1 00:00:00,088 --> 00:00:02,618 Mike, thank you so much for joining today. 2 00:00:03,988 --> 00:00:05,188 Ted, great to be with you. 3 00:00:06,188 --> 00:00:09,758 Yeah, I've been, uh, I've been looking forward to this conversation. 4 00:00:09,838 --> 00:00:14,957 I knew I wanted you on as soon as I read about, uh, Norm Law, and I 5 00:00:14,978 --> 00:00:18,837 think there are some really unique characteristics about what you guys 6 00:00:18,838 --> 00:00:24,578 are doing, and that's been reflected in the market and, um, the headlines. 7 00:00:25,148 --> 00:00:29,807 But before we jump in, um, if you don't mind, why don't you tell our 8 00:00:29,808 --> 00:00:33,917 listeners a little bit about yourself and how, how Norm Law came to be? 9 00:00:35,948 --> 00:00:45,208 Um, well, as for myself, um, I practiced, uh, for 35 years at Sidley Austin, um, 10 00:00:45,238 --> 00:00:51,268 where I grew up as an investment funds and asset management lawyer, um, and 11 00:00:51,268 --> 00:00:53,918 regulatory specialist in that space. 12 00:00:54,358 --> 00:01:00,358 Um, I eventually became, uh, a group head, uh, in that 13 00:01:00,358 --> 00:01:03,278 practice, uh, for about 10 years. 14 00:01:03,598 --> 00:01:08,268 Um, and then while continuing to lead that practice globally as it was growing, 15 00:01:08,717 --> 00:01:15,527 um, became the managing partner of Sidley's New York office, uh, in 2011. 16 00:01:16,078 --> 00:01:22,217 Uh, I had that role through the end of 2017, uh, when I was elected 17 00:01:22,217 --> 00:01:24,868 chair, uh, of the executive committee. 18 00:01:24,877 --> 00:01:32,357 And so I led the firm from January of 2018 through April of 2025. 19 00:01:32,837 --> 00:01:39,358 Um, and my term was non-renewable, and I stepped down, um, in accordance with our 20 00:01:39,358 --> 00:01:49,018 partnership agreement, uh, that April, um, and, uh, was introduced, uh, to Norm 21 00:01:49,018 --> 00:01:56,947 AI and John Ney, um, by a mutual friend who was on the advisory board of Norm AI. 22 00:01:57,627 --> 00:02:04,857 Um, and I was introduced, uh, shortly after my retirement announcement went 23 00:02:04,857 --> 00:02:07,877 out, uh, at Thanksgiving of 2025. 24 00:02:09,607 --> 00:02:18,167 Um, and, uh, I ended up spending some time with John, and then between Christmas and 25 00:02:18,227 --> 00:02:26,957 New Year's, I met with the rest of the advisory board, uh, of Norm AI, um, and, 26 00:02:27,187 --> 00:02:33,077 uh, saw the company, I think the first or second business day of January, and 27 00:02:33,137 --> 00:02:41,018 failed retirement after 11 days, uh, and signed on to lead Nu- Norm Law, um, and 28 00:02:41,018 --> 00:02:48,670 to, uh, contribute as a senior, uh, legal engineer at Norm AI Very interesting. 29 00:02:48,690 --> 00:02:49,900 Well, you mentioned your board. 30 00:02:49,910 --> 00:02:51,590 That was your advisory board. 31 00:02:51,600 --> 00:02:56,180 That was what caught my eye when Norm was announced. 32 00:02:56,549 --> 00:03:02,620 You have a really kind of a who's who in the regulatory space, even in 33 00:03:02,620 --> 00:03:04,829 the law firm and legal tech space. 34 00:03:05,390 --> 00:03:10,329 You've got, you know, former SEC general counsel and CFTC commissioner, 35 00:03:10,809 --> 00:03:16,170 former CEO of Thomson Reuters, uh, former partner at Cadwalader and King 36 00:03:16,170 --> 00:03:20,850 & Spalding, um, former superintendent of the New York Department of Financial 37 00:03:20,850 --> 00:03:23,809 Services, and a former SEC commissioner. 38 00:03:24,240 --> 00:03:26,679 That is not your typical advisory board. 39 00:03:27,040 --> 00:03:34,999 Um, that-- As soon as I saw that list, I said to myself, "This sounds 40 00:03:35,049 --> 00:03:40,819 different than what I've seen thus far in the AI native space." And it feels 41 00:03:40,819 --> 00:03:44,459 like, um, uh, like a second generation. 42 00:03:44,519 --> 00:03:49,029 The first generation, I think, of AI native firms had a fairly 43 00:03:49,040 --> 00:03:55,660 narrow focus, you know, a lot of contract work, MSAs, DPAs, uh, 44 00:03:55,690 --> 00:03:57,629 quick turnaround times, low cost. 45 00:03:58,290 --> 00:04:03,539 And seeing that and then hearing about your background coming to the 46 00:04:03,540 --> 00:04:08,729 firm, um, really made me feel like this is kind of a second generation. 47 00:04:09,099 --> 00:04:11,080 Is, is that how you see it as well? 48 00:04:12,142 --> 00:04:13,542 Yeah, that's, that's right, Ted. 49 00:04:13,552 --> 00:04:16,981 Um, I, I think there is a substantial difference. 50 00:04:17,012 --> 00:04:22,382 Um, I think one of the reasons that John introduced me to the Flow advisory board 51 00:04:22,402 --> 00:04:30,392 is, um, he understood that my sitting down with them, um, would shift a paradigm, 52 00:04:30,462 --> 00:04:38,302 um, around what either a startup law firm might be or a startup AI native 53 00:04:38,302 --> 00:04:42,582 law firm might be, because as you point out, these are very serious people. 54 00:04:42,601 --> 00:04:49,442 They've had really important, uh, policy and governance roles around our financial 55 00:04:49,442 --> 00:04:56,002 markets, um, and sort of if you look at what we do in this country, um, 56 00:04:56,011 --> 00:05:00,822 that supports our standard of living, it's while we invent the world's new 57 00:05:00,831 --> 00:05:03,592 knowledge and specifically technology. 58 00:05:03,872 --> 00:05:08,491 But the other thing is we manage the world's money, um, and, you know, 59 00:05:08,491 --> 00:05:12,001 our financial markets and their regulation in that are critical. 60 00:05:12,471 --> 00:05:18,671 Um, and of course, you know, law firms, uh, you know, play a big role in the 61 00:05:18,671 --> 00:05:25,201 transactions around, uh, those markets, um, and the regulation of those markets. 62 00:05:25,521 --> 00:05:31,901 Um, and my time meeting with that, uh, advisory board between Christmas 63 00:05:31,901 --> 00:05:33,881 and New Year's was just extraordinary. 64 00:05:33,932 --> 00:05:39,831 Um, you know, the conversations were, you know, far into the future. 65 00:05:40,201 --> 00:05:46,642 Um, they were very much about, uh, the role that, um, Norm Law could play in the 66 00:05:46,642 --> 00:05:53,401 financial markets, um, in representing clients, uh, in those markets, um, and, 67 00:05:53,502 --> 00:05:59,881 you know, and a role at a level, as you point out, very different from what AI 68 00:05:59,892 --> 00:06:02,451 native law firms had been focusing on. 69 00:06:02,862 --> 00:06:07,001 And they were doing a, a great job and are doing a great job around what I would 70 00:06:07,002 --> 00:06:11,751 call, you know, vendor contract work and other, you know, very automatable 71 00:06:11,761 --> 00:06:18,441 work, but where there isn't, you know, a real depth of, you know, legal 72 00:06:18,441 --> 00:06:20,452 knowledge and experience required. 73 00:06:20,832 --> 00:06:26,844 Um And here I was spending all these ti- this time with people that had tremendous, 74 00:06:27,183 --> 00:06:29,594 uh, depth and experience in that. 75 00:06:29,623 --> 00:06:36,974 And, you know, to hear a vision about an AI firm that would practice law, you know, 76 00:06:37,044 --> 00:06:40,744 at those levels, um, really intrigued me. 77 00:06:40,774 --> 00:06:46,953 Um, and that's in fact what got me to go see the company, as I said, on the 78 00:06:46,953 --> 00:06:49,013 first or second business day of January. 79 00:06:49,024 --> 00:06:53,913 And it, you know, walking through those doors just really blew my mind. 80 00:06:53,973 --> 00:06:58,744 Um, and so in the space of, you know, 10 days, I have these extraordinary 81 00:06:58,744 --> 00:07:04,854 conversations with the advisory board, and then I go see the company, and those 82 00:07:04,854 --> 00:07:12,713 two things together persuaded me that this was the future of law, um, at, you 83 00:07:12,713 --> 00:07:20,063 know, a really different paradigm, um, and in a way where, you know, you could 84 00:07:20,074 --> 00:07:26,033 do work faster at the same quality, more economically, but really importantly, 85 00:07:26,033 --> 00:07:34,374 high value work, um, that you would bring real intellectual, um, rigor and, 86 00:07:34,424 --> 00:07:41,773 uh, and development to the practice, just like you would at any law firm, 87 00:07:41,783 --> 00:07:45,923 elite law firm, but now delivering those services very differently. 88 00:07:46,844 --> 00:07:47,174 Yeah. 89 00:07:47,174 --> 00:07:50,823 So you and I got a chance to meet in London at the Financial Times Summit, 90 00:07:50,963 --> 00:07:56,213 and I, um, really enjoyed th- your panel. 91 00:07:57,064 --> 00:08:01,884 We, uh, we had-- You were up there with your investor, uh, one of your 92 00:08:01,884 --> 00:08:03,554 investors, which is Blackstone. 93 00:08:04,073 --> 00:08:07,803 And, you know, the, the message was, I mean, you've got very se- 94 00:08:07,803 --> 00:08:12,824 you got a very serious, uh, board of directors, um, extremely credible. 95 00:08:13,533 --> 00:08:18,294 Uh, you've got a very serious, incredible cap table. 96 00:08:18,833 --> 00:08:26,246 You know, you've got you, who has a, a very, um Prestigious background in 97 00:08:26,256 --> 00:08:32,135 big law, and it just paints a different kind of picture than what we've seen. 98 00:08:32,765 --> 00:08:37,566 And I've been, uh, I've been in the space for about 20 years, uh, primarily 99 00:08:37,566 --> 00:08:41,535 selling to law firms, but also, you know, in the early days, I was in the 100 00:08:41,535 --> 00:08:47,495 trenches helping law firms with technology initiatives and optimizing knowledge 101 00:08:47,495 --> 00:08:49,206 management and innovation processes. 102 00:08:49,815 --> 00:08:54,475 And, you know, they're slow movers, and we're in a very fast-paced 103 00:08:54,635 --> 00:08:59,646 environment where the technology is rapidly innovating, and it feels 104 00:08:59,646 --> 00:09:01,835 like law firms aren't keeping up. 105 00:09:02,335 --> 00:09:06,536 Um, I believe his name is, uh, I'm gonna, I'm gonna miss the name. 106 00:09:06,566 --> 00:09:08,406 Steven Crowley from Ford. 107 00:09:09,005 --> 00:09:12,935 The, the GC at Ford published an article on Bloomberg Law and said, "Law firms, 108 00:09:12,936 --> 00:09:15,455 you're not keeping up with us internally." 109 00:09:15,695 --> 00:09:19,945 So it feels like there's a tension building between, um, the 110 00:09:19,945 --> 00:09:24,505 expectations of inside legal teams in terms of tech-enabled legal 111 00:09:24,505 --> 00:09:26,236 service delivery and big law. 112 00:09:26,616 --> 00:09:30,706 And it seems like, you, you can tell me if I'm wrong here, 113 00:09:31,126 --> 00:09:32,896 you're kind of filling that void. 114 00:09:33,135 --> 00:09:34,955 Is that an accurate way to frame it? 115 00:09:36,544 --> 00:09:37,834 I, I think that's fair. 116 00:09:37,864 --> 00:09:43,644 Um, I, I, I believe that Norm Law exists for three reasons. 117 00:09:43,664 --> 00:09:48,534 The first is to do excellent legal work and to do it faster 118 00:09:48,564 --> 00:09:53,763 and at the same level or better quality, um, and more economically. 119 00:09:54,273 --> 00:10:02,083 The second reason we exist is to, um, help educate, excite, um, in-house legal 120 00:10:02,084 --> 00:10:08,703 departments about, uh, AI tools that they can use on a co-pilot basis and to 121 00:10:08,703 --> 00:10:11,103 become more AI forward, more productive. 122 00:10:11,643 --> 00:10:16,794 Um, and the third reason is, frankly, to be used as a cudgel 123 00:10:17,113 --> 00:10:19,483 against legacy counsel's rates. 124 00:10:19,814 --> 00:10:26,704 Um, and i- if going into our meetings with clients, uh, you know, uh, we come 125 00:10:26,704 --> 00:10:29,474 away with only two and three, we fail. 126 00:10:29,963 --> 00:10:32,643 But, you know, we are there to do legal work. 127 00:10:32,703 --> 00:10:34,223 But you're exactly right. 128 00:10:34,593 --> 00:10:42,413 We are some-- we are something of, um, you know, a step function forward in terms of 129 00:10:42,413 --> 00:10:45,284 the way legal service can be delivered. 130 00:10:45,523 --> 00:10:50,504 And I think general counsels, including the general counsel of Ford, are 131 00:10:50,504 --> 00:10:54,343 taking note of those possibilities and trying to drive change. 132 00:10:55,113 --> 00:10:55,883 It makes sense. 133 00:10:56,293 --> 00:11:01,363 So there's been, you know, a decade plus of, of rate increases in the 134 00:11:01,363 --> 00:11:07,554 big law space, and I think there is mount-- and record profits, right? 135 00:11:07,593 --> 00:11:13,264 I mean, Kirkland broke the ten billion barrier and, you know, twelve billion in 136 00:11:13,433 --> 00:11:16,704 PPEP and things have never been better. 137 00:11:16,763 --> 00:11:19,813 Uh, these law firms are printing money, and I think there's a little 138 00:11:19,814 --> 00:11:25,983 bit of innovator's dilemma taking hold where it's kind of hard to disrupt 139 00:11:26,314 --> 00:11:30,163 and, you know, tell a room full of millionaires, especially ones that have 140 00:11:30,163 --> 00:11:34,963 their retirement horizons in sight, "Hey, we need to take partner capital 141 00:11:35,003 --> 00:11:39,893 and deploy it on changing this model that is delivering record profits." 142 00:11:40,153 --> 00:11:43,283 Is that kind of how you see the things as well? 143 00:11:44,536 --> 00:11:48,555 Well, I think innovator's dilemma is the, the right frame, um, 144 00:11:48,575 --> 00:11:51,396 for the situation currently. 145 00:11:51,606 --> 00:11:58,085 We know a transition needs to occur, um, in terms of utilizing technology because 146 00:11:58,085 --> 00:12:04,065 it is extraordinarily capable and has become so much so-- more so recently. 147 00:12:04,555 --> 00:12:10,505 Um, but that efficiency, if it reduces the hours of human labor, 148 00:12:11,016 --> 00:12:16,675 um, which is the model, the economic model that drives Big Law, you know, 149 00:12:16,685 --> 00:12:18,686 that is going to be disruptive. 