[00:00:00] Alona, how are you this afternoon? I'm so good, Chad. How are you? It's great to see you. It's great to see you. Welcome back. This is, uh, I think your second time maybe. My second time. It's been years for us though. It's- It has ... been a little while. I think you were at maybe McKenzie the last time we did this. I th-- Or maybe just coming on board at Theory, but yeah, it was definitely years, not months, for sure. Yeah. Well, good. I'm glad we get to catch up. So much has changed and you've landed in an amazing spot, which we're gonna talk more about. But, um, before we jump in, um, maybe you could do a quick intro, tell everybody who you are, what you do, and where you do it. Yeah. For sure. Um, so I am at HSF Kramer, Alona Lugbinova. I'm the chief AI officer, and notably, and I do think this is actually really... it's something that I'm very proud of. It's something that our firm is proud of. You know, this was one of the first chief AI officer positions within the legal industry, and now, you know, a year later, we're seeing so [00:01:00] many of the titles and roles pop up. But when I was just joining the firm last November, it was a very new role and title, and so it's exciting to be here. You know, I'm coming up on my year mark and anniversary, and it's just, it's really fantastic. I can only say the best things about, you know, the transformation journey so far. And before joining HSF Kramer, I was at Cleary Gottlieb, similarly in a, you know, transformation leadership role. I was the director of practice innovation there. And before that, I was at McKinsey just for under, just, just around five years, maybe four and a half, where I was a practicing AI lawyer and also, um, in the latter time there, I was leading innovation for the corporate legal team. And before McKinsey, I was at MasterCard, where I was a tech transactions lawyer. So sort of, you know, twenty eighteen, just around the start of, um, AI starting to be part of the forefront in terms of emerging tech, but not quite there yet. And before that, I was a debt finance lawyer at, um, at Fried Frank. So a little bit of a varied journey, but very happy to be here now. This is certainly, you know, [00:02:00] my passion project and, and what I love to do, and I'm very excited to be here. Yeah, you know, um, it's interesting, you started on the external side. You went in-house. You came back- Yeah It u- usually, um, I, I don't see that a lot. And w- what was it that decided to bring you back to the law firm side? It's so funny that you mention that. I remember my first day at Cleary. I remember being back in, in a law firm office, right? In, in my, my office, and it brought back all of these feelings that, you know, I just... It was a very different feeling to be a lawyer at a law firm. You know, the intensity, you know, kind of the hours, the commitment. Many of us, you know, are no stranger to all of that, and it still very much exists today, just the hard work and the pace of things. And then when you go in-house, it changes, of course, right? And, and the nature of the role also has changed as my career evolved. Um, but I, I feel very [00:03:00] energized being in the walls of a law firm right now. I actually think there couldn't be a more exciting place to be. I think there is so much attention on legal services as an industry, right? Professional services more generally, but legal specifically. And I think we are very much in the spotlight kind of from a broader societal standpoint, right? Also, from an investment standpoint, VCs are paying attention, right? There's a lot of legal AI. You were just at Alticon. My team was just at Alticon, right? There is so much momentum in this industry, and for good reason, because the transformation potential is certainly here. And so I think the energy inside law firms right now is pretty incredible. And so being back here, you know, I do feel very energized by it. And I think the runway is real, right? For the firms who are willing to engage in transformation and go on that journey. The moment is here, the opportunity is there, and I think most importantly, and this is certainly something that we're focused on, the clients are looking for it. From a client-centric perspective, [00:04:00] right, client centricity, putting clients first, the clients are looking for their firms to come forward and, you know, showcase innovation and showcase their transformation efforts and what they can do for them. You know, and the reality is that- Um, most aren't yet, and I have a little bit of data to back that up. So Deloitte did a study. Um, they released a report in June. They talked to 120 in-house legal leaders, and somewhere between 60 and 70% had only had either a cursory conversation or no conversation at all about how AI was gonna impact the economics of the relationship. And, um, I think I get it, uh, re- just reading tea leaves a little bit. It's- Yeah ... law firms are still trying to figure this out, like how do we, how do we generate efficiencies for our clients? And lawyers are used to coming to the table with answers. Mm-hmm. And the reality is those answers are still kind of evolving. Um, but, [00:05:00] you know, what I see in the market as well, in addition to, I think, clients feeling like they want more engagement and understanding and visibility and transparency, um, there's really seems to be kind of a K-shaped trajectory in the law firm world. You've got firms like HSFK that really seem to be investing, making bold moves, um, hiring people like you and Rahul, who I met last week at Ulticon, super sharp, comes from, you know, the tech world. Yeah. And then, you know, you've got some firms who are Who are kind of limping in a little bit, you know, um, maybe promoting somebody from within, uh, to kind of lead the AI efforts. Not that there's necessarily anything