In this episode of The Geek in Review, hosts Marlene Gebauer and Greg Lambert interview Laura Leopard, founder and CEO of Leopard Solutions, about succession planning challenges facing law firms. Leopard explains that many firms have partners nearing retirement age but no concrete plans for transitioning clients and leadership. This lack of succession planning threatens law firms’ futures.

Laura mentions that to make matters worse, the path to equity partnership is getting longer, making it harder to retain promising senior associates and counsel. Firms have added non-equity partner roles, keeping equity partner numbers small to inflate profits per partner. Leadership lacks incentives to retire, with no retirement plans or continued compensation. All this will hamper recruiting efforts, as younger generations prioritize work-life balance.

She recommends that in order to retain mid-career attorneys, firms must rethink policies on remote work, billable hours, and flexibility. Virtual firms with better lifestyle offerings are growing competitors. But firms seem unwilling to change. Leopard argues everything should be on the table for analysis by outside consultants. Phased retirements and succession mentoring could also help transition clients and power.

Though Laura Leopard (and even Bruce MacEwan) cannot point to examples of firms that have executed succession planning well, it is possible with courageous leadership. She advises setting retirement age limits, crafting written plans, and easing older partners’ exits. A too-big-to-fail mentality persists despite serious business vulnerabilities if talent is not retained and recruited.

Looking ahead, Leopard predicts the rise of virtual firms will shake up the legal industry as they encroach on Big Law territory with alternative fee arrangements. The pandemic accelerated dissatisfaction with law firm partnership and policies. As generational divides grow, flexible virtual firms will keep gaining ground over more rigid large firms.

This engaging discussion unpacks the complex dynamics around law firm succession planning and existential threats posed by lack of preparation. As partners cling to power, can bold leaders emerge to implement creative solutions and secure these institutions’ longevity? Tune in for an insightful examination of forces reshaping the legal landscape.

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⁠⁠Transcript

Continue Reading Laura Leopard on Law Firms’ Current Succession Planning: Step One – Do Nothing (TGIR Ep. 215)

by 3 Geeks (Ryan McClead, Greg Lambert, and Toby Brown)

This is part 2 in a 3 part series. The first part is here. Part 3 is here.

The Big Idea: We found a much better dataset, though still small, from which to extrapolate actual effects of Generative AI on the legal industry.

Key takeaways:

  • We got anonymized and summarized data for 10 corporate legal departments from LexisNexis CounselLink
  • The data showed that almost 40% of time entries, representing 47% of billings, could potentially use Generative AI.
  • We estimate that a realistic initial upper limit for Generative AI would be to reduce that work by half, or 20% of time entries and 23.5% of revenue

In the previous post, Ryan got tired of hearing the Goldman Sachs “44% of Legal is going away” stat being quoted uncritically and decided to actually look into the underlying data used in their report. Ryan’s exploration of the data is an interesting story in and of itself, but the bottom line is that the data is fuzzy at best, the sample size is laughable, and the breathlessly unquestioning reporting on Goldman’s study has been remarkably sloppy.

After writing up his findings, Ryan shared that post with Greg and Toby, and the question quickly arose, “can we find some actual, useful data to better understand the effect that Generative AI might actually have on law firms?” Gregreached out to Kris Satkunas from LexisNexis CounselLink, a recent interviewee on the Geek in Review, to see if CounselLink could share some anonymized benchmark data for us to analyze.

LexisNexis CounselLink Data

As a reminder the Goldman data was using survey questions about how important certain “work tasks” were for their jobs. Those tasks included things like “Getting Information”, “Identifying Objects, Actions, and Events”, and “Scheduling Work and Activities”. These are quite vague and wide open to interpretation.

In an attempt to find more useful data for our purposes, we asked Kris for the percentages of all time entries that included the keywords “Draft” or “Review” in the description. Our assumption is that those two terms will capture a large percentage of actual time entries in which lawyers are likely to use Generative AI. We fully recognize that this simple heuristic will not produce a clean data set from which to extrapolate definitive results, but as a first pass at some real data, we believe this gives us a nice estimate of tasks that could potentially be ripe for automation with Generative AI.
Continue Reading Generative AI Could Reduce Law Firm Revenue by 23.5%