150 00:12:19,006 --> 00:12:24,175 Um, you know, they, they need to keep-- Big Law needs to keep, um, its 151 00:12:24,185 --> 00:12:29,945 revenue model, uh, stable in order to keep equity partners happy, uh, 152 00:12:29,995 --> 00:12:36,435 and in order to buy lateral practice groups, which has become a real part 153 00:12:36,435 --> 00:12:39,835 of the strategy for a number of firms. 154 00:12:40,195 --> 00:12:46,825 Um, and they will struggle with passing through the benefits of the, the economic 155 00:12:46,825 --> 00:12:53,065 benefits of more efficiency, um, if it either lowers e-equity partner profits 156 00:12:53,106 --> 00:12:56,475 or reduces their lateral partner budget. 157 00:12:56,935 --> 00:13:03,305 Um, and so it is a dilemma, um, but they are going to have to transition through 158 00:13:03,335 --> 00:13:10,495 because the technology is, has arrived, it is utilizable, efficiencies are possible, 159 00:13:10,816 --> 00:13:13,396 and general counsels have noticed. 160 00:13:14,465 --> 00:13:21,245 Yeah, I did a post recently on some of the sacred cows that must be 161 00:13:21,246 --> 00:13:28,335 slaughtered in Big Law to, as part of this transformation, and they are, they 162 00:13:28,335 --> 00:13:30,775 are daunting to say the least, right? 163 00:13:30,776 --> 00:13:36,376 They're cornerstones of the industry, and I'm gonna pull it up here and reference 164 00:13:36,376 --> 00:13:41,606 it, but it's, uh… What, what I'm most-- The biggest question in my mind is, is 165 00:13:41,606 --> 00:13:44,632 it What does this transition look like? 166 00:13:44,632 --> 00:13:48,432 So performance metrics, top line metrics become much less 167 00:13:48,452 --> 00:13:50,952 useful in a, in a world of AFAs. 168 00:13:51,252 --> 00:13:55,461 The billable hour, which doesn't just affect pricing, it affects compensation, 169 00:13:55,472 --> 00:14:00,131 staffing, partner track, KPIs the firm measures themself against, 170 00:14:00,612 --> 00:14:05,411 the apprenticeship model, how they value, recruit, train, and compensate 171 00:14:05,452 --> 00:14:07,702 and empower business professionals. 172 00:14:08,172 --> 00:14:11,602 Systems and data, law firm data is typically a mess. 173 00:14:12,092 --> 00:14:17,041 Um, the cash basis profit sweep, where, you know, you close out the books at 174 00:14:17,042 --> 00:14:21,611 the end of the year and there's not much left for a capital investment. 175 00:14:22,151 --> 00:14:25,731 Um, client transparency, that's one I'm, I'm hearing much 176 00:14:25,741 --> 00:14:27,331 more about on the GC side. 177 00:14:27,862 --> 00:14:35,162 So I get a lot of GCs and, uh, CLOs as part of the podcast, and the message I'm 178 00:14:35,162 --> 00:14:40,472 getting is today they have very little transparency into how technology's being 179 00:14:40,472 --> 00:14:46,142 used and even less transparency in how that's gonna translate into more efficient 180 00:14:46,612 --> 00:14:48,801 de- uh, service delivery for them. 181 00:14:49,441 --> 00:14:53,512 Like, that seems like a big jump where if you start with a clean slate, 182 00:14:53,641 --> 00:14:59,011 all of those really strong cultural norms don't have to be redirected. 183 00:14:59,011 --> 00:15:03,712 It seems like a firm like Norm would be at a huge advantage in that respect. 184 00:15:05,464 --> 00:15:07,733 Well, I, I, I think that's, that's right. 185 00:15:07,784 --> 00:15:12,093 Um, we do have a, a clean slate on which to build. 186 00:15:12,154 --> 00:15:16,894 Uh, we aren't burdened by, uh, tying to the billable hour. 187 00:15:16,894 --> 00:15:18,343 In fact, we don't at all. 188 00:15:18,353 --> 00:15:22,633 We- we're outcome-based in terms of our pricing, uh, either by 189 00:15:22,633 --> 00:15:24,243 document or by transaction. 190 00:15:24,743 --> 00:15:32,103 Um, and, and so we do have, uh, I think, uh, some agility available to us that, 191 00:15:32,163 --> 00:15:38,413 that maybe is, uh, gonna be part of a transition or, you know, some deep 192 00:15:38,413 --> 00:15:41,134 thinking about strategy for, for big law. 193 00:15:41,473 --> 00:15:47,564 And big law, you know, the, the elite firms are really good at a whole bunch 194 00:15:47,564 --> 00:15:52,993 of things and, in fact, the best in the world at really sophisticated, 195 00:15:53,483 --> 00:15:56,373 complex, multidisciplinary work. 196 00:15:57,013 --> 00:16:02,244 But there's also a lot of work that needs to be reexamined in terms of the value 197 00:16:02,244 --> 00:16:05,343 proposition, uh, offered to clients. 198 00:16:05,343 --> 00:16:09,834 And, you know, uh, I'm not gonna advise big law, but they will have 199 00:16:09,863 --> 00:16:14,043 to go-- the different firms will have to think about, you know, the things 200 00:16:14,043 --> 00:16:19,153 they're really and truly exceptional at and the things that they just do. 201 00:16:19,833 --> 00:16:25,213 Um, and then there maybe there are things that shouldn't be part of their offering 202 00:16:25,213 --> 00:16:32,243 any longer, and they'll have to adjust through that, uh, as technology sort of 203 00:16:32,244 --> 00:16:39,823 changes, um, their capabilities, improves their capabilities and efficiencies, um, 204 00:16:39,863 --> 00:16:45,833 and in fact, their ability to deliver even more high-value work because 205 00:16:45,873 --> 00:16:52,033 they can be faster in integrating these complex, uh, transactions 206 00:16:52,273 --> 00:16:54,674 or regulatory situations and that. 207 00:16:54,674 --> 00:16:59,524 So I think there's a real opportunity for big law there, but you're correct. 208 00:16:59,814 --> 00:17:05,793 There are a whole bunch of sacred cows, if you will, that they, you know, that 209 00:17:05,793 --> 00:17:11,273 law firm leaders are gonna have to go off and consider, um, and that, you know, we 210 00:17:11,273 --> 00:17:17,893 are, uh, we're not in a position to have to sort of, uh, reform our- ourselves. 211 00:17:17,894 --> 00:17:19,273 We can just move forward. 212 00:17:19,903 --> 00:17:20,253 Yeah. 213 00:17:20,254 --> 00:17:24,424 What, what sort of reaction have you gotten from your former colleagues, 214 00:17:24,424 --> 00:17:26,563 peers, the industry as a whole? 215 00:17:26,564 --> 00:17:34,533 Has it been, has it been positive, um, or has it been, um, something else? 216 00:17:36,214 --> 00:17:44,774 Um, I would say it's positive, um, and an awful lot of interest in terms of how we 217 00:17:44,774 --> 00:17:51,014 are thinking about, um, uh, the practice of law and the delivery of client service. 218 00:17:51,014 --> 00:17:56,293 And I, I've been willing to, and I have spoken with many, uh, uh, big law 219 00:17:56,303 --> 00:18:01,533 leaders that I got to know during my seven and a half years as the chair 220 00:18:01,533 --> 00:18:03,433 of the executive committee at Sidley. 221 00:18:03,914 --> 00:18:10,783 Um, and you know, by and large, they're very, very interested in, um, how 222 00:18:10,784 --> 00:18:12,733 we're thinking about what we're doing. 223 00:18:13,244 --> 00:18:15,593 Um, and I'm happy to talk to them about it. 224 00:18:15,994 --> 00:18:21,494 Um, most of them know, including my former colleagues, that knowledge management 225 00:18:21,523 --> 00:18:26,053 and trying to understand what we knew, who knew it, and where to find it, you 226 00:18:26,053 --> 00:18:32,843 know, was a, was a real driver of my tenure, um, including eventually the, uh, 227 00:18:32,863 --> 00:18:35,793 legging into the Harvey pilot and that. 228 00:18:35,803 --> 00:18:39,933 So I think most folks that know me, uh, understand that this has 229 00:18:39,933 --> 00:18:44,654 been a passion, uh, for a long time, um, in terms of offering 230 00:18:44,663 --> 00:18:48,204 better, uh, value, um, and faster. 231 00:18:48,674 --> 00:18:52,733 Um, and so it's, uh, it's been a lot of good conversation. 232 00:18:53,714 --> 00:18:54,014 Good. 233 00:18:54,023 --> 00:18:55,303 That, that's good to hear. 234 00:18:55,343 --> 00:18:58,303 I mean, if you don't do it, somebody's gonna do it, right? 235 00:18:58,343 --> 00:19:02,324 I mean, it's, it's not like, um, Mike doesn't do this and 236 00:19:02,324 --> 00:19:03,944 the opportunity evaporates. 237 00:19:03,953 --> 00:19:05,493 Somebody's gonna fill this void. 238 00:19:06,703 --> 00:19:12,863 Well, the general counsels, as you pointed out earlier, um, you know, frankly, uh, 239 00:19:13,534 --> 00:19:21,413 without any regard to norm law, um, have noticed, uh, where their legal bills are, 240 00:19:21,793 --> 00:19:26,734 uh, particularly as I was saying, for the high value but not highest value work. 241 00:19:27,123 --> 00:19:34,443 Um, and so this is really, uh, something that it was gonna impact and in a way 242 00:19:34,473 --> 00:19:42,584 disrupt, uh, big law regardless of norm law, but we, we are, um, certainly, 243 00:19:42,943 --> 00:19:53,273 um, a, a tangible, um, a tangible, uh, you know, flag, uh, planted in the 244 00:19:53,273 --> 00:19:57,784 space of, okay, we need to talk about, you know, what, what, what the value 245 00:19:57,784 --> 00:20:03,659 really is and what it-- and what the cost is and are we in alignment Yeah, 246 00:20:03,690 --> 00:20:08,070 I don't know that there are official definitions around these terms, but I 247 00:20:08,070 --> 00:20:13,700 think there's a general consensus, um, around them, which is kind of bet the 248 00:20:13,700 --> 00:20:15,679 company versus operate the company. 249 00:20:16,090 --> 00:20:21,730 And if you hear estimates on what the ratio is of work that gets 250 00:20:21,730 --> 00:20:25,540 sent to external legal counsel, it's roughly eighty/twenty. 251 00:20:26,189 --> 00:20:30,330 Um, eighty being operate the company, twenty being bet the company. 252 00:20:30,470 --> 00:20:35,280 And there are, there are, there are different takes on that, but from 253 00:20:35,280 --> 00:20:39,130 my just anecdotal observation, it seems like most people land in that. 254 00:20:39,139 --> 00:20:49,629 H-how, how can Norm and other, or can Norm and other AI legal firms compete 255 00:20:49,629 --> 00:20:52,419 with Big Law in the bet the company space? 256 00:20:54,279 --> 00:20:55,310 Not right now. 257 00:20:55,459 --> 00:21:04,329 Um, uh, I, I think again, um, you know, the breadth of the most elite law firms 258 00:21:04,330 --> 00:21:12,210 in terms of, you know, their capabilities in multiple jurisdictions with multiple 259 00:21:12,219 --> 00:21:19,779 regulatory schemes, uh, with various types of transactions that can be hybridized to 260 00:21:19,780 --> 00:21:25,600 do something new, um, to take account of a combination that's never been done before. 261 00:21:26,079 --> 00:21:32,350 No, those are things that are far too human, um, at this point in time. 262 00:21:32,719 --> 00:21:42,430 Um, and, uh, it is where, again, um, the innovation, um, and, uh, um, and 263 00:21:42,479 --> 00:21:50,299 expertise that elite law firms really in the, in the US and UK bring, um, frankly 264 00:21:50,329 --> 00:21:55,579 affect the whole standard of living of the, of the countries, the two countries. 265 00:21:55,609 --> 00:22:03,099 Um, and no, we-- the AI native law firms, uh, aren't going to compete. 266 00:22:03,129 --> 00:22:07,039 Uh, and frankly, you know, what I would call middle market law firms just 267 00:22:07,049 --> 00:22:13,029 because they have access to AI tools and that aren't going to contend with the 268 00:22:13,030 --> 00:22:15,300 most elite firms for that work either. 269 00:22:15,369 --> 00:22:23,059 Um, there is just too much important human experience, knowledge, and judgment, as 270 00:22:23,069 --> 00:22:30,219 well as, um, the ability to innovate, um, that are housed i-in, in those practices. 271 00:22:32,078 --> 00:22:32,958 Yeah, that makes sense. 272 00:22:32,958 --> 00:22:37,158 So where, where can AI native firms compete with Big Law? 273 00:22:38,428 --> 00:22:42,758 Well, in two different places, and it depends, uh, on the talent 274 00:22:42,797 --> 00:22:45,497 that, uh, you know, is at the firm. 275 00:22:45,498 --> 00:22:50,518 And so, um, AI native firms can do basic document work, um, and do it 276 00:22:50,518 --> 00:22:56,518 very well if, uh, there is a pretty tight sandbox, uh, around that, uh, 277 00:22:56,687 --> 00:23:03,418 around that workflow, um, and you don't need a lot of, you know, sophisticated 278 00:23:03,447 --> 00:23:05,927 lawyers, uh, or experienced lawyers. 279 00:23:06,598 --> 00:23:11,498 You know, that-- And we've seen that proposition, you know, proved out already. 280 00:23:11,868 --> 00:23:18,207 Um, as you move up in the water column of work from the most basic, you know, to, 281 00:23:18,238 --> 00:23:25,648 into what is really operate the company, not just, um, status quo, um, but you 282 00:23:25,648 --> 00:23:37,647 move into transactions, financings, um, uh, uh, investments, uh, more complex 283 00:23:37,677 --> 00:23:40,668 commercial arrangements and agreements. 284 00:23:41,207 --> 00:23:45,647 Um, you need human beings, uh, real estate transactions. 285 00:23:45,798 --> 00:23:51,027 You need human beings that have experience functioning, you 286 00:23:51,027 --> 00:23:53,727 know, at that level of practice. 287 00:23:54,118 --> 00:23:58,198 And ideally, and frankly what we're doing at Norm Law, is we're 288 00:23:58,198 --> 00:24:00,328 overpowering that level of practice. 289 00:24:00,328 --> 00:24:05,687 We're bringing in market leading lawyers that have seen the operate 290 00:24:05,737 --> 00:24:09,167 the company work day in and day out for many years, but have also 291 00:24:09,167 --> 00:24:10,867 practiced at the highest levels. 292 00:24:11,298 --> 00:24:16,737 And so to sort of quip, um, doing the operate the company 293 00:24:16,758 --> 00:24:18,127 work is like riding a bike. 294 00:24:18,427 --> 00:24:19,518 They've never forgotten. 295 00:24:19,688 --> 00:24:21,337 It's straightforward. 