Legal Leaders Exchange - Podcast episode 17

The Future-Ready Lawyer: How legal departments can get ready for what's next

In this podcast episode, Barry Ader, our Vice President of Product Management and Marketing, joins Nathan Cemenska, our Director of Legal Operations and Industry Insights, to talk about what it means for corporate legal departments to be future-ready. Central to the conversation is how to maximize efficiencies in legal spend and outside-counsel management. They discuss how companies can build comprehensive strategies to leverage new technologies and data-driven metrics to achieve these goals.

Listen to learn more about:

• Understanding which strategies legal departments should have in place to be better business partners
• The importance of legal teams remaining nimble so they are able to pivot when necessary
• Simultaneously maintaining cost control, high-quality outcomes, and law firm relationships
• Using internal and benchmark data to develop strategies that improve legal department operations
• Choosing proven AI tools, avoiding those built on unproven technology, and leveraging reliable solutions to control spend

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Transcript

Greg Corombos

Hi, I’m Greg Corombos. Welcome to Legal Leaders Exchange. This podcast series was created to deliver insights on optimizing legal operations for corporate legal and insurance claims professionals. Is your corporate legal department prepared to navigate what lies ahead, both the challenges and opportunities? Are you equipped to balance innovation with practicality? Do you have a legal technology roadmap that aligns with current and future needs and organizational goals? Are you positioned to improve efficiency and compliance in an ever-changing economic and regulatory climate?

Seeking answers to these questions, we brought in two leaders at Wolters Kluwer ELM Solutions, Barry Ader, Vice President of Product Management and Marketing, and Nathan Cemenska, Director of Legal Operations and Industry Insights. Barry and Nathan, welcome to this new episode, The Future-Ready Lawyer: How legal departments can get ready for what’s next. I’ll now pass the conversation over to you.

Nathan Cemenska

Hi everybody Nathan Cemenska, thought leader for Wolters Kluwer ELM Solutions. We’re one of the largest e-billing providers, matter management providers. We also have lots of rate benchmarking products, predictive analytics that help predict the likely cycle time, spend, and outcome of litigation matters; and we also do AI-assisted invoice review. And we are here today to talk about the future-ready lawyer. We'll get into what that means here in a second but before we do that, I want to introduce my co-speaker Barry Ader. Barry?

Barry Ader

Hey, Nate how are you? Hey guys, it's Barry Ader here I'm the Vice President of Product Management and Marketing at ELM Solutions which is part of Wolters Kluwer, and I'm excited today to talk a little bit about the future-ready lawyer.

Nathan Cemenska

Thank you, Barry. Just for background for our clients, Wolters Kluwer does do a major survey every year which is called The Future-Ready Lawyer survey and we are going to be publishing that in the next month or two. We're not going to get into the details and contents of the survey on this call because it's still under development. But I did want to prime the pump by letting people know to look out for that. So we're going to talk more about the future-ready lawyer at a conceptual level. I have some ideas about what it means to be future-ready, but what about you? Barry, what do you think? What does that phrase mean?

Barry Ader

Yeah, I mean, It's a great catch phrase. But let's, you know, talk a little bit about what that actually means in in reality. And to me what future-ready means is… There's a lot of changes happening in the legal world, in the corporate legal department world. And making sure that we're keeping up with the opportunities, we're keeping up with the technology, we're running as efficiently as we can. There's a lot of things that are coming at the legal department right now. At a high level, that, to me, is what future-ready means. But if we could dive into it just a little bit, it's really about understanding the strategies that your legal department needs to make in order for it to be the best business partner it can be to the corporation. Stronger cost management is a key area. Collaboration with your outside counsel and how you can collaborate better, more efficiently – these are all examples of how a company can be more future-ready and I'm excited to talk more about it as we go, Nate.

Nathan Cemenska

Thanks Barry. One of the phrases that you hear over and over again if you look at the literature is that general counsel want a seat at the table, that they want to be considered strategic partners. They've always been partners in some sense, but I think, historically speaking, they were more viewed as legal experts in the sense that internally clients would come to them with a problem and say hey what do I do about this? But the transformation that's happening – it’s been happening for a while, but it's got a ways to go – is from that more passive legal expert approach to a more proactive businesslike approach where you're anticipating legal issues.

