Libby Clark

[00:00:00] Libby Clark, thank you for joining me today. Thank you so much for having me. I'm excited. Yeah, I'm excited too. You, you came highly recommended from Anastasia, who's one of my favorite people in the industry, so- Same. W- when she told me that w- uh, we needed to chat, I, uh, I jumped on it And here we are. So why, why don't we start off with an intro?

Can you tell us a little bit about who you are, what you do, and where you do it? Sure. Yeah. I'm currently a general counsel and legal strategist to mid-size companies. Uh, that's where I've landed these days. But I've been in practice for about 22 years, spent most of my time in real estate development in New York, you know, hanging out in those rooms.

And throughout that process, I guess I would say on a dual track, I became very interested after the loss of one of my colleagues, probably in my second year of practice, to addiction. And what drew me to attorney well-being [00:01:00] really was looking at the attrition factor into practice and people leaving, why was it happening to certain people and not others.

But mostly what it really taught me was the indifference to the suffering that was going on. Like, we had all just lost this, this, this associate. We all knew, but no one discussed it. It was kind of look-looked at as a personal failing. But yet, you know, I was out to dinner with colleagues, you know. I was talking to young lawyers.

I, I knew we weren't the only ones that were suffering, you know. He was just the one that fell apart, right, outwardly. But inwardly, there was a lot of pain and suffering. And I was just mystified by the indifference. You know, it's-- That tends to be, as I look back over 22 years, I'm always mystified by indifference.

It's, it-- Why do people not care? Why do we drive by the accident scene? How come we can't stop and look at this problem? And that led me into the attorney well-being journey, and I ended up, um, being the co-chair of the New York State Attorney Well-Being Task Force in 2021, uh, which did a sort of a landmark report, which [00:02:00] was adopted by the House in 2022, I think.

Uh, I think I have my years right. And then I became the first chair of the Standing Committee on Attorney Well-Being in New York. So had the rough and tumble world of real estate development alongside the, what I thought at the time was sort of the warm and fuzzy world of attorney well-being. And so that's where I find myself today.

Uh, you know, I-- it didn't occur to me, I think probably until the last eight years when I realized how much AI was going to really begin to touch and concern the attorney well-being issue, that things were gonna accelerate faster, that problems were going to happen even faster. Uh, and that's when I got really, really interested in technology's impact on the human.

So are, are you of the opinion that the well-being situation becomes more dire as a result of AI or less? I think it becomes-- It depends on how we hold it, right? It's like the same thing in your industry. You know, you can, you can slap a tool onto a firm, but unless it's, unless it's [00:03:00] integrated into workflow in a way that's meaningful and measurable, it just kinda doesn't matter.

And well-being is sort of the same way, right, but just from a different angle, where you can slap tools, workshops benefits packages, but if the underlying systems are still damaging, right? There's still-- Then all you're going to do with AI is make those systems faster. That's my, that's my take on the article I wrote for the state bar, which is about, you know, op- you know, racing to operationalize intelligence but not wisdom, right?

So you can make certain things faster, it just doesn't mean that you're going to-- You're still building on, on a faulty, on a faulty premise or faulty system, and my argument is that we have not corrected the things that the task force found. Yeah, and you know, there's lots of takes on the future of Big Law as it relates to being kind of post-transformation.

There's dystopian, utopian, and I think kind of the [00:04:00] middle of the road, which is where I land. I think there's gonna be a significant amount of reshuffling and reshaping within Big Law, not just into how the work gets done, but the, the size and shape of the industry. Like honestly, you know, if you really look at the metrics, uh, Big Law is one of the most fragmented industries on the planet.

So my listeners have heard me talk a lot about, you know, the combined revenues of the AM Law 200, it's about 200 million. Uh, the Big Four combined is about 200 and-- that was billion, um, 240 billion, right? So four bi- four Big Four companies are, exceed the revenue of 200 law firms. And if you look at market concentration, so any industry is considered fragmented where one firm does not control 5% of the market, and the closest is K- K&E at, uh, about 2.5%.

And K&E is an extreme outlier. It is, yeah. You know, so highly fragmented, [00:05:00] um, and AI is, I believe, going to be a consolidating force in, in the industry Because so much of the industry is reliant on, at least here in the US, partner capital to fund the transformation. And, you know, you were talking about kind of change earlier and the different dimensions of change.

It's not just the tech, and the tech by itself is significant, but the organizational change, like I saw a great article the other day that said, "Your org chart is your transformation strategy." And I was like, "Oh, that's so good." Trying to get that guy on the, on the podcast. Oh, nice. Yeah. But, you know, I, I do believe that to be true.

It's-- You can buy the best tech in the world, but how you align your organization, empower, resource them, and set the tone at the top is gonna dictate success or failure. It's not gonna be your tech. Inside a change-resistant profession. Highly resistant. So one of the takeaways from the task force report, and we did have [00:06:00] clinical advisors on the task force, so we did hear from this from both the legal industrial side, but also the psychological side, which is, for reasons that I will not go into here, lawyers are trained towards pessimism.

