Mike Schmidtberger

[00:00:00] Mike, thank you so much for joining today. Ted, great to be with you. Yeah, I've been, uh, I've been looking forward to this conversation. I knew I wanted you on as soon as I read about, uh, Norm Law, and I think there are some really unique characteristics about what you guys are doing, and that's been reflected in the market and, um, the headlines.

But before we jump in, um, if you don't mind, why don't you tell our listeners a little bit about yourself and how, how Norm Law came to be? Um, well, as for myself, um, I practiced, uh, for 35 years at Sidley Austin, um, where I grew up as an investment funds and asset management lawyer, um, and regulatory specialist in that space.

Um, I eventually became, uh, a group head, uh, [00:01:00] in that practice, uh, for about 10 years. Um, and then while continuing to lead that practice globally as it was growing, um, became the managing partner of Sidley's New York office, uh, in 2011. Uh, I had that role through the end of 2017, uh, when I was elected chair, uh, of the executive committee.

And so I led the firm from January of 2018 through April of 2025. Um, and my term was non-renewable, and I stepped down, um, in accordance with our partnership agreement, uh, that April, um, and, uh, was introduced, uh, to Norm AI and John Ney, um, by a mutual friend who was on the advisory board of Norm AI. Um, and I was introduced, [00:02:00] uh, shortly after my retirement announcement went out, uh, at Thanksgiving of 2025.

Um, and, uh, I ended up spending some time with John, and then between Christmas and New Year's, I met with the rest of the advisory board, uh, of Norm AI, um, and, uh, saw the company, I think the first or second business day of January, and failed retirement after 11 days, uh, and signed on to lead Nu- Norm Law, um, and to, uh, contribute as a senior, uh, legal engineer at Norm AI Very interesting.

Well, you mentioned your board. That was your advisory board. That was what caught my eye when Norm was announced. You have a really kind of a who's who [00:03:00] in the regulatory space, even in the law firm and legal tech space. You've got, you know, former SEC general counsel and CFTC commissioner, former CEO of Thomson Reuters, uh, former partner at Cadwalader and King & Spalding, um, former superintendent of the New York Department of Financial Services, and a former SEC commissioner.

That is not your typical advisory board. Um, that-- As soon as I saw that list, I said to myself, "This sounds different than what I've seen thus far in the AI native space." And it feels like, um, uh, like a second generation. The first generation, I think, of AI native firms had a fairly narrow focus, you know, a lot of contract work, MSAs, DPAs, uh, quick turnaround times, low cost.

And seeing that and [00:04:00] then hearing about your background coming to the firm, um, really made me feel like this is kind of a second generation. Is, is that how you see it as well? Yeah, that's, that's right, Ted. Um, I, I think there is a substantial difference. Um, I think one of the reasons that John introduced me to the Flow advisory board is, um, he understood that my sitting down with them, um, would shift a paradigm, um, around what either a startup law firm might be or a startup AI native law firm might be, because as you point out, these are very serious people.

They've had really important, uh, policy and governance roles around our financial markets, um, and sort of if you look at what we do in this country, um, that supports our standard of living, it's while we [00:05:00] invent the world's new knowledge and specifically technology. But the other thing is we manage the world's money, um, and, you know, our financial markets and their regulation in that are critical.

Um, and of course, you know, law firms, uh, you know, play a big role in the transactions around, uh, those markets, um, and the regulation of those markets. Um, and my time meeting with that, uh, advisory board between Christmas and New Year's was just extraordinary. Um, you know, the conversations were, you know, far into the future.

Um, they were very much about, uh, the role that, um, Norm Law could play in the financial markets, um, in representing clients, uh, in those markets, um, and, you know, and a role at a level, as you point out, very different from what AI [00:06:00] native law firms had been focusing on. And they were doing a, a great job and are doing a great job around what I would call, you know, vendor contract work and other, you know, very automatable work, but where there isn't, you know, a real depth of, you know, legal knowledge and experience required.

Um And here I was spending all these ti- this time with people that had tremendous, uh, depth and experience in that. And, you know, to hear a vision about an AI firm that would practice law, you know, at those levels, um, really intrigued me. Um, and that's in fact what got me to go see the company, as I said, on the first or second business day of January.