But you're also putting in the people, processes, and technology so that your law department can handle pretty much anything that comes at them. And one of the phrases that came to mind when I was thinking about this was a phrase from Andy Grove, who was the third person to start up Intel, it's actually the title of one of his books, “only the paranoid survive.” And I think what he meant by that was you really don't know what's going to happen next, right? You may have your theories but I think the last couple years have shown that theories are often disproven. Nobody anticipated the pandemic, nobody anticipated the inflation that was going to happen. The fed was totally caught off guard by that inflation. And so we need to try to anticipate the future to some extent. But at the same time, isn’t it true, Barry, that we really have to be well-rounded organizations and have all sorts of scenarios that we are prepared for, not just what we consider to be the most likely scenario?

Barry Ader

Yeah, the way I would put it, Nate, is you have to be nimble, right? You have to have the technology foundation. You have to have the ability to get access to the data that you need to pivot on a dime and to help the business with whatever scenario might come out to play. To give an example, right: in the past, you'd go to your legal department, you'd say “Give me the ruling on x, y, or z.” Well, it's not like that anymore you want to go to your legal department and your legal department wants to be the business partner to say “Okay, let's play this scenario out, but I need data to help me do that.” So it's really about being nimble and being able to leverage data to help you make those decisions when you're trying to be nimble.

Nathan Cemenska

Thanks, Barry. And on the topic of being prepared, having data, we talked before about the concept of maturity, business maturity of corporate law departments and insurance claims organizations. And from a technology perspective, our organization puts our clients, and in some cases potential clients, through maturity assessments that help them determine their readiness for the sorts of things we're talking about, isn't that right?

Barry Ader

Yeah, that's exactly right. And if I step back just one second off of that, what you really want to do is you want to create a roadmap for your own legal technology, right? And if you're going to create a legal technology roadmap, how do you start? What areas should you focus on? And in order to understand what areas to focus on, the best thing you can do is do a maturity assessment of where you are and what your business needs. Every company is going to be different, so it's really a question of laying out the goals and the strategies that you're trying to do and then measuring yourself against those goals. How good am I? How important is it? How quickly can I get access to it, whatever the “it” is? So you have to do that maturity assessment and that’ll help you understand where to focus your energies and then create your legal technology roadmap over the next twelve to eighteen months, depending upon that maturity assessment.

Nathan Cemenska

And Barry I assume that we are not just talking about your maturity with respect to any particular piece of technology, but really a holistic analysis of all the ways you could be using various types of technology to better your organization. That being said, we here at Wolters Kluwer ELM Solutions, we're a spend management company. That's what we're focused on. We're focused on helping our clients save money on outside legal costs. There's other things that we do but that is our number one thing that we're focused on. And so you can really do a maturity assessment, not only in a holistic sense, but you can do a maturity assessment that is focused on spend management, right?

Barry Ader

Absolutely, you can do a maturity assessment across all of legal technology, spend, e-billing, matter, CLM, etc. But you could also do… and focus on things like spend management. I'll give you an example of something that I'm seeing as a trend in the industry these days, Nate. We all know that relationships between corporate legal departments and their outside counsel is extremely important and deciding who you're going to use for different matters, historically, has been based upon those relationships. One of the trends that we're seeing is building out some legal technology roadmap and assessments around better understanding, are relationships the way to go? Or is there other data out there that can help me determine the better outside counsel law firm to use on a particular matter or on a particular discipline or vertical? So I’m really seeing the trend towards more maturity around how you pick your law firm, how you pick your panel, how you pick deciding the diversity – if you will, as an example – of the panel that you want to use on a particular matter. There's really a big shift going on there.

Nathan Cemenska

There is no question, Barry, that you are hitting on a major important… what's called a secular trend, meaning a long-term trend. Historically speaking, law has been a relationship-based business. I think it's actually going to continue to be that. It needs to continue to make sense on a personal level. In addition, though, what I think is happening is that the relationship also is required to make sense on an impersonal level. So, it needs to make sense both on a relationship level and, basically, on a math level.

Barry Ader

Yeah, on a business level, a math, business level.

Nathan Cemenska

Correct. So this really is about cost, quality, and outcomes in the end. And relationships are not a sideshow to that, but both of these things are equally important. So, Barry, just because of the way that you're talking, I assume that that you are alluding to the sort of trend that we're seeing, and that we're part of, to help clients with a legal engagement, at the outset, with outside counsel is that right?