We're trained against change. We're precedential in our behavior. So you combine all of those things with everything you just said, and it's almost like a perfect storm for ostriching, right? Like sticking our head down in the sand while our butt's exposed. No offense to any of your listeners. But that's essentially, um, the strategy of those types of characteristics.

And, you know, if you're a person listening to this right now and you see those behaviors around you, I want people to understand that that's happening because of the culture of law, right? That, that is-- And to be heads up when you're seeing that because it's not a change strategy, it's an avoidance strategy, and it's deeply, it's deep in the profession.

It, it, it truly is. It really-- And I, I often cite, [00:07:00] uh, Dr. Larry Richard's work, you know- Yeah, that's Larry's, of course ... Yeah. You know- Empathy and resilience are well below the mean in the average attorney personality profile, and those w- those are two really important characteristics wh- when it comes to, to change and transformation.

Empathy, understanding how the person on the other side of the table- Right ... feels, and resilience, fighting through resistance. Mm-hmm. Um, and b- you know, so we have, we have not only some cultural work to do, but, you know, w- maybe some work as individuals in- Oh, no question. I mean, I think the, the... Having sat at partnership tables, the, the part that makes us dangerous to ourselves is the ability to make arguments so cogently and so tight and so wrong that to stay stuck, we're great at it, right?

We can really [00:08:00] dismiss, minimize, rationalize. We're trained. We are literally trained to make arguments, but when those arguments are to stay stuck, they become a detriment to us. And so I just-- I want people who, who sense change is coming, who, who sense that there is a new way on the horizon, because they're right, that when they see that kind of, of stuckness around them, not only is it cultural, but it's a thing to, it's a thing to tilt against.

It's a thing to go at even when it's hard. Because not doing so, I think, leaves the, the structure, the profession in, in jeopardy when it could be iterating towards its own success. Yeah. I'm reading a book right now. Well, I'm actually listening on Audible because I hate reading. I fall right asleep, so I listen instead.

Hmm. Hmm. It's called "Zone to Win." It's by Geoffrey Moore. He was the author of "Crossing the Chasm." Yeah. And he talk, he talks about how difficult it is and, and [00:09:00] cites dozens of case studies how difficult it is. Like, this book was written over 10 years ago, and the rate of change looked modest compared to what we're facing right now, and he lists all these case studies of companies who really fought unsuccessfully against the innovator's dilemma, right?

Where you've got a profitable business with, you know, s- existing supply chain and stakeholders and employees and customers and culture and ways of doing business, and the amount of resources that it takes that you have to carve out of that, what is today a very productive and profitable path, the, you know, the slice of the pie chart that you have to allocate to change is significant, like more than 20%.

And b- building consensus within an organization, um, you know, in this case it's a partnership- Within the partnership to divert, [00:10:00] you know, more than a fifth of your resources towards disrupting your existing model that's printing money and setting rec- record profits every year- Right ... that's a really tough proposition.

Yeah. And, and few firms can do it, and if you stack on top of that all of the, all of the industry cultural baggage that has- Yeah ... existed and, you know, it's tough. Well, and, and also you have the relative, if you, if you layer on top the relative generational impact of those decisions in a business on a cash basis, and you're not aligned in a governance structure for the future of the firm, I'm not saying that's everybody, but let's say that is your situation, then you have stakeholders and probably at a sizable equity voting percentage that have no desire to divert 20% in the last three years of practice, who have no interest.

There's no incentive for them to do that. So we're, we're, we're hoping for their altruistic desire, you know, bolster a [00:11:00] firm into a future that they don't plan to be at, right? So you, you have these very structural, you know, incentives that run counter to one another. And not-- I, I advise a lot of corporations, right?

That's a lot of what I do. And so advising corporate behavior is slightly different than advising partnership behavior in firms for reasons that I think you and I both understand sort of intuitively. So because we're all not rowing in the same direction for the future of the company, we're rowing in the direction of the, of the practice that we have built.

And I say we 'cause I'm a practicing lawyer, so I know what it's like to build your own book and to be proud of it, and to be able to take it with you wherever you go. I also work inside companies to know what a liability that mindset can be. For sure. And you know, everything has really stacked up to encourage a lone wolf mindset.

You know- You bet ... Ru- Rule 5-6, being able to take your book and walk across the street to the other... I mean, we jokingly call Big Law hotel for lawyers because it's a, [00:12:00] it's not a s- always a sticky relationship. And, um- It's a, it's a, it's a, it's a glor- again, and I'm trying to be, I've been in firms, so I'm, I'm, I'm one of us.

But it is a glorified re- you know, expense sharing or, or, or you know, sort of overhead sharing scheme. I mean, because of the rule that you said, which has its downsides, it has its upsides too, but, but I think again, naming something for what it is isn't being critical Naming something for what it is allows choice.

