Welcome to Legal Tech Matters, a Litera podcast dedicated to creating conversations about trends, technology and innovation for modern law firms and companies. Big and small.
00;00;15;14 - 00;00;35;12
Scott Ferguson
And hello, everyone. My name is Scott Ferguson, and welcome to today's webcast and panel discussion entitled The Unexpected Benefits of AI in Legal Work. This event is brought to you by law.com, and it is sponsored by Litera.
And now for today's topic and the reason why everybody is here today, the Unexpected Benefits of AI and Legal Work. Legal professionals know that artificial intelligence saves time, removes drudgery, and streamlines legal workflows. But that's not all. As AI becomes ubiquitous in the industry, law firms are discovering unexpected benefits for the use of these technologies. For example, the creation of structured data can provide additional value to law firms and their clients. As well as to help reduce lawyer attrition.
AI and other technologies in the legal industry have already revolutionized the way law firms operate from talent acquisition and retention to improving matters of efficiency. And as we look to the future, the use of technology and AI specifically will continue to impact what it means to do legal work. Now, before we begin our panel discussion today, we do have a couple of poll questions for our audience, and I'll read those off and give our audience a few minutes to reflect on those.
So, our first one is what is your experience with AI solutions and your choices are? I personally have used or use AI solutions at my firm. We have an AI solution at our firm, but its use is limited. I'm aware of several uses of it, but I don't really use it right now in AI and legal. And I'm unsure how AI is used in legal.
Let's go onto our second poll question of the Day. And now one is Do you plan to expand your organization's usage of technologies like AI over the next five years? You can either answer yes in the next year or more like in ten years, no, or you're unsure. And when we give everybody a few seconds to discuss those poll questions and get our responses up there, I want to introduce the person who will be leading our panel today.
It's Kennan Samman. He is the vice president of Global Product Sales at Litera. And with that, Kennan, I can turn it over to you to start.
Kennan Samman
All right. Thank you, Scott. Thank you, everyone, for joining us today. We're going to start with introductions first and then we'll get into the content itself. As Scott mentioned, my name is Kennan Samman. I am the global and the VP of Global Product Sales at Litera. Joining me today also from Litera is my colleague, Josie. I'll hand it over to you.
00;02;40;09 - 00;03;20;18
Josephine Good
Thanks. Great to be here. Thank you for joining us. My name is Josie Good. And as Kennan said, I'm one of the members of the Litera team, so I'm one of the practice advisors at Litera. So that pretty simply means I came from practice. And in a former life I spent about five and a half years at Sherman and Sterling in London where I was an M&A associate and today I suppose I'm here maybe to talk a little bit about the unexpected benefits being a career path, working Litera and Kira, but also just exploring how we work with our existing customers and prospects and look at these benefits of this technology.
00;03;22;03 - 00;03;46;29
Sarah McCormick
Thank you. Hi, my name's Sarah McCormick. I'm the senior manager of Client Value Initiative at Honigman, a AmLaw 200 firm based in Detroit, Michigan. I have run the legal project management team at the firm, and I'm also highly involved in the operations of our in-house diligence center called Honigman Review Solutions, which you'll hear a lot more about shortly.
So, with that, I will pass it over to Julien
00;03;50;14 - 00;04;22;03
Julien Cayet
Thank you, Sarah. Good afternoon, everyone. My name is Julien Cayet. I work with Loyens & Loeff, a European firm based out of Amsterdam with 900 lawyers. Offices across Europe with also international offices in the US and Asia. We are a transaction firm, mostly with a large tax advisory practice and I'm a bit of an atypical panelist today because I don't have a law degree, neither a technology degree and more than innovation and business transformation specialists with the firm.
00;04;23;01 - 00;04;48;26
Kennan Samman
All right, Julien, we share that by the way, I don't have either a JD or a Ph.D. in tech but I am thrilled to be here. So first, just quickly go over the agenda for today. First, we're going to start with the use of AI and transactional work then we'll move on to the benefits of AI, unexpected benefits of AI, and that will kick off our roundtable discussion.
So, Kim, if we can move on to the next slide again. Good morning. Good afternoon. Good evening, everyone, and welcome to the Unexpected Benefits of AI in Legal Work. I am thrilled to be joined by this all-star cast of legal experts to discuss this hot topic. But before we bring in our stars, allow me to get through a couple of slides and observations to set the stage.
I am Kennan Samman and I'm the VP of Global Product Sales at Litera. I joined Litera through the Kira Systems acquisition last September. My origin story and legal tech began with practical law, but with AI it began in early 2015 with a little Toronto start-up company called Diligence Engine. Great name, by the way, who quickly rebranded to Kira shortly thereafter.
Literally within 24 hours, they rebranded to Kira. Over the past seven years, I've had the unique privilege to work with many of you law firm leaders and professionals across the globe. The output together, we as a legal community drove AI and legal work forward to where it is today. Often there is no playbook or blueprint for AI vendors when creating a category or entering new markets.
Our objective at the most basic level starts with does our tool do what we built it to do, and does it drive value? From there, we partner with the community to build the framework required when firms assess and adopt intelligent software and take those learnings to evolve strategy and product moving forward. When you put intelligent tools in the hands of sophisticated professionals, interesting and innovative things happen.
No truer statement can be made. As I personally reflect from where we started to where we are today and excited to learn and hear from Julien and Sarah and Josie, their perspectives on this too in a little bit. For the purposes of this discussion. I'm going to reference the founders of Kira Systems and friends of mine, Noah Weisberg and Dr. Alexander Hudek's definition of AI in their book AI for Lawyers.