Barry Ader

Yeah, agreed and it's really about panel management, legal engagement, better understanding. And by the way every company is different, right? There are there are some companies where relationships matter so much. But I'd even argue that that's changing to a degree, as well, and even those companies where historically it's all been about relationship, even there it's starting to change as well. But yeah, that's exactly right. And one of the trends that we're seeing is using data – and Nate, you're the king of data – using data helped make those decisions. And you can probably talk even better than I can about some of those data-based decisions on legal engagement.

Nathan Cemenska

Yeah, I think that the best example of that that I can think of right now is our Predictive Insights functionality that we have in our tools. This is a functionality that uses artificial intelligence, I mentioned it at the beginning of this talk, to predict the cost and the outcome and the length of litigation matters. It tends to focus on higher-volume, lower-risk matters like insurance litigation, but it could really be used for any kind of litigation where there's going to be a high enough volume to have a good sample size. I've been part of that product and that really is the way of the future. But there's so many other ways to go after the data-driven aspect of various legal matters.

I'm particularly interested in the very largest legal matters I do some reports called LegalVIEW Insights and one of the findings of those reports is that 61% of outside counsel costs are derived from legal matters that have one million dollars or more in total outside spend. So, you can try really hard to save as much money as you can on your immigration matters and your single-plaintiff labor and employment matters and all those, but the reality is if you really want to save some money, you've got to go after the largest legal matters.

We here at Wolters Kluwer have published some research on what we call “megamatters,” the largest types of matters that I just alluded to. And we are about to publish some more research that's going to be about three segments. It's going to be about M&A, product liability, and patent litigation. And we're going to be looking at UTBMS codes and talking about how long these legal matters last. What are the different phases? How long do they last? How are they staffed? How much they cost and all that type of stuff, and it's just going to keep going. Everybody's into this stuff. And, you know, people say you can't predict how long a legal matter is going to last or how much it's going to cost. You can't predict it with 100% accuracy but you can certainly produce a range, and our company has proven that. Barry, go ahead, sorry.

Barry Ader

Yeah, and what's really important there is about the data itself, right? You can only help make better predictions based upon how good your database is and how good your benchmark data is to compare it against. Whatever you look to decide on benchmarks, the key there is make sure that the data that the benchmark is going after is wide and deep, as well. You know it's really, really important to have quality data to do that benchmarking against.

Nathan Cemenska

Yeah, and that goes into one of the other topics that I wanted to discuss with you, Barry. You are referring to, when you say “the importance of having big enough data,” I assume you're alluding to things like LegalVIEW data warehouse which is the benchmarking database that we maintain here at Wolters Kluwer ELM Solutions. As of about six months ago, it had $163 billion worth of legal invoices and other associated data in there. And that's what allows us to have the Predictive Insights product that I mentioned, allows us to have our AI-assisted invoice review product, which is called LegalVIEW BillAnalyzer, and allows me to do the research on product liability, patent litigation, and mergers and acquisitions that I just mentioned.

And this is 1 example, although certainly not the only example of… Barry, tell me whether I'm right… how you want to partner with a company that has a long-term view and makes long-term investments because LegalVIEW data warehouse was not a quick win. This is something we've been doing since 2010. And we are getting dividends from it now. But really this has been a long-term investment that benefits us, but also benefits the industry. And not all companies have the luxury of focusing on the long-term like that.

Barry Ader

Yeah, you're absolutely right. And this legal view database, it started many years ago and, I guess, first and foremost I want to thank our data contributors because it's companies that allow us to anonymize their data and put it into this database that allows us to have that rich set of data. So without the data contributors, we wouldn't have the database. Then, that's the foundation, right? And then once you have the database, how are we leveraging that database in order to help companies make better decisions? And I'll give you an example. A lot of people know us as the company that does these Real Rate Reports and that's great, and that's awesome, and I hope everybody reads those. But even a more practical example is legal bill review. We've now been able to leverage our LegalVIEW database to help customers with legal bill review automate that whole process of comparing the invoices against their billing guidelines and against the industry data that comes from this database. So, it's really about not only having the data but then being able to build practical examples, in this case using AI, to be able to feed off of that data.

Nathan Cemenska

Yeah, and Barry this is not a brand new solution. This is a tried and true solution that we've been doing for what, 5 or 6 years now?

Barry Ader

Yeah, I believe it's 5, it may already be 6, but yeah, and it's only building. The more customers that we now have on it, the AI keeps learning, the AI keeps getting even better. And being able to save companies real dollars off of their spend, their invoices, has dramatically changed the way corporate legal departments work with their outside counsel.