It allows awareness. So if we can just say that, "Hey, 5.6, having our own book, being self-interested, like that's who we are," that's just naming it. How is it affecting us, and can we have a robust discussion about are all the shadow sides of this something we've thought about and dealt with? I just don't think naming something is necessarily being critical.

I think it's-- I think it gives us a lot of opportunity to say, "Oh, I've never had to think about this before in a time of this sort of change. Maybe I should." Agreed. Yeah. You know, I've heard, I heard a funny metaphor [00:13:00] one time. Law firms are like, like s- hair salons in that, you know, you get like Sarah, who cuts my hair.

I could care less if she's at Salon Lofts or whatever, you know, rent-a-booth place down the street, and when COVID happened and she started cutting hair in her garage, guess where I went? I went to the garage. I went to the garage. That's right. And you know, so it, the dy- that, the dynamic runs deeper than just within the law firms themselves.

It's, it's in the whole law firm client relationship, is you build a sig- you make significant investments in your legal partners, in the people and over time, you know, you know, those relationships get sticky. Yeah. And I think the reason you like Sarah is because you come in and complain about, you know, your dog or, you know, whatever it is, and Sarah's like super empathetic, and she listens to you and, and, and she cuts a great hair, you know.

But it's the whole experience that you enjoy, right? That's the thing I think we, we forget, and you [00:14:00] know, when I was writing for the state bar about the difference between operational intelligence and wisdom, this is what I'm talking about, right? The-- is remembering that output isn't lawyer. You know, we're never gonna do output at this point faster than the machine can But the experience of being in the chair and having Sarah listen to us and understand that we would follow her even to her garage is the thing that we should be focusing on and training on, and explaining how those lawyers are able to produce that kind of stickiness because it is humane skills.

It is, you know, skills that involve listening, empathy, all the things that you listed a minute ago, and the ability to apply that to wisdom and pattern recognition. And if we're not producing a way to train the Sarahs, right, then we just have people who could-- robots that can cut hair. Yeah. H-h- and i- is there sufficient em- emphasis on that today?

Like, it, it seems like the [00:15:00] lawyers who are good at it either inherently possess some skills that others don't, or they learn on the job. It doesn't seem like there's a lot of focus in law school on those sorts of things. Well, I think that's the tragedy, right? I, I, I think, you know, the more that I talk to lawyers about this subject, you know, essentially I find myself, you know, talking to the outlaws, so to speak, the people who kind of have left the legal industrial complex, as I've come to call it, because the profession, the profession, like many, is both art and science.

It is both. It's both. It's that for medicine, it's that for law. But because of the feeder and the way that the culture and the legal industrial complex developed, again, um, this is my-- just my take on being in law schools, is the skills that were taught were the ones that were helpful for output and the ones that were helpful for the production line because that's what firms were hiring at the time.

If my theory is [00:16:00] right, and I'm not sure that it is, but if it is, that operational output is gonna be far more productive to use machines, then what's left for a lawyer? And those are the things that I think we're woefully behind on in law schools. We continue-- I just read an article that, you know, some, some law school, and I won't remember, it doesn't matter, you know, is banning the use of AI first year.

Is that a good decision or a bad decision? You know? Like, y- you're gonna train them into all of this operational output that's, they're never gonna do, right? So I just don't know that we're thinking high enough, broad enough about, like you said, it's sort of more of the Potter Stewart, I know it when I see it.

I know those lawyers that have that thing that can do that, that something that makes them sticky. Shouldn't we find out what that is? You know, and I think there's those, no offense to, to Dr. Larry Richards. I mean, he probably knows. But like, as a broad concept, understand that what people are going to be paying for is essentially [00:17:00] cultivated wisdom, and do we ever, have we ever asked ourselves, how do we get there?

How does a lawyer obtain that in a, I call them analog lawyers. I'm an analog lawyer, meaning I can remember the books in the library, but, you know, I'm one of the last generations of a fully analog lawyer. So I'll benefit from this digitized world because I can use my analog knowledge, and I can use the benefits of the tools.

But if I'm 20 years younger and I don't have analog training, how are we gonna get the lawyers that can do that kind of wisdom? And here's my other concern. With this pace of AI, the j- the decisions that are gonna be handed to the lawyers are gonna have more gravity and more weight and more import than ever before, and we don't know how to train wisdom.

So it's just I look at it as a slow-moving, you know, s- a slow-moving storm. I- is it possible to train wisdom? Uh, what would that look like? That's the question we should be asking. Yeah. It has to be possible, right? And [00:18:00] if we go all the way back, doesn't mean I have all the answers, but I think it is possible because prior to law schools, we had a very robust apprenticeship program.

That was how lawyers became, um, lawyers, was through a deep apprenticeship. You know, we're, I believe we're a guild profession all the way back. So if you, you think about that history, it's from watching and doing and being immersed in. And in some ways, I believe we, we offloaded that responsibility to law schools for, for reasons that make a lot of sense, right?

