In this episode of The Geek in Review Podcast, hosts Greg Lambert and Marlene Gebauer interview Richard Tromans, founder of Tromans Consulting and artificiallawyer.com. Tromans shares his insights on the future of legal innovation and the upcoming Legal Innovators California conference, scheduled to take place on June 7-8 in San Francisco.
Tromans begins the conversation by highlighting the role of artificial intelligence (AI) in the legal industry. He emphasizes the importance of not only adopting AI but also using it to its full potential to deliver better legal services. He also discusses the potential impact of AI on law firm business models.
Moving on to the topic of alternative legal service providers (ALSPs), Tromans examines their role in the legal industry and how it has evolved over time. He believes that the future of ALSPs depends on their ability to embrace technology and shift their focus from being mere “bodyshops” to incorporating more sophisticated technology and consulting services.
The discussion then moves on to the Legal Innovators California conference. Tromans shares his views on what attendees can expect, including insights into the latest legal innovation trends, opportunities for cross-fertilization between private practice and in-house legal teams, and exposure to a variety of ALSPs.
Tromans also shares information on his own platform, artificiallawyer.com, which provides news, features, and educational videos related to legal innovation, and the upcoming conference. He invites listeners to check out the conference website, legalinnovatorscalifornia.com, for more information.
Tromans emphasized the need for the legal industry to shift its focus from traditional metrics like profits and risk reduction to a more holistic approach that considers broader outcomes. He believes that this shift will take time, but he is hopeful that the Legal Innovators California conference and similar events will pave the way for the industry to move forward in this direction.
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Marlene Gebauer 0:08
Welcome to The Geek in Review. The podcast focused on innovative and creative ideas in the legal industry. I’m Marlene Gebauer.
Greg Lambert 0:15
And I’m Greg Lambert. So we are Marlene, we’re getting into that time of year where the conferences are coming in, you know, heart hard and fast. Yeah. But there’s one that we wanted to kind of highlight this week, which is a fantastic conference coming up in June, that, you know, may be flying below some people’s radar. So we wanted to kind of get someone on here to highlight it and talk to one of our fellow legal tech geeks in the world here to tell us a little bit more about it.
Marlene Gebauer 0:50
Yeah, so we’d like to welcome Richard Truman’s from artificial lawyer and conference creator and Chair of legal innovators, UK and California. Richard, welcome to The Geek in Review.
Richard Tromans 0:59
Thanks, Marlene. Thanks, Greg. Pleasure to be here.
Marlene Gebauer 1:02
So I know you’re on sabbatical at the moment. But for those listeners who may not be familiar with artificial lawyer, can you talk about your work there over the years?
Richard Tromans 1:12
Yeah, sure. I’ll give you the short version. So I got is the new the the legal world in 1999, which seems like several lifetimes ago now. By joined as the INTERNATIONAL REPORTER The magazine called legal week, which was eventually bought by American lawyer media, and if it has been folded in to load or calm. I left that incredibly, almost 20 years ago, and then had a career across Europe as a foreign correspondent for different magazine. Then I came back to London, I became a strategy consultants, working with Thomson Reuters with Hilda brands and Baker Robins that I joined an m&a Boutique in London, we used to merge law firms together. And one of my key jobs was to analyze trends and market movements, sort of big sort of high level, you know, where’s market going. And that’s kind of how I got into legal Tech, I had some one of the last papers I wrote, for the market was mostly aimed at managing partners and large law firms in the US and UK. touched on AI. That was in sort of 2015. I didn’t really know where it was going. But then I left I set up my own business, troubles consulting, which does strategy, innovation, blah, blah, blah. And I thought, the best way to learn about the subject, so I knew nothing about legal, so absolutely nothing. At that point, I could name two legal tech companies. And I wasn’t even really quite sure they were legal tech companies. Really, it despite having been in the legal market for years and years and years and years, I’ve been dealing with business aspects, you know, profits per Equity partner, where should we open office? Should we do a merger? You know, it was just business business business, I wasn’t focused, not technology, I was alone, I thought a good way to learn about technology is to write about it. So I started a blog called artificial lawyer. And it was a real, you know, like $1 kind of blog, you know, I bought a domain name, I got a WordPress site. And I started it up and totally without any planning in to my complete surprise, it just exploded, it just took off completely. Within a couple of weeks, I was getting 1000s and 1000s of hits. And I was getting invited to speak left, right and center. Because that was like the first way that legal AI, right, mostly driven by what you might call natural language processing, or at least the first blush, the first version of natural language processing. Well, to the AI experts in the audience, it was probably the third or fourth or fifth iteration, but to many of the legal market is really the first time it really got to grips. They were meeting companies like, you know, Kia or illuminants. E Bravia seal, the big two Thomson Reuters and LexisNexis. Were trying to get their heads around it LexisNexis bought up smaller, much more infinitesimally smaller companies who were going down that road to bring them in Thomson Reuters decided to build it itself. And the market was just exploding. And they were it’s so funny, because what was happening in 2015 2016 is exactly what’s happening that everyone’s going completely bananas about LLMs and AI. Right, right. ChatGPT will be
Marlene Gebauer 4:32
we’ve heard a few things about
Richard Tromans 4:37
deluge and the funny thing is, is that it was it was very, very, very similar. I mean that you had the you know, end of lawyers debates, you had privacy and security and risks and how accurate is it and what effect will it have? And will this change for business model and all those types of things? And it’s really fun. It’s like a deja vu, but difference this time is the I actually believe it’s real this time, the last six years in some ways, it really has been real. But it hasn’t been transformative. The natural language processing has found its way into many, many, many products from eDiscovery, to due diligence to legal research, litigation, analytics and prediction, all types of legal tech tool, but it hasn’t been absolutely transformative. It hasn’t really changed the business model. This time around, I think it actually will, I think it will really have an impact. But equally at the same time, I’m kind of glad that I’m on a sabbatical at the moment. And because we’re in that very, very early phase of the wave, where there are just millions and millions of announcements, it’s very frothy, there’s a lot of stuff, it’s insubstantial. And I think it’s going to shake itself out. But this time, I really do think it’s going to make a difference.
