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[00:00:00] Marlene Gebauer: We’re going to do the best we can, I think, and power through it.
[00:00:03] Greg Lambert: It’s my favorite quote from Thurgood Marshall, do the best you can with what you have.
[00:00:08] Marlene Gebauer: That’s right.
[00:00:09] Greg Lambert: All right. Let’s do the best we can then.
[00:00:19] Marlene Gebauer: Welcome to The Geek in Review, the podcast designed to cover the legal information profession with a slant toward technology and management. I’m Marlene Gebauer.
[00:00:27] Greg Lambert: And I’m Greg Lambert. So this week, we are going to be talking about surveys with HBR consultant Kevin Clem. So HBR’s law department survey has become a staple in the industry. And we wanted to get Kevin here to describe some of the results that they found in this year’s survey.
[00:00:44] Marlene Gebauer: Yeah, I understand that law firms have expressed interest in some of the data as well. So we’ll discuss ways that firms and law departments can collaborate using the survey data. Now the survey is very content rich. So I expect there’s going to be lots of ways the survey can facilitate better communication as to what matters between firms and legal departments.
[00:01:05] Greg Lambert: So Marlene, before we get started in this week’s information inspirations, I wanted to talk about a couple of things that I saw on Twitter this week.
[00:01:13] Marlene Gebauer: So these are like pre-inspirations? So these are like pre-inspirations?
[00:01:16] Greg Lambert: Yes. Yes.
[00:01:17] Marlene Gebauer: Oh, wow. So pre-inspirations and inspirations this week?
[00:01:21] Greg Lambert: And inspirations, of course.
[00:01:22] Marlene Gebauer: Okay, let’s hear it.
[00:01:24] Greg Lambert: So one of the things that’s funny, and the other one was a head shaker. So the funny one I reposted, which was this kid watching another kid turn a cartwheel. And then someone took the video and overlaid this kind of mathematical computation.
[00:01:39] Marlene Gebauer: So you could see the thoughts running through the kid’s head of how he’s going to replicate this cartwheel. See– I saw that.
[00:01:40] Greg Lambert: But once he actually tried to replicate it, so he stands up and then he just falls flat on his face.
[00:01:51] Marlene Gebauer: My kids were asking me, did he get hurt? And I was like, no, he was on a mat.
[00:01:55] Greg Lambert: No, he was on a mat. And the best thing was, as soon as he fell on his face, the credits start rolling. So it’s like the end.
[00:02:02] Marlene Gebauer: Children falling on the internet, classic. But it made me think about what I hear from people when they don’t want to share information. of what they’re doing at conferences. Ryan McLeed and I have had this conversation before about, Ryan would say, I could show. you everything that I’m doing and you could not replicate it.
[00:02:22] Greg Lambert: It’s okay. My thoughts are don’t worry about someone replicating your ideas at the conference. Share away. They’re more likely to give you suggestions on how to improve your processes rather than steal your ideas.
[00:02:34] Marlene Gebauer: Yeah, I think that’s true. Since we’re on videos, I saw one on Facebook about Levi being the best big brother. It’s very cute. So Levi’s little sister is in her crib and she wants to get into his bed. And he helps her by getting a step stool, so when she climbs out, she doesn’t fall out. Then he goes the extra mile and he gets her baby, which is his doll, so Levi climbs in to get it for her. They work together to get the doll and Levi out of the crib. So there’s lots of feels here for successful collaboration, and also customer satisfaction. Not only does Levi help his sister accomplish her goal of getting out of the crib, he goes the extra mile and gets the baby. And she in turn helps him to do that. So collaboration for customer satisfaction and better relationships. Even a child can do it, except my children.
[00:03:28] Greg Lambert: Yes, of course. Well, my older sister would have pushed me out of the crib, so.
[00:03:33] Marlene Gebauer: Well, I was the older sister and I probably would have done the same thing.
[00:03:38] Greg Lambert: I can see that. I can see that. Okay, now. All right. So my second Twitter experience was from Pepperdine’s online law master’s degree. So Marlene, in the ad for the program, they specifically say, and I’m quoting here, Pepperdine’s Law’s new online master’s of legal studies program helps non- lawyers build essential legal skills. They use the non-word. I should introduce them to Zena Applebaum.
[00:04:10] Marlene Gebauer: Well, you know, we really need sound effects for an audience groan here because that is totally a groan. totally a groan. And you know, seriously, and warning to everybody, I’m going to go on a very, very small rant here. Small. Small. Okay? No legal support professional, see what I did there, likes this. Not only is it disrespectful, it doesn’t even suggest what the person does. And no other profession I know does this. So classic example, you don’t have non-doctors in medicine. You don’t have non-directors in the movies or non-chefs in restaurants. So why is it like this illegal? Are we really that uncreative or ungenerous or, wait for it, lazy that we can’t find a better descriptor? It’s not like people have not put them out there. You mentioned Zena, and she’s talked about this as well. Greg, I have an idea. All right. I have an idea.
