It’s not unusual for law firms to invest $1M or more in recruiting, hiring, training, and retention of Associates over the first four years of their legal career. However, if you look at the actual retention rates through the fourth or fifth year, it is essentially a coin flip on whether the firm retains, or loses that talent. Bryan Parker, CEO of Legal Innovators thinks that it is not a good return on the law firm’s (and the Associate’s) time and capital investment. Parker believes that you can take a more holistic approach to the recruitment process and evaluate the best talent out there, in particular, women, minorities, and those from underrepresented backgrounds through a two-year process that more resembles the European apprenticeship model than the US on-campus recruiting and Summer Associate method.
In addition to this fascinating discussion, we also have a deep (and fun) discussion of Bryan’s sneaker obsession.
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Information Inspirations
The cancellation of in-person conferences is on the mind of all of us who usually attend these conferences for our professional development and networking needs. There are alternatives, however. For example, Stanford’s CodeX Future Law conference is available online, and Greg is on a panel for Litera’s April 23rd online event called The Changing Lawyer LIVE! Go check out both conferences.
We want to say how happy we are in David Lat’s recovery from his COVID-19 hospitalization. Bob Ambrogi interviewed David after his release from the hospital for his LawNext podcast.
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Please take the time to rate and review us on Apple Podcast. Contact us anytime by tweeting us at @gebauerm or @glambert. Or, you can call The Geek in Review hotline at 713-487-7270 and leave us a message. You can email us at geekinreviewpodcast@gmail.com. As always, the great music you hear on the podcast is from Jerry David DeCicca.
Transcript
[00:00:00] Greg Lambert: Well, Marlene, it’s good to be doing a podcast back on a regular basis. So, you know, it’s good to be regular.
[00:00:08] Marlene Gebauer: Isn’t that what your mom used to say?
[00:00:10] Greg Lambert: Exactly.
[00:00:23] Marlene Gebauer: Welcome to The Geek in Review, the podcast focused on innovative and creative ideas in the legal industry. I’m Marlene Gebauer.
[00:00:31] Greg Lambert: And I’m Greg Lambert. Marlene, it’s good to be doing the podcast back on a regular basis. It feels like everything has been turned upside down right now. So a sense of normalcy feels pretty darn good.
[00:00:43] Marlene Gebauer: Yeah, it’s good to be back in sort of a regular swing of things. I know that a lot of people are really having a tough time right now. And, you know, listen. We’re all in this together and we’re going to get through it.
[00:00:57] Greg Lambert: As I’ve heard many times, this is a marathon, not a sprint. So, you know, pace yourself, people.
[00:01:04] Marlene Gebauer: So today we have a great talk with Bryan Parker, the CEO of Legal Innovators. I think this interview was very timely considering all of the changes we’re seeing in regard to the summer associate programs, the pass/fail grades in the spring semester of law schools, and overall changes that are going to certainly come out of this pandemic and the shutdown of the world economy.
[00:01:28] Greg Lambert: Yeah, but in addition to this interview, we actually had a good sub talk with Bryan.
[00:01:34] Marlene Gebauer: We totally did.
[00:01:36] Greg Lambert: On a completely non-legal issue. But it was so much fun. And man, do we need some fun discussions right about now.
[00:01:44] Marlene Gebauer: Exactly.
[00:01:45] Greg Lambert: But we decided to actually put the conversation at the end of the show and share it with everyone. So stick around for a little something extra at the end. But right now, let’s jump into this week’s information inspirations. Well, most of the conferences that we usually attend are being canceled left and right, you know, such as yesterday, the Legal Marketing Association announced that the P3 conference in June has been canceled. However, there are some online conferences and seminars popping up to fill the void. In fact, I just saw Codex just announced that theirs is online.
[00:02:28] Marlene Gebauer: Very good.
[00:02:29] Greg Lambert: I just happen to be on a panel for one of these. Latira is hosting a virtual conference on April 23rd called The Changing Lawyer Live. It’s all cast with an exclamation point. So I hope I said that right.
[00:02:44] Marlene Gebauer: Well, it’s got to be good. It’s got an exclamation point.
[00:02:47] Greg Lambert: Yeah, well, I’m going to be on a panel discussing our current situation and how it is accelerating knowledge management within law firms. The fun part is going to be the number of keynote speakers, which includes Molly Bloom, the author of Molly’s Game, which was adapted into a Jessica Chastain movie, by the way.
[00:03:08] Marlene Gebauer: Very cool.
[00:03:09] Greg Lambert: Scott Dorsey, the former CEO of ExactTarget and the issues they had in the 2008 downturn. And Gretchen Rubin, the author of The Happiness Project. Now the event does have a cost. It’s a whopping $25. But all proceeds are going to go to the CDC’s Foundation Emergency Response Fund to battle COVID-19. So great content and a great cause.
[00:03:34] Marlene Gebauer: So Greg, my inspiration is short and sweet. Bob Ambrogi on his Law Next podcast was able to get David Latt to talk about his experience with COVID-19. And I’m sure many of our listeners are familiar with David Latt, who is a former editor of Above the Law and is now a legal recruiter. He contracted COVID-19 and has a very personal and heartfelt interview with Bob Ambrosi to give the complete experience from beginning to end. So I will say that we are all very, very happy that David is feeling better. And please, everybody, take a listen to this.
[00:04:17] Greg Lambert: Yeah, David’s a good guy. So I’m glad he was able to recover. He sounds still a little hoarse, but I think that he’ll take that. He mentioned that.
[00:04:27] Marlene Gebauer: He mentioned that. Exactly. And that wraps up this week’s Information Inspirations.
