Brad Blickstein, Principal at the Blickstein Group, a research and advisory firm for both in-house and outside law firms, joins us to talk about legal operation, and his recent experiences at the 2019 CLOC Institute in Las Vegas. As with many great conferences, the programming between 9 AM and 5 PM is good… but the conversations from 5 PM to 9 PM (or 5 AM, this was Vegas), are what makes the gathering really special. We’re calling it #CLOCAfterDark.
There’s a lot going on in Legal Operations, and the Blickstein Group has put out a Law Department Operations survey for over a decade. He gives some great insights on the relationships between in-house counsel and outside law firms. While there’s a big difference between the business operations in a company versus a law firm, the attorneys tend to be cut from the same cloth. Groups like CLOC are positioned perfectly to help lawyers understand the roles they need to play to protect their organizations. Blickstein stresses that Legal Operations is a broad topic, and that CLOC is part of that movement, but is not all there is within the movement. There’s a lot going on, and the opportunities are pretty expansive these days. (12:00 mark)

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Information Inspirations
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Blickstein Interview Transcript

Greg: Today’s guest is Brad Blickstein, principal at the Blickstein Group, a research and advisory firm for both in-house legal teams as well as law firms. And Brad, I’m assuming is probably even more than that, right?

Brad: That’s right.

Greg: All right, well, welcome to the show.

Brad: Thanks, guys.

Greg: Hey, would you mind giving us just a little bit about your background? And what led you to create the Blickstein Group?

Brad: Sure. I was one of the co-founders of what was then known as Corporate Legal Times. It’s now Inside Council owned by ALM. We launched that in 1991. I led a management buyout of it in ‘98 and sold out in 2002. And if you know anything about the general economy in those times, you can guess how well I did in those years. So I left in 2002 needing something else to do and wasn’t sure what that would be, but wound up getting a couple offers in the meantime, just a “Hey, can you help us with this little project? We’re trying to strategize around this. Maybe you could help us with that.” After about six months of that happening, I realized that that was my business. So I formed the Blickstein Group, really just to serve as a consulting, strategy, manage services firm for legal service providers, law firms and the occasional law department. Come 2008, I started to have a pretty good sense of sort of what I would call the rise of legal operations… started to see more of these legal ops people coming aboard and and realize that when there was buying to be done on anything except actual law firm services, and there was a legal ops person, they were often the buyer. So I launched the Blickstein Group Law Department Operation Survey with my friend and colleague David Cambria. We’ve been Publishing that were 11 years in on that now and it’s 300 data points and kind of that from some combination of luck and foresight, it’s really the definitive resource for legal ops.

Greg: Hey, sometimes having the right timing is all it takes, right?

Brad: Absolutely.

Greg: So I want to talk to you about the Corporate Legal Operations Consortium or CLOC conference that you attended a couple of weeks ago and get some of your feedback on that. But before we jump into that, I do want to ask you about those surveys that you conduct, including the Law Department Operation (LDO) survey that you just talked about. What is it exactly that these surveys cover? Why have they existed now for over a decade?

Brad: Yeah, that’s a great question. So what we call the LDO survey, law department operations survey, it’s 300 data points all around what legal ops people do. Back when we launch in 2008, we were thrilled to get 33 responses. David and I basically called in every favor we had to get those 33 responses. Now we’re, I think, over 138 or something. Last year, 300 different data points. Really in all the areas that the legal ops person do. We start by asking them what they do. A little bit about compensation and roll. How they deal with outside counsel, which has changed a lot over the years. How they do a technology. How effective technology is. Alternative fee arrangements. Process and legal project management. And that’s really the driver of a lot of this stuff. That’s sort of the granddaddy survey.

Marlene: What’s the demographic would you say, as far as the people who participate?

Brad: Well, all in-house. Because it’s a survey of law department operation people. It’s across the board, largely larger organizations, because that’s who has legal ops, you know. So you know, a small for personal department doesn’t tend to have much in the way of legal ops. So it tends to skew big. And, of course, it’s in-house.