And it, you know, walking through those doors just really blew my mind. Um, and so in the space of, you know, 10 days, I have these extraordinary conversations [00:07:00] with the advisory board, and then I go see the company, and those two things together persuaded me that this was the future of law, um, at, you know, a really different paradigm, um, and in a way where, you know, you could do work faster at the same quality, more economically, but really importantly, high value work, um, that you would bring real intellectual, um, rigor and, uh, and development to the practice, just like you would at any law firm, elite law firm, but now delivering those services very differently.

Yeah. So you and I got a chance to meet in London at the Financial Times Summit, and I, um, really enjoyed th- your panel. We, uh, we had-- You were up there with [00:08:00] your investor, uh, one of your investors, which is Blackstone. And, you know, the, the message was, I mean, you've got very se- you got a very serious, uh, board of directors, um, extremely credible.

Uh, you've got a very serious, incredible cap table. You know, you've got you, who has a, a very, um Prestigious background in big law, and it just paints a different kind of picture than what we've seen. And I've been, uh, I've been in the space for about 20 years, uh, primarily selling to law firms, but also, you know, in the early days, I was in the trenches helping law firms with technology initiatives and optimizing knowledge management and innovation processes.

And, you know, they're slow movers, and we're in a very fast-paced environment where the technology is rapidly innovating, and it feels like [00:09:00] law firms aren't keeping up. Um, I believe his name is, uh, I'm gonna, I'm gonna miss the name. Steven Crowley from Ford. The, the GC at Ford published an article on Bloomberg Law and said, "Law firms, you're not keeping up with us internally."

So it feels like there's a tension building between, um, the expectations of inside legal teams in terms of tech-enabled legal service delivery and big law. And it seems like, you, you can tell me if I'm wrong here, you're kind of filling that void. Is that an accurate way to frame it? I, I think that's fair.

Um, I, I, I believe that Norm Law exists for three reasons. The first is to do excellent legal work and to do it faster and at the same level or better quality, um, and more economically. The second reason we exist is to, um, help educate, excite, [00:10:00] um, in-house legal departments about, uh, AI tools that they can use on a co-pilot basis and to become more AI forward, more productive.

Um, and the third reason is, frankly, to be used as a cudgel against legacy counsel's rates. Um, and i- if going into our meetings with clients, uh, you know, uh, we come away with only two and three, we fail. But, you know, we are there to do legal work. But you're exactly right. We are some-- we are something of, um, you know, a step function forward in terms of the way legal service can be delivered.

And I think general counsels, including the general counsel of Ford, are taking note of those possibilities and trying to drive change. It makes sense. So there's been, you know, a decade plus of, of rate [00:11:00] increases in the big law space, and I think there is mount-- and record profits, right? I mean, Kirkland broke the ten billion barrier and, you know, twelve billion in PPEP and things have never been better.

Uh, these law firms are printing money, and I think there's a little bit of innovator's dilemma taking hold where it's kind of hard to disrupt and, you know, tell a room full of millionaires, especially ones that have their retirement horizons in sight, "Hey, we need to take partner capital and deploy it on changing this model that is delivering record profits."

Is that kind of how you see the things as well? Well, I think innovator's dilemma is the, the right frame, um, for the situation currently. We know a transition needs to occur, um, in terms of utilizing technology because it is extraordinarily [00:12:00] capable and has become so much so-- more so recently. Um, but that efficiency, if it reduces the hours of human labor, um, which is the model, the economic model that drives Big Law, you know, that is going to be disruptive.

Um, you know, they, they need to keep-- Big Law needs to keep, um, its revenue model, uh, stable in order to keep equity partners happy, uh, and in order to buy lateral practice groups, which has become a real part of the strategy for a number of firms. Um, and they will struggle with passing through the benefits of the, the economic benefits of more efficiency, um, if it either lowers e-equity partner profits or reduces their lateral partner budget.

Um, and so it is a dilemma, um, [00:13:00] but they are going to have to transition through because the technology is, has arrived, it is utilizable, efficiencies are possible, and general counsels have noticed. Yeah, I did a post recently on some of the sacred cows that must be slaughtered in Big Law to, as part of this transformation, and they are, they are daunting to say the least, right?