Greg Lambert 5:53
Yeah, well, you’re gonna have to buckle up when you get back.
Marlene Gebauer 5:57
Well, I mean, I think sabbaticals are great, that kind of gives you the opportunity to digest a lot of this and think a lot about this, you know, before kind of stepping into the fray.
Richard Tromans 6:09
Yeah, yeah. Um, it’s been writing the book, but at the moment, all I’m doing is promoting my my conference. But
Greg Lambert 6:17
speaking of speaking of, that’s why we asked you on the show. So you have the upcoming California legal innovators conference is happening in San Francisco in early June, I think it’s June 7, and eighth. Can you start by telling us a little bit about the legal innovators California conference, and what the overall mission is?
Richard Tromans 6:40
Yeah, sure. I think it’s twofold. So let me just take a little step back. So first of all, legal innovators is a conference series that we started a few years ago in London. It’s grown incredibly well in the UK. And then just before the COVID hit, we decided to launch one in California. And we decided San Francisco is the logical place to do it. Because, you know, Silicon Valley, lots of big law firms, lots of innovation because of stuff happening there. And then COVID here, and he got delayed for about two years. And we finally did the first one last year, in June 2022, which was our site was a good start. Got some great speakers. And so this year is effectively the second time we’ve done it. And we’ve expanded it to two days denoted. So day one is law firms and LSPs, or alternative legal service providers. Day two is in Harrison legal ops, and the idea of that is invoked, we’re going to have a lot of overlap in the audience. And probably I would have guessed at 90% will probably be on both days. The idea is that it allows speakers to sort of drill down because clearly, running a legal team inside a corporate is quite different to working in legal innovation inside of the law firm. It’s very, very, very different approaches, in many ways. And it allows people to do that. Kind of like a safe space. So you know, the the B inherits lorries and the legal ops people can kind of they can talk about their world, and the lawyers can talk about their world. It’s live from each other.
Marlene Gebauer 8:14
Yeah, that’s what I was gonna say. I mean, to your point that I bet you you’ll have people stay the whole time, just because they want to hear, you know, what interests people, you know, what are they doing on, you know, both in and Legal Operations, and also in law firms? So, so, first day of Compass, focus on private practice. LSPs. So, can you tell us a little bit more about the topics and themes that will be covered? And what like, What the What can attendees expect to learn?