[00:04:38] Greg Lambert: Well, we know that when things get back to normal for law firms, we really won’t understand what normal is any longer. Brian Parker, the CEO of Legal Innovators, has worked in the industry for decades and is currently disrupting the recruiting and training areas of the legal industry. We have a great discussion about how this might be the time to transition away from our well-known routines for recruiting talent. from our well-known routines for recruiting talent and look at a more holistic approach and look at a more holistic approach on how we recruit, how we train, and how we actually retain that talent. And also we have a bonus section where we talk about sneakers.
[00:05:16] Marlene Gebauer: Sneakers! Sneakers!
[00:05:25] Greg Lambert: Brian Parker, thanks for joining us on The Geek in Review. We’re really happy to have you here.
[00:05:31] Brian Parker: Happy to be here. Nice to get to know you and your audience out there. So look forward to the discussion.
[00:05:36] Marlene Gebauer: Brian, can you tell us a little bit about yourself, including one fun fact and how you got to be the CEO and lead operations at Legal Innovators?
[00:05:48] Brian Parker: So, you know, my background, since we’re talking about law, starts there. I was a summer and then worked for Sherman & Sterling for four years and worked in the M&A group. When I was a summer associate, my mentor at the time, John Greenblatt, later became my partner. And so if you look at our whole name, it’s Legal Innovators by Greenblatt and Parker. And a part of what we talk about is training and his mentorship. For me, it started early on and Sherman was just a great training ground. John, who I’ve known all these years. And then when I got to Sherman, the head of M&A and then the head of the firm, David Heleneck, was a mentor. So it was good preparation, but going into school, I knew that I was going to get onto the business side at some point. So doing M&A was interacting with lots of bankers. So did banking for about eight years with Lehman and Merrill. And then during the dot-com, I led the software and internet infrastructure practice for SG Count on the West Coast. So that was fun. And then the rest of my career up until now, but the rest of the career has been getting on the operations side and using both the legal and the financial skills that I was able to gain. So I’ve been able to take a company or help take a company public, started on the COO track and did that for a couple of private equity and VC backed people. I had a mentor, again, mentorship that brought me to DeVito, which is a large player in healthcare, does dialysis. So at DeVito, I was able to run a billion dollar division for them. So this whole rigor around data and analytics and numbers, that was just a graduate level course in all of those things. And I’m always making sure that you have a track of the metrics that are telling a story around the business and the financial health. So after DeVito, dabbled a little bit in politics. I led a technology company, which is a software as a service model in California that was backed by KKR in Mithril. And when that company was in the process of being sold, I was thinking about what I would do next and looked at, again, a number of VC and private equity opportunities. And John and I started talking. And so for me, it became, do you take over the business that somebody else is kind of gotten up and going with whatever rewards it has on it? Or do you come back to, and for us, it’s a subject matter, something that I know as a lawyer. And then the partnership really has been perfect with John and I. He was a 40-year lawyer at Sherman and Sterling. So when we think about what’s going to work in the legal market, what kind of training, how do we develop a curriculum, that sort of thing, and what are some elements that need to change, right? I think he has a really good strategic perspective on those things. with my operational sense. And when we got together and some of our investors thought, look, maybe the division of labor that everybody became comfortable with, that I would run it as our CEO, but John is the chairman of the board. And we really run like a partnership. We just play things off of each other. And I think up until the virus hit, the conversation was going well and we were getting some real traction in the marketplace. It was good. And now it’s one of those things that everybody has to face at some point in their career if you want to do operations, and that is that something goes wrong. And that could be your fault, hopefully not, or that could be a more macro thing like what we’re experiencing right now. And I think that, look, the best operators, the best companies, the best law firms, they’re going to make it through because they have a strategic vision and they’ll be able to make a plan and execute. And that’s certainly what we’re thinking about. The challenges of a startup are obviously when you’re disrupted like that, and how do you think about liquidity and just making it to the other side of what does that other side mean? I think some of the operational experiences I’ve had in the past.
[00:10:01] Greg Lambert: Now you have a unique interview process that you do. It’s not the standard interview in person and how people normally think of landing a job. So can you tell us a little bit about that model and why you think that works better than the traditional model?