They're cornerstones of the industry, and I'm gonna pull it up here and reference it, but it's, uh... What, what I'm most-- The biggest question in my mind is, is it What does this transition look like? So performance metrics, top line metrics become much less useful in a, in a world of AFAs. The billable hour, which doesn't just affect pricing, it affects compensation, staffing, partner track, KPIs the firm measures themself [00:14:00] against, the apprenticeship model, how they value, recruit, train, and compensate and empower business professionals.

Systems and data, law firm data is typically a mess. Um, the cash basis profit sweep, where, you know, you close out the books at the end of the year and there's not much left for a capital investment. Um, client transparency, that's one I'm, I'm hearing much more about on the GC side. So I get a lot of GCs and, uh, CLOs as part of the podcast, and the message I'm getting is today they have very little transparency into how technology's being used and even less transparency in how that's gonna translate into more efficient de- uh, service delivery for them.

Like, that seems like a big jump where if you start with a clean slate, all of those really strong cultural norms don't have to be redirected. It seems like a [00:15:00] firm like Norm would be at a huge advantage in that respect. Well, I, I, I think that's, that's right. Um, we do have a, a clean slate on which to build.

Uh, we aren't burdened by, uh, tying to the billable hour. In fact, we don't at all. We- we're outcome-based in terms of our pricing, uh, either by document or by transaction. Um, and, and so we do have, uh, I think, uh, some agility available to us that, that maybe is, uh, gonna be part of a transition or, you know, some deep thinking about strategy for, for big law.

And big law, you know, the, the elite firms are really good at a whole bunch of things and, in fact, the best in the world at really sophisticated, complex, multidisciplinary work. But there's also a lot of work that needs to be [00:16:00] reexamined in terms of the value proposition, uh, offered to clients. And, you know, uh, I'm not gonna advise big law, but they will have to go-- the different firms will have to think about, you know, the things they're really and truly exceptional at and the things that they just do.

Um, and then there maybe there are things that shouldn't be part of their offering any longer, and they'll have to adjust through that, uh, as technology sort of changes, um, their capabilities, improves their capabilities and efficiencies, um, and in fact, their ability to deliver even more high-value work because they can be faster in integrating these complex, uh, transactions or regulatory situations and that.

So I think there's a real opportunity for big law there, but you're correct. [00:17:00] There are a whole bunch of sacred cows, if you will, that they, you know, that law firm leaders are gonna have to go off and consider, um, and that, you know, we are, uh, we're not in a position to have to sort of, uh, reform our- ourselves.

We can just move forward. Yeah. What, what sort of reaction have you gotten from your former colleagues, peers, the industry as a whole? Has it been, has it been positive, um, or has it been, um, something else? Um, I would say it's positive, um, and an awful lot of interest in terms of how we are thinking about, um, uh, the practice of law and the delivery of client service.

And I, I've been willing to, and I have spoken with many, uh, uh, big law leaders that I got to know during my seven and a [00:18:00] half years as the chair of the executive committee at Sidley. Um, and you know, by and large, they're very, very interested in, um, how we're thinking about what we're doing. Um, and I'm happy to talk to them about it.

Um, most of them know, including my former colleagues, that knowledge management and trying to understand what we knew, who knew it, and where to find it, you know, was a, was a real driver of my tenure, um, including eventually the, uh, legging into the Harvey pilot and that. So I think most folks that know me, uh, understand that this has been a passion, uh, for a long time, um, in terms of offering better, uh, value, um, and faster.

Um, and so it's, uh, it's been a lot of good conversation. Good. That, that's good to hear. I mean, if you don't do it, somebody's gonna do it, right? I mean, it's, it's not like, [00:19:00] um, Mike doesn't do this and the opportunity evaporates. Somebody's gonna fill this void. Well, the general counsels, as you pointed out earlier, um, you know, frankly, uh, without any regard to norm law, um, have noticed, uh, where their legal bills are, uh, particularly as I was saying, for the high value but not highest value work.

Um, and so this is really, uh, something that it was gonna impact and in a way disrupt, uh, big law regardless of norm law, but we, we are, um, certainly, um, a, a tangible, um, a tangible, uh, you know, flag, uh, planted in the space of, okay, we need to talk about, you know, what, what, what the value really is and what it-- and what the cost [00:20:00] is and are we in alignment Yeah, I don't know that there are official definitions around these terms, but I think there's a general consensus, um, around them, which is kind of bet the company versus operate the company.