Richard Tromans 8:41
Absolutely. Well, yeah, I suppose. And it’s kind of twofold. Because there’s an educational aspect. I think, also, there’s a sharing aspect. I mean, for me, the other reason why I do this, the only reason why I started artificial oil, and the only reason why I do these events is because I quite earnestly want to see a change in the business of law, globally, both in the US, UK around the world. To me, even though you know, you might say we’re a financial incentives, etc. If there isn’t a purpose to this, there is no point in doing it. I mean, I’ve got a mission. And I’m trying to engage with other people who also have a mission. And I see that in, you know, in lots of people involved in the industry, whether it’s in house or law firms, or, you know, in the tech sector right now, this piece, you know, they’re they’re running a business, they are trying to change the world, in their away as much as they can, you know, there’s a there’s a, there’s a broader goal, you know, they’re not just, you know, hey, let’s hit X revenue. Let’s make the partners 2% richer this year, or, you know, there’s there’s a, there’s a deeper, deeper driving force in all of this. And I think that’s to be asked me that’s fundamentally what it’s all about. So, anything that moves the needle, anything that drives Is this forward so educationally people will be sharing experiences, there’s going to be plenty about generative AI. So we’ve got speakers such as Dan Katz, as you know, he’s one of the first people, I think he actually was the first person to use an LLM to pass the bar exam, which got a lot of headlines. But he’s done so much more since that. Also looking at the bigger picture as well, like my Markiewicz, who’s very interested in justice tech, because also, I mean, what is the point in all of this in any of this, if we’re just going to help like 5% of corporate America or corporate Europe pay, it’s really as not a, it’s not enough, we need more, there has to be a bigger benefit. And so access to justice, just as tech, whatever you want to call it. That has to be part of the picture. It has to be because there has to be a broader outcome on the legal ops. And in her side. In some ways, I think, actually, the pendulum has swung back now. I mean, most of the legal tech focus for years and years was on the law firms. And it’s really swung back now, I think, to in Harris, because I think actually, it houses really embracing change in a way that they didn’t I think in the past, and some GCS might be unhappy for me to say this, but I think a lot of it was just lip service in the past, and very little actually changed. I think now. I think the gloves are off, I think they actually will do something. I think they’re interesting. LSPs is genuine. I think the financial pressures are genuine. And I think also the broader market knowledge is filtering upwards. People in the C suite CFO or CEO investors even, you know, shareholder activists, big big funds, BlackRock, whoever, they starting to see so much stuff about legal tech, legal innovation, about change management’s that they’re starting to hold on a minute, why are we doing anything here, we can really do something. So this isn’t just about shaving off a couple of percentage points on the you know, the day to day work inside corporates on the legal side, this is about sort of transformational stuff. And this is where the AI piece really comes in nicely. And that links also with the LSPs. So it’s all about changing the business of law, changing the business model. So that so you might say back to the educational bit. So there’s that bit about sort of understanding the bigger picture where we’re going. And then I think the second part is just personal experiences. Because everybody, or nearly everybody at the conference will probably have had some personal experience of trying and failing, and trying and succeeding or wanting to try but not being allowed to try or going off and just doing their own thing, building their own tech company or building a consultancy or creating an LSP, or whatever it is, or changing roles inside a company. And I wrote a piece just before I went on sabbatical about the the illegal innovation ecosystem. And it really is an ecosystem. Because there’s so many paths, so many branches, you start off as a baby lawyer, and you guys were big law firm. And then you realize, oh, my God, I don’t want to do this anymore. When you go in house, and you’re like, Well, I don’t want to do this either. So you move to a legal ops role, when you come out of that, maybe you join a legal tech company, maybe then you leave that and you create your own and you make a ton of money, then you become an investor, then you get invited to be a little professional, I don’t know, like, an honorary law professor or something. And honor or number roles keep changing and jumping around. And you know, the the information just is shared and built upon. There’s like this cross fertilization across the market. And eventually it builds up, it builds up in the silos break down, you just get to this critical mass. And I think that’s where we are now. And that’s why it’s so exciting. And that’s why I’m very excited about legal innovators, because you’re bringing all these people together in person to share that newer energy who wrote that information, and the direction that you’re bringing together? It’s really extraordinary. And it’s a great, it’s a great time to be in legal tech.
Marlene Gebauer 13:59
Yeah, I mean, we obviously agree. One of the sessions is going to be about the law firm of the future, appropriate appropriately. And what do you see as, as the biggest challenges facing law firms in terms of adapting to new technology and innovation and how can they overcome them, you mentioned like in house seems to be embracing this a little bit more. So what are the challenges that law firms have?
Richard Tromans 14:26
Well, I would say that they’re embracing it more than the law firms. I think he’s just they’re they’re starting to embrace it. But there’s a difference is if, if the seller changes if a law firm changes, just, you know a little bit doesn’t have much impact on the rest of the market, except it may impact some of its competitors who feel compelled to do similar things. If the buyers change even a microscopic amounts, but leverage of that is 1000 times. So if the large banks and the large fortune 500 companies in America suddenly went, hey, you know what the billable hour is, in fact no going to be the minority of our work that we pay for externally, not the majority, it’ll be the really, really odd jobs, unusual jobs, then you have to have fixed fees, you have to have productized services. At that point, lawyers in law firms, or partners who are very, very smart immediately will go, Oh, hold on a minute. If we work as we work, now, we’re all going to be bankrupt. We need as much technology we need as much efficiency as possible, be heard. And that’s the only way we’re going to stay rich and powerful and connected and important. So we’re just going to Monster efficiency, we’re going to invest in innovation, like never ever, ever before. And that’s why thinking about going back to that point about the last six, seven years, it’s always has been like a dummy rod. Yeah, it’s been like a dress rehearsal. Because the fundamentals of the legal market have not changed. I wrote a piece on LinkedIn A while ago, when ChatGPT kind of exploded, saying, you know, everyone’s saying, this is a game changer. It’s not a game changer. Unless the game changes, the game has not changed. The billable hour dominates. In House lawyers are still incredibly reluctant to shift the model to put their foot down and change things. So challenge length. But Mr. thinks it’s a bit like all revolutions. I mean, if you think about you have looked at the American Revolution, and social change, and American civil rights movements, you know, women’s suffrage, right to vote, are all the things they build up over centuries. Somebody says this isn’t right, in like 1600. And then every every few decades, somebody else writes another book with a demonstration, they get hung drawn and quartered. And, you know, they’re wiped out from history, and then someone else comes along. And then eventually, eventually, eventually, the right conditions emerge, and bang, something actually happens. And I think we’re, it’s very, very hard to tell, maybe this is going to be another false dawn. Right? They be what’s happening now, is just more preparation. Maybe, but maybe not. Maybe this is a real thing. Maybe maybe the next five or six years actually couldn’t see world real transformation. So Somalia to answer your question.