296 00:24:21,337 --> 00:24:22,247 They know how to do it. 297 00:24:22,548 --> 00:24:28,697 Um, and they're going to be able to ensure that the quality that 298 00:24:28,807 --> 00:24:33,657 the clients are requiring, um, that those quality standards are met. 299 00:24:34,087 --> 00:24:38,358 Uh, and so it really becomes if you are utilizing AI, 300 00:24:40,408 --> 00:24:45,128 and I'd say whether it as a co-pilot, meaning tools doing it better than 301 00:24:45,128 --> 00:24:49,527 you used to or native doing the first pass of the work autonomously, 302 00:24:50,348 --> 00:24:55,357 the lawyers you have ultimately are the differentiator, um, uh, in the 303 00:24:55,357 --> 00:24:57,137 value proposition that you can offer. 304 00:24:57,567 --> 00:25:01,888 And the more sophisticated the lawyers you have, the more sophisticated work you 305 00:25:01,888 --> 00:25:06,418 can do for clients, and the more you can take advantage of the efficiencies that 306 00:25:06,418 --> 00:25:13,160 AI offers if you're willing to pass those through to the clients Yeah, interesting. 307 00:25:13,220 --> 00:25:16,129 You know, I think about, and I've, I've said this before on 308 00:25:16,129 --> 00:25:20,260 the show, I think about this transformation happening in waves. 309 00:25:20,639 --> 00:25:25,150 And the first wave, which Big Law is squarely in, is the copilot, 310 00:25:25,230 --> 00:25:28,169 lowercase C copilot phase, right? 311 00:25:28,170 --> 00:25:35,090 Where, uh, you take a platform and you pair it, it with an attorney who 312 00:25:35,479 --> 00:25:41,379 is largely doing work the way they have for thirty years, and you get 313 00:25:41,379 --> 00:25:43,349 some incremental efficiency gains. 314 00:25:43,750 --> 00:25:49,849 I think wave two is going to be the re-architecting of, of work and 315 00:25:49,899 --> 00:25:56,660 unbundling legal tasks, bringing in proper process engineering discipline into the 316 00:25:56,660 --> 00:26:02,610 practice, and formally documenting and evaluating how the work gets delivered. 317 00:26:03,130 --> 00:26:09,379 And then I think the third wave is the agentic era, where this work gets 318 00:26:09,389 --> 00:26:15,709 automated to the largest extent possible, and it feels like you're-- you guys are 319 00:26:15,709 --> 00:26:21,460 skipping wave one and two because, you know, well, maybe you're jumping right 320 00:26:21,460 --> 00:26:26,329 into wave two, which is kind of the re-architecting of how the work gets done. 321 00:26:26,639 --> 00:26:28,209 Does that-- is that a fair assessment? 322 00:26:29,209 --> 00:26:29,569 Yeah. 323 00:26:30,020 --> 00:26:31,109 So two and three. 324 00:26:31,399 --> 00:26:31,979 Um- Yes. 325 00:26:32,009 --> 00:26:38,040 We are re-architecting in the sense that, um, we've moved past the copilot stage. 326 00:26:38,499 --> 00:26:45,909 Um, we are building reusable AI agents that have skills, um, and those skills 327 00:26:45,909 --> 00:26:48,520 are around certain types of transactions. 328 00:26:49,060 --> 00:26:53,569 And we've built an architecture on which the-- a software architecture 329 00:26:53,569 --> 00:26:57,269 on which those agents sit and are callable, as if you would call certain 330 00:26:57,270 --> 00:26:59,409 associates with different expertises. 331 00:27:00,159 --> 00:27:07,209 On top of that, we've built agents that have specialized knowledge 332 00:27:07,630 --> 00:27:15,748 around the client's precedents and playbooks and predilections And 333 00:27:15,998 --> 00:27:23,548 essentially educated those agents to do the work a-autonomously, but the 334 00:27:23,548 --> 00:27:28,907 way an associate that had been doing that kind of transaction for that 335 00:27:28,908 --> 00:27:31,528 particular client for several years. 336 00:27:31,858 --> 00:27:36,248 And so we are in the two and three in the sense we are re-architecting 337 00:27:36,257 --> 00:27:42,658 because the process, uh, uh, and, uh, moving a document, moving flow, 338 00:27:42,907 --> 00:27:47,548 getting approvals, including through the client, that's software, and we're 339 00:27:47,548 --> 00:27:51,557 doing that, but we're also building these skills that are reusable. 340 00:27:51,568 --> 00:27:56,628 So unlike a copilot where you do your task and then it kind of thrown away and you go 341 00:27:56,647 --> 00:28:02,847 do a task again, the agents that are built with specific skill sets are permanent. 342 00:28:02,868 --> 00:28:03,778 They're available. 343 00:28:04,127 --> 00:28:07,007 They never quit, they never get tired, they never have a bad day, 344 00:28:07,537 --> 00:28:13,927 um, and they are callable by more senior lawyers to do these functions, 345 00:28:14,307 --> 00:28:17,807 um, or tasks, um, autonomously. 346 00:28:18,327 --> 00:28:28,957 Um, and so if a lawyer working with copilot tools is two X, well, if that 347 00:28:28,957 --> 00:28:34,947 same transaction term sheet comes in to a partner but drops a-automatically 348 00:28:34,948 --> 00:28:40,747 to an AI agent that has been trained to do the suite of documents the way the 349 00:28:40,897 --> 00:28:46,717 particular client would require them and subject to their preferences, it's already 350 00:28:46,717 --> 00:28:50,817 working in the background while the partner is talking to the in-house team. 351 00:28:51,637 --> 00:28:54,747 That suite of documents will be delivered somewhere between five and 352 00:28:54,798 --> 00:29:00,848 ten X faster than a lawyer working with tools would be able to deliver it, 353 00:29:01,368 --> 00:29:03,878 and at the same level, uh, of quality. 354 00:29:04,368 --> 00:29:10,087 And that level is about a third-year associate, and it's then ready for review. 355 00:29:10,857 --> 00:29:15,367 So we've moved up the first human interaction with the document suite, 356 00:29:15,647 --> 00:29:19,718 whether it's the generation of documents or it's commenting on someone else's. 357 00:29:20,097 --> 00:29:24,548 We've moved that level of human interaction up to a more sophisticated 358 00:29:24,618 --> 00:29:31,457 point of sort of the mid to senior associate or partner level, and that is 359 00:29:31,457 --> 00:29:39,066 dramatically more efficient You know, um, one potential gap I, I see in the AI 360 00:29:39,256 --> 00:29:45,786 native strategy, and I don't think it's as big a, a gap as people make it out to be. 361 00:29:46,236 --> 00:29:48,126 Um, I have a theory on data. 362 00:29:48,626 --> 00:29:54,676 So I think data is a necessary component, but an insufficient one. 363 00:29:54,676 --> 00:29:57,996 In, in other words, there's a lot of talk about data is the new oil. 364 00:29:58,466 --> 00:30:01,595 Uh, I don't, I don't think it-- data by itself creates a moat. 365 00:30:01,635 --> 00:30:08,336 I think what is going to create a moat for law firms in particular is how they deploy 366 00:30:08,536 --> 00:30:16,115 tech, build learning loops, and then package that into a go-to-market motion 367 00:30:16,315 --> 00:30:20,766 that aligns really well with client needs. 368 00:30:21,106 --> 00:30:22,796 I think that is gonna be the differentiator. 369 00:30:22,796 --> 00:30:27,606 In other words, the incremental value of, let's say, transactional 370 00:30:27,626 --> 00:30:31,766 data between Latham & Kirkland isn't a dial mover, right? 371 00:30:31,766 --> 00:30:36,366 Kirkland's bigger, but it's-- once you get to a certain critical mass of a 372 00:30:36,366 --> 00:30:43,076 data corpus, I think that any, you know, uh, additional data that's acquired 373 00:30:43,095 --> 00:30:45,136 only provides an incremental gain. 374 00:30:45,136 --> 00:30:50,216 I really think that it's the p- the packaging and the, the learning loops and 375 00:30:50,216 --> 00:30:56,386 how effectively firms capture and improve knowledge and improve systems with it. 376 00:30:56,676 --> 00:31:00,635 Do you see it the same way, or do, do you feel like, um, data- No. 377 00:31:00,635 --> 00:31:01,745 Yeah … is, is the new oil? 378 00:31:02,816 --> 00:31:03,386 No. 379 00:31:03,406 --> 00:31:11,096 Um, d- data, data is important, um, and in the way we're thinking about it, the 380 00:31:11,096 --> 00:31:17,655 client's library, you know, is, uh, is incredibly important in terms of, you 381 00:31:17,656 --> 00:31:25,065 know, working through, um, a specific, uh, work stream, um, or transaction type. 382 00:31:25,415 --> 00:31:30,345 Um, but what's also important is what's in the head of the client, uh, and 383 00:31:30,345 --> 00:31:32,415 the domain expertise of our partners. 384 00:31:32,735 --> 00:31:36,666 Um, and so data is a very big component of it. 385 00:31:37,305 --> 00:31:44,515 I'm not sure generalized data is as valuable, um, in terms of working with 386 00:31:44,595 --> 00:31:53,385 large institutions that have a history, um, of transactions, um, or even in the 387 00:31:53,386 --> 00:31:59,705 dispute space, um, and have their own in-in-house department that frankly, 388 00:31:59,715 --> 00:32:05,845 y-you know, is driving, uh, the strategy or the pain points or the must-haves. 389 00:32:06,225 --> 00:32:11,305 Um, I'm, I'm not sure undifferentiated data is all that, that helpful. 390 00:32:11,305 --> 00:32:19,885 I think what is helpful is the data that is really useful to the client and really 391 00:32:19,886 --> 00:32:27,266 good project management and plumbing, and a lot of that can be software. 392 00:32:27,676 --> 00:32:33,375 Um, but, uh, and, you know, so I think, I think it is a combination, 393 00:32:33,375 --> 00:32:40,375 but I think just having more data, um, i-is not necessarily, uh, you know, 394 00:32:40,415 --> 00:32:42,225 gonna create efficiencies for clients. 395 00:32:42,225 --> 00:32:47,456 And one example might be if I were doing fund number four for a large 396 00:32:47,485 --> 00:32:52,005 private equity house, I really don't need to boil the ocean in 397 00:32:52,005 --> 00:32:56,455 order to come up with the limited partnership agreement for fund five. 398 00:32:56,955 --> 00:33:03,395 I really wanna look at fund four, and I wanna look at all the investor asks that 399 00:33:03,395 --> 00:33:08,196 they put into side letters and things that occurred during the operation of that 400 00:33:08,265 --> 00:33:16,190 partnership as I think about, okay, what is the best design for fund five Taking 401 00:33:16,200 --> 00:33:20,350 those things into account, I really don't need to know what everybody else has done 402 00:33:20,350 --> 00:33:23,879 with all their agreements and what other investors have done with other funds. 403 00:33:24,740 --> 00:33:25,649 Not so much. 404 00:33:26,170 --> 00:33:31,330 Maybe, maybe that little increment lives in the head of the human being, the 405 00:33:31,330 --> 00:33:34,129 partner, or the in-house legal department. 406 00:33:34,339 --> 00:33:36,030 So I agree with you. 407 00:33:36,810 --> 00:33:42,210 You need to think carefully about whether or not i-in the way you're utilizing data, 408 00:33:42,540 --> 00:33:50,490 you're actually completing the client's mission, or y-you're just adding a lot of 409 00:33:50,499 --> 00:33:59,952 time and effort and, you know, information that doesn't really move the needle I 410 00:33:59,952 --> 00:34:02,691 think, yep, I, we're aligned on that. 411 00:34:02,952 --> 00:34:07,952 Um, there is a perception, and I think it's a valid one in, 412 00:34:08,161 --> 00:34:13,541 from clients about Big Law, that they are not customer-centric. 413 00:34:13,741 --> 00:34:19,442 And I'm sure there are some exceptions to this, but in general, um, a- and to get 414 00:34:19,442 --> 00:34:25,562 specific a- about why they feel that way, they feel there's a lack of transparency. 415 00:34:26,051 --> 00:34:31,461 They feel, they feel like there's a lack of, hmm-- or they feel the relationship, 416 00:34:31,491 --> 00:34:35,001 I'll go the opposite direction, is sometimes feels arm's length. 417 00:34:35,732 --> 00:34:44,812 Um, there's, uh, you know, a lack of, um, customer needs considered 418 00:34:44,901 --> 00:34:49,771 when pricing models are developed. 419 00:34:50,061 --> 00:34:51,571 And I mean, there's real data on this. 420 00:34:51,572 --> 00:34:59,761 Deloitte had a study from, uh, June of this year where they surveyed 121 inside 421 00:34:59,761 --> 00:35:07,191 legal leaders, and something like 65% said that they have only had either an 422 00:35:07,191 --> 00:35:12,511 initial conversation or no conversation at all about how AI is going to impact 423 00:35:12,511 --> 00:35:14,221 the economics of the relationship. 424 00:35:14,981 --> 00:35:21,191 And so I think Big Law has a lot of work to do in making, putting the customers 425 00:35:21,222 --> 00:35:24,011 at the center of their thinking. 426 00:35:24,331 --> 00:35:29,762 Um, how are you approaching this customer-centric matter? 427 00:35:31,142 --> 00:35:31,412 Right. 428 00:35:31,491 --> 00:35:38,571 So in terms of what we're doing at Norm Law, w- we're getting the pricing out 429 00:35:38,572 --> 00:35:43,061 of the way right at the beginning by charging on a flat rate per transaction 430 00:35:43,631 --> 00:35:50,611 or, uh, per document, and that, um, we're not talking about pricing and, you 431 00:35:50,612 --> 00:35:54,312 know, phone calls that relate to the work stream and that we don't charge for them. 432 00:35:54,711 --> 00:36:01,341 It's all part of the cost, and so we can move immediately to, okay, what 433 00:36:01,341 --> 00:36:10,352 is the work and how do we get it done fast, efficiently, expertly, and how 434 00:36:10,352 --> 00:36:15,881 do we work with the in-house department to make that happen collaboratively? 435 00:36:16,331 --> 00:36:21,141 Um, and, and that's a very important part of our model. 436 00:36:21,572 --> 00:36:27,731 In order to improve the performance of the AI agent, it needs to be informed. 437 00:36:27,851 --> 00:36:33,271 It needs to be informed by the drafts that the lawyers at Norm Law exchange 438 00:36:33,271 --> 00:36:39,390 with the counterparties The comments that come from in-house review of our 439 00:36:39,390 --> 00:36:45,220 work, um, and conversations that happen between the partner and the in-house team, 440 00:36:45,220 --> 00:36:47,170 and that has to be fed into the agent. 