Nathan Cemenska

And so this is an area where our company is way ahead of everyone else. We've been doing this for literally four years, I think, longer than our nearest competitor in terms of AI and working with clients and with data and the AI. And we also have an edge because it is informed by LegalVIEW data warehouse, which we mentioned, Could we talk a little bit about the importance of not getting distracted by the bright shiny object? Because everybody is talking about ChatGPT.

Barry Ader

I knew where you were going, Nate!

Nathan Cemenska

Only, probably, one percent of those people know what they're talking about, which is why I don't say anything on the subject. But I was at a conference, at the CLOC conference a couple months ago, and a person that I came up with in legal operations, who in my opinion is one of the smartest people in legal operations, said on the one hand you have to start doing something with large language models. But then, literally on the next slide, he said there is about to be an absolute avalanche of garbage products – and I believe that was his exact quote, that's why I'm using that language. How are people supposed to deal with this? Is it a viable option to stick to what is known and what we know works, including forms of artificial intelligence that we know work, or is it time to experiment? Or do we maybe want to do both?

Barry Ader

The answer is both and let me let me talk a little bit about that. So, first off, AI has been around for a while. Real, practical examples of how to use AI are out there and available for customers to use and. LegalVIEW BillAnalyzer is a great example of that. Predictive Insights is a great example of that, building on foundational data to give you real results now. With that said, innovation is what fuels our industry. The technology industry is fueled by innovation and Legal is just one example of that and there are plenty of vendors out there, us included, that are going to spend the next twelve, eighteen, twenty-four months and more, seeing how ChatGPT can help customers deliver real solutions. But my point is: let us figure that out and let us do the innovation. And as you look for these examples that come out from vendors, make sure that they're providing real, practical help and value, and it's not just using AI for the sake of AI and it's not just ChatGPT because you checked the box. It has to be about solving real problems, leveraging data to help you do it.

Nathan Cemenska

Well, let's end on this final point: we're really getting into the area where it's really not just about the technology that's being deployed. It's really about who are you partnering with and what type of organization is that? Technologies come and go, but there are some companies that are going to treat you right and that are going to invest in the future and that are stable. And then there's other companies that might not be able to say all those things about themselves. And I think you and I, Barry, both agree that you really want to partner with someone who's got the wherewithal to last and to continue innovating, not only with whatever the newest technology is, but the one that comes after that and the one that comes after that and the one that comes after that. Is that accurate?

Barry Ader

Absolutely. And okay, I'm a little prejudiced. I work for a company that has been around for a very long time and a company that believes in investing in innovation and technology to get us to the next place. And again, I'm a little prejudiced because of that and I'm also seeing what we're all seeing, which is the VC community and the dollars that are being invested in the VCP community. They're starting to dry up a little bit I'm not sure that these companies… are they going to be around tomorrow? Are they going to be able to invest in technologies? As an example, just something that we've recently done, which is moving our entire product set to Microsoft Azure, a big, costly investment that we did. But it's an investment that needed to be done and is going to provide a platform that customers are going to be able to leverage and grow with over time. So yes, I'm a little prejudiced because I work for a large company, but I truly do believe that working with a vendor that you trust, working with a vendor that you believe is stable and will be there with you tomorrow… those are really important things to look at.

Nathan Cemenska

Yes, I couldn't agree more, Barry. I will go ahead and conclude this with a little story. I used to do legal technology procurement for a living at my last job and I remember the client, which was a corporate law department, actually had me make a slide about a particular e-billing software that they were looking at buying, which was not us, and the slide was basically “what if these people go out of business” and all the contingency plans if that happened. I really don't think that you should be dealing with a vendor where you feel like you have to have one of those slides. Just my opinion. Ok, thank you so much, Barry, and thank you so much to our audience for joining us. I Hope that you learned something, I know that I did. Have a good day.

Greg Corombos

That was Wolters Kluwer ELM Solutions’ Barry Ader, Vice President of Product Management and Marketing, and Nathan Cemenska, Director of Legal Operations and Industry Insights. This podcast is hosted by Wolters Kluwer ELM Solutions, the market-leading provider of enterprise legal spend and matter management, contract lifecycle management, and legal analytics solutions. For more information and additional guidance, please visit wolterskluwer.com or call (713) 572-3282. Please join us for future podcasts on optimizing legal operations and achieving your legal and business goals.