Marlene Gebauer 17:19
He’s the you’re already doing the crystal ball question.
Richard Tromans 17:24
Everything is pivotal on this point, if this if if LLMs, or another dress rehearsal, and the clients don’t really change how they demand work is done. And the shareholders don’t care about wasting literally billions upon billions of dollars of money every year for work that doesn’t need to be done in that way. If it just carries on troubles on everyone in the legal media, it just keeps churning out press release after press release, blah, blah, blah, blah, blah. We have lots of conferences, and it always be used as everyone scratching each other’s back, and we do nothing of any real substance. It will all just be a dress rehearsal complete waste of time. I was going to use it Anglo Saxon phrase. I’ll keep this polite, because obviously,
Greg Lambert 18:12
I was gonna say do we need very adult only content on
Richard Tromans 18:18
parental advisory? This is a thing. And yet, isn’t that why that is why it’s so tantalizing. Because we could be on the cusp of something really significant. We could equally be on a scenario. In a scenario where it’s just a ton more window dressing.
Greg Lambert 18:37
It definitely feels like real change. But I guess as with everything, only time will tell on that. So Richard, on day two of the conference, we’re going to switch gears and you’re going to focus on in house legal teams for the DEI, can you tell us a little bit more of what you’re going to focus in on with the in house?
Richard Tromans 19:00
Yeah, I mean, it’s, I mean, it’s effectively the same, same thing. We’re gonna talk about AI, we’re going to talk about alternative legal service providers. And it’s interesting to note that about, I think about half of the sponsors of the events, we’ve got quite a few already half of sponsors are actually a LSPs or a LSP. Like businesses, which is extraordinary, really, because I’ve never I’ve never been part of the conference where half of the sponsors were LSPs. And I think that tells you something about what’s what’s changing in America as well, which is, which is great. So they’ll be talking about that legal ops. Where are we now? I mean, legal ops, in some ways, has been sort of like tore through and back out the other end again. I mean, it’s kind of it kind of almost like Burma subject down a bit. But I think perhaps again, it goes back to AI. I think, you know, I think this the new the new reality of what can be done, will hopefully re energize the debate and the conversation. And I think also, I mean, you know, obviously no one wants to see a recession, but the third The big first wave of you know, really quite sophisticated tools threaten automation and AI, to some degree could argue came out of the 2008 financial crash. If it hadn’t been for that, there wouldn’t have been this beginning of what people call the new normal. Right? You know, like CFO is walking down the corridor for the very first time to meet with GC. Why do we spend all this money? I cannot please explain the genius of you having to go what you actually want me to tell you why we spend what we spend AALL? Yeah, basically, yeah, if you could be pretty hard paying, if you say the concept concepts, where you know, where it will reduce where it won’t increase our risks, that will be absolutely awesome. And so began the new normal, which I think underpinned whether consciously or unconsciously, a lot of what came with LegalTech. Third, you know, it really gave it a economic impetus. The current kind of doldrums, the western economies are in, again, I think is really significant. And also look at the big tech companies in California, we are laying off 10s of 1000s. Look at Twitter, for example. It laid off or three quarters of its workforce. And I know they’ve had a few problems that they’ve they’ve just realized they can still function. Of course, some people would argue, but not recite those problems.
Greg Lambert 21:23
You might get stuck, you might get some arguments.