441 00:36:47,690 --> 00:36:54,359 So it's in our interest to spend more time talking to the client and 442 00:36:54,359 --> 00:36:59,059 making sure that we're updating the agent, and we don't wanna put, put a 443 00:36:59,060 --> 00:37:04,849 disincentive around that improvement in performance by saying, "Well, we're 444 00:37:04,849 --> 00:37:06,840 gonna charge you for that conversation." 445 00:37:07,310 --> 00:37:15,350 So I think we've tried to construct our way of working i-i- so that we create 446 00:37:15,359 --> 00:37:20,949 the most value, uh, and efficiency and improvement in the AI agent 447 00:37:20,970 --> 00:37:24,779 performance as the work streams progress. 448 00:37:25,359 --> 00:37:31,049 Um, in terms of big law, what I would say about it is, yes, there's been a 449 00:37:31,049 --> 00:37:36,219 pull apart between the lawyers and the clients, and a lot of it relates to the 450 00:37:36,220 --> 00:37:42,939 rate raises over the last decade that, you know, frankly went previously from 451 00:37:42,949 --> 00:37:46,199 three to five percent to nine to 14%. 452 00:37:46,939 --> 00:37:53,340 And with that, you saw the advent of procurement departments at clients. 453 00:37:53,979 --> 00:37:58,000 Procurement departments didn't exist, you know, 15, 20 years ago. 454 00:37:58,499 --> 00:38:03,419 They were a response to pricing pressures. 455 00:38:03,949 --> 00:38:11,929 And, you know, that dynamic is not one of alignment or certainly strains alignment. 456 00:38:12,859 --> 00:38:17,009 Now, what I would say about the lawyers at big law, frankly, 457 00:38:17,009 --> 00:38:22,549 but this pertains generally with lawyers, is they are client-driven. 458 00:38:23,119 --> 00:38:30,830 Um, they came into the profession because they wanted to be in service to clients. 459 00:38:31,170 --> 00:38:35,569 They wanted to be valued for their expertise and their responsiveness. 460 00:38:35,999 --> 00:38:41,959 Um, and, you know, the, some of the operating elements, um, at 461 00:38:41,979 --> 00:38:47,989 clients and at big law have gotten in the way of those relationships. 462 00:38:48,429 --> 00:38:53,760 And, you know, it might be one of those times where at least with some firms 463 00:38:53,760 --> 00:39:00,139 and some clients, they both disarm, um, and, uh, you know, can realign. 464 00:39:00,580 --> 00:39:03,380 Um, and maybe that's with some of these transac- transitions, you know, 465 00:39:05,429 --> 00:39:08,729 we'll see some of that, um, you know, TBD. 466 00:39:09,868 --> 00:39:12,598 I went to a, uh, I go to a lot of conferences. 467 00:39:12,598 --> 00:39:16,898 I'm at about fourteen, fifteen a year, and last year I went to my first pricing 468 00:39:16,898 --> 00:39:22,867 conference, and it was a panel of GCs and all the pricing professionals 469 00:39:22,868 --> 00:39:27,198 at law firms in the audience, and I thought a fistfight was gonna break out. 470 00:39:28,397 --> 00:39:32,777 It was super entertaining, um, to hear, and they were very 471 00:39:32,777 --> 00:39:35,418 candid that, um, on both sides. 472 00:39:35,787 --> 00:39:41,217 You know, the GCs were basically saying, "Look, this, this trajectory 473 00:39:41,267 --> 00:39:48,157 of rates is unsustainable, and, you know, we, we-- what we want is, like, 474 00:39:48,917 --> 00:39:55,297 more predictable predictability around, you know, rate increases for hourly 475 00:39:55,297 --> 00:40:00,638 work, but also a much higher percentage of alternative fee arrangements." 476 00:40:01,187 --> 00:40:04,857 And then on the, on the pr- the pricing professional side, they, they-- there was 477 00:40:04,858 --> 00:40:07,047 a lot of what sounded like valid pushback. 478 00:40:07,047 --> 00:40:12,647 Like, "Hey, look, fixed price requires fixed scope, and you can't fix scope 479 00:40:12,777 --> 00:40:16,697 around… It's very difficult to do around a big category of legal work." 480 00:40:17,147 --> 00:40:23,127 And, um, you know, so there's the, uh-- But the tension was palpable in that 481 00:40:23,128 --> 00:40:28,268 room, and it, it ended up, I saw, I stuck around afterwards, ev- you know, 482 00:40:28,268 --> 00:40:32,897 a lot of friendly conversations, but that was a really heated dialogue, and 483 00:40:32,957 --> 00:40:38,397 it-- I think it captures the disconnect today between inside legal team, what 484 00:40:38,707 --> 00:40:43,167 inside legal teams want and what external legal providers are, are offering. 485 00:40:43,167 --> 00:40:46,517 And I'm not saying who's at fault there because I think there's plenty 486 00:40:46,547 --> 00:40:51,137 on both sides, but, um, it seems like you're kind of filling s-some 487 00:40:51,137 --> 00:40:54,372 of that void Well, that's right. 488 00:40:54,532 --> 00:40:59,662 Um, and, and to your point, um, you know, look, when I see kickoff meetings 489 00:40:59,662 --> 00:41:04,572 on transactions, you know, for, for the last, you know, my, my years of practice 490 00:41:04,572 --> 00:41:09,692 in that, um, or other get-togethers between the lawyers and the clients, um, 491 00:41:10,262 --> 00:41:16,152 you see the relationships and you see how much the clients value the work that 492 00:41:16,152 --> 00:41:21,531 the lawyers do, um, their responsiveness, you know, e- even, you know, their 493 00:41:21,531 --> 00:41:24,312 character, um, and personalities. 494 00:41:24,371 --> 00:41:28,572 That there's a reason there's a fit between their lawyers and their clients. 495 00:41:29,032 --> 00:41:34,131 It's the pricing, the billing, and the collecting that gets in the way of that. 496 00:41:34,602 --> 00:41:38,881 Um, and we've tried to just take that off the table. 497 00:41:39,361 --> 00:41:44,542 Um, and, uh, I, I think, you know, that puts us in a healthier place where 498 00:41:44,731 --> 00:41:50,382 we can concentrate on, you know, what it is that is bringing us together. 499 00:41:50,391 --> 00:41:56,032 What is the mission that we collectively are going to embark on and accomplish? 500 00:41:56,422 --> 00:42:02,362 Um, and we're not talking about, um, what each increment is gonna cost. 501 00:42:02,381 --> 00:42:10,162 Now, to your point, you know, you need to have trust, um, and transparency 502 00:42:10,221 --> 00:42:15,282 so that we can get that pricing correct and then get it off the table. 503 00:42:15,631 --> 00:42:23,232 Um, and, um, I, I, I think that is possible , um, you know, but you need 504 00:42:23,232 --> 00:42:29,752 to have transparency and trust and commitment, um, to the longer term. 505 00:42:29,992 --> 00:42:33,491 I'm not gonna take advantage of you today because you're gonna need 506 00:42:33,492 --> 00:42:36,292 me again tomorrow, and vice versa. 507 00:42:36,901 --> 00:42:44,822 Um, but, you know, we're a long way from getting back to, um, nirvana. 508 00:42:45,471 --> 00:42:45,891 Yeah. 509 00:42:45,922 --> 00:42:51,841 How, how is Norm managing the unpredictability that's inherent in some 510 00:42:51,852 --> 00:42:56,512 legal work when you're You know, going through your pricing strategy- Yeah 511 00:42:56,522 --> 00:42:57,542 how do you think about that? 512 00:42:58,542 --> 00:43:02,681 Yeah, and a- and again, um, well, and, and here, you know, there's a bit of 513 00:43:02,682 --> 00:43:08,431 an unfairness in, in, uh, the, the commentary in the sense that we are not 514 00:43:08,432 --> 00:43:13,751 doing the highest value work that is the most complex and the most unique, 515 00:43:13,802 --> 00:43:20,301 um, and iterative on, uh, you know, prior, uh, uh, prior knowledge and that. 516 00:43:20,312 --> 00:43:23,651 And so, um, it is more predictable. 517 00:43:24,222 --> 00:43:28,232 Um, it's high value, it's important, and there can be a range. 518 00:43:29,001 --> 00:43:34,742 But our view of that is that we're-- if we have a commitment with a client 519 00:43:35,102 --> 00:43:40,631 to do multiple transactions, it's worth our investment, um, it's worth training 520 00:43:40,641 --> 00:43:43,372 the agent, and we can price that. 521 00:43:43,372 --> 00:43:46,452 And if one transaction takes longer, so be it. 522 00:43:46,821 --> 00:43:48,841 If one is shorter, so be it. 523 00:43:49,271 --> 00:43:54,872 But we basically index to the client's average cost, and we accept that. 524 00:43:55,391 --> 00:44:00,511 Um, and we aren't looking to pick up, you know, nickels in front of a steamroller. 525 00:44:01,152 --> 00:44:01,562 Yeah. 526 00:44:02,171 --> 00:44:08,792 And, um, I think that there is, there have been unhealthy dynamics on the inside 527 00:44:09,222 --> 00:44:15,781 legal realm as well, like shadow billing, you know, where, "Hey, I want a fixed 528 00:44:15,791 --> 00:44:17,941 price, but I also wanna see your hours." 529 00:44:18,501 --> 00:44:22,011 And, or- Right … or asking for, like, does not exceeds. 530 00:44:22,411 --> 00:44:25,572 You know, I-- we're a service provider, we're a product company, but for 531 00:44:25,582 --> 00:44:31,561 f- 14 years, from '08 to 2022, we were consultants, and we would get 532 00:44:31,561 --> 00:44:36,810 approached and be asked to deliver Uh, fixed price engagements and 533 00:44:36,819 --> 00:44:39,710 the default was does not exceeds. 534 00:44:40,140 --> 00:44:43,340 And that is the worst possible scenario for a service provider 535 00:44:43,340 --> 00:44:44,690 because there's no upside. 536 00:44:44,819 --> 00:44:52,579 It's if, if I'm, if I beat the estimate, I, I lose revenue, and if I go over, 537 00:44:52,629 --> 00:44:54,889 I lose because I'm eating hours. 538 00:44:55,170 --> 00:45:00,450 So- Right … you know, um, h-how, how- Yeah, so we're not doing that. 539 00:45:00,450 --> 00:45:00,519 Yeah. 540 00:45:00,519 --> 00:45:04,619 Yeah, we're not doing the, the, you know, the, the caps and things like that. 541 00:45:04,639 --> 00:45:10,709 It's just a straight cost, um, and, uh, and, and build a relationship, 542 00:45:10,719 --> 00:45:12,390 meaning we wanna have conversations. 543 00:45:12,390 --> 00:45:14,449 Conversations use up human time. 544 00:45:14,959 --> 00:45:16,179 Human time is finite. 545 00:45:16,569 --> 00:45:20,819 Um, so we need an understanding with the clients that we're gonna 546 00:45:20,819 --> 00:45:26,579 work together, you know, in good faith on this mission, um, and we're 547 00:45:26,580 --> 00:45:31,749 gonna have to have conversations if that starts not to be the case. 548 00:45:32,139 --> 00:45:37,769 But, you know, we also, you know, spend a fair amount of time scoping and doing 549 00:45:37,769 --> 00:45:41,769 project management upfront so that we all understand what we're doing. 550 00:45:42,160 --> 00:45:51,390 Um, but really, it's to no one's benefit when, um, the parties aren't, uh, 551 00:45:51,410 --> 00:45:56,350 don't have an understanding, uh, of one another and aren't willing, you know, 552 00:45:56,350 --> 00:45:58,950 to engage in sort of a mutual journey. 553 00:45:59,319 --> 00:46:06,769 You know, the adversarial advantage from one to another really doesn't, 554 00:46:06,919 --> 00:46:13,160 doesn't work for the client, and it, it, that is not a good way for an in-house 555 00:46:13,199 --> 00:46:17,899 department to behave, and it doesn't work for outside counsel, and it's 556 00:46:17,909 --> 00:46:24,399 not a good way to foster the long-term relationship that Big Law depends on. 557 00:46:24,679 --> 00:46:31,170 So there is a way to, through, again, transparent conversation, you know, 558 00:46:31,170 --> 00:46:37,020 to get there, but both sides have to be willing to, you know, engage 559 00:46:37,049 --> 00:46:43,829 and be honest about, you know, what they're doing, what the value really 560 00:46:43,830 --> 00:46:48,450 is, and what the cost really should be, and how it's going to be staffed 561 00:46:48,520 --> 00:46:54,749 to make sure you meet that quality, um, and how it's gonna be supported 562 00:46:54,770 --> 00:47:00,849 internally, um, so that everybody comes out where, you know, they expect. 563 00:47:01,109 --> 00:47:05,370 Or in the words of Yogi Berra, you know, "If you don't know where you're 564 00:47:05,370 --> 00:47:10,760 going, you wind up somewhere else." And that's not good for anybody. 565 00:47:11,559 --> 00:47:15,220 That's a great quote, and we're out of time, so we'll, we'll end on that 566 00:47:15,229 --> 00:47:17,410 because I love Yogi Berra quotes. 567 00:47:17,819 --> 00:47:21,140 Um, well, it's been an absolute pleasure to have you on. 568 00:47:21,149 --> 00:47:26,120 Mike, how do people find out more about y- you know, you and, and Norm Law? 569 00:47:27,648 --> 00:47:28,518 Well, we're you-- 570 00:47:30,998 --> 00:47:36,928 normlaw, uh, .com and, uh, Norm AI, um, and, uh, we're, we're out there. 571 00:47:37,098 --> 00:47:41,798 Um, we're easily findable on the worldwide web of knowledge. 572 00:47:42,248 --> 00:47:42,778 Awesome. 573 00:47:42,837 --> 00:47:46,387 And we'll include some links- It's been a pleasure … links in the show notes. 574 00:47:46,387 --> 00:47:47,828 It-- Yeah, the pleasure's been mine. 575 00:47:47,828 --> 00:47:51,048 I've been looking forward to this podcast for, for quite some time. 576 00:47:51,048 --> 00:47:54,298 So thank you so much for taking time out of your day. 577 00:47:54,298 --> 00:47:58,947 I know you're very busy and, um, I hope to bump into you at a conference again soon. 578 00:48:00,048 --> 00:48:00,688 Look forward to it. 579 00:48:01,028 --> 00:48:01,357 All right. 580 00:48:01,357 --> 00:48:01,608 Bye-bye. 581 00:48:01,618 --> 00:48:02,167 Thanks, Mike. 582 00:48:02,217 --> 00:48:04,487 Thanks for listening to Legal Innovation Spotlight. 583 00:48:05,017 --> 00:48:08,487 If you found value in this chat, hit the subscribe button to be notified 584 00:48:08,487 --> 00:48:09,847 when we release new episodes. 585 00:48:10,487 --> 00:48:13,177 We'd also really appreciate it if you could take a moment to rate 586 00:48:13,177 --> 00:48:15,797 us and leave us a review wherever you're listening right now. 587 00:48:16,397 --> 00:48:19,047 Your feedback helps us provide you with top-notch content. 