Hello, and welcome to today's General Counsel Institute's webinar series. For a kick off today's webinar, I'd like to address a few housekeeping items. Regarding Sealy Credit, please be sure to fill out the survey as well as respond to the pop up check ins. We will apply for Sealy Credit to each state identified after the completion of the webinar. Unfortunately, we aren't able to offer credits for South Carolina or Pennsylvania at this time.
Deally credit is only available for this live day and not on demand. The survey can be answered at any time through the survey icon at the bottom of your screen or it will pop up at the end of the webinar. I wanted to bring to your attention the resource icon at the bottom of your screen. Here is where you'll be able to download the deck. And now it is my pleasure to introduce today's webinar, the business of law 2020, the FTI Relativity General Counsel survey presented by today's General Counsel and FTI.
Our distinguished speakers are David Oregon, Discovery Council, and Legal Education Director for Relativity, Ari Kaplan, principal for Ari Kaplan Advisors, and Wendy King, Senior Managing Director for FTI Consulting. And now I'd like to pass it off to David. David?
Thank you very much Jennifer. I appreciate it. It is great to be with all of you today. Thank you for taking some time out of your day join us. As Jennifer said, my name is David Horrick, and I'm Discovery Council And Legal Education Director at Relativity.
Part of my role is to help put together programs like this. Our friends of FTI, really did the heavy lifting on this one. And a special recognition to Kate Holmes, who is part of the FTI team, who helps bring you these educational programs. A little bit of my background, I was analyst council at 451 Research before joining Relativity was in house counsel for several years in Washington, DC with the magazine published America as well as the Entertainment Software Association and, was reporter and assistant editor at the National Law Journal, and I still serve on the board of legal tech news and, still write articles for them to this day. But enough of me, I wanna turn us over to the stars of show as we go through today's presentation.
First is Ari Kaplan. He is an institution in the field of legal technology. He is an attorney, an industry analyst, and some of his research has really been, an outstanding help to law firms, corporations, and the legal space because Ari has a knack for being able to get to the the issue and more importantly, get people to guide us to the cracks of the issue. He has had numerous awards, as you can see on the screen. Please join us in welcoming Ari Kaplan Ari.
Thanks for being here today.
It's a privilege, David. Thanks so much.
Absolutely. We also have Wendy King with us today, senior managing director at FTI Consulting. When telling you about Wendy King, I have to, keep the hometown crowd happy and let you know that, Wendy is an alumnus of relativity. She used to be part of the team here. She has moved over to several years ago, moved over to FTI Consulting, where she advises clients on the nuts and bolts of ediscovery.
She's also had service at Croll on track. She has relatively relatively certifications. And she's an industry recognized expert. Please join us in welcoming Wendy King, Wendy. Thanks for being here.
Thank you, David. It's my pleasure.
You'll see our agenda today. We're going to go through some of the demographics and the methodology of the survey, and, we're going to talk about some of the key concepts that we took away from the data, how the general counsel's role has changed, technology at patient and, of course, advice for law firms and law students who are, just starting their careers. You also see Q and a there at the bottom, but you don't have to wait till the end. On your console, there is a vehicle for submitting a question. If there's anything you would like us to get to, please put it in your console and, we'll do our best to answer it.
Before we get to Ari and a little bit of the background on the demographics and methodology, I wanted to tell you a little bit how this survey came to be. As you know, at Relativity, we are a software company. We developed the software that lawyers use to conduct, e discovery investigations and, data management and information governance. On the other hand, our partners at FTI Consulting and course, more importantly, the FTI Technology business within FTI Consulting, they are, as the name implies, consultants. And they have the expertise take the software and guide you through the discovery process.
So as we were sitting last year talking about what we could possibly do, we thought, you know, One of the things we'd like to do is be able to see how general counsel think and what general counsel want And as a software developer, we wanna make our software to meet those needs. And as a group of some the best consultants in the globe, FTI wants to make sure that they're tailoring their services offerings to what gen council need. And so then we set off, we engaged our capital advisors, a preeminent legal research firm, I don't mean legal research in the sense of, citing case laws and doing blue book citation, research on the legal industry and the technology industry as well. So we retained our capital advisors to get us not just raw numbers. So, like, okay, x number of lawyers said this.
Just sit down with deep in-depth interviews. And, thus, we have our methodology. Ari, do you wanna tell us a little bit about how you went about setting up our search.