Richard Tromans 21:27
Yeah, that’s a choice for sure. But I think the thing is, is I think a lot of the big companies are reassessing what they spend money on. And that’s tremendously exciting if you’re interested in innovation, because to me, economics and innovation go hand in hand. They’re the two are not surprised. I mean, another Elon Musk business, but look at SpaceX. Why is SpaceX so successful? Because it found a way to bring back the launchers, which saves huge amounts of money. It’s not just the innovation of making launcher that come back down again, it’s the fact that they’re saving the money, the cost saving aspect of this totally connected to innovation. And I mean, it’ll be very, very interesting to see if the inherent people really are embracing that or perhaps not again, you know, I’ve been disillusion silo many times by possibilities of real change. And then people saying, well, actually, we don’t really care. So, you know, I mean, yes, we’ll be honest, there’s no point there’s no point pretending is I mean, God, I mean, how many conversations about change revolution, you know, in the in the field of legal tech, are the new comeback a year later, and nothing has really changed. So yeah, yeah. I mean, really excited. I think we got a great bunch of people building a good audience, and really interesting subjects. But I think fundamentally, the I think this is great opportunity to talk about genuine change.
Greg Lambert 22:59
Let’s jump in on a couple of topics on the on the second day. And I think, in Marlene, I think you’d get this question, but I think this runs parallel to your SpaceX example of, if you can reduce the cost in one area, it can exponentially expand some of the some of the other things. So like we had Darth Vaughn from Ford on a couple of weeks ago. And he mentioned he’s like, look, I don’t lack for legal problems that I need outside counsel to help me with. What I lacked for is time and money to get to all of these projects. And so if you can figure out ways to do that, but I think, you know, one of the sessions and Marlene, you want to want to take this one on change management.
Marlene Gebauer 23:48
Well, yeah, we wanted to sort of dive a little bit deeper into this based on sort of some of the things you’re saying there is a focus one of the sessions on change management and you know, how to implement successful change, you know, wanted to get your thoughts on like, what are some of the challenges that in house legals teams face when they’re trying to implement this?
Richard Tromans 24:10
It boiled over with actually wanting to do it? I mean, I’ve worked as a management consultant for years and years and you know, aside from doing artificial lawyer, the media side, you know, I’ve advised you know, obviously with other people, not just myself some of the largest law firms in the world, and it always boils down to this I think, I mean, my boss as it were of a time when I was working in the City of London, he basically said You know, there are two kinds of jobs there are jobs where they pay you a ton of money and take the report and put it in their desk drawer and never look at it again. Even though the whole partnership has just voted on one approving it. And the wall where they pay you a lot of money and they actually do something he was quite open about it. The the vast majority of cases they don’t do anything about it. All they do all they pick me smallest easiest aspects on page 27. And go, Okay, let’s do that bit, because that’s the only bit that we can do we feel comfortable with in the versioning. They’ve agreed it. I think that’s a problem change management, who knows, I’m sure all of your other guests have said he is incredibly hard. It’s really hard and you need real leadership. I think the in house legal function is such an interesting area, because it’s so important to the business. It’s like the life support system really, in many ways, you know, if if the house goes down, particularly in the US, which is So, you know, so much litigation, so forth. It’s an existential threat to the business. And yet at the same time, it’s kind of like second guessed by the C suite. Because if the C suite doesn’t say to the GC, I want to see a 25% cut year on year, like they might say to the logistics team, you know, better logistics, if they don’t deliver what the CC one C suite wants, they will be sacked by the end of the year. You know, no golden parachute is Bye, bye. Get out of your busy busy box, off you go. Right. When was the last time that GC got sacked for not shaving off enough money from legal spent? I probably never in history. And you know, not saying that that should happen. Innovation is all about economics. And yet simultaneously, we’re living in an environment where the most powerful, important people in the room, the buyers are not under the same kind of economic pressure that you would get in other departments in a large business. It’s very, very weird. I mean, I’ve got I’ve grappled with this for years. And I must admit, it’s infuriating. Because you know, it’s like if we weren’t in legal take, if we were if we were in, let’s say, all three of us in the audience, we were all working in logistics. There would be no debate here. It would just be like, Oh, that’s, that’s quicker and faster and better and cheaper than that thing. Right? Let’s just do it. And anyone who objected to it, you would look like you were completely mad. Right? Whereas in law, you can easily say, no, no, no, no, no, no, no. I don’t think we should be going faster, cheaper, better, quicker,
Greg Lambert 27:07
whatever. Yeah, fact, you’re more likely to get get fired by going for that, for that then than to stick to the traditional gun. So yeah, that I imagine, you know, the old saying of No, no one got fired for buying IBM, you know, back in the day, it’s, you know, not many GCS are gonna get fired for hire hiring Kirkland. Yeah, you might get fired for IBM
Richard Tromans 27:32