This is the first in a 3-part blog post, it first appeared on The Sente Playbook.  The other 2 posts are co-authored by Toby Brown and Greg Lambert and will follow later this week. Apologies for the length of this post, but I was channeling my inner Casey Flaherty.
The Big Idea:  The data that Goldman used is insufficient to make the claims about Generative AI’s effect on legal that their report did.
Key Take-Aways:
  • Reporting about this report is sloppy
  • Reporting within this report is sloppy
  • The underlying data doesn’t tell us much meaningful
  • 3 Geeks attempts to find meaningful data
On March 26th, 2023 Goldman Sachs sent shockwaves through the legal industry by publishing a report claiming that 44% of “something” in the Legal Industry was going to be replaced by Generative AI.  I didn’t question that stat at the time, because it sounded about right to me.  I suspect that was true for most people who know the legal industry.  As I’ve heard this stat repeated by multiple AI purveyors actively scaring lawyers into buying their products or services, I eventually started to question its validity.
I started by looking into the press coverage of that 44% number and was immediately confused.  (All emphasis below added by me.)

Law.com  – March 29, 2023
Generative AI Could Automate Almost Half of All Legal Tasks, Goldman Sachs Estimates
“Goldman Sachs estimated that generative AI could automate 44% of legal tasks in the U.S. “

Observer – March 30, 2023
Two-Thirds of Jobs Are at Risk: Goldman Sachs A.I. Study
“The investment bank’s economists estimate that 46% of administrative positions, 44% of legal positions, and 37% of engineering jobs could be replaced by artificial intelligence.

NY Times – April 10, 2023
A.I. Is Coming for Lawyers, Again
“Another research report, by economists at Goldman Sachs, estimated that 44 percent of legal work could be automated.”

Okay, so which is it?  Generative AI is going to replace 44% of legal tasks, positions, or work?
Because those are 3 very different things; each of which would have extremely different impacts on the industry if they came to pass.  Lest you think I cherry-picked three outlying articles, go ahead and Google “AI Replace 44% Legal Goldman Sachs” and see what you get.  Those 3 articles are in my top 5 results.
My top result as of this writing is a news article from IBL News, writing last Tuesday that Goldman says,  “AI could automate 46% of tasks in administrative jobs, 44% of legal jobs, and 37% of architecture and engineering professions.”
We should probably just go back to what the Goldman Sachs report actually said and then we can chalk this up to lazy tech journalism.  Well, not so fast.  Because while the Goldman researchers clearly say “current work tasks” (see below) even that begins to fall apart once you dig into the underlying data.

What Goldman Sachs actually said in the report

Continue Reading 44% of Investment Bankers Think They Can Make Lots of Money Off of Attorney Insecurity (AI)

Our guest this week is Kristina Satkunas, Director of Analytic Consulting at LexisNexis. Kristina discusses the recently released LexisNexis CounselLink Enterprise Legal Management Trends Report for 2023. This annual report provides insights and benchmarks on key metrics related to corporate legal spending and outside counsel relationships.

The 2023 report found that law firm hourly rates increased 4.5% over the past year, the highest year-over-year increase in the 10 years LexisNexis has published the report. While rate increases are not surprising, the magnitude is noteworthy. Kris attributes the largest drivers of the increase to economic factors like inflation as well as lower demand for certain types of legal work. However, average blended rates (the rates charged for entire matters rather than individual timekeepers) remained relatively flat. This suggests in-house counsel are mitigating rate hikes by changing the mix of firms, timekeepers, and types of timekeepers working their matters.

The report also found the ongoing trend of consolidation to fewer outside firms continues, with 61% of companies using 10 or fewer firms for 80% of their legal spending. Kristina expects this trend to remain relatively stable but notes there are benefits to using both a smaller number of firms (e.g. better rates, stronger relationships) and a larger number of firms (e.g. subject matter expertise, competitive rates). She recommends companies determine when to use large firms versus smaller or midsize firms based on factors like matter complexity, risk profile, and cost.

Alternative fee arrangements (AFAs) have not gained significant traction according to the report, remaining at about 12% of matters. Kristina is an advocate for wider AFA adoption and believes companies need to ask for and consider AFA proposals, especially for appropriate matters. AFAs can help buffer rising hourly rates. She acknowledges AFAs require effort to evaluate and implement but thinks legal operations teams and outside counsel should work together using data and analytics to develop reasonable AFA proposals.

The report provides new data on international lawyer rates in 22 countries. Rates differ significantly between countries based on factors like a country’s economy, political stability, and role in global trade and commerce. Many companies are leveraging international firms for regulatory, litigation, IP, and other legal needs outside the U.S. Benchmark data on rates in different countries provides helpful context, especially when engaging firms in new countries.