And if you hear estimates on what the ratio is of work that gets sent to external legal counsel, it's roughly eighty/twenty. Um, eighty being operate the company, twenty being bet the company. And there are, there are, there are different takes on that, but from my just anecdotal observation, it seems like most people land in that.

H-how, how can Norm and other, or can Norm and other AI legal firms compete with Big Law in the bet the company space? Not right now. Um, uh, I, I think again, um, you [00:21:00] know, the breadth of the most elite law firms in terms of, you know, their capabilities in multiple jurisdictions with multiple regulatory schemes, uh, with various types of transactions that can be hybridized to do something new, um, to take account of a combination that's never been done before.

No, those are things that are far too human, um, at this point in time. Um, and, uh, it is where, again, um, the innovation, um, and, uh, um, and expertise that elite law firms really in the, in the US and UK bring, um, frankly affect the whole standard of living of the, of the countries, the two countries. Um, and no, we-- the AI native [00:22:00] law firms, uh, aren't going to compete.

Uh, and frankly, you know, what I would call middle market law firms just because they have access to AI tools and that aren't going to contend with the most elite firms for that work either. Um, there is just too much important human experience, knowledge, and judgment, as well as, um, the ability to innovate, um, that are housed i-in, in those practices.

Yeah, that makes sense. So where, where can AI native firms compete with Big Law? Well, in two different places, and it depends, uh, on the talent that, uh, you know, is at the firm. And so, um, AI native firms can do basic document work, um, and do it very well if, uh, there is a pretty tight sandbox, uh, around that, uh, around that workflow, um, and you don't [00:23:00] need a lot of, you know, sophisticated lawyers, uh, or experienced lawyers.

You know, that-- And we've seen that proposition, you know, proved out already. Um, as you move up in the water column of work from the most basic, you know, to, into what is really operate the company, not just, um, status quo, um, but you move into transactions, financings, um, uh, uh, investments, uh, more complex commercial arrangements and agreements.

Um, you need human beings, uh, real estate transactions. You need human beings that have experience functioning, you know, at that level of practice. And ideally, and frankly what we're doing at Norm Law, is we're overpowering that level of [00:24:00] practice. We're bringing in market leading lawyers that have seen the operate the company work day in and day out for many years, but have also practiced at the highest levels.

And so to sort of quip, um, doing the operate the company work is like riding a bike. They've never forgotten. It's straightforward. They know how to do it. Um, and they're going to be able to ensure that the quality that the clients are requiring, um, that those quality standards are met. Uh, and so it really becomes if you are utilizing AI, and I'd say whether it as a co-pilot, meaning tools doing it better than you used to or native doing the first pass of the work autonomously, the lawyers you have ultimately are the differentiator, um, uh, in the value proposition that you can offer.

And the more sophisticated the lawyers you have, [00:25:00] the more sophisticated work you can do for clients, and the more you can take advantage of the efficiencies that AI offers if you're willing to pass those through to the clients Yeah, interesting. You know, I think about, and I've, I've said this before on the show, I think about this transformation happening in waves.

And the first wave, which Big Law is squarely in, is the copilot, lowercase C copilot phase, right? Where, uh, you take a platform and you pair it, it with an attorney who is largely doing work the way they have for thirty years, and you get some incremental efficiency gains. I think wave two is going to be the re-architecting of, of work and unbundling legal tasks, bringing in proper process engineering discipline into the practice, and formally documenting and [00:26:00] evaluating how the work gets delivered.

And then I think the third wave is the agentic era, where this work gets automated to the largest extent possible, and it feels like you're-- you guys are skipping wave one and two because, you know, well, maybe you're jumping right into wave two, which is kind of the re-architecting of how the work gets done.

Does that-- is that a fair assessment? Yeah. So two and three. Um- Yes. We are re-architecting in the sense that, um, we've moved past the copilot stage. Um, we are building reusable AI agents that have skills, um, and those skills are around certain types of transactions. And we've built an architecture on which the-- a software architecture on which those agents sit and are callable, as if you would call certain associates with different expertises.[00:27:00]

On top of that, we've built agents that have specialized knowledge around the client's precedents and playbooks and predilections And essentially educated those agents to do the work a-autonomously, but the way an associate that had been doing that kind of transaction for that particular client for several years.