Thank you, David. And let me start by saying that it's a really a privilege to get to do this kind of work. I always say when people say, what do you do? I always say I do lucky work. Because, you know, the idea of being able to well, first of all, the idea that that any general counsel would actually take my call is, is a wonder thing and that I get to work with the relativity and FDI is, you know, just adds to the gift.
And so the the goal here was to speak directly to the general counsel, the the head of the law department, and to try to understand what their key issues were? What are they what are they, struggling with? Where are their challenges? Where are their opportunities as we head toward 2020? And So I reached out and spoke with 32 GCs.
They were mostly in the US, but I spoke with also GCs in Israel, Canada, the Netherlands, and Germany. 2 of them were University General Council. Several were in the Fortune 500 and even one in the Dow Thirty. So really trying to get a a great cross section as the chart shows, about 40% were with companies that earn more $500,000,000 in revenue and more than half had, worked in organizations that had more than a 1000 employees. They were predominantly from technology and telecommunications, but then widespread 13% in Banking Insurance Financial Services, 9% each manufacturing and energy and utilities.
And then and then a handful from, as I said, higher education, but life sciences, retail, transportation, and a variety of others. And there were, you know, there was a very interesting sort of issues with respect to what what we learned. And I'll just sort of share that one of the things that was very compelling was that that someone described the role of the general counsel as moving from gatekeeper to ship captain. And technology had a lot to do with that, but it was a very interesting visual and an understanding. And as someone I know that the 2 of you have have often connected with, in house leaders over the years, but as someone who's, you know, spoken with them and and interviewed 100 of of in house counsel, that concept of moving from you know, for example, the Department of No, which will probably catch up on to this idea of spearheading and and the transformation of the law department was really a really interesting takeaway.
From a lot of this research.
Alright. That's a great point. And, you know, as you look at the chart on the screen, you'll see 97% of those general counsel now consider themselves to be business strategist. You see risk management is always there. It's it's a little over a third.
Expectations are higher. Frankly, I'm surprised the number is not higher for expectations being higher. And I'm also surprised that, cost was not, bigger than that because the GC's office has always been seen as a cost center. As I already pointed out, one of our respondents came up with a great quote that we're no longer just the department of no. It's not a department where great ideas go to die because the general council finds some way to make sure that there's too much risk and we can't do it.
Instead, they're becoming business strategist. But Wendy King, you had an interesting experience just recently there in the trenches doing a discovery where the attorney's role and the general counsel's role as a business adviser, as much as a legal adviser, pretends present some challenges. For those of you, doing a discovery, What do you think?
Yeah. So, you know, one of the things I think that just impacts discovery or e discovery in general is a privilege review. It's not as black and white. They're now, holding business roles. So in those first level reviews, the call of privilege, has has changed and then determining what of their communications is privileged.
But, yeah, I'm really not surprised to see the role change. I mean, business strategy and risk are intricately related. And I think that general counsel is particularly well suited to look at risk from several angles, not just legal. And as you said, not where it just goes, and the idea is go to buy, but really looking at legal, how can we get in front of those risks? How do we look at reputational and financial risk as well?
The way that we do business has changed, and I think really forced, that change or evolution. If we think about cyber risk or data privacy, before data breaches really became common play, cyber risk was a threat left to IT. And now it's something that GCs are are getting in front of and involved in the conversation and with data privacy regulations such as GDPR or CCPA, impacting an organization and how they do business. I think the legal ramifications and risk management and that intersection with business strategy, are gonna be more and more tightly and intertwined. And, again, I think GCs are particularly well suited to play an integral role in those conversations and look at it from every aspect.
Great point, Wendy. And, you know, you're talking about, the role on who owns the data being intertwined. But you are there in a lot of corporations. What are you seeing? Is IT still owning the data, or is it a new chief information officer, a risk management function, legal.
Who's clay who, if anyone, is claiming ownership of that data?
Everyone. It what I mean by that is it's it's, you know, the more I've applied with clients, they are having a a team approach. You have your compliance the individuals responsible for compliance. The individuals, who might be responsible for you know, holding the the data and the retention policies and how you handle litigation hold. Everyone has been impacted by the change and the regulations and the the introduction of new regulations.
