1 00:00:02,279 --> 00:00:03,957 Richard, good to see you this afternoon. 2 00:00:03,957 --> 00:00:04,942 How are you? 3 00:00:05,282 --> 00:00:07,100 Hi Ted, thanks for having me on the show. 4 00:00:07,100 --> 00:00:08,393 I'm pretty good actually. 5 00:00:08,563 --> 00:00:09,474 Good, good. 6 00:00:09,474 --> 00:00:12,610 Other than, um, fighting some cold weather there. 7 00:00:12,610 --> 00:00:13,858 Are you in London? 8 00:00:13,858 --> 00:00:16,233 Yeah, I'm in London, yeah, North London, yeah. 9 00:00:16,605 --> 00:00:25,689 think the whole world must be in a cold snap right now because all over the United States, it's freezing cold and it sounds like it is over in the UK as well. 10 00:00:26,092 --> 00:00:26,442 Yeah. 11 00:00:26,442 --> 00:00:32,085 Oh, not as bad as some of the East Coast cities, but it's, you know, it's, pretty bad over in London. 12 00:00:32,085 --> 00:00:32,169 Yeah. 13 00:00:32,169 --> 00:00:33,049 That's true. 14 00:00:33,598 --> 00:00:34,228 Well, good stuff. 15 00:00:34,228 --> 00:00:35,339 I appreciate you joining. 16 00:00:35,339 --> 00:00:36,870 Yeah. 17 00:00:37,131 --> 00:00:43,996 I think many of our listeners probably know who you are based on your work at artificial lawyer. 18 00:00:44,076 --> 00:00:50,451 And, but for those that don't just want to do, give you a chance to do a quick introduction. 19 00:00:50,451 --> 00:00:52,073 Yeah. 20 00:00:52,073 --> 00:00:56,546 I was interested to see that you were, you were an editor at ALM. 21 00:00:56,546 --> 00:01:03,271 had a short stint at Thompson Reuters and you founded artificial lawyer in 22 00:01:03,355 --> 00:01:08,981 2016, which was quite a bit before chat GPT lit the world on fire. 23 00:01:08,981 --> 00:01:15,757 Um, but yeah, why don't you tell us a little bit about, uh, who you are, what you do and where you do it. 24 00:01:16,046 --> 00:01:17,006 Yeah, no, sure. 25 00:01:17,006 --> 00:01:22,226 So I started in the legal world in 1999, so 25, 26 years. 26 00:01:22,226 --> 00:01:23,846 Oh my God, that's a long time. 27 00:01:24,806 --> 00:01:35,486 I joined what was effectively a startup in 1999 called Legal Week, which was a legal magazine focused on big commercial law firms. 28 00:01:35,486 --> 00:01:37,066 And I joined as an international reporter. 29 00:01:37,066 --> 00:01:44,966 At that point, it was an independent business created by a couple of people who had left a more established magazine called The Lawyer. 30 00:01:45,454 --> 00:01:56,874 in the UK and I was as far as I understand either one of the first international reporters or the first international reporter for the commercial legal market. 31 00:01:56,874 --> 00:01:58,654 That is the only thing I did. 32 00:01:58,654 --> 00:02:09,394 I only covered international mergers, international expansion, office openings, joint ventures in Singapore, US and UK law firms merging, UK law firms opening an office in 33 00:02:09,394 --> 00:02:09,934 Amsterdam. 34 00:02:09,934 --> 00:02:11,354 That was what I did. 35 00:02:12,300 --> 00:02:15,832 So I got into, so I went straight into strategy. 36 00:02:15,832 --> 00:02:27,177 So like within, you know, couple of months of getting up to speed with how big law firms worked, I was right into strategy and the business of law because the first question you 37 00:02:27,177 --> 00:02:31,719 ask anybody as a journalist, you know, why are you doing this? 38 00:02:32,099 --> 00:02:35,461 You know, why have you just merged across the Atlantic? 39 00:02:35,461 --> 00:02:37,142 Why have you just opened in Singapore? 40 00:02:37,142 --> 00:02:38,414 And then they start telling you stuff. 41 00:02:38,414 --> 00:02:40,475 And course you've got to try and figure it out and understand it. 42 00:02:40,475 --> 00:02:51,681 So I very, very, very quickly got introduced into the world of strategy and business, which is kind of like not what I expected when I trained as a journalist. 43 00:02:51,681 --> 00:02:59,746 I kind of thought, you know, I'll be working at the Guardian or something like that, you And so I ended up completely without any planning. 44 00:02:59,746 --> 00:03:02,077 didn't choose to work at Legal Week. 45 00:03:02,077 --> 00:03:08,030 just, a friend had a job there and I was looking for a job and... 46 00:03:08,075 --> 00:03:12,087 The general rule as a junior journalist is just get the first job you can and get going. 47 00:03:12,087 --> 00:03:15,205 You know, don't sit around, just get going, get cracking. 48 00:03:15,205 --> 00:03:20,190 I mean, it just took off because the legal market then was very exciting. 49 00:03:20,551 --> 00:03:22,651 Globalisation was really kicking off. 50 00:03:22,651 --> 00:03:27,323 The big UK law firms were expanding at an incredible rate. 51 00:03:27,323 --> 00:03:28,664 It's hard to remember those days. 52 00:03:28,664 --> 00:03:38,062 I mean, if the legal market now was doing what it did back then, particularly younger people who probably don't remember 53 00:03:38,062 --> 00:03:42,942 those early days 25 years ago, would just be amazed. 54 00:03:42,942 --> 00:03:52,042 mean, know, law firms like Linklaters, for example, just a classic example, went from being, you know, sort of medium-sized, high-quality magic circle firm in London to forming 55 00:03:52,042 --> 00:03:58,662 alliances with every major top-tier firm across Europe and then merged with all of them, pretty much. 56 00:03:58,982 --> 00:04:03,442 And then expanded in the US, expanded across, you know, Asia Pacific and so forth. 57 00:04:03,442 --> 00:04:05,342 Just an incredible expansion. 58 00:04:05,342 --> 00:04:07,116 Now you might think, why is he talking about this? 59 00:04:07,116 --> 00:04:17,113 Well, that then led to me becoming eventually a management consultant because I was so focused on business, so focused on strategy that I then became a management consultant and 60 00:04:17,113 --> 00:04:20,555 I joined a strategy group that was inside Tomton Reuters. 61 00:04:20,555 --> 00:04:22,476 And then I didn't study that long. 62 00:04:22,476 --> 00:04:28,500 And then I joined a sort of UK based strategy consultancy. 63 00:04:28,721 --> 00:04:30,862 I spent five very interesting years there. 64 00:04:30,862 --> 00:04:37,070 It was kind of like doing an MBA in law firm business strategy and learned an enormous amount. 65 00:04:37,070 --> 00:04:43,670 And it was my last year there, which I think was around 2014, 2015. 66 00:04:43,910 --> 00:04:48,730 One of the things I had, so I was head of research and I also had my own consulting gig, know, had my own clients. 67 00:04:48,930 --> 00:04:53,930 And one of my jobs was to do reports, big deep analysis. 68 00:04:53,930 --> 00:04:58,210 So, you know, like, you know, what's, what's going to happen with growth in China, you know? 69 00:04:58,210 --> 00:05:00,210 And so I'd get into the world bank data. 70 00:05:00,210 --> 00:05:03,090 I'd get into all kinds of huge. 71 00:05:03,118 --> 00:05:10,618 data analysis projects and I would like rip out the data and analyze it and then try and like connect it to what was happening in the legal market. 72 00:05:11,157 --> 00:05:19,438 And you know, and then we would give those to the big law firms who would then sit there and consider it and then obviously the idea that they would engage you on big consulting 73 00:05:19,438 --> 00:05:20,378 projects. 74 00:05:21,358 --> 00:05:24,118 One of the ones that I did was about technology. 75 00:05:24,378 --> 00:05:25,758 Where is technology going? 76 00:05:25,758 --> 00:05:27,578 And AI came up. 77 00:05:27,578 --> 00:05:29,918 Now I've always been interested in technology. 78 00:05:30,778 --> 00:05:32,538 I've always found it fascinating. 79 00:05:33,474 --> 00:05:38,978 But AI just kind of popped up and I just thought, yeah, this is really something real. 80 00:05:38,978 --> 00:05:49,345 And I think the last thing I did while I was working for that consultancy in London was I did a chapter on AI or legal AI before I'd even heard the term. 81 00:05:49,885 --> 00:05:51,196 And I just went off on one. 82 00:05:51,196 --> 00:05:52,507 I was just letting myself go. 83 00:05:52,507 --> 00:06:02,764 And I was coming up with ideas like, what if two different law firms both had an AI and the different AIs were using game theory to negotiate a contract? 84 00:06:03,214 --> 00:06:05,994 And I was, know, I had no, I mean, I'd never read a Legal Tech magazine. 85 00:06:05,994 --> 00:06:09,334 I didn't even know that Legal Tech was a subject, right? 86 00:06:09,334 --> 00:06:16,374 I mean, I knew, I knew there was a company or two out there, you know, but I no, I didn't know what Legal Tech was. 87 00:06:16,374 --> 00:06:17,334 I hadn't got a clue. 88 00:06:17,334 --> 00:06:22,274 And this is interesting, I mean, I started in the legal world in 1999, right? 89 00:06:22,274 --> 00:06:26,934 And I first wrote about Legal Tech or Legal Tech related things in 2015. 90 00:06:27,494 --> 00:06:29,954 So what's that 16 years, yeah? 91 00:06:30,254 --> 00:06:33,534 In 16 years, Legal Tech never ever. 92 00:06:33,602 --> 00:06:43,665 got above a third or fourth tier subject amongst managing partners who were primarily the people I was talking to. 93 00:06:44,806 --> 00:06:48,187 Maybe practice heads, but it was almost always managing partners. 94 00:06:48,187 --> 00:06:51,269 So LegalTech did not come into it at all. 95 00:06:51,269 --> 00:06:55,330 I mean, was like the only time LegalTech came up with once or twice. 96 00:06:55,566 --> 00:06:58,726 when someone said, oh yeah, you were having to buy a new practice management system. 97 00:06:58,726 --> 00:06:59,466 It's a real pain. 98 00:06:59,466 --> 00:07:00,306 It's really expensive. 99 00:07:00,306 --> 00:07:01,966 And you know, it's coming off our bottom line. 100 00:07:01,966 --> 00:07:03,166 And I'm really upset about it. 101 00:07:03,166 --> 00:07:03,706 And that was it. 102 00:07:03,706 --> 00:07:05,446 It was just like, okay, well, yeah, whatever. 103 00:07:05,766 --> 00:07:06,266 Let's get on. 104 00:07:06,266 --> 00:07:07,746 Let's talk about more interesting stuff. 105 00:07:07,746 --> 00:07:10,046 Like who you're going to merge with. 106 00:07:11,566 --> 00:07:16,246 And then the AI changed everything really for me. 107 00:07:16,246 --> 00:07:17,146 I mean, I did that. 108 00:07:17,146 --> 00:07:23,094 I mean, after that, just by chance, I've been, you decided, I think I'd probably had enough of working. 109 00:07:23,094 --> 00:07:26,456 inside someone else's organization and decided to create my own business. 110 00:07:26,456 --> 00:07:28,677 So I launched my own consulting business. 111 00:07:29,398 --> 00:07:40,506 And while I was doing that, I saw something about a company called Raven, which was, which is now part of Ironman Asian has been absorbed and that brand name has disappeared. 112 00:07:40,506 --> 00:07:42,277 But it was an independent company in those days. 113 00:07:42,277 --> 00:07:48,192 And they were, they were, they kept on popping up in the news for the things that they were doing using AI. 114 00:07:48,192 --> 00:07:52,142 And I went to their office, which was in Shoreditch, which at that point was super cool. 115 00:07:52,142 --> 00:07:55,782 who was kind of like Brooklyn in his heyday, super, super cool. 116 00:07:57,162 --> 00:08:03,802 And they went into their office and they showed me how we could zip through a whole load of real estate documents. 117 00:08:03,802 --> 00:08:06,002 And it did it in just a few seconds. 118 00:08:06,002 --> 00:08:09,822 And it pulled out all the, obviously we didn't do an accuracy check or anything like that. 119 00:08:09,822 --> 00:08:12,422 I just assumed it was all perfect back in those days. 120 00:08:12,622 --> 00:08:13,962 And they just laid it all out. 121 00:08:13,962 --> 00:08:14,922 just went, bang, there you go. 122 00:08:14,922 --> 00:08:17,062 We pulled out all the key parts of the contract. 123 00:08:17,062 --> 00:08:18,002 This is this, this is this. 124 00:08:18,002 --> 00:08:19,142 And they're just like, wow. 125 00:08:19,362 --> 00:08:30,166 And it just hit me because like for years and years and years I've been working, you know, with law firms talking about profitability and, you know, know, revenue per theater, the 126 00:08:30,166 --> 00:08:40,691 leverage model, all of your things, profit margins, you know, I mean, people, people used to, you know, I mean, most of people, might see my consultant colleagues used to talk 127 00:08:40,691 --> 00:08:42,051 about timekeepers. 128 00:08:42,051 --> 00:08:43,852 You know, that was, that was the standard phrase. 129 00:08:43,852 --> 00:08:45,117 People would just talk about timekeepers. 130 00:08:45,117 --> 00:08:46,673 You didn't talk about lawyers. 131 00:08:47,153 --> 00:08:49,414 He talks about timekeepers because 132 00:08:49,454 --> 00:08:52,894 If you're a consultant to a law firm, there's a whole bunch of different people. 133 00:08:52,894 --> 00:09:02,874 I mean, in some cases, there are more people who are not lawyers than there are lawyers in some firms because there's a whole enormous hinterland of support, all kinds of things 134 00:09:02,874 --> 00:09:04,034 going on. 135 00:09:04,034 --> 00:09:05,654 Other times it's a smaller. 136 00:09:06,234 --> 00:09:14,994 But so we talked about timekeepers because that was the bit that was generating revenue, but it didn't mean that the other part of the business wasn't important. 137 00:09:16,114 --> 00:09:19,782 And now suddenly here is this thing that I've just looked at. 138 00:09:19,866 --> 00:09:23,419 And I'm just, you know, and it just, just, boom, it falls into place into my mind. 139 00:09:23,419 --> 00:09:26,151 I'm just like, this is going to change everything. 140 00:09:26,532 --> 00:09:39,112 Cause up to that point, the entire business model of law firms had, except, you know, as has been explored earlier by other people was, you e-discovery, but particularly from a UK 141 00:09:39,112 --> 00:09:45,367 perspective, which is more transactionally based, there's less, there's less e-discovery type work over here. 142 00:09:45,808 --> 00:09:47,006 It just like hit me. 143 00:09:47,006 --> 00:09:48,490 It's just like, wow. 144 00:09:48,526 --> 00:10:01,306 If AI takes off in the legal world, the entire basis of the legal industry that I've been living with and living within for all these years is gonna completely and utterly and 145 00:10:01,306 --> 00:10:02,946 absolutely transform. 146 00:10:03,486 --> 00:10:09,146 Now at that point, that was really early days, really early days, end of 2015, beginning of 2016. 147 00:10:09,206 --> 00:10:15,686 I didn't understand the subtleties at that point, but I quickly did. 148 00:10:15,958 --> 00:10:19,230 And I just thought, you this is, this is going to be so transformative. 149 00:10:19,230 --> 00:10:21,121 It's going to be so transformative. 150 00:10:21,601 --> 00:10:31,817 And I decided to start a blog, artificial lawyer, which originally was going to be called several other things, but I settled on artificial lawyer because I thought it was a good 151 00:10:31,817 --> 00:10:32,847 title. 152 00:10:33,168 --> 00:10:40,262 And it's funny because I didn't want to talk too much about myself at beginning, but the funny thing is it actually helps to connect to the bigger issues that I'd like to get into 153 00:10:40,262 --> 00:10:44,113 as we go along, which is it's all about the means of production. 154 00:10:44,234 --> 00:10:45,038 Right. 155 00:10:45,038 --> 00:10:46,558 It's all about productivity. 156 00:10:46,558 --> 00:10:54,518 It's all about moving from an artisanal manual labor, legal labor model to one that is industrialized. 157 00:10:54,538 --> 00:11:05,638 And I remember, I think it's probably after I started artificial lawyer, I remember changing my job title on LinkedIn to legal industrialist. 158 00:11:06,498 --> 00:11:14,358 Because I grew up in the Midlands, which was the home of the Industrial Revolution, or at least part of the Industrial Revolution. 159 00:11:15,478 --> 00:11:20,561 And the teacher, know, history classes, we were taught about the industrial revolution. 160 00:11:20,962 --> 00:11:24,254 We didn't do the Napoleonic Wars and stuff like that. 161 00:11:24,254 --> 00:11:33,951 We did the industrial revolution because it was almost so that were the history teachers were allowed to pick, you know, variety of options you could focus on, know, Napoleon and 162 00:11:33,951 --> 00:11:36,632 Wellington and all of that, or you could do something different. 163 00:11:36,873 --> 00:11:41,956 And our teachers, because we were in the Midlands and, you know, that's where it all started. 164 00:11:41,956 --> 00:11:44,856 We focused very, very much on the industrial revolution. 165 00:11:44,856 --> 00:11:55,205 So we learned about the spinning genny and the beginning of the steam engines and have railways developed, the growth of factories and iron smelting and all these things. 166 00:11:55,205 --> 00:12:00,299 And the whole way that industrialization changed the world. 167 00:12:01,040 --> 00:12:08,946 And so for me, it was kind of like buried in the back of my mind, know, been there for decades, literally. 168 00:12:08,987 --> 00:12:10,668 And it just kind of all just fell into place. 169 00:12:10,668 --> 00:12:12,730 And I was just like, yes, this is it. 170 00:12:12,802 --> 00:12:13,802 This is literally it. 171 00:12:13,802 --> 00:12:14,043 is it. 172 00:12:14,043 --> 00:12:19,055 This is the thing that changes the foundational basis of this industry. 173 00:12:19,055 --> 00:12:20,666 This is going to be extraordinary. 174 00:12:20,666 --> 00:12:23,327 Now that was 2016, right? 175 00:12:24,028 --> 00:12:27,450 Now people were at the time, some people were just like, yeah, this is awesome. 176 00:12:27,450 --> 00:12:31,312 And, know, I met a whole bunch of people who totally, totally got into it. 177 00:12:31,632 --> 00:12:37,336 You know, sometimes people were actually into the AI stuff, but they were not as gung-ho as I was. 178 00:12:37,336 --> 00:12:42,348 mean, you know, there was a whole bunch of companies pioneering back then, you know, the people like Kira. 179 00:12:42,466 --> 00:12:46,267 You know, there was Ebrevia, was Seal. 180 00:12:46,567 --> 00:12:53,309 There was a whole bunch of AI companies, legal AI companies, the very first way, using machine learning, natural language processing. 181 00:12:53,309 --> 00:13:01,571 Now, of course, we look back at what they could achieve and what they can do is still good, but it looks extremely niche, very narrow. 182 00:13:01,591 --> 00:13:10,134 And, you know, as time went by, I kind of realized that, you know, AI was as it was then, was limited. 183 00:13:10,786 --> 00:13:17,869 But I never really ever gave up hope that there would be this transformation. 184 00:13:18,689 --> 00:13:21,931 But what I didn't know was that generative AI was going to come around the corner. 185 00:13:21,931 --> 00:13:29,174 I mean, to me, it just kind of felt that the machine learning AI would just get better and better and better. 186 00:13:29,174 --> 00:13:33,636 And that somehow I couldn't quite figure out how it was going to get there. 187 00:13:33,676 --> 00:13:37,728 It was just going to spread out and really start to have a real impact at last. 188 00:13:38,126 --> 00:13:44,266 And that's actually, you know, that's one of the reasons why I got so into looking at the business model. 189 00:13:44,726 --> 00:13:49,146 Cause like, you know, I'd often think to myself, well, you know, why isn't it spreading? 