And so we are in the two and three in the sense we are re-architecting because the process, uh, uh, and, uh, moving a document, moving flow, getting approvals, including through the client, that's software, and we're doing that, but we're also building these skills that are reusable. So unlike a copilot where you do your task and then it kind of thrown away and you go do a task again, the agents that are built [00:28:00] with specific skill sets are permanent.

They're available. They never quit, they never get tired, they never have a bad day, um, and they are callable by more senior lawyers to do these functions, um, or tasks, um, autonomously. Um, and so if a lawyer working with copilot tools is two X, well, if that same transaction term sheet comes in to a partner but drops a-automatically to an AI agent that has been trained to do the suite of documents the way the particular client would require them and subject to their preferences, it's already working in the background while the partner is talking to the in-house team.

That suite of documents will be delivered somewhere between five and ten X faster than a lawyer working with tools would be [00:29:00] able to deliver it, and at the same level, uh, of quality. And that level is about a third-year associate, and it's then ready for review. So we've moved up the first human interaction with the document suite, whether it's the generation of documents or it's commenting on someone else's.

We've moved that level of human interaction up to a more sophisticated point of sort of the mid to senior associate or partner level, and that is dramatically more efficient You know, um, one potential gap I, I see in the AI native strategy, and I don't think it's as big a, a gap as people make it out to be.

Um, I have a theory on data. So I think data is a necessary component, but an insufficient one. In, in other words, there's a lot of talk about data is the new oil. Uh, I don't, I don't think it-- [00:30:00] data by itself creates a moat. I think what is going to create a moat for law firms in particular is how they deploy tech, build learning loops, and then package that into a go-to-market motion that aligns really well with client needs.

I think that is gonna be the differentiator. In other words, the incremental value of, let's say, transactional data between Latham & Kirkland isn't a dial mover, right? Kirkland's bigger, but it's-- once you get to a certain critical mass of a data corpus, I think that any, you know, uh, additional data that's acquired only provides an incremental gain.

I really think that it's the p- the packaging and the, the learning loops and how effectively firms capture and improve knowledge and improve systems with it. Do you see it the same way, or do, do you feel like, um, [00:31:00] data- No. Yeah ... is, is the new oil? No. Um, d- data, data is important, um, and in the way we're thinking about it, the client's library, you know, is, uh, is incredibly important in terms of, you know, working through, um, a specific, uh, work stream, um, or transaction type.

Um, but what's also important is what's in the head of the client, uh, and the domain expertise of our partners. Um, and so data is a very big component of it. I'm not sure generalized data is as valuable, um, in terms of working with large institutions that have a history, um, of transactions, um, or even in the dispute space, um, and have their own in-in-house department that frankly, [00:32:00] y-you know, is driving, uh, the strategy or the pain points or the must-haves.

Um, I'm, I'm not sure undifferentiated data is all that, that helpful. I think what is helpful is the data that is really useful to the client and really good project management and plumbing, and a lot of that can be software. Um, but, uh, and, you know, so I think, I think it is a combination, but I think just having more data, um, i-is not necessarily, uh, you know, gonna create efficiencies for clients.

And one example might be if I were doing fund number four for a large private equity house, I really don't need to boil the ocean in order to come up with the limited partnership agreement for fund five. I really wanna look at fund four, and [00:33:00] I wanna look at all the investor asks that they put into side letters and things that occurred during the operation of that partnership as I think about, okay, what is the best design for fund five Taking those things into account, I really don't need to know what everybody else has done with all their agreements and what other investors have done with other funds.

Not so much. Maybe, maybe that little increment lives in the head of the human being, the partner, or the in-house legal department. So I agree with you. You need to think carefully about whether or not i-in the way you're utilizing data, you're actually completing the client's mission, or y-you're just adding a lot of time and effort and, you know, information that doesn't really move the needle I [00:34:00] think, yep, I, we're aligned on that.

Um, there is a perception, and I think it's a valid one in, from clients about Big Law, that they are not customer-centric. And I'm sure there are some exceptions to this, but in general, um, a- and to get specific a- about why they feel that way, they feel there's a lack of transparency. They feel, they feel like there's a lack of, hmm-- or they feel the relationship, I'll go the opposite direction, is sometimes feels arm's length.