And don't think one person can have a seat at the table anymore. I think you have to have IT to talk about their aspect of it, compliance, talk about their And and, certainly, that's another reason why the GC and has a prominent role in those conversations as well.
Thanks, Wendy. You know, David, the other the other interesting thing.
Yeah. The other the other interesting thing, I think I think just to go back to your point about, more cost scrutiny, you know, we the the slide that something, you know, that that people are looking at, more cost scrutiny, expectations are higher. What's happened within the law department is this you know, it's been a bit of a stratification in terms of the the roles and responsibilities such that there is, you know, an incredible array of talent that sets the foundation for what the general council is doing. So everyone has to remember that we're speaking. I spoke to the the general council So within that organization, there is a, you know, generally ahead of legal operations.
There are, you know, deputies and assistance and associates. And so they're the array of responsibilities has been changed. A single individual can no longer be responsible for, you know, cost scrutiny or be responsible for service design principles. Right? You're talking about someone that's managing a much bigger operation.
And as a result, that individual is so when you see 97% as business strategist, so that individual is definitely the business strategist. That individual is reporting to the board. That individual is is the direct liaison to the to the business units. And so when we're talking about some of this other granular stuff, the general counsel is relying on other pools of talent within the department, and that's the key that I think is really important because what you're seeing is this, you know, someone said there's a substantial number of data analysts and project the law department, which reflects a trend and a shift in how the company views the role of the legal department. And there was, you know, someone described it as, you know, being the ambassador of growth so they're bridging IT procurement, the business units.
And even the GCs are evaluating which tasks even require the skills and and and increasingly really, you know, what what skills and increasing realizing that lawyer's talents may not be best utilized to leverage technology to solve certain types of problems.
Alright, Kathleen. As you so often do, you have provided me with an excellent segue going from business to our next point, technological competence. You mentioned just now that lawyers that the general counselor relying on many, many talents and big teams to bring legal services and bring the business advice they do. But, one of the real issues is technological competence. This concept was kicked off.
Really, I would argue in earnest when the American Bar Association in 2012 made its amendments to comment 8 to model rule, the first model rule. And, but time. It was like, well, you know, it's not a comment. It's not binding. There's no meat to it.
What people didn't realize in 2012 was each state bar was gonna pick up the ball and run with it on that. And now we have, I believe, 48 out of the 50 states having some sort of ethics rule requirement, maybe in their ethics opinions that's saying you've got to have some technological competence And, you know, if we have California lawyers, with us today, you know, the state of California has given lawyers 3 choices. You either learn the technology. You have someone to teach you the technology, hire someone who knows the technology, or you refuse the representation. Ari, when you're talking to these general counsel, what kind of feedback are you getting on how these lawyers are embracing technology?
Well, the technological competence issue is an interesting one because there are statistics, you know, that show that people at least we found that the general council didn't necessarily think that that that as many lawyers as you would you you think should have technological confidence had it. They they certainly there's a much greater level of confidence in the confidence of litigation, sport professionals, and paralegals. One person said, I think that most lawyers have adequate technological competence to serve their clients as expected by the codes of conduct, but that's not the same thing as saying that lawyers are the right people to be the source of innovative solution for the legal practice. And I think that's a really important point. I had the privilege of delivering the keynote address.
I do a keynote at a lot of department retreats called the law department has a competitive advantage. And when I was speaking, I was also moderating a panel of law firms, that that the key law firms company and the general counsel at very savvy, forward looking general counsel said, look, please go back to your firms and tell tell the leaders that we want more than just billing partner in the room. We want head of head of innovation. We want pricing. We want project management.
We don't wanna necessarily be built for that meeting for all those people, but we definitely want that diverse skill set, which is why, you know, Wendy and her team are so valuable because they bring this holistic approach to solving a problem. And so you know, someone else said, legal's headed to the same destination at which the Financial Services industry has already arrived, which is one where data analytics and data science will play in recently important role in performance. So there's this issue of technological competence, but the question is, who's technological competence is most important in whatever instance.
Wendy King, you are the logical guru on whom these lawyers rely. When you go in and, obviously, we're not asking you to name your clients or anyone else. But you see a lot of people, general counsel, lawyers who are not your clients. Generally, in the past 7 years since the ABA took to stand in 2012, have you seen technological competence of lawyers get better?