190 00:13:49,146 --> 00:13:49,866 Why is it? 191 00:13:49,866 --> 00:13:52,406 it because, is it because the tech doesn't work? 192 00:13:52,406 --> 00:13:58,466 But I mean, by sort of 2017, 2018, the tech was pretty good. 193 00:13:58,466 --> 00:14:03,726 I mean, if you were doing a due diligence task and you'd been using a particular type of, you know, 194 00:14:03,726 --> 00:14:11,106 AI software for a long time, for several years, and they'd been training it up, and you'd been training it up, and you knew what you were doing, you were going to get very accurate 195 00:14:11,106 --> 00:14:11,986 results. 196 00:14:11,986 --> 00:14:15,026 It wasn't like the early days, by 2018, 2019. 197 00:14:15,206 --> 00:14:17,206 And yeah, it just wasn't really picking up. 198 00:14:17,206 --> 00:14:20,446 I used to go on to the... 199 00:14:20,446 --> 00:14:23,926 In the UK, you can see how much revenue certain companies make. 200 00:14:23,926 --> 00:14:26,106 You can see, because it's public. 201 00:14:26,286 --> 00:14:33,306 And also you could tell just by looking at how many people other companies had hired, you can have a pretty good guess. 202 00:14:33,390 --> 00:14:34,530 of what their revenue is. 203 00:14:34,530 --> 00:14:37,890 You if they've got 10 people, 30 people, 100 people, you know, you can have a guess. 204 00:14:37,890 --> 00:14:41,550 So they're making 5 million, 20, 30, right? 205 00:14:41,670 --> 00:14:46,030 And the revenues for the AI companies were so low, so incredibly low. 206 00:14:46,030 --> 00:14:48,710 And you're like, well, how is that possible? 207 00:14:48,710 --> 00:14:49,950 They've got a good product. 208 00:14:49,950 --> 00:14:52,370 A lot of people are still going nuts about it. 209 00:14:52,610 --> 00:14:55,410 There's so much talk about AI, even in 2018, 2019. 210 00:14:55,410 --> 00:15:00,550 And yet if you look at their revenues, that tells you a completely separate story, right? 211 00:15:00,550 --> 00:15:02,974 Because, you know, financial data really tells you a 212 00:15:02,974 --> 00:15:07,507 story as I'd learned back in the day when I was just doing consulting all the time. 213 00:15:09,134 --> 00:15:11,214 And I thought, what is going on? 214 00:15:11,214 --> 00:15:18,554 And that's when I started really getting into analyzing the billable hour and other things, know, law firm culture, the leverage model. 215 00:15:18,554 --> 00:15:21,774 And again, that brought back lot of stuff that I'd learned as a consultant. 216 00:15:21,774 --> 00:15:31,574 In those days, the idea was to try and encourage people to exploit the billable model and the leverage model as much as they possibly could to expand their profitability. 217 00:15:31,574 --> 00:15:37,114 And there's nothing wrong in that, you know, law firms be profitable to attract the best talents and do great work and so forth. 218 00:15:37,254 --> 00:15:37,920 But 219 00:15:37,920 --> 00:15:41,091 It was clear to me that there was a structural impediment. 220 00:15:41,632 --> 00:15:43,013 So I spent a lot of time on that. 221 00:15:43,013 --> 00:15:47,115 And then in 2022, along comes chat GBT. 222 00:15:47,595 --> 00:15:55,359 And that really changed everything because for the first time people were saying, this is the AI I've been waiting for. 223 00:15:55,680 --> 00:16:04,905 know, I mean, with the early machine learning stuff, I remember like people like sending me messages going, yeah, this is all very cool, but this is not AI or if this is AI, it's 224 00:16:04,905 --> 00:16:07,606 really not what I imagined. 225 00:16:07,726 --> 00:16:09,908 You know, it's very, very narrow what it can do. 226 00:16:09,908 --> 00:16:11,509 You know, it's very niche. 227 00:16:11,509 --> 00:16:15,211 The irony is, is that most of that machine learning software did get absorbed. 228 00:16:15,211 --> 00:16:19,634 You go to like a hundred different companies, you it got absorbed into e-discovery. 229 00:16:19,634 --> 00:16:22,596 It got absorbed into legal research. 230 00:16:22,596 --> 00:16:26,518 It got absorbed into a dozen different verticals in the legal tech world. 231 00:16:26,639 --> 00:16:29,091 So, you know, AI did have an impact. 232 00:16:29,091 --> 00:16:34,324 It did get normalized, but it didn't change the world. 233 00:16:34,324 --> 00:16:35,765 It was like round one. 234 00:16:35,765 --> 00:16:37,346 It was like MySpace. 235 00:16:37,654 --> 00:16:38,435 Right. 236 00:16:38,435 --> 00:16:48,822 You know, it was my space of legal AI, you know, and although very few people exited for 200 million, although some people eventually did, of course, because they added a bit of 237 00:16:48,822 --> 00:16:51,543 gen AI on the end and did extremely well for themselves. 238 00:16:52,324 --> 00:16:54,366 But yeah, I don't want to get too much into individual companies. 239 00:16:54,366 --> 00:17:03,222 But and so that's kind of like brings us up to speed and generative AI changed everything because and this is a funny thing as well, because there's like a whole bunch of people 240 00:17:03,222 --> 00:17:06,422 like, you know, from Richard Susskind. 241 00:17:06,422 --> 00:17:14,829 to other people who really pioneered away, like Noah Waysberg, Ned Gannon, Jim Wagner. 242 00:17:14,829 --> 00:17:18,571 I mean, there's a whole bunch of really pioneering people. 243 00:17:18,952 --> 00:17:20,934 There were the people who were actually building stuff. 244 00:17:20,934 --> 00:17:28,410 There were people who were constantly writing and being kind of like a cheerleader and trying to do stuff. 245 00:17:28,410 --> 00:17:33,824 And then there was a whole body of people who were really, really like, yes, this is it, this is it. 246 00:17:34,525 --> 00:17:36,576 But the tech just wasn't that. 247 00:17:37,006 --> 00:17:44,986 But this is the irony is that as soon as generative AI arrived, I found myself having exactly the same discussions I had back in 2016. 248 00:17:45,366 --> 00:17:49,426 So will AI get him away of training lawyers? 249 00:17:49,426 --> 00:17:54,986 So if a junior lawyer's day job is done with AI, how are they going to learn anything? 250 00:17:54,986 --> 00:17:57,446 How they going learn how to review a contract if you use AI? 251 00:17:57,646 --> 00:17:59,286 Is it the end of lawyers? 252 00:17:59,426 --> 00:18:06,706 I mean, literally, I know already that seems like dated, but back in the end of 22, beginning of 23, people were seriously debating that again. 253 00:18:06,882 --> 00:18:07,882 And it was so weird. 254 00:18:07,882 --> 00:18:11,663 It was like, it was almost as if we, was a complete deja vu. 255 00:18:11,764 --> 00:18:16,085 But the funny, was almost as well, it's kind of like, it's like the world had been prepped. 256 00:18:16,345 --> 00:18:20,726 Have you, don't know if you've ever, you ever, have you ever read the Dune books or watched the Dune movies? 257 00:18:22,086 --> 00:18:23,347 Oh, okay, well. 258 00:18:23,347 --> 00:18:27,428 All right, I won't go down, I won't go down that road. 259 00:18:27,428 --> 00:18:34,070 But basically the, there's this idea that the way is prepared. 260 00:18:34,070 --> 00:18:35,576 You're preparing the way. 261 00:18:35,576 --> 00:18:41,268 And that first and then when it really happens, it really happens because you prepared the way. 262 00:18:41,268 --> 00:18:53,203 You've put in place the metaphysical concepts, you've put in place some of the discussions, some of the books that analyze the big philosophical questions have already 263 00:18:53,203 --> 00:18:54,074 been written. 264 00:18:54,074 --> 00:19:00,086 So it's almost like when the thing actually hits for real, bang, it's like, ah, actually we know what to do with this stuff. 265 00:19:00,086 --> 00:19:03,357 We know what it's gonna, we know the impact, we know how to handle it. 266 00:19:03,497 --> 00:19:05,514 And of course, you know, 267 00:19:05,514 --> 00:19:06,974 It has spread like wildfire. 268 00:19:06,974 --> 00:19:08,335 I mean, it's extraordinary. 269 00:19:08,335 --> 00:19:10,046 No, it is relative, right? 270 00:19:10,046 --> 00:19:11,086 It is all relative. 271 00:19:11,086 --> 00:19:14,966 And, you know, I think sometimes people think that I'm a bit negative, but I'm not. 272 00:19:14,966 --> 00:19:19,780 I'm a short-term pessimist, long-term optimist, right? 273 00:19:19,920 --> 00:19:22,201 I'm completely realistic about the challenges. 274 00:19:22,201 --> 00:19:24,922 I mean, I've been covering this sector now for what? 275 00:19:27,363 --> 00:19:28,219 Yeah, exactly. 276 00:19:28,219 --> 00:19:28,984 I'm not very good at maths. 277 00:19:28,984 --> 00:19:33,266 I did do A-level maths, but basic maths is not my forte. 278 00:19:34,758 --> 00:19:38,661 This, you know, we're just at the beginning. 279 00:19:38,922 --> 00:19:40,824 Even after all this time, we're just at the beginning. 280 00:19:40,824 --> 00:19:42,085 We are just at the beginning. 281 00:19:42,085 --> 00:19:45,468 So, you know, like you, you mentioned, you might want to talk about agents. 282 00:19:45,468 --> 00:19:47,353 Agents are a bit ropey. 283 00:19:47,353 --> 00:19:48,020 They're a bit flaky. 284 00:19:48,020 --> 00:19:49,751 They're not accurate enough. 285 00:19:51,333 --> 00:19:54,516 People keep saying that 2025 is going to be the year of the agents. 286 00:19:54,616 --> 00:19:57,058 It's going to be the year of people playing with agents. 287 00:19:57,396 --> 00:20:10,005 Well, one thing struck me on what you said, and that was how when you were covering law firm strategy, the topic of technology would come up. 288 00:20:11,407 --> 00:20:14,929 it was, hey, let's talk about something more interesting. 289 00:20:15,030 --> 00:20:22,175 And historically, so I've been involved in the industry since 2008, tangentially even earlier than that. 290 00:20:22,956 --> 00:20:27,013 technology historically has not been a strategic 291 00:20:27,013 --> 00:20:29,003 imperative for law firms. 292 00:20:29,454 --> 00:20:33,465 there's many reasons why, uh, they operate on a cash basis. 293 00:20:34,505 --> 00:20:39,907 there is, uh, there is a lot of lateral movement within law firms. 294 00:20:39,907 --> 00:20:52,110 You know, we, we call big law firms here, sometimes hotels for lawyers, because there there's so much, it's so transient in nature and that makes capital projects difficult 295 00:20:52,110 --> 00:20:56,830 because, um, for, many reasons, especially because as 296 00:20:56,830 --> 00:21:06,812 the law firm leadership that rises through the ranks by seniority and oftentimes by being the best at lawyering as opposed to who's necessarily the best leader. 297 00:21:06,933 --> 00:21:14,366 And the fact that law firm ownership is exclusively lawyers in the U S except for 298 00:21:14,366 --> 00:21:16,686 that's an interesting point you see. 299 00:21:18,946 --> 00:21:22,466 People thought that the Legal Services Act in the UK was going to change everything. 300 00:21:22,466 --> 00:21:24,586 It didn't change anything, hardly anything. 301 00:21:24,586 --> 00:21:26,366 It was a complete damp script. 302 00:21:28,546 --> 00:21:38,606 As I said in an article in artificial law the other day, it doesn't matter who owns a group of law firm, lawyers in a particular sort of type of corporate entity, if they don't 303 00:21:38,606 --> 00:21:40,886 change how they work, nothing changes. 304 00:21:41,166 --> 00:21:42,882 And the fundamental... 305 00:21:42,882 --> 00:21:50,808 thing is, is that they did not change how they worked and they did not change how they worked because they didn't see an incentive to do so. 306 00:21:51,129 --> 00:21:54,141 There was no, there was no burning platform and there was no incentive. 307 00:21:54,141 --> 00:21:57,674 There was no lily pad, but it was better and more golden to jump onto. 308 00:21:57,674 --> 00:22:00,357 And there was no burning platform either. 309 00:22:00,357 --> 00:22:03,489 And it's the thing is, that, law firms can do incredible things. 310 00:22:03,489 --> 00:22:07,833 It's like going back to like when I was in the midst of the globalization of the legal market. 311 00:22:07,833 --> 00:22:12,118 I law firms, law firms, very, very conservative organizations on one level. 312 00:22:12,118 --> 00:22:14,259 When they want to move, man, they move. 313 00:22:14,960 --> 00:22:24,925 They, I mean, you know, these large English law firms and large US law firms just went around the world like a supernova just went boom in about two years. 314 00:22:24,925 --> 00:22:32,289 They went from like being 500 lawyers to like, you know, 3000 lawyers with like from three offices to like 25 offices. 315 00:22:33,410 --> 00:22:36,512 And that required a lot of investment as well. 316 00:22:36,512 --> 00:22:40,406 And they did that, they did that because there was a gigantic advantage. 317 00:22:40,406 --> 00:22:42,547 And there was also a gigantic threat, right? 318 00:22:42,547 --> 00:22:45,108 If they didn't globalize, they would lose their clients. 319 00:22:45,229 --> 00:22:48,610 And if they did globalize, they could charge way more. 320 00:22:48,711 --> 00:23:00,118 And also there would be far fewer of them because there's far fewer really top tier global law firms, certainly back 20 years ago there was, than there were just good firms in 321 00:23:00,118 --> 00:23:01,898 various each local market. 322 00:23:02,039 --> 00:23:04,160 Now with legal tech, we're not there yet. 323 00:23:04,160 --> 00:23:07,882 Legal tech is still seen as decoration, right? 324 00:23:07,882 --> 00:23:23,456 It's like an Ikea catalog, you flick through it, you go, yeah, like one of those skublish pillows and a flutu shelving unit and a you-do whatever, know, doofa, you know, made out 325 00:23:23,456 --> 00:23:24,927 of whatever. 326 00:23:25,647 --> 00:23:27,998 And it makes your life easier, makes your life nicer. 327 00:23:27,998 --> 00:23:30,809 As a lawyer, it's more comfortable, it's more pleasant. 328 00:23:30,809 --> 00:23:35,190 You shave away some of the inefficiency, but it never really gets into the billable work, right? 329 00:23:35,190 --> 00:23:36,430 We're still... 330 00:23:36,430 --> 00:23:38,210 We're still in that stage. 331 00:23:38,210 --> 00:23:44,549 haven't, but this is the things I do honestly believe that the train has left the platform, right? 332 00:23:44,549 --> 00:23:52,730 And that's why I wrote an article a few weeks ago, a couple of months ago, which some people either loved or hated, but I think it's absolutely true, which is, know, it's the 333 00:23:52,730 --> 00:23:55,790 end of, you know, the legal world as we know it. 334 00:23:55,790 --> 00:24:04,450 And I feel fine because it is, because finally, finally, finally, finally, you know, someone has lit the touch paper. 335 00:24:06,208 --> 00:24:08,961 the fundamental things that were needed, the right conditions. 336 00:24:08,961 --> 00:24:16,448 It's like revolutions, some famous revolution, not sure which one said it, that for a revolution to start, you need the right conditions. 337 00:24:16,548 --> 00:24:18,358 You can't just have a bunch of revolutionaries. 338 00:24:18,358 --> 00:24:22,354 You can't have as many revolutionaries as you like running up and down the streets going, we're a revolution. 339 00:24:22,354 --> 00:24:25,698 If you don't have the right conditions, nothing happens. 340 00:24:25,698 --> 00:24:28,770 You just get a of really annoying demonstrations. 341 00:24:28,770 --> 00:24:30,762 Nothing actually ever changes. 342 00:24:31,510 --> 00:24:32,920 And I think this is what's different. 343 00:24:32,920 --> 00:24:34,671 I think the conditions are there. 344 00:24:34,671 --> 00:24:37,232 Now, am I expecting rapid change? 345 00:24:37,232 --> 00:24:38,452 Absolutely not. 346 00:24:38,452 --> 00:24:40,753 mean, you know, once bitten twice shy. 347 00:24:40,753 --> 00:24:44,544 mean, my estimate, and I don't know where I got this from. 348 00:24:44,544 --> 00:24:47,135 It's kind of almost like an instinct, and I could be wrong. 349 00:24:47,195 --> 00:24:51,356 We'll get to where we need to be, at least at end of stage one in 2037. 350 00:24:51,356 --> 00:24:55,056 That's my guess, about a dozen years. 351 00:24:55,056 --> 00:24:55,898 Wow. 352 00:24:56,204 --> 00:24:58,275 Yeah, I don't think we'll get where we need. 353 00:24:58,275 --> 00:25:01,176 And when I say where we need to be, mean, real transformation. 354 00:25:01,176 --> 00:25:06,739 mean, in the same way that no one really uses landlines, we've all got mobile phones, we've all got smartphones. 355 00:25:06,739 --> 00:25:12,900 The same way that people don't go to lending libraries anymore, we all use some form of digital entry point. 356 00:25:13,042 --> 00:25:17,503 That's the kind of transformation I'm I'm talking real transformation of the legal market. 357 00:25:17,544 --> 00:25:22,786 It's going to take about a dozen years, but we're on the way. 358 00:25:23,187 --> 00:25:28,787 Yeah, well, and how far we are down that path is an interesting question. 359 00:25:28,887 --> 00:25:34,147 So I looked at the, I have it up here, the 2024 Iltta Technology Survey. 360 00:25:34,147 --> 00:25:43,867 And this question could have been asked better, but the question was, is your firm using generative AI tools for business tasks? 361 00:25:43,867 --> 00:25:50,607 For law firms, 700 attorneys and above, the answer was yes for 74 % of the firms. 362 00:25:50,920 --> 00:25:59,354 Then on another screen here, have Thompson Reuters reports that says just 10 % of law firms have a GEN.AI policy. 363 00:26:00,596 --> 00:26:08,429 Yeah, I don't think I mean, I don't most of these tables are all these surveys have limited value. 364 00:26:08,429 --> 00:26:10,890 Some of them better up and others some are really good. 365 00:26:11,271 --> 00:26:20,134 but you know, and also they're out of date by the time they've been written in many cases, you know, particularly when it comes to slight gene AI adoption. 366 00:26:20,134 --> 00:26:25,296 The reality is the vast majority of big law firms are using generative AI in some way. 367 00:26:25,296 --> 00:26:29,098 The reality though is that very few of them are actually using it. 368 00:26:29,098 --> 00:26:32,900 to alter how they're doing billable work or significant amounts of billable work. 369 00:26:32,900 --> 00:26:35,720 They're it up to the edges. 370 00:26:36,941 --> 00:26:39,622 One of the metaphors I use is the pizza. 371 00:26:39,622 --> 00:26:47,946 So imagine like a really, really chunky deep dish pizza with a beautiful cheesy crust, well, a crust without any cheese on it around the edge, right? 372 00:26:47,946 --> 00:26:50,667 The crust is being eaten away by generative AI. 373 00:26:50,667 --> 00:26:53,028 There's no more crust on this pizza. 374 00:26:53,028 --> 00:26:56,919 You know how everyone eats pizzas in a different way? 375 00:26:56,919 --> 00:26:58,630 Some people cut them into like, 376 00:26:58,994 --> 00:27:10,239 sort of like completely irregular sort of like parallelograms and other people just cut me into tiny slices and other people just fold them up and you know, it's kind of like that's 377 00:27:10,239 --> 00:27:20,644 kind of like where we are, but fundamentally the real center of the pizza where all the good stuff is, that's not really being touched very much. 378 00:27:20,644 --> 00:27:22,544 It really isn't, you know. 379 00:27:23,265 --> 00:27:26,506 But that's the thing is once it is, I mean, 380 00:27:27,254 --> 00:27:29,116 Law firms are not that complicated, right? 381 00:27:29,116 --> 00:27:32,649 They're actually one of the simplest businesses on the planet. 382 00:27:32,649 --> 00:27:35,201 As corporate organisms go, they're incredibly simple. 