[00:10:21] Brian Parker: So, you know, look, I don’t think it’s, you know, maybe to say it’s different, it is, but, you know, many elements of the traditional model. I mean, our goal when we’re having these interviews, whether it’s a student on campus or lateral or wherever else you’re meeting legal talent could be a partner coming over, right? Our goal is always to do the same thing. And that is as professionals. And that is, is this person, can this person, you know, perform better above, you know, the grade level of their peers or the class level of their peers on, you know, on up the stack? I mean, the partner, you measure that by profits per partner. So can they bring over a good business? And, you know, one of the things that we’re trying to explore, and we’re certainly not, you know, foolish enough or, you know, so full of ourselves to think that people are going to throw out the summer associate process because we’re here and we say, hey, here’s a new mousetrap. I think it’s more about can you change the mix, right? We’ve gotten so, in our opinion, we’ve gotten so carried away with this salary wars that have gone on for the last decade plus, and sitting here now at 200,000. And so who’s the next top whatever, say it’s a top 30 firm, and they go, and they’re going to go to 225. Well, does somebody ever call an end to the madness? Or does everybody just follow to 225? Because we got to get the best talent and all that. And so for us, when you break apart the process, and, you know, you have these snippets, 15, 20 minutes on campus, and you invite those people back for interviews, and the partner is, maybe they’re busy, maybe they’re not. You’re getting to know them for eight weeks, eight to 10 weeks, and I’m extending it, right? The question just becomes, how much do you know about this person? How much do they know about you? And for us, leading indicator, the kid, you know, the canary in the coal mine of this whole thing, is look at the turnover rates at third and fourth year. It is almost the equivalent of flipping a coin, right? And so if you were going to invest in, you take Greenberg, Trowick, and it’s Jackson is your law firm, right? Jackson Walker. Yeah, Jackson Walker. And you say, okay, hey, look, we’re going to spend 100, 150 between recruiting and doing the summer program and get this person to the door. We’re going to, including that big salary, say, somewhere our carrying costs for this person, their first, second years is going to be 450 to $600,000. Let’s take a midpoint in there and say, that’s 500. So you got a million and you got the 100 to 200,000 you did in recruiting. Now, let’s measure what happens at third and fourth year. And if you say that I’ve just invested a million two in this individual, and I’m willing to live with a coin flips toss, that that person is still going to be here as a third or fourth year, I would say, forget about law, right? So take law out of it for a second. I would tell you, whatever industry that was, you’re not going to be successful. Because if you’re investing in talent that way, you’re watching half of it walk out of the door. So for the invested capital you have, you have half the people to make back your return. I have a hard time seeing the ROI in that, right? And so that’s really the premise of how we think about it. And so to your point, Greg, it’s in you guys have had, I don’t know, maybe you even had Bill Henderson on this, on this podcast, but you guys undoubtedly both know him, professor over at IU. He calls him a poor predictor of who’s going to be a good lawyer. And I think that that takes it too far. But our theology is, it’s one factor. And we need to understand all of the factors that make up someone, including when they hit things that may be hard for them, you know, staying up late, partner that’s a little disagreeable, whatever it is. Can they push through and then can they be a long term, you know, productive member of your organization to justify those kinds of investments that you’re making in people? So we have a process that, you know, I think our processes is a little bit different in the fact that we try to get to the partnerships with the school, allow us to hopefully get to know people a little bit longer. And then we try to just be a little bit more deliberate with the interview process, meaning that it’s stretched out over some period of time and we really get to know them and hopefully they get to know us. I talked to you about my DaVita experience at the beginning. I am, you know, a data and analytics guy. I think that there are predictive things that you can look at that will show us combined with this person’s grades, where they went to school, how they grew up, how they are just mentally made up to whether they’re going to be a successful lawyer. And in our minds, that takes more than just two weeks. I get it. You know, firms are bringing in 10, 25, 50, 100 people at a time and they’ve got to go, you know, sort of quick. Part of this, I think, can be proving, you know, running a little pilot that things can be done differently and that you’re not sacrificing, you know, quality at a little bit of a different level. Because if you stick to interviewing at the top 15 schools, top 25 schools, and you’re only going to look at people in that top 10, 15 or 20 percent, you’re going to miss some folks. And so ours, I guess the best I can say it is that we try to be holistic and we try to use all the tools that are available to make those determinations.
[00:15:48] Marlene Gebauer: Yeah, it’s interesting. I mean, I do think that there’s a real opportunity now, given sort of the COVID-19 crisis, for firms to take a closer look at this, because many of them are just saying, you know, I don’t know if we’re going to have a summer program. And clearly nobody’s on campus right now. So this seems like a great time to really press this type of new way of doing things, both from the sort of long-term relationship with the students, but also the analytics end of things, because that seems to be like a really new twist to sort of the hiring process.
[00:16:28] Brian Parker: So let me just say, as the choir would say, amen, right? You know, from your lips to God’s ears, right? Like that’s back to Greg’s point about getting people to know us better. You know, I think that that’s part of the story, right? But we don’t want to be too cavalier. We’ve got a worldwide epidemic that’s really impacting people and their families, and we’re losing neighbors and that sort of thing along the way. But I do think that you are right. It’s forcing a conversation to say, okay, well, I can see the benefits. Let’s try it out to this, just prudent running a business, right? It’s going to be, how do we lower our fixed carrying costs so that the next time something comes along and, you know, God forbid, hopefully it’s not like COVID, but you know, we get something, right? There’s disruptions every few years. And the last one was the 08 real estate crash. And, you know, you guys have probably been around as long as me and go back to 87 and we can, you know, see Black Monday there. And, you know, we go to the .com and we go to, you know, 9-11. The question is, how do you prepare a business that can be flexible enough to thrive in those environments? And I think summer programs, we’re not saying that there’s no place for them, right? Because they are branding activities for the firm. They’re fun. People like to do. And the law is one of those industries that people, you know, they’re slow to change, right? So you can’t do too much at once. And if you asked me, which I didn’t see on the questions, but I’ll say it’s like, okay, what just keeps people from adopting this thing overnight? And you guys are, you know, sort of the next Uber or something. I’d say, well, you know, that’s great. But I think, and this is the prudence and you talk about analytics, right? So we can have a great conversation. We’re already having a great conversation here. We’ve done that before COVID. I think that this brings it to your point, more urgency to question. What is the role of analytics and how do we back up all the things that I’m saying? Some of those things are anecdotal. Some of those things have data with them, but anytime you have a new system, it’s the first three, four, five years of that system to where you have enough data to where if we’re going to look at this from a statistical perspective, people always focus on the end, right? What’s my count in this thing? So where is the insignificant? And then we want to try to say, here’s a mean of result and the standard deviation is where we can live. And that is by and large, you’re going to have people that are as successful or more than the people that were going in your old way. When you can, then people will think about it. I think this way, you’ll sit back and you’ll think about, well, I sell legal talent, right? And the best legal thinking and theories possible. There’s probably still a role. If you’re hiring 50, the question becomes how many of those 200,000 people do you need? And I think about as a business leader, that’s a mixed issue for me. That’s not a choosing. And so if I have 50, I don’t know if it’s 25, 25, I don’t know if it’s 40 my way, 10 the other way or reverse. But I think law is a business and you guys are sort of living testimonies of that. Marlene, what we’re seeing is that firms that will be best positioned going forward will be those that are investing in positions like you have, right? Investing in the innovation space, bringing over people that were mid-level associates. It’s the partners at the consulting firms, the Booz, the McKinsey’s, those kinds of people, having more and more professional people that are running it with the attendant power that are sitting right by side by side with the senior partner. And that will ripple all the way down. So when you have your chief talent officer, either that person is either from a different industry or they bring somebody in to partner and we’ve got to think this is a business that we’re running. And the American lawyer, we could say, I don’t know, 15 years ago, 20 years ago, actually it was probably 20 years or more, they started tracking this statistic of profits per partner. Well, you know, like then that perverted, I think a lot of things because what you measure becomes what’s important and what manifests itself. And so if the only thing that the primary thing that we’re focused on is exactly how much profit per partner we have, then other things get obscured like the role of mentoring, the role of diversity and inclusion. And I think we’ve got to score those as well. But we can’t be duplicitous about the thing either. We can’t say that we’re comparing about profits per partner and then do this coin flip thing that I outlined at the beginning. And that’s the reverse of your draining profits at that point. So I think there’s got to be some consistency and some broader looking of the industry as a whole of the problems. that we’re trying to attack. And so that’s how we’re thinking about it.