Kristina sees two significant changes on the horizon:

  1. Determining how to properly and effectively employ AI and technology to increase efficiency and reduce costs; and
  2. Continued access to data enabling both in-house and outside counsel to make smarter, data-driven decisions.

When asked what metric in-house and outside counsel should focus on, Kristina recommends using available data, whether from the survey or a company’s own systems. Data is a “two-way street” that should be shared collaboratively to improve decision making.

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⁠⁠Transcript

Continue Reading The Rising Cost of Legal Services: Insights from 10 Years of Data from CounselLink’s Kristina Satkunas

For the first time, Law360 and Major, Lindsey, and Africa team up to survey BigLaw partners in their 2022 Partner Compensation Survey. We are joined by Craig Savitzky, Senior Data Analyst at Law360 and Jeffrey Lowe, Global Practice Leader of the Law Firm Practice at Major Lindsey and Africa. With this being the first survey of law firm partners since most firms have made some effort to return to the office, there were some surprises on how much remote work partners want to take versus how much their firms are offering. It may not be what you think.

Women and minority partners made some strong gains according to this survey in narrowing the pay gap. While the gap is still significant between women/minority partners and their white male colleagues, this was the smallest percentage in the history of the survey which began in 2010.

For the first time, the difference between average equity partner pay was more than $1 Million over average non-equity partner pay.

Savitzky and Lowe unpack a lot of data from the survey for us.

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Crystal Ball Answers from LVNx

This week we talk with Properoware founder Keith Lipman, who recently merged into Litera, about the role that ALSP’s and others will play in filling the gap left by law firms when the economy begins its expected downturn.

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Music: Jerry David DeCicca

Transcript

Continue Reading An Overview of the 2022 Partner Compensation Survey with Law360’s Craig Savitzky and MLA’s Jeffrey Lowe (TGIR Ep. 178)

As Laura Leopard‘s team at Leopard Solutions was analyzing the 2021 law firm lateral movement data, a glaring statistic stood out. There were a lot of women attorneys leaving AmLaw200 firms, and were not coming back like their male counterparts were. As with any good data expert, Laura worked with her team to find out the reasoning behind this trend. The results of that study were released earlier this summer in Leopard Solution’s “Women Leaving Law” report.
We sit down with Laura to discuss statistics that show that some 64% of women lawyers who leave AmLaw200 firms don’t come back to those firms, some 60% of male attorneys don’t either. And while many might think that the reasons for women not returning are part of the “Shecession” of the pandemic, the survey shows that is not the primary reason. The actual reasons involve things like law firm culture, lack of lateral recruiting of women, uneven promotions, and lack of flexibility needed to retain women in the legal workforce.
The report does give eleven processes that law firms can implement to help recruit and retain women. We go through each of those, one by one to learn more.
AALL Crystal Ball Question
We have a familiar voice joining us this week as Bob Ambrogi answers our Crystal Ball Question and discusses the path he predicts state legal regulatory sandboxes are going to take over the next few years.

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Transcript

Continue Reading 11 Steps Law Firms Can Take to Stop “Women Leaving Law” – Laura Leopard (TGIR Ep. 170)

While we are still struggling with COVID outbreaks this summer, the 2022 Summer Associate ranks are faring quite differently than their 2021 counterparts according to a recent survey conducted by Law360. Kerry Benn, Director of Series Surveys and Data at Law360 breaks down the results of the survey and explains how the struggles differ significantly this year. One of the biggest shifts from 2021 to 2022 was around mentorship and the need for the summer associate to “connect” with the lawyers of the firm in face to face interactions. While many law firms still stressed the need access to mentorship, the summers had much less of a concern for that this year versus last. One stressor that did rise this year was the ability to handle the workload being placed upon the summer associates this year. 
Not surprisingly, the preferred places to work as a summer associate were Kirkland & Ellis (the new #1), Latham, Cooley, Skadden, and Sidley Austin. One thing that was surprising was the salary ranges for those summers who did not land a BigLaw job. Some firms were paying as little as $15.00 and hour. That made some law students reconsider working at a law firm, or going back to Target or Olive Garden and make more. The flexibility of law firms to allow for associates to work remotely continued and seems to be something that may have a long-term affect going forward for a number of years. However, 92% of summers said they would be willing to work in the office, so there may be some flexibility on both sides of this equation.
We also ask Kerry Benn about future surveys that Law360 is producing including the second part of the Summer Associate Survey that reviews their actual experiences, the Glass Ceiling Survey, and Diversity Reports. Benn looks into her crystal ball and projects that there will be more demand for LGBTQ+ and additional diversity surveys and how law firms are implementing alternative structures in their fee arrangements with clients.  