383 00:27:35,201 --> 00:27:40,925 They're mostly corporate, sorry, they're mostly partnerships rather than corporates. 384 00:27:41,306 --> 00:27:42,607 They're individuals. 385 00:27:42,607 --> 00:27:53,756 You have a small group of owners, you have equity partners, have a pyramidal base of leverage which goes down mostly via seniority, which is ranked to some degree on the 386 00:27:53,756 --> 00:27:55,758 complexity of the work that they can handle. 387 00:27:55,758 --> 00:27:57,418 and they get charged different amounts as well. 388 00:27:57,418 --> 00:27:59,978 It's a beautifully simplistic model, it's wonderful. 389 00:28:00,998 --> 00:28:05,138 To make as much money as possible, you just work as many hours as possible, that's all you have to do. 390 00:28:05,138 --> 00:28:10,038 Even if you get big write-offs, it doesn't matter, as long as you're busy, everything's cool, right? 391 00:28:10,038 --> 00:28:19,198 You're on the hour, the financial risk is someone else's, you have to pay for professional indemnity insurance, but beyond that, as long as you don't mess up, everyone's happy, 392 00:28:19,198 --> 00:28:19,358 right? 393 00:28:19,358 --> 00:28:20,478 We're all happy. 394 00:28:21,038 --> 00:28:25,292 And the clients, despite everything they say every single year, are... 395 00:28:25,292 --> 00:28:28,363 generally allowing the law firms to do whatever they want. 396 00:28:28,363 --> 00:28:37,345 And I think fundamentally, the reason why they do that is because A, they have come out of those law firms in the first place because that was their training ground. 397 00:28:37,345 --> 00:28:43,987 And secondly, because I think, and it's one of these things that people don't like to talk about, it's another elephant in the room, it's like the billable hour, it's another 398 00:28:43,987 --> 00:28:54,830 elephant in the room, which is I think a lot of corporates enjoy, enjoy is not the right word, but they actually, they feel comfortable spending a lot of money. 399 00:28:54,990 --> 00:29:02,070 on particular law firms in the same way that people want to go to certain ski resorts. 400 00:29:02,070 --> 00:29:04,570 Snow is snow, right? 401 00:29:04,570 --> 00:29:14,810 You don't have to go to some luxury eight-star resort in wherever, where they sprinkle caviar on the piece for you. 402 00:29:15,230 --> 00:29:16,050 Snow is snow. 403 00:29:16,050 --> 00:29:17,710 You can just ski. 404 00:29:17,710 --> 00:29:21,342 But let's face it, we live in the real world. 405 00:29:21,342 --> 00:29:32,085 society itself is pyramidal stratification there's all kinds of weird um you could you could argue illogical social behavior but then if you argue equally that one of the 406 00:29:32,085 --> 00:29:39,897 aspects of all pyramidal societies is you know sort of hierarchical control and hegemony and all these kind of things we can get into some really sort of deep philosophical stuff 407 00:29:39,897 --> 00:29:48,844 if you like this is one of the problems is is that you you look at a basic law firm business model and you just go this is completely irrational of course 408 00:29:48,844 --> 00:29:56,905 new technology will be absorbed, they will drop the billblower, they will move on to fix fees, they will increase their profits, they will send out a message to the clients that 409 00:29:56,905 --> 00:29:58,118 this is the way to go. 410 00:29:58,118 --> 00:30:02,720 It's so obvious, it's so logical, but it doesn't happen. 411 00:30:02,920 --> 00:30:08,642 So I've spent literally years getting into it and it is fascinating, it is fascinating. 412 00:30:08,943 --> 00:30:16,686 I think one of the fundamental problems of the legal industry, the commercial legal industry, is that the buyers are not the buyers. 413 00:30:17,174 --> 00:30:21,795 Right, the buyers for legal services, right, don't go anywhere near the law firms. 414 00:30:22,916 --> 00:30:29,978 Except the CEO of Goldman Sachs doesn't go wandering around law firms, and I'm sure he tries not to, right. 415 00:30:29,978 --> 00:30:34,059 It's the lawyers inside Goldman Sachs who engage the law firms outside. 416 00:30:34,059 --> 00:30:41,311 And they all came from those law firms in the first place and probably have relations, and they were probably intermarried and went to the same schools and play at the same tennis 417 00:30:41,311 --> 00:30:42,272 clubs and all this kind of stuff. 418 00:30:42,272 --> 00:30:44,372 And it's like a subtle stratification type thing. 419 00:30:44,792 --> 00:30:54,610 You know, that's an extreme example, that, you know, you might say that's, you know, microcosm plays out across all the entire planet and all markets, even down to the 420 00:30:54,610 --> 00:30:57,632 smallest country town, you know. 421 00:30:58,314 --> 00:31:00,576 So it's, you've got that. 422 00:31:00,576 --> 00:31:08,442 And then of course you've got this point about, you know, the legal market effectively places itself, controls itself. 423 00:31:08,442 --> 00:31:13,196 So, you know, the police force for the legal market, at least in many countries. 424 00:31:13,354 --> 00:31:26,145 is the bar, and the bar is run by lawyers and the effectively the, you you might say the executive branch of this sort of like control organisation of courts, the judges within 425 00:31:26,145 --> 00:31:28,306 it, their lawyers obviously. 426 00:31:28,306 --> 00:31:32,249 So, you know, it's kind of like they've got all the angles covered. 427 00:31:32,370 --> 00:31:40,686 But this thing is like, and I think, you know, and I think a lot of people have argued understandably for long time, but if we can get rid of that, then the whole legal market 428 00:31:40,686 --> 00:31:41,077 will change. 429 00:31:41,077 --> 00:31:43,094 But we did this in the UK years ago. 430 00:31:43,094 --> 00:31:44,815 It changed absolutely nothing. 431 00:31:44,915 --> 00:31:48,777 I mean, any, mean, I could, if I had enough money, I could buy a law firm, right? 432 00:31:48,777 --> 00:31:57,252 I could walk around the city of London with my checkbook and go, right, you know, I'm sure the very large ones would tell me to bugger off, but maybe a very small one would say, 433 00:31:57,252 --> 00:31:57,812 okay, fair enough. 434 00:31:57,812 --> 00:31:59,723 If you've got enough money, yeah, you can have us. 435 00:31:59,723 --> 00:32:00,314 Right? 436 00:32:00,314 --> 00:32:02,534 I mean, like I could list them on the stock market. 437 00:32:02,534 --> 00:32:04,135 I mean, after that, could say, there's enough of that. 438 00:32:04,135 --> 00:32:06,326 I'll sell them to a private equity fund. 439 00:32:06,467 --> 00:32:13,073 It would make absolutely no difference at all to the legal market unless they changed how they worked. 440 00:32:13,073 --> 00:32:13,923 Right. 441 00:32:14,224 --> 00:32:14,544 Yeah. 442 00:32:14,544 --> 00:32:18,286 Well, that's a chicken or the egg concept in my mind. 443 00:32:18,286 --> 00:32:31,394 think that, so we are, this transformation of ownership rules is underway here in the U S and you've heard about the big four stepping in KPMG specifically. 444 00:32:31,394 --> 00:32:32,945 We've heard this before. 445 00:32:33,052 --> 00:32:34,572 I think it'll have no effect at all. 446 00:32:34,572 --> 00:32:37,408 I think it will have almost zero impact personally. 447 00:32:37,408 --> 00:32:39,550 so, and a lot of people agree with you. 448 00:32:39,550 --> 00:32:40,530 I'm on the other side. 449 00:32:40,530 --> 00:32:42,541 I'm on the other side of that this time. 450 00:32:42,541 --> 00:32:50,546 Um, I know we've seen there, you know, there's been this, um, industrialization of legal services in the past, right? 451 00:32:50,546 --> 00:33:01,949 With ALSPs and then, you know, the big four consultants coming in previously, E and Y standing up a fairly big, uh, organization around delivering legal work. 452 00:33:01,949 --> 00:33:14,840 The reason I think it's differently, different this time is just because there is a mechanism where it's going to put pressure on the billable hour in a way where I think 453 00:33:14,840 --> 00:33:21,596 outsiders coming in with different skill sets and evaluating the problem domain within legal. 454 00:33:21,596 --> 00:33:29,723 know, historically legal has been such a bespoke artisan industry, as you point out, and now we're in a place where that is under pressure. 455 00:33:29,795 --> 00:33:41,218 And you're going, if this does, if this movement does get traction where, you know, again, the big four will be the first entrance into the space, but public, uh, private equity 456 00:33:41,218 --> 00:33:43,139 could be not far behind. 457 00:33:43,139 --> 00:33:53,652 Um, there will be management structures and boards of directors in place that are no longer lawyers that are going to re look at these problems differently and how to solve 458 00:33:53,652 --> 00:33:57,843 them and how to, how to build innovation, you know, innovation. 459 00:33:57,862 --> 00:34:00,153 Legal innovation is an oxymoron. 460 00:34:00,153 --> 00:34:03,635 It's like saying jumbo shrimp or military intelligence. 461 00:34:03,635 --> 00:34:07,176 There's very little innovation that happens in legal. 462 00:34:07,176 --> 00:34:08,417 And I say that with love. 463 00:34:08,417 --> 00:34:11,538 These are my customers, the legal innovation teams. 464 00:34:11,898 --> 00:34:21,996 And I'm not saying there's not innovative work happening, but the fundamental structural elements of law firms hasn't changed at all. 465 00:34:21,996 --> 00:34:24,713 Well, that part I would definitely agree with, 466 00:34:24,721 --> 00:34:27,272 Yeah, well, and that's what innovation is. 467 00:34:27,452 --> 00:34:34,796 you know, Chief Innovation Officers are really mostly focused on improvement, not innovation. 468 00:34:34,796 --> 00:34:37,717 They're incremental improvement officers. 469 00:34:37,997 --> 00:34:40,378 And it's not for a lack of skill. 470 00:34:40,378 --> 00:34:46,661 know highly skilled, innovative thinkers in these roles, and it's not for lack of trying. 471 00:34:46,661 --> 00:34:51,343 It's the culture, it's the industry, it's the ownership model. 472 00:34:51,604 --> 00:35:01,656 All of these things have been so well entrenched and you know, the pricing model, the client engagement model, the internal firm compensation model, these things are so firmly 473 00:35:01,656 --> 00:35:09,978 entrenched and there has to be movement within those elements in order for, in order for there to be real change. 474 00:35:09,978 --> 00:35:12,649 there's, there just hasn't been an appetite for that. 475 00:35:12,649 --> 00:35:21,457 So I'm, I'm, I'm, I'm less skeptical than you on this go round, but ultimately time will tell. 476 00:35:21,457 --> 00:35:22,264 Right? 477 00:35:22,702 --> 00:35:24,122 Yeah, well, I hope you're right. 478 00:35:24,122 --> 00:35:25,442 hope you're right. 479 00:35:25,962 --> 00:35:35,422 The thing is, I mean, in a funny way, it's like, I'm actually more optimistic because I'm like, my big picture view is like really, really transformative. 480 00:35:36,042 --> 00:35:41,202 I mean, it's kind of, I mean, for me, it's like an exponential curve. 481 00:35:41,202 --> 00:35:43,022 It's just like what's happening at the moment. 482 00:35:43,022 --> 00:35:46,482 We're really at the bottom of it and it looks so slow and so small. 483 00:35:46,522 --> 00:35:51,662 But when we really start to get up, you know, into the higher parts of that curve, 484 00:35:51,662 --> 00:35:53,082 It's really radical. 485 00:35:53,082 --> 00:35:56,802 But like I say, we're looking at a decade plus to get to that radical bit. 486 00:35:56,802 --> 00:36:00,322 I mean, this was simply doing the groundwork. 487 00:36:00,322 --> 00:36:02,202 We're preparing the way. 488 00:36:03,222 --> 00:36:06,792 The irony is that there were people even before 2015. 489 00:36:06,792 --> 00:36:12,982 I mean, think, know, because eBrevier can trace its roots back to I think about 2012 or something. 490 00:36:13,322 --> 00:36:21,422 I mean, there are people who've been working in this field using these ideas and coming up against these problems, which we're knocking around. 491 00:36:21,902 --> 00:36:29,602 for like 20 years, well, 20 years, 13 years. 492 00:36:30,802 --> 00:36:32,282 But we will get there. 493 00:36:32,282 --> 00:36:33,922 I mean, think this is the thing, it? 494 00:36:33,922 --> 00:36:37,942 I mean, the age thing is a really interesting one, isn't it? 495 00:36:38,722 --> 00:36:46,402 Because if you were 20 and you were at a law firm and someone told you, like in 12 years, the industry really is going to change. 496 00:36:46,402 --> 00:36:49,962 I know we all keep talking about whether that change will change, but it really will change. 497 00:36:50,190 --> 00:36:56,170 You'd like, well, if I start this law firm and I become a partner, I'll probably just be really getting into high gear. 498 00:36:56,170 --> 00:36:58,890 I'll just be really, really motoring at that point. 499 00:36:58,890 --> 00:37:01,710 And I'll be perhaps even an owner if I'm lucky. 500 00:37:01,710 --> 00:37:03,970 It might be an equity partner if I was really lucky. 501 00:37:04,390 --> 00:37:06,450 And wow, yeah. 502 00:37:06,450 --> 00:37:10,350 So it's going to be very, very, very interesting for that generation. 503 00:37:10,450 --> 00:37:16,524 Whereas if you're an equity partner now and you're like 45 heading towards 50, you know. 504 00:37:16,524 --> 00:37:17,765 These are smart people, right? 505 00:37:17,765 --> 00:37:29,975 They can see how much change has been so far and they'll just like, yeah, I'm going to see out the rest of my career and into retirement before anything really, really looks like a 506 00:37:29,975 --> 00:37:31,176 burning platform. 507 00:37:31,495 --> 00:37:31,975 Yeah. 508 00:37:31,975 --> 00:37:35,878 And you know, the, what's interesting is I did a little research on the billable hour. 509 00:37:35,878 --> 00:37:40,542 Um, so it's really only firmly been entrenched for about 50 years. 510 00:37:40,542 --> 00:37:42,142 It was, it was formed. 511 00:37:42,142 --> 00:37:51,782 And it was Hale and Doar, it's funny that you sent me that because I actually found that out myself, I was doing some research and I actually contacted Hale and Doar twice to see 512 00:37:51,782 --> 00:37:54,662 if they wanted to talk about it and they never replied to me. 513 00:37:54,662 --> 00:38:01,362 So I don't know if you've got any good buddies at Hale and Doar, if they would like to talk about the birth of the Bill of the Hour. 514 00:38:01,362 --> 00:38:07,330 But originally we started as an access to justice move because I thought that... 515 00:38:07,330 --> 00:38:10,152 by having clarity over what something costs. 516 00:38:10,152 --> 00:38:12,534 Because obviously in the old days, people would literally just look at you. 517 00:38:12,534 --> 00:38:16,987 They'd look at your shoes, look at your pocket watch and go, where do you live? 518 00:38:16,987 --> 00:38:18,508 Hmm, okay, right. 519 00:38:18,508 --> 00:38:20,130 So it's gonna be this much. 520 00:38:20,130 --> 00:38:23,722 And they would literally charge, it would just be like, what's this guy worth? 521 00:38:23,722 --> 00:38:24,492 Right? 522 00:38:24,492 --> 00:38:26,743 And would just charge whatever they felt. 523 00:38:27,504 --> 00:38:31,487 And then the idea was is that the billable hour would give transparency. 524 00:38:31,487 --> 00:38:36,142 So people who didn't have as much wealth would get a fair shake of the stick. 525 00:38:36,142 --> 00:38:38,403 And then of course, that was generally ignored. 526 00:38:38,404 --> 00:38:46,541 then with economic growth, and I think particularly the end of 70s and certainly with the 80s, there's this explosion of economic growth across the West, globalization, 527 00:38:46,541 --> 00:38:55,517 computerization, massive rising productivity, know, that kind of Reagan era, know, Thatcher era, globalization of capitalism, global capitalism in general. 528 00:38:56,639 --> 00:39:00,832 It created this huge surge of work for commercial lawyers. 529 00:39:01,454 --> 00:39:04,014 And there's a big expansion of in-house legal teams. 530 00:39:04,014 --> 00:39:09,054 was a real change, a real sea change in global capitalism, really, really altered. 531 00:39:09,954 --> 00:39:15,354 And people started to realize that leverage wasn't just question of having bodies to do the work. 532 00:39:15,354 --> 00:39:21,614 That if you were clever about how you managed it, partner profits could gigantically increase. 533 00:39:22,114 --> 00:39:26,094 mean, that's one of the things, if you go back, if you go back like 40 years, you look at what partners made. 534 00:39:26,094 --> 00:39:29,506 mean, they were wealthy compared to the average person in America or Britain. 535 00:39:29,506 --> 00:39:33,248 But compared to now, they were making a fraction of what they make now. 536 00:39:33,248 --> 00:39:40,152 mean, now, like, and this is very, very much due to leverage in the middle of the hour. 537 00:39:40,752 --> 00:39:52,379 You could not, mean, with that, then this is the thing I keep trying to try to introduce into the into the discussion is that you can actually make more money as an owner using 538 00:39:52,379 --> 00:39:55,200 technology and fixed fees. 539 00:39:56,541 --> 00:39:58,458 people, people just don't want to go down that road. 540 00:39:58,458 --> 00:40:01,680 well, and what people, I don't think it's all law firms. 541 00:40:01,680 --> 00:40:08,645 think the buyers of legal services are also most comfortable with this model that's been firmly entrenched for 50 years. 542 00:40:08,645 --> 00:40:14,629 If you talk to inside teams, inside legal teams, you know, they kind of want the best of both worlds. 543 00:40:14,629 --> 00:40:19,072 They, uh, kind of a not to exceeds model where, Hey, I pay you. 544 00:40:19,072 --> 00:40:24,275 I don't know that there's enough trust in between law firm and 545 00:40:24,525 --> 00:40:36,500 and legal buyer for legal buyer to feel comfortable that whatever that price is set is going to ultimately be fair. 546 00:40:36,500 --> 00:40:42,702 And I think it's just been a factor of buyer side hesitation. 547 00:40:42,923 --> 00:40:47,425 And on the law firm side, a lot of law firms have been flying blind. 548 00:40:47,425 --> 00:40:53,467 Their data has historically sucked around this and the ability to 549 00:40:53,502 --> 00:40:54,743 build pricing models. 550 00:40:54,743 --> 00:40:55,384 It's gotten better. 551 00:40:55,384 --> 00:41:04,121 And I'd say the last five years, like pre-COVID, I started to see like real data work, data rationalization work happening within law firms. 552 00:41:04,121 --> 00:41:06,534 And it's accelerated since then. 553 00:41:06,534 --> 00:41:07,755 definitely. 554 00:41:07,755 --> 00:41:10,836 If you look at all the billing software out there now, it's so advanced. 555 00:41:10,836 --> 00:41:17,859 mean, you know, and then you've got people like organizations like Sally, which are really helping develop taxonomies and so forth. 556 00:41:17,994 --> 00:41:20,700 I mean, there's no excuses now for the large firms. 557 00:41:20,700 --> 00:41:21,390 have the data. 558 00:41:21,390 --> 00:41:22,210 have the data. 559 00:41:22,210 --> 00:41:24,802 The funny thing is the write-offs are gigantic. 560 00:41:25,562 --> 00:41:31,385 you know, I won't mention any names, but I can think of a firm that is literally writing off hundreds of millions a year. 561 00:41:31,385 --> 00:41:34,956 mean, literally hundreds of millions of dollars. 562 00:41:35,438 --> 00:41:37,098 total write-offs, right? 