Um, there's, uh, you know, a lack of, um, customer needs considered when pricing models are developed. And I mean, there's real data on this. Deloitte had a study from, uh, June of this year where they surveyed 121 inside [00:35:00] legal leaders, and something like 65% said that they have only had either an initial conversation or no conversation at all about how AI is going to impact the economics of the relationship.

And so I think Big Law has a lot of work to do in making, putting the customers at the center of their thinking. Um, how are you approaching this customer-centric matter? Right. So in terms of what we're doing at Norm Law, w- we're getting the pricing out of the way right at the beginning by charging on a flat rate per transaction or, uh, per document, and that, um, we're not talking about pricing and, you know, phone calls that relate to the work stream and that we don't charge for them.

It's all part of the cost, and so we can move immediately [00:36:00] to, okay, what is the work and how do we get it done fast, efficiently, expertly, and how do we work with the in-house department to make that happen collaboratively? Um, and, and that's a very important part of our model. In order to improve the performance of the AI agent, it needs to be informed.

It needs to be informed by the drafts that the lawyers at Norm Law exchange with the counterparties The comments that come from in-house review of our work, um, and conversations that happen between the partner and the in-house team, and that has to be fed into the agent. So it's in our interest to spend more time talking to the client and making sure that we're updating the agent, and we don't wanna put, put a [00:37:00] disincentive around that improvement in performance by saying, "Well, we're gonna charge you for that conversation."

So I think we've tried to construct our way of working i-i- so that we create the most value, uh, and efficiency and improvement in the AI agent performance as the work streams progress. Um, in terms of big law, what I would say about it is, yes, there's been a pull apart between the lawyers and the clients, and a lot of it relates to the rate raises over the last decade that, you know, frankly went previously from three to five percent to nine to 14%.

And with that, you saw the advent of procurement departments at clients. Procurement departments didn't exist, you know, 15, 20 years ago. They were a [00:38:00] response to pricing pressures. And, you know, that dynamic is not one of alignment or certainly strains alignment. Now, what I would say about the lawyers at big law, frankly, but this pertains generally with lawyers, is they are client-driven.

Um, they came into the profession because they wanted to be in service to clients. They wanted to be valued for their expertise and their responsiveness. Um, and, you know, the, some of the operating elements, um, at clients and at big law have gotten in the way of those relationships. And, you know, it might be one of those times where at least with some firms and some clients, they both disarm, um, and, uh, you know, can [00:39:00] realign.

Um, and maybe that's with some of these transac- transitions, you know, we'll see some of that, um, you know, TBD. I went to a, uh, I go to a lot of conferences. I'm at about fourteen, fifteen a year, and last year I went to my first pricing conference, and it was a panel of GCs and all the pricing professionals at law firms in the audience, and I thought a fistfight was gonna break out.

It was super entertaining, um, to hear, and they were very candid that, um, on both sides. You know, the GCs were basically saying, "Look, this, this trajectory of rates is unsustainable, and, you know, we, we-- what we want is, like, more predictable predictability around, you know, rate increases for hourly work, but also a much higher percentage of alternative fee [00:40:00] arrangements."

And then on the, on the pr- the pricing professional side, they, they-- there was a lot of what sounded like valid pushback. Like, "Hey, look, fixed price requires fixed scope, and you can't fix scope around... It's very difficult to do around a big category of legal work." And, um, you know, so there's the, uh-- But the tension was palpable in that room, and it, it ended up, I saw, I stuck around afterwards, ev- you know, a lot of friendly conversations, but that was a really heated dialogue, and it-- I think it captures the disconnect today between inside legal team, what inside legal teams want and what external legal providers are, are offering.

And I'm not saying who's at fault there because I think there's plenty on both sides, but, um, it seems like you're kind of filling s-some of that void Well, that's right. Um, and, and to your point, um, you know, look, when I see kickoff meetings on [00:41:00] transactions, you know, for, for the last, you know, my, my years of practice in that, um, or other get-togethers between the lawyers and the clients, um, you see the relationships and you see how much the clients value the work that the lawyers do, um, their responsiveness, you know, e- even, you know, their character, um, and personalities.

That there's a reason there's a fit between their lawyers and their clients. It's the pricing, the billing, and the collecting that gets in the way of that. Um, and we've tried to just take that off the table. Um, and, uh, I, I think, you know, that puts us in a healthier place where we can concentrate on, you know, what it is that is bringing us together.