wrong with that, but- Yeah ... like outside DNA brings new perspectives. Yeah, for sure. Um, you know, and, uh, something [00:06:00] else that I noticed about your role that I think also speaks to you guys being on the upward leg of the K is your reporting structure. If I understand it correctly, you report directly to leadership. I do, yeah. Yeah. Um, yeah. Yeah. So it seems like you guys are on, on the upward leg. Like how intentional has that been by leadership to say, "Hey, we are going all in on this"? Um- Very intentional, and I think intentionality is the right framing and the right word, right? Because it is, I think, law firms, exactly to your point, law firms have, have operated differently, more traditionally, right? They haven't had to think in this sort of innovative, transformative way. The business model has been consistent and necessary and straightforward, and now there is a new capability that has emerged that is increasingly and, you know, an emergent capability. It's continuously changing. It's, you know, advancing every single day, quite literally. And the, the power of [00:07:00] that capability is still, to some extent, an unknown. And so figuring out the X factor of that power is some-- It's a new opportunity. It's a new skill set, right? Lawyers are having to figure out, how do we figure out what this could mean for our clients and what this could mean for our business? That's not something that law firms have ever had to do. It's not, you know, we never really had to decipher capabilities and figure out the business purposes and the business drivers and how we can, you know, power the engine of our services delivery with something new. But now it's very much kind of part of the job description, and so innovation is both an opportunity but also a mandate. And exactly to your point around kind of bringing in new DNA, right, and being intentional about it, our firm is very intentional about delivering to clients at a standard of excellence, and we understand that that standard of excellence is evolving. And so the, the, the exercise for leadership, right, and bringing on my role and also the work that we're continuing to do is how can we set up that [00:08:00] infrastructure in the right way to really deliver on that mandate, right? And to really make sure that we're bringing that to life. And that was certainly something that was appealing to me because that shows commitment, and that shows that if you're willing to, you know, put this kind of role and this kind of, um, you know, this kind of responsibility at the, at the upper layer of the organization, then that means something in terms of the intentionality that stands behind it. Yeah. And, and this is, you know, there's so many aspects of this transformation that require, like, cornerstones of the industry to be rethought. You know, the billable hour, um, the practice being the center of the universe, right? Yeah. Like in, in the future, legal engineers are gonna be just as important for getting- Yeah work out the door as the attorneys. Like, that's a big mind shift. Um- Yeah ... the, the partner track, internal firm comp, client engagement. Yeah. Like, all of these things that are really deeply rooted now all of a sudden have to be reevaluated and [00:09:00] that, that's hard. Um- It is hard. And, and I think, you know, the concept it- of legal engineer in its own right, it's very unclear what that is or what the value is. So I think indexing on that for a minute may just be helpful because legal engineering is really just figuring out how you use legal concepts, right, and merge legal concepts, legal workflows, and how you merge them or augment them with AI, right? With intelligence that's non-human, essentially. Whatever that capability is, whatever form or shape it takes, right? Whether it's frontier model capability or Legora or Harvey, right? Or ano- or another tool. Um, the engineering part is figuring out how can you use this new class of tooling to do the work that you're doing, and that is a learned skill. And exactly to your point, it's something that will start to be injected more and more into practice because it has to be. Because if we're not using these capabilities, then we're not delivering at a standard that is, you know, emerging as, as best in class. [00:10:00] And so these are the new skills that have to be learned, and there's a whole architecture internally that goes along with that, right? How do you develop talent? How do you train talent? How do you set up the right, um, technology stack to let your people both legal engineer and build and, you know, in, in the way that we're kind of setting up our delivery models. So yeah. Yeah, resounding yes to everything that you just said. Yeah. So, um- It's true ... I saw a really interesting headline the other day on a article, and it said-- I think it, it really resonated with me. It said Your org structure is your transformation strategy Mm-hmm And I think that is brilliant because I think it's very true. It's, it's less... Like the tech is important, but if you think about how you align your organization- Yeah ... and the people that you have in the role to drive. You know, it's not, it- change management is so much more than training, [00:11:00] right? Like you train- Very, yeah ... that's a discrete task. You train once, but it's like the ongoing adoption and evolution of how these platforms and tools get used. Mm-hmm. And that's gonna be driven by your organizational structure and strategy. You, d- do you, does that resonate with you as well? Completely. I haven't seen that before, but I'm actually... So I always say, structure dictates outcomes, right? And I think if you structure something the right way, then you are just, you're miles beyond where you could be if you didn't structure it the right way. And, and of course, the, you know, first