[00:05:20] Greg Lambert: I want to hear it. All right. All right. Let’s turn this lemon into lemonades. That’s right.
[00:05:25] Marlene Gebauer: So I’m going to post this. I’m going to put this idea out to the listeners. Call in with some better descriptors. And don’t be shy. I mean, you know, the bar is so low, almost anything would be better. And we’ll share them on a future episode.
[00:05:38] Greg Lambert: That sounds good. Well, just to let you know, I tweeted back at Pepperdine. So maybe they took my advice. Yes.
[00:05:45] Marlene Gebauer: We’ll see. We’ll check the website.
[00:05:47] Greg Lambert: All right. Well, enough with the ranting. So let’s jump into this week’s information, inspirations.
[00:05:58] Marlene Gebauer: So Greg, my first inspirations are really a couple of announcements. So sorry, I cheated a little bit.
[00:06:04] Greg Lambert: That is cheating.
[00:06:05] Marlene Gebauer: It is cheating, but time sensitive and they are important. So I was selected to be a member of the ILTA practice management content coordination team for 2019 and 20. Thank you.
[00:06:19] Greg Lambert: Congratulations.
[00:06:20] Marlene Gebauer: Thank you and big thanks to ILTA and this year’s team for having me. I am super excited.
[00:06:27] Greg Lambert: Good.
[00:06:28] Marlene Gebauer: So practice management focuses on the area of analytics, business intelligence, contract language analytics, matter management, and automation, among other things. So if any of you have ideas for webinars or blog posts or papers, please reach out to me on Twitter, LinkedIn, or an email and send me a pitch and I can share them at the planning meeting in January. And the second announcement is that I am speaking on the value of legal analytics at the DLAW summit. Now DLAW stands for disrupt law and the date is October 22nd through 23rd.
[00:07:06] Greg Lambert: I’m on the 22nd and it’s being held in New York City. So attorneys, you can get CLE credit if you attend. I think the speakers and the agenda looks great.
[00:07:15] Marlene Gebauer: It’s a mix of firms and legal departments. So there’s a lot of good networking opportunities there. And some of the topics that are going to be covered include embracing culture transformation. I mean, that’s what we’re always talking about. Managing the impact of social, mobile, and collaborative apps on e- discovery, which sounds really interesting. And using AI to streamline the contract management process. And the second day has some problem-solving sessions as well. So if you’re attending, I hope to see you there.
[00:07:48] Greg Lambert: Very cool. Sounds like a fun conference. I’m going to make sure that we put a link to that on the show notes. Great. So my first inspiration is that general counsel now are business strategists. So I know we’re going to talk about the HBR legal department survey later, but I also ran across another survey of in-house legal teams from Relativity, FTI Technology, and they collaborated with Ari Kaplan. The biggest takeaway from the survey, at least in my opinion, is that 97% of GCs replied that they are now an integral part of the business strategy for their companies. So this means that they are no longer an island to themselves. It means they can’t summarily veto ideas coming in from other company leaders, but they actually have to find ways to make things work.
[00:08:18] Marlene Gebauer: The biggest takeaway from the survey, at least in my opinion, is that 97% of GCs replied that they are now an integral part of the business strategy for their companies. So this means that they are no longer an island to themselves. It means they can’t summarily veto ideas coming in from other company leaders, but they actually have to find ways to make things work.
[00:08:43] Greg Lambert: So what that means is they really, really need their outside counsel to know what their business is all about. And that is a great opportunity for law firms who have set up know-your-client operations or KYC. So if you’re in marketing or if you’re in the library or knowledge services area of a firm, I’m telling you, this is a golden opportunity for you to put your skills into action and help your lawyers better know their clients. It’s not just about the legal issues, but it’s also about understanding of competitive intelligence and business intelligence issues, what’s driving the client’s business, who’s the competition, where are they headed in the next quarter, the next year, or the next five-year period. So, again, I’m telling you, Marlene, CI and BI may be as or more important now than ever.
[00:09:33] Marlene Gebauer: Actually, this sounds like a great opportunity for the GC to develop more different types of abilities for the role and, of course, CI and BI to support that. So that’s fantastic. We always worry about work drying up, but it always seems that new things happen and we find other stuff that is important to do. This is one example of that. I do have another inspiration. Sorry. I listened to a radio program the other day, so none of this highfalutin podcast stuff. It’s honest, down-to-earth radio, right? I was happy to hear that low-tech research solutions still work to solve problems and in journalism to boot. Everyone is interested in the Donald Trump tax returns, right? He’s fighting to keep them private. Well, Heather Vogel, who’s a reporter at ProPublica, found some. She found some tax information. How she did it was she used a simple FOIA request to obtain separate documents filed for a New York City tax court appeal along with financing documents for some of Trump’s real estate investments. These are public. I won’t spoil the story, but let’s just say it was a very effective use of one of our public rights for information.