00:00:02,618 Mike, thank you so much for joining today. 2 00:00:03,988 --> 00:00:05,188 Ted, great to be with you. 3 00:00:06,188 --> 00:00:09,758 Yeah, I've been, uh, I've been looking forward to this conversation. 4 00:00:09,838 --> 00:00:14,957 I knew I wanted you on as soon as I read about, uh, Norm Law, and I 5 00:00:14,978 --> 00:00:18,837 think there are some really unique characteristics about what you guys 6 00:00:18,838 --> 00:00:24,578 are doing, and that's been reflected in the market and, um, the headlines. 7 00:00:25,148 --> 00:00:29,807 But before we jump in, um, if you don't mind, why don't you tell our 8 00:00:29,808 --> 00:00:33,917 listeners a little bit about yourself and how, how Norm Law came to be? 9 00:00:35,948 --> 00:00:45,208 Um, well, as for myself, um, I practiced, uh, for 35 years at Sidley Austin, um, 10 00:00:45,238 --> 00:00:51,268 where I grew up as an investment funds and asset management lawyer, um, and 11 00:00:51,268 --> 00:00:53,918 regulatory specialist in that space. 12 00:00:54,358 --> 00:01:00,358 Um, I eventually became, uh, a group head, uh, in that 13 00:01:00,358 --> 00:01:03,278 practice, uh, for about 10 years. 14 00:01:03,598 --> 00:01:08,268 Um, and then while continuing to lead that practice globally as it was growing, 15 00:01:08,717 --> 00:01:15,527 um, became the managing partner of Sidley's New York office, uh, in 2011. 16 00:01:16,078 --> 00:01:22,217 Uh, I had that role through the end of 2017, uh, when I was elected 17 00:01:22,217 --> 00:01:24,868 chair, uh, of the executive committee. 18 00:01:24,877 --> 00:01:32,357 And so I led the firm from January of 2018 through April of 2025. 19 00:01:32,837 --> 00:01:39,358 Um, and my term was non-renewable, and I stepped down, um, in accordance with our 20 00:01:39,358 --> 00:01:49,018 partnership agreement, uh, that April, um, and, uh, was introduced, uh, to Norm 21 00:01:49,018 --> 00:01:56,947 AI and John Ney, um, by a mutual friend who was on the advisory board of Norm AI. 22 00:01:57,627 --> 00:02:04,857 Um, and I was introduced, uh, shortly after my retirement announcement went 23 00:02:04,857 --> 00:02:07,877 out, uh, at Thanksgiving of 2025. 24 00:02:09,607 --> 00:02:18,167 Um, and, uh, I ended up spending some time with John, and then between Christmas and 25 00:02:18,227 --> 00:02:26,957 New Year's, I met with the rest of the advisory board, uh, of Norm AI, um, and, 26 00:02:27,187 --> 00:02:33,077 uh, saw the company, I think the first or second business day of January, and 27 00:02:33,137 --> 00:02:41,018 failed retirement after 11 days, uh, and signed on to lead Nu- Norm Law, um, and 28 00:02:41,018 --> 00:02:48,670 to, uh, contribute as a senior, uh, legal engineer at Norm AI Very interesting. 29 00:02:48,690 --> 00:02:49,900 Well, you mentioned your board. 30 00:02:49,910 --> 00:02:51,590 That was your advisory board. 31 00:02:51,600 --> 00:02:56,180 That was what caught my eye when Norm was announced. 32 00:02:56,549 --> 00:03:02,620 You have a really kind of a who's who in the regulatory space, even in 33 00:03:02,620 --> 00:03:04,829 the law firm and legal tech space. 34 00:03:05,390 --> 00:03:10,329 You've got, you know, former SEC general counsel and CFTC commissioner, 35 00:03:10,809 --> 00:03:16,170 former CEO of Thomson Reuters, uh, former partner at Cadwalader and King 36 00:03:16,170 --> 00:03:20,850 & Spalding, um, former superintendent of the New York Department of Financial 37 00:03:20,850 --> 00:03:23,809 Services, and a former SEC commissioner. 38 00:03:24,240 --> 00:03:26,679 That is not your typical advisory board. 39 00:03:27,040 --> 00:03:34,999 Um, that-- As soon as I saw that list, I said to myself, "This sounds 40 00:03:35,049 --> 00:03:40,819 different than what I've seen thus far in the AI native space." And it feels 41 00:03:40,819 --> 00:03:44,459 like, um, uh, like a second generation. 42 00:03:44,519 --> 00:03:49,029 The first generation, I think, of AI native firms had a fairly 43 00:03:49,040 --> 00:03:55,660 narrow focus, you know, a lot of contract work, MSAs, DPAs, uh, 44 00:03:55,690 --> 00:03:57,629 quick turnaround times, low cost. 45 00:03:58,290 --> 00:04:03,539 And seeing that and then hearing about your background coming to the 46 00:04:03,540 --> 00:04:08,729 firm, um, really made me feel like this is kind of a second generation. 47 00:04:09,099 --> 00:04:11,080 Is, is that how you see it as well? 48 00:04:12,142 --> 00:04:13,542 Yeah, that's, that's right, Ted. 49 00:04:13,552 --> 00:04:16,981 Um, I, I think there is a substantial difference. 50 00:04:17,012 --> 00:04:22,382 Um, I think one of the reasons that John introduced me to the Flow advisory board 51 00:04:22,402 --> 00:04:30,392 is, um, he understood that my sitting down with them, um, would shift a paradigm, 52 00:04:30,462 --> 00:04:38,302 um, around what either a startup law firm might be or a startup AI native 53 00:04:38,302 --> 00:04:42,582 law firm might be, because as you point out, these are very serious people. 54 00:04:42,601 --> 00:04:49,442 They've had really important, uh, policy and governance roles around our financial 55 00:04:49,442 --> 00:04:56,002 markets, um, and sort of if you look at what we do in this country, um, 56 00:04:56,011 --> 00:05:00,822 that supports our standard of living, it's while we invent the world's new 57 00:05:00,831 --> 00:05:03,592 knowledge and specifically technology. 58 00:05:03,872 --> 00:05:08,491 But the other thing is we manage the world's money, um, and, you know, 59 00:05:08,491 --> 00:05:12,001 our financial markets and their regulation in that are critical. 60 00:05:12,471 --> 00:05:18,671 Um, and of course, you know, law firms, uh, you know, play a big role in the 61 00:05:18,671 --> 00:05:25,201 transactions around, uh, those markets, um, and the regulation of those markets. 62 00:05:25,521 --> 00:05:31,901 Um, and my time meeting with that, uh, advisory board between Christmas 63 00:05:31,901 --> 00:05:33,881 and New Year's was just extraordinary. 64 00:05:33,932 --> 00:05:39,831 Um, you know, the conversations were, you know, far into the future. 65 00:05:40,201 --> 00:05:46,642 Um, they were very much about, uh, the role that, um, Norm Law could play in the 66 00:05:46,642 --> 00:05:53,401 financial markets, um, in representing clients, uh, in those markets, um, and, 67 00:05:53,502 --> 00:05:59,881 you know, and a role at a level, as you point out, very different from what AI 68 00:05:59,892 --> 00:06:02,451 native law firms had been focusing on. 69 00:06:02,862 --> 00:06:07,001 And they were doing a, a great job and are doing a great job around what I would 70 00:06:07,002 --> 00:06:11,751 call, you know, vendor contract work and other, you know, very automatable 71 00:06:11,761 --> 00:06:18,441 work, but where there isn't, you know, a real depth of, you know, legal 72 00:06:18,441 --> 00:06:20,452 knowledge and experience required. 73 00:06:20,832 --> 00:06:26,844 Um And here I was spending all these ti- this time with people that had tremendous, 74 00:06:27,183 --> 00:06:29,594 uh, depth and experience in that. 75 00:06:29,623 --> 00:06:36,974 And, you know, to hear a vision about an AI firm that would practice law, you know, 76 00:06:37,044 --> 00:06:40,744 at those levels, um, really intrigued me. 77 00:06:40,774 --> 00:06:46,953 Um, and that's in fact what got me to go see the company, as I said, on the 78 00:06:46,953 --> 00:06:49,013 first or second business day of January. 79 00:06:49,024 --> 00:06:53,913 And it, you know, walking through those doors just really blew my mind. 80 00:06:53,973 --> 00:06:58,744 Um, and so in the space of, you know, 10 days, I have these extraordinary 81 00:06:58,744 --> 00:07:04,854 conversations with the advisory board, and then I go see the company, and those 82 00:07:04,854 --> 00:07:12,713 two things together persuaded me that this was the future of law, um, at, you 83 00:07:12,713 --> 00:07:20,063 know, a really different paradigm, um, and in a way where, you know, you could 84 00:07:20,074 --> 00:07:26,033 do work faster at the same quality, more economically, but really importantly, 85 00:07:26,033 --> 00:07:34,374 high value work, um, that you would bring real intellectual, um, rigor and, 86 00:07:34,424 --> 00:07:41,773 uh, and development to the practice, just like you would at any law firm, 87 00:07:41,783 --> 00:07:45,923 elite law firm, but now delivering those services very differently. 88 00:07:46,844 --> 00:07:47,174 Yeah. 89 00:07:47,174 --> 00:07:50,823 So you and I got a chance to meet in London at the Financial Times Summit, 90 00:07:50,963 --> 00:07:56,213 and I, um, really enjoyed th- your panel. 91 00:07:57,064 --> 00:08:01,884 We, uh, we had-- You were up there with your investor, uh, one of your 92 00:08:01,884 --> 00:08:03,554 investors, which is Blackstone. 93 00:08:04,073 --> 00:08:07,803 And, you know, the, the message was, I mean, you've got very se- 94 00:08:07,803 --> 00:08:12,824 you got a very serious, uh, board of directors, um, extremely credible. 95 00:08:13,533 --> 00:08:18,294 Uh, you've got a very serious, incredible cap table. 96 00:08:18,833 --> 00:08:26,246 You know, you've got you, who has a, a very, um Prestigious background in 97 00:08:26,256 --> 00:08:32,135 big law, and it just paints a different kind of picture than what we've seen. 98 00:08:32,765 --> 00:08:37,566 And I've been, uh, I've been in the space for about 20 years, uh, primarily 99 00:08:37,566 --> 00:08:41,535 selling to law firms, but also, you know, in the early days, I was in the 100 00:08:41,535 --> 00:08:47,495 trenches helping law firms with technology initiatives and optimizing knowledge 101 00:08:47,495 --> 00:08:49,206 management and innovation processes. 102 00:08:49,815 --> 00:08:54,475 And, you know, they're slow movers, and we're in a very fast-paced 103 00:08:54,635 --> 00:08:59,646 environment where the technology is rapidly innovating, and it feels 104 00:08:59,646 --> 00:09:01,835 like law firms aren't keeping up. 105 00:09:02,335 --> 00:09:06,536 Um, I believe his name is, uh, I'm gonna, I'm gonna miss the name. 106 00:09:06,566 --> 00:09:08,406 Steven Crowley from Ford. 107 00:09:09,005 --> 00:09:12,935 The, the GC at Ford published an article on Bloomberg Law and said, "Law firms, 108 00:09:12,936 --> 00:09:15,455 you're not keeping up with us internally." 109 00:09:15,695 --> 00:09:19,945 So it feels like there's a tension building between, um, the 110 00:09:19,945 --> 00:09:24,505 expectations of inside legal teams in terms of tech-enabled legal 111 00:09:24,505 --> 00:09:26,236 service delivery and big law. 112 00:09:26,616 --> 00:09:30,706 And it seems like, you, you can tell me if I'm wrong here, 113 00:09:31,126 --> 00:09:32,896 you're kind of filling that void. 114 00:09:33,135 --> 00:09:34,955 Is that an accurate way to frame it? 115 00:09:36,544 --> 00:09:37,834 I, I think that's fair. 116 00:09:37,864 --> 00:09:43,644 Um, I, I, I believe that Norm Law exists for three reasons. 117 00:09:43,664 --> 00:09:48,534 The first is to do excellent legal work and to do it faster 118 00:09:48,564 --> 00:09:53,763 and at the same level or better quality, um, and more economically. 119 00:09:54,273 --> 00:10:02,083 The second reason we exist is to, um, help educate, excite, um, in-house legal 120 00:10:02,084 --> 00:10:08,703 departments about, uh, AI tools that they can use on a co-pilot basis and to 121 00:10:08,703 --> 00:10:11,103 become more AI forward, more productive. 122 00:10:11,643 --> 00:10:16,794 Um, and the third reason is, frankly, to be used as a cudgel 123 00:10:17,113 --> 00:10:19,483 against legacy counsel's rates. 124 00:10:19,814 --> 00:10:26,704 Um, and i- if going into our meetings with clients, uh, you know, uh, we come 125 00:10:26,704 --> 00:10:29,474 away with only two and three, we fail. 126 00:10:29,963 --> 00:10:32,643 But, you know, we are there to do legal work. 127 00:10:32,703 --> 00:10:34,223 But you're exactly right. 128 00:10:34,593 --> 00:10:42,413 We are some-- we are something of, um, you know, a step function forward in terms of 129 00:10:42,413 --> 00:10:45,284 the way legal service can be delivered. 130 00:10:45,523 --> 00:10:50,504 And I think general counsels, including the general counsel of Ford, are 131 00:10:50,504 --> 00:10:54,343 taking note of those possibilities and trying to drive change. 132 00:10:55,113 --> 00:10:55,883 It makes sense. 133 00:10:56,293 --> 00:11:01,363 So there's been, you know, a decade plus of, of rate increases in the 134 00:11:01,363 --> 00:11:07,554 big law space, and I think there is mount-- and record profits, right? 135 00:11:07,593 --> 00:11:13,264 I mean, Kirkland broke the ten billion barrier and, you know, twelve billion in 136 00:11:13,433 --> 00:11:16,704 PPEP and things have never been better. 137 00:11:16,763 --> 00:11:19,813 Uh, these law firms are printing money, and I think there's a little 138 00:11:19,814 --> 00:11:25,983 bit of innovator's dilemma taking hold where it's kind of hard to disrupt 139 00:11:26,314 --> 00:11:30,163 and, you know, tell a room full of millionaires, especially ones that have 140 00:11:30,163 --> 00:11:34,963 their retirement horizons in sight, "Hey, we need to take partner capital 141 00:11:35,003 --> 00:11:39,893 and deploy it on changing this model that is delivering record profits." 142 00:11:40,153 --> 00:11:43,283 Is that kind of how you see the things as well? 143 00:11:44,536 --> 00:11:48,555 Well, I think innovator's dilemma is the, the right frame, um, 144 00:11:48,575 --> 00:11:51,396 for the situation currently. 145 00:11:51,606 --> 00:11:58,085 We know a transition needs to occur, um, in terms of utilizing technology because 146 00:11:58,085 --> 00:12:04,065 it is extraordinarily capable and has become so much so-- more so recently. 147 00:12:04,555 --> 00:12:10,505 Um, but that efficiency, if it reduces the hours of human labor, 148 00:12:11,016 --> 00:12:16,675 um, which is the model, the economic model that drives Big Law, you know, 149 00:12:16,685 --> 00:12:18,686 that is going to be disruptive. 