of all, you know, we should, we should talk about the design of innovation teams, because I don't think it's obvious to anyone what the right design of an innovation team ought to be, right? And most innovation leaders or a, you know, chief AI officers who come into an organization, maybe they have something like an existing team, right, or an existing structure. But most of the time, there's a build aspect to it, a build or a rebuild, right, or a reshaping that'll [00:12:00] happen. And I think that exercise is so important, and it's so hard to get right because so many of these, um, you know, I call them verticals on my team. I, I think of our team as a growth engine within the organization, right? And, and it has certain accelerators that are verticals that power the team. And, um, you know, figuring out what are those verticals, what are those accelerators. There-- A lot of them are new categories, right, across data, across, you know, applied science, applied AI, um, legal engineering, right? They're categories that haven't existed before in law firms. And of course, on the flip side, there are teams that have existed, like knowledge management. And the question is, well, does that stay knowledge management? Does that become knowledge engineering? Does that become knowledge and data, right? So there's all these kind of structural questions, right, and, um, and points that I think if you get right in the right order, can really dictate the level of outcome that you're looking for. But if some of [00:13:00] them are not quite right or if they're not in the right place in the organization, that can really slow down the exercise. Yeah. Uh, l- let's talk just a little bit about the chief AI officer itself. Um, it, it is a new role and- Yeah ... um, but it's very much emerging. I'm seeing more and more people sit in that role. Like how, how does the role differ from, let's say, a chief innovation officer? Um- Yeah ... or, or, or does it? I think it depends on the firm, and that's such a lawyer answer, right? It depends. But I, we see so many of these new titles across the industry now, and my favorite is kind of the alphabet soup of the names, right? Some firms have, like, the chief knowledge innovation and AI officer, and that's just so many letters in a title. Yeah. But yeah. So I think it really depends on the firm and the strategic mission and what you're building towards, right? Um, innovation officer and AI officer can be [00:14:00] synonymous. I certainly think of my mandate, and, and I think leadership would agree that my mandate is innovation within the firm, right? But, but, but my take is that I don't see how you can have innovation without AI at this point, and I think AI is very much central to the mission. It's a driver of the mission, right? It's an accelerant And so if, if that's true, then all of it sort of has to be powered by AI in, in a substantive way. And we very much are, are setting up for AI nativity, right? So having an, an AI nativity element to our firm, right, and a really kind of core grounding where we are driving towards embedding AI into the work that we do and having, you know, intelligence be kind of central to how we serve clients. Yeah. Yeah. That, that's a great point. You can't have innovation without AI, and you can't have AI without innovation. Yeah, yeah. They're intimately like- They really are tightly coupled Yes, exactly. In today's [00:15:00] world, right? In today's world. Yeah. If we look at the, at the world four years ago, AI was not necessarily part of the innovation agenda, and innovation at a law firm was very, not very different, but it certainly did not have the scope, you know, or the opportunity realm that I think it has right now in terms of AI enablement. So Yeah. Um, I have a theory. I'm curious your take on this. Um, I think the- I love your theories. I thi- And, and maybe I, maybe I'm wrong here, but I, I'm, I'm drawing on experience in, from my years. I spent a decade in financial services and process engineering roles largely, and, um, I think that the legal engineering function as it stands today, if you look at-- I, I, I read job recs. I must have a screw loose. I read job recs for fun. Like I- ... I geek out on, because it's, it, like, the organizational aspect of this transformation is very interesting to me. Yeah. And, um, it feels like the, [00:16:00] the, too much is being bundled into one role. Like, many of these roles require JDs, they require tech skills, they require some process engineering. Yeah. That's a lot for one person. Yeah. And like when I was at Bank of America, we had, um, we had a pretty fairly, um, extensive segregation of duties. Like y- y- process engineers would come and parachute in, and you would pair with a JD or a software engineer or a risk manager. Um, and that allowed people to really go deep in their chosen disciplines. Yeah. Yeah. I don't know. Do you think we're bundling too much into these roles? 'Cause it's, there's only-- I heard a stat, I don't know if this is true, and I forget where I read it. Um, I heard that there are only 2,000 people on planet Earth who meet the requirements in most [00:17:00] of these legal engineer, um, job recs, which- That is fascinating. Yeah. I wonder how they-- Wow. Okay, I love this. I love all of this. That's such a great question. Okay. So I, I do have a perspective on this. I think about this a lot, actually, in, in, from slightly a different lens. But I think- This is sort of like a call to renaissance people, right? We want the people in these roles to be like renaissance people and good at many different things in a cross-disciplinary way that we've never really taught anyone to do before. But we want these skills to be in this combination, in this order, at the right seniority level, right? Go. But I think what's really interesting is that legal has