[00:11:00] Greg Lambert: Amen. Amen. Amen. Well, good. All right. So you want to go ahead and lead us out for the– Yes, yes, yes.
[00:11:01] Marlene Gebauer: Amen. Well, good. All right. You want to go ahead and lead us out for those? Yes. Yes. And Greg, that wraps up our information inspirations.
[00:11:19] Greg Lambert: So, Marlene, I have a question for you. Who’s your favorite host on The Family Feud?
[00:11:28] Marlene Gebauer: You know, that’s very tough, but I’m going to have to go with Richard Dawson just because that’s when I watched it the most, so I’ll stick with him.
[00:11:39] Greg Lambert: Yeah, I’m a Richard Dawson fan myself, but I do have to admit Steve Harvey has one heck of a mustache.
[00:11:44] Marlene Gebauer: Yes, he does. Very impressive.
[00:11:46] Greg Lambert: Well, I bring it up this week because our guest, Kevin Clem of HBR Consulting, uses a little Family Feud reference in his presentations of the HBR Law Department survey.
[00:11:57] Marlene Gebauer: He had some great trivia on that too, so please listen until the end, guys, because it’s great.
[00:12:03] Greg Lambert: All right.
[00:12:04] Marlene Gebauer: So let’s jump in and see what this survey says. This week, we have Kevin Clem, Chief Commercial Officer at HBR Consulting, joining us to discuss the recent HBR Law Department survey. Hey, Kevin. Thanks for being on the Geek & Review.
[00:12:25] Kevin Clem: Thanks, Greg. Glad to be here.
[00:12:27] Marlene Gebauer: Yeah, Kevin, thank you. Can you tell us, to get started, a little bit about the history, purpose, and audience of the survey?
[00:12:35] Kevin Clem: Sure thing. Yeah. So the HBR Law Department survey has been in the industry for about 15 years. Actually, this is our 16th year in the survey. And initially, it was really focused on giving law departments some metrics and data that they could support as they think about how to staff and how to set targets around spending within their law departments. Two major parts of the survey, the first part being around key metrics, things like staffing and spending and use of outside counsel.
[00:13:05] Marlene Gebauer: The second part being around compensation, so giving law departments some perspective on how peers are compensating their in-house counsel. So those are the two major aspects of it, really. Key metrics to help inform some data-driven decision-making, and then the compensation part as well. We get about 250 companies that participate on an annual basis, and it skews towards larger companies.
[00:13:27] Kevin Clem: About 65% of the participant base are Fortune 500-level companies, but across a wide array of industries and different revenue bands and regions and the like. So it ends up being a pretty robust data set for law departments to evaluate how they compare to peers and get a better sense of what trends in the market are emerging and declining.
[00:13:49] Marlene Gebauer: So what were the big takeaways this year from the survey, and what have you noticed in terms of trends over time?
[00:13:57] Kevin Clem: So a couple of things. One, the continued trend of law departments really being thoughtful about how they’re allocating their spending. So we’ve seen over the past couple of years more of a growth as law departments think about internalizing work. So trying to think about how they can bring more work in-house, how they can move from being just managers of outside counsel spend into actually doing some of the legal work themselves. themselves. So that’s essentially plateaued. Historically, the spending was about 60% outside and 40% inside. It’s gotten to a point now where it’s about leveled off, right? About 50-50. So that’s an interesting trend as law departments think about how they can equip their internal team members to create margin in the work that they’re doing, and therefore be less reliant on outside counsel for capacity constraints. We do know that there are instances, the majority of the time, outside counsel is being used for expertise, whether that’s jurisdictional needs or specific subject matter expertise. But we’re seeing fewer law departments having outside counsel really as an overflow valve and more focused on the expertise of the firms. So that was one. It’s kind of the focus on internalizing work and being more efficient in how they deliver services back to the business. And then within that same question or trend, we see a continued expansion of how law departments are thinking about using alternative service providers. And we can talk a little bit more about that later. But obviously, there’s been a lot of press around the Big Four entering into the service provider space and other law companies picking up, getting additional traction and making acquisitions. acquisitions. So that’s an area that we’ve seen continued growth. Still a relatively small percentage of a typical law department’s wallet share, but on a significant uptick over the past couple of years.