In the book, they define AI as any task that a computer does that shows human like intelligence or better. They note that the precise edges of this definition are less important than the overall impact that AI and similar technologies have on society and the practice of law. And as a result, tasks that we once considered untouchable by computers become routine.
And our definition of human like intelligence becomes narrower. This definition is important because at Kira, our mission from the beginning was to demystify AI from the sci fi mystique and present the tool as an assisted review platform that augments the reviewer's workflow within the scope of capability. A brief history of AI in the legal industry shows 20 years of evolution spanning across a wide variety of addressable needs, as evident in this timeline.
AI has since driven real change in how lawyers work, and more is coming. As you can see, the field of eDiscovery offers one of the oldest examples with AI powered technology assisted review, which has been accepted as black letter law since at least 2015. And staying in 2015, former AI intelligence shocked the industry when it outperformed an experienced lawyer, finding a nearly identical precedent in seconds rather than the 10 hours it took a human to find the same case.
More recent areas in development include legal experts systems that provide rules and inference based legal answers for standard inquiries. As well as litigation analytics that can accurately predict the outcome of litigation. To summarize, AI has won a digital hand and digital eye to the mundane tasks and drudgery legal professionals experience and less normalized the term AI as not as a threatening, all-encompassing RoboCop who's out to replace lawyers, but rather tools narrowly designed with focus to assist legal professionals with their daily tasks.
So, this timeline highlights some of the milestones of air use in legal tech. We can move on to the next slide, which is how top firms are using AI and transactional work. In the beginning, when Noah and Alex founded Kira, when I joined them in 2015, they realized three things. One, we all professionals spend a lot of time reviewing contracts Two people make mistakes.
Even those who have graduated from top law schools or have been through extensive training, and hence why we build multiple levels of review and finally, people often review contracts for the same things over and over again. A great application for machine learning software to augment legal professionals contract review tasks. And as a result, the immediate value drivers we've seen include accuracy.
Human plus machine is greater than human or machine alone. Time Allocation. Expedite review by allowing Kira to be your first set of eyes before your first set of eyes even begin. That's as an example, right and efficiency, which includes total diligence, do more or complete a total review of the data room rather than a subset deemed material. As a result, increasing the scope of work minimizes risk at a lower incremental cost.
I would be remiss if I didn't call out the obvious and I'll quote a Chicago CIO who spoke at a Litera customer panel last week, which validates a lot of my interactions with you and others over the years. And I'm paraphrasing here, if it makes your life better, that's what matters stated differently, that it takes some of the friction and pain out of the process.
The benefits, legal professionals and law firms experience when using AI is far greater than what is on this slide and what we anticipated many, many years ago. So, let's move on to the unexpected benefits of AI. As I mentioned earlier, when you put intelligent tools in the hands of sophisticated professionals, interesting and innovative things happen. We've seen it.
And when you adopt multiple or a multitude of intelligent technologies, their joint capabilities will more than increase the value proposition of each tool in isolation by optimizing each other. We're here today to discuss the unexpected benefits of AI and the breadth and depth of value that AI tools bring while bridging the gap between the business and practice of law.
Moreover, investing in these critical intelligence systems improves productivity increases accuracy, enhances client delivery, all while unlocking law firm data to perform activities through newly acquired insights and all within the goldmine of knowledge and data that law firms sit on, they otherwise may not have been able to do. The result? Breaking down silos among legal teams by providing insights across the firm.
Bridging the practice and business of law. New career opportunities. We quickly shifted away from the threat of well AI replace lawyers and legal professional professionals to AI as the modern job creator, which is a chapter in AI for lawyers, by the way. Or what more can AI do for my legal professionals winning new business so they can solve interestingly, legal problems, increased profitability, less time spent on administrative tasks means larger margins, fewer write downs, and more deal capacity, providing higher quality legal services so they can win more cases and close more deals.
Maintain and grow your client base, increase potential to cement client relationships and accelerate broader legal services or gain a competitive advantage open new avenues to provide better service and win new business mitigating risk across a firm with a higher degree of governance, fostering greater collaboration all while exceeding client expectations, and as a result, help reduce attrition. Attract top talent.
Ensure lateral moves are set up for success. And ultimately continue to build on firm culture with the future in mind. In conclusion, the firms have seen success view when investing in AI they view as more than a quantitative measure as a value driver. They also view as an investment in firm talent, experience, and culture. What I've observed over the past seven years is an evolution from quantitative measures on the benefits of AI to a combination of quantitative with a heavier focus on the qualitative and most recently, the unexpected benefit the role investing in AI plays on firm culture.
All right. So that was a lot I know that you all are not necessarily here to hear here to hear me speak this entire time, but that's my view and observation over the thousands of conversations that I've had over the many years. So now let's get Sarah, Julien and Josie in the mix. And I am going to open up this roundtable discussion with Sarah first.
So, Sarah, how has AI based legality changed work that lawyers are doing? For example, intelligent drafting, purchase agreements, insulator agreements, disclosure schedules, etc.
00;14;05;22 - 00;14;24;19
Sarah McCormick
Thank you. Yeah. So, AI is now part of daily practice for many of our attorneys at the firm, and it is one of the cornerstones of our project of our client service delivery model. So, in particular, one area where we see the highest use of AI in our firm is with our group called Honigman Review Solutions.