Greg: What’s the temperature right now of this group? I know, after 2008-2009, I know that the temperature was kind of burning hot on trying to get a lot of changes going … mostly reduced legal. Let me back up a little bit. What are kind of the generic questions that you’ve asked over the years, and have you seen changes in how they’ve reacted?

Brad: Yeah, in some cases. I mean, we there’s more than 100 different questions in the survey, so it’s very deep and very broad. One thing that has not changed, and you just mentioned it is just about every year, the top three KPI are cost-related. You know, managing to budget or managing overall costs, those types of things, every year. So it’s still it always has been, and still is. The driving force behind the elaborations is cost savings. It just is. Some things have stayed relatively the same. For example, we ask how effective various law department technologies are. And the answer for almost every technology is between 5.5 and 7.5 on a 10 point scale every year. And, by the way, every year, contract management, and I expect we’ll talk about that in a little while, is the lowest ranked legal technology of them all… every year. One thing that has changed a lot, though, is the relationship between legal ops people and outside counsel. Back in 2008-2009 their legal ops people might run like a convergence program or something, but that would be about where they’d stop. That would be… that was really it.

Greg: I was kind of expecting you to say they might run for the hills when they saw these legal ops people, but sorry. Sorry. Go ahead.

Brad: Well, now they are right, But now they are, or at least the smart firms or started to run towards them. But back in 2008-2009 the law firms were not at all impressed or scared with legal ops people. They were the domain of process and technology. And again, maybe if you had a process around, you’re like your law firm priority list, they might get involved in that, but it was still lawyers choosing lawyers. That’s changed. That’s evolved quite a bit. And, ah, third to half of our respondents now are somewhat involved in the selection of actual in house counsel for actual matters. That’s a pretty big shift. You know, that used to be always the domain of the General Counsel and the associate general counsel of the folks, and that’s moving away from them and towards more professional purchase.

Marlene: So, Brad, I know you also do some other surveys. Can you tell us a little bit about those?

Brad: Yeah, they tend to be offshoots of the LDO survey. So for three years now, I’ve partnered with Extero on a survey about effective legal spend management, specifically what law departments are doing and how well it’s working to manage legal spend. We just launched earlier this year with Above the Law an IP operations demographic survey to take a look at who the people are, who run IP Operations, which is sort of akin to legal operations. And a couple years ago, we did a big GDPR survey with Yarrow Solutions who is now part of Elevate. That was sort of a pre-GDPR survey. Now that GDPR is online, we don’t we don’t do it anymore. But those tend to be sort of offshoots of the LDO Survey.

Greg: What do you see is still the biggest gulf between in-house counsel and outside firms? I think I’ve got something in my head, but I want to hear what you have to say.

Brad: Well, that’s an interesting question. You know what… I honestly think that in a lot of cases that gulf is more perceived than real.

Marlene: Really?

Brad: The law departments, you know, if you read the legal press and you guys are, you know, you see all this stuff about law departments, they want to reduce costs, and they do, and they want alternative fee arrangements, and they want more collaboration, and they want… they say they want all these things. But they’re the buyers. They are in the driver’s seats and they are not pushing it. They’re not. They could force all that could happen, and they don’t. It’s not quite lip service, but I think a lot of it is, you know, in-house folks feel like they should want that stuff and don’t quite know how to get there. I think that’s going to change as legal office becomes more popular.

Marlene: I was going to ask you… why don’t they? Why don’t they push it?