150 00:12:19,006 --> 00:12:24,175 Um, you know, they, they need to keep-- Big Law needs to keep, um, its 151 00:12:24,185 --> 00:12:29,945 revenue model, uh, stable in order to keep equity partners happy, uh, 152 00:12:29,995 --> 00:12:36,435 and in order to buy lateral practice groups, which has become a real part 153 00:12:36,435 --> 00:12:39,835 of the strategy for a number of firms. 154 00:12:40,195 --> 00:12:46,825 Um, and they will struggle with passing through the benefits of the, the economic 155 00:12:46,825 --> 00:12:53,065 benefits of more efficiency, um, if it either lowers e-equity partner profits 156 00:12:53,106 --> 00:12:56,475 or reduces their lateral partner budget. 157 00:12:56,935 --> 00:13:03,305 Um, and so it is a dilemma, um, but they are going to have to transition through 158 00:13:03,335 --> 00:13:10,495 because the technology is, has arrived, it is utilizable, efficiencies are possible, 159 00:13:10,816 --> 00:13:13,396 and general counsels have noticed. 160 00:13:14,465 --> 00:13:21,245 Yeah, I did a post recently on some of the sacred cows that must be 161 00:13:21,246 --> 00:13:28,335 slaughtered in Big Law to, as part of this transformation, and they are, they 162 00:13:28,335 --> 00:13:30,775 are daunting to say the least, right? 163 00:13:30,776 --> 00:13:36,376 They're cornerstones of the industry, and I'm gonna pull it up here and reference 164 00:13:36,376 --> 00:13:41,606 it, but it's, uh… What, what I'm most-- The biggest question in my mind is, is 165 00:13:41,606 --> 00:13:44,632 it What does this transition look like? 166 00:13:44,632 --> 00:13:48,432 So performance metrics, top line metrics become much less 167 00:13:48,452 --> 00:13:50,952 useful in a, in a world of AFAs. 168 00:13:51,252 --> 00:13:55,461 The billable hour, which doesn't just affect pricing, it affects compensation, 169 00:13:55,472 --> 00:14:00,131 staffing, partner track, KPIs the firm measures themself against, 170 00:14:00,612 --> 00:14:05,411 the apprenticeship model, how they value, recruit, train, and compensate 171 00:14:05,452 --> 00:14:07,702 and empower business professionals. 172 00:14:08,172 --> 00:14:11,602 Systems and data, law firm data is typically a mess. 173 00:14:12,092 --> 00:14:17,041 Um, the cash basis profit sweep, where, you know, you close out the books at 174 00:14:17,042 --> 00:14:21,611 the end of the year and there's not much left for a capital investment. 175 00:14:22,151 --> 00:14:25,731 Um, client transparency, that's one I'm, I'm hearing much 176 00:14:25,741 --> 00:14:27,331 more about on the GC side. 177 00:14:27,862 --> 00:14:35,162 So I get a lot of GCs and, uh, CLOs as part of the podcast, and the message I'm 178 00:14:35,162 --> 00:14:40,472 getting is today they have very little transparency into how technology's being 179 00:14:40,472 --> 00:14:46,142 used and even less transparency in how that's gonna translate into more efficient 180 00:14:46,612 --> 00:14:48,801 de- uh, service delivery for them. 181 00:14:49,441 --> 00:14:53,512 Like, that seems like a big jump where if you start with a clean slate, 182 00:14:53,641 --> 00:14:59,011 all of those really strong cultural norms don't have to be redirected. 183 00:14:59,011 --> 00:15:03,712 It seems like a firm like Norm would be at a huge advantage in that respect. 184 00:15:05,464 --> 00:15:07,733 Well, I, I, I think that's, that's right. 185 00:15:07,784 --> 00:15:12,093 Um, we do have a, a clean slate on which to build. 186 00:15:12,154 --> 00:15:16,894 Uh, we aren't burdened by, uh, tying to the billable hour. 187 00:15:16,894 --> 00:15:18,343 In fact, we don't at all. 188 00:15:18,353 --> 00:15:22,633 We- we're outcome-based in terms of our pricing, uh, either by 189 00:15:22,633 --> 00:15:24,243 document or by transaction. 190 00:15:24,743 --> 00:15:32,103 Um, and, and so we do have, uh, I think, uh, some agility available to us that, 191 00:15:32,163 --> 00:15:38,413 that maybe is, uh, gonna be part of a transition or, you know, some deep 192 00:15:38,413 --> 00:15:41,134 thinking about strategy for, for big law. 193 00:15:41,473 --> 00:15:47,564 And big law, you know, the, the elite firms are really good at a whole bunch 194 00:15:47,564 --> 00:15:52,993 of things and, in fact, the best in the world at really sophisticated, 195 00:15:53,483 --> 00:15:56,373 complex, multidisciplinary work. 196 00:15:57,013 --> 00:16:02,244 But there's also a lot of work that needs to be reexamined in terms of the value 197 00:16:02,244 --> 00:16:05,343 proposition, uh, offered to clients. 198 00:16:05,343 --> 00:16:09,834 And, you know, uh, I'm not gonna advise big law, but they will have 199 00:16:09,863 --> 00:16:14,043 to go-- the different firms will have to think about, you know, the things 200 00:16:14,043 --> 00:16:19,153 they're really and truly exceptional at and the things that they just do. 201 00:16:19,833 --> 00:16:25,213 Um, and then there maybe there are things that shouldn't be part of their offering 202 00:16:25,213 --> 00:16:32,243 any longer, and they'll have to adjust through that, uh, as technology sort of 203 00:16:32,244 --> 00:16:39,823 changes, um, their capabilities, improves their capabilities and efficiencies, um, 204 00:16:39,863 --> 00:16:45,833 and in fact, their ability to deliver even more high-value work because 205 00:16:45,873 --> 00:16:52,033 they can be faster in integrating these complex, uh, transactions 206 00:16:52,273 --> 00:16:54,674 or regulatory situations and that. 207 00:16:54,674 --> 00:16:59,524 So I think there's a real opportunity for big law there, but you're correct. 208 00:16:59,814 --> 00:17:05,793 There are a whole bunch of sacred cows, if you will, that they, you know, that 209 00:17:05,793 --> 00:17:11,273 law firm leaders are gonna have to go off and consider, um, and that, you know, we 210 00:17:11,273 --> 00:17:17,893 are, uh, we're not in a position to have to sort of, uh, reform our- ourselves. 211 00:17:17,894 --> 00:17:19,273 We can just move forward. 212 00:17:19,903 --> 00:17:20,253 Yeah. 213 00:17:20,254 --> 00:17:24,424 What, what sort of reaction have you gotten from your former colleagues, 214 00:17:24,424 --> 00:17:26,563 peers, the industry as a whole? 215 00:17:26,564 --> 00:17:34,533 Has it been, has it been positive, um, or has it been, um, something else? 216 00:17:36,214 --> 00:17:44,774 Um, I would say it's positive, um, and an awful lot of interest in terms of how we 217 00:17:44,774 --> 00:17:51,014 are thinking about, um, uh, the practice of law and the delivery of client service. 218 00:17:51,014 --> 00:17:56,293 And I, I've been willing to, and I have spoken with many, uh, uh, big law 219 00:17:56,303 --> 00:18:01,533 leaders that I got to know during my seven and a half years as the chair 220 00:18:01,533 --> 00:18:03,433 of the executive committee at Sidley. 221 00:18:03,914 --> 00:18:10,783 Um, and you know, by and large, they're very, very interested in, um, how 222 00:18:10,784 --> 00:18:12,733 we're thinking about what we're doing. 223 00:18:13,244 --> 00:18:15,593 Um, and I'm happy to talk to them about it. 224 00:18:15,994 --> 00:18:21,494 Um, most of them know, including my former colleagues, that knowledge management 225 00:18:21,523 --> 00:18:26,053 and trying to understand what we knew, who knew it, and where to find it, you 226 00:18:26,053 --> 00:18:32,843 know, was a, was a real driver of my tenure, um, including eventually the, uh, 227 00:18:32,863 --> 00:18:35,793 legging into the Harvey pilot and that. 228 00:18:35,803 --> 00:18:39,933 So I think most folks that know me, uh, understand that this has 229 00:18:39,933 --> 00:18:44,654 been a passion, uh, for a long time, um, in terms of offering 230 00:18:44,663 --> 00:18:48,204 better, uh, value, um, and faster. 231 00:18:48,674 --> 00:18:52,733 Um, and so it's, uh, it's been a lot of good conversation. 232 00:18:53,714 --> 00:18:54,014 Good. 233 00:18:54,023 --> 00:18:55,303 That, that's good to hear. 234 00:18:55,343 --> 00:18:58,303 I mean, if you don't do it, somebody's gonna do it, right? 235 00:18:58,343 --> 00:19:02,324 I mean, it's, it's not like, um, Mike doesn't do this and 236 00:19:02,324 --> 00:19:03,944 the opportunity evaporates. 237 00:19:03,953 --> 00:19:05,493 Somebody's gonna fill this void. 238 00:19:06,703 --> 00:19:12,863 Well, the general counsels, as you pointed out earlier, um, you know, frankly, uh, 239 00:19:13,534 --> 00:19:21,413 without any regard to norm law, um, have noticed, uh, where their legal bills are, 240 00:19:21,793 --> 00:19:26,734 uh, particularly as I was saying, for the high value but not highest value work. 241 00:19:27,123 --> 00:19:34,443 Um, and so this is really, uh, something that it was gonna impact and in a way 242 00:19:34,473 --> 00:19:42,584 disrupt, uh, big law regardless of norm law, but we, we are, um, certainly, 243 00:19:42,943 --> 00:19:53,273 um, a, a tangible, um, a tangible, uh, you know, flag, uh, planted in the 244 00:19:53,273 --> 00:19:57,784 space of, okay, we need to talk about, you know, what, what, what the value 245 00:19:57,784 --> 00:20:03,659 really is and what it-- and what the cost is and are we in alignment Yeah, 246 00:20:03,690 --> 00:20:08,070 I don't know that there are official definitions around these terms, but I 247 00:20:08,070 --> 00:20:13,700 think there's a general consensus, um, around them, which is kind of bet the 248 00:20:13,700 --> 00:20:15,679 company versus operate the company. 249 00:20:16,090 --> 00:20:21,730 And if you hear estimates on what the ratio is of work that gets 250 00:20:21,730 --> 00:20:25,540 sent to external legal counsel, it's roughly eighty/twenty. 251 00:20:26,189 --> 00:20:30,330 Um, eighty being operate the company, twenty being bet the company. 252 00:20:30,470 --> 00:20:35,280 And there are, there are, there are different takes on that, but from 253 00:20:35,280 --> 00:20:39,130 my just anecdotal observation, it seems like most people land in that. 254 00:20:39,139 --> 00:20:49,629 H-how, how can Norm and other, or can Norm and other AI legal firms compete 255 00:20:49,629 --> 00:20:52,419 with Big Law in the bet the company space? 256 00:20:54,279 --> 00:20:55,310 Not right now. 257 00:20:55,459 --> 00:21:04,329 Um, uh, I, I think again, um, you know, the breadth of the most elite law firms 258 00:21:04,330 --> 00:21:12,210 in terms of, you know, their capabilities in multiple jurisdictions with multiple 259 00:21:12,219 --> 00:21:19,779 regulatory schemes, uh, with various types of transactions that can be hybridized to 260 00:21:19,780 --> 00:21:25,600 do something new, um, to take account of a combination that's never been done before. 261 00:21:26,079 --> 00:21:32,350 No, those are things that are far too human, um, at this point in time. 262 00:21:32,719 --> 00:21:42,430 Um, and, uh, it is where, again, um, the innovation, um, and, uh, um, and 263 00:21:42,479 --> 00:21:50,299 expertise that elite law firms really in the, in the US and UK bring, um, frankly 264 00:21:50,329 --> 00:21:55,579 affect the whole standard of living of the, of the countries, the two countries. 265 00:21:55,609 --> 00:22:03,099 Um, and no, we-- the AI native law firms, uh, aren't going to compete. 266 00:22:03,129 --> 00:22:07,039 Uh, and frankly, you know, what I would call middle market law firms just 267 00:22:07,049 --> 00:22:13,029 because they have access to AI tools and that aren't going to contend with the 268 00:22:13,030 --> 00:22:15,300 most elite firms for that work either. 269 00:22:15,369 --> 00:22:23,059 Um, there is just too much important human experience, knowledge, and judgment, as 270 00:22:23,069 --> 00:22:30,219 well as, um, the ability to innovate, um, that are housed i-in, in those practices. 271 00:22:32,078 --> 00:22:32,958 Yeah, that makes sense. 272 00:22:32,958 --> 00:22:37,158 So where, where can AI native firms compete with Big Law? 273 00:22:38,428 --> 00:22:42,758 Well, in two different places, and it depends, uh, on the talent 274 00:22:42,797 --> 00:22:45,497 that, uh, you know, is at the firm. 275 00:22:45,498 --> 00:22:50,518 And so, um, AI native firms can do basic document work, um, and do it 276 00:22:50,518 --> 00:22:56,518 very well if, uh, there is a pretty tight sandbox, uh, around that, uh, 277 00:22:56,687 --> 00:23:03,418 around that workflow, um, and you don't need a lot of, you know, sophisticated 278 00:23:03,447 --> 00:23:05,927 lawyers, uh, or experienced lawyers. 279 00:23:06,598 --> 00:23:11,498 You know, that-- And we've seen that proposition, you know, proved out already. 280 00:23:11,868 --> 00:23:18,207 Um, as you move up in the water column of work from the most basic, you know, to, 281 00:23:18,238 --> 00:23:25,648 into what is really operate the company, not just, um, status quo, um, but you 282 00:23:25,648 --> 00:23:37,647 move into transactions, financings, um, uh, uh, investments, uh, more complex 283 00:23:37,677 --> 00:23:40,668 commercial arrangements and agreements. 284 00:23:41,207 --> 00:23:45,647 Um, you need human beings, uh, real estate transactions. 285 00:23:45,798 --> 00:23:51,027 You need human beings that have experience functioning, you 286 00:23:51,027 --> 00:23:53,727 know, at that level of practice. 287 00:23:54,118 --> 00:23:58,198 And ideally, and frankly what we're doing at Norm Law, is we're 288 00:23:58,198 --> 00:24:00,328 overpowering that level of practice. 289 00:24:00,328 --> 00:24:05,687 We're bringing in market leading lawyers that have seen the operate 290 00:24:05,737 --> 00:24:09,167 the company work day in and day out for many years, but have also 291 00:24:09,167 --> 00:24:10,867 practiced at the highest levels. 292 00:24:11,298 --> 00:24:16,737 And so to sort of quip, um, doing the operate the company 293 00:24:16,758 --> 00:24:18,127 work is like riding a bike. 294 00:24:18,427 --> 00:24:19,518 They've never forgotten. 295 00:24:19,688 --> 00:24:21,337 It's straightforward. 