[00:15:45] Greg Lambert: Kevin, just curious, have there been any processes that the in-house team has taken away from the law firms that they’ve then decided to either give back or outsource out to an alternative legal service provider?
[00:16:00] Kevin Clem: That’s a great question. Yeah, I think one of the things we see a lot of is an uptick in exploring how to outsource some of the contract review portions. That’s probably the biggest place that law departments are looking at alternative providers to step in and fill some space. And not only alternative providers in the sense of the labor side of that, but also the technology side. We automate some of the contract review and a lot of AI solutions are stepping into that void. But I think that’s an area that historically, if it was done by outside counsel, there was an intent on the law department side to bring that more in-house. But now there’s a recognition that obviously contract and commercial work will continue to grow.
[00:16:38] Marlene Gebauer: And how can we think about doing this differently? We’re not going to send it back to a law firm necessarily, but could we send it to an alternative provider at a lower cost or a provider who’s made investments in technology that can make that contract review process more efficient?
[00:16:51] Greg Lambert: Well, when it comes to surveys, we tend to get involved in surveys so that we can kind of see what our competitors and peers are doing out there. So what is it that you’re seeing the clients doing with your survey when they get it back?
[00:17:05] Kevin Clem: So a couple of things. One, for a lot of companies, it’s just an annual checkpoint to make sure that they are still staying within either the quartile that they want to be in, if they’re targeting first quartile in terms of spending, or the median, so a chance to kind of check and make sure that they’re still triangulating well relative to peer companies. Another one is if they’re looking to make some significant investment, whether it’s in new initiatives or new technology, getting a sense from the survey as to what are the trends, what are we seeing in other companies trying to do and adopt? And sometimes it’s more defensive. A lot of departments will be getting some pressure from the C-suite or in instances of some cost containment measures enterprise-wide. There’s firms that will come in and say, oh, you’re overspending or you’re overstaffed. And sometimes those benchmarks aren’t really as valid because they don’t look at the company’s true peers. And so sometimes there’s a defensive element of the results in saying, okay, no, we actually are quite well-staffed or we are at the appropriate spending levels when you truly look at our firms that make up our peer set. So because we’ve got a pretty broad participation, we have over 800 companies in the data set over the years, we can start to narrowly define what that peer group is and help defray some of the criticism that sometimes law departments get around being overstaffed or overspending.
[00:18:29] Greg Lambert: Yeah, I think we all feel that pressure.
[00:18:32] Marlene Gebauer: Certainly. That’s true. I was going to say, like, how do you narrow that down? Because I mean, you do have such a broad range of companies participating, and I would imagine they all have various technology needs. So trying to compare what others are using or the direction they’re going might be difficult.
[00:18:52] Kevin Clem: Yeah, we try to get a couple different lenses on what are comparable companies. So we’ll look at industry, obviously. So that’s often the place people want to go is, if I’m a utility, what are other utilities doing? If I’m a tech company, what are their tech companies doing? So that’s one lens that we can place on it. We also look at the size in terms of the revenue band of the company. We look at the size of the law department itself. We can look at the region. So trying to get a couple different cuts to give you a composite view of what are peers, depending on how you define peers, doing. And we can also do custom cuts where we’ll say, okay, here’s the 250 companies, here’s the 20 that are in a given industry, pick the 10 that you feel are most closely aligned with what you want to compare yourselves to. So the ability to really custom define peer groups, I think, is another unique thing about our survey. We have that granular level of detail down to the individual company. And often we’ll look at a company’s SEC filings for their proxy peers that the analysts will say are relatively comparable companies and use those as a starting point for defining who they want to compare themselves against. But that being said, broader technology trends, a lot of times they’ll say, well, what is the broader industry doing? It’s not just my peer group, because I might not want to aspire to be similar to my peers. I might want to be best in class. So we can incorporate whatever cuts of data are most interested for the company.
[00:20:17] Marlene Gebauer: And I understand another thing that you’re doing to make the survey more accessible is you’re using dynamic reporting for the survey. And I’m not sure if you’re using Power BI or if you’re using another tool that you’d want to share. But I’m also curious, why did you do this? Does it make the results of the survey more useful and why?
[00:20:40] Kevin Clem: Yeah, so it’s funny, we’re big proponents of dynamic reporting dashboards. We’ve got a couple of products that we provide to clients that allow them to make better, more interactive decisions with their data. But for a variety of reasons, we hadn’t adopted that with our own survey data historically. We realized that while, you know, a static report contains the data that people are looking for, and they historically would also purchase a physical binder, and they would put it on their shelf and say, here’s the 2017, the 2018, the 2019 result.
[00:21:11] Marlene Gebauer: Wait, the binder strategy! It’s the binder strategy!