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Transcript

Continue Reading The Geek in Review Ep. 162 – Law360’s Kerry Benn on 2022 Summer Associate Preferences, Challenges, and Options

When the pandemic began, many law firms prepared for the worst by furloughing or laying off lawyers and legal professionals. Many of these same firms then found themselves at a disadvantage when the hiring spree began in the fourth quarter of 2020. Leopard Solution‘s Phil Flora joins us this week to talk about the numbers that they tracked over this time on hiring and movement in the legal industry. Pre-pandemic, there were 6,000 – 7,000 open jobs at any given moment. Currently, that number is 12,000+. And it doesn’t appear to be slowing down.

Phil Flora discusses a number of issues around how law firms and others are managing, recruiting, and retaining talent in such an active market. Of course, money is the traditional approach for law firms, and that is no exception this time around. However, Flora points out that there are a lot of “greats” going on in the market, including the “Great Pause”, the “Great Resurgence”, and the “Great Reflection” to name a few. And while money will be one piece of the solution, legal talent is wanting many more adjustments in order to keep them content and in place. This includes more work flexibility, mentoring, and even more social awareness by the law firms when it comes to how they align with societal goals.

Crystal Ball Question

We asked Norton Rose Fulbright’s Zack Barnes to look into his crystal ball and predict what he sees for the legal industry. Barnes’ future expands upon the ability for the legal market to expand upon the sandboxes created by Utah and Arizona to allow for ownership of law firms beyond the licensed attorney ranks. For true business innovation, there needs to be diversity in the ownership ranks.

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Transcript

Continue Reading The Geek in Review Ep. 153 – Phil Flora on What Law Firms are doing in the Battle for Talent

One of the things we love to talk about on this podcast is how to take data and make it tell a story. This week’s guests are doing just that on the topic of Community Policing and making sure that there is equal coverage for both the Community part, as well as the Policing part. Ama Romaine, co-founder and Chair, and Wayne Harris, Executive Director of The Initiative: Advancing the Blue and Black Partnership, join us to describe how they are taking quantitative and qualitative data from both communities and the police agencies to identify the current relationship between them, and how they are aligned and misaligned when it comes to community policing.
The conversation about [community] policing… really needs to get to where we recognize that we’re in this together. That there’s very little separation between the men and women wearing a police uniform, and the people that they are working with.” – Wayne Harris
What we are really trying to do is give voice to individuals in their communities and create a way for local leaders, for police leaders, for anyone, really, to be able to understand what a community needs. And then let’s focus on creating and providing those needs for that community. That’s what’s going to create thriving communities in the end and, frankly, reduce the need for law enforcement to solve every single problem that we have.” – Ama Romaine
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Information Inspirations:

Our fellow geek, Casey Flaherty talks about his recent blog post series with Chad Main of the Technically Legal Podcast.

Is a workcation or bleisure travel in your future? A survey of business/leisure travelers seems to point in that direction.
Contact Us:
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Email: geekinreviewpodcast@gmail.com.
Music: As always, the great music you hear on the podcast is from Jerry David DeCicca.
Transcript:

Continue Reading The Geek in Review Ep. 145 – Ama Romaine and Wayne Harris on The Initiative: Advancing the Blue and Black Partnership

Back in May (ep. 117), we had Bloomberg Law’s Molly Huie on the show to talk about the Bloomberg Law DEI Framework survey she and her team created and were pushing law firms to contribute. So we close the loop on this conversation by asking Molly to come back and talk about the results of the survey. There were over 30 firms who participated in the survey with 28 of those firms making “the cut” to be included in the 2021 DEI Framework results. Molly walks us through why these firms jumped onboard this inaugural survey, what issues they may have had in collecting and answering the over 90 questions in the survey, and what reactions they had to the results of the survey.
The survey results are free to download from Bloomberg Law’s DEI Framework page, and the 2022 edition of the survey will be out in the first quarter of next year for any firms who want to see if they make the cut for inclusion in the DEI Framework.
 

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Share with a friend
If you like what you hear, please share the podcast with a friend or colleague. Or, reach out to us and let us know what you think.
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Music: As always, the great music you hear on the podcast is from Jerry David DeCicca.
Transcript

Continue Reading The Geek in Review Ep. 135 – Results of the Bloomberg Law DEI Framework with Molly Huie