And what Honigman Solutions is, is a team of diligent attorneys. And they work primarily with our M&A and private equity groups for now with hopes to expand. And we wouldn't be able to have hopes to expand if we weren't able to leverage AI technology but basically, what that what they're tasked with doing is they are every day doing diligence for our deal teams at Honigman we have a very, very robust corporate practice.
And so, this team of four attorneys, they title review attorneys, they get the work from our deal teams, and they do the diligence leveraging Kira every single transaction. So, it is just part of the way that we do business when we're looking at Honigman Review Solutions as a standalone group within the firm. And it allows them to it allows the team of four to take on more projects at a time, and it allows to cut down on human mistakes and also to answer client questions faster.
So, we have a standard set of fields that we're looking at for any diligence project. But and we scoped that at the beginning of the project and the client will add or subtract what they're looking for as it relates to their diligence review. But if the client comes back and says, hey, you know, we want to look at a different term instead of us having to sit there, you know, the diligence review attorneys having to retrace their steps and go through each and every document piece by piece, they're able to run a very quick search and get to that answer a little bit faster.
We drive home really the concept that, you know, the use of Kira does not replace that the review of our attorneys and that they're still responsible for the review, but it definitely does expedite it. But overall, it has completely made our process for diligent review more efficient, and it has allowed us to take on more projects and to design groups like this diligence center
00;16;28;17 - 00;16;33;11
Kennan Samman
Okay. That's helpful. I want to double click on that. But before Julien, what's been your experience and perspective in this.
00;16;36;28 - 00;17;15;02
Julien Cayet
I think there are some similarities. At Loyens and Loeff we use AI in three practices, the litigation practice, the real estate practice and the corporate practices. We use Kira specifically on corporate and real estate. The major difference from what my peer was saying a minute ago is that between our due diligence team and deal team, frankly, one team doing more to guide the negotiation in the transaction and, and the due diligence.
So, but I would say in terms of benefits and especially in the real estate practice for the last 18 months, yeah, a standard feature of any large due diligence we would probably keep AI on smaller due diligence, but we can come back to that and that's, that's my view in a nutshell.
00;17;36;24 - 00;17;55;02
Kennan Samman
Yeah. And Josie, you've had the luxury and privilege to work with many firms across the globe in the way that they're adopting technology specifically Kira and other technologies. What have you seen and the way that lawyers are doing this whether it's diligence or other exercises?
00;17;57;04 - 00;18;24;17
Josephine Good
Yeah, I think the other summed up pretty well as I was thinking about sort of the unexpected benefits of AI. And we look at and hear a lot about, as you say, the work the lawyers are doing. People come to me and say, so how is diligence changing? What's the change? What's everyone talking about? What's happening And I think from my perspective, other than some of the things the others have alluded to in terms of the way in which doing it has changed.
I don't think the core work has changed there's still the need to do that work. It's just the way in which firms are doing it is so different in so many ways. So be that sort of the different business models that Sarah was talking about or Julian was talking about just really kind of making AI positive these core practices in the way that it's used all the time.
I think lots of different ways that people are bringing that into their work and bringing it into the practices. But I think those kind of underlying themes to all the changes in terms of the benefits the AI is bringing to the practices that is consistent across that of most of the firms I work with, whatever practice areas the AI in the technology might be touching and I think the way in which people are working that is to sort of make changes I've seen at least in my conversations and really it's all underpinned by data.
So, it's really about taking these really manual processes. Yes, making them more efficient, but really turning everything into data that can be manipulated and used. And I think that might be sort of a theme across lots of our conversations today. But what that means in terms of the actual changes is changes to output. So, changes to the client output and the conversations that people are having in that respect because they've got more actionable data.
And then also just changes in the way people are working and using that data to be a little bit more efficient. So, I think really the work isn't changing so much, but I think the way that people are using that data that is produced by doing the work and the way in which they're doing it is the change, I think.
00;20;01;11 - 00;20;12;27
Kennan Samman
Yeah, I couldn't agree more. And I'm curious, Sarah, from your perspective, have you seen the firm's ability to then leverage the data now that it's organized to do other interesting things moving forward?
00;20;15;00 - 00;20;48;16
Sarah McCormick
So, this is where my two roles kind of are interesting in the overlap. I really assist the time with the operational side of Honigman Review solutions, which is the dedicated diligence center. But then I also lead the LPM team. And so, as part of our legal project management team, we're constantly looking at data and in particular data as it relates to pricing things and the AI technology that we use It was interesting to me because I pulled a spreadsheet and there's data on there, right? That may seem like a very small data piece. For example, the number of pages of a contract that may seem like Who cares, right? Who cares about the number of pages? But that small piece of data has allowed us to better price our engagement so we're able to look at the time that it took per contract to then predict future pricing.
And then also it empowers us to come up with creative pricing models so we can say we've done ten like if we're just doing a contract review project, for example, and we do the review of 200 contracts, looking at that page count allows us to say, okay, well, we had X number of contracts that were ten pages or less and per contract we spent X amount of time and then we had other contracts in a different category that were 20 pages or more, and this is how long this took us and all that data.
If you keep collecting it over time and you look at the different variables, so complexity type of work that we're doing and you gather all of that, then you're able to take all of that and better inform pricing, better inform the budgets, and then the tracking of that and what you can expect and also staffing which then allows us to staff better in the future because we know what's coming in.
And yeah, so those have been a lot of the benefits, you know, looking at all of the data that a tool provides, not just the output in the sense that not just the terms that it's providing you, that it's finding in the contract, but looking at each piece.