I'm not suggesting that. But the profit for having someone just follow you around and watch you doesn't make sense inside the legal industrial complex. It makes sense in a profession, but it doesn't make sense in that. So I think there we again find that schism that's starting to happen about, you know, really what makes the profession.

And I think about it with the, you know, when did surgery become part of the medical profession, if anyone's looked at the history of [00:19:00] that versus what were considered healers. And so you're really starting to see us in our profession begin to unpack the difference between someone who is practicing the profession and someone who's putting out output.

Yeah. And I think we're gonna cut along that line. Yeah. You know- God, I hate to sound so doom and gloom here, but I think there's a lot of-- To your point, the, the goal is not to be critical. Yeah. The goal is to, like, lay everything out on the table and figure out, let's, let's have the hard conversations.

Agreed. And I, I wrote a post a while back, and I, I-- It was the 10 sacred cows that have to be sacrificed, but I added another one, so they're now 11. And I'll just kind of-- I'll read through them really quickly and not- Sure ... go into detail. So performance metrics, and these are the sacred cows that have to be slaughtered to come out the other side of this transformation successful.

Yeah. Uh, performance metrics have to be changed. You know, top-line metrics don't make sense [00:20:00] in an AFA scenario. The billable hour, it's not just pricing, it's part of lawyer identity. Business professionals, they have to be properly empowered, recruited, incented, trained, and have the appropriate seats at the table.

The apprenticeship model that we just talked about. Yes. S-systems and data. Today, Big Law spends two point four percent. That's half what le-- accounting and consulting, our closest adjacent industry spend. Incentive structures, cash basis we talked about, the partnership model, decision rights. Mm-hmm.

Transparency, client transparency, and then the 11th one I added that I want to riff on for just a minute is go-to-market. Law firms historically have not had to think about go-to-market very much. Not like a traditional business. It's like my go-to-market is I go get the best damn people that can originate new business and deliver amazing outcomes, and that's my [00:21:00] go-to-market.

And now we're entering into an era where go-to-market is gonna mean so much. In fact, when, when AI really started to kind of break loose, in the beginning, my thinking was, you know what? Whoever has the best, like, data is really gonna have a huge advantage, and I have shifted away from that. I don't think data is gonna be the differentiator.

I think it's gonna be necessary, but not sufficient to differentiate. What I do think is gonna be a, a big differentiator is how firms build the learning loops and capture the knowledge and wisdom within their practice, and how they package and price those products and services in alignment with market expectations.

Mm-hmm. And that's, that's more of a newer insight, and what made me come to that insight was when I realized how-- You don't need-- Like, the, the delta between Kirkland and Latham's data is not gonna move the dial. You don't need an [00:22:00] endless corpus of data to train AI. In fact, 50, 60 examples is plenty. So, you know, I, I, I-- my thinking has evolved on what's gonna make the difference.

I don't know. What are your thoughts on, like, differentiation? Well, I've, I have so much here. You know, part of it is I do not profess to be a technology expert. In fact, that's probably the last thing anyone Um, should look to for me. But what I am really, really interested in is, is human design and how humans design systems, right?

And, and so tech impacts that. So what I would say about my thinking is data, and one of the things we know about the collection of data, and this is-- this comes from an adjacent industry, but really the tech industry, is that data will always be backwards looking. Always. It has to be. It's based upon, and so it's based upon history, okay?

And there is a certain amount of [00:23:00] probability that that history will repeat again, but there's also a high probability that it won't. And so when you understand that, what you're really saying is, "I have the best backwards-looking rearview mirror, but I don't have my headlights on." So, you know, I'm not trying to be difficult here, but, like, it's the headlight conversation that we need to be having.

So when you talk about go to market, I'm really fascinated by that, because what it's saying is, "I've stopped looking in the rearview. I understand that a whole bunch of attorney wisdom and judgment and, is the ability to take the back-looking and project it forward," right? That's a skill. That's a talent, and there's no AI on the planet that I'm aware of yet that can do that, right?

Because it's all based on everything that's happened. It's not a, it's not, to the best of my knowledge, it's not a fortune teller yet. Right. So, because it's based on everything we've done. So that still means that all the future work [00:24:00] to be done will be done by humans, because that's our talent is our, turn our headlights on.

So when you talk about go to market, firms won't be selling talent alone. That's true. The talent that you followed, that stickiness, that, that lawyer that you went with, whatever, had the both the rear and the forward, right? So when you say, how do we market that into the future, right? You're saying we have both the data, that's the backwards looking, and we understand how to value that, we understand how to price that, and we have the best forward-looking strategic operators that you can imagine 'cause we've trained them as the humans to do the work of forward looking.