[00:21:14] Kevin Clem: Absolutely, they love their binders. And it’s almost like, you know, you get the next iteration of the Encyclopedia Britannica that comes to the door and rings the doorbell, we would have a spot on your shelf for the next year binder. But obviously, that’s not the most effective way of being able to analyze data and flipping through a physical binder or even scanning through a PDF of the report. So we took our own medicine, as we’ve been asking our clients to and adopted an analytic solution. So we’ve got as part of our broader analytics tool that we have with our law departments, a tool called Council Command, that’s using Qlik, which is a comparable solution to Power BI. We’ve also leveraged Tableau for people that are just interested in the survey data because it’s got more of a reader license that makes it scalable. without the additional incremental cost of licensing that other BI providers have. So we felt like it was necessary. It creates better visuals and more of a visualization layer that you can run different scenarios, you can slice and dice the data in more meaningful ways, as opposed to just having it somewhat static, as it’s historically been. So we think it’s going to be more useful. We’ll see, this is the first year. We’ll be curious to see how the market reacts to this additional way of managing the data and interacting with it. Because to be fair, a lot of this information that’s in the survey, you really want to look at it once a year. You might go back to it at different points in the year, but the data doesn’t change day to day. It’s not really looking at your spending or in terms of your actual legal spending. It’s a point in time. So how much people will go back and look at it and run different scenarios, we’ll see. But certainly moving from a static binder and or PDF to a more dynamic tool is something we felt like we were a little behind the game. in getting it transferred to that medium.
[00:23:09] Marlene Gebauer: I would imagine having a dynamic report, you could look at over time, how things have changed both in your organization and in other organizations that you want to.
[00:23:20] Kevin Clem: For sure. No, absolutely. And like I said, it’s often as people are heading into 2020 planning for the next year, how do we compare if we’re looking to add headcount, how will that compare us to our peers? What are the technologies that other companies are planning to implement in the next one to two years that we can think about? Do we want to make a comparable investment? So it is something that is often used around this time of the year as people are looking towards the next year. But to your point, you’d be able to come back to it throughout the course of the year to evaluate other trends or insights over multiple years is hopefully something that has some increased utility for our participants.
[00:23:51] Greg Lambert: Yeah. Well, speaking of trends over multiple years, so you’ve now coming out with the 16th edition of the survey. I know you want to stay consistent across multiple years on the survey so that you can compare trends over time. What are some of the things that you’ve decided not to track? And I would ask, are there things on the horizon where you’re thinking about bringing into the survey?
[00:24:23] Kevin Clem: Yeah, it’s a great point. I mean, we try to keep some longitudinal consistency so that year over year, you don’t have new definitions or new categories that don’t track to prior years. But there are things that continue to emerge. So specifically in the technology arena. So, for instance, a couple of years ago, we limited the types of technology that we asked about to about 13 different categories of technology. And those were pretty traditional in-house legal tools like matter management, document management, contract management, patents, trademarks, corporate governance, etc. So we’ve started to add to that as new technologies have come on the scene. So a couple of years ago, we added e-signature, which isn’t necessarily a new technology, but it’s one that we saw a lot of law departments realizing the benefit of and saw a pretty significant uptick year over year in the implementation of e-signature tools. And we added workflow as a new category, I think, two years ago, and we added artificial intelligence as a big category. So to the question of what do we not track that we’d like to, right now, we just there’s a category called AI. And it’s very broad, very wide. We do list choices of tools there. So we pre-populate for survey participants. What are the tools that we consider in that bucket? The challenge there is, as I’m sure you guys are well aware, AI is very much becoming embedded in other technology. Yes. Contract management being one where we see a lot of AI being embedded, e-discovery, the same is true there. And there are other places where AI is being leveraged. And it’s challenging to essentially get a pulse on adoption and perspectives on AI when they’re really becoming embedded in other tools more directly. So that’s an area that is obviously a hot topic. Everyone wants to talk about what’s emerging in terms of artificial intelligence. The data suggests that more companies are giving it a go. We only had 1% of participants in the 2017 survey say that they were using any kind of artificial intelligence tool. That ticked up to 7% in 2018. And we’re just finalizing the data for the 2019 data set. But I expect that to be in that same range, right? Just in the high single digits, maybe the low double digits. But to be able to get a more granular and say, well, what types of AI are you using? How are you using it? What are the applications of that? What’s the benefit? Are you getting the return that you expected? We always have to strike a balance between going deep and asking the types of questions that would be pretty interesting from a trending standpoint. But also not asking so many questions that it deters people from completing it. Because it’s probably the most comprehensive survey in terms of the topics we cover in the industry. And we don’t have thousands of participants every year in large part because it’s difficult to gather all the information it requires. Some of our clients and participants take weeks to be able to fill it out. You can’t just sit down and go take the survey. It does require gathering data from a variety of sources. So anyway, it’s that continuum of having enough data that we can answer key questions and identify trends that are interesting. But not asking so many questions so narrowly that it takes us down a path of then creating resistance to actually completing it.