not done the work of home growing that talent. If you have that talent, it's probably, it's probably based on your experience across a number of different domains, that you have then risen to understand how all of those different domains fit together and how you can draw on the skills and experience [00:18:00] in those different experiences and put them together and apply them to this role at this moment in time. So I completely understand why the pool is so small. But on the other side of it, having spent time at McKinsey, what really, you know, what both impressed me and surprised me all the time was how renaissance the skill set was across most consultants at, at that organization, right? And it was very much a learned exercise. The training, the development opportunities, the ethos of the organization, right? Growth mindset, obligation to dissent, you know, uh, just constantly learning and growing and challenging yourself and your peers to come up with the best answer to the problem statement. Calls at McKinsey were called problem-solving sessions, right? A call was a PS. If you're not solving a problem, what are you doing, right? And so you learn to be-- You learn to think critically in a certain way. You learn to apply all these different, you know, skills and domains from, you [00:19:00] know, kind of domain expertise in different ways. And you sort of become this renaissance person in a way where you can get dropped into something new and you can figure it out, right? You have the navigation quotient, quote, unquote, another McKinsey term, to figure it out. And I think that's what professional services, whether it's across banking, and I think this is probably emergent in banking too, right? And certainly legal, I think, is starting to realize that there is really a premium on that sort of skill set, where you can draw from different domains, where you have this kind of application of fluid intelligence, and you can activate that and apply it to a specific role and a specific, you know, point in time. Um, and that is, of course, an attractive set of skills. But I think legal can do much more, and we're certainly focused on this, in terms of developing talent differently. And I think our industry will start to focus on that more and more in terms of how we can develop our talent with more intentionality, right? With more dimensionality, so that we can have this kind of talent be homegrown, and that, [00:20:00] I think, is the North Star Interesting. So, um, I, we agree that it's a very shallow talent pool- ... that, that can meet the threshold that a lot of these roles require. The next question is, how do law firms compete with Silicon Valley or, yeah, I mean, with Harvey or Legora? Mm-hmm. Yeah. Um, you know, they have, they have stock options. Law firms here in the US can't offer stop, stock options. Yeah. And even if they could, there's not really a liquidity event, right? Like, law firms generate cash flow, s- uh, software companies generate enterprise value. Yeah. And enterprise value means a big payday down the road. Um, and not only does the comp and incentive structures, I think, put law firms at a bit of a disadvantage, but also just the, like, the really rockstar people, like, going to a law firm is not- ... like, uh, the highest on their list- Yeah ... because historically, like, [00:21:00] law firms have been laggards, right? Yeah, yeah. They've been no... Like, rockstar tech people don't wanna go work on five, let alone 10-year technology. So how do, how do law firms compete for these people? Um, yeah. I'm laughing and giggling a bit because I hear this question so often, and I think it's a, it's a good question, right? It's a valid point. But I think sometimes the most exciting places to be are the places where there is the most runway for change, and for better or for worse, that's certainly where law firms are right now, right? Because we have not changed in so long. And so the opportunity, the runway is so vast in terms of what can be done, and I think the, the people who really nerd out on what they do and love what they do, they love an addressable problem statement. And legal, you know, law firms, legal, but law firms specifically certainly offers that in terms of really, you know, finding your [00:22:00] space, owning your space, and really, you know, doing something that's pretty magnanimous, and the opportunity is there. It certainly doesn't exist in every law firm, but I think Part, I think the industry is starting to move in that direction, and certainly the m- the more progressive firms and I would, you know, I would ambitiously put us in that category. I'm very proud of the work that we're doing. I think the opportunity is really there, and putting the right team together, together, putting the right momentum behind the team, um, that can seem pretty appealing. And I think you're hitting on another point there, too, which is, you know, what does it look like from a growth perspective and from an upside perspective? And that, that's kind of a, a business and operating model point for law firms that I think w- the industry is working to figure out. I can't really give away the horse with the barn, but let's just say it's something that's top of mind. Yeah. Yeah. And I, I think that in future state, whenever that happens, there will-- law [00:23:00] firms will-- they will generate enterprise value because- Yeah ... all of the systems and processes and AFA, like high volume, like that will look, that will be recurring revenue, which is- Yeah ... what, which is the basis for enterprise value. So but we're still w- we're still a ways away between here and there. Like, um, if I were... And now I actually asked Rahul this. I said, uh, so he was at Meta. Um- Yeah ... he was one of your direct reports. I inter- Yeah, he was, yeah ... interviewed him on LinkedIn Live