[00:21:25] Greg Lambert: I’m curious, Brian, because we were talking about ROI on this and coin flip and you may not have a number. Is there a percentage of retention that you think would be an achievable goal?
[00:21:42] Brian Parker: Yeah. No, that’s a good question because I think that my statements in your question sort of beg the question, right? that we’re dealing with human capital. So I’m trying to choose my words carefully. But there’s always going to be some attrition, right? And some attrition will be forced because people are not up to the standard that you want, however they came in, whether that’s through legal innovators or another ASLP. I assume you guys have talked about alternative legal service providers and that’s where we find ourselves. So there’s going to be attrition. And by the way, this is a two-sided thing. So when we look at this, we look at our constituencies as the ultimate client, the law firm and the law student in their school. They may say, I mean, the culture has changed from when I was an associate. I’m sure as long as you guys have been looking at the industry, you’ve seen the culture change. It’s not for everybody. And so when people come in and some of this current generation, they’re still exploring. Maybe some will just pay loans off and then they want to go do what’s driving their heart. Some, like my classmate, M&A back in 96, he’s off in Hollywood writing scripts. So there’ll be attrition by people who leave and just want to do other things and people that get forced out. You’re saying, you’re asking the Jack Welsh management question of the year in what is an acceptable. you that you should be turning over the bottom 10 to 15% every year, no matter what. I think I think we are being that draconian when we’re talking about human capital, that’s probably not the right thing. But if we say it’s a coin flip, if you accept that and say that somewhere between 35 and 50% is turning over between those two. And we measure what the drag on earnings or profit that there is. Look, do I think 25%, 20% is achievable? I think so. That seems to me to be a more, and then that gives you a middle-of- the-road guidepost to go to between what is going on right now, and then the old Jack Welsh system where you’re saying 10, 15% no matter what. ‘Cause you have places that, they’ve got rockstar associates, I’m gonna go in and make an arbitrary thing, and I’ve gotta cut 10% no matter what. That’s probably not the right way to run a knowledge-based business, but I think it does instruct us that reality is, There’s going to be turnover and there’s going to be attrition. Some you want, some you don’t want, but how do you manage that? And I think if I could make one more point, when you think about this, and not to be shamelessly plugging legal innovators, but when you explore the model, and we set this up as taking lessons from the European system, the apprentice system. folks are getting to know our person for two years and vice versa, right? Lot more details and a lot more information than you get in eight to 10 weeks of the summer. And so what’s going to happen is you’re going to opt in, each side is going to opt in with some hopefully material portion of people that are coming through our program and then they’re going to add those. So all of a sudden, what’s going to happen is that you still have your attrition and hopefully we can bring that number down, Greg, to your point, the problems still persist, where do you go and fill the hole, right?
[00:24:45] Marlene Gebauer: attrition and hopefully we can bring that down, that number down, Greg, to your point. The problem still persists. Where do you go and get, where do you go and fill the hole?
[00:24:53] Brian Parker: And right now, before COVID came along the lateral market was white hot. What are we getting from the lateral market? It’s a little bit of a black box. You don’t know where the person is coming from, why they left all of those kinds of things. And so now you’ve developed your own kind of, I don’t want to call it minor leagues, but you’ve developed your own team and you can look at more of them to fill that hole than have to go outside. I mean, you’re always still going to go with lateral market, right? There may just be somebody that’s a rock star in a certain amount of… specialty or whatever. And we thought there’s partners that are coming over, even in this environment, because they’re people that bring big books of business that outlast whatever market disruption we’re going for.
[00:25:37] Greg Lambert: Yeah, I can verify the lateral market is still moving, even though no one else is.
[00:25:42] Marlene Gebauer: Brian, I want to bring the conversation back to sort of schools and firms and that kind of relationship. And we touched upon this a little earlier about sort of time spent with students and maybe the lack of use about analytics. Are there other challenges that you see for schools and firms to connect on talent? I know we’ve had many folks on the show here, you know, from the school side and, you know, and from the other side where they talk about like a disconnect in terms of, what folks are learning and how they’re being trained versus what the firms are looking for.