563 00:41:37,098 --> 00:41:40,318 Now that means that the whole, it becomes really bizarre. 564 00:41:40,318 --> 00:41:44,278 Like I was talking to someone once and I was thinking like, you know, where's the value? 565 00:41:44,278 --> 00:41:47,378 And they were saying, well, the value is in the senior partners, the experience. 566 00:41:47,378 --> 00:41:48,818 I said, okay, so that's what the client is paying. 567 00:41:48,818 --> 00:41:52,098 So let's say you do a deal, let's say it's a relatively small deal. 568 00:41:52,098 --> 00:41:53,598 It's a million dollars, right? 569 00:41:53,598 --> 00:41:54,878 Big law deal, right? 570 00:41:54,878 --> 00:41:56,458 M &A deal, million dollars. 571 00:41:56,458 --> 00:41:57,938 And I said, well, so where's the value then? 572 00:41:57,938 --> 00:42:04,750 I said, well, know, the vast majority of that is the expertise of the firm, the historical, you know, IP of these. 573 00:42:04,750 --> 00:42:10,030 individuals, you know, their skills, their experience, they've been through a hundred major deals, they've seen everything. 574 00:42:10,030 --> 00:42:11,230 And I said, okay, brilliant. 575 00:42:11,230 --> 00:42:11,870 That's perfect. 576 00:42:11,870 --> 00:42:12,570 Wonderful. 577 00:42:12,570 --> 00:42:21,070 So why is it that 85 % of the bill is non equity partner and below leverage billing? 578 00:42:21,490 --> 00:42:32,850 So effectively you're getting people to do a ton of what you might call manual labor to pad out a bill, which is then sent to the client who then knocks off a third and says, 579 00:42:32,850 --> 00:42:34,242 because, I can. 580 00:42:34,242 --> 00:42:37,443 they've just put up their rates by a third over the last couple of years anyway. 581 00:42:37,443 --> 00:42:40,504 So it's an absolute muddle. 582 00:42:41,165 --> 00:42:46,767 The idea of the billable hour is that it gives some kind of empirical clarity to what's going on. 583 00:42:46,767 --> 00:42:51,379 It's actually the whole thing really, it's an illusion. 584 00:42:51,379 --> 00:42:56,191 The idea that there's any logic in any of it doesn't make any sense, right? 585 00:42:56,191 --> 00:43:02,684 So you've got a junior lawyer who has no technology other than word and email. 586 00:43:03,342 --> 00:43:06,582 plodding their way through a due diligence exercise, right? 587 00:43:06,582 --> 00:43:11,782 And the lawyer next to them is using the best AI of all automation and all kinds of stuff. 588 00:43:11,802 --> 00:43:17,562 And they've got a fantastic understanding of data and metadata and they're absolutely on it, right? 589 00:43:17,942 --> 00:43:23,122 They're zipping through the documents like, you know, one every five minutes and a really high accuracy, right? 590 00:43:23,122 --> 00:43:29,962 Probably accuracy at the same level as you have a junior lawyer, because, you know, the accuracy to some degree is based on their own ability to spot errors and that's based on 591 00:43:29,962 --> 00:43:31,122 experience, right? 592 00:43:31,122 --> 00:43:32,750 So like one guy, 593 00:43:32,750 --> 00:43:36,990 He's doing a document every five minutes and everyone's doing a document every hour. 594 00:43:37,490 --> 00:43:38,250 Right. 595 00:43:38,250 --> 00:43:42,170 Now, if we were not in the legal world, we were in a completely different industry. 596 00:43:42,170 --> 00:43:45,610 And I said to you, which of these is the more profitable? 597 00:43:45,610 --> 00:43:48,630 You'd be like, well, obviously the guy who's going at five minutes, this guy's a genius. 598 00:43:48,630 --> 00:43:53,390 mean, you know, want loads of these and like, wrong. 599 00:43:53,890 --> 00:43:56,650 You know, this guy is a liability. 600 00:43:56,650 --> 00:43:59,010 Get rid of him, for God's sake. 601 00:43:59,840 --> 00:44:00,813 It's madness. 602 00:44:00,813 --> 00:44:01,464 It's madness. 603 00:44:01,464 --> 00:44:04,465 The only person who sees this, it's completely insane. 604 00:44:04,465 --> 00:44:04,816 Yeah. 605 00:44:04,816 --> 00:44:07,738 I mean, the billable hour does reward inefficiency. 606 00:44:07,738 --> 00:44:09,542 And I think that's. 607 00:44:09,642 --> 00:44:12,262 don't think they're doing it deliberately so much. 608 00:44:13,302 --> 00:44:18,151 I think for me it prevents efficiency. 609 00:44:18,151 --> 00:44:20,212 Yeah, right. 610 00:44:20,573 --> 00:44:22,094 And that's, that's very true. 611 00:44:22,094 --> 00:44:30,912 Talking about the tools for a minute, cause I had a visual in my mind when, when you laid out that metaphor and I'm going to use Harvey as an example, but the question isn't about 612 00:44:30,912 --> 00:44:31,373 Harvey. 613 00:44:31,373 --> 00:44:34,706 It's just, they're kind of a first mover in the space. 614 00:44:34,706 --> 00:44:37,288 Um, you talked about my space. 615 00:44:37,288 --> 00:44:39,891 First movers aren't always the long-term winners. 616 00:44:39,891 --> 00:44:45,448 I mean, look in the software world, you know, um, Netscape Navigator, um, 617 00:44:45,448 --> 00:44:49,830 You know, Lotus one, two, three, Harvard graphics, Dbase. 618 00:44:50,211 --> 00:44:52,492 there's a million examples, MySpace. 619 00:44:52,492 --> 00:44:56,044 The first mover usually isn't the long-term winner. 620 00:44:56,044 --> 00:45:06,340 And what I'm, what I'm thinking about when I see these valuations in this massive tidal wave of investment that's making its way into legal tech now, which I think is a good 621 00:45:06,340 --> 00:45:12,593 thing overall, but are these kind of early platforms going to be the long-term winners? 622 00:45:12,593 --> 00:45:23,828 Because if you look at the amount being invested and what needs to happen in order to hit evaluation that the investors are going to walk away happy about, they kind of have to be. 623 00:45:24,709 --> 00:45:28,162 What are your thoughts on that dynamic? 624 00:45:28,162 --> 00:45:34,745 want to get into any particular company because it's kind of unfair to do something that's going to be aired publicly. 625 00:45:34,745 --> 00:45:47,650 I mean, I mean, just generally, if you look at startup revenues, right, they're relatively small in the legal tech world and they stay small, they grow relatively slowly. 626 00:45:49,972 --> 00:45:56,094 Some companies that were given a lot of money very quickly ended up in trouble and got bought. 627 00:45:56,334 --> 00:46:01,434 And the founders exited quite nicely, but you know, walked away with a good amount of money. 628 00:46:01,634 --> 00:46:13,114 But the classic, you might say, cliche, the Palo Alto cliche of, you know, a couple of people in a garage, if they create a company, money just starts getting sucked towards 629 00:46:13,114 --> 00:46:15,414 them, you know, like a black hole. 630 00:46:15,734 --> 00:46:19,334 They grow like crazy, bang, know, IPO, whatever, in about three or four years. 631 00:46:19,334 --> 00:46:21,854 I mean, that is just so unlike legal tech. 632 00:46:21,854 --> 00:46:25,614 The vast majority of legal tech companies grow from, you know, 633 00:46:25,614 --> 00:46:29,394 their seed very slowly, really slowly. 634 00:46:29,394 --> 00:46:34,854 mean, you know, mean, I companies, good companies doing good work, making decent revenue. 635 00:46:35,274 --> 00:46:38,114 Many, many of them are way below $10 million. 636 00:46:38,754 --> 00:46:39,414 Right? 637 00:46:39,414 --> 00:46:42,114 that's not names that you will have heard of, right? 638 00:46:42,114 --> 00:46:47,594 I mean, there are, are, you know, there are household names, at least in the legal tech world. 639 00:46:47,594 --> 00:46:50,154 You know, if I said X names here, you'd be like, yeah, yeah, yeah, of course. 640 00:46:50,154 --> 00:46:52,034 Really successful, great work. 641 00:46:52,034 --> 00:46:53,990 Brilliant, brilliant, You know. 642 00:46:54,074 --> 00:47:00,057 And you realize that they've been going for like eight years and their revenue is about 20 million. 643 00:47:00,057 --> 00:47:10,913 And when you look at their properties and you look at their marketing spend and you look at their staff costs and then you look at the fact that actually because they're super, 644 00:47:10,913 --> 00:47:20,388 super, you know, leveraged up with investment and maybe some debt as well now, they're actually not, if you actually look at the balance sheet for real, A, the revenue is 645 00:47:20,388 --> 00:47:23,714 relatively small for a company that's meant to be in the tech sector. 646 00:47:23,714 --> 00:47:26,055 that's been going for eight years, right? 647 00:47:26,495 --> 00:47:34,099 And secondly, if you actually look, if you drill down into the real numbers, that balance sheet is pretty weak, right? 648 00:47:34,099 --> 00:47:38,921 But then they get bought by a much, much larger company who then, you know, does what they do. 649 00:47:38,921 --> 00:47:45,884 that is actually more sort of slow, relatively slow growth is actually more than normal. 650 00:47:45,884 --> 00:47:50,846 So this idea you get like a hundred million or more and you grow like wildfire. 651 00:47:51,490 --> 00:47:54,002 That's almost unheard of in the legal tech world. 652 00:47:54,002 --> 00:47:55,295 It's really rare. 653 00:47:55,410 --> 00:47:56,300 It really is. 654 00:47:56,300 --> 00:48:07,563 And you know, the legal tech world is also, I have a blog post half written, maybe not even half, but it's called legal tech is small town USA. 655 00:48:07,743 --> 00:48:12,784 And I use a metaphor of, know, the legal tech community is very tight knit. 656 00:48:12,784 --> 00:48:15,165 Um, I've been in it for 16 years. 657 00:48:15,165 --> 00:48:17,856 It took me five years before anybody took me seriously. 658 00:48:17,856 --> 00:48:21,527 Um, I don't, some, some may not still take me seriously. 659 00:48:21,527 --> 00:48:23,547 I don't know, but it took a while. 660 00:48:23,547 --> 00:48:27,900 And it took a lot of relationship building and everybody knows each other. 661 00:48:28,911 --> 00:48:40,831 and for someone to come in from the outside and grow and really, you know, uh, several of the, I'm not talking about anybody in particular here, but several of these legal tech AI 662 00:48:40,831 --> 00:48:48,677 startups have, have kind of grown so fast, so quick, at least in terms of balance sheet capital deployed. 663 00:48:48,680 --> 00:48:56,193 They haven't really had a chance to build these relationships and there's been a little bit of skepticism, I think from the legal tech community about, is this, is this going to 664 00:48:56,193 --> 00:48:57,795 be a long-term winner here? 665 00:48:57,795 --> 00:49:01,026 Is there what's what's the deal with their tech? 666 00:49:01,026 --> 00:49:12,246 I think the ones from what I've seen, the ones that are planning or effectively, you know, as you alluded to, like needing really, really massive revenue growth are looking at 667 00:49:12,246 --> 00:49:12,906 things differently. 668 00:49:12,906 --> 00:49:21,966 mean, a lot of the household names in the legal tech world, aside from people like Cleo and other ones like that, generally have focused on big law, right? 669 00:49:23,246 --> 00:49:29,038 You know, you can make a pretty good living serving 40 or 50 very large law firms. 670 00:49:29,038 --> 00:49:31,618 Right, you've got a couple of thousand lawyers each. 671 00:49:32,218 --> 00:49:39,458 You're selling your licenses, I don't know, let's say the bottom is $20,000 and it goes up to whatever, right? 672 00:49:39,458 --> 00:49:41,138 You've got 40 or 50 of those. 673 00:49:41,138 --> 00:49:43,158 That's a nice living, right? 674 00:49:43,438 --> 00:49:46,458 But you're never gonna get into the hundreds of millions of revenue just doing that. 675 00:49:46,458 --> 00:49:50,178 You've really got to open, you've got to open the market right up. 676 00:49:50,418 --> 00:49:52,078 So you've got to do small law. 677 00:49:52,078 --> 00:49:54,298 You've got to get into every small law firm. 678 00:49:54,298 --> 00:49:55,738 You've got to get into mid-sized law firms. 679 00:49:55,738 --> 00:49:57,110 You've got to go in-house. 680 00:49:57,110 --> 00:49:59,721 You've got to get into government even perhaps. 681 00:49:59,721 --> 00:50:01,492 You've got to get into everything. 682 00:50:01,492 --> 00:50:04,014 You've got to be like Thomson Reuters or Lexis, right? 683 00:50:04,014 --> 00:50:10,998 You've got to be indispensable to literally hundreds of thousands of lawyers and different organizations. 684 00:50:10,998 --> 00:50:11,678 And they can do that. 685 00:50:11,678 --> 00:50:15,130 Most companies can do that, of course, because they were very smart, very early on. 686 00:50:15,130 --> 00:50:20,863 And I don't know if they did it because they knew what was going to happen or they were just very lucky that they got the data. 687 00:50:20,863 --> 00:50:24,407 They built those legal databases, great legal databases. 688 00:50:24,407 --> 00:50:26,516 I all the tech cameras layered on top. 689 00:50:26,604 --> 00:50:26,784 Right. 690 00:50:26,784 --> 00:50:29,255 But that put me in a fantastic position, right. 691 00:50:29,255 --> 00:50:34,178 The scaling because every lawyer who can afford it would like to get their hands on that data. 692 00:50:34,178 --> 00:50:34,998 Right. 693 00:50:35,899 --> 00:50:37,240 Like the licensing. 694 00:50:37,240 --> 00:50:41,202 mean, I don't know how many customers Thompson Reuters has on its legal side. 695 00:50:41,562 --> 00:50:47,806 You know, in total, if you add every single individual, yeah, every single individual, it must be gigantic. 696 00:50:47,806 --> 00:50:48,266 Right. 697 00:50:48,266 --> 00:50:49,247 So they can do that. 698 00:50:49,247 --> 00:50:50,487 They can do that. 699 00:50:50,928 --> 00:50:55,500 How many other companies are going to gain that kind of leverage? 700 00:50:56,150 --> 00:50:57,154 across the 701 00:50:57,248 --> 00:50:58,168 right. 702 00:50:59,269 --> 00:51:11,240 It's very hard and it takes time and it's not a, you know, the VC model is eight to 10 years on the long side of, you know, right? 703 00:51:11,240 --> 00:51:13,422 Yeah, it's, it's been pushing longer. 704 00:51:13,422 --> 00:51:23,921 It used to be even shorter, but you know, VC investors, these limited partners expect to return, um, a significant return cause it's a high risk and, uh, you know, high risk 705 00:51:23,921 --> 00:51:24,861 investment. 706 00:51:24,861 --> 00:51:33,233 fairly quickly and I'm looking at these companies and wondering how the TAM and legal is small, total addressable market. 707 00:51:33,233 --> 00:51:43,934 But I know you said, but this is the thing someone says to as I was in Palo Alto a couple of years ago off the back of the our Legal Innovators Conference in San Francisco. 708 00:51:44,214 --> 00:51:51,114 And someone I was talking about, you know, joking, I said, yeah, hey, I should should create my own legal tech company, you know, spent years in this field. 709 00:51:51,714 --> 00:51:55,774 And they said, yeah, but you'd you'd never make it through the VC round. 710 00:51:55,774 --> 00:51:57,054 And said, well, how do you mean? 711 00:51:57,054 --> 00:52:01,670 Because you like to tell things as they are, at least how you think they are. 712 00:52:01,678 --> 00:52:03,878 And that's not what a lot of VCs want. 713 00:52:03,878 --> 00:52:12,938 VCs want you to paint them a picture, tell them a story, because they're not going to be around to pick up the end of that story. 714 00:52:12,938 --> 00:52:19,198 They're going to drop off about halfway through, and someone else is going to pick it up, a private equity fund or a much larger corporate or whoever. 715 00:52:19,198 --> 00:52:20,678 It's going to be a trade buy. 716 00:52:21,378 --> 00:52:24,238 And so that's one of the challenges, isn't it? 717 00:52:24,598 --> 00:52:28,878 You throw 100 million or 50 million or 20 million in a company. 718 00:52:28,878 --> 00:52:31,478 It does grow temporarily quite rapidly. 719 00:52:31,478 --> 00:52:32,238 It looks good. 720 00:52:32,238 --> 00:52:36,538 You the hockey stick started to form and you say, right guys, I'm out of here. 721 00:52:37,158 --> 00:52:39,858 right now it's your problem. 722 00:52:40,318 --> 00:52:41,238 You deal with it. 723 00:52:41,238 --> 00:52:43,158 You grow this thing like crazy. 724 00:52:43,958 --> 00:52:48,318 You know, I mean, how many companies have been bought and then written off? 725 00:52:50,104 --> 00:52:53,017 so many, so many. 726 00:52:53,017 --> 00:52:54,188 Yeah. 727 00:52:54,188 --> 00:53:03,737 Even in my little niche, know, Thompson Reuters, so we are internet extranet platform and there was a platform called XM Law. 728 00:53:03,737 --> 00:53:06,119 Good buddy of mine, Rob Cicconi founded it. 729 00:53:06,119 --> 00:53:09,022 Thompson Reuters bought it and basically killed it. 730 00:53:09,022 --> 00:53:10,413 They did nothing with it. 731 00:53:10,555 --> 00:53:12,517 So it's, pretty common. 732 00:53:12,517 --> 00:53:14,029 Well, I know we're running out of time here. 733 00:53:14,029 --> 00:53:23,359 I want to make sure that I give you a minute or so to just tell people how to get in touch or learn more about the content. 734 00:53:23,359 --> 00:53:25,251 Your content is fantastic. 735 00:53:25,251 --> 00:53:27,013 It's been an honor to have you on the show. 736 00:53:27,013 --> 00:53:33,399 I could talk for hours, but, um, tell people how, how they might find out more about your work. 737 00:53:33,782 --> 00:53:34,943 Yeah, it's easy. 738 00:53:34,943 --> 00:53:42,670 Just go, just type in artificial lawyer into Google or your search engine of choice and take it from there. 739 00:53:42,670 --> 00:53:53,198 And if you, if you're kind of person that likes in-person events, we also do the Legal Innovators conferences, Legal Innovators UK in London in November. 740 00:53:53,198 --> 00:53:58,162 And we're doing the next big event will be in California in San Francisco, June. 741 00:53:58,310 --> 00:54:02,971 11th 12th in central San Francisco, which should be a lot of fun over two days. 742 00:54:02,971 --> 00:54:06,872 And it'll be our fourth event in the city. 743 00:54:07,653 --> 00:54:10,473 But generally, yeah, just type in artificial lawyer. 744 00:54:10,473 --> 00:54:13,754 I'm on LinkedIn every day, multiple times. 745 00:54:13,754 --> 00:54:15,705 I generally use my own personal account. 746 00:54:15,705 --> 00:54:22,417 So Richard Trowans, T-R-O-M-E-N-S, that's probably the easiest way to find me. 747 00:54:23,657 --> 00:54:27,399 yeah, thank you for listening and thank you for having me on the show. 748 00:54:27,399 --> 00:54:29,143 Yeah, it's been a pleasure. 749 00:54:29,143 --> 00:54:31,729 We didn't get to a lot of the stuff we were going to talk about. 750 00:54:31,729 --> 00:54:34,516 We had a great conversation and that's the goal. 751 00:54:34,516 --> 00:54:37,813 So maybe we can revisit at some point and do it. 752 00:54:37,813 --> 00:54:39,643 be honored to come back, thank you. 753 00:54:39,643 --> 00:54:40,124 Awesome. 754 00:54:40,124 --> 00:54:41,066 Well, great. 755 00:54:41,066 --> 00:54:46,534 I really appreciate your time and we'll maybe I'll see you at Legal Innovators. 756 00:54:46,534 --> 00:54:52,238 I'm going to make a note to take a look at that San Francisco conference and see if we can put that on the calendar. 757 00:54:52,238 --> 00:54:53,358 Yeah, that would be awesome. 758 00:54:53,358 --> 00:54:54,163 That would be great. 759 00:54:54,163 --> 00:54:54,983 Good stuff. 760 00:54:54,983 --> 00:54:55,203 All right. 761 00:54:55,203 --> 00:54:57,243 Have a good rest of your afternoon. 762 00:54:57,523 --> 00:54:58,263 All right. 