I have. And I I recall a story, and, of course, this this was, before 2012, where I was working with a young lawyer who said to me, I went to law school, so I didn't have to deal with computers. We all may remember the stories And and and they were quite proud of that, but we remember the stories of solar who has a computer on his desk, and he wouldn't turn it on. By contrast, I recently had a conversation with a partner. And the very first question she had for me when we were talking about the matter was, tell me the difference between tar 1.0 or tar 2.0.
I I have to tell you I I've I've stood back for a second because not that I certainly could not answer the question, but it was a question I would not have expected from the lead partner on the matter. They're becoming more and more aware of their need to understand how we're using the technology and what technology to use. And to Art's point, bringing others in the room who can speak to this, I'm certainly seeing those conversations shift for them to even if they don't know what tar 1.0 or tar 2.0 is, They understand it's important enough to know they need to ask the question and make sure they and their team understand the planation and how it will craft their their work, so their review strategies on their particular matters that they're working with. And that's a very tactical one I think they're also looking at how technology shifts, and changes impact the business when you look at at corporate Council in particular.
Sure. Well, let's take a look at how lawyers are using some of this technology. If you look up at the screen now, you'll see, technology adoption And then you're gonna always see artificial intelligence as a way of measuring this. Ari, anything stand out from you on the data we got back on lawyers using artificial intelligence?
Point. One general counsel suggested that that lawyers obtain a basic understanding of programming. Now this is not comment. And then, you know, I I and you know that I'm a big fan of this because I I developed a
I I I Here's code. Here's Yeah. That code is fine. On that.
Every every every fry well, it's free. It's it's it's like more of a public service than an advertisement, but but The general counsel said there is talk about contracts being written in code. So an ability to understand code can facilitate that process and potentially help someone write an amendment to software in order to deliver the contract they want. We're entering this phase of not necessarily lawyer. You know, you there are certainly, and I've done other research on knowledge management and law firm innovation, and there's certainly a movement of of lawyers or certainly at least law firms and legal and institutions developing their own technology, and you're seeing more of this innovation labs within law departments.
In many ways, the law department is leading a lot of this. They're bringing in in an opposite direction than it used to be, the law department is bringing in procurement and the business units and saying, hey, we have all this great technology, which which is certainly, you know, has the foundation of AI, but you see on the in the screen, a number of using AI, a number plan to do so soon. Contract review is is generally the the primary area. Not as many for e discovery, although depending on how people define AI since AI was generally first used in e discovery as predictive coding is if you're counting predictive coding. So people have talked about trying to roll out machine learning and AI with respect to contract reviews to determine whether you can get a 1st drafts of an agreement or maybe expanding their discovery technology to these other areas.
Many are taking advantage of it for time sensitive redundant tasks. And for those who are not one challenge, it's just identifying the use case. That's really been, you know, the key issue is is where do we use it? Not not necessarily will it work?
Wendy King, you've had at least one person, a a lawyer who may be ahead of the curve asking for the difference between TAR and by the way, for some of our viewers who aren't in the weeds on e discovery, it's technology assistant review 1.0 versus technology assistant review 2.0. But, what are you seeing on adaptation of AI? I mean, people talk about AI all the time. And we are having the invasion of the robots if one were to believe the hype. But, what are you seeing in the trenches?
Are is AI playing a much bigger role?
You know, I think in in the one point you did make, and Ari, you you mentioned something a moment ago about it started at e Discovery, but if I look at this chart, you know, 69% is saying they're using AI of managing and reviewing business contracts, which I think is outside the context of eDiscovery. And it has a lot of of use. I do think that AI is still one of those terms. We could throw a lot of acronyms around. You have a definition can vary from individual to individual.
So, certainly, there's some confusion maybe around what AI means and when to use it. But it is becoming much more of a commonplace topic about how it can help businesses outside of just a talked about predictive coding in ediscovery. I actually had a conversation with someone yesterday, where they were talking about the use of AI for rebates. A lot of organizations have in their contracts if certain things are are met, that there would be a rebate issue. Those are often unrecovered.
Cause it could be unduly burdens. Some could go out and look at all of those and and see, you know, from a business perspective, was it met, what does the contract ask for? And then be able to issue or get those back. Now with AI, it makes it much easier for them to do that or due diligence for contract reviews as a part of a merger or an acquisition. So I think the the technology adoption in this area has grown.