[00:27:44] Greg Lambert: Right.
[00:27:45] Marlene Gebauer: So I’m going to shift gears a little bit, Kevin. I actually heard on another podcast interview about last year’s survey. And this was an interview with your colleague, Lauren Chung, where she said the thing your clients are most interested in is the comparison of tools. And I found that very surprising when you’re talking about spend and staffing and responsibilities and workflow, that the interest always goes back to satisfaction with tools. Is this an opportunity for law firms to share their knowledge about tools as well? We may be looking at a broader set of tools, at least in big law, because we have a broader range of legal practices to support. So I’m curious about whether there’s a collaboration opportunity here based on the results and the interest from the survey participants.
[00:28:46] Kevin Clem: Yeah, no, I would concur. It’s a little surprising that given that for 16 years we’ve been asking questions around kind of key management trends and topics and metrics, that what we found quite a bit of interest in has been the additional data around technology. We didn’t used to ask about technology at all. So it’s only been within the past five or six years that we started asking questions around that. And it’s quickly become a very popular data set because there really isn’t, to our knowledge, another solution or another survey out there that goes as broad and as deep around the technology as the survey does. And given how relatively immature law departments feel their adoption of technology is, there’s a recognition that, OK, if we’re going to, as I alluded to before, manage more work in-house or become more efficient or really provide value back to the business, we need to understand how to leverage technology more thoughtfully. So we ask, do you have a solution? If so, which solution have you implemented? If you have the tool, what’s your level of satisfaction and what are your plans for the coming year? So it really is a pretty extensive assessment across 19 different categories of technology that we’ve defined. And as I said, some of those have been added to the list, things like workflow, AI, real-time fee monitoring is a kind of a new emerging technology where they see more overnight law firm activity as opposed to waiting 45 days for a bill to show up, matter-based RFP tools that are legal specific. So all of those are newer emerging areas. And I think there is an interest on the part of law departments to say, what are the things that I should be considering? But one of the things to your point about maybe law firms being able to help, one of the areas that we hear over and over again is even with the tools that are more standard around matter management, document management, that may be more kind of the core tech stack, so to speak, of a typical law department, there still is a challenge with adoption. So getting good use of your document management system, and that’s an area specifically that I feel like law firms could certainly help. Law departments are somewhat late to the game, relatively speaking, in terms of document management. It’s been a ubiquitous solution for law firms for years because of the nature of needing to be able to access documents and search for them and reuse them for new work products. There’s still some law departments that don’t have a DM solution at all. And we hear consistently where lawyers from law firms will come in- house and say, where’s my DM solution? Like, we’re just putting stuff on shared drives? Like, how are we actually managing our work? This is crazy. So that’s an area where I think if law firms have best practices, obviously knowledge management more broadly is certainly a challenge for law firms and law departments, but especially law departments if they don’t have a good solution set. So I would suggest, you know, if that’s an area that a law firm feels like they do well, and candidly, I think, when we talk to our law firm clients, that’s still an area of opportunity. A lot of law firms still struggle with that themselves. But I’d say a lot of departments would be very receptive to tips and tricks on how to manage legal knowledge more efficiently.
[00:32:01] Greg Lambert: And I agree, having to deal a lot with laterals that come in, the biggest issue we have with laterals are those that come in that have never used a document management system before. And it’s such a learning curve, usually for us, they come in from more boutique law firms. And so it’s definitely one of those things that we ΓÇô it’s the hardest thing to get them up to speed on when they arrive inside the law firm.
[00:32:29] Kevin Clem: Yeah, no, agreed and in fact this whole notion of knowledge management, I mean it is kind of the holy grail if you can start to really curate and collect information, not just the artifacts, but what are the insights, the learnings, the lessons from a matter, from a case that can be memorialized and searched for. It’s interesting, we closely work with the CLOC organization, and they have an annual session at the institute every year that I’ve been fortunate to participate in as one of the panelists for the last couple of years. And it walks through the 12 core competencies of legal operations, one of which is knowledge management. And every single year since 2016, when the survey was first done at the first session, knowledge management is the 12th out of 12 in terms of maturity. So it’s an area that law departments really don’t feel like they are moving the needle. So anything that a law firm can do to share with law department clients, recommendations or approaches, or even your own knowledge, for that matter, that law firms have that have built up over time, I would say is a ripe opportunity to help law departments move towards more mature knowledge management practices.