Brad: Everyone likes to think about the relation between law firm and in-house, as the law firm is like. It’s like a football game. The law firm is the offense, and they’re trying to strike downfield and get rate increases and bill more hours. And the in-house folks are the defense right? And they’re supposed to stop all that. That’s their plan. Like they hold the line right, that’s their job. But the in house counsel, they’re not trained to play defense. They’re trained to play offense right. They went to the same law schools. They usually started the same firms. They don’t think like steely-eyed business people looking to save a buck. They think like law firm lawyers trying to practice law. And while on some level they maybe understand that what’s good for their corporation is what they should be doing, kind of deep down, that’s not what they’re built for. And, you know, the example I used kind of poorly is … well, you’re in New Jersey, Marlene. You know, like Eli Manning may be the greatest quarterback of all time, or he may not be. But it doesn’t matter how great a football player is. A great quarterback is. You plug him in a cornerback and you’re going to give up a lot of yards. That sort of what’s happened. They take guys that are trained to be a quarterback and they’re playing them on defense. And shockingly, they can’t. They don’t really know what to do. And they and their frankly, you know, deep down, not all that interested in doing it.

Greg: That leaves perfectly into our CLOC discussion. So again, CLOC is the Corporate Legal Operations Consortium. They had a big… what was this, their fourth?

Brad: This was their fourth what they call institute that just last week.

Greg: And has become extremely popular. But you wrote an Above the Law article entitled “I’m Going Down to Lucky Town”, which I love.

Marlene: Yes

Greg: “A wish list for this year’s CLOC institute.” Can you tell me a little bit about what do you think CLOC is doing that you think is exciting? And just some of the things you were hoping to get out of this year’s meeting.

Brad: Yeah. So I got to tell you, I loved my time at CLOC. I’ve been all four CLOCs. I love them all. You know, if you’re in this world, if you’re in the world of legal operations or legal innovation or legal tech, I’m going to call it, you know the people you want to talk to are there. The top legal ops people tend to be there. Some of the really good like financial services ones from New York don’t come. But most of the really good legal ops people are there. The really innovative vendors are there. The law firms that have at least figured out that they ought to be talking about this stuff, are there. It’s a great learning environment, you know, even if you don’t get a lot out of the official like CLOC sessions. It’s a great learning environment. Someone said it to me, “It’s like it’s a good conference from 9 to 5, but a great conference from 5 to 9”, or it’s really more like 5 to 5, in Vegas. That’s true. I found it great just because of the network of people that are there. I think it really is the place for this kind of discussion. Absolutely.

Marlene: How has CLOC changed in your opinion over the years? What should we all be focused on now?

Brad: That’s a really good question. I think the biggest change is that even four years ago, when CLOC started, legal ops people were still, you know, they weren’t in the … I hate to use the word zeitgeist, I’m not sure that that’s the right word. But you know, I would say most law firm people, and certainly all vendors at this point, at least understand, like generally that there’s these legal ops people and they’re growing and creating power, and there’s some powerbase there. And that wasn’t the case even really five years ago. For the most part, that was closer to a little cabal. So that’s been the biggest difference is that CLOC and people who go and the legal ops people have become the most… are among the most influential people in the legal space. And that wasn’t sure a few years ago. Which has created or resulted in some changes around all of this. It’s not just legal ops people have created some changes that service providers and in law firms, you know, we’ve seen ALSPs (alternate legal service providers) starting and growing. We’ve seen law Firm’s taking notes. Some law firms… Baker McKenzie famously is forming their own legal operations functions. All of that as a reaction to this move towards innovation that’s moved towards operations. This move towards process. And I think you’re seeing that a CLOC where you start, you know, I think there were 12 law firms there this year, whereas I believe in the first year there was one or maybe two.

Greg: Well, I can tell you it’s because it’s ungodly expensive for law firms to show up. So up until this year, I felt like CLOC was, you know, building its power. But it was again siloing the legal operations folks in-house and kind of saying, “OK, we’re going to get together. We all hate what the law firms are doing. Ra, ra, ra…  and then nothing. Let me throw out something to you. ACC Value Challenge. You know it was great. It was a big flash and then pfffff, not so much anymore. To me, it seems like if CLOC is only about, you know, “we’re going to build the in house team… we’re just going to talk to each other,” again, it misses that opportunity to talk with the outside counsel and come to some type of agreement, not just come to a “here’s why we don’t like you.” So am I… am I missing it?