And is is the chart show and survey results show it's grown outside of just the response of a reactionary from the eDiscovery perspective. It's grown in ways that are allowing businesses to operate more efficiently, and to stay ahead in some ways ahead of risk as well.
Makes sense. Thanks, Wendy. Of course, AI is not the only technology issue with which lawyers are dealing. There's also the cloud I am always amused every time I hear the story about it apparently was at a bar association event where the speaker asked the audience. Okay.
How many of you work on legal matters in the cloud, and there were maybe a little, spattering of hands across the room, not many at all. As they sat there, you got it. Editing depositions on their phones. Like nothing ever gets done on the cloud. When we see this, 75% they're using SaaS or other cloud technologies to perform legal tasks.
Frankly, I thought, no, no, granted, we're dealing in this survey with the chief legal officers. So it's a pretty sophisticated crowd. Nevertheless, Ari, were you as surprised as I was see that number at 75% saying yes, so high?
No. It's it it I always laugh at this that, you know, we're still talking about these things. I mean, you know, the the the nature of technology is such that people want something that's convenient. They they recognize the level of security that a cloud tool offers these days. You know, this this transformation is happening very rapidly They need to be, you know, making this accessible to the to the diverse array of teams that I'm talking about in in, you know, a remarkable number of locations so much easier to throw up an office now.
And so and to allow your most trusted third parties to access your system, to pows it yourself. I mean, there are just so many reasons why this is an important development. And although I always ask about this, I'm always fascinated that we we were talking about it. And and I wonder if it'll be like if the conversations that I was happening about the cloud years ago are similar the conversations I am having now about AI. And so it'll be interesting to know if in a year or 2, I don't know, however rapidly we get through this period of of uncertainty whether that will that too will be something where people are are so comfortable that the, you know, it's surprising that we're having a discussion about it.
You know, Wendy King, you and I both work for companies who have made major shifts in the cloud to, fast platforms, obviously, still offering on premises software. But, I know from our personal experience, One of the reasons we did it is because our customers were demanding it. What are you seeing out there, vis a vis, SaaS, and the cloud?
You know, I'm a little surprised we're still having this, conversation. The question is coming up as well. I do think that in that 25% There's still a small group of folks who may not understand what this means. I recall having a conversation with someone who said, we won't put our data in the cloud. And then within the same breath, it was can you collect from Office 365?
Yeah. But I think this this is Right. Those are, you know, which is the cloud. Those are becoming more, rare than than commonplace. So we've we've certainly seen that evolution.
I think, to your point before it's secure. You've got folks that are focused on the security, it's more expandable. And at least for us in particular, it takes you out of any sort of limitation of offering a solution that is tied to the constraints of software needing to be scaled before you can offer that solution and the time that that would take. Oftentimes these things are much faster. In terms of the scalability and the security.
So at least for us, the adoption of SAS for at least relatively 1 and and even our on prem, we've got an on prem instance and another cloud, allows us to focus on just the workflows and the expertise and not have the constraints of sort of a hardened, and less scalable and, at least, quickly data center, be a limiting factor for our recommendations. Does that make sense?
That makes perfect sense. You know what? I found interesting is one of the respondents replied that, you know, they may not have made the move to the cloud. It's sort of like what I was saying earlier. But, many of their customers have already made that move, and they mentioned, slack as, something from which, companies gonna have to collect.
So emerging data sources are another one. And, you know, while we're on this issue of technology, we've talked a little bit about competence before. And you'll see on this slide, guess who is ranking the lowest, those of us are lawyers. And this came as 0 surprise with lawyers having the least degree of technology competence, paralegals having more technology competence, and then, of course, the litigation support professionals the people who are really in the trenches, they've they've got the most. If we continue on our journey here, We found this one to be an interesting response.
I understand there are no absolutes. I just wanna focus on the simplest best answer. Ari, Kaplan, when you were talking to the chief legal officers and conducting this survey, were they sensitive to the fact that lawyers are often accused of operating in non simple terms, speaking in legalese and, not getting to a place in an easy, simple matter. Did the general counsel seem aware of this?
General Counsel are acutely aware of, you know, what what is changing? They recognize that they're you know, they have a range of things that they're most concerned about, and they want their outside counsel to understand that, that, you know, we will judge. And many of them used to be law firm partners So, you know, they they have stood in the shoes. It's interesting. The general counsel is often stood in the shoes of their outside counsel.