That's where I think the, the market conversation will begin, um, as opposed to what it's been up until now, which is, you know, just to use a, a, a normal name here, like, you know, everybody goes to Bob for [00:25:00] M&A 'cause Bob's the M&A guy. You know, uh, that was our marketing strategy, okay? Those days are over. Yeah.

Right? Like, love you, Bob, but if it takes you three times as much money and three times as long, you're about to lose market share to a faster, better, more efficient model. That's something we've never faced before. That's why go-to-market's so important, is the market you're entering is not the one Bob came from.

Right. You know, I would, I would even take it a step further and say that lawyers aren't the best people to figure this out Really? Yeah. And, and I'll tell you why. Like, I'll give you an example. Okay. So there's some data that, that supports my position on this. So my listeners have heard me refer to the Deloitte report, came out in June, surveyed 120 inside legal leaders and asked them questions like, "How-- what percentage of your law firms, your panel, has had meaningful conversations with you about how AI is gonna affect the [00:26:00] economics of the relationship?"

Almost 70% said, "We've only had initial conversation or no conversation at all." So what that tells me, reflecting on that as I have, is lawyers are paid to come prepared, to be right, to not be necessarily be vulnerable, and as a software CEO, I don't have those tendencies. So I go to customers all the time and go, "Hey, look, I don't have this figured out, but I think there's a problem that you have that I can help you solve."

And I create what's called a design partner relationship. So I partner with the firm or firms, and they help me understand the problem, and we iterate together on a solution. And in return for the time that they invest, they get a significant discount on the, the licensing when the thing is fully baked.

Law firms don't know-- They don't understand how that works, and that is what's not happening right now, design partnerships [00:27:00] around pricing and the economics, and it, it's what law firm clients want. They wanna be engaged. They don't want law firms to go into a vacuum, into a closed-door meeting and put this nice little neat package together that's, you know, with a bow on it and come and present it.

That's not what they want. They want to understand 'cause they're immediately gonna poke holes in it. If they help design it, th-they will support it, they will embrace it, and we're not hap-- So my point in all that is there are concepts. When you're just selling people's time, lawyers in leadership, I think, are a totally fine proposition.

It's not that complicated. The business of law is not complicated. Practice of law, very complicated. Business of law, not so much. And now we're entering into a, a, an era where firms are gonna have to take risk. They're gonna have to make capital investment. They're gonna have to understand go-to-market strategies and the trade-offs inherent in [00:28:00] decision-making around that, and that's not probably not much- And do you want, you want Bob in the room talking about that?

Right. No offense to Bob. There is no Bob. Yeah. But you know what I mean. The, the, the, the, that there is the tool-- There's an old adage in my family that the The tools that brung you aren't gonna be the ones that launch you, right? So, like, the tools that you use to get to where you are, congratulations. Good.

I'm glad you're in the position to talk about, you know, reinvestment of capital. Those are excellent things. But there is a moment where y- you really have to say, and this is tough for lawyers, "Am I the be- am I in the best position to be iterating this or to be thinking about this?" And I remember when I was in, you know, a law firm partnership and we were talking about, you know, something very simple like redoing our website, and this was over 15 years ago, fif- maybe it was 15 years ago.

I don't know. And, and I had the novel and insane idea of hiring somebody who writes marketing [00:29:00] copy to write our bios instead of us. And it was like, you know, it was like I had launched a rock through the window. Like, just what do you-- And this is such a simple concept compared to what you're talking about, right?

That it took me to arm wrestle the older partners to the grou- more senior, excuse me, the more senior partners to the ground in order to be able to get a marketing person to write the marketing copy because we don't know how to write that. And I, and I had to reassure them, "I know we're great writers, guys.

Like, I know we're, we're all really good writers. It's not about that, right? It's that we don't have the thing that we need to attract client attention." So, you're saying essentially the same thing, but on a macro scale, and it takes a lot of humility to say, "I might not be the person," right? "And I might be o- and, and, um, I need to be okay in iteration.

I need to be okay in discovery with a partner I trust," which would be your company, right? I trust-- That's where trust comes in, right? And you're in an industry, I think, where you could, if you wanted [00:30:00] to, give everybody a package and just bolt it on and say, "Thank you. Here's your fee, and here's your everything all figured out for you," knowing it will break.

But that's not, that's not the style, and that's not a deliverable, and that's not how you wanna do it. So it's like, how do you get them to a place to understand that it is a trust-based partnership of discovery? Yeah. A- a- and, and, you know, I, I have such a hard time envisioning how the transition would work, where bringing in, like, professional management, right?

Like a, a proper CEO who understands how to poll the market and understand market expectations and build offerings, and where to take risk and in what capacity and to what extent. Capital strategy, right? Like, I mean, if you're just- No doubt ... funding every- everything out of partner capital, great if you're Kirkland.

If you're anyone else, good luck, uh, especially- Mm-hmm ... if you're in the Am Law Second 100, right? Not so easy. All of those sorts of, you know, [00:31:00] things that might Somebody who's done it, who's got the resume, been there, got the T-shirt, pulling someone like that in and enabling. There are a few examples, uh, but not many I was gonna say there's a, there's a couple of firms that did this and did it well Yes.