296 00:24:21,337 --> 00:24:22,247 They know how to do it. 297 00:24:22,548 --> 00:24:28,697 Um, and they're going to be able to ensure that the quality that 298 00:24:28,807 --> 00:24:33,657 the clients are requiring, um, that those quality standards are met. 299 00:24:34,087 --> 00:24:38,358 Uh, and so it really becomes if you are utilizing AI, 300 00:24:40,408 --> 00:24:45,128 and I'd say whether it as a co-pilot, meaning tools doing it better than 301 00:24:45,128 --> 00:24:49,527 you used to or native doing the first pass of the work autonomously, 302 00:24:50,348 --> 00:24:55,357 the lawyers you have ultimately are the differentiator, um, uh, in the 303 00:24:55,357 --> 00:24:57,137 value proposition that you can offer. 304 00:24:57,567 --> 00:25:01,888 And the more sophisticated the lawyers you have, the more sophisticated work you 305 00:25:01,888 --> 00:25:06,418 can do for clients, and the more you can take advantage of the efficiencies that 306 00:25:06,418 --> 00:25:13,160 AI offers if you're willing to pass those through to the clients Yeah, interesting. 307 00:25:13,220 --> 00:25:16,129 You know, I think about, and I've, I've said this before on 308 00:25:16,129 --> 00:25:20,260 the show, I think about this transformation happening in waves. 309 00:25:20,639 --> 00:25:25,150 And the first wave, which Big Law is squarely in, is the copilot, 310 00:25:25,230 --> 00:25:28,169 lowercase C copilot phase, right? 311 00:25:28,170 --> 00:25:35,090 Where, uh, you take a platform and you pair it, it with an attorney who 312 00:25:35,479 --> 00:25:41,379 is largely doing work the way they have for thirty years, and you get 313 00:25:41,379 --> 00:25:43,349 some incremental efficiency gains. 314 00:25:43,750 --> 00:25:49,849 I think wave two is going to be the re-architecting of, of work and 315 00:25:49,899 --> 00:25:56,660 unbundling legal tasks, bringing in proper process engineering discipline into the 316 00:25:56,660 --> 00:26:02,610 practice, and formally documenting and evaluating how the work gets delivered. 317 00:26:03,130 --> 00:26:09,379 And then I think the third wave is the agentic era, where this work gets 318 00:26:09,389 --> 00:26:15,709 automated to the largest extent possible, and it feels like you're-- you guys are 319 00:26:15,709 --> 00:26:21,460 skipping wave one and two because, you know, well, maybe you're jumping right 320 00:26:21,460 --> 00:26:26,329 into wave two, which is kind of the re-architecting of how the work gets done. 321 00:26:26,639 --> 00:26:28,209 Does that-- is that a fair assessment? 322 00:26:29,209 --> 00:26:29,569 Yeah. 323 00:26:30,020 --> 00:26:31,109 So two and three. 324 00:26:31,399 --> 00:26:31,979 Um- Yes. 325 00:26:32,009 --> 00:26:38,040 We are re-architecting in the sense that, um, we've moved past the copilot stage. 326 00:26:38,499 --> 00:26:45,909 Um, we are building reusable AI agents that have skills, um, and those skills 327 00:26:45,909 --> 00:26:48,520 are around certain types of transactions. 328 00:26:49,060 --> 00:26:53,569 And we've built an architecture on which the-- a software architecture 329 00:26:53,569 --> 00:26:57,269 on which those agents sit and are callable, as if you would call certain 330 00:26:57,270 --> 00:26:59,409 associates with different expertises. 331 00:27:00,159 --> 00:27:07,209 On top of that, we've built agents that have specialized knowledge 332 00:27:07,630 --> 00:27:15,748 around the client's precedents and playbooks and predilections And 333 00:27:15,998 --> 00:27:23,548 essentially educated those agents to do the work a-autonomously, but the 334 00:27:23,548 --> 00:27:28,907 way an associate that had been doing that kind of transaction for that 335 00:27:28,908 --> 00:27:31,528 particular client for several years. 336 00:27:31,858 --> 00:27:36,248 And so we are in the two and three in the sense we are re-architecting 337 00:27:36,257 --> 00:27:42,658 because the process, uh, uh, and, uh, moving a document, moving flow, 338 00:27:42,907 --> 00:27:47,548 getting approvals, including through the client, that's software, and we're 339 00:27:47,548 --> 00:27:51,557 doing that, but we're also building these skills that are reusable. 340 00:27:51,568 --> 00:27:56,628 So unlike a copilot where you do your task and then it kind of thrown away and you go 341 00:27:56,647 --> 00:28:02,847 do a task again, the agents that are built with specific skill sets are permanent. 342 00:28:02,868 --> 00:28:03,778 They're available. 343 00:28:04,127 --> 00:28:07,007 They never quit, they never get tired, they never have a bad day, 344 00:28:07,537 --> 00:28:13,927 um, and they are callable by more senior lawyers to do these functions, 345 00:28:14,307 --> 00:28:17,807 um, or tasks, um, autonomously. 346 00:28:18,327 --> 00:28:28,957 Um, and so if a lawyer working with copilot tools is two X, well, if that 347 00:28:28,957 --> 00:28:34,947 same transaction term sheet comes in to a partner but drops a-automatically 348 00:28:34,948 --> 00:28:40,747 to an AI agent that has been trained to do the suite of documents the way the 349 00:28:40,897 --> 00:28:46,717 particular client would require them and subject to their preferences, it's already 350 00:28:46,717 --> 00:28:50,817 working in the background while the partner is talking to the in-house team. 351 00:28:51,637 --> 00:28:54,747 That suite of documents will be delivered somewhere between five and 352 00:28:54,798 --> 00:29:00,848 ten X faster than a lawyer working with tools would be able to deliver it, 353 00:29:01,368 --> 00:29:03,878 and at the same level, uh, of quality. 354 00:29:04,368 --> 00:29:10,087 And that level is about a third-year associate, and it's then ready for review. 355 00:29:10,857 --> 00:29:15,367 So we've moved up the first human interaction with the document suite, 356 00:29:15,647 --> 00:29:19,718 whether it's the generation of documents or it's commenting on someone else's. 357 00:29:20,097 --> 00:29:24,548 We've moved that level of human interaction up to a more sophisticated 358 00:29:24,618 --> 00:29:31,457 point of sort of the mid to senior associate or partner level, and that is 359 00:29:31,457 --> 00:29:39,066 dramatically more efficient You know, um, one potential gap I, I see in the AI 360 00:29:39,256 --> 00:29:45,786 native strategy, and I don't think it's as big a, a gap as people make it out to be. 361 00:29:46,236 --> 00:29:48,126 Um, I have a theory on data. 362 00:29:48,626 --> 00:29:54,676 So I think data is a necessary component, but an insufficient one. 363 00:29:54,676 --> 00:29:57,996 In, in other words, there's a lot of talk about data is the new oil. 364 00:29:58,466 --> 00:30:01,595 Uh, I don't, I don't think it-- data by itself creates a moat. 365 00:30:01,635 --> 00:30:08,336 I think what is going to create a moat for law firms in particular is how they deploy 366 00:30:08,536 --> 00:30:16,115 tech, build learning loops, and then package that into a go-to-market motion 367 00:30:16,315 --> 00:30:20,766 that aligns really well with client needs. 368 00:30:21,106 --> 00:30:22,796 I think that is gonna be the differentiator. 369 00:30:22,796 --> 00:30:27,606 In other words, the incremental value of, let's say, transactional 370 00:30:27,626 --> 00:30:31,766 data between Latham & Kirkland isn't a dial mover, right? 371 00:30:31,766 --> 00:30:36,366 Kirkland's bigger, but it's-- once you get to a certain critical mass of a 372 00:30:36,366 --> 00:30:43,076 data corpus, I think that any, you know, uh, additional data that's acquired 373 00:30:43,095 --> 00:30:45,136 only provides an incremental gain. 374 00:30:45,136 --> 00:30:50,216 I really think that it's the p- the packaging and the, the learning loops and 375 00:30:50,216 --> 00:30:56,386 how effectively firms capture and improve knowledge and improve systems with it. 376 00:30:56,676 --> 00:31:00,635 Do you see it the same way, or do, do you feel like, um, data- No. 377 00:31:00,635 --> 00:31:01,745 Yeah … is, is the new oil? 378 00:31:02,816 --> 00:31:03,386 No. 379 00:31:03,406 --> 00:31:11,096 Um, d- data, data is important, um, and in the way we're thinking about it, the 380 00:31:11,096 --> 00:31:17,655 client's library, you know, is, uh, is incredibly important in terms of, you 381 00:31:17,656 --> 00:31:25,065 know, working through, um, a specific, uh, work stream, um, or transaction type. 382 00:31:25,415 --> 00:31:30,345 Um, but what's also important is what's in the head of the client, uh, and 383 00:31:30,345 --> 00:31:32,415 the domain expertise of our partners. 384 00:31:32,735 --> 00:31:36,666 Um, and so data is a very big component of it. 385 00:31:37,305 --> 00:31:44,515 I'm not sure generalized data is as valuable, um, in terms of working with 386 00:31:44,595 --> 00:31:53,385 large institutions that have a history, um, of transactions, um, or even in the 387 00:31:53,386 --> 00:31:59,705 dispute space, um, and have their own in-in-house department that frankly, 388 00:31:59,715 --> 00:32:05,845 y-you know, is driving, uh, the strategy or the pain points or the must-haves. 389 00:32:06,225 --> 00:32:11,305 Um, I'm, I'm not sure undifferentiated data is all that, that helpful. 390 00:32:11,305 --> 00:32:19,885 I think what is helpful is the data that is really useful to the client and really 391 00:32:19,886 --> 00:32:27,266 good project management and plumbing, and a lot of that can be software. 392 00:32:27,676 --> 00:32:33,375 Um, but, uh, and, you know, so I think, I think it is a combination, 393 00:32:33,375 --> 00:32:40,375 but I think just having more data, um, i-is not necessarily, uh, you know, 394 00:32:40,415 --> 00:32:42,225 gonna create efficiencies for clients. 395 00:32:42,225 --> 00:32:47,456 And one example might be if I were doing fund number four for a large 396 00:32:47,485 --> 00:32:52,005 private equity house, I really don't need to boil the ocean in 397 00:32:52,005 --> 00:32:56,455 order to come up with the limited partnership agreement for fund five. 398 00:32:56,955 --> 00:33:03,395 I really wanna look at fund four, and I wanna look at all the investor asks that 399 00:33:03,395 --> 00:33:08,196 they put into side letters and things that occurred during the operation of that 400 00:33:08,265 --> 00:33:16,190 partnership as I think about, okay, what is the best design for fund five Taking 401 00:33:16,200 --> 00:33:20,350 those things into account, I really don't need to know what everybody else has done 402 00:33:20,350 --> 00:33:23,879 with all their agreements and what other investors have done with other funds. 403 00:33:24,740 --> 00:33:25,649 Not so much. 404 00:33:26,170 --> 00:33:31,330 Maybe, maybe that little increment lives in the head of the human being, the 405 00:33:31,330 --> 00:33:34,129 partner, or the in-house legal department. 406 00:33:34,339 --> 00:33:36,030 So I agree with you. 407 00:33:36,810 --> 00:33:42,210 You need to think carefully about whether or not i-in the way you're utilizing data, 408 00:33:42,540 --> 00:33:50,490 you're actually completing the client's mission, or y-you're just adding a lot of 409 00:33:50,499 --> 00:33:59,952 time and effort and, you know, information that doesn't really move the needle I 410 00:33:59,952 --> 00:34:02,691 think, yep, I, we're aligned on that. 411 00:34:02,952 --> 00:34:07,952 Um, there is a perception, and I think it's a valid one in, 412 00:34:08,161 --> 00:34:13,541 from clients about Big Law, that they are not customer-centric. 413 00:34:13,741 --> 00:34:19,442 And I'm sure there are some exceptions to this, but in general, um, a- and to get 414 00:34:19,442 --> 00:34:25,562 specific a- about why they feel that way, they feel there's a lack of transparency. 415 00:34:26,051 --> 00:34:31,461 They feel, they feel like there's a lack of, hmm-- or they feel the relationship, 416 00:34:31,491 --> 00:34:35,001 I'll go the opposite direction, is sometimes feels arm's length. 417 00:34:35,732 --> 00:34:44,812 Um, there's, uh, you know, a lack of, um, customer needs considered 418 00:34:44,901 --> 00:34:49,771 when pricing models are developed. 419 00:34:50,061 --> 00:34:51,571 And I mean, there's real data on this. 420 00:34:51,572 --> 00:34:59,761 Deloitte had a study from, uh, June of this year where they surveyed 121 inside 421 00:34:59,761 --> 00:35:07,191 legal leaders, and something like 65% said that they have only had either an 422 00:35:07,191 --> 00:35:12,511 initial conversation or no conversation at all about how AI is going to impact 423 00:35:12,511 --> 00:35:14,221 the economics of the relationship. 424 00:35:14,981 --> 00:35:21,191 And so I think Big Law has a lot of work to do in making, putting the customers 425 00:35:21,222 --> 00:35:24,011 at the center of their thinking. 426 00:35:24,331 --> 00:35:29,762 Um, how are you approaching this customer-centric matter? 427 00:35:31,142 --> 00:35:31,412 Right. 428 00:35:31,491 --> 00:35:38,571 So in terms of what we're doing at Norm Law, w- we're getting the pricing out 429 00:35:38,572 --> 00:35:43,061 of the way right at the beginning by charging on a flat rate per transaction 430 00:35:43,631 --> 00:35:50,611 or, uh, per document, and that, um, we're not talking about pricing and, you 431 00:35:50,612 --> 00:35:54,312 know, phone calls that relate to the work stream and that we don't charge for them. 432 00:35:54,711 --> 00:36:01,341 It's all part of the cost, and so we can move immediately to, okay, what 433 00:36:01,341 --> 00:36:10,352 is the work and how do we get it done fast, efficiently, expertly, and how 434 00:36:10,352 --> 00:36:15,881 do we work with the in-house department to make that happen collaboratively? 435 00:36:16,331 --> 00:36:21,141 Um, and, and that's a very important part of our model. 436 00:36:21,572 --> 00:36:27,731 In order to improve the performance of the AI agent, it needs to be informed. 437 00:36:27,851 --> 00:36:33,271 It needs to be informed by the drafts that the lawyers at Norm Law exchange 438 00:36:33,271 --> 00:36:39,390 with the counterparties The comments that come from in-house review of our 439 00:36:39,390 --> 00:36:45,220 work, um, and conversations that happen between the partner and the in-house team, 440 00:36:45,220 --> 00:36:47,170 and that has to be fed into the agent. 