They want their outside counsel to do the reverse. They want them to stand in the shoes just as they had so that they can kind of appreciate the fact that, like, every little detail does not need to be briefed and membered we really just need an answer. We pay you the big bucks because we rely on the fact that you're gonna give us the closest best answer that we can then decide how to judge whatever the strategy is going to be, but they're getting things thrown at them. You know, you have this image of the, you know, the general counsel as the as the as the cat and the hat on the ball, you know, on the ball with the fish and the cup and the rake, like, that's what's going on. And so when they call and say, do I do I choose the brown rig or the red rig, and you're, you know, you give them a 1000 different reasons why the brown rig is not as good, you know, I guess I'm going too far with this visual.
But you get what I'm saying? Like, we're talking about a balancing act that has become exponentially more complicated. And so this idea of, look, I just wanna focus on the simplest best answer is a really important point that they're trying to get their outside counsel to understand because if outside counsel is going to start losing, as we've discussed, some of the work that it probably shouldn't be doing anyway, or at least the lawyers at at the outside counsel. Right? Because in, you know, a lot of firms have become savvy at this and developing these multidisciplinary teams.
So if the they're gonna lose some of this work, well, then they might as well give the highest and best use of their skill to their client for questions that will allow them to this. And and so they're best best suited to answer a question like that. Yeah.
You know, Ari, that's a great point. And, one of the lawyers from our survey, Jessica Nolan, who is Senior Vice President, General Counsel Soul at PLZ Aero Science, was kind enough to join us at Relativity Festival. We discussed some of these issues. And I thought she had a great point on what matters. And and when she said, consider what's important to the company.
I don't want a lawyer who's gonna win every issue not my goal. I want a lawyer who's gonna be effective in wish winning the issues I care about and not spend a minute on what I don't care about. Because all I get out of that is an invoice. And she said it was a big struggle. And, she said, you know, it it disappeared to be a communications issue.
I know Jessica brought this up. Did in conducting the survey, did you get a lot of feedback on communicating with the outside counsel?
Sorry. Have you talking to me or Wendy?
I'm sorry. If I said Wendy, I meant Ari. My apologies.
So what's been interesting about this point is that general counsel The people that I spoke with were extraordinary. I mean, you know, Jessica's a great example, of a general council that is very forward thinking and, you know, wanting run her law department the way that a business unit should be run. And that's what's happened. The the the law department is no longer, as you said earlier, Department of No. It's no longer where I great ideas go to die.
In many ways, it's the genesis of great ideas. It's the it's the foundational center of where the business units or procurement or compliance is coming to really be around people who are thinking holistically about not only the risk factors, but how do we become the department of Yes. This way. Like, yes, we can do it, but if we do it this way. So it's not just yes, Willie Nilly, and it's not just no.
It's, like, Well, we have evaluated this. We have these tools. We have this talent. And so the general counsel recognizes that he or she can now become a much more creative business strategist who can come up with solutions, notwithstanding the fact that those solutions have to be bound by norms that, you know, protect the organization from anything. So, you know, when people will come to the jet to the legal department, it won't be kind of when they've taken the step that didn't work out and now they have to clean it up, they'll come and say, you guys are great about coming up with something creative and dynamic.
And we'd like to ask you this. Please sit in our meeting. Please be our ambassador. Please be the liaison so that we know for shot, this will be a great opportunity.
Thanks, Ari. Wind to King, bring bringing some all these concept together. We've talked about communication. We've talked about not being in the department of no, being a business center, more than a legal center. One of our questions was what advice would you give to your board on the above six areas, the areas we've discussed before and their potential to have a legal or regulatory impact on the company Those also include GDPR data privacy.
And, one of the responses was and this was addressed to the board, but in some conversations, it's also addressed to the Office of the General Counsel. They have to be actively aware of these issues and stay ahead of the game. You cannot be reactive. So we've talked about, don't be the department to know, be it business units, etcetera, but are they still being reactive in the e discovery world? We talk about the reactive last minute fire drill to get everything in a row as opposed to proactive information governance.
Wendy, when you are working with these corporations, do you find them still being pretty reactive, or are we seeing more proactive, IG, proactive business consulting, etcetera.