[00:33:35] Greg Lambert: So Kevin, you did a recent session in Austin. I was checking out some of your work on, I think, LinkedIn. And you talked about how leading law departments are turning what may have been historically a family feud between in-house and outside counsel into opportunities for collaboration and co-innovation. And in fact, from what I understand, you actually use the Family Feud game show as kind of the basis for your presentation.
[00:34:11] Kevin Clem: Well, it’s funny you say that. That was actually the first question we asked of the group was, who’s your favorite Family Feud host of all time? And this is probably more than the audience cares to hear, but I’m a big Richard Dawson fan. And because in 1979, my parents, my aunt, my uncle, and my grandfather went on and competed and ended up winning eight shows in a row. And my mom was the recipient of many on-the-lips kisses from Mr. Richard Dawson. As a two-year-old, I wasn’t old enough to remember it. But yeah, several times we’ve broken out the video, the VCR, and watched the Clem family with Richard Dawson Family Feud. So there’s some family ties, so to speak, to that game show. Obviously, that was a fun theme, and we got the participants in that session split into two groups, and they picked a name for their respective areas, and they competed and got three strikes and all that fun stuff. So we played on that theme with the session. But the intent was to start to highlight where there are opportunities for in-house teams and outside counsel to collaborate more thoughtfully. And I think the answer that was most widely stated as the number one answer was something to the effect of, we reluctantly endure our outside counsel. And they’re expensive, but they get the job done for us, so we’re okay. There were a couple that went as far as to say it’s a family feud. That was kind of the minority answer, but it wasn’t as glowing of a feedback on working with outside counsel as we would have liked. So I think there’s opportunity there to think about, how are you as law firms coming to your clients with ideas for problem solving? And often it’s around just sitting down at the beginning of a matter, having an informed conversation about how we’re going to staff this, what the strategy is, coming to alignment around the plan for the matter. It’s not rocket science, but rarely do we see law firms and law departments having that really thoughtful and thorough conversation at the beginning of a matter about scoping and approach and staffing so that the fees then are commensurate or aligned with the expectations from the get-go. So I think that’s one area is just collaboration around how to set and price matters. Law firms have a wealth of data in that regard, and how can you kind of come alongside your law departments and say, as we look across all of our recent matters that are in this type of work, here’s the range of fees, here’s the typical settlements if it’s litigious, so here’s the strategy we could employ. So leveraging some of that pricing data I think is one area for potential collaboration. And then just technology as well. We’ve got a client right now who, actually it’s two clients, it’s a law firm and a law department, and we’re helping to facilitate some work so that they’re leveraging an in-house solution that the law firm had acquired around collaboration, but really wasn’t getting as much utility out of it. So there are starting to see some of these examples, and we’re working with some firms, and Greg, your firm, in fact, is somebody we’re working with on some co-innovation efforts, bringing in some clients to team up and think about how can we define success collectively. with clients’ interests as opposed to innovation being defined just as something that’s going to help improve profits per partner at the firm. So I think there’s an opportunity to have both law departments and law firms think about common challenges like talent, like service delivery, like use of technology.
[00:38:12] Marlene Gebauer: So Kevin, we talk a lot about innovation in the legal industry. How are our law departments defining innovation, and what are they expecting from their partner law firms? Because you know, innovation is this very broad concept and could mean a lot of different things to different people. And I’m also curious, are alternative legal service providers filling any of the vacuums that law firms are leaving?
[00:38:41] Kevin Clem: It’s a great question, and it’s one that I think continues to evolve. In the survey that we talked about quite a bit, we actually ask the law department participants to define criteria for rating outside counsel. The number one, in terms of importance, is really knowledge of the company and the expertise of a specific lawyer. So your classic, right, you have the expertise you need, and you know the company well, those are the top two. But right there behind it is innovation. It’s something that they’re looking for. And specifically here, the survey talks about innovation and fee arrangements. So coming at that with a different perspective about how do we get to a fair price for the work. So that’s one kind of area of innovation. And there’s another evaluation form that CLOC has defined. And innovation and creativity is one of the criteria, in addition to things like the quality of a work product, responsiveness, understanding the business. But then innovation and creativity, they define as things outside the box to resolve business and legal challenges. And then creativity is a way to resolve business and legal challenges, understands company cost constraints and responds with creative solutions. So I think just moving beyond the traditional legal work, delivering a great legal work product, writing a great brief, getting a good result, closing the deal or helping to defend a patent, those are becoming great outcomes, but essentially table stakes. So that’s why we feel like innovation from law departments has been thinking differently about how work is performed, focusing on value, focusing on the right resources, doing the right work in an efficient manner. And that’s where, to your question of the alternative providers, I think that’s a lot of law departments are saying, well, are law firms best equipped to match the right resources with the efficient level of work? Or are they constrained with the resources that they have at the firm to deploy resources in the most efficient manner? So I think innovation in terms of fee arrangements, innovation in terms of resourcing, use of technology, I think, because that’s what alternative providers are really there to step in and try and fill.