at ILTACON. We had a great conversation, super sharp. He's so great, yeah. Um, I'm, I'm a big fan. And but I asked him, I was like, "So you went from Meta to a law, to a law firm." Yeah. "Like, what was the thinking?" And he had a great answer, and this is how I would look at it too. Like you were a big part of the equation, right? Like he sees, like from an outsider, if you're evaluating, like, is this a law firm? Is this a law firm on the upward leg of a K or the downward [00:24:00] leg? Like, or extra, like, what's visible to you as a candidate? Well, the people and, you know, a conversation with you and a look at your background, I think that speaks well, and your reporting structure and how the, how you guys are talking about yourselves, like this AI n-nativity. Is that the right- Nativity, yeah. You got it. Yeah. Um, so y- you, you have like very high ambitions. Mm-hmm. Um, and so all of that is visible, so that would be an easier, a lower bar for me to get over, you know, from leaving a, a tech company to come to work for a law firm. If you don't have that, I- Yeah ... you know, I would be hesitant. So yeah, how does the market, how do we, how do we adjust? Because it's gonna require a whole new way law firms talk about themselves and hire and- Yeah ... um, it's gonna take some work. It's-- And, and we think about this a lot in terms of what [00:25:00] will it take to attract talent at the level that we're scoping talent at, right? Both at the associate ranks and, you know, the partner ranks and, you know, also innovation and AI talent. And I think it's a c- it's a compilation combination of factors. To your point, I think the way that the structure works is really important, right? Because that just tells you what a level of impact can be. It's highly indicative of the level of impact you can have. I think the tech stack also is really important, right? What are you equipping yourselves with as an organization? You know, are you bringing in an enterprise frontier model in addition to a Harvey or a Legora or other vertical tools? Are you creating lab environments where, where your people can build, right? And what does that look like? And what does your IT team look like in terms of an enablement perspective? You know, how engaged are your lawyers? What are your ambitions? All of this has to matter, and I think this is where setting up the infrastructure layer [00:26:00] of the organization becomes really important because it's not hidden away anymore. I think the questions that good talent will ask will, will raise it to the surface very quickly, and so we're paying a lot of attention to that. Um, makes sense. Um, I was at the Financial Times event, uh, the in- um, Innovative Lawyer Summit in June, and I was on a panel, and I was sitting next to, I think he's, like, maybe the managing partner at CMS, the, um, CEO of an AI native firm, and they, they asked me a question about kinda trajectory. And I-- it just occurred to me when I was sitting next to them, I was like, you know- Your traditional law firm, that's-- let's call it 1.0. Yeah. Um, the AI native firm, that's a 2.0. What does 1.5 look like? Mm-hmm. Like, you have current state, future state, but what does transitional state look like? So how do you, how do you think about, okay, I know what our end state looks like, but we can't just [00:27:00] quantum leap from here to there. How do we- Yeah ... how do we build an intermediate state that gives us sufficient, um, allows us to transform sufficiently to meet market expectations, but doesn't swing too far that is ultimately gonna be really difficult change to absorb? Um, um- So I think that AI native is-- it can be, if done right, I think it can be more of a qualifier than a definition, right? It can be more of a descriptive. So definitionally, there are players in the industry that are AI native firms, and, you know, that characterizes them in a certain way, and they operate in a certain way. But they are currently not set up to do the type of work that the existing firms, right, the, the existing leading big law firms are set up to do. And clients will still go, you know, to the big law firms for, for that kind of-- for the infrastructure that they have, for the [00:28:00] expertise, the relationships that they have. But I do think that there's an opportunity for, you know, a firm like ours, I won't speak for other firms, but I will say, you know, firms of this kind of standing generally, that I think there's an opportunity to embed AI nativity. And then I think that starts to approximate that one point five that, that you, you may be talking about, which means that we do embed, you know, we start from intelligence. We embed AI capabilities onto that intelligence, right? In terms of the way that we're serving clients and the way that we're delivering work to clients. We still have our existing way that we work. We have our existing expertise, our client relationships, right? All of the kind of historical knowhow and, um, and information that goes into how we serve clients and how we, how we work with clients. But now we just embed leading edge capabilities into that. And that, I think, starts to get towards where we should be heading, which is that more AI native disposition. [00:29:00] But we don't need to look like an AI native firm, right? The-- one of the new class of emerging players, to do work that is of leading quality for, for the clients that we service. And that's what's really exciting to me. It's how can we get kind of the benefits of where all of this is heading and still retain what the, you know, kind of the core of what we do really well and, and what makes us great at what we do and how we serve clients Yeah. You know, there's a, a case study that I think is useful, which is Netflix, and, you know, they started in late '90s, '96, '97, and they had from day