I'll I'll give the lawyer answer and say it depends. I think we've seen some very sophisticated, GCs and and legal departments and corporations that understand the importance of being proactive and they're taking those measures. And then there may be some who are still being much more reactive. Overall, I would say that it's a much healthier balance now, and you're seeing that shift to being proactive. And and again, and you mentioned GDPR and and CCPA and whatever else will come tomorrow.
Those are driving a lot of that. I think the one key takeaway for anyone in the the legal industry I've myself, a legal technologist, is that you cannot afford to become complacent. It is always about learning and staying ahead of the impacts of the change in tech technology and how that impacts your business, both from an operational perspective and a strategic perspective. And nowhere else, I think that's more important. Been for the law department in the corporation.
And if I were going to say to a law firm, you know, how can they help their clients, it's know my business. And, you know, you guys have talked about the finer points of winning the right points. It's knowing my business and helping us where we need the the help, and and guiding and informing about the types of implications that some of the technology changes there. Because whatever we're talking about today, rest assured tomorrow, there will be something else new that we're going to start talking about emerging data sources or regulations. So, people almost have to become what I'll call in as expert generalist.
And constantly learning and developing an expertise in the Intersection of Technology And Business because they're not separate anymore. And the legal technology and business is not separate anymore. It's all very interrelated.
Thanks, Wendy. Ari, moving on to advice. And I, Once again, you've given us one great segue and Wendy's given us the 2nd great segue of the day because you can see here at 66% the biggest piece of advice was know my business better and then, alternative billing arrangements and, focusing on the addressing these first two points, knowing my business better, and then alternative business arrangements, 2 part questions, How's it going on that getting to know my business better? I assume not too well if that's the number one issue that people the general counsel are giving advice on, And then number 2, are they thinking outside of the box, pass based billing instead of the billable hour?
The in house lawyers are, you know, whether they're outside counsel are doing that. I mean, someone said if I could change one thing in the world, I would I would have law firms charged away other businesses charge and, you know, someone else said I want my outside counsel to offer fee arrangements that don't measure time, but are based on value. And, you know, a third, treat me like a customer, not a client. So if you don't think of clients, you will think of how you wanna be treated. So, again, stand in my shoes.
It's not just know my business. Know my business's table stakes. The idea that that people are still asking for their outside counsel to understand the nuances of their business is unfortunate. It really needs to be much more of stand in my shoes. Right?
Look at it from my perspective. And looked through my eyes at what I'm really trying to deal with. And so someone else said, you know, the best outside counsel that I deal with and those that for thoroughly understand my business, but they charge by the hour, yet the best ones don't make me feel like they charge by the hour. So they're there was another so some practical advice, communicate better. Not telling me what's going on is really, really annoying.
And I think beyond you know, that's a that's a huge, I mean, that's a huge problem for anyone. You know, I think it's fair to say, but from a business standpoint, the outside counsel, sorry, the in house leaders are relying. And because there are various layers, they're all relying on this information. So there's gotta be a harmonization of what the people in the firm know and what the people in the firm are sharing with their clients. And that is a really interesting issue.
The other thing is just about some of the methodologies for doing the work. I was in an event years ago, I was moderating a panel discussion on on legal project management, and one of the people on the panel was ahead of a ginormous organization's legal operations team. And I asked a law firm partner on the team who is the head of project management. I said, do you bill for the time that your team spends on project management. Like, are those individuals who are who who are not lawyers?
Well, are those individual? I didn't say not lawyers. Are those individuals on the invoice? And they before I could actually finish my discussion, the head of legal operation said, whatever that I would pay that bill. Basically, he was like, that shows me efficiency right away.
You don't have to tell me about efficiency. I can see it right in front of me. There's so much wonderful low hanging fruit that gives the opportunity to, you know, law firm lawyers who are trying to develop a competitive advantage that these this report, we I hope, and I know that you guys hope, will be really helpful to them as much as it's helpful to the in house bar.
You know, Ari and Wendy, I have always been amazed why on the billing issue, we don't take the taxicab approach because some lawyers will argue the weakness with task based billing is you don't know how time consuming a case will be and how much work will be involved until you get in there. So task based billing is not fair because one merger and acquisition may be far different than another one, or one deposition may be far different for another one. The taxicab model is it's a combination. It's a hybrid model. If you are sitting there in bumper to bumper traffic, that meter is going tick, tick, tick, tick, tick.