Brad: No, I wouldn’t say exactly that. So, first of all, I think it’s important to not conflate CLOC with the legal ops movement, you know? I mean the CLOC people, some of the people act CLOC sometimes feel like they are the legal ops movement. I don’t think that’s true, necessarily. I mean it’s a part of it, for sure. So, you know, the value challenge was it was… is, I guess, a specific program put together by ACC. Which is not the same is like legal innovation in general, right. And I think that’s the same thing here…. First I think CLOC is working is themselves working hard to do more outside of their own annual institute. But legal ops people, I mean, they talked to their firms all the time, and they talk to their service providers all the time, and they try to work with their in house people to add more business process around their work with their firm’s all the time. So while CLOC may end on May 16th and no one thinks that CLOC again for a year, maybe. These legal ops discussions are happening with their law firms all the time. I also say that, you know, one thing CLOC announced is that they’re going to start taking some law firm membership. Between you and me, or I guess between all of us now, I’m not sure they didn’t really clarify very much what exactly that was going to mean. But if you talked to Mary O’Carroll, who’s the CEO or president, or Chair of CLOC? She’ll tell you that she sees the whole thing is an ecosystem that it’s not really just about the corporate legal operations people. It’s also about the similar people at law firms and the pricing people law firms. And it’s all one big thing. Now, how you build that in a situation where it is all one big ecosystem, but there are buyers, and there are sellers, that’s going to be a challenge for them. You know, it’s easy to say so let’s all come together and talk and Kumbaya. But at the end of the day, some of the people are there to sell to other people. That’s always going to the case. So they’re going to figure out a balance that. That’s going to be a great challenge.

Marlene: What about people that have the non-client facing roles in law firms? What can they do to, you know, get more client facing work? And if that is impossible, what can they do to contribute to client value? What would Mary O’Carroll say?

Brad: I’ll answer myself on my own behalf, I guess because I sort of agree with her. Although, you know she’s talking about CLOC. I’m talking about, you know, legal ops. But I think that the legal ops people are there to provide business discipline to the law department. Just like takes place in other departments throughout the company. And if you’re in a law firm and you want to, you know, these are kind of new buyers, they’re looking for different ways for legal services to be delivered. They’re looking not just to save a buck but to change the value proposition. If you want to be client facing, legal ops people they want to hear about different ways that their law firms that could help them, rather than just let me call the firm and by hours from the firm. And if you can help along that mission, you’re going to be incredibly valuable for your firm. Because lawyers at the law firms and lawyers in house, they think about their product as an hour of their services. And I’m not really saying this just to rail against a billable hour. But even when they’re not using a billable hour, what they think they sell is an hour of their time. And, anyone that could help break that mental paradigm and have them understand that what they’re selling is a solution to a legal problem. And maybe the best way to figure out what that should cost is in hours… and maybe not. That’s what’s going to change everything. That’s when they start to understand that they’re selling solutions and not time, much in the way that you know, my car mechanic. And I know that’s an over simplified analogy, but, you know, my car mechanic may technically bill in hours, but I’m paying him to fix my car. And he doesn’t think that what he sold me his three hours of car fixing time. He thinks what he sold me has a new head gasket. You know, and then that’s, I think, where we have to start thinking. That’s where… people haven’t grown up selling hours to clients every day. You know they can help us along that shift. I think they’re going to be extremely valuable to their firms

Marlene: So I want to go back a little bit to some of the themes of CLOC I was following some of the tweets about the institute and one of the themes. And again this was, I think, Mary O’Carroll who said this: “I think we don’t know what we’re doing, and that’s okay. We have to come together to answer the questions and be transparent.” Are we doing that? Really?

Greg: That sounds like me every day. I don’t know what I’m doing… and that it’s okay.

Marlene: And I mean, I think she meant it in a positive way. It’s like that. That’s all right. We’re exploring this new area, but you know, we have to work together and you’d be very transparent about our successes and failures. And are we really doing that?