one, from everything that I've read, a, um, a goal of being a streaming platform. Yep. But the infrastructure wasn't ready, and so they built kind of a transitional state business where- Mm-hmm ... you know, they put up a public-facing site and drove traffic there and built learning algorithms and payment infrastructure and [00:30:00] recommendation, um, algorithms, and they, they did that. They, they limped along in kind of that transitional state until the infrastructure was ready, and when it was, they were in a three-point stance ready to tackle the opportunity. And Blockbuster, you know, the 1.0- Yeah ... uh, version in that industry kinda sat on their hands and waited, and by the time they realized, you know, the writing on the wall, it was, it was too late to act. So yeah, I kinda think of what you guys are trying to accomplish, it-- from the outside, it seems like you're kinda taking the, the Netflix model, which is like, hey, let's-- like, we can't be AI native because we already exist, right? Native technically means you were born into it, but you can take elements that ultimately Drive go-to-market motions that [00:31:00] meet expectations in, in the marketplace and deliver value. Is, is that a good metaphor? I, I, I'm almost kind of shocked that you and I didn't talk about this beforehand. I, I use this metaphor all the time. Do you really? This is exactly-- Yeah, I talk about the Netflix Blockbuster example all the time because I think it's so beautifully telling, right? It's, it's such a-- It's so interesting that this is, this is how it happened. And most people don't know this, so Netflix actually went to Blockbuster in the early 2000s to try to be acquired, right? And Blockbuster's CEO said, "No, thanks. We're good." They didn't see the vision. They didn't get it, right? They were like, "No, no, no, why do we need this whole, you know, thing, this digital media vision?" You know, "This isn't real." And of course, that kind of reminds us all of the times we're in now, where Netflix didn't just augment the work that they were doing. They created a whole new category in, in their space. And so I f- I find that incredibly inspiring and, [00:32:00] um, and I, I talk about that all the time with our leadership team. So I really, I really appreciate that analog. Yeah, I mean- Yeah ... um, I, I, when I was in business school, when I was working on my MBA, we st- we studied it. And, um, the first person to bring it up to me, uh, related to this legal transformation was Al Hounsell. I had him on the podcast, uh, years ago. And, um, yeah, I think it's a, I think it, there's a lot of parallels there. Um, so what about all of the hard stuff that has to change? Oh, God. Like- We love that, yeah the billable hour- Of course, yeah ... and the comp model and the partner track. Like how, how do you go about that? How do you become-- Because it's easier for an AI native firm because those, those things aren't firmly entrenched, but- Right, right ... in an existing law firm, like h- how do you move the dial on those things? It's an intentional redesign. Um, so it goes to the operating model question of the firm, right? And again, without giving away the horse [00:33:00] with the barn, I will just say we're focused on it as a firm in terms of figuring out, you know, where are we right now? Where are we headed? And structurally and strategically, what do we have to shift, right, in order to get the forward motion that we're looking for? But that's very much a point of focus for us. Um, I think different firms, you know, from what I'm seeing in the industry, different firms are thinking about it differently. There's, there's a question around billable hours, right? Will the billable hour go away? I think it, it's not a, it's not... To me, that's the wrong question. I think the question is where is the value? And what we will start to see is that we will move from the billable hour being a measure of, you know, what will change is that the billable hour will be a measure of time, but not the measure of value. And what we will then focus on is what is value? How do we measure that, right? And how do we price that in the way that aligns with, you know, client expectations and also reflects the work [00:34:00] that we're putting into, you know, our side of it, the R&D, right, everything that we're building up to make sure that we're delivering to clients in the way that we'd like to. Um, yeah. And you know, the, what, what else is interesting about what you're trying to do, and I think what many firms are trying to do, is i- if you're If you aspire to be, you know, have that AI native, um, whatever paradigm- Yeah the AI native firms are actually evolving as well. Like look at the first generations- Exactly ... you know, the, the h- the Crosbys, the Garfields, the, you know, the General.Legals- Right ... that have a fairly narrow focus, and they deliver high volume- Exactly ... work. And now you've got a new generation, you know, like the Irving Technology- Mm-hmm the- Yeah ... the Norm AI. And, like, so Yeah ... so this is, you're, you're aiming at a moving target here. And I think there's, there, you know, the way I've, I've thought about it too, is it's almost like a spectrum, right? So the legacy [00:35:00] firms are here, the new AI native firms are here, and they've started with kind of more verticalized specific use cases. They're moving towards more general use cases and more general purpose, you know, client service. We are moving towards, you know, more AI nativity. So there is, there's this world where we're kind of moving towards the middle, right? And I think what the future looks like is that traditional firms will just compete with AI native firms on panels. I think that's, that's the direction of travel, and I'm fully... You know, that, that is what I would anticipate. That's what I'm