Now I'm not addressing Uber and Lyft in this scenario. But there are hybrid approaches available. Wendy King, when you're in there, what are people telling you about billing and how it should go?
Oh,
here's an interesting topic, which is never black and white. Alright? You you asked me to say to the question. You said, you don't know until you get in there. If these things were cookie cutter and all data was same, and all issues were the same.
And it was black and white. You could have that predictability. I think this topic, which I have been a part of, let me say, with legal technologists for 2 decades now, for about 2 decades would have been solved. The the challenge is it's not cookie cutter, and you don't know until you get in there. I think you're your analogy, though, of the taxi cab and the hybrid approach may be spot on.
I I don't know that we can leave a solve this problem by trying to make it an assembly line approach with assembly line pricing, when it's it's not in the assembly line. You certainly have your best practices and the way that you would recommend doing workflows, but those all differ too based on the nature of the case, the geography of the case, and I I think it's a conversation that won't end anytime soon. Not not a direct answer, but I think it's a we don't have answer today because it's not an assembly line approach, nor do I think it ever will be. I mean, look at how much things change. Right?
It's it's constantly evolving. It's hard to have predictability when tomorrow. You don't know what tomorrow is gonna bring in terms of the next legal issue or or challenge that the newest technology presents for an organization either proactive or actionary.
Thanks, Wendy. Ari, one of the, quotes that I liked that I saw the responses that they came in was 1 general counsel who said compliance is revenue. And you usually think of compliance as a cost center, something that cost you money. You don't make money off it. But, I think and you were there live in person.
My take on this was that this chief legal officer was making the point. Reputational damage can often exceed the operational expenses and fines. And, demonstrating compliance especially around data privacy can earn customer loyalty and thus compliance's revenue. Did you see this theme reoccurring when you were talking to people, what did these GCs tell you about compliance? Because it is an important part of the job.
Has issues of security privacy, even patent protection, are are becoming drivers of volatility in in in company valuations. This is what someone said. Executive teams and boards are making the role of the general counsel more central to the leadership. So it's about understanding the risk and how the business functions. So for some compliance is part of the effort to materially contribute to the business.
And as you said, that issue was just being compliant will generate revenue. It assures that you can be trusted. So if you're trying to create a competitive advantage, Well, then, like security, non compliance, will prompt customers to shy away. So that's one of the other reasons that there's this greater movement of embedding legal into the various departments rather than keeping it as this siloed organization. Legal is now value added.
It's it's versatile. It's client service oriented, and it's business enabling. It's connecting rather than breaking those connections and taking them piecemeal. And so compliance is at the core of that because of all of these issues and because of the complexity of this new regulatory environment.
Thanks, Ari. Wendy, what are you seeing? I mean, obviously, you do a lot of request for proposal. And, I assume that there is the box there to check for compliance and that when you go in and you talk to clients, the compliance, data protection, data privacy, or a real thing. 2 part question.
Number 1, are you in fact seeing that, compliance is becoming a much bigger issue. And the second part of the question is, is the general data protection, regulation from the EU or California's upcoming California Consumer Privacy Act, are these legal and legislative initiatives driving this? If it is going up, what are you seeing?
Just we're having a lot of conversations in a lot of different ways on on compliance. From a proactive measure with the regulatory requirements and compliance around, how you maintain individual's data and their rights to the data, it it's certainly become more important. Not again, just from the e discovery and making sure that that data is handled in the right way. But from the proactive measure as well. I think it's gonna become an increasing topics for individuals and focus for organizations.
I think there's a study that was up that showed the average fine for an organization is $25,000,000. So it's certainly not a small number, which forces the conversation to really be at the forefront for those individuals looking at the compliance and how we handle data, both proactive and reactive. You look at corporate integrity agreements or compliance monitoring and what folks are are doing that plays a factor in in business as well. So I don't think compliance is in any one area. I think it's across across the board for an organization, and will this continue to be a very hot topic and and the pointed part of the conversation?
Thanks, Wendy. Ari, when you were talking to the GCs, one thing that caught my eye was there was one general council who said, you know, on the GDPR, they're really gonna be going after the big guys. They're not going after the little guys. So it really is not enough to for us to do anything. Now this general counsel was saying, hey.
You know, we're not gonna be slackers here. We're not just, throwing hard drives out the window or what have you and acting Willie Nilly, but nonetheless, this general counsel said the GDPR was not the driver of it. Do