[00:26:24] Brian Parker: Is there anything there that you’re, that you’re noticing? Yeah. You know, look, I think that the disconnect is there. So first of all, I don’t think that every firm is not using analytics, that there are plenty of firms that are. I’m just saying that there’s probably a role more broad in the industry for it. I think that the disconnect becomes, it is a, it’s a very transactional relationship, right. Certainly with customers and then just down to the schools, meaning, hey, we’re coming here. We’re good. You know, they pick on, you know, where I went and you say, NYU, we’ve got to have five people, 10 people, whatever we want to get the top people in class, but let’s roll. And there’s during that interaction, how is the full person being valued? How are you thinking about, you know, where their career goals are? How are you thinking about the kind of things that excite their passions and that make them come alive? Because if you can capture in that, the work that you need to get done, but everybody’s kind of going to, you know, this bogey, I think it becomes a, you know, a better conversation and a little bit less transactional. And so I think if you had folks sit down and you could have a round table of law schools, lawyers, and clients, meaning, you know, GC, the corporate legal departments, and everybody was having a conversation, you’d much, much better have a better chance of getting on the same page. But, you know, those things don’t happen. It’s like, okay, here’s, you know, another cog in the wheel. You go through till you fall out, and then kind of next. I think we’ve got to just have a little bit of a change in that relationship, because, and again, let me come from the firm side, and in the client side. I think it’s gotten better. And you guys are, you’re in this knowledge part, and I’d be interested in your views, you know, Marlene, you’re trained in the law, you’ve got to get a certain amount of just black letter law down under your belt, and understanding the way lawyers think and act and reason and problem solve. I think law schools have gotten better in sort of practical skills, too, and writing and moot court, and just the stuff that you’ll do as a lawyer, but probably unfair for them to think, like, is it just a vocation, and you’re coming out purely, you’ve got to hit the ground running, and you just know all these things? Or do you want people that are smart, general, and they can, they can think as the situations are different. So I think if there was a conversation, then to the law firms and the client’s point, well, you could probably get some more practical stuff, even though then what’s going on in right now. And then from the client’s perspective, they’re saying, Look, God, I’m, you know, I’m having to pay for all this training and the places that you are. And so I think, in our view, you know, part of the model, and you guys have gotten this is, you know, probably one of the more straightforward parts is that if you can get more cost effective, law firms, again, are probably better able to earn the profits that they want, clients feel heard, and they can save some money. And then you’re putting people into the system. So you are putting more jobs in the system that is then that is there right now. And you’re creating that next cadre of really smart lawyers that by the time they’re third, fourth, fifth year, you know, they’ll be able to return some, you know, some real profitability, and to the client, then they’ll say, Okay, well, I recognize we all cut our teeth somewhere. And so I’m paying and people are learning on the job, I get it. But I think to
[00:29:46] Marlene Gebauer: ask people to pay premium prices for junior talent, and while they’re learning is probably a little bit unfair. Yeah, and it’s, you know, we’ve talked about this kind of struggle as to, you know, what type of work are they going to be doing? You know, should they be sort of focused on sort of the more theoretical and being able to think like a lawyer? And, you know, or, you know, are they really looking more towards something in the ops area? And, you know, are we preparing all of them adequately for those different types of jobs?
[00:30:23] Brian Parker: Yeah.
[00:30:24] Marlene Gebauer: And we also talk about the Delta lawyer model quite a bit in terms of having kind of all of those skills coming out of school to a certain extent and why that’s important. I mean, when I started doing what I’m doing, I mean, I never would have imagined being where I am now because things are so flexible and then things change. And so being able to have all of those skills is very useful.
[00:30:49] Brian Parker: Or just maybe not forcing people to do stuff that they’re not good at. I mean, there’s plenty of people like you that maybe made the transition and they know the law. But I would say if you populated your whole team, there’s probably some people just from a pure business background that could probably do a little bit better than lawyers, those ops roles. And so why are we trying to, in some cases, fit square pegs in round holes? Teach them the substance around the industry that they need to be in, but then let them bring their analytical and their quantitative and the other skills to the table. And I think you make a team there. And again, law firms start to look more like a business. more like a business. The old days of we had this partnership, and it was the lawyers that ran the business. you know, ran the business and some lawyers were great business people and great at numbers and some aren’t. But you’re also asking how you get to be a senior partner or managing partner. One of these people is like, you’re kicking butt, right? Clients are saying that you’re one of the best lawyers, and you’re bringing in great money. And then now you ask them to do this job on the top of it. Even if you don’t sleep, which some people don’t sleep very much, I’m not sure that that’s the most efficient. But look, we’re not trying to, you know, reconstitute the whole practice of law and field partners how to do their job at that level. But I think over time, look, law will morph like other things and other industries. It’ll just get more and more efficient and take on some of these characteristics, many of which many law firms have started doing it already. And we’ve talked about that.
[00:32:17] Greg Lambert: You’ve built some recent relationships with some of the top law schools, a lot of T14 law schools. So how is it that, or what is it that you, what’s your reasoning for picking the schools that you are?