Mm-hmm Who, who really had a professional-- I believe the professional CEOs had the legal background, but they weren't practicing anymore. In other words, they spoke the language Yeah But I know it's, it's, it's happened and it's, and it's, it's gone well for those, for those firms. But you're right, is, it is, it is the outlier, not the norm Yeah, exactly.

And how do we, how do we transition into an era where it is the norm? Because, uh, again, if I'm right, which who knows, maybe, maybe I am, maybe I'm not. But if that is the, if the go-to-market piece is as critical in the success of the, the post-transformation world, if that ends up being true, who's gonna be best positioned to capitalize?

Is it gonna be those who've brought in external DNA [00:32:00] and thought differently about these problems? Or is it gonna be, you know, the firms that have leadership who got there by being the best at lawyering? I think it's gonna be the firms that do the one thing that we are so loathe to do Which is? Which is focus on what our clients want.

Okay? So we focus on what we want and how we've practiced and how we set up our industry and our rules and our ethics, and we are one of the most inwardly focusing professions. So before I launched my practice two years ago, almost two years ago now, I went out and interviewed 50 CEOs, and I asked them the same 10 questions about how they procure legal services and what they hate about it.

For those that I didn't say in my background, I've also been a COO of a large company, so I've actually-- So I started as a general counsel. I was promoted to chief operating officer, so I've actually run the P&L. I've done, I've done the inside track, and I've hired legal services, and so I understand what it felt like from the client side, and it is brutal.

And I [00:33:00] was standing in a room full of, I think, I think it was managing partners in New York City last spring, and I asked them, "When was the last time that you invited your largest client on a golf outing?" And all the hands went up. I said, "When was the last time you were invited on a golf outing for one of your companies?"

About 25% of the hands went up. This was the outcome. I won't get into the details of what my CEO survey showed, which is they hate how we do business. They hate how we do business Yeah Okay? So when we talk about picking our head up out of the sand, one of the things that we have to come very-- we have to come to grips with is how disliked we are for our business practices For the legal industrial complex.

We are not liked for it. That doesn't mean that we're doing anything wrong. It doesn't mean it's a criticism. It means that I think the firms that are gonna win are gonna go to market client-focused. Yes. That's what I'm saying. Yes. Right? And yes, it will be uncomfortable internally. Yes, it's gonna be a whole culture shift.

Yes, you're gonna have to recruit and train and, [00:34:00] and have different performance metrics. Yes, all of that is going to stink, and yet you still want the date. So you're gonna have to do the things that make you datable, right? 'Cause the monopoly is ending. Yeah. That's a great point. I mean, go to market is inherently customer focused.

I mean- That's my whole point ... the market is the customers. And all this conversation... Like, and so LinkedIn, I, I go on there, and again, I read it, and all of, most of the conversation is inwardly focused. What's happens to the hours? What happens inside? How are we gonna build the tech? Everything is internal, and so little of the conversation is about what our clients want to experience in this new...

You have it in here under number 10, under client transparency. But I think that, you know, that is what they're going to ask, Cory. I know 'cause I did the interviews They're going to ask you, and, and, and I encourage everyone to not think that the, the being offended is going to work anymore. Like, if you [00:35:00] s- I'm not worth, I, you know, you don't think I'm worth that?

Um, you may be, but why don't you know how to say it? Oh, 'cause you were never trained to say what your value is. Well, today's the day. Yeah. So go to market means you're gonna name and defend your value in a way that is transparent to your client, and you're gonna say it with feeling, and you're gonna mean it because you think you have the best product on the market, and the product is the company behind you, and that company happens to be a law firm.

Indeed. But that, that training doesn't exist. Indeed. Yeah, and you know, what's, what's interesting is as the, um, I'm not a buyer on the billable hours going away anytime soon. I don't believe that to be the case. But what I do believe is that, you know, the AFA slice of the pie chart that today is 10 to 15%, depending on who you ask, is going to grow, I think, in fairly short order.

I think 2027 we're gonna see a lot more value-based pricing offerings. Yeah, I just think we have to look at the numbers in the UK and Australia. I mean- Mm-hmm ... there, there are, there are leaders on this. We can, [00:36:00] we can just look around. I mean, the thing that makes it harder for us right now, not harder, more of a barrier to d- to moving at the pace that happens overseas is our jurisdictional structure, right?

We have 50 states, 50 bars, you know, a federal bar. We have more than 50 bars. But my point is that, you know, our regulatory structure with the differing, um, rules, ethics rules across the country makes consolidation of AFA harder, right? It just does. Mm-hmm. But that doesn't mean it's not coming. It just means we're slower because we have some institutional or some structural issues in the way, but it's coming.