today. And yeah, but suppose this is the thing you say. I mean, you know, last year the thing is the the the the complexity and the sheer range of legal compliance tasks that a large corporate has to handle that is just exponentially bigger than it was a 50 years ago, when the idea of having sizeable in house legal teams first started to evolve. I mean, that the quantity and the complexity of legal matters is just mind boggling. And also global, though, I mean, you know, large, US corporate isn’t just operating in three or four American states is operating across the entire planet is made up, if it’s not even operating just in the physical world is operating, the virtual is operating in the digital realm is operating in all different kinds of levels. Heard as a corporate triage, break it up, it’s okay, this bit doesn’t need to go as a co founder, Nicholas Fitbit does deserve to have second year associates being paid 1000 pounds $1,000 an hour to proofread these documents. Who cares? It’s life and death. It’s like 2% of all the legal work we do doesn’t matter. But what about the other 98% We’re actually this is not life and death. It’s just really gnarly. The processes, we don’t even know our own processes. I was called a consulting job. I won’t mention name, obviously. But it was a very large it was a global bank. They contacted me they wanted me to help. And I said, so well. Let’s solve brass tacks foundation level. Could you describe what you actually do as a legal department in this back? And they said, Well, no, we don’t actually know what we do. We know we get up we work really hard. We’re always really busy. Some stuff we can’t handle and it goes out and then you know, we go to bed we wake up the next day, it happens all over again. I said well, first of all what I’m just by myself, There’s no way I can help you. But I ended up referring them out to a very large law firm and had a consulting group. I and I said look, you know, before you even go down that road, you’ve got to know what you actually do. What are your processes? In a filter by the way, where do you keep the precedence? How do you how do you choose who does what how do you? How do you divvy up work? The headlight none of that everything was just this like organic kind of bloom orange. Like a mushroom is like kind of a big fungus that had kind of grown out of the slide of his corporate and they were quite married and you know really nice people and that they they vote that They were aware that something was going terribly wrong, that they couldn’t really tell you what it was. And this is a thing, it’s like, there was no oversight. The CEO or CFO wouldn’t not coming down and saying, This is terrible. What are you doing? They were just thinking, well, this, these people, prevents us from dying on a monthly basis. Let’s just leave them to it. And so yeah, I mean, it’s, we’re the entire industry is systemically disincentivized. From change. And I guess if legal innovators, California, legal innovators, London’s an artificial, I can do anything to help change that by lending support, moral support, publicity to those who are trying to change things, whether inside organizations or outside, there are many of them. And hopefully, it’s all for a greater good.
Greg Lambert 30:52
Yeah, you know, there’s a couple of hot areas here. And I think you’re you’re covering both of those, at the end of day two, which is there’s a lot of adoption. And it’s like, before generative AI all of a sudden hit in January, the big talk has always been on, you know, lifecycle management systems that are out there. And then the other being a LSP. So that’s how you’re wrapping up the day. Is the lifecycle management systems? Are they still a huge topic right now? Or do you think that there’s going to be some AI involved in leveraging this? So what’s your thoughts on that?
Richard Tromans 31:33
Well, yeah, I mean, let’s face it, I think the CLM companies, I guess, are, they’re entering their third era, the first year of our body shops, right 1000s of people sitting in warehouses in India, or the Philippines or wherever, or spread out across Europe in the US, or makes it all of those, handling the contracts, for large corporates, on a very basic level, or just doing lots of lots of almost like ediscovery type work, but focus on the contractual side, they were like, incredibly inefficient, they were effectively just cheaper versions, or a management contract management system, or department, the then people started to use natural language processing. So you know, organizations like contract, pod AI, started to bring in AI. So personally buy the note. And things starts to get more efficient, but they were still pretty much in many ways, body shops. And I think now with LLM technology, things really are gonna is going to change because, you know, if you’re a large corporate, you can either build your own LLMs, or there are definitely ways that you can securely link effectively your entire corpus, whether financial legal to and LLM. And with the right prompt engineering and right management and risk control, you’ll have total control over at that point, you don’t have to ask, and like the CRM companies will shoot me for saying this kid didn’t really have to ask, where are they heading? Kids, many of them are built for a worldview, where this wasn’t possible. I just had lunch before I just came here for this call. I just had lunch with the guy who’s building this really cool dock automation tool. Read it, it’s good. It’s got it works in a different way. It’s almost everybody else’s, it’s really original. But I said there was like, you know, when when this will finally launches, you’re ready to launch? Will it be part of a world that is now part of the LLM era or not? Is it like 1920? And you’ve just built the fastest stage coach in the world, right horse driven stagecoach, but nobody wants one because everyone’s driving cars. No, it’s you know, you’ve done a beautiful innovation. Well thought, you know, congratulations. Sorry, but it’s actually now irrelevant. And I think that’s that’s one of the challenges is that if you think about it, over the last few years, lots of legal tech companies have been given 10s of millions of dollars in VC cash to develop tools that fit a world that may not exist in two years. Because it will be it will be in a different environment, their entire engineering team, all their product focused and marketing, their sales, their relationship clients, is all built on a world that possibly quite genuinely, quite possibly what exists in two years.