[00:32:34] Brian Parker: Well, look, I think when you think about this, you know, you think about other people that are in the, this industry in the broad space, right, of the alternative legal service provider. And you might look at Axiom, right? Like they do something very different than we do, but you know, they have been for a while in every market in America and over in Europe and other places. So the needs really exist, but for us, you know, I want to make sure, and we want to make sure that we had the operations, right. So we said, look, let’s start in the East Coast for a lot of reasons, and then we can expand out from there. But Washington seemed to be a place that, well, look, you can touch Philly and Boston and New York and DC from there. So you’ve got lots of clients, you’ve got lots of law firms, and then, you know, there are a number of law schools in DC, if you guys hadn’t heard. And, you know, we were really… And a lot of lawyers. And a lot of lawyers. You know, I think we were really fortunate with the first three partners that we got. And, you know, it’s just like, they saw the vision, they saw some of the things that we were seeing, and they added things to us along the way. And so that’s how we started thinking about it in terms of a partnership. If you look at Georgetown and GW and Howard, which were our first three partners, we were talking to them before the business was incorporated, right? So we’re building the business case and doing lots of survey work and things 15, 18 months in advance of when we started the business, because we wanted to approach this like grown-ups. And part of the survey work and a part of what a partner can do is to say, okay, you know what? That’s a good part of the business model. Here, why don’t you think about this? Why don’t you think about doing this a little bit differently? So our first partners, they developed some trust and some belief in us and some respectful thoughtfulness of the model. Because again, you know, these are, you talk about T14, I mean, Georgetown is in that, it’s T14. I mean, Georgetown is in that, GW is a top 25, and then Howard has had its historic strength. For them to evaluate a startup and say, hey, you know what? We’re going to let you in our doors. You know, they’re putting a lot on the line and we’ve taken that faith very seriously. And then with the rest, it has to do both with issues of excellence and geographic expansion as we think about things, you know, down the road. And I’ll say that we got some of it, it’s always fortunate too, right? When the American lawyer profiled us, you know, a number of people took notice, including schools. And so some of the schools started the conversations themselves. And so we were fortunate, but any school that we partnered with and, you know, look, there are probably some others that we’d love to partner with that, you know, weren’t ready to partner with us. So I think it, you know, it goes both ways. Had to have that same commitment in that same relationship, hopefully, that Georgetown and GW and Howard did. And that is, can we go deeper? Will you tell us when we need to improve? Can we give you feedback about your model? And where we need to, always make sure that the students are at the front side of our interest. So when we have conversations, it’s how do we advance that? How do we all stay committed to the same principles? And, you know, look, our model is about providing cost-effective, you know, solutions where we help provide training and mentoring. But what’s also really important to us is diversity and inclusion, right? We have both diverse and non-diverse lawyers, but as a person of color and John, who’s not a person of color, but did found the diversity committee at Sherman back in the early nineties, we’ve seen by the numbers, there are still the same underrepresented groups. We wanted to do something about that. Firms, I guess the last thing I’ll say is about the partners. I’m a very mission and values driven leader. And so any partner that we’re going to get in partnership with is going to have to share those same values. And so that’s the last component that we looked at. Then we have conversations, they evaluated us and we evaluated them. And we were fortunate that you know some really good and talented law schools and their career development officers saw something and see something in us that they wanted to invest.
[00:36:54] Marlene Gebauer: You know our traditional partnership track model, you know how does your business model influence that?
[00:37:05] Brian Parker: So it works in a symbiotic nature, right? So when you think about, so part of, and we didn’t talk about this. You know, part of the conversation is because firms have been using contract and staffing attorneys and they use them right now, right? And those are both lower cost options. That’s not what we’re saying. We are saying we’re doing the exact same work. It’s a way to do it more cost effectively, but there’s a mix in terms of how committed all law firms are to formal training programs, right? We’re a big believer in it. And so if you partner with us, it’s both low cost, but training and continual training through the whole period. And so when you look at the partnership model, the premise of ours is, all right, we’ve got this apprentice program, two years. What we say at the beginning is, look, have a good faith look that if these people are cultural fits and they do a good job, then you’ll hire them. And if you do, then everybody’s in the same pool swimming towards partnership, right? You’ve got a bunch of third years. And we know who this partner, some people don’t want to be partnered anymore, but those people that do, you’re all in the pool. And you’ve got, I guess at the earliest now, it seems that partners get made at eight, but it’s anywhere from eight to twelve years. So if somebody’s coming in as a third year, you’ve got five to nine years to really prove yourself, right? And you’ll be measured on the same category and statistics as everybody else. Our goal is to make sure that from a competencies perspective, you have the same competency as anybody else by the time you’re starting your third year. So that’s it. I mean, it’s, we come recognizing that there is a law firm structure and even the law firms that want to change, they’re not going to change everything, right? So we’re not coming in proposing to change your partnership models. This is giving you a different launch point, helping you think about some different costs and rounding out your talent. Once they’re in the pool, they gotta prove themselves to make partner just like anybody else would.
[00:39:09] Greg Lambert: I’m just curious, Brian, if you were running a law firm today, would you have an alternative path other than to partner? Have you thought about how is it you can keep talent happy, funded but profitable, but keep them long-term?
[00:39:23] Brian Parker: Yeah.
[00:39:28] Greg Lambert: What other paths would you think there would be out there for them?
[00:39:32] Brian Parker: No, I think it’s a good–.
[00:39:33] Marlene Gebauer: How would you run the zoo?
[00:39:35] Brian Parker: Well, you know, so I do just, you know, just to help our business, I think about that question all the time. But, you know, look, I think just zeroing in right on your question, Greg, We say that all the time. So if you look at where I was at DaVita, right? And we had 65,000 employees, right? And so, you know, there’s lots of places for people to go. There’s vice president, senior vice president, group, you know, like this and that. So there’s just lots of other positions and titles that denote somebody has been successful. And you really raised the, you know, one of the central issues in law. And that is, if you don’t make partner or in some people even get more specific, if you don’t make equity partner, right? Have you been, have you not been successful? You know, likely you’ve been really successful. And I think some law firms are already doing part of this and, you know, our CEO at DaVita used to say that we’re sending forth ripples of citizen leadership, right? And so when I look at some of the people that were there with me at DaVita, and I look at all of, a lot of them are still in the healthcare space, but they’re the COO or CEO or some, you know, meaningful position that’s influencing the ecosystem. So even at corporations, we’re saying, look, our job is to create leaders that not only are going to stay here, that are going to go out and law firms do that, right? Like they help their lawyers get to in-house positions. And, you know, obviously there’s a, there’s a good symbiotic relationship there because if you have a good relationship, hopefully that firm will, you know, send you work. But I do think as you expand, Marlene, it’s like, Marlene, tell me if I got your background right.