So I'm not a big, I, I'm not a believer of anything in the extreme. You know, do I think that there are still gonna be files for the rest of our lives where time Where time plus a value equals what the fee is gonna be? Yeah, that's gonna stay, and it's gonna stay for a certain slice of practices where it makes sense.

But when I'm meeting with law firms and we're talking about it from the [00:37:00] operational COO finance reinvestment standpoint, you need to be able to identify those line items within your practice or your practice areas, which ones are gonna be sort of AFA proof. Wait, what are the ones that we really think it's gonna stay hourly?

And then all the other ones where we can begin to figure out how-- I mean, law firms have 20, 30, 40 years of data that they can pull from to say, "Okay, how, how long does it take me to get to a bill of particulars? How long does it take to me to get to depositions? How long does it take me..." We could run these numbers if we wanted to and begin to quantify how AI helps us pick up the efficiencies and where to reinvest that.

But that's, but that's operational finance, and I, I don't see a lot of lawyers sort of versed in that. Does that make sense? Yeah. So that's my issue, is just, uh, the extremes are gonna hurt people. It's all gonna stay billable hour, it's all gonna go away isn't actually reality. The reality is we need to sit down and do a practice by practice area to say which ones are not gonna change for a really long time, and how do we [00:38:00] build in efficiencies there and client transparency, and what are the ones that we should start packaging as AFA?

And then up from that, how do we have the partnership conversations about fee and value, right? And how do we develop lawyers in these practice areas versus these? This is deep, deep change management. Indeed. Yeah, and you know, the-- If you look at, if you look at, like, let's-- the AI native market, um, it started off very- Hmm

narrowly focused, right? The Crosbys, the Garfields, the General Legals, a really narrow n- fairly low risk, high volume tranche of work, and now you're seeing the- The low-hanging fruit, yeah ... yeah, the low-hanging fruit that's very- Totally ... predictable and- Mm-hmm ... you know, moderate risk at best case, a lot, a lot being low risk.

And now you're seeing, like Irving and Norm put together-- I just had Mike Schmidt Berger on the podcast, and he talked about w- I asked the question, does Norm have ambitions of doing bet [00:39:00] the company work? And he's like, "Not right now, but we are doing high value work." So significantly further up the spectrum from where the first generation, all those firms I named started out, and you're starting to see, I don't know if you've seen Norm's board of directors and- Mm-hmm

you know, I mean, it's a really impressive lot, and I-- over time there's gonna be more Irvings and Norms, and it's gonna force the market. And the question is, are big, is big, are, are they gonna wait so long that it's gonna be impossible to catch up or, or not? That's a really important question. Oh God, that's such a great question, because I'll just give you my intuition as opposed to anything else, which is as a w- a wait and see profession, this is the one time where it may crush us.

Yeah. You know, in my, in one of the articles I wrote, I wrote a, a series on the future of, of law and, and one of the articles that's, that's exactly what I [00:40:00] discussed, which is everything in our history about waiting, process, delay, discernment, all has worked to our advantage. And now I have a concern that it will work to our disadvantage, and we're not practiced enough at being able to pivot and move 'cause wait and see, slow and steady, right?

Like, you know, always wins the race and I just don't know this time that we're not asleep to that habit. Yeah. You know, I've-- my listeners have heard me talk about this before. Not only is everything you're saying true, there's an extra, extra dimension to it. So I know business of law professionals that were literally hand selected for the resistance to change.

Uh, I have a CIO friend of mine, he's-- we have done business with him at three firms, and he has told me verbatim, "Ted, I have two jobs, keep the lights on and spend as little money as possible." So basically, the firm lined up their 10 short list of candidates and said, "Okay, which [00:41:00] one of these people is most resistance to change?

Oh, that one? Let's make him an offer."Mm-hmm. So not only do you have all of the inherent, you know dynamics in play, but you, y- we also have leaders who've been hand-selected for their resistance to change, and that is gonna have to be addressed. Now, could you make him-- Could, could you turn him around into somebody who embraces change?

I don't know the answer to that. Um, I think it's gonna be harder than maybe making a difficult decision- So I, I think you, I think you hit this earlier in our discussion. The... Oh, how do I say this? Sort of the avatar at the top has to be a change-ready leader, right? You cannot ask someone, not that you cannot, I would not expect someone without the authority or the, or the power to be the change initiator, because they'll get their head chopped off.

I don't actually blame anybody for following sort of the lingua franca, you know, like the sort of the language of the day, right? Like if, if we're a [00:42:00] change-resistant place, I stick my neck out, I get fired. I can understand the self-preservation of that, and I actually respect it, which is why I think earlier in the conversation when you talked about putting together a leadership team capable of ushering in change.

And, and let's talk about what change really is, right? Change is the ability to sit still when things are ugly. It's the, it's this, there is a-- You talked about resilience. So all these words mean the same thing, which is, yes, it's about to get ugly. Yes, we're gonna have some pain. Yes, people are gonna be complaining, and we're gonna grit our teeth and go into the sewer anyway.