763 00:54:58,263 --> 00:54:59,245 Thanks a lot. 00:00:03,957 Richard, good to see you this afternoon. 2 00:00:03,957 --> 00:00:04,942 How are you? 3 00:00:05,282 --> 00:00:07,100 Hi Ted, thanks for having me on the show. 4 00:00:07,100 --> 00:00:08,393 I'm pretty good actually. 5 00:00:08,563 --> 00:00:09,474 Good, good. 6 00:00:09,474 --> 00:00:12,610 Other than, um, fighting some cold weather there. 7 00:00:12,610 --> 00:00:13,858 Are you in London? 8 00:00:13,858 --> 00:00:16,233 Yeah, I'm in London, yeah, North London, yeah. 9 00:00:16,605 --> 00:00:25,689 think the whole world must be in a cold snap right now because all over the United States, it's freezing cold and it sounds like it is over in the UK as well. 10 00:00:26,092 --> 00:00:26,442 Yeah. 11 00:00:26,442 --> 00:00:32,085 Oh, not as bad as some of the East Coast cities, but it's, you know, it's, pretty bad over in London. 12 00:00:32,085 --> 00:00:32,169 Yeah. 13 00:00:32,169 --> 00:00:33,049 That's true. 14 00:00:33,598 --> 00:00:34,228 Well, good stuff. 15 00:00:34,228 --> 00:00:35,339 I appreciate you joining. 16 00:00:35,339 --> 00:00:36,870 Yeah. 17 00:00:37,131 --> 00:00:43,996 I think many of our listeners probably know who you are based on your work at artificial lawyer. 18 00:00:44,076 --> 00:00:50,451 And, but for those that don't just want to do, give you a chance to do a quick introduction. 19 00:00:50,451 --> 00:00:52,073 Yeah. 20 00:00:52,073 --> 00:00:56,546 I was interested to see that you were, you were an editor at ALM. 21 00:00:56,546 --> 00:01:03,271 had a short stint at Thompson Reuters and you founded artificial lawyer in 22 00:01:03,355 --> 00:01:08,981 2016, which was quite a bit before chat GPT lit the world on fire. 23 00:01:08,981 --> 00:01:15,757 Um, but yeah, why don't you tell us a little bit about, uh, who you are, what you do and where you do it. 24 00:01:16,046 --> 00:01:17,006 Yeah, no, sure. 25 00:01:17,006 --> 00:01:22,226 So I started in the legal world in 1999, so 25, 26 years. 26 00:01:22,226 --> 00:01:23,846 Oh my God, that's a long time. 27 00:01:24,806 --> 00:01:35,486 I joined what was effectively a startup in 1999 called Legal Week, which was a legal magazine focused on big commercial law firms. 28 00:01:35,486 --> 00:01:37,066 And I joined as an international reporter. 29 00:01:37,066 --> 00:01:44,966 At that point, it was an independent business created by a couple of people who had left a more established magazine called The Lawyer. 30 00:01:45,454 --> 00:01:56,874 in the UK and I was as far as I understand either one of the first international reporters or the first international reporter for the commercial legal market. 31 00:01:56,874 --> 00:01:58,654 That is the only thing I did. 32 00:01:58,654 --> 00:02:09,394 I only covered international mergers, international expansion, office openings, joint ventures in Singapore, US and UK law firms merging, UK law firms opening an office in 33 00:02:09,394 --> 00:02:09,934 Amsterdam. 34 00:02:09,934 --> 00:02:11,354 That was what I did. 35 00:02:12,300 --> 00:02:15,832 So I got into, so I went straight into strategy. 36 00:02:15,832 --> 00:02:27,177 So like within, you know, couple of months of getting up to speed with how big law firms worked, I was right into strategy and the business of law because the first question you 37 00:02:27,177 --> 00:02:31,719 ask anybody as a journalist, you know, why are you doing this? 38 00:02:32,099 --> 00:02:35,461 You know, why have you just merged across the Atlantic? 39 00:02:35,461 --> 00:02:37,142 Why have you just opened in Singapore? 40 00:02:37,142 --> 00:02:38,414 And then they start telling you stuff. 41 00:02:38,414 --> 00:02:40,475 And course you've got to try and figure it out and understand it. 42 00:02:40,475 --> 00:02:51,681 So I very, very, very quickly got introduced into the world of strategy and business, which is kind of like not what I expected when I trained as a journalist. 43 00:02:51,681 --> 00:02:59,746 I kind of thought, you know, I'll be working at the Guardian or something like that, you And so I ended up completely without any planning. 44 00:02:59,746 --> 00:03:02,077 didn't choose to work at Legal Week. 45 00:03:02,077 --> 00:03:08,030 just, a friend had a job there and I was looking for a job and... 46 00:03:08,075 --> 00:03:12,087 The general rule as a junior journalist is just get the first job you can and get going. 47 00:03:12,087 --> 00:03:15,205 You know, don't sit around, just get going, get cracking. 48 00:03:15,205 --> 00:03:20,190 I mean, it just took off because the legal market then was very exciting. 49 00:03:20,551 --> 00:03:22,651 Globalisation was really kicking off. 50 00:03:22,651 --> 00:03:27,323 The big UK law firms were expanding at an incredible rate. 51 00:03:27,323 --> 00:03:28,664 It's hard to remember those days. 52 00:03:28,664 --> 00:03:38,062 I mean, if the legal market now was doing what it did back then, particularly younger people who probably don't remember 53 00:03:38,062 --> 00:03:42,942 those early days 25 years ago, would just be amazed. 54 00:03:42,942 --> 00:03:52,042 mean, know, law firms like Linklaters, for example, just a classic example, went from being, you know, sort of medium-sized, high-quality magic circle firm in London to forming 55 00:03:52,042 --> 00:03:58,662 alliances with every major top-tier firm across Europe and then merged with all of them, pretty much. 56 00:03:58,982 --> 00:04:03,442 And then expanded in the US, expanded across, you know, Asia Pacific and so forth. 57 00:04:03,442 --> 00:04:05,342 Just an incredible expansion. 58 00:04:05,342 --> 00:04:07,116 Now you might think, why is he talking about this? 59 00:04:07,116 --> 00:04:17,113 Well, that then led to me becoming eventually a management consultant because I was so focused on business, so focused on strategy that I then became a management consultant and 60 00:04:17,113 --> 00:04:20,555 I joined a strategy group that was inside Tomton Reuters. 61 00:04:20,555 --> 00:04:22,476 And then I didn't study that long. 62 00:04:22,476 --> 00:04:28,500 And then I joined a sort of UK based strategy consultancy. 63 00:04:28,721 --> 00:04:30,862 I spent five very interesting years there. 64 00:04:30,862 --> 00:04:37,070 It was kind of like doing an MBA in law firm business strategy and learned an enormous amount. 65 00:04:37,070 --> 00:04:43,670 And it was my last year there, which I think was around 2014, 2015. 66 00:04:43,910 --> 00:04:48,730 One of the things I had, so I was head of research and I also had my own consulting gig, know, had my own clients. 67 00:04:48,930 --> 00:04:53,930 And one of my jobs was to do reports, big deep analysis. 68 00:04:53,930 --> 00:04:58,210 So, you know, like, you know, what's, what's going to happen with growth in China, you know? 69 00:04:58,210 --> 00:05:00,210 And so I'd get into the world bank data. 70 00:05:00,210 --> 00:05:03,090 I'd get into all kinds of huge. 71 00:05:03,118 --> 00:05:10,618 data analysis projects and I would like rip out the data and analyze it and then try and like connect it to what was happening in the legal market. 72 00:05:11,157 --> 00:05:19,438 And you know, and then we would give those to the big law firms who would then sit there and consider it and then obviously the idea that they would engage you on big consulting 73 00:05:19,438 --> 00:05:20,378 projects. 74 00:05:21,358 --> 00:05:24,118 One of the ones that I did was about technology. 75 00:05:24,378 --> 00:05:25,758 Where is technology going? 76 00:05:25,758 --> 00:05:27,578 And AI came up. 77 00:05:27,578 --> 00:05:29,918 Now I've always been interested in technology. 78 00:05:30,778 --> 00:05:32,538 I've always found it fascinating. 79 00:05:33,474 --> 00:05:38,978 But AI just kind of popped up and I just thought, yeah, this is really something real. 80 00:05:38,978 --> 00:05:49,345 And I think the last thing I did while I was working for that consultancy in London was I did a chapter on AI or legal AI before I'd even heard the term. 81 00:05:49,885 --> 00:05:51,196 And I just went off on one. 82 00:05:51,196 --> 00:05:52,507 I was just letting myself go. 83 00:05:52,507 --> 00:06:02,764 And I was coming up with ideas like, what if two different law firms both had an AI and the different AIs were using game theory to negotiate a contract? 84 00:06:03,214 --> 00:06:05,994 And I was, know, I had no, I mean, I'd never read a Legal Tech magazine. 85 00:06:05,994 --> 00:06:09,334 I didn't even know that Legal Tech was a subject, right? 86 00:06:09,334 --> 00:06:16,374 I mean, I knew, I knew there was a company or two out there, you know, but I no, I didn't know what Legal Tech was. 87 00:06:16,374 --> 00:06:17,334 I hadn't got a clue. 88 00:06:17,334 --> 00:06:22,274 And this is interesting, I mean, I started in the legal world in 1999, right? 89 00:06:22,274 --> 00:06:26,934 And I first wrote about Legal Tech or Legal Tech related things in 2015. 90 00:06:27,494 --> 00:06:29,954 So what's that 16 years, yeah? 91 00:06:30,254 --> 00:06:33,534 In 16 years, Legal Tech never ever. 92 00:06:33,602 --> 00:06:43,665 got above a third or fourth tier subject amongst managing partners who were primarily the people I was talking to. 93 00:06:44,806 --> 00:06:48,187 Maybe practice heads, but it was almost always managing partners. 94 00:06:48,187 --> 00:06:51,269 So LegalTech did not come into it at all. 95 00:06:51,269 --> 00:06:55,330 I mean, was like the only time LegalTech came up with once or twice. 96 00:06:55,566 --> 00:06:58,726 when someone said, oh yeah, you were having to buy a new practice management system. 97 00:06:58,726 --> 00:06:59,466 It's a real pain. 98 00:06:59,466 --> 00:07:00,306 It's really expensive. 99 00:07:00,306 --> 00:07:01,966 And you know, it's coming off our bottom line. 100 00:07:01,966 --> 00:07:03,166 And I'm really upset about it. 101 00:07:03,166 --> 00:07:03,706 And that was it. 102 00:07:03,706 --> 00:07:05,446 It was just like, okay, well, yeah, whatever. 103 00:07:05,766 --> 00:07:06,266 Let's get on. 104 00:07:06,266 --> 00:07:07,746 Let's talk about more interesting stuff. 105 00:07:07,746 --> 00:07:10,046 Like who you're going to merge with. 106 00:07:11,566 --> 00:07:16,246 And then the AI changed everything really for me. 107 00:07:16,246 --> 00:07:17,146 I mean, I did that. 108 00:07:17,146 --> 00:07:23,094 I mean, after that, just by chance, I've been, you decided, I think I'd probably had enough of working. 109 00:07:23,094 --> 00:07:26,456 inside someone else's organization and decided to create my own business. 110 00:07:26,456 --> 00:07:28,677 So I launched my own consulting business. 111 00:07:29,398 --> 00:07:40,506 And while I was doing that, I saw something about a company called Raven, which was, which is now part of Ironman Asian has been absorbed and that brand name has disappeared. 112 00:07:40,506 --> 00:07:42,277 But it was an independent company in those days. 113 00:07:42,277 --> 00:07:48,192 And they were, they were, they kept on popping up in the news for the things that they were doing using AI. 114 00:07:48,192 --> 00:07:52,142 And I went to their office, which was in Shoreditch, which at that point was super cool. 115 00:07:52,142 --> 00:07:55,782 who was kind of like Brooklyn in his heyday, super, super cool. 116 00:07:57,162 --> 00:08:03,802 And they went into their office and they showed me how we could zip through a whole load of real estate documents. 117 00:08:03,802 --> 00:08:06,002 And it did it in just a few seconds. 118 00:08:06,002 --> 00:08:09,822 And it pulled out all the, obviously we didn't do an accuracy check or anything like that. 119 00:08:09,822 --> 00:08:12,422 I just assumed it was all perfect back in those days. 120 00:08:12,622 --> 00:08:13,962 And they just laid it all out. 121 00:08:13,962 --> 00:08:14,922 just went, bang, there you go. 122 00:08:14,922 --> 00:08:17,062 We pulled out all the key parts of the contract. 123 00:08:17,062 --> 00:08:18,002 This is this, this is this. 124 00:08:18,002 --> 00:08:19,142 And they're just like, wow. 125 00:08:19,362 --> 00:08:30,166 And it just hit me because like for years and years and years I've been working, you know, with law firms talking about profitability and, you know, know, revenue per theater, the 126 00:08:30,166 --> 00:08:40,691 leverage model, all of your things, profit margins, you know, I mean, people, people used to, you know, I mean, most of people, might see my consultant colleagues used to talk 127 00:08:40,691 --> 00:08:42,051 about timekeepers. 128 00:08:42,051 --> 00:08:43,852 You know, that was, that was the standard phrase. 129 00:08:43,852 --> 00:08:45,117 People would just talk about timekeepers. 130 00:08:45,117 --> 00:08:46,673 You didn't talk about lawyers. 131 00:08:47,153 --> 00:08:49,414 He talks about timekeepers because 132 00:08:49,454 --> 00:08:52,894 If you're a consultant to a law firm, there's a whole bunch of different people. 133 00:08:52,894 --> 00:09:02,874 I mean, in some cases, there are more people who are not lawyers than there are lawyers in some firms because there's a whole enormous hinterland of support, all kinds of things 134 00:09:02,874 --> 00:09:04,034 going on. 135 00:09:04,034 --> 00:09:05,654 Other times it's a smaller. 136 00:09:06,234 --> 00:09:14,994 But so we talked about timekeepers because that was the bit that was generating revenue, but it didn't mean that the other part of the business wasn't important. 137 00:09:16,114 --> 00:09:19,782 And now suddenly here is this thing that I've just looked at. 138 00:09:19,866 --> 00:09:23,419 And I'm just, you know, and it just, just, boom, it falls into place into my mind. 139 00:09:23,419 --> 00:09:26,151 I'm just like, this is going to change everything. 140 00:09:26,532 --> 00:09:39,112 Cause up to that point, the entire business model of law firms had, except, you know, as has been explored earlier by other people was, you e-discovery, but particularly from a UK 141 00:09:39,112 --> 00:09:45,367 perspective, which is more transactionally based, there's less, there's less e-discovery type work over here. 142 00:09:45,808 --> 00:09:47,006 It just like hit me. 143 00:09:47,006 --> 00:09:48,490 It's just like, wow. 144 00:09:48,526 --> 00:10:01,306 If AI takes off in the legal world, the entire basis of the legal industry that I've been living with and living within for all these years is gonna completely and utterly and 145 00:10:01,306 --> 00:10:02,946 absolutely transform. 146 00:10:03,486 --> 00:10:09,146 Now at that point, that was really early days, really early days, end of 2015, beginning of 2016. 147 00:10:09,206 --> 00:10:15,686 I didn't understand the subtleties at that point, but I quickly did. 148 00:10:15,958 --> 00:10:19,230 And I just thought, you this is, this is going to be so transformative. 149 00:10:19,230 --> 00:10:21,121 It's going to be so transformative. 150 00:10:21,601 --> 00:10:31,817 And I decided to start a blog, artificial lawyer, which originally was going to be called several other things, but I settled on artificial lawyer because I thought it was a good 151 00:10:31,817 --> 00:10:32,847 title. 152 00:10:33,168 --> 00:10:40,262 And it's funny because I didn't want to talk too much about myself at beginning, but the funny thing is it actually helps to connect to the bigger issues that I'd like to get into 153 00:10:40,262 --> 00:10:44,113 as we go along, which is it's all about the means of production. 154 00:10:44,234 --> 00:10:45,038 Right. 155 00:10:45,038 --> 00:10:46,558 It's all about productivity. 156 00:10:46,558 --> 00:10:54,518 It's all about moving from an artisanal manual labor, legal labor model to one that is industrialized. 157 00:10:54,538 --> 00:11:05,638 And I remember, I think it's probably after I started artificial lawyer, I remember changing my job title on LinkedIn to legal industrialist. 158 00:11:06,498 --> 00:11:14,358 Because I grew up in the Midlands, which was the home of the Industrial Revolution, or at least part of the Industrial Revolution. 159 00:11:15,478 --> 00:11:20,561 And the teacher, know, history classes, we were taught about the industrial revolution. 160 00:11:20,962 --> 00:11:24,254 We didn't do the Napoleonic Wars and stuff like that. 161 00:11:24,254 --> 00:11:33,951 We did the industrial revolution because it was almost so that were the history teachers were allowed to pick, you know, variety of options you could focus on, know, Napoleon and 162 00:11:33,951 --> 00:11:36,632 Wellington and all of that, or you could do something different. 163 00:11:36,873 --> 00:11:41,956 And our teachers, because we were in the Midlands and, you know, that's where it all started. 164 00:11:41,956 --> 00:11:44,856 We focused very, very much on the industrial revolution. 165 00:11:44,856 --> 00:11:55,205 So we learned about the spinning genny and the beginning of the steam engines and have railways developed, the growth of factories and iron smelting and all these things. 166 00:11:55,205 --> 00:12:00,299 And the whole way that industrialization changed the world. 167 00:12:01,040 --> 00:12:08,946 And so for me, it was kind of like buried in the back of my mind, know, been there for decades, literally. 168 00:12:08,987 --> 00:12:10,668 And it just kind of all just fell into place. 169 00:12:10,668 --> 00:12:12,730 And I was just like, yes, this is it. 170 00:12:12,802 --> 00:12:13,802 This is literally it. 171 00:12:13,802 --> 00:12:14,043 is it. 172 00:12:14,043 --> 00:12:19,055 This is the thing that changes the foundational basis of this industry. 173 00:12:19,055 --> 00:12:20,666 This is going to be extraordinary. 174 00:12:20,666 --> 00:12:23,327 Now that was 2016, right? 175 00:12:24,028 --> 00:12:27,450 Now people were at the time, some people were just like, yeah, this is awesome. 176 00:12:27,450 --> 00:12:31,312 And, know, I met a whole bunch of people who totally, totally got into it. 177 00:12:31,632 --> 00:12:37,336 You know, sometimes people were actually into the AI stuff, but they were not as gung-ho as I was. 178 00:12:37,336 --> 00:12:42,348 mean, you know, there was a whole bunch of companies pioneering back then, you know, the people like Kira. 179 00:12:42,466 --> 00:12:46,267 You know, there was Ebrevia, was Seal. 180 00:12:46,567 --> 00:12:53,309 There was a whole bunch of AI companies, legal AI companies, the very first way, using machine learning, natural language processing. 181 00:12:53,309 --> 00:13:01,571 Now, of course, we look back at what they could achieve and what they can do is still good, but it looks extremely niche, very narrow. 182 00:13:01,591 --> 00:13:10,134 And, you know, as time went by, I kind of realized that, you know, AI was as it was then, was limited. 183 00:13:10,786 --> 00:13:17,869 But I never really ever gave up hope that there would be this transformation. 184 00:13:18,689 --> 00:13:21,931 But what I didn't know was that generative AI was going to come around the corner. 185 00:13:21,931 --> 00:13:29,174 I mean, to me, it just kind of felt that the machine learning AI would just get better and better and better. 186 00:13:29,174 --> 00:13:33,636 And that somehow I couldn't quite figure out how it was going to get there. 187 00:13:33,676 --> 00:13:37,728 It was just going to spread out and really start to have a real impact at last. 188 00:13:38,126 --> 00:13:44,266 And that's actually, you know, that's one of the reasons why I got so into looking at the business model. 189 00:13:44,726 --> 00:13:49,146 Cause like, you know, I'd often think to myself, well, you know, why isn't it spreading? 