actually make the most value, if you can automate some of that work, um, outsource it efficiently, integrate a, a nice [00:46:00] model where you're, you know, using other alternate service providers in, in a, in a way that's well-balanced, like that, there's a lot, I guess, of value to be had there, and that's where I think a lot of folk will have to spend their time in thinking through, um, yeah, how to allocate the budget that they have for, for legal. Yeah, that makes sense. How are, um, and we're almost out of time, but I wanted to boun- bounce one other question off of you. Yeah. Um, h- how and when do you see ALSP-- um, not ALSPs, AI native firms really becoming viable paths for enterprise buyers of legal services? Like today, they're, they're, they're fairly niche, right? And we-- there's about- Yep ... 50 that exist globally that people are tracking. So it's still very, we're in the very early innings, but if we're reading tea leaves a little bit, how, how do you think corporate buyers are going to think about what work they [00:47:00] send to the AI native firms versus their traditional big law partners? Yeah. Well, and I, I, I think what it comes down to, it'll depend on who you're working with or who the contact is, like who the literal person, the in-house contact is. Um, I can say, like for me, like I'd be super comfortable if I was running an in-house team today, like I would absolutely be using an AI native firm, um, today. I think it's ready, particularly NDAs, commercial contracts, DPAs, a lot of that, total comfort. Um, but you know, not everyone i- is as comfortable yet. I think, again, going back to the like lawyers follow precedent by nature, there are other folks who don't wanna be the first one to try that. But if they h- if they hear, "Hey, I have three other in-house counsel friends at three other companies, they're using this AI native firm for their commercial contracts. Oh yeah, I feel totally confident now rolling that out myself." Right? Um, so I do think it could kind of snowball from there once you get the initial, uh, traction. So, and really it's just kind of a marketing psychology issue at this point, not a technology [00:48:00] question to, to, to me. And I do think within the year you- we'll probably see a huge shift with a lot more work going to AI, AI native firms, um, particularly with smaller in-house teams again. I don't think for the larger companies it makes sense to really use them. I think they should just develop an AI native firm in the company for themselves. Um, but, but yeah. That makes sense. Um, a- how much pressure are you getting-- Like I have heard, um, from the law firm side that it is a myth that the buyers are really trying to save money. And when I, when I do have people from the inside teams- Who said that? Law firms say that? Yeah. Give me the names. They shall remain nameless. But, you know, I've heard people who really know what they're talking about saying, "You know what? It's, um, there's not as much pressure as you think on the buy side internally to reduce outside legal spend." And that doesn't logically make sense to me. I know if I were on a board, if I were [00:49:00] on a corporate board and, and I was, and I understood the technology transformation that's underway, one of the first places I would push management to apply scrutiny is around outside legal spend. But I- Yeah ... I'm hearing that that's not actually happening yet. Is it just, i- is that true? Is it about to happen? Like what is your take on that? Yeah, I, I would say I beg to differ on that. And I, I, I've had a real shift, I think, in the last, like, three, four years, um, in the couple roles that I've, I've been in, where I am very cognizant of what I'm spending. Um, so I, I would say like, no, I, I certainly feel a lot of pressure, and I should. Like, I rightfully should feel pressure. It's extremely important. And as I said, the primary objective of my job is to use my judgment to determine, like, how much money we should spend, how much risk we sh- we should take on, and find the right balance, right? So it's a fundamental part of that equation for me in every decision that I'm making when I'm using outside counsel or not.[00:50:00] Um, so I don't think that's true, at least with respect to most peers in my circle. Now, I do think, again, for these giant bet-the-company type deals, like, yes, there's, there's less cost sensitivity there, and I don't know that those have fundamentally changed perhaps. But that doesn't mean, like, on a daily basis that I'm not very aware of kind of how much I'm spending and I'm not checking in. Um, and I do think, you know, as we have more layoffs, as we have more pressure to use AI, um, you'll see that happen, I think, more and more, and it certainly is very front and center to the in-house jobs that I've, I've been in in the last few years. Yeah. That makes a lot of sense to me. So, um, and you know, that, that really, the situation that was described to me is really in- inelastic demand, and I, I don't know that that exists in an environment where, again, you've got boards of directors that hold management accountable [00:51:00] for expenses, uh, you know, who are beholden to shareholders that- Right. Yep ... are bottom-line focused. Um, well this has been a great conversation. I so much appreciate you spending- Yeah ... a little bit of time and, um, how do people-- You, you don't post often, but the ones that you do get great traction. Like, how do people find you, uh, and what you write about online? Yeah. I, I just use LinkedIn, and again, I don't post often. I only post when I have something to say. I probably should do more, but again, I just am like, well, when I have something to say, I will say it. Um, but yeah, feel free to reach out to me on LinkedIn. Always happy to chat. Love hearing about new legal tech products and how people are using AI. Um, and yeah, super excited to kind of be in law today for the reasons I mentioned. I think this is just an awesome time to, to be a practicing lawyer and, and trying out all these things. I completely agree. Well, thanks again for your time, and, uh, I hope to meet you in person one day real soon. Yeah. Would love to see you. Thanks, Ted. All right. Take care. Bye. Thanks for listening to Legal [00:52:00] Innovation Spotlight. If you found value in this chat, hit the subscribe button to be notified when we release new episodes. 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