441 00:36:47,690 --> 00:36:54,359 So it's in our interest to spend more time talking to the client and 442 00:36:54,359 --> 00:36:59,059 making sure that we're updating the agent, and we don't wanna put, put a 443 00:36:59,060 --> 00:37:04,849 disincentive around that improvement in performance by saying, "Well, we're 444 00:37:04,849 --> 00:37:06,840 gonna charge you for that conversation." 445 00:37:07,310 --> 00:37:15,350 So I think we've tried to construct our way of working i-i- so that we create 446 00:37:15,359 --> 00:37:20,949 the most value, uh, and efficiency and improvement in the AI agent 447 00:37:20,970 --> 00:37:24,779 performance as the work streams progress. 448 00:37:25,359 --> 00:37:31,049 Um, in terms of big law, what I would say about it is, yes, there's been a 449 00:37:31,049 --> 00:37:36,219 pull apart between the lawyers and the clients, and a lot of it relates to the 450 00:37:36,220 --> 00:37:42,939 rate raises over the last decade that, you know, frankly went previously from 451 00:37:42,949 --> 00:37:46,199 three to five percent to nine to 14%. 452 00:37:46,939 --> 00:37:53,340 And with that, you saw the advent of procurement departments at clients. 453 00:37:53,979 --> 00:37:58,000 Procurement departments didn't exist, you know, 15, 20 years ago. 454 00:37:58,499 --> 00:38:03,419 They were a response to pricing pressures. 455 00:38:03,949 --> 00:38:11,929 And, you know, that dynamic is not one of alignment or certainly strains alignment. 456 00:38:12,859 --> 00:38:17,009 Now, what I would say about the lawyers at big law, frankly, 457 00:38:17,009 --> 00:38:22,549 but this pertains generally with lawyers, is they are client-driven. 458 00:38:23,119 --> 00:38:30,830 Um, they came into the profession because they wanted to be in service to clients. 459 00:38:31,170 --> 00:38:35,569 They wanted to be valued for their expertise and their responsiveness. 460 00:38:35,999 --> 00:38:41,959 Um, and, you know, the, some of the operating elements, um, at 461 00:38:41,979 --> 00:38:47,989 clients and at big law have gotten in the way of those relationships. 462 00:38:48,429 --> 00:38:53,760 And, you know, it might be one of those times where at least with some firms 463 00:38:53,760 --> 00:39:00,139 and some clients, they both disarm, um, and, uh, you know, can realign. 464 00:39:00,580 --> 00:39:03,380 Um, and maybe that's with some of these transac- transitions, you know, 465 00:39:05,429 --> 00:39:08,729 we'll see some of that, um, you know, TBD. 466 00:39:09,868 --> 00:39:12,598 I went to a, uh, I go to a lot of conferences. 467 00:39:12,598 --> 00:39:16,898 I'm at about fourteen, fifteen a year, and last year I went to my first pricing 468 00:39:16,898 --> 00:39:22,867 conference, and it was a panel of GCs and all the pricing professionals 469 00:39:22,868 --> 00:39:27,198 at law firms in the audience, and I thought a fistfight was gonna break out. 470 00:39:28,397 --> 00:39:32,777 It was super entertaining, um, to hear, and they were very 471 00:39:32,777 --> 00:39:35,418 candid that, um, on both sides. 472 00:39:35,787 --> 00:39:41,217 You know, the GCs were basically saying, "Look, this, this trajectory 473 00:39:41,267 --> 00:39:48,157 of rates is unsustainable, and, you know, we, we-- what we want is, like, 474 00:39:48,917 --> 00:39:55,297 more predictable predictability around, you know, rate increases for hourly 475 00:39:55,297 --> 00:40:00,638 work, but also a much higher percentage of alternative fee arrangements." 476 00:40:01,187 --> 00:40:04,857 And then on the, on the pr- the pricing professional side, they, they-- there was 477 00:40:04,858 --> 00:40:07,047 a lot of what sounded like valid pushback. 478 00:40:07,047 --> 00:40:12,647 Like, "Hey, look, fixed price requires fixed scope, and you can't fix scope 479 00:40:12,777 --> 00:40:16,697 around… It's very difficult to do around a big category of legal work." 480 00:40:17,147 --> 00:40:23,127 And, um, you know, so there's the, uh-- But the tension was palpable in that 481 00:40:23,128 --> 00:40:28,268 room, and it, it ended up, I saw, I stuck around afterwards, ev- you know, 482 00:40:28,268 --> 00:40:32,897 a lot of friendly conversations, but that was a really heated dialogue, and 483 00:40:32,957 --> 00:40:38,397 it-- I think it captures the disconnect today between inside legal team, what 484 00:40:38,707 --> 00:40:43,167 inside legal teams want and what external legal providers are, are offering. 485 00:40:43,167 --> 00:40:46,517 And I'm not saying who's at fault there because I think there's plenty 486 00:40:46,547 --> 00:40:51,137 on both sides, but, um, it seems like you're kind of filling s-some 487 00:40:51,137 --> 00:40:54,372 of that void Well, that's right. 488 00:40:54,532 --> 00:40:59,662 Um, and, and to your point, um, you know, look, when I see kickoff meetings 489 00:40:59,662 --> 00:41:04,572 on transactions, you know, for, for the last, you know, my, my years of practice 490 00:41:04,572 --> 00:41:09,692 in that, um, or other get-togethers between the lawyers and the clients, um, 491 00:41:10,262 --> 00:41:16,152 you see the relationships and you see how much the clients value the work that 492 00:41:16,152 --> 00:41:21,531 the lawyers do, um, their responsiveness, you know, e- even, you know, their 493 00:41:21,531 --> 00:41:24,312 character, um, and personalities. 494 00:41:24,371 --> 00:41:28,572 That there's a reason there's a fit between their lawyers and their clients. 495 00:41:29,032 --> 00:41:34,131 It's the pricing, the billing, and the collecting that gets in the way of that. 496 00:41:34,602 --> 00:41:38,881 Um, and we've tried to just take that off the table. 497 00:41:39,361 --> 00:41:44,542 Um, and, uh, I, I think, you know, that puts us in a healthier place where 498 00:41:44,731 --> 00:41:50,382 we can concentrate on, you know, what it is that is bringing us together. 499 00:41:50,391 --> 00:41:56,032 What is the mission that we collectively are going to embark on and accomplish? 500 00:41:56,422 --> 00:42:02,362 Um, and we're not talking about, um, what each increment is gonna cost. 501 00:42:02,381 --> 00:42:10,162 Now, to your point, you know, you need to have trust, um, and transparency 502 00:42:10,221 --> 00:42:15,282 so that we can get that pricing correct and then get it off the table. 503 00:42:15,631 --> 00:42:23,232 Um, and, um, I, I, I think that is possible , um, you know, but you need 504 00:42:23,232 --> 00:42:29,752 to have transparency and trust and commitment, um, to the longer term. 505 00:42:29,992 --> 00:42:33,491 I'm not gonna take advantage of you today because you're gonna need 506 00:42:33,492 --> 00:42:36,292 me again tomorrow, and vice versa. 507 00:42:36,901 --> 00:42:44,822 Um, but, you know, we're a long way from getting back to, um, nirvana. 508 00:42:45,471 --> 00:42:45,891 Yeah. 509 00:42:45,922 --> 00:42:51,841 How, how is Norm managing the unpredictability that's inherent in some 510 00:42:51,852 --> 00:42:56,512 legal work when you're You know, going through your pricing strategy- Yeah 511 00:42:56,522 --> 00:42:57,542 how do you think about that? 512 00:42:58,542 --> 00:43:02,681 Yeah, and a- and again, um, well, and, and here, you know, there's a bit of 513 00:43:02,682 --> 00:43:08,431 an unfairness in, in, uh, the, the commentary in the sense that we are not 514 00:43:08,432 --> 00:43:13,751 doing the highest value work that is the most complex and the most unique, 515 00:43:13,802 --> 00:43:20,301 um, and iterative on, uh, you know, prior, uh, uh, prior knowledge and that. 516 00:43:20,312 --> 00:43:23,651 And so, um, it is more predictable. 517 00:43:24,222 --> 00:43:28,232 Um, it's high value, it's important, and there can be a range. 518 00:43:29,001 --> 00:43:34,742 But our view of that is that we're-- if we have a commitment with a client 519 00:43:35,102 --> 00:43:40,631 to do multiple transactions, it's worth our investment, um, it's worth training 520 00:43:40,641 --> 00:43:43,372 the agent, and we can price that. 521 00:43:43,372 --> 00:43:46,452 And if one transaction takes longer, so be it. 522 00:43:46,821 --> 00:43:48,841 If one is shorter, so be it. 523 00:43:49,271 --> 00:43:54,872 But we basically index to the client's average cost, and we accept that. 524 00:43:55,391 --> 00:44:00,511 Um, and we aren't looking to pick up, you know, nickels in front of a steamroller. 525 00:44:01,152 --> 00:44:01,562 Yeah. 526 00:44:02,171 --> 00:44:08,792 And, um, I think that there is, there have been unhealthy dynamics on the inside 527 00:44:09,222 --> 00:44:15,781 legal realm as well, like shadow billing, you know, where, "Hey, I want a fixed 528 00:44:15,791 --> 00:44:17,941 price, but I also wanna see your hours." 529 00:44:18,501 --> 00:44:22,011 And, or- Right … or asking for, like, does not exceeds. 530 00:44:22,411 --> 00:44:25,572 You know, I-- we're a service provider, we're a product company, but for 531 00:44:25,582 --> 00:44:31,561 f- 14 years, from '08 to 2022, we were consultants, and we would get 532 00:44:31,561 --> 00:44:36,810 approached and be asked to deliver Uh, fixed price engagements and 533 00:44:36,819 --> 00:44:39,710 the default was does not exceeds. 534 00:44:40,140 --> 00:44:43,340 And that is the worst possible scenario for a service provider 535 00:44:43,340 --> 00:44:44,690 because there's no upside. 536 00:44:44,819 --> 00:44:52,579 It's if, if I'm, if I beat the estimate, I, I lose revenue, and if I go over, 537 00:44:52,629 --> 00:44:54,889 I lose because I'm eating hours. 538 00:44:55,170 --> 00:45:00,450 So- Right … you know, um, h-how, how- Yeah, so we're not doing that. 539 00:45:00,450 --> 00:45:00,519 Yeah. 540 00:45:00,519 --> 00:45:04,619 Yeah, we're not doing the, the, you know, the, the caps and things like that. 541 00:45:04,639 --> 00:45:10,709 It's just a straight cost, um, and, uh, and, and build a relationship, 542 00:45:10,719 --> 00:45:12,390 meaning we wanna have conversations. 543 00:45:12,390 --> 00:45:14,449 Conversations use up human time. 544 00:45:14,959 --> 00:45:16,179 Human time is finite. 545 00:45:16,569 --> 00:45:20,819 Um, so we need an understanding with the clients that we're gonna 546 00:45:20,819 --> 00:45:26,579 work together, you know, in good faith on this mission, um, and we're 547 00:45:26,580 --> 00:45:31,749 gonna have to have conversations if that starts not to be the case. 548 00:45:32,139 --> 00:45:37,769 But, you know, we also, you know, spend a fair amount of time scoping and doing 549 00:45:37,769 --> 00:45:41,769 project management upfront so that we all understand what we're doing. 550 00:45:42,160 --> 00:45:51,390 Um, but really, it's to no one's benefit when, um, the parties aren't, uh, 551 00:45:51,410 --> 00:45:56,350 don't have an understanding, uh, of one another and aren't willing, you know, 552 00:45:56,350 --> 00:45:58,950 to engage in sort of a mutual journey. 553 00:45:59,319 --> 00:46:06,769 You know, the adversarial advantage from one to another really doesn't, 554 00:46:06,919 --> 00:46:13,160 doesn't work for the client, and it, it, that is not a good way for an in-house 555 00:46:13,199 --> 00:46:17,899 department to behave, and it doesn't work for outside counsel, and it's 556 00:46:17,909 --> 00:46:24,399 not a good way to foster the long-term relationship that Big Law depends on. 557 00:46:24,679 --> 00:46:31,170 So there is a way to, through, again, transparent conversation, you know, 558 00:46:31,170 --> 00:46:37,020 to get there, but both sides have to be willing to, you know, engage 559 00:46:37,049 --> 00:46:43,829 and be honest about, you know, what they're doing, what the value really 560 00:46:43,830 --> 00:46:48,450 is, and what the cost really should be, and how it's going to be staffed 561 00:46:48,520 --> 00:46:54,749 to make sure you meet that quality, um, and how it's gonna be supported 562 00:46:54,770 --> 00:47:00,849 internally, um, so that everybody comes out where, you know, they expect. 563 00:47:01,109 --> 00:47:05,370 Or in the words of Yogi Berra, you know, "If you don't know where you're 564 00:47:05,370 --> 00:47:10,760 going, you wind up somewhere else." And that's not good for anybody. 565 00:47:11,559 --> 00:47:15,220 That's a great quote, and we're out of time, so we'll, we'll end on that 566 00:47:15,229 --> 00:47:17,410 because I love Yogi Berra quotes. 567 00:47:17,819 --> 00:47:21,140 Um, well, it's been an absolute pleasure to have you on. 568 00:47:21,149 --> 00:47:26,120 Mike, how do people find out more about y- you know, you and, and Norm Law? 569 00:47:27,648 --> 00:47:28,518 Well, we're you-- 570 00:47:30,998 --> 00:47:36,928 normlaw, uh, .com and, uh, Norm AI, um, and, uh, we're, we're out there. 571 00:47:37,098 --> 00:47:41,798 Um, we're easily findable on the worldwide web of knowledge. 572 00:47:42,248 --> 00:47:42,778 Awesome. 573 00:47:42,837 --> 00:47:46,387 And we'll include some links- It's been a pleasure … links in the show notes. 574 00:47:46,387 --> 00:47:47,828 It-- Yeah, the pleasure's been mine. 575 00:47:47,828 --> 00:47:51,048 I've been looking forward to this podcast for, for quite some time. 576 00:47:51,048 --> 00:47:54,298 So thank you so much for taking time out of your day. 577 00:47:54,298 --> 00:47:58,947 I know you're very busy and, um, I hope to bump into you at a conference again soon. 578 00:48:00,048 --> 00:48:00,688 Look forward to it. 579 00:48:01,028 --> 00:48:01,357 All right. 580 00:48:01,357 --> 00:48:01,608 Bye-bye. 581 00:48:01,618 --> 00:48:02,167 Thanks, Mike. 582 00:48:02,217 --> 00:48:04,487 Thanks for listening to Legal Innovation Spotlight. 583 00:48:05,017 --> 00:48:08,487 If you found value in this chat, hit the subscribe button to be notified 584 00:48:08,487 --> 00:48:09,847 when we release new episodes. 585 00:48:10,487 --> 00:48:13,177 We'd also really appreciate it if you could take a moment to rate 586 00:48:13,177 --> 00:48:15,797 us and leave us a review wherever you're listening right now. 587 00:48:16,397 --> 00:48:19,047 Your feedback helps us provide you with top-notch content. -->