190 00:13:49,146 --> 00:13:49,866 Why is it? 191 00:13:49,866 --> 00:13:52,406 it because, is it because the tech doesn't work? 192 00:13:52,406 --> 00:13:58,466 But I mean, by sort of 2017, 2018, the tech was pretty good. 193 00:13:58,466 --> 00:14:03,726 I mean, if you were doing a due diligence task and you'd been using a particular type of, you know, 194 00:14:03,726 --> 00:14:11,106 AI software for a long time, for several years, and they'd been training it up, and you'd been training it up, and you knew what you were doing, you were going to get very accurate 195 00:14:11,106 --> 00:14:11,986 results. 196 00:14:11,986 --> 00:14:15,026 It wasn't like the early days, by 2018, 2019. 197 00:14:15,206 --> 00:14:17,206 And yeah, it just wasn't really picking up. 198 00:14:17,206 --> 00:14:20,446 I used to go on to the... 199 00:14:20,446 --> 00:14:23,926 In the UK, you can see how much revenue certain companies make. 200 00:14:23,926 --> 00:14:26,106 You can see, because it's public. 201 00:14:26,286 --> 00:14:33,306 And also you could tell just by looking at how many people other companies had hired, you can have a pretty good guess. 202 00:14:33,390 --> 00:14:34,530 of what their revenue is. 203 00:14:34,530 --> 00:14:37,890 You if they've got 10 people, 30 people, 100 people, you know, you can have a guess. 204 00:14:37,890 --> 00:14:41,550 So they're making 5 million, 20, 30, right? 205 00:14:41,670 --> 00:14:46,030 And the revenues for the AI companies were so low, so incredibly low. 206 00:14:46,030 --> 00:14:48,710 And you're like, well, how is that possible? 207 00:14:48,710 --> 00:14:49,950 They've got a good product. 208 00:14:49,950 --> 00:14:52,370 A lot of people are still going nuts about it. 209 00:14:52,610 --> 00:14:55,410 There's so much talk about AI, even in 2018, 2019. 210 00:14:55,410 --> 00:15:00,550 And yet if you look at their revenues, that tells you a completely separate story, right? 211 00:15:00,550 --> 00:15:02,974 Because, you know, financial data really tells you a 212 00:15:02,974 --> 00:15:07,507 story as I'd learned back in the day when I was just doing consulting all the time. 213 00:15:09,134 --> 00:15:11,214 And I thought, what is going on? 214 00:15:11,214 --> 00:15:18,554 And that's when I started really getting into analyzing the billable hour and other things, know, law firm culture, the leverage model. 215 00:15:18,554 --> 00:15:21,774 And again, that brought back lot of stuff that I'd learned as a consultant. 216 00:15:21,774 --> 00:15:31,574 In those days, the idea was to try and encourage people to exploit the billable model and the leverage model as much as they possibly could to expand their profitability. 217 00:15:31,574 --> 00:15:37,114 And there's nothing wrong in that, you know, law firms be profitable to attract the best talents and do great work and so forth. 218 00:15:37,254 --> 00:15:37,920 But 219 00:15:37,920 --> 00:15:41,091 It was clear to me that there was a structural impediment. 220 00:15:41,632 --> 00:15:43,013 So I spent a lot of time on that. 221 00:15:43,013 --> 00:15:47,115 And then in 2022, along comes chat GBT. 222 00:15:47,595 --> 00:15:55,359 And that really changed everything because for the first time people were saying, this is the AI I've been waiting for. 223 00:15:55,680 --> 00:16:04,905 know, I mean, with the early machine learning stuff, I remember like people like sending me messages going, yeah, this is all very cool, but this is not AI or if this is AI, it's 224 00:16:04,905 --> 00:16:07,606 really not what I imagined. 225 00:16:07,726 --> 00:16:09,908 You know, it's very, very narrow what it can do. 226 00:16:09,908 --> 00:16:11,509 You know, it's very niche. 227 00:16:11,509 --> 00:16:15,211 The irony is, is that most of that machine learning software did get absorbed. 228 00:16:15,211 --> 00:16:19,634 You go to like a hundred different companies, you it got absorbed into e-discovery. 229 00:16:19,634 --> 00:16:22,596 It got absorbed into legal research. 230 00:16:22,596 --> 00:16:26,518 It got absorbed into a dozen different verticals in the legal tech world. 231 00:16:26,639 --> 00:16:29,091 So, you know, AI did have an impact. 232 00:16:29,091 --> 00:16:34,324 It did get normalized, but it didn't change the world. 233 00:16:34,324 --> 00:16:35,765 It was like round one. 234 00:16:35,765 --> 00:16:37,346 It was like MySpace. 235 00:16:37,654 --> 00:16:38,435 Right. 236 00:16:38,435 --> 00:16:48,822 You know, it was my space of legal AI, you know, and although very few people exited for 200 million, although some people eventually did, of course, because they added a bit of 237 00:16:48,822 --> 00:16:51,543 gen AI on the end and did extremely well for themselves. 238 00:16:52,324 --> 00:16:54,366 But yeah, I don't want to get too much into individual companies. 239 00:16:54,366 --> 00:17:03,222 But and so that's kind of like brings us up to speed and generative AI changed everything because and this is a funny thing as well, because there's like a whole bunch of people 240 00:17:03,222 --> 00:17:06,422 like, you know, from Richard Susskind. 241 00:17:06,422 --> 00:17:14,829 to other people who really pioneered away, like Noah Waysberg, Ned Gannon, Jim Wagner. 242 00:17:14,829 --> 00:17:18,571 I mean, there's a whole bunch of really pioneering people. 243 00:17:18,952 --> 00:17:20,934 There were the people who were actually building stuff. 244 00:17:20,934 --> 00:17:28,410 There were people who were constantly writing and being kind of like a cheerleader and trying to do stuff. 245 00:17:28,410 --> 00:17:33,824 And then there was a whole body of people who were really, really like, yes, this is it, this is it. 246 00:17:34,525 --> 00:17:36,576 But the tech just wasn't that. 247 00:17:37,006 --> 00:17:44,986 But this is the irony is that as soon as generative AI arrived, I found myself having exactly the same discussions I had back in 2016. 248 00:17:45,366 --> 00:17:49,426 So will AI get him away of training lawyers? 249 00:17:49,426 --> 00:17:54,986 So if a junior lawyer's day job is done with AI, how are they going to learn anything? 250 00:17:54,986 --> 00:17:57,446 How they going learn how to review a contract if you use AI? 251 00:17:57,646 --> 00:17:59,286 Is it the end of lawyers? 252 00:17:59,426 --> 00:18:06,706 I mean, literally, I know already that seems like dated, but back in the end of 22, beginning of 23, people were seriously debating that again. 253 00:18:06,882 --> 00:18:07,882 And it was so weird. 254 00:18:07,882 --> 00:18:11,663 It was like, it was almost as if we, was a complete deja vu. 255 00:18:11,764 --> 00:18:16,085 But the funny, was almost as well, it's kind of like, it's like the world had been prepped. 256 00:18:16,345 --> 00:18:20,726 Have you, don't know if you've ever, you ever, have you ever read the Dune books or watched the Dune movies? 257 00:18:22,086 --> 00:18:23,347 Oh, okay, well. 258 00:18:23,347 --> 00:18:27,428 All right, I won't go down, I won't go down that road. 259 00:18:27,428 --> 00:18:34,070 But basically the, there's this idea that the way is prepared. 260 00:18:34,070 --> 00:18:35,576 You're preparing the way. 261 00:18:35,576 --> 00:18:41,268 And that first and then when it really happens, it really happens because you prepared the way. 262 00:18:41,268 --> 00:18:53,203 You've put in place the metaphysical concepts, you've put in place some of the discussions, some of the books that analyze the big philosophical questions have already 263 00:18:53,203 --> 00:18:54,074 been written. 264 00:18:54,074 --> 00:19:00,086 So it's almost like when the thing actually hits for real, bang, it's like, ah, actually we know what to do with this stuff. 265 00:19:00,086 --> 00:19:03,357 We know what it's gonna, we know the impact, we know how to handle it. 266 00:19:03,497 --> 00:19:05,514 And of course, you know, 267 00:19:05,514 --> 00:19:06,974 It has spread like wildfire. 268 00:19:06,974 --> 00:19:08,335 I mean, it's extraordinary. 269 00:19:08,335 --> 00:19:10,046 No, it is relative, right? 270 00:19:10,046 --> 00:19:11,086 It is all relative. 271 00:19:11,086 --> 00:19:14,966 And, you know, I think sometimes people think that I'm a bit negative, but I'm not. 272 00:19:14,966 --> 00:19:19,780 I'm a short-term pessimist, long-term optimist, right? 273 00:19:19,920 --> 00:19:22,201 I'm completely realistic about the challenges. 274 00:19:22,201 --> 00:19:24,922 I mean, I've been covering this sector now for what? 275 00:19:27,363 --> 00:19:28,219 Yeah, exactly. 276 00:19:28,219 --> 00:19:28,984 I'm not very good at maths. 277 00:19:28,984 --> 00:19:33,266 I did do A-level maths, but basic maths is not my forte. 278 00:19:34,758 --> 00:19:38,661 This, you know, we're just at the beginning. 279 00:19:38,922 --> 00:19:40,824 Even after all this time, we're just at the beginning. 280 00:19:40,824 --> 00:19:42,085 We are just at the beginning. 281 00:19:42,085 --> 00:19:45,468 So, you know, like you, you mentioned, you might want to talk about agents. 282 00:19:45,468 --> 00:19:47,353 Agents are a bit ropey. 283 00:19:47,353 --> 00:19:48,020 They're a bit flaky. 284 00:19:48,020 --> 00:19:49,751 They're not accurate enough. 285 00:19:51,333 --> 00:19:54,516 People keep saying that 2025 is going to be the year of the agents. 286 00:19:54,616 --> 00:19:57,058 It's going to be the year of people playing with agents. 287 00:19:57,396 --> 00:20:10,005 Well, one thing struck me on what you said, and that was how when you were covering law firm strategy, the topic of technology would come up. 288 00:20:11,407 --> 00:20:14,929 it was, hey, let's talk about something more interesting. 289 00:20:15,030 --> 00:20:22,175 And historically, so I've been involved in the industry since 2008, tangentially even earlier than that. 290 00:20:22,956 --> 00:20:27,013 technology historically has not been a strategic 291 00:20:27,013 --> 00:20:29,003 imperative for law firms. 292 00:20:29,454 --> 00:20:33,465 there's many reasons why, uh, they operate on a cash basis. 293 00:20:34,505 --> 00:20:39,907 there is, uh, there is a lot of lateral movement within law firms. 294 00:20:39,907 --> 00:20:52,110 You know, we, we call big law firms here, sometimes hotels for lawyers, because there there's so much, it's so transient in nature and that makes capital projects difficult 295 00:20:52,110 --> 00:20:56,830 because, um, for, many reasons, especially because as 296 00:20:56,830 --> 00:21:06,812 the law firm leadership that rises through the ranks by seniority and oftentimes by being the best at lawyering as opposed to who's necessarily the best leader. 297 00:21:06,933 --> 00:21:14,366 And the fact that law firm ownership is exclusively lawyers in the U S except for 298 00:21:14,366 --> 00:21:16,686 that's an interesting point you see. 299 00:21:18,946 --> 00:21:22,466 People thought that the Legal Services Act in the UK was going to change everything. 300 00:21:22,466 --> 00:21:24,586 It didn't change anything, hardly anything. 301 00:21:24,586 --> 00:21:26,366 It was a complete damp script. 302 00:21:28,546 --> 00:21:38,606 As I said in an article in artificial law the other day, it doesn't matter who owns a group of law firm, lawyers in a particular sort of type of corporate entity, if they don't 303 00:21:38,606 --> 00:21:40,886 change how they work, nothing changes. 304 00:21:41,166 --> 00:21:42,882 And the fundamental... 305 00:21:42,882 --> 00:21:50,808 thing is, is that they did not change how they worked and they did not change how they worked because they didn't see an incentive to do so. 306 00:21:51,129 --> 00:21:54,141 There was no, there was no burning platform and there was no incentive. 307 00:21:54,141 --> 00:21:57,674 There was no lily pad, but it was better and more golden to jump onto. 308 00:21:57,674 --> 00:22:00,357 And there was no burning platform either. 309 00:22:00,357 --> 00:22:03,489 And it's the thing is, that, law firms can do incredible things. 310 00:22:03,489 --> 00:22:07,833 It's like going back to like when I was in the midst of the globalization of the legal market. 311 00:22:07,833 --> 00:22:12,118 I law firms, law firms, very, very conservative organizations on one level. 312 00:22:12,118 --> 00:22:14,259 When they want to move, man, they move. 313 00:22:14,960 --> 00:22:24,925 They, I mean, you know, these large English law firms and large US law firms just went around the world like a supernova just went boom in about two years. 314 00:22:24,925 --> 00:22:32,289 They went from like being 500 lawyers to like, you know, 3000 lawyers with like from three offices to like 25 offices. 315 00:22:33,410 --> 00:22:36,512 And that required a lot of investment as well. 316 00:22:36,512 --> 00:22:40,406 And they did that, they did that because there was a gigantic advantage. 317 00:22:40,406 --> 00:22:42,547 And there was also a gigantic threat, right? 318 00:22:42,547 --> 00:22:45,108 If they didn't globalize, they would lose their clients. 319 00:22:45,229 --> 00:22:48,610 And if they did globalize, they could charge way more. 320 00:22:48,711 --> 00:23:00,118 And also there would be far fewer of them because there's far fewer really top tier global law firms, certainly back 20 years ago there was, than there were just good firms in 321 00:23:00,118 --> 00:23:01,898 various each local market. 322 00:23:02,039 --> 00:23:04,160 Now with legal tech, we're not there yet. 323 00:23:04,160 --> 00:23:07,882 Legal tech is still seen as decoration, right? 324 00:23:07,882 --> 00:23:23,456 It's like an Ikea catalog, you flick through it, you go, yeah, like one of those skublish pillows and a flutu shelving unit and a you-do whatever, know, doofa, you know, made out 325 00:23:23,456 --> 00:23:24,927 of whatever. 326 00:23:25,647 --> 00:23:27,998 And it makes your life easier, makes your life nicer. 327 00:23:27,998 --> 00:23:30,809 As a lawyer, it's more comfortable, it's more pleasant. 328 00:23:30,809 --> 00:23:35,190 You shave away some of the inefficiency, but it never really gets into the billable work, right? 329 00:23:35,190 --> 00:23:36,430 We're still... 330 00:23:36,430 --> 00:23:38,210 We're still in that stage. 331 00:23:38,210 --> 00:23:44,549 haven't, but this is the things I do honestly believe that the train has left the platform, right? 332 00:23:44,549 --> 00:23:52,730 And that's why I wrote an article a few weeks ago, a couple of months ago, which some people either loved or hated, but I think it's absolutely true, which is, know, it's the 333 00:23:52,730 --> 00:23:55,790 end of, you know, the legal world as we know it. 334 00:23:55,790 --> 00:24:04,450 And I feel fine because it is, because finally, finally, finally, finally, you know, someone has lit the touch paper. 335 00:24:06,208 --> 00:24:08,961 the fundamental things that were needed, the right conditions. 336 00:24:08,961 --> 00:24:16,448 It's like revolutions, some famous revolution, not sure which one said it, that for a revolution to start, you need the right conditions. 337 00:24:16,548 --> 00:24:18,358 You can't just have a bunch of revolutionaries. 338 00:24:18,358 --> 00:24:22,354 You can't have as many revolutionaries as you like running up and down the streets going, we're a revolution. 339 00:24:22,354 --> 00:24:25,698 If you don't have the right conditions, nothing happens. 340 00:24:25,698 --> 00:24:28,770 You just get a of really annoying demonstrations. 341 00:24:28,770 --> 00:24:30,762 Nothing actually ever changes. 342 00:24:31,510 --> 00:24:32,920 And I think this is what's different. 343 00:24:32,920 --> 00:24:34,671 I think the conditions are there. 344 00:24:34,671 --> 00:24:37,232 Now, am I expecting rapid change? 345 00:24:37,232 --> 00:24:38,452 Absolutely not. 346 00:24:38,452 --> 00:24:40,753 mean, you know, once bitten twice shy. 347 00:24:40,753 --> 00:24:44,544 mean, my estimate, and I don't know where I got this from. 348 00:24:44,544 --> 00:24:47,135 It's kind of almost like an instinct, and I could be wrong. 349 00:24:47,195 --> 00:24:51,356 We'll get to where we need to be, at least at end of stage one in 2037. 350 00:24:51,356 --> 00:24:55,056 That's my guess, about a dozen years. 351 00:24:55,056 --> 00:24:55,898 Wow. 352 00:24:56,204 --> 00:24:58,275 Yeah, I don't think we'll get where we need. 353 00:24:58,275 --> 00:25:01,176 And when I say where we need to be, mean, real transformation. 354 00:25:01,176 --> 00:25:06,739 mean, in the same way that no one really uses landlines, we've all got mobile phones, we've all got smartphones. 355 00:25:06,739 --> 00:25:12,900 The same way that people don't go to lending libraries anymore, we all use some form of digital entry point. 356 00:25:13,042 --> 00:25:17,503 That's the kind of transformation I'm I'm talking real transformation of the legal market. 357 00:25:17,544 --> 00:25:22,786 It's going to take about a dozen years, but we're on the way. 358 00:25:23,187 --> 00:25:28,787 Yeah, well, and how far we are down that path is an interesting question. 359 00:25:28,887 --> 00:25:34,147 So I looked at the, I have it up here, the 2024 Iltta Technology Survey. 360 00:25:34,147 --> 00:25:43,867 And this question could have been asked better, but the question was, is your firm using generative AI tools for business tasks? 361 00:25:43,867 --> 00:25:50,607 For law firms, 700 attorneys and above, the answer was yes for 74 % of the firms. 362 00:25:50,920 --> 00:25:59,354 Then on another screen here, have Thompson Reuters reports that says just 10 % of law firms have a GEN.AI policy. 363 00:26:00,596 --> 00:26:08,429 Yeah, I don't think I mean, I don't most of these tables are all these surveys have limited value. 364 00:26:08,429 --> 00:26:10,890 Some of them better up and others some are really good. 365 00:26:11,271 --> 00:26:20,134 but you know, and also they're out of date by the time they've been written in many cases, you know, particularly when it comes to slight gene AI adoption. 366 00:26:20,134 --> 00:26:25,296 The reality is the vast majority of big law firms are using generative AI in some way. 367 00:26:25,296 --> 00:26:29,098 The reality though is that very few of them are actually using it. 368 00:26:29,098 --> 00:26:32,900 to alter how they're doing billable work or significant amounts of billable work. 369 00:26:32,900 --> 00:26:35,720 They're it up to the edges. 370 00:26:36,941 --> 00:26:39,622 One of the metaphors I use is the pizza. 371 00:26:39,622 --> 00:26:47,946 So imagine like a really, really chunky deep dish pizza with a beautiful cheesy crust, well, a crust without any cheese on it around the edge, right? 372 00:26:47,946 --> 00:26:50,667 The crust is being eaten away by generative AI. 373 00:26:50,667 --> 00:26:53,028 There's no more crust on this pizza. 374 00:26:53,028 --> 00:26:56,919 You know how everyone eats pizzas in a different way? 375 00:26:56,919 --> 00:26:58,630 Some people cut them into like, 376 00:26:58,994 --> 00:27:10,239 sort of like completely irregular sort of like parallelograms and other people just cut me into tiny slices and other people just fold them up and you know, it's kind of like that's 377 00:27:10,239 --> 00:27:20,644 kind of like where we are, but fundamentally the real center of the pizza where all the good stuff is, that's not really being touched very much. 378 00:27:20,644 --> 00:27:22,544 It really isn't, you know. 379 00:27:23,265 --> 00:27:26,506 But that's the thing is once it is, I mean, 380 00:27:27,254 --> 00:27:29,116 Law firms are not that complicated, right? 381 00:27:29,116 --> 00:27:32,649 They're actually one of the simplest businesses on the planet. 382 00:27:32,649 --> 00:27:35,201 As corporate organisms go, they're incredibly simple. 