[00:41:20] Marlene Gebauer: I read, read it quickly, but you, did you start out as a lawyer? I did. Yeah. I did it back. I did it backwards.
[00:41:29] Brian Parker: Well, no, I think it’s just, you know, to Greg’s point, I mean, that’s a little bit beyond the scope of, of legal innovators, but you know, we’re, we’re, we think about the question too. And so part of it is you want people that understand the nuances. So I mean, look at, look at John and I, and look at legal innovators. And I come in here and yeah, I did law for a little bit and I could come and have a hundred ideas. Well, it needs somebody that’s really been in the trenches of a lot of calibrate and give me some, you know, some, well, you know, we tried that back in 92 and that really just fell flat on its face. Well, John could, right, he could say that. And then on the other hand, I can push him to say, well, what about this efficiency and why are we doing it here where this is this much of a drag on earnings? And I can cite 10 examples and say, oh, okay. So it’s a good team. My point simply is when you take the Marlene’s of the world and Greg, this is your question, you’ve got this captive knowledge base. So she comes up, she goes into the knowledge management part of the firm. She knows a lot about law. That’s great. Well, you probably still want to pair up and have some people that have business opportunities, but how do you say that all of these things are, and I don’t know if it’ll be nomenclature. I don’t know if there’ll be other beyond just your equity and non- equity, if there’ll be other, you know, sort of partnership titles over, over time. But how do you make the folks that are contributing to your business going forward through comp, through titles, through everything else, feel like they’re valued and just as, as important set another way. Can that partner in M&A make as much money as they are going to make for the firm without having these other supports? And if you have a great leaders that are running those other areas and you don’t reward them, well, then you run the risk of leaving. Flip it. If you do reward them and you do elevate them and this, this becomes a business and all of these things are maybe on par or at least on par, then people say, huh, you know what? I really would rather be like doing the law, I mean, doing the business of law rather than practicing lawyer. you see, I mean, Marlene Smiley right now, like there was something that when you, I’m guessing when you went over into that new area that woke you up and, you know, I’m a big disciple of, of, of jobs. And he laid this, this philosophy out at the 2005 commencement of the Stanford business school when he said, you know, about the role of passion, right? You’ve got to get people and put them where their passion buckets can explore. And I think today’s law firm structure is probably just as a whole is a little bit limiting on being able to let that truly flourish. I think as over time, as people figure that out, you know, you’ll really have something where you keep your best talent and they feel valued.
[00:44:11] Greg Lambert: All right. You know, I think that’s probably the best place to stop right there, Brian.
[00:44:15] Marlene Gebauer: I know.
[00:44:16] Greg Lambert: Don’t get me wrong. I could listen to you for a couple more hours, but I was going to say really, it’s like we could talk.
[00:44:21] Marlene Gebauer: We can talk more often.
[00:44:23] Greg Lambert: Thanks, Brian. Appreciate your time. All right.
[00:44:26] Marlene Gebauer: Okay, thank you.
[00:44:32] Greg Lambert: Well, Marlene, I could hear the cogs and Brian’s mind churning as we were discussing his efforts at Legal Innovators. You know, this issue of spending seven figures on recruits to your law firm, you know, over the years and then having the retention of that investment essentially be a coin flip was something you could really tell bothered him about the current structure. So it’s definitely something that we’ve been saying for a long time now that’s ripe for disruption. And it seems like Brian is one of the people on the crest of that wave.
[00:45:03] Marlene Gebauer: Exactly. I mean, this is a perfect time to start examining that because you cannot do all of the traditional things that you have done before. And so attempting to look at this in a different way is quite, quite timely.
[00:45:19] Greg Lambert: Yeah. And now for the fun part.
[00:45:21] Marlene Gebauer: Yes. Now for the fun part. So I asked Brian for a fun fact about himself. Sometimes I do this with some of our interviewees and, you know, in all honesty, it took a conscious effort on our parts to bring us back to the topic that we brought Brian to the show to talk about. We could have talked about this for a long time, but, you know, it was so, so good that we didn’t want to leave it out. So here’s the fun fact about how Brian is a sneakerhead and how excited we all were to discuss it. You forgot the fun fact. Oh, yes. Or maybe you didn’t forget the fun fact.
[00:46:01] Greg Lambert: That sounded like a bunch of fun facts.
[00:46:03] Brian Parker: Right. I could give you, you know, the time that I showed up to be the CFO in this company and first day was in Hong Kong and found out that our financing deal had fell apart.
[00:46:16] Marlene Gebauer: But that’s not going to be the fun fact. That’s the un-fun fact.
[00:46:20] Brian Parker: This helps me. I think this helps me relate to the students that we’re recruiting is that I am, if you guys know what a sneakerhead is, I have a massive collection of sneakers, vintage, collectible. And sneakers that will be collectible. And you think about them as just like pieces of art and you try to evaluate which ones are going to have staying power, which ones are interesting to be able to be collected and that sort of thing. And so I have a collection that I’m somewhat proud of.
[00:46:50] Greg Lambert: What’s one of your favorite ones?
[00:46:52] Brian Parker: Well, that’s always an interesting question to ask.
[00:46:56] Greg Lambert: Just one of them.