Marlene Gebauer 34:33
I want to follow up on Greg’s question about the panel on LSPs know, we’re sort of talking about how changed, you know, where we’re basically these companies are sort of developing things that you know, in a couple of years just may be irrelevant. So let’s sort of take that theme and apply it to the LSPs you know, are they ever going to eat law firms high volume lunch, and how to you consider the roles of a LSPs evolving in the legal industry, and what are the key considerations for for in house legal teams when deciding to use them?
Richard Tromans 35:07
Yeah, brilliant question. I mean, the the LSP thing, I think, in some ways is equally as important as the I want, though they I think we are equally weighted. I think the future of LSP is whether they’re in house entities, sorry. So law firm, inst entities. So you’re a law firm, you know, whether it’s a large or a small one has effectively build their own LSP. Or it’s an independent, freestanding LSP. Or it’s an LSP. That belongs to the big four. Right? It doesn’t matter what type of ISP they are, in fact, some corporates actually built their own LSPs. Suddenly, British Telecom built their own in the UK, its own little LSP unit that serviced itself, it doesn’t matter where they are in the ecosystem. The key aspect is will they remain Bodyshops. And, of course, LSP, MSPs are two types, you’ve got the lawyers on demand, I imagined the high grade lawyers on demand side we’ll we’ll we’ll carry on as usual, the axioms social. If you’re a large corporate and you go, hey, you know, we’re in a merger, we need 10 extra people with seven years PQ II, that probably won’t change on the higher volume on the repetitive work on the sort of complex but at scale stuff, where we are basically so you know, we’re talking about, you know, sophisticated Body Shop type approaches. The question then is, do they embrace tech or not. And the problem is, is that a lot of the ALS peas and again, I’ll probably get shot for saying this are specialized versions of law firms, they bill out by the hour, they work often hand in hand with law firm, the law firm has its business model, the LSP is using almost an identical business model, but it’s a bit cheaper. And certain types of work will go in that way. The more sophisticated LSPs are doing fixed fees or success fees, or the AFA is, they’re using a lot of technology. They’ve got their own consulting groups, they’ve got their own legal ops groups, which makes them almost a bit more like the big four. They’re more sophisticated. But again, it all boils down to the same thing. Will they really embrace tech? Technology? No. Yeah. And will the GCS, ask for it? Rationally, I would say that about 20% of the US legal market, commercial legal market could easily be handled by LSPs, which would mean that the total value of a LSPs in America would be what we’re talking 10s of billions 10s of billions of revenue per year, and in 10s of billions of dollars, we’re nowhere near that, we’re nowhere near that, it’s still remains a tiny, tiny minority of all revenue, the US legal market goes to LSPs, a tiny, tiny, tiny proportion. And that’s just not rational. It’s just not rational. Doesn’t make any sense. Because the services they’re providing are specialized labor, dedicated to providing exactly what the corporates want. But at a lower price.
Greg Lambert 38:10
Again, I think we touched on it earlier that that that’s that’s not where the pressures coming from, though, until the pressure is truly on, you’re going to be rewarded for reducing overall cost versus you’re going to be room rewarded for safely removing as much risk as possible. Yeah, again, the incentives aren’t aren’t necessarily there. I bet that’s going to be amazing discussion. Yeah,
Richard Tromans 38:39
you get what you reward if you if you reward if you only reward risk reduction, that’s all you get. Yeah. It’s really, really this fantastic book, for which we is mostly about a particular law firm, which did a few naughty things. But it also covers the the birth of the American lawyer, and Steve Brill, the very, very first time that anyone ever published how much a lawyer made in a magazine, and then the creation of the law 100. And how will the lawyers were pitched against each other and everyone was like jumping ship to get more and more money than they had to increase salaries for associates because they just created this arms race. And every everyone just became obsessed with profits and profit margins and so forth. Which perhaps, you know, it was inevitable at some point. But I guess this is, I guess, to me is the third leg. Yes. So you got the AI, you got LSPs. And then the third one is, can we shift the matrix? Can we start to look at the legal market through a different lens? Because up until about the 80s. I mean, we it’s amazing actually how short everyone’s memories are, you know, until the 80s. The idea that you would ask a law firm how much money they made, would have would have been regarded as indecent. Just think about the birth American lawyers fascinating. It was saying that people would just literally shout at the journalist and put the phone down and say, How dare you ask me how much money I make? You know, but I am a lawyer. You know, I’m a servant of the court. How dare you even think that I want to talk to you about money? But maybe, maybe, maybe maybe we’re actually the beginning of the third era? I don’t think we I don’t think we’re going to throw out this kind of super financially focused aspects of the law. But perhaps there’s something else that comes after that, where we’re looking at outcomes that are not just kind of risk versus money. That the some broader aspect, though? I don’t know. I don’t know. I’m still I’m still feeling my way through this. And if
Marlene Gebauer 40:48
you can expound on that, that’s a really interesting idea.