00;22;23;02 - 00;22;47;17
Kennan Samman
Yeah. In my long-winded preamble, we talked about how this tool, how tools can help optimize value to one another, the interactivity and or interconnectivity of these tools. And so, zooming out it sounds like when you start when you start using intelligence, whether it's Kira or something else, the data output that you're getting is allowing you to optimize another tool.
It's going to pull that data out and allow you to make smart decisions in another area that's going to influence or impact the client matter. And so, Julien with that, is that something that resonates with you in the firm?
00;23;00;02 - 00;23;28;23
Julien Cayet
Yeah, totally. And I must say, with all that Sarah just said, I am taking notes because we should be doing much more and I see a lot of potential there. But very honestly, we went into production with Kira about eighteen months ago, and we've been very, very focused on getting the value out of technology from true operational standpoint. And we haven't entered yet into leverage other benefits.
But it's interesting what I see when it comes to the discussion on the side benefits of AI is the potential for AI to relieve, especially junior and media associates from the challenge of going through large volume of contracts, especially in real estate transactions. We can have success using AI in rendering all types of files and performing the review under extremely tight deadlines and sometimes it's simply impossible to get to the bottom of this due diligence.
So, we need to go into something we suppose makes everyone nervous. But sometimes given the time constraint, that's the only way through to get the results for the client. So, we can avoid something. We can review each and every piece of content for due diligence within the time constraints of clients, which just like a notch transaction so a big big bust!
00;24;30;17 - 00;24;32;00
Kennan Samman
Yeah, I love the idea.
00;24;32;25 - 00;24;41;19
Julien Cayet
And a relief for the associate. In the good old days it would have been, like, a whole weekend trying to get to the bottom of the pile of these reviews.
00;24;41;28 - 00;25;12;02
Kennan Samman
Yeah, totally. So, I think if I heard you correctly on that, just the, the qualitative impact that has on, on the, on the review themselves or the legal professionals that are involved too. And I absolutely love the idea of pools optimizing other tools to inform putting in pricing strategy, right? So, you're using a tool to do something else to help create efficiencies and deliver greater value.
Kennan Samman
But as you start getting familiar and acquainted with the boards and the impact it's going to have on the workflow of your specific term, how can you then take it to the next level, which is using that data to inform policy and pricing strategy as an example or business of even early when it's informing knowledge management, not management or innovation projects and matters internally Josie, again, you have a unique perspective working with many firms. Have you seen firms do this?
00;25;39;26 - 00;26;06;06
Josephine Good
Yeah, and I'm interested actually as to what that is that that I did that actually we tend to pigeonhole ourselves when we're thinking about the data we are getting out. So, we're just thinking about what we might expect at Kira at the pulling out in the process of causes. But actually, there's so much more in this and really a hub of data in the place of and that's definitely what I think we'll see from.
Doing well will also be more pertinent to the data taking up some care in the process as the minutes later that day exciting things are in that way. So, we're a lot more open. To the desire to use that data for extended studies. So, lots of firms are wanting to differentiate themselves. They're sitting on this data and they're saying, how do I take this to the market? I'm getting my client bringing me saying, what's market? Which is one of the most difficult questions to answer, and I want to answer it with data.
And I've just used a technology to tell me what's in my contract, that I must be in a pretty well-informed position now to go to the market and tell them what's market from up that perspective. So, I think as we look at knowledge management and we look at managing that data, there are so many things. That's what Sarah spoke about in terms of pitching and pricing but there's also those sorts of client differentiating external studies that people are doing.
So maybe they're using contracts from diligence, or they've got contracts from public sources. And what they're doing is they're using these sort of AI technologies to structure that data and present market studies and report to their clients to say, here's what's market and it's real and it's really based and sort of data. And in fact, so that's definitely something that I've seen on the increase as people get more familiar and we're on this sort of journey of understanding the full benefit to AI, I think.
00;27;34;04 - 00;27;58;22
Kennan Samman
Yeah, it's enabling legal professionals to be more proactive with their clients. And getting ahead of any risk or issues too. I do want to just move on to another question here is and it's really going back to the origins of adopting technology and when you embrace it. So, Sarah, let's start with you. When did your firm begin embracing these technologies and adding new roles to oversee the use of implementation in the firm?
00;28;00;20 - 00;28;43;03
Sarah McCormick
Yeah. So, I would say actually I think we took a reverse approach where we got the people first and then we started the people that could be prepared to then implement these technologies. So, I would say probably about ten years ago, our staff side roles really started to, you know, begin. And now we have a very, very large team, an entire client service delivery model that practice technology is one pillar and then LPM and creative pricing and are six pillars that, you know, our goal when we're looking at client service delivery is to say, here's the problem and of this platter of options, what do we pick to create the solution that makes more sense?
So, whether it's an AI tool, whether it's another technology that doesn't necessarily use AI, what kind of staffing? So, our team has really grown. We've but I would say about ten years ago, would be the timeline
00;29;03;15 - 00;29;08;10
Kennan Samman
And Julien, for you, when did your firm begin embracing these technologies and adding new rules to oversee them?
00;29;11;01 - 00;29;43;02
Julien Cayet
Well it depends on how you look at it, I mean, AI, strictly speaking, about five, six years ago it started in litigation, but technology in a broader sense is probably about the same time as Sarah, ten, 11 years ago. And it started with the, I mean, the usual document automation and I liked the comment of Sarah that you guys took people centric approach... when I joined the firm and it was a bit too much of a tech centric approach, and we are trying to reverse that.