383 00:27:35,201 --> 00:27:40,925 They're mostly corporate, sorry, they're mostly partnerships rather than corporates. 384 00:27:41,306 --> 00:27:42,607 They're individuals. 385 00:27:42,607 --> 00:27:53,756 You have a small group of owners, you have equity partners, have a pyramidal base of leverage which goes down mostly via seniority, which is ranked to some degree on the 386 00:27:53,756 --> 00:27:55,758 complexity of the work that they can handle. 387 00:27:55,758 --> 00:27:57,418 and they get charged different amounts as well. 388 00:27:57,418 --> 00:27:59,978 It's a beautifully simplistic model, it's wonderful. 389 00:28:00,998 --> 00:28:05,138 To make as much money as possible, you just work as many hours as possible, that's all you have to do. 390 00:28:05,138 --> 00:28:10,038 Even if you get big write-offs, it doesn't matter, as long as you're busy, everything's cool, right? 391 00:28:10,038 --> 00:28:19,198 You're on the hour, the financial risk is someone else's, you have to pay for professional indemnity insurance, but beyond that, as long as you don't mess up, everyone's happy, 392 00:28:19,198 --> 00:28:19,358 right? 393 00:28:19,358 --> 00:28:20,478 We're all happy. 394 00:28:21,038 --> 00:28:25,292 And the clients, despite everything they say every single year, are... 395 00:28:25,292 --> 00:28:28,363 generally allowing the law firms to do whatever they want. 396 00:28:28,363 --> 00:28:37,345 And I think fundamentally, the reason why they do that is because A, they have come out of those law firms in the first place because that was their training ground. 397 00:28:37,345 --> 00:28:43,987 And secondly, because I think, and it's one of these things that people don't like to talk about, it's another elephant in the room, it's like the billable hour, it's another 398 00:28:43,987 --> 00:28:54,830 elephant in the room, which is I think a lot of corporates enjoy, enjoy is not the right word, but they actually, they feel comfortable spending a lot of money. 399 00:28:54,990 --> 00:29:02,070 on particular law firms in the same way that people want to go to certain ski resorts. 400 00:29:02,070 --> 00:29:04,570 Snow is snow, right? 401 00:29:04,570 --> 00:29:14,810 You don't have to go to some luxury eight-star resort in wherever, where they sprinkle caviar on the piece for you. 402 00:29:15,230 --> 00:29:16,050 Snow is snow. 403 00:29:16,050 --> 00:29:17,710 You can just ski. 404 00:29:17,710 --> 00:29:21,342 But let's face it, we live in the real world. 405 00:29:21,342 --> 00:29:32,085 society itself is pyramidal stratification there's all kinds of weird um you could you could argue illogical social behavior but then if you argue equally that one of the 406 00:29:32,085 --> 00:29:39,897 aspects of all pyramidal societies is you know sort of hierarchical control and hegemony and all these kind of things we can get into some really sort of deep philosophical stuff 407 00:29:39,897 --> 00:29:48,844 if you like this is one of the problems is is that you you look at a basic law firm business model and you just go this is completely irrational of course 408 00:29:48,844 --> 00:29:56,905 new technology will be absorbed, they will drop the billblower, they will move on to fix fees, they will increase their profits, they will send out a message to the clients that 409 00:29:56,905 --> 00:29:58,118 this is the way to go. 410 00:29:58,118 --> 00:30:02,720 It's so obvious, it's so logical, but it doesn't happen. 411 00:30:02,920 --> 00:30:08,642 So I've spent literally years getting into it and it is fascinating, it is fascinating. 412 00:30:08,943 --> 00:30:16,686 I think one of the fundamental problems of the legal industry, the commercial legal industry, is that the buyers are not the buyers. 413 00:30:17,174 --> 00:30:21,795 Right, the buyers for legal services, right, don't go anywhere near the law firms. 414 00:30:22,916 --> 00:30:29,978 Except the CEO of Goldman Sachs doesn't go wandering around law firms, and I'm sure he tries not to, right. 415 00:30:29,978 --> 00:30:34,059 It's the lawyers inside Goldman Sachs who engage the law firms outside. 416 00:30:34,059 --> 00:30:41,311 And they all came from those law firms in the first place and probably have relations, and they were probably intermarried and went to the same schools and play at the same tennis 417 00:30:41,311 --> 00:30:42,272 clubs and all this kind of stuff. 418 00:30:42,272 --> 00:30:44,372 And it's like a subtle stratification type thing. 419 00:30:44,792 --> 00:30:54,610 You know, that's an extreme example, that, you know, you might say that's, you know, microcosm plays out across all the entire planet and all markets, even down to the 420 00:30:54,610 --> 00:30:57,632 smallest country town, you know. 421 00:30:58,314 --> 00:31:00,576 So it's, you've got that. 422 00:31:00,576 --> 00:31:08,442 And then of course you've got this point about, you know, the legal market effectively places itself, controls itself. 423 00:31:08,442 --> 00:31:13,196 So, you know, the police force for the legal market, at least in many countries. 424 00:31:13,354 --> 00:31:26,145 is the bar, and the bar is run by lawyers and the effectively the, you you might say the executive branch of this sort of like control organisation of courts, the judges within 425 00:31:26,145 --> 00:31:28,306 it, their lawyers obviously. 426 00:31:28,306 --> 00:31:32,249 So, you know, it's kind of like they've got all the angles covered. 427 00:31:32,370 --> 00:31:40,686 But this thing is like, and I think, you know, and I think a lot of people have argued understandably for long time, but if we can get rid of that, then the whole legal market 428 00:31:40,686 --> 00:31:41,077 will change. 429 00:31:41,077 --> 00:31:43,094 But we did this in the UK years ago. 430 00:31:43,094 --> 00:31:44,815 It changed absolutely nothing. 431 00:31:44,915 --> 00:31:48,777 I mean, any, mean, I could, if I had enough money, I could buy a law firm, right? 432 00:31:48,777 --> 00:31:57,252 I could walk around the city of London with my checkbook and go, right, you know, I'm sure the very large ones would tell me to bugger off, but maybe a very small one would say, 433 00:31:57,252 --> 00:31:57,812 okay, fair enough. 434 00:31:57,812 --> 00:31:59,723 If you've got enough money, yeah, you can have us. 435 00:31:59,723 --> 00:32:00,314 Right? 436 00:32:00,314 --> 00:32:02,534 I mean, like I could list them on the stock market. 437 00:32:02,534 --> 00:32:04,135 I mean, after that, could say, there's enough of that. 438 00:32:04,135 --> 00:32:06,326 I'll sell them to a private equity fund. 439 00:32:06,467 --> 00:32:13,073 It would make absolutely no difference at all to the legal market unless they changed how they worked. 440 00:32:13,073 --> 00:32:13,923 Right. 441 00:32:14,224 --> 00:32:14,544 Yeah. 442 00:32:14,544 --> 00:32:18,286 Well, that's a chicken or the egg concept in my mind. 443 00:32:18,286 --> 00:32:31,394 think that, so we are, this transformation of ownership rules is underway here in the U S and you've heard about the big four stepping in KPMG specifically. 444 00:32:31,394 --> 00:32:32,945 We've heard this before. 445 00:32:33,052 --> 00:32:34,572 I think it'll have no effect at all. 446 00:32:34,572 --> 00:32:37,408 I think it will have almost zero impact personally. 447 00:32:37,408 --> 00:32:39,550 so, and a lot of people agree with you. 448 00:32:39,550 --> 00:32:40,530 I'm on the other side. 449 00:32:40,530 --> 00:32:42,541 I'm on the other side of that this time. 450 00:32:42,541 --> 00:32:50,546 Um, I know we've seen there, you know, there's been this, um, industrialization of legal services in the past, right? 451 00:32:50,546 --> 00:33:01,949 With ALSPs and then, you know, the big four consultants coming in previously, E and Y standing up a fairly big, uh, organization around delivering legal work. 452 00:33:01,949 --> 00:33:14,840 The reason I think it's differently, different this time is just because there is a mechanism where it's going to put pressure on the billable hour in a way where I think 453 00:33:14,840 --> 00:33:21,596 outsiders coming in with different skill sets and evaluating the problem domain within legal. 454 00:33:21,596 --> 00:33:29,723 know, historically legal has been such a bespoke artisan industry, as you point out, and now we're in a place where that is under pressure. 455 00:33:29,795 --> 00:33:41,218 And you're going, if this does, if this movement does get traction where, you know, again, the big four will be the first entrance into the space, but public, uh, private equity 456 00:33:41,218 --> 00:33:43,139 could be not far behind. 457 00:33:43,139 --> 00:33:53,652 Um, there will be management structures and boards of directors in place that are no longer lawyers that are going to re look at these problems differently and how to solve 458 00:33:53,652 --> 00:33:57,843 them and how to, how to build innovation, you know, innovation. 459 00:33:57,862 --> 00:34:00,153 Legal innovation is an oxymoron. 460 00:34:00,153 --> 00:34:03,635 It's like saying jumbo shrimp or military intelligence. 461 00:34:03,635 --> 00:34:07,176 There's very little innovation that happens in legal. 462 00:34:07,176 --> 00:34:08,417 And I say that with love. 463 00:34:08,417 --> 00:34:11,538 These are my customers, the legal innovation teams. 464 00:34:11,898 --> 00:34:21,996 And I'm not saying there's not innovative work happening, but the fundamental structural elements of law firms hasn't changed at all. 465 00:34:21,996 --> 00:34:24,713 Well, that part I would definitely agree with, 466 00:34:24,721 --> 00:34:27,272 Yeah, well, and that's what innovation is. 467 00:34:27,452 --> 00:34:34,796 you know, Chief Innovation Officers are really mostly focused on improvement, not innovation. 468 00:34:34,796 --> 00:34:37,717 They're incremental improvement officers. 469 00:34:37,997 --> 00:34:40,378 And it's not for a lack of skill. 470 00:34:40,378 --> 00:34:46,661 know highly skilled, innovative thinkers in these roles, and it's not for lack of trying. 471 00:34:46,661 --> 00:34:51,343 It's the culture, it's the industry, it's the ownership model. 472 00:34:51,604 --> 00:35:01,656 All of these things have been so well entrenched and you know, the pricing model, the client engagement model, the internal firm compensation model, these things are so firmly 473 00:35:01,656 --> 00:35:09,978 entrenched and there has to be movement within those elements in order for, in order for there to be real change. 474 00:35:09,978 --> 00:35:12,649 there's, there just hasn't been an appetite for that. 475 00:35:12,649 --> 00:35:21,457 So I'm, I'm, I'm, I'm less skeptical than you on this go round, but ultimately time will tell. 476 00:35:21,457 --> 00:35:22,264 Right? 477 00:35:22,702 --> 00:35:24,122 Yeah, well, I hope you're right. 478 00:35:24,122 --> 00:35:25,442 hope you're right. 479 00:35:25,962 --> 00:35:35,422 The thing is, I mean, in a funny way, it's like, I'm actually more optimistic because I'm like, my big picture view is like really, really transformative. 480 00:35:36,042 --> 00:35:41,202 I mean, it's kind of, I mean, for me, it's like an exponential curve. 481 00:35:41,202 --> 00:35:43,022 It's just like what's happening at the moment. 482 00:35:43,022 --> 00:35:46,482 We're really at the bottom of it and it looks so slow and so small. 483 00:35:46,522 --> 00:35:51,662 But when we really start to get up, you know, into the higher parts of that curve, 484 00:35:51,662 --> 00:35:53,082 It's really radical. 485 00:35:53,082 --> 00:35:56,802 But like I say, we're looking at a decade plus to get to that radical bit. 486 00:35:56,802 --> 00:36:00,322 I mean, this was simply doing the groundwork. 487 00:36:00,322 --> 00:36:02,202 We're preparing the way. 488 00:36:03,222 --> 00:36:06,792 The irony is that there were people even before 2015. 489 00:36:06,792 --> 00:36:12,982 I mean, think, know, because eBrevier can trace its roots back to I think about 2012 or something. 490 00:36:13,322 --> 00:36:21,422 I mean, there are people who've been working in this field using these ideas and coming up against these problems, which we're knocking around. 491 00:36:21,902 --> 00:36:29,602 for like 20 years, well, 20 years, 13 years. 492 00:36:30,802 --> 00:36:32,282 But we will get there. 493 00:36:32,282 --> 00:36:33,922 I mean, think this is the thing, it? 494 00:36:33,922 --> 00:36:37,942 I mean, the age thing is a really interesting one, isn't it? 495 00:36:38,722 --> 00:36:46,402 Because if you were 20 and you were at a law firm and someone told you, like in 12 years, the industry really is going to change. 496 00:36:46,402 --> 00:36:49,962 I know we all keep talking about whether that change will change, but it really will change. 497 00:36:50,190 --> 00:36:56,170 You'd like, well, if I start this law firm and I become a partner, I'll probably just be really getting into high gear. 498 00:36:56,170 --> 00:36:58,890 I'll just be really, really motoring at that point. 499 00:36:58,890 --> 00:37:01,710 And I'll be perhaps even an owner if I'm lucky. 500 00:37:01,710 --> 00:37:03,970 It might be an equity partner if I was really lucky. 501 00:37:04,390 --> 00:37:06,450 And wow, yeah. 502 00:37:06,450 --> 00:37:10,350 So it's going to be very, very, very interesting for that generation. 503 00:37:10,450 --> 00:37:16,524 Whereas if you're an equity partner now and you're like 45 heading towards 50, you know. 504 00:37:16,524 --> 00:37:17,765 These are smart people, right? 505 00:37:17,765 --> 00:37:29,975 They can see how much change has been so far and they'll just like, yeah, I'm going to see out the rest of my career and into retirement before anything really, really looks like a 506 00:37:29,975 --> 00:37:31,176 burning platform. 507 00:37:31,495 --> 00:37:31,975 Yeah. 508 00:37:31,975 --> 00:37:35,878 And you know, the, what's interesting is I did a little research on the billable hour. 509 00:37:35,878 --> 00:37:40,542 Um, so it's really only firmly been entrenched for about 50 years. 510 00:37:40,542 --> 00:37:42,142 It was, it was formed. 511 00:37:42,142 --> 00:37:51,782 And it was Hale and Doar, it's funny that you sent me that because I actually found that out myself, I was doing some research and I actually contacted Hale and Doar twice to see 512 00:37:51,782 --> 00:37:54,662 if they wanted to talk about it and they never replied to me. 513 00:37:54,662 --> 00:38:01,362 So I don't know if you've got any good buddies at Hale and Doar, if they would like to talk about the birth of the Bill of the Hour. 514 00:38:01,362 --> 00:38:07,330 But originally we started as an access to justice move because I thought that... 515 00:38:07,330 --> 00:38:10,152 by having clarity over what something costs. 516 00:38:10,152 --> 00:38:12,534 Because obviously in the old days, people would literally just look at you. 517 00:38:12,534 --> 00:38:16,987 They'd look at your shoes, look at your pocket watch and go, where do you live? 518 00:38:16,987 --> 00:38:18,508 Hmm, okay, right. 519 00:38:18,508 --> 00:38:20,130 So it's gonna be this much. 520 00:38:20,130 --> 00:38:23,722 And they would literally charge, it would just be like, what's this guy worth? 521 00:38:23,722 --> 00:38:24,492 Right? 522 00:38:24,492 --> 00:38:26,743 And would just charge whatever they felt. 523 00:38:27,504 --> 00:38:31,487 And then the idea was is that the billable hour would give transparency. 524 00:38:31,487 --> 00:38:36,142 So people who didn't have as much wealth would get a fair shake of the stick. 525 00:38:36,142 --> 00:38:38,403 And then of course, that was generally ignored. 526 00:38:38,404 --> 00:38:46,541 then with economic growth, and I think particularly the end of 70s and certainly with the 80s, there's this explosion of economic growth across the West, globalization, 527 00:38:46,541 --> 00:38:55,517 computerization, massive rising productivity, know, that kind of Reagan era, know, Thatcher era, globalization of capitalism, global capitalism in general. 528 00:38:56,639 --> 00:39:00,832 It created this huge surge of work for commercial lawyers. 529 00:39:01,454 --> 00:39:04,014 And there's a big expansion of in-house legal teams. 530 00:39:04,014 --> 00:39:09,054 was a real change, a real sea change in global capitalism, really, really altered. 531 00:39:09,954 --> 00:39:15,354 And people started to realize that leverage wasn't just question of having bodies to do the work. 532 00:39:15,354 --> 00:39:21,614 That if you were clever about how you managed it, partner profits could gigantically increase. 533 00:39:22,114 --> 00:39:26,094 mean, that's one of the things, if you go back, if you go back like 40 years, you look at what partners made. 534 00:39:26,094 --> 00:39:29,506 mean, they were wealthy compared to the average person in America or Britain. 535 00:39:29,506 --> 00:39:33,248 But compared to now, they were making a fraction of what they make now. 536 00:39:33,248 --> 00:39:40,152 mean, now, like, and this is very, very much due to leverage in the middle of the hour. 537 00:39:40,752 --> 00:39:52,379 You could not, mean, with that, then this is the thing I keep trying to try to introduce into the into the discussion is that you can actually make more money as an owner using 538 00:39:52,379 --> 00:39:55,200 technology and fixed fees. 539 00:39:56,541 --> 00:39:58,458 people, people just don't want to go down that road. 540 00:39:58,458 --> 00:40:01,680 well, and what people, I don't think it's all law firms. 541 00:40:01,680 --> 00:40:08,645 think the buyers of legal services are also most comfortable with this model that's been firmly entrenched for 50 years. 542 00:40:08,645 --> 00:40:14,629 If you talk to inside teams, inside legal teams, you know, they kind of want the best of both worlds. 543 00:40:14,629 --> 00:40:19,072 They, uh, kind of a not to exceeds model where, Hey, I pay you. 544 00:40:19,072 --> 00:40:24,275 I don't know that there's enough trust in between law firm and 545 00:40:24,525 --> 00:40:36,500 and legal buyer for legal buyer to feel comfortable that whatever that price is set is going to ultimately be fair. 546 00:40:36,500 --> 00:40:42,702 And I think it's just been a factor of buyer side hesitation. 547 00:40:42,923 --> 00:40:47,425 And on the law firm side, a lot of law firms have been flying blind. 548 00:40:47,425 --> 00:40:53,467 Their data has historically sucked around this and the ability to 549 00:40:53,502 --> 00:40:54,743 build pricing models. 550 00:40:54,743 --> 00:40:55,384 It's gotten better. 551 00:40:55,384 --> 00:41:04,121 And I'd say the last five years, like pre-COVID, I started to see like real data work, data rationalization work happening within law firms. 552 00:41:04,121 --> 00:41:06,534 And it's accelerated since then. 553 00:41:06,534 --> 00:41:07,755 definitely. 554 00:41:07,755 --> 00:41:10,836 If you look at all the billing software out there now, it's so advanced. 555 00:41:10,836 --> 00:41:17,859 mean, you know, and then you've got people like organizations like Sally, which are really helping develop taxonomies and so forth. 556 00:41:17,994 --> 00:41:20,700 I mean, there's no excuses now for the large firms. 557 00:41:20,700 --> 00:41:21,390 have the data. 558 00:41:21,390 --> 00:41:22,210 have the data. 559 00:41:22,210 --> 00:41:24,802 The funny thing is the write-offs are gigantic. 560 00:41:25,562 --> 00:41:31,385 you know, I won't mention any names, but I can think of a firm that is literally writing off hundreds of millions a year. 561 00:41:31,385 --> 00:41:34,956 mean, literally hundreds of millions of dollars. 562 00:41:35,438 --> 00:41:37,098 total write-offs, right? 563 00:41:37,098 --> 00:41:40,318 Now that means that the whole, it becomes really bizarre. 