Richard Tromans 40:51
I don’t know hung it off. I’ll tell you what we got. I think if we’ve got time, we might do a little workshop either on the, on the 748. During the conference, and I’d be I really want to knock that idea around that, you know, can we evaluate what we’re all involved with? You know, in a different way?
Greg Lambert 41:11
Yeah. Oh, Richard, you’ve kind of answered in every question. There are a crystal ball question, which is, normally, you know, what do you project to two to five years out? So I’m gonna, I’m going to kind of swap that out and ask you a different version. And so pull out your crystal ball? And let us know for the people that are attending the legal innovators California conference in June. What do you think the people who attend the conference are going to walk away with when it’s over? And hopefully now your your workshop too?
Richard Tromans 41:50
I think I think they’ll have learned what’s market, because they’ll have shared with each other, they’ll have learn from each other. And it’d be able to ask questions to the panels and talk to each other in the breaks and so forth. Which I think at the moment, I think understanding what’s market is probably more critical than ever before, because things are moving so quickly. I think there’s a real, genuine, you know, tangible benefit from just being in a room with a bunch of people who work in your field and and saying, Well, what on earth is going on? I think another aspects, you know, that generates value, which we touched on before is that you’ve got the people on the practitioner side, the private practice side, and then on the inner side, and hopefully, there’s gonna be some osmosis between them, they can learn from each other as well. And to actually understand the different parties perspectives, and where they’ve got to be very interesting, particularly stuff like AI. You know, there’ll be some law firms speaking to the corporate what’s going, I read an article that you guys are actually using PII now, in your business, you know, could you tell us how it’s going? And, you know, they’ll be, you know, vice versa, perhaps it’ll be some really, really interesting sort of like cross fertilization between the different groups. I think they’ll, they’ll be there. They’ll get to meet a ton of interesting companies, are they LSPs? I bet not measured any particular ones, because they’re there will be very wide.
Unknown Speaker 43:09
Then your travels.
Richard Tromans 43:12
You can check them out, you can see all the sponsors and all speakers, it’s all public, on the website. I think it’s going to be a lot of fun. It’s going to be exciting. And I think it’d be very positive. I think California has had a bumpy few months. Let’s face it, you know, hasn’t it? It’s, we’ve had planks going in the wrong direction. We’ve had a bit of turmoil around staffing. People are wondering what’s going on in all different types of areas. So I think it’d be nice to sort of come together and have a sort of very positive experience and sort of look forward to, to do what I mean everybody in that room, in some ways connected to legal innovation. Yeah. It’s a great time to be there. It
Greg Lambert 43:54
sounds like a good time. So Richard, Romans, thank you very much for taking the time to talk with us. I’ll make sure that I put the links out to the legal innovators California conference on the show notes as well. So thanks. Thanks again, Richard.
Richard Tromans 44:10
Thank you. Thanks, Greg. Thanks, Molly. Thanks for the questions and for having me on the show.
Marlene Gebauer 44:14
And thank you to all of our followers, listeners and subscribers, for taking the time to listen to The Geek in Review podcast. If you enjoy the show, share it with a colleague. We’d love to hear from you. So reach out to us on social media. I can be found at @gebauerm on
Greg Lambert 44:29
Twitter, And I can be reached @glambert on Twitter. Richard, if someone wanted to find out more about you, where should they look online?
Richard Tromans 44:38
Well, to the things that I want them to know about me.
Have a look at artificial lawyer.com which is the media site news and features. I’m on sabbatical moments. But there are literally hundreds upon hundreds of articles and think pieces but also plenty of educational videos and it’s all free. So please, please enjoy that resource. The as he just mentioned, the conference itself is on June 7, eighth. It’s in San Francisco website if you want to check it out again, the ticket is very simply. It’s quite a long one. Legal innovators, California.com.
Greg Lambert 45:24
Marlene Gebauer 45:25
Richard Tromans 45:27
Exactly. It does what it says on the tin, and
Marlene Gebauer 45:30
And listeners, you can also leave us a voicemail on our geek and review Hotline at 71348778 to one and as always, the music you hear is from Jerry David DeCicca
Greg Lambert 45:40
Thank you, Jerry. Thanks, Jerry. Alright, Marlene, I’ll talk to you later.
Marlene Gebauer 45:43
Okay, bye bye
Unknown Speaker 45:56
hey, hey. Welcome back. To back, devils back home. Bills back