kind of setting us up for in terms of preparation, right? That we should be prepared for that, and the posture that we should take is, you know, to be thoughtfully competitive to that in terms of, you know, uh, going forward. Yeah. Um, another concept that I've been thinking a lot about that I'd love to get your thoughts on is, like, what is going to be- How are law firms going to differentiate from one another in the future? [00:36:00] And what I s-started thinking, you know, in the beginning of this was it was really around data and knowledge and all of the collective wisdom that's inside the firm. I've actually changed my stance on that. Um, my thinking has evolved. I don't think that's gonna be a moat because, you know, is the M&A data at Kirkland that gonna make that big of a difference over Latham? I would argue that especially as I've seen this tech evolve, there is absolutely a point of diminishing returns in terms of training data, right? Yeah. For, for, for skills like, um, the scaling laws apply, training models throw everything at it, and yes, uh, more makes it better. But when you're in, um, you know, narrow verticals, you can have 60 examples of, uh, you know, um, a model document, and that's more than enough. So what I think-- how I think about how law firms [00:37:00] are gonna differentiate, and again, I'd love your take on this, is like, I think the firms that build the knowledge loops and the systems that extract the tacit knowledge out of their very talented lawyers' heads and, and systematize it, and then how they translate that into goods and services that align with market expectations. I feel it, I feel it kind of the moat being more system design, org design, um, go-to-market. Uh, I don't know. What, what are your thoughts on that? I think all of that is right, and I think, you know, to me, that just sounds like a commercialization strategy, which is something that law firms have not really thought about or done or positioned in that way, right? It's very much kind of a product mar- mindset, a commercial mindset. Um, we don't, you know, law firms have never had a chief product officer. We don't think of our services as products. We don't think of our clients as [00:38:00] consumers. But if we start to think in that way, and that's certainly something... That, that is language that I use internally in terms of thinking of our clients from a consumer mindset standpoint, right? How do we think about their user experience? How do we think about their experience generally, and what does that look and feel like? We haven't thought about the UX of legal services delivery, right? The UX or the UI, um, the way that our, our products and services feel for our clients, and I think that's a whole area of opportunity that I'm really excited to tap into. But that, that to me kind of speaks to what you're saying, which is what is the differentiation, right? It's not just the data, it's how you take that data, how you make it relevant, applicable, right? How you tailor it, how you make it about the client, and how you deliver it to that client. That I could not agree more. Yeah. I, I actually mapped this out in a, like a pie chart. It- For those, a lot, a lot of people listen and they, so they, they'll, we'll just have to explain this and [00:39:00] they'll use their imagination. Yeah. But, um, you know, historically, law firms have differentiated, like largely brand is encompassing of people. There's overlap between these dimensions, but- Yeah ... trust, brand, practice depth, footprint, and then there's this new slice of the pie over here in the tomorrow that's the client service model. I love this, yeah. And it's, it's br- Okay ... it's broad by definition, right? I didn't say pricing. I didn't say- Okay you know, product offering. It's the entire kind of client service model, and you are 1000% correct in that historically, like, that's not been- No ... a thing in law firms. Mm-mm. Not a thing. And now it's gonna be, and like- Gonna be a thing. Yeah ... it's gonna happen. Like how do we- Yeah ... uh, how do we make the leap and start thinking differently as an industry? Talent is a huge part of it. So going back to the conversation and where we started, you know, you mentioned that outside talent [00:40:00] brings new DNA. It's such a good way of framing it, and you're absolutely right. And I think we're seeing law firms starting to bring in senior level talent up from other industries and, you know, to get that sort of cross-disciplinary perspective, to get that outside in, to reshape, to use a McKinsey term, rewire, right, what an organization can do at the executive level. It's also really important to, to realize that law firms have not had an executive suite, right, a C-suite really ever up until the last five years, and that's a very much a new development on the leadership front. I, I think mostly law firms have had a managing partner and directors, and that's about it. And so, you know, in a lot of firms, those directors have risen up through the organization and they, they, you know, may not, you know, be, y- you know, they may not have the experience to apply kind of the, that kind of client service thinking that, that we're talking about for the next generation. But then from other industries, right, whether it's across [00:41:00] professional services or tech, those industries have had to figure that out. They've had to have, they had to have that commercialization mindset, right? That product mindset, consumer mindset. Um, and so that I think becomes highly relevant when you start thinking about law firms as a business versus just professional services, because increasingly we are very much businesses and we have to think about ourselves that way. Um, and, and you know what's interesting? Th- there are many in the industry that to this day refuse to talk about them