That's the... Right? Yeah. Because the amount of, the, the amount of, what do they call that? Institutional gravity to go back to the way that you've al- is gonna be so strong, right? That I really do believe that it will have to come from the top. And I think, you know, if you're a firm that says, uh, "I hate change," don't sign up for leadership.

Not in this time and not in this, not in this world, and 'cause we're gonna get things wrong, and boy, we [00:43:00] love to be right. And so, you know, any one of those teams that forms, you know, one of the rules is that I give them is We, we can't play the blame game. We have to put that aside right now 'cause that's not gonna get us where we need to go.

We're gonna get half this wrong, right? But we're gonna get half of it right, and that's... I don't know if those are the right numbers, but, you know, tolerance for perfection has to-- Sorry, tolerance, intolerance for perfection, imperfection needs to go out the window. Yeah. Perfectionism will kill. You know, uh, Clay Christensen in Innovator's Dilemma y- had a really, what I think is useful case study for law firms to take note of.

In the early 1980s when IBM was innovating around the PC, they had an existing mainframe business that was very lucrative, and they recognized how difficult it would be to allocate the proper resources and not have stakeholders, um, you know, throwing monkey [00:44:00] wrenches. So they carved out a separate business, isolated and allowed the, that, that portion of the business to innovate independently.

I really think that law firms need to consider that approach- Absolutely ... when, when thinking about how to get from A to B. That's what I was talking about. One of the firms I'm working with right now, that's exactly the activity that we engaged in. We took 10 years of data, and we started isolating practice areas that were the most resistant to change and those that were gonna be the most up for change, in other words, and then we ranked them.

And then we started to break out what change was gonna look like over time and over what period of time, because again, you don't, you can't do everything at once. And so one of the ideas is honestly to, to segment off the things that are gonna change and treat them as a revenue line different from the sort of traditional model we're gonna protect for a while, right?

So that you're not, you know, again, you're able to innovate where- [00:45:00] You're able to innovate in a segment that doesn't break your whole machine, right? And I think that's something that we're in right now, is exactly what you said, a place where we are trying to get ahead where we can and protect what's not broken.

But that's very, very hard for, um, at least from m- my conversations, just the way that law firms are set up in the partnership model to do. It's just hard. I'm not- It is ... gonna lie about that. It's hard. It is, and those with the most influence, to your point, are th- uh, typically the most senior, you know, with the big- biggest equity stakes in the business.

Mm-hmm. And they have the loudest voices and the most influence. They're also have the least economic reasons to adopt a new model. That's my, that's my point. Yeah. And so I think, again, just calling that out as a fact rather than, you know, anything other than that. It's, it's a fact. How do you still get around that, though?

H- how, how do you-- We have to get creative about saying, you know, "Okay, where do we draw the [00:46:00] line in the sand?" Um, because at the, because I think what we're really talking about, and you said it a minute ago, is we- we're in a very fragmented profession. The winners and the losers are gonna start to show themselves.

And, and by losers, I don't mean like a game that we're, you know, we're, we're calling out numbers. I mean people lose their jobs. You know, we have a, you know, a You know, how do I say this? You know, we have careers that have become affected. Like, this affects human beings, right? It's not just a, uh, which is what I see a lot of the discussion being is sort of like callous predictions.

But these are human beings' lives. These are careers. These are my colleagues. You know, I spent 15 years of my life caring for their wellbeing. This matters to me a lot that we get this right. And so in, in thinking about that, I think it should be much more incumbent upon my generation, right, the lawyers between the ages of sort of like 38 and 55, to really say, "What are we inheriting?

What are we gonna do about it?" And, you know, can we form enough creativity that [00:47:00] takes care of our more senior partners but also recognizes they're not gonna be here in the world we're about to enter? I think that's the kind of business forecasting, the c- business acumen that you need to have in leadership right now.

Indeed, and those aren't easy discussions. They're not. Well, this is, this has been a fantastic conversation. I knew it would be. I, I loved it. I thank you so much. Yeah. No, thank you for, for taking the time. Before we go, how do people find out more about you and the, the work that you do around attorney wellness?

Okay, so I have two websites. Uh, the law firm is libbyclarklaw.com. Likewell.org is the dedicated lawyer wellbeing website. So if you need a firm assessment on wellbeing, if you wanna take a personal assessment, all of those resources are there, and they're for free. Um, you could access them anytime, and that is my site with Dr.

Kerry O'Hara. So we do a blended program on psychology and law for law firms trying to a- d- uh, address what we call existential change management, which is being able to hold both the business but [00:48:00] the people that are involved in change. Awesome. All right. And we'll include, we'll include those links in the show notes.

Thank you. Libby, so, thanks so much again. Thank you. And, uh, I look forward to meet- meeting you in person real soon, hopefully. Same. It was a pleasure. Thanks so much. All right, take care. All right, bye. 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.

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