Brad: Well, to some extent, I think. But again, I think it’s talking about CLOC in particular. I mean, not at the CLOC sessions, right? The CLOC sessions were case studies about successful implementations or executions that went great, except for this one little blip we found along the way that we overcame with this, right? That’s not the sessions go. But you know, that’s not how the bars went. In the bars, the talk was “Well, Oh, man, I wish I had met you before. I would have saved myself this whole big hassle or jeez, you know, I heard that firm really crapped the bed on that thing,” and you know that it’s a whole different world. So I really think that to me, for CLOC, The most valuable thing is that it’s building connections among these people, and those people are transparent amongst each other. You know, they’re not going to get in front of 125 strangers  at CLOC and say, “Oh, this is the worst thing we ever did.”

Marlene: Yes, I could be like stress-falling in front of all of them, right?

Brad: Right. But I don’t know, you know, like you meet someone who introduces you to someone, and you’re four whiskies in, and you become more transparent.

Marlene: Yes you do!

Brad: And as you build those relationships over time, you don’t even need the booze. You know…

Marlene: There’s a trust that’s built.

Brad: That’s right. So and I’ll tell you that as far as I could tell in the bars at least, and obviously I think that it’s a bit of a euphemism. But the lines between firm and department and service provider and software company are shocked, you know, like though they don’t exist there, you know. They’re like “oh, let me introduce you to her. She’s really smart, Her company does this and you really need to talk to her to get to know her.” And no one thinks very much. “Well, that’s a software company. I don’t want to work with that, you know, they’re just trying to sell me something,” … That’s maybe how it works, like an official meetings and exhibit halls. But you know, that’s not how it is at CLOC after dark.

Greg: #CLOCAfterDark.

Brad: Mary, you can have that one.

Greg: I know one of the things that we look at is the technology to help us. Marlene and I were talking, and I think that there was some talk there at CLOC. Well, in fact, I wrote a blog post a couple of weeks ago, that says technology doesn’t improve who you are, it just amplifies who you are. How is tech playing into this in things like artificial intelligence. What’s the buzz around that?

Brad: That’s a great question. Technology powered solutions are critical to solving some of these problems. But the key to the whole thing is that they’re critical to solving the problems. They are not panaceas, and the solution is in itself “let’s get more technology.” What you need to be doing is identifying the problems you have at figuring out the best way to solve that problem the same way for everything else in your life than everyone’s life. Right? So one thing I’ve seen that I find this really fascinating is for the first time ever, and I’ve be around doing this stuff for two decades or more, is like GCs and Managing Partner types coming downstairs to their tech people – you guys might have been the sea some of this, too –  And, “Hey, what’s our AI strategy? What are we doing about artificial intelligence here at the firm?” Right? Well, what kind of questions that??? You know, I mean, it’s it’s like coming out of saying “what are we doing about databases here at the firm??” Like it could be anything right? What’s important not to get lost is what are our biggest problems or what our easiest problems to solve… because nothing wrong, low hanging fruit…  and what’s the best way to solve that? And can technology help? And that’s gotten lost in the AI hype. And I think that as we get back to people understanding that AI is an engine, is a tool, is a way to power technology that could be part of your solution. I think we’re going to a lot more effective than this whole AI hype thing. I’ll give an example. One of the booths that CLOC they’re Booth backdrop said “AI for Legal Operations.” What did it do?? And there wasn’t even like a sub head that says “this is really about e-discovery” or it was just you couldn’t tell what they did. And that’s why … can I talk a little bit, Greg and Marlene about this new research I’m working on.

Greg: Sure

Marlene: Yeah

Brad: So come August, I’m launching… we’re calling it the Blickstein Group Legal AI Efficacy Report. I’m working with Erin Harrison. Erin used to be the editor at both Inside Counsel Magazine and Law Technology News, and we are taking a deep dive look into probably is going to be about 50 of what I think about the 65 legal AI… I really should call them AI-Powered Solutions out there and legal. We’re trying to find everyone that actually has customers. We’re not talking about real start-ups… and taking a really sort of SWAT oriented look into what they say the tool does. How well, it actually does that. How easy it is for people to use. How easy it is for people to administer. So that when we’re done with this thing in August, we’re gonna launch it at ILTA (International Legal Technology Association.) People will be able to take a better look at AI tools as problem solving devices, not just as like the cool hip technology that people are asking about.