being a business. They will correct you and say, "We are a profession." And I say, "Baloney, you're both," right? You're- Exactly ... you're- Yeah. It's not either/or completely. Yeah. It- Yeah So, um, I, I got another question I wanna bounce off you about the chief AI officer role. Does that role need to be a lawyer in your opinion? Yeah. So, such a good question. Um- It, you know, it makes me think of my daughter asking me if I'm, if I'm a real lawyer, quote, unquote. You know? So, [00:42:00] um, I don't... You know, I think this-- I've, I've met successful innovation leaders or AI officers who are not. I think understanding how a law firm works is really helpful in a law firm leadership role, and that understanding doesn't have to be from being a lawyer. It can be from just being a quick study, right? Or be- spending a lot of time in your career inside law firms. There are certainly, you know, so many colleagues across business services that have spent so many, you know, so much time in a law firm because of the nature of their work. But I, I do think it helps in terms of understanding the firm. It, it's not a, it's not a must-have. I think it's a nice-to-have. But really, I think it depends on the person in terms of, you know, what you're bringing, what you're bringing forward. This is such a unique role and such a unique moment in time. I also think that a chief AI officer for X industry, for X organization, the skill [00:43:00] set necessarily needs to be different, right? You can be an, a chief AI officer in pharma, in, you know, a consumer products company, in a law firm, but the recipe of what will make you successful in each place will, will differ, and I don't think the same chief AI officer will find the same level of success, maybe with few exceptions, right, in, in the same place. I think there's very much a uniqueness about the industry because the way that I see this role, it ought to be a growth engine. That's, that's really where you add value. And to understand how you can make an organization grow with AI, you have to really understand how it works and what it is, you know, that we're delivering and how we're delivering it and what it takes to deliver that in a, in a different way, right, with an evolved delivery model. Yeah. Yeah. Um, you know, some of the-- I, I know several um, innovation leaders in law firms that aren't JDs. You know some of these people, too, like Glenn LaForce at Holland & Knight. Yeah. Dave, Dave Bolen at Ogletree [00:44:00] Deakins, Kate Kane at Sheppard Mullin, and they are- Yep ... exceptional. Agreed, yeah. Um, it, so, you know, I, um, I'm in the camp that I don't think it does need to be a JD. Uh, I, I think it probably helps. It, there are some advantages to it. Yeah. Interestingly, um, and I know we gotta go in a, in just a minute here, but, um, one of the advantages historically has been- Um ... kind of the respect factor, right? Like, you know, lawyers respect the opinions of other lawyers and, um, you know, I think we're entering into an era where we have to, we have to shift that thinking. It's not, not that lawyers shouldn't respect other lawyers, but y- Yeah ... we can't just focus, you know, that lens there, because there's gonna be so many other disciplines, like your product managers, and your, and your, and your- Totally, yeah ... process engineers, and your business analysts, and your AI architects, and- Yeah [00:45:00] all, all of those, those new roles that are now gonna be central to legal service delivery have to be, um, empowered, respected, and resourced appropriately. Um- I couldn't agree more. I could not agree more. Yeah, and, and everyone you mentioned is completely fabulous, so I couldn't agree more. Yeah Well, good stuff. Well, this is, had b- has been an amazing conversation as it always is with you Yeah And, um, how do people find out more about, um, the work that you're doing? I saw that you had a y- something, I don't know if it was a webinar in Australia. You've, you've got some stuff coming up We've done... Yeah, so I, so I'm doing kind of the world tour, if you will, right? So visiting our, our offices across the world. So I had the privilege of being in Australia in February. I was just in Singapore last week, headed back to London next week. So we're doing our chief AI officer series, which is really just a conversation with me and, you know, some of our clients and some of our key partners at the firm, and [00:46:00] our partners within the firm, right? So just talking about emerging trends and kind of where we're headed and how we're thinking about AI in our organization and, of course, what's on the mind of clients. So that's definitely one way. Um, we're also, you know, the door is always open virtually or physically. I'd love to connect if there are questions. And I really appreciate this forum and opportunity. You are very, very good at what you do, and I o- just, you know, the conversation and the thinking, and I truly can't believe you brought up the Netflix example. You're just you know, very much kind of on the same wavelength. Yes, yes. So really appreciate the opportunity. Thank you so much for the kind words. Well, hopefully we will run into each other in person at some point. Definitely. I missed you at ILTACON. Dang, yeah. Maybe TLTF Summit. Definitely, yes. Wouldn't miss it. Awesome. Yeah. Awesome. All right, well thanks for your time, and I look forward to seeing you in October. Excellent. Likewise. Thank you so much. All righty. Bye-bye. All right. Thanks for listening to Legal Innovation Spotlight. If you found value in this chat, hit the subscribe button to be notified when we release new episodes. We'd also [00:47:00] really appreciate it if you could take a moment to rate us and leave us a review wherever you're listening right now. Your feedback helps us provide you with top-notch content.