564 00:41:40,318 --> 00:41:44,278 Like I was talking to someone once and I was thinking like, you know, where's the value? 565 00:41:44,278 --> 00:41:47,378 And they were saying, well, the value is in the senior partners, the experience. 566 00:41:47,378 --> 00:41:48,818 I said, okay, so that's what the client is paying. 567 00:41:48,818 --> 00:41:52,098 So let's say you do a deal, let's say it's a relatively small deal. 568 00:41:52,098 --> 00:41:53,598 It's a million dollars, right? 569 00:41:53,598 --> 00:41:54,878 Big law deal, right? 570 00:41:54,878 --> 00:41:56,458 M &A deal, million dollars. 571 00:41:56,458 --> 00:41:57,938 And I said, well, so where's the value then? 572 00:41:57,938 --> 00:42:04,750 I said, well, know, the vast majority of that is the expertise of the firm, the historical, you know, IP of these. 573 00:42:04,750 --> 00:42:10,030 individuals, you know, their skills, their experience, they've been through a hundred major deals, they've seen everything. 574 00:42:10,030 --> 00:42:11,230 And I said, okay, brilliant. 575 00:42:11,230 --> 00:42:11,870 That's perfect. 576 00:42:11,870 --> 00:42:12,570 Wonderful. 577 00:42:12,570 --> 00:42:21,070 So why is it that 85 % of the bill is non equity partner and below leverage billing? 578 00:42:21,490 --> 00:42:32,850 So effectively you're getting people to do a ton of what you might call manual labor to pad out a bill, which is then sent to the client who then knocks off a third and says, 579 00:42:32,850 --> 00:42:34,242 because, I can. 580 00:42:34,242 --> 00:42:37,443 they've just put up their rates by a third over the last couple of years anyway. 581 00:42:37,443 --> 00:42:40,504 So it's an absolute muddle. 582 00:42:41,165 --> 00:42:46,767 The idea of the billable hour is that it gives some kind of empirical clarity to what's going on. 583 00:42:46,767 --> 00:42:51,379 It's actually the whole thing really, it's an illusion. 584 00:42:51,379 --> 00:42:56,191 The idea that there's any logic in any of it doesn't make any sense, right? 585 00:42:56,191 --> 00:43:02,684 So you've got a junior lawyer who has no technology other than word and email. 586 00:43:03,342 --> 00:43:06,582 plodding their way through a due diligence exercise, right? 587 00:43:06,582 --> 00:43:11,782 And the lawyer next to them is using the best AI of all automation and all kinds of stuff. 588 00:43:11,802 --> 00:43:17,562 And they've got a fantastic understanding of data and metadata and they're absolutely on it, right? 589 00:43:17,942 --> 00:43:23,122 They're zipping through the documents like, you know, one every five minutes and a really high accuracy, right? 590 00:43:23,122 --> 00:43:29,962 Probably accuracy at the same level as you have a junior lawyer, because, you know, the accuracy to some degree is based on their own ability to spot errors and that's based on 591 00:43:29,962 --> 00:43:31,122 experience, right? 592 00:43:31,122 --> 00:43:32,750 So like one guy, 593 00:43:32,750 --> 00:43:36,990 He's doing a document every five minutes and everyone's doing a document every hour. 594 00:43:37,490 --> 00:43:38,250 Right. 595 00:43:38,250 --> 00:43:42,170 Now, if we were not in the legal world, we were in a completely different industry. 596 00:43:42,170 --> 00:43:45,610 And I said to you, which of these is the more profitable? 597 00:43:45,610 --> 00:43:48,630 You'd be like, well, obviously the guy who's going at five minutes, this guy's a genius. 598 00:43:48,630 --> 00:43:53,390 mean, you know, want loads of these and like, wrong. 599 00:43:53,890 --> 00:43:56,650 You know, this guy is a liability. 600 00:43:56,650 --> 00:43:59,010 Get rid of him, for God's sake. 601 00:43:59,840 --> 00:44:00,813 It's madness. 602 00:44:00,813 --> 00:44:01,464 It's madness. 603 00:44:01,464 --> 00:44:04,465 The only person who sees this, it's completely insane. 604 00:44:04,465 --> 00:44:04,816 Yeah. 605 00:44:04,816 --> 00:44:07,738 I mean, the billable hour does reward inefficiency. 606 00:44:07,738 --> 00:44:09,542 And I think that's. 607 00:44:09,642 --> 00:44:12,262 don't think they're doing it deliberately so much. 608 00:44:13,302 --> 00:44:18,151 I think for me it prevents efficiency. 609 00:44:18,151 --> 00:44:20,212 Yeah, right. 610 00:44:20,573 --> 00:44:22,094 And that's, that's very true. 611 00:44:22,094 --> 00:44:30,912 Talking about the tools for a minute, cause I had a visual in my mind when, when you laid out that metaphor and I'm going to use Harvey as an example, but the question isn't about 612 00:44:30,912 --> 00:44:31,373 Harvey. 613 00:44:31,373 --> 00:44:34,706 It's just, they're kind of a first mover in the space. 614 00:44:34,706 --> 00:44:37,288 Um, you talked about my space. 615 00:44:37,288 --> 00:44:39,891 First movers aren't always the long-term winners. 616 00:44:39,891 --> 00:44:45,448 I mean, look in the software world, you know, um, Netscape Navigator, um, 617 00:44:45,448 --> 00:44:49,830 You know, Lotus one, two, three, Harvard graphics, Dbase. 618 00:44:50,211 --> 00:44:52,492 there's a million examples, MySpace. 619 00:44:52,492 --> 00:44:56,044 The first mover usually isn't the long-term winner. 620 00:44:56,044 --> 00:45:06,340 And what I'm, what I'm thinking about when I see these valuations in this massive tidal wave of investment that's making its way into legal tech now, which I think is a good 621 00:45:06,340 --> 00:45:12,593 thing overall, but are these kind of early platforms going to be the long-term winners? 622 00:45:12,593 --> 00:45:23,828 Because if you look at the amount being invested and what needs to happen in order to hit evaluation that the investors are going to walk away happy about, they kind of have to be. 623 00:45:24,709 --> 00:45:28,162 What are your thoughts on that dynamic? 624 00:45:28,162 --> 00:45:34,745 want to get into any particular company because it's kind of unfair to do something that's going to be aired publicly. 625 00:45:34,745 --> 00:45:47,650 I mean, I mean, just generally, if you look at startup revenues, right, they're relatively small in the legal tech world and they stay small, they grow relatively slowly. 626 00:45:49,972 --> 00:45:56,094 Some companies that were given a lot of money very quickly ended up in trouble and got bought. 627 00:45:56,334 --> 00:46:01,434 And the founders exited quite nicely, but you know, walked away with a good amount of money. 628 00:46:01,634 --> 00:46:13,114 But the classic, you might say, cliche, the Palo Alto cliche of, you know, a couple of people in a garage, if they create a company, money just starts getting sucked towards 629 00:46:13,114 --> 00:46:15,414 them, you know, like a black hole. 630 00:46:15,734 --> 00:46:19,334 They grow like crazy, bang, know, IPO, whatever, in about three or four years. 631 00:46:19,334 --> 00:46:21,854 I mean, that is just so unlike legal tech. 632 00:46:21,854 --> 00:46:25,614 The vast majority of legal tech companies grow from, you know, 633 00:46:25,614 --> 00:46:29,394 their seed very slowly, really slowly. 634 00:46:29,394 --> 00:46:34,854 mean, you know, mean, I companies, good companies doing good work, making decent revenue. 635 00:46:35,274 --> 00:46:38,114 Many, many of them are way below $10 million. 636 00:46:38,754 --> 00:46:39,414 Right? 637 00:46:39,414 --> 00:46:42,114 that's not names that you will have heard of, right? 638 00:46:42,114 --> 00:46:47,594 I mean, there are, are, you know, there are household names, at least in the legal tech world. 639 00:46:47,594 --> 00:46:50,154 You know, if I said X names here, you'd be like, yeah, yeah, yeah, of course. 640 00:46:50,154 --> 00:46:52,034 Really successful, great work. 641 00:46:52,034 --> 00:46:53,990 Brilliant, brilliant, You know. 642 00:46:54,074 --> 00:47:00,057 And you realize that they've been going for like eight years and their revenue is about 20 million. 643 00:47:00,057 --> 00:47:10,913 And when you look at their properties and you look at their marketing spend and you look at their staff costs and then you look at the fact that actually because they're super, 644 00:47:10,913 --> 00:47:20,388 super, you know, leveraged up with investment and maybe some debt as well now, they're actually not, if you actually look at the balance sheet for real, A, the revenue is 645 00:47:20,388 --> 00:47:23,714 relatively small for a company that's meant to be in the tech sector. 646 00:47:23,714 --> 00:47:26,055 that's been going for eight years, right? 647 00:47:26,495 --> 00:47:34,099 And secondly, if you actually look, if you drill down into the real numbers, that balance sheet is pretty weak, right? 648 00:47:34,099 --> 00:47:38,921 But then they get bought by a much, much larger company who then, you know, does what they do. 649 00:47:38,921 --> 00:47:45,884 that is actually more sort of slow, relatively slow growth is actually more than normal. 650 00:47:45,884 --> 00:47:50,846 So this idea you get like a hundred million or more and you grow like wildfire. 651 00:47:51,490 --> 00:47:54,002 That's almost unheard of in the legal tech world. 652 00:47:54,002 --> 00:47:55,295 It's really rare. 653 00:47:55,410 --> 00:47:56,300 It really is. 654 00:47:56,300 --> 00:48:07,563 And you know, the legal tech world is also, I have a blog post half written, maybe not even half, but it's called legal tech is small town USA. 655 00:48:07,743 --> 00:48:12,784 And I use a metaphor of, know, the legal tech community is very tight knit. 656 00:48:12,784 --> 00:48:15,165 Um, I've been in it for 16 years. 657 00:48:15,165 --> 00:48:17,856 It took me five years before anybody took me seriously. 658 00:48:17,856 --> 00:48:21,527 Um, I don't, some, some may not still take me seriously. 659 00:48:21,527 --> 00:48:23,547 I don't know, but it took a while. 660 00:48:23,547 --> 00:48:27,900 And it took a lot of relationship building and everybody knows each other. 661 00:48:28,911 --> 00:48:40,831 and for someone to come in from the outside and grow and really, you know, uh, several of the, I'm not talking about anybody in particular here, but several of these legal tech AI 662 00:48:40,831 --> 00:48:48,677 startups have, have kind of grown so fast, so quick, at least in terms of balance sheet capital deployed. 663 00:48:48,680 --> 00:48:56,193 They haven't really had a chance to build these relationships and there's been a little bit of skepticism, I think from the legal tech community about, is this, is this going to 664 00:48:56,193 --> 00:48:57,795 be a long-term winner here? 665 00:48:57,795 --> 00:49:01,026 Is there what's what's the deal with their tech? 666 00:49:01,026 --> 00:49:12,246 I think the ones from what I've seen, the ones that are planning or effectively, you know, as you alluded to, like needing really, really massive revenue growth are looking at 667 00:49:12,246 --> 00:49:12,906 things differently. 668 00:49:12,906 --> 00:49:21,966 mean, a lot of the household names in the legal tech world, aside from people like Cleo and other ones like that, generally have focused on big law, right? 669 00:49:23,246 --> 00:49:29,038 You know, you can make a pretty good living serving 40 or 50 very large law firms. 670 00:49:29,038 --> 00:49:31,618 Right, you've got a couple of thousand lawyers each. 671 00:49:32,218 --> 00:49:39,458 You're selling your licenses, I don't know, let's say the bottom is $20,000 and it goes up to whatever, right? 672 00:49:39,458 --> 00:49:41,138 You've got 40 or 50 of those. 673 00:49:41,138 --> 00:49:43,158 That's a nice living, right? 674 00:49:43,438 --> 00:49:46,458 But you're never gonna get into the hundreds of millions of revenue just doing that. 675 00:49:46,458 --> 00:49:50,178 You've really got to open, you've got to open the market right up. 676 00:49:50,418 --> 00:49:52,078 So you've got to do small law. 677 00:49:52,078 --> 00:49:54,298 You've got to get into every small law firm. 678 00:49:54,298 --> 00:49:55,738 You've got to get into mid-sized law firms. 679 00:49:55,738 --> 00:49:57,110 You've got to go in-house. 680 00:49:57,110 --> 00:49:59,721 You've got to get into government even perhaps. 681 00:49:59,721 --> 00:50:01,492 You've got to get into everything. 682 00:50:01,492 --> 00:50:04,014 You've got to be like Thomson Reuters or Lexis, right? 683 00:50:04,014 --> 00:50:10,998 You've got to be indispensable to literally hundreds of thousands of lawyers and different organizations. 684 00:50:10,998 --> 00:50:11,678 And they can do that. 685 00:50:11,678 --> 00:50:15,130 Most companies can do that, of course, because they were very smart, very early on. 686 00:50:15,130 --> 00:50:20,863 And I don't know if they did it because they knew what was going to happen or they were just very lucky that they got the data. 687 00:50:20,863 --> 00:50:24,407 They built those legal databases, great legal databases. 688 00:50:24,407 --> 00:50:26,516 I all the tech cameras layered on top. 689 00:50:26,604 --> 00:50:26,784 Right. 690 00:50:26,784 --> 00:50:29,255 But that put me in a fantastic position, right. 691 00:50:29,255 --> 00:50:34,178 The scaling because every lawyer who can afford it would like to get their hands on that data. 692 00:50:34,178 --> 00:50:34,998 Right. 693 00:50:35,899 --> 00:50:37,240 Like the licensing. 694 00:50:37,240 --> 00:50:41,202 mean, I don't know how many customers Thompson Reuters has on its legal side. 695 00:50:41,562 --> 00:50:47,806 You know, in total, if you add every single individual, yeah, every single individual, it must be gigantic. 696 00:50:47,806 --> 00:50:48,266 Right. 697 00:50:48,266 --> 00:50:49,247 So they can do that. 698 00:50:49,247 --> 00:50:50,487 They can do that. 699 00:50:50,928 --> 00:50:55,500 How many other companies are going to gain that kind of leverage? 700 00:50:56,150 --> 00:50:57,154 across the 701 00:50:57,248 --> 00:50:58,168 right. 702 00:50:59,269 --> 00:51:11,240 It's very hard and it takes time and it's not a, you know, the VC model is eight to 10 years on the long side of, you know, right? 703 00:51:11,240 --> 00:51:13,422 Yeah, it's, it's been pushing longer. 704 00:51:13,422 --> 00:51:23,921 It used to be even shorter, but you know, VC investors, these limited partners expect to return, um, a significant return cause it's a high risk and, uh, you know, high risk 705 00:51:23,921 --> 00:51:24,861 investment. 706 00:51:24,861 --> 00:51:33,233 fairly quickly and I'm looking at these companies and wondering how the TAM and legal is small, total addressable market. 707 00:51:33,233 --> 00:51:43,934 But I know you said, but this is the thing someone says to as I was in Palo Alto a couple of years ago off the back of the our Legal Innovators Conference in San Francisco. 708 00:51:44,214 --> 00:51:51,114 And someone I was talking about, you know, joking, I said, yeah, hey, I should should create my own legal tech company, you know, spent years in this field. 709 00:51:51,714 --> 00:51:55,774 And they said, yeah, but you'd you'd never make it through the VC round. 710 00:51:55,774 --> 00:51:57,054 And said, well, how do you mean? 711 00:51:57,054 --> 00:52:01,670 Because you like to tell things as they are, at least how you think they are. 712 00:52:01,678 --> 00:52:03,878 And that's not what a lot of VCs want. 713 00:52:03,878 --> 00:52:12,938 VCs want you to paint them a picture, tell them a story, because they're not going to be around to pick up the end of that story. 714 00:52:12,938 --> 00:52:19,198 They're going to drop off about halfway through, and someone else is going to pick it up, a private equity fund or a much larger corporate or whoever. 715 00:52:19,198 --> 00:52:20,678 It's going to be a trade buy. 716 00:52:21,378 --> 00:52:24,238 And so that's one of the challenges, isn't it? 717 00:52:24,598 --> 00:52:28,878 You throw 100 million or 50 million or 20 million in a company. 718 00:52:28,878 --> 00:52:31,478 It does grow temporarily quite rapidly. 719 00:52:31,478 --> 00:52:32,238 It looks good. 720 00:52:32,238 --> 00:52:36,538 You the hockey stick started to form and you say, right guys, I'm out of here. 721 00:52:37,158 --> 00:52:39,858 right now it's your problem. 722 00:52:40,318 --> 00:52:41,238 You deal with it. 723 00:52:41,238 --> 00:52:43,158 You grow this thing like crazy. 724 00:52:43,958 --> 00:52:48,318 You know, I mean, how many companies have been bought and then written off? 725 00:52:50,104 --> 00:52:53,017 so many, so many. 726 00:52:53,017 --> 00:52:54,188 Yeah. 727 00:52:54,188 --> 00:53:03,737 Even in my little niche, know, Thompson Reuters, so we are internet extranet platform and there was a platform called XM Law. 728 00:53:03,737 --> 00:53:06,119 Good buddy of mine, Rob Cicconi founded it. 729 00:53:06,119 --> 00:53:09,022 Thompson Reuters bought it and basically killed it. 730 00:53:09,022 --> 00:53:10,413 They did nothing with it. 731 00:53:10,555 --> 00:53:12,517 So it's, pretty common. 732 00:53:12,517 --> 00:53:14,029 Well, I know we're running out of time here. 733 00:53:14,029 --> 00:53:23,359 I want to make sure that I give you a minute or so to just tell people how to get in touch or learn more about the content. 734 00:53:23,359 --> 00:53:25,251 Your content is fantastic. 735 00:53:25,251 --> 00:53:27,013 It's been an honor to have you on the show. 736 00:53:27,013 --> 00:53:33,399 I could talk for hours, but, um, tell people how, how they might find out more about your work. 737 00:53:33,782 --> 00:53:34,943 Yeah, it's easy. 738 00:53:34,943 --> 00:53:42,670 Just go, just type in artificial lawyer into Google or your search engine of choice and take it from there. 739 00:53:42,670 --> 00:53:53,198 And if you, if you're kind of person that likes in-person events, we also do the Legal Innovators conferences, Legal Innovators UK in London in November. 740 00:53:53,198 --> 00:53:58,162 And we're doing the next big event will be in California in San Francisco, June. 741 00:53:58,310 --> 00:54:02,971 11th 12th in central San Francisco, which should be a lot of fun over two days. 742 00:54:02,971 --> 00:54:06,872 And it'll be our fourth event in the city. 743 00:54:07,653 --> 00:54:10,473 But generally, yeah, just type in artificial lawyer. 744 00:54:10,473 --> 00:54:13,754 I'm on LinkedIn every day, multiple times. 745 00:54:13,754 --> 00:54:15,705 I generally use my own personal account. 746 00:54:15,705 --> 00:54:22,417 So Richard Trowans, T-R-O-M-E-N-S, that's probably the easiest way to find me. 747 00:54:23,657 --> 00:54:27,399 yeah, thank you for listening and thank you for having me on the show. 748 00:54:27,399 --> 00:54:29,143 Yeah, it's been a pleasure. 749 00:54:29,143 --> 00:54:31,729 We didn't get to a lot of the stuff we were going to talk about. 750 00:54:31,729 --> 00:54:34,516 We had a great conversation and that's the goal. 751 00:54:34,516 --> 00:54:37,813 So maybe we can revisit at some point and do it. 752 00:54:37,813 --> 00:54:39,643 be honored to come back, thank you. 753 00:54:39,643 --> 00:54:40,124 Awesome. 754 00:54:40,124 --> 00:54:41,066 Well, great. 755 00:54:41,066 --> 00:54:46,534 I really appreciate your time and we'll maybe I'll see you at Legal Innovators. 756 00:54:46,534 --> 00:54:52,238 I'm going to make a note to take a look at that San Francisco conference and see if we can put that on the calendar. 757 00:54:52,238 --> 00:54:53,358 Yeah, that would be awesome. 758 00:54:53,358 --> 00:54:54,163 That would be great. 759 00:54:54,163 --> 00:54:54,983 Good stuff. 760 00:54:54,983 --> 00:54:55,203 All right. 761 00:54:55,203 --> 00:54:57,243 Have a good rest of your afternoon. 762 00:54:57,523 --> 00:54:58,263 All right. 763 00:54:58,263 --> 00:54:59,245 Thanks a lot. -->