[00:41:56] Marlene Gebauer: So I’m curious, any discussion about the application of legal analytics to either the practice or business of law? Any discussion about that?
[00:42:09] Kevin Clem: Absolutely. In fact, I alluded earlier to the flash surveys that we try to do at the roundtables that we hold, and one a couple years ago was AI. The most recent flash survey we did was around analytics. Because current state of analytics in most law departments is pretty immature. They’ve got a lot of data that they’ve gathered. Most of it’s spending data, contracts data, discovery data, but rarely are law departments really leveraging that data in a meaningful way to inform decision making. In fact, I alluded earlier to the fact that the 12th out of 12 core competencies in the clock survey is knowledge management. Well, 11 out of 12 is data analytics. So between knowledge management and analytics, those are areas that law departments are struggling. And what we’re starting to see is there are departments that have started to apply dashboarding and analytics tools to make better decisions on spending. What we’re now starting to see more of is actually the practice side of law. So predictions around what the outcomes might be, as opposed to just informing data, letting historical data inform future spending patterns. It’s now getting into the actual which judge is going to give the best result, and what’s the potential settlement amount given these set of factors with correlation and regression analysis and things that go more into true data science.
[00:44:00] Greg Lambert: All right. And then I’ve got a bonus question for you, Kevin. Fast money here. Set the clock to 60 seconds. So actually, I’m going to go with, are law departments looking at things outside of technology and outside their relationships and looking at things like the diversity of their outside counsel? Is that something that you’re seeing more of an emphasis on recently?
[00:44:33] Kevin Clem: Yeah, it sure is. And different departments have different levels of priority on that topic. To the comments I made earlier about the innovation and fee arrangements being one of the criteria for aiding outside counsel in our survey, diversity is another one that we have on the list. There have been some pretty publicly known law departments making very aggressive commitments to diversity, and I think that’s fantastic. But yeah, I think that the groups like Diversity Lab and the different Mansfield rules, the things that are being adopted in the industry are only going to continue to gain momentum as there’s a recognition for the importance of not only diverse ethnicities and gender, but also perspectives in how legal work is being performed. We’ve been helping support a fair bit of surveying, using the ABA model diversity survey for our clients to gather information about their firms. Because being able to be a very diverse firm overall is great. But if you’re not bringing in the diverse team members to the legal work that they’re doing for a client, it’s not really giving you the diversity that you’re looking for.
[00:46:49] Greg Lambert: All right. Well, that sounds like the perfect place to end our conversation. So, Kevin, thank you very much for joining us today.
[00:46:56] Kevin Clem: Thank you, Kevin. My pleasure. Thanks for having me. Really appreciate it, guys.
[00:46:58] Greg Lambert: All right. Bye-bye. Bye.
[00:47:02] Marlene Gebauer: So that was super informative in terms of both what the survey covers and really, I mean, a lot of breadth and depth to this. But also, all of the opportunity that’s out there as a result of the information you get from this survey. I mean, I was delighted to hear that there’s so much opportunity in the areas of knowledge management and legal insights that we can really start working directly with clients to really help with those sorts of questions.
[00:47:44] Greg Lambert: Yeah, we talked a bit offline about the fact that insights and KM were so low on the list. But really, I think it’s that they don’t know where to start or how to do that operations. And so there’s a great opportunity there for us to go in and help them. And one of the themes we’ve always had at the firms I’ve worked at is the more you’re able to have interactions with the client, the more opportunities you have. So this is just one more way of getting people in front of the client and making that relationship stronger. I think, again, like you said, there’s a lot of opportunity.
[00:48:23] Marlene Gebauer: I know. You and I have our work cut out for us.
[00:48:26] Greg Lambert: Yes, we do. Yes, we do. All right. Well, once again, I want to thank Kevin Klim for joining us today. Thanks, Kevin.
[00:48:35] Marlene Gebauer: Yes, thank you, Kevin. It was really great. And listeners, please take the time to subscribe on Apple Podcasts, Spotify, or wherever you listen to podcasts. Rate and review us as well. If you have comments about today’s show or suggestions for a future show, you can reach us on Twitter at @GayBauerM or @Glambert, or you can call the Geek & Review hotline at 713-487-7270 or email us at geekandreviewpodcast@gmail.com. And as always, the music you hear is from Jerry David DeSicca. Thanks, Jerry.
[00:49:11] Greg Lambert: Thanks, Jerry. All right. Thanks, Marlene. I will talk with you later. Ciao.
[00:49:43] Speaker E: Transcribed by https://otter.ai