What is the mission that we collectively are going to embark on and accomplish? Um, and we're not talking about, um, [00:42:00] what each increment is gonna cost. Now, to your point, you know, you need to have trust, um, and transparency so that we can get that pricing correct and then get it off the table. Um, and, um, I, I, I think that is possible , um, you know, but you need to have transparency and trust and commitment, um, to the longer term.

I'm not gonna take advantage of you today because you're gonna need me again tomorrow, and vice versa. Um, but, you know, we're a long way from getting back to, um, nirvana. Yeah. How, how is Norm managing the unpredictability that's inherent in some legal work when you're You know, going through your pricing strategy- Yeah

how do you think about that? Yeah, and a- and again, um, [00:43:00] well, and, and here, you know, there's a bit of an unfairness in, in, uh, the, the commentary in the sense that we are not doing the highest value work that is the most complex and the most unique, um, and iterative on, uh, you know, prior, uh, uh, prior knowledge and that.

And so, um, it is more predictable. Um, it's high value, it's important, and there can be a range. But our view of that is that we're-- if we have a commitment with a client to do multiple transactions, it's worth our investment, um, it's worth training the agent, and we can price that. And if one transaction takes longer, so be it.

If one is shorter, so be it. But we basically index to the client's average cost, and we accept that. Um, and we aren't looking to pick up, you know, nickels in front of a [00:44:00] steamroller. Yeah. And, um, I think that there is, there have been unhealthy dynamics on the inside legal realm as well, like shadow billing, you know, where, "Hey, I want a fixed price, but I also wanna see your hours."

And, or- Right ... or asking for, like, does not exceeds. You know, I-- we're a service provider, we're a product company, but for f- 14 years, from '08 to 2022, we were consultants, and we would get approached and be asked to deliver Uh, fixed price engagements and the default was does not exceeds. And that is the worst possible scenario for a service provider because there's no upside.

It's if, if I'm, if I beat the estimate, I, I lose revenue, and if I go over, I lose because I'm eating hours. So- Right ... you know, um, h-how, how- Yeah, so we're not [00:45:00] doing that. Yeah. Yeah, we're not doing the, the, you know, the, the caps and things like that. It's just a straight cost, um, and, uh, and, and build a relationship, meaning we wanna have conversations.

Conversations use up human time. Human time is finite. Um, so we need an understanding with the clients that we're gonna work together, you know, in good faith on this mission, um, and we're gonna have to have conversations if that starts not to be the case. But, you know, we also, you know, spend a fair amount of time scoping and doing project management upfront so that we all understand what we're doing.

Um, but really, it's to no one's benefit when, um, the parties aren't, uh, don't have an understanding, uh, of one another and aren't willing, you know, to engage in sort of a mutual journey. You know, [00:46:00] the adversarial advantage from one to another really doesn't, doesn't work for the client, and it, it, that is not a good way for an in-house department to behave, and it doesn't work for outside counsel, and it's not a good way to foster the long-term relationship that Big Law depends on.

So there is a way to, through, again, transparent conversation, you know, to get there, but both sides have to be willing to, you know, engage and be honest about, you know, what they're doing, what the value really is, and what the cost really should be, and how it's going to be staffed to make sure you meet that quality, um, and how it's gonna be supported internally, um, so that everybody comes out where, you know, [00:47:00] they expect.

Or in the words of Yogi Berra, you know, "If you don't know where you're going, you wind up somewhere else." And that's not good for anybody. That's a great quote, and we're out of time, so we'll, we'll end on that because I love Yogi Berra quotes. Um, well, it's been an absolute pleasure to have you on. Mike, how do people find out more about y- you know, you and, and Norm Law?

Well, we're you-- normlaw, uh, .com and, uh, Norm AI, um, and, uh, we're, we're out there. Um, we're easily findable on the worldwide web of knowledge. Awesome. And we'll include some links- It's been a pleasure ... links in the show notes. It-- Yeah, the pleasure's been mine. I've been looking forward to this podcast for, for quite some time.

So thank you so much for taking time out of your day. I know you're very busy and, um, I hope to bump into you at a conference again soon. [00:48:00] Look forward to it. All right. Bye-bye. Thanks, Mike. 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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