So, to start by looking at the job to be done, looking at who/how do we get the job done, who are the right people to get the job done? And then technology is an add on on top of that. So, but yeah, that's that. In terms of new, new roles, it's an evolving picture. But clearly the role of legal engineer is a key role, but we, that is a role that was introduced with documents automation about ten, 11 years ago.
Since I joined a firm three years ago, we started to introduce the role of Innovation Advisor. So it's a bit someone that is closer to the practice most of the time, an alumnus from the practice, that can really relate to the job to be done by the practice and then act as a bit as a translator to understand what in the ways of working, what in the technology actually needs to be changed to, to get the job done better, faster, cheaper.
And there are new rules a bit, still a bit more immature in the team, but we can see some potential and we do believe that sometimes AI needs a bit of an AI operator. So, I'm looking at potentially creating roles of people that would be specialized not just on technology but on AI specifically to make sure they can really choose when to deploy AI, in the best interest of the firm, how to get the most out of it when the choice has been made to deploy AI on a specific matter, and potentially as well to reap some of the side benefits that Sarah was spelling out before in terms of capturing the data that comes out of the out of running AI on many transactions.
00;31;32;13 - 00;31;50;02
Kennan Samman
Yeah. You know, just to follow up on that for both of you and Josie if you can take this as well, it does seem like there is a bridge has being built between the practice and business of law. I mean, it's not just unique to AI as a technology is technologies and processes that are that are driving this.
Right. How do you how do you bridge the gap between the business and practice of law? Both of you referenced the creation of roles in order to take this structured data and influence the firm or the practitioners themselves as fee earners in different ways. And every firm approaches us a little bit differently, whether it's creating new roles. The title of those roles with the responsibilities of those roles was, ah, have you seen.
Yes. The question is, have you seen greater collaboration happening between the practice groups and innovation or knowledge management and others? Because now you have clearer visibility of the data of your client data organize into a central place that you can now make more action or take greater action with their outcome. Sarah to you first.
00;32;33;03 - 00;32;57;27
Sarah McCormick
Sure. I think that this in some circumstances and in some instances, yes, I think there's three groups typically in law firms that and one group that is at the forefront of innovation. And those are your trusted advisers that you can, you know from a training perspective that you can try new things out on and they're willing to jump into innovation.
Then there's a middle group that you can convince to come up to your top group. And then there's the group of attorneys that, you know, they've had a super successful practice for a long time, and they're not really interested. Right. And so, we collaborate a ton and drive new solutions a ton with that top group and the middle group, we actually just had innovation day couple of last month.
We have an entire day dedicated to innovation, and all of the attorneys got up to talk to their innovations, but they did with us being the team of innovation, innovation professionals on the staff side, sorry. And what we see is that we need the attorneys to be standing up and telling their stories. And once we have the attorneys standing up and telling their stories or telling their peers or their peers saying, hey, I just got this terrible terribly like large contract review, I don't know what to do.
And they say, call Sarah or call so-and-so, you know? And so, we have to we haven't seen our success has been very large in corporate, but we're starting to see successes in other areas. And I think that that's really by word of mouth.
00;34;22;17 - 00;34;37;16
Kennan Samman
Yeah, it's really taken those internal case studies, those internal wins, and using that as the mechanism to drive greater adoption and really getting more buy in. And through those trusted advisers that you mentioned, Julien, how have you approached this?
00;34;39;06 - 00;35;06;16
Julien Cayet
I think collaboration is really the key question tonight, and it's the reason I'd like elaborate on it. I'd like to lend, maybe three things, really adding up on top of what Sarah was saying: One thing I worked a lot on, and I think it's yielding some interesting benefits is to work on the tone at the top. So, I'm really using the board, the managing directors to tell the story to reinforce that it is indeed a firm wide strategy/priority.
We're not walking away from it. We are putting serious money behind it. And he expects and the board expects everybody to lead by example in the partnership. So, tone at the top is really important. Then the second thing we do a lot which helps at working level, we practice co-creation. So, whatever we explore pain points, whenever we pilot or build or configurator a new solution or launch that solution, we have partners and associates from the practice that work with my team currently on the innovation project. So that's what we call co-creation.
And then lastly, to my surprise, in the first few months was the firm I requested to make the hours spent on innovation billable for the associates. I was expecting I would be turned down, but I got an accept. So, so we managed to carve out a bit of a special budget next to my direct expenses budget to basically compensate for the for the opportunity cost of the hours spent on innovation, which means that there is a strong incentive alignment, and the associates that get to work on my team, they won't have regrets when the bonus ranking is defined at the end of the year.
And it's extremely powerful because we went from having basically the leaders working on innovations to having the keepers working on innovation by aligning incentives. So that's yeah, that those are three; tone of the top, co-creation, and incentive alignment have been extremely useful to foster collaboration.
00;36;50;10 - 00;37;12;10
Kennan Samman
Yeah, I want to expand on that. Right. So, incentivizing to drive the outcomes that you want. So, it looks like, Julien, you found a way, Sarah, for you, is there any anything that you've implemented, or the firm has implemented to incentivize the behavior to drive the outcomes that you that you want with respect to technology adoption?
00;37;14;26 - 00;37;50;28
Sarah McCormick
I'm not that I'm particularly familiar with. I have a lot of ideas of how we can incentivize the use of things, not just technology, but innovation across the board. But Honigman review solutions is an interesting example. The individuals that got out of the front and they were willing to use Honigman Review Solutions, which was a four attorney team at the time, or is a four track team, they now get they now as part of their business model and part of their practice, they use HRS on every single M&A deal that they do.