[00:46:57] Brian Parker: Yeah. Well, I’ll give you two. And so the first one, it shows how the worlds of art and fashion and what was the hip hop community have come together. And you look at, his name will come to me in a second, but Virgil Abloh. So he created something called the Off-White brand, which was an extension of Nike. So Virgil is actually now the creative director for Louis Vuitton. So you talk about these worlds coming together. And so the first shoe that most people learn about is the Jordan, right? And so the Jordan one is sort of the seminal shoe. And so Jerry did a takeoff of the Jordan one. And so what the Off-White brand is doing is making fun of, people say Nike Air or this or that. And so it’s got writings and different things to make it a little bit whimsical. And so it’s in the color of North Carolina where he went to school. So that probably is my favorite one. And there was a second one that was done by a skate shop called Diamond Dunk in Southern California. When these shoes came out, canary yellow, and you look at them, you’re like, oh my God, why would I ever want to own these things, right?
[00:48:14] Marlene Gebauer: I would totally want to wear those things.
[00:48:18] Brian Parker: So when we talk about the ridiculousness that is in the sneaker industry. So they came out. So there are these conferences, just like we have legal conferences, there’s conferences around these sneakers and around the culture.
[00:48:30] Marlene Gebauer: And so this one was called Complex, there’s a magazine that writes a lot about the culture. And so they had this come out at Complex Con.
[00:48:37] Brian Parker: And so these shoes come out, they’re gonna have 250 pair of them only for friends and family. And so somehow people started selling them there and it disseminated into this brawl, like people were fighting over. So the shoe never got released massively to the public and the limited supply plus the story of how it came out, it just created this urban legend. And so when you can find them, usually you’re gonna have to pay about 10 grand for these shoes. And so I was at a consignment store, but when you think about it, this is like an asset. And so this person needed some money for their car or rent or whatever it was. And they were selling them for $2,100. And I said, okay, well, there’s a chance for some market arbitrage and that’s the only way that I would have them because I’m not paying $10,000 for sneakers. So anyway.
[00:49:31] Marlene Gebauer: All right. We can just do the podcast on this. Okay.
[00:49:34] Greg Lambert: This is all we need to talk about. After this is over, I’m going to go pull out some sneakers and I’m going to show them to you.
[00:49:41] Marlene Gebauer: Please do. Yeah.
[00:49:43] Greg Lambert: Well, Virgil, I know Virgil Abloh has a great storyline behind his, if it’s who I’m thinking about, it was one of his sayings was if one symbol of Louis Vuitton is good, then a lot of people are going to love Louis Vuitton. So if one symbol of Louis Vuitton is good, then a lot of people are going to love Louis Vuitton. So there you go. There you go. There that was Kiri’s favorite way to go after all. Laughter. There we go.
[00:50:27] Brian Parker: I guess it was last year of the fashion week in London. So Calvin Klein’s head, I don’t know if he’s the head designer or if he’s in charge of makeup, but whichever one. So he’s on the stage, Asian American guy, and he’s wearing, you know, the fashion people, right? He’s very fashion forward. He’s got these leather pants on, really cool shirt. And you look down and I’m like, oh, wait a minute. He’s wearing off- white sneakers with this. So now people just think about sneakers, either I run out or maybe, you know, I’ve got the old, so I can’t even think of where those are, not vans, but you know, just the old sneakers that you beat around in. And now people are like, I can go out to, I can go out wearing a tuxedo. Wearing my Chucks. Well, maybe not that.
[00:51:15] Marlene Gebauer: There’s never a bad time for Chucks.
[00:51:17] Brian Parker: Well, you know, so I’ll give you an alternative. Prada made a pair of patent leather sneakers about four years ago. And so they made them in red and black. And so for a tuxedo, black patent leather, it just looks fantastic. And if you really just wanted to go out there, then red ones.
[00:51:37] Marlene Gebauer: I had a patent leather, orange pair of Pumas that I sold and I should not have, I have, should not have sold them. It was like for 10 bucks. This was a while ago. And it’s like, I’m like,
[00:51:51] Brian Parker: never too late to jump back in Marlene.
[00:51:53] Marlene Gebauer: That’s true. That’s true. You’re talking to the right person. Believe me, Greg knows.
[00:51:58] Brian Parker: Well, next, next one, we can, we can talk all sneakers.
[00:52:02] Greg Lambert: All right. I’m going to, I’m going to bring it, bring us back in here.
[00:52:06] Brian Parker: What you get for asking for a fun fact, you guys, I assume a lot of that’ll get edited out.
[00:52:12] Greg Lambert: Well, what I’m, what I’m thinking about is I may put this at the end of the interview and just say, you know, we had this great sub, sub talk here. Let’s, here it is.
[00:52:22] Marlene Gebauer: If you like sneakers and art and culture.
[00:52:26] Brian Parker: If you didn’t get enough of Brian Parker, listen to him hold forth about, about sneakers.
[00:52:30] Greg Lambert: Absolutely. Hey, we just go where the conversation takes us. Well, thanks again to Brian Parker for joining us today and sharing a few of his passions with us.
[00:52:40] Marlene Gebauer: And it was so much fun talking shoes with him and associate models. Yeah, that’s it. Yeah, that’s it.
[00:52:50] Greg Lambert: But before we go, we wanted to remind listeners to take the time to subscribe on Apple podcasts,
[00:52:56] Marlene Gebauer: 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, at Gabe Bauer M or at Glamberg, or you can call the Geek and Review hotline at 713-487-7270 or email us at geekandreviewpodcast at gmail.com. As always, the music you hear is from Jerry David DeSicca. Thank you, Jerry. Thanks, Jerry. All right, Marlene. I will see you later. Stay safe.
[00:53:27] Greg Lambert: Okay, stay healthy, Greg. Bye.