Marlene: That’s brilliant. So speaking of hype, what about analytics? I saw that Susan Hackett tweeted that there are a lot of presentations and discussions on data driven practice. So not just analytics for pricing and business development. Do you see this is a trend, and what sort of examples are you seeing in practice?

Brad: Absolutely. First, all the in House. Folks don’t care about AI for business development at all,

Marlene: Of course.

Brad: And you know, pricing is a whole nother discussion, right? Because that I would argue they would argue the pricing is the job of the firm’s not the in-house people. What we’re seeing, though, is in you know what? What’s the old saying…  “what gets measured gets managed,” and we’re seeing in all sorts of areas the use of data to understand how long work is taking to get done. What’s the best way to get this work done? You know, is the accuracy good enough that an alternative legal service provider? I mean in a lot of ways it’s a lot of the things that the e-discovery people were doing years ago because that was really kind of the first area of law that lending itself very well to practice process. And we’re seeing those same source of tools just applied to all kinds of legal work. First, largely around contract management of things like that. We’re seeing a lot of that, but I think it applies across the board. We’re starting to see more and more law departments not just trust their line council to say, “Oh, yeah, the matter is going great.” But instead to track carefully and see where the were things follow against benchmarks.

Greg: So, Brad, any other thoughts on what the future holds in the world of legal technology and in operations?

Brad: Yeah, first so I think we’re going to see some major changes as people figure out how to use artificial intelligence better. And what those tools can do. And again, really I think of it more as an engine that can help you build that can run a tool that does all kinds of things. So we’re starting to see some really interesting applications around… you know, there’s a company out there, Legalmation, and, you know, and they’ll tell you that they are, you know, they do sort of interrogatory response. And they say that what they do automatically in seconds is the same effectiveness as fourth year associate.

Marlene: Yeah, they write answers and discovery.

Greg: Yeah. Patrick DiDomenico uses it.

Marlene: Ogletree uses it.

Brad: And I love the way to describe it as the fourth year associate because law firm partner’s not going to let fourth year associates work go to the client anyway, right? It’s going to get reviewed by a partner other person still has to. But it saves a whole lot of time and energy, and you know they’re going to find something else for the fourth year associate to do, or if they are really smart, find a whole new model to bill for that kind of work. So I think that technology is going to change things as people realize better how to apply the technology. I mean, I alluded to this a this a minute ago, but I think that E Discovery is a really good analog. When he discovered sort of became an issue 10-15 years ago, it had the advantage, so to speak, of a new thing that nobody understood how to do, which isn’t the case on more core legal work. But you know what happened? First, the clients like, punted to their law firm, saying, help with like do you know anything about what to do here in any law firm that’s incredibly say they knew anything, we could make a fortune in fees and, like associate document review fees for a long time because the because the client did have any better idea. They didn’t know what to do other than just trust their firm. Then they realized how process oriented it is. Some of the Legal Service Providers came aboard to really help you understand maybe firms aren’t the best people to do. This technology started to play in to make some of this stuff way more efficient. And people started understand that e-discovery is such a process oriented area of law that they could apply some of these solutions and get really good results. Now we’re starting to see some of those same sort of things in contract management. I think we’re going to see them in negotiations and more in the litigation side of litigation, not just e-discovery and in other areas to and also property is for sure, right for it. So I think when you look at the path that e-discovery took over the past 10 years, I think we’re going to start seeing that same path and multiple other areas of law that are also process oriented, but just weren’t is obvious and scary as he discovery was at the outset. I think it’s a good model to look at.

Greg: Hey, Brad. This has been a great conversation.

Marlene: Yeah, really. We think we could go on a lot longer, I think with this conversation.

Greg: We could, we could. So hey, thanks for joining us today. This again has been a pleasure talking to you.

Marlene: Yeah. Thank you, Brad

Brad: Thanks guys.