00;37;51;08 - 00;38;11;19
Sarah McCormick
And it was because they took the chance that the front end to reach out and leverage this new group. Right. Because it's not forced on anyone to use Honigman review solutions one way or another. The attorneys have the opportunity to approach the team and ask if we have the availability. And so, what's happened with them is they've been able to hit the ground running.
Honigman solutions has been around for a year now and we have been working with them and really figuring out the collaboration piece on how best our team works with their team and vice versa. And so, you know, taking that one step out to try something new has really been beneficial to them, to the associates on the team.
And I know that we touched a little bit on the unexpected benefits, one being, you know, lower associate turnover. I mean, the associates now they have a team that's doing the diligence, so it allows them to think at a higher level, are doing higher level tasks like negotiations and things like that. But prior to that, they would be doing the review of the diligence.
So, I don't have any specific incentives, although we're definitely trying to come up with them. And like I said, I could come up with a lot. But whether or not they would be approved is a whole other story.
00;39;12;20 - 00;39;29;15
Kennan Samman
Yeah, I know that that's fair. And Josie from your lens, working with many firms Have you seen any any incentives that are driving specific behavior that would be worth the audience worth for the audience to know or hear.
00;39;29;15 - 00;39;59;21
Josephine Good
It probably wouldn't come as a surprise to any audience that change is hard. The things we're discussing here and the difficulty in getting some of these process changes, it's hard. I think everyone's on different stages of that journey and exploring different things, and that's what I see. And in my day to day. But I think it goes back to kind of what you were saying, the start and has been alluded to and what Sarah and Julien said, we can kind of focus too much on the numbers in the billable hours.
And that's important as Julien says, we need to make sure that the lawyers are being well compensated in terms of the time they're gaining and the targets they're hitting. That's really about seeing those changes and that will make the change happen. So, process is really important, like putting those things in place can help drive that and push that forward.
So be it. Every time you open a matter, there is consideration or conversation with the technology team or whatever it might be, be that you know that you're going to get your hours. That's great. That helps force the change. But I think it's there's nothing better than someone using it saying that, you know, the difference between the quantitative and qualitative that you opened with Kennan.
I'm really this is about lawyers experiencing the benefits and the unexpected benefits and integrating that into their own process and making that change themselves. So, I definitely see a bit of both. I see it driven and I think as Julien was saying by the people in this, but also by the process, is definitely that combination. It's powerful. And I see some firms where the people will drive it and others where the process really takes that through. So probably a bit of both. In my experience.
00;41;12;06 - 00;41;34;07
Sarah McCormick
I think I'm going to drive it for it. You take off the number one way to drive it is for the clients to ask for it. Their clients are asking for it and they come to us. I mean, one thing at Honigman is that our team is very highly our innovation team is very highly utilized. And so, the reason, you know, not the only reason why they're highly utilized is because the clients are asking for it.
But the client, the clients in many instances are asking for alternative ways to do to run processes and things like that. So, I think that's the biggest incentive for attorneys to use their way.
00;41;47;23 - 00;42;14;28
Josephine Good
And can I, I think that's a really important for me. That conversation has changed even in the time since I moved from practice where when I was in practice, the partners would come to me as this tech person in the practice and say, what technology can we use? And it was maybe at the end of a pitch, and it was a small comment, but now the clients are a little bit more discerning they really want to understand what the technology is, what benefits it's bringing.
And that's when I now get the phone call on the other side to say, we have this RFP we really need to get into the details of how Kira is going to help or whatever other technology is going to help. And I think the clients are being more demanding and more discerning and when it comes to the detail of what the benefits might be of using that technology rather than just using technology, that doesn't seem to be acceptable anymore in my experience, at least.
00;42;41;12 - 00;43;08;23
Kennan Samman
Right. And within the spirit of this discussion specifically, Julien, are you seeing clients coming to you now either being driven by innovation in or other parts of the firm that are perhaps suggesting outwardly marketed that the firm is being more innovative using technology? Or is there a different strategy that you've implemented that's driving the request or need of tools like Kira or others on client matters.
00;43;10;23 - 00;43;37;00
Julien Cayet
Well, I think typically there are two client triggers. One is pricing. If there is price pressure. We've been discussing a lot about due diligence since the beginning of this call. I mean, everybody knows that clients are less and less willing to pay for due diligence. So, at best it's neutral, sometimes a loss leader. So, we hope to have a good margin combining the deal negotiation and due diligence. But clearly there is an incentive driven by price pressure to be more effective on due diligence.
The other trigger is more... sometimes client's phone, like I remember a discussion with for example the CEO of one of our client organizations. He was basically challenging us to make things more simple for them. It was in a context on a large, of a large litigation, and he really challenged us to find solutions to make it more simple, to manage all the documentation, device councils, and the litigation that was cross-border, quite complex, with high stakes. So, he was very keen to be in control and he felt that just the traditional ways of working were just not good enough.
And that was a fantastic trigger because we yeah, everybody jumped on the plate and then we got something that we really enjoy. Pricing and a thirst for simplicity are drivers.
00;44;39;07 - 00;44;55;13
Kennan Samman
Yeah, so to both you, Julien and Sarah, have you seen the adoption of these intelligence rules bringing and fostering a closer relationship with your clients directly? Maybe any sound examples that you have of that?
00;44;55;13 - 00;45;47;20
Sarah McCormick
Yeah, so again, this is a combination. So, this is a combination of multiple service lines, right? It's a combination of process improvement, legal project management and leveraging practice technology and an AI tool and the way that we view our clients from our perspective, our clients at the firm are both our attorney client and our clients of the firm itself, but we've been able to come up with solutions where we the attorney is offering services that he didn't he wouldn't have typically offer because we can leverage AI and we can leverage AI in a combination with professional staff attorneys that we also have in combination with OPM, also in combination with process improvement.
And so that package of a service delivery really lends itself to being able to collaborate with the client. And you know, what's interesting is that a lot of times using these tools are implementing project management or process improvement. The hardest sell is not actually the client. The hardest sell is the attorney. The clients are using a lot of our finds, our business clients, and they're used to seeing process improvement.
They're using project management and the use of technology. So, we like to couple as many tools as we can together and couple as many service lines as we can to create these package client solutions that increases collaboration and then also creates that stickiness between us and the client, where we're working so well together that it's harder for them.
It would be harder for them if they decided to go, you know, use a different provider.
00;46;39;01 - 00;47;10;10
Kennan Samman
Yeah. Sticking with the unexpected one, that AI drives me a little bit about talent a little bit about culture and the role that technology plays. Want to double click into that? Do you find that through the acquisition of these tools that the that attrition at talent, you're attracting greater talent, that you're reducing the attrition that is improving culture even in this hybrid work from home environment?
And I will leave it to you to take it however you want. Julien, start with you.
00;47;17;21 - 00;47;41;02
Julien Cayet
Happy to comment on this. I think on that there are two ways of looking at it when it comes to talent. You have the ability, the attractiveness of the firm and then the ability of another to retain talent within the firm. When it comes to the latter, I'm not sure we can have definitive conclusions at this stage.
I think it's probably helping, but I wouldn't say it's a huge difference maker. But on the on the former, I think since we have been investing massively in innovation, in technology, making it known in the market, what I heard more and more from foreigners partners that it is mentioned by talent in during the recruiting process that they picked up that the firm was really spitting up and stepping up in terms of tech and innovation.
And that was that was part of their reasoning for choosing the firm over another firm. So that is starting to play physical role in terms of the attractiveness for.
00;48;29;25 - 00;49;13;01
Josephine Good
I'm probably simply a realist. Same as you, Julien, in terms of this isn't really AI technology isn't going to solve a lot of the things that are being talked about around sort of talent retention and people wanting to sort of continue. But then that practices I think the solution to lots of those things. But I do think it does show an investment in the future of the firm that gives the lawyers the perception and understanding that this firm is very much feature looking when it comes to that talent and technology and are trying everything, they can try to improve things in that respect.
So I definitely don't think it's the solution, but it does really show a willingness to try to bring those efficiencies, to try to understand that there are solutions out there that can go some way to help and just very much future thinking and forward thinking and wanting to sort of make those investments for the sake of their lawyers, which are obviously the most valuable asset the end of the day.
00;49;37;27 - 00;49;44;20
Kennan Samman
Right. Sounds like a signal, right? What the firm might be signaling. Signaling. Sarah, any thoughts from your own.
00;49;46;00 - 00;50;09;24
Sarah McCormick
No, I agree with both. The other thing is, though, is that if I put myself in the shoes of a candidate and I was looking at multiple, multiple firms I almost feel like a base level of innovation and technology is something that almost all larger firms have. And so, if I came across a firm that maybe didn't have that, I would probably question it.
You know, technology and innovation are a barrier to entry into and some are few responses, right, like that. It's just expected now. So, the other thing is, is I think, you know, having AI technology is one thing, but also having the people that implement it together, like in putting those two things together is super important. You can have a piece of technology, but you have to have the support to drive it.
And so yeah, I think, you know, those are those are a couple of thoughts that I have on the hiring situation.
00;50;48;07 - 00;51;14;17
Kennan Samman
I know we have about 8 minutes left. I wanted to make sure that there were there any other benefits to AI or unexpected benefits to AI that we haven't covered that. Julien, you were Sarah or Josie you would like to mention so I guess moving forward, where do you sorry, where do you see the role, AI or where do you see AI's role in legal practice going forward, Julien?
00;51;14;19 - 00;51;36;21
Julien Cayet
I think the potential is enormous, and the road will be long. So that's a bit of my quick summary. The potential is enormous because I could think of dozens of use cases. But now I've in three years of practicing AI with Kira and other technology. I can see it's hard work to make it work and it's hard all the work to get the return on investment. So, we are confident we will get there and there will be a good payback.
But it's technology that still needs to mature a little bit. Where I would see the next frontier. I think we still need to get the full potential of AI in the transaction practices. We're working hard on it. The next frontier use cases that I find really interesting personally is the potential of AI to support the deal team as well, not just their due diligence teams to understand what have been previously negotiated positions on specific clauses with specific law firms, specific types of clients, to make sure that the deal team can have an informed position when they are negotiating an FDA with a counterparty. That's something we dreamed off a few years ago. We are not quite there yet, but I know the deal teams would love to have something like that.
Sarah McCormick
I agree with Julien, and I think that there's a huge space for expansion taking it and a little bit of a different direction. I see they're there to be a lot of use cases for internal operations of law firms. So, work allocation is one that kind of sticks out to me. Work allocation across attorneys and being able to predict future work leveraging AI. That would be something that I help someone on the phone would like to go back to their desks and create, but there's a lot of a lot of things on the on the internal side of the law firm that could be enhanced by AI too.
So, I don't think it's just limited to those use cases or use by clients.
00;53;20;04 - 00;53;35;08
Kennan Samman
Yeah. And I think we've seen that as well with certain firms across the globe. Are taking advantage of the impact that it has on the business of law and within knowledge management, within innovation, legal project management. And I like Josie. Any thoughts from your end?
00;53;36;19 - 00;53;57;23
Josephine Good
I think I'm just interested and curious as to where this is all going to take us in terms of business models. I think we've spoken a little bit about today about how the structure of the law firms changing what lawyers are wanting to do, new career path. I'm just interested how much of an impact that could potentially have on the business model of the law firms as we know it.
And that goes to everything we've talked about, I think, in terms of pitching and pricing and how technology becomes part of that and sort of how the business might be transformed by this is the bit I'm excited to watch.
00;54;09;18 - 00;54;29;22
Kennan Samman
Yeah, I agree. And I think we've seen the shift happen. At least. I have in the last seven years, and we've seen a shift in the last five years and really since the pandemic hit in the last three years, that operating model is changing a little bit. So now we have 5 minutes left and I believe we want to leave it for some of the questions that came on board.
Scott, is that correct?
Scott Ferguson
Yeah, we do have some questions I'll try to get through as many as possible. And why don't we just start right away? One question that came in, it seems like both Julien and Sarah's firms have quite extensive experience with AI use in building programs around innovation. Do you have any advice for firms seeking to build out their tech stacks and use a more?
00;54;54;19 - 00;54;56;05
Julien Cayet
Do you want to go first Sarah?
00;54;57;11 - 00;55;00;04
Sarah McCormick
I've gone first way more times than you? So go ahead, Julien.
00;55;00;27 - 00;55;23;12
Julien Cayet
Oh, no, but I'll be very brief. I think I would turn things around. The goal is not to take back. The goal is to get the job done better, faster, cheaper for clients, and so my advice would be start by the be done and see what needs to be done to get that job done better, faster, cheaper. And technology plays a very big role but it's not the only one.
And so, Sarah I'm echoing what you said. It's redesigning the work processes, being smart about staffing, including with non-lawyers, and that's there is a lot of value out there as well.
00;55;36;25 - 00;55;41;26
Sarah McCormick
I couldn't agree more with that answer. So, Julien I'm glad you went first because that was a great answer.
00;55;43;20 - 00;55;46;16
Scott Ferguson
That's great. And we can jump into our next question is. Is the use of AI as simply tools being taught in law school? And how is it being addressed?
00;55;53;29 - 00;56;27;07
Sarah McCormick
Yes, I can take this one because I actually I went to law school and then an entire program, again, not only focus on technology, but they had an entire program to teach about process improvement, project management, technology, data analysis, I think it's definitely expanding throughout law schools because these alternative legal careers are becoming so much greater when, you know, when I graduated five years ago, the number of jobs was nothing like it is today, and it keeps expanding.
And the skills that you learn, if you learn across the skills that I mentioned, the opportunities for employment are very huge. So, law schools are definitely starting to expand their curriculums around this space.
00;56;44;11 - 00;56;53;10
Kennan Samman
Yeah. And I would add that we have been contacted by law school professor who use Kira here in classes. So, we are talking to them.
00;56;55;12 - 00;57;31;07
Julien Cayet
Maybe Europe is a bit different than the US. But I was quite shocked when I joined three years ago whenever I would brief the new class of New Joiners, I would ask who has any experience with tech innovation? I whatever out of 50 people I would get like three or four hands showing up and then when I saw what's your experience and the experience with me on the impact of AI on the substance of law, but hardly anyone would have experience of deploying AI, as you know, as a professional tool to serve clients.
So, I think I see quite a bit of an acceleration in the last two years, but from a fairly low baseline I would say I saw a lot of room to grow in that space in Europe, at least.
00;57;46;09 - 00;57;54;06
Scott Ferguson
Okay, and this'll be our last question is can you discuss or pointers to sources that would allow a small or a small-medium sized firm to figure out how best to utilize AI when it comes to non-due diligence scenarios?
00;58;03;15 - 00;58;27;27
Julien Cayet
I would go where the volume is. That's my simple advice. I have large routine work then probably there is there is potential for AI and anything that is large volume, and it sounds like a stupid tip, but a lot of the time people get excited by the technology, and they forget to ask the question are how big is the volume of that specific task do we get the bang for the buck?
00;58;30;24 - 00;58;49;09
Kennan Samman
Yeah. I would echo volume and task. With Kira, we do have small medium law firms that use Kira outside of diligence exercises as well, whether it's for internal needs or other client matters, something I'd be happy to take offline. I know we're at the top of the hour. I think that was from John Irving. Happy to connect with you offline as well. I saw a question come in from DWP too on data privacy. Also, happy to take that offline as well to address those concerns.
Scott Ferguson
And that is all the time we have for today. We want to thank everybody for joining us and we hope that this event was useful to you. And we want to thank all of our panelists for their insight as well as for Litera for their support of today's event. The presentation will also be available and other online resources as well at the conclusion. If you missed any part of the webcast, remember, will be archived shortly at law.com and you can view it again there or refer someone else to it.
And when you're on that page, we always encourage you to explore other upcoming and on-demand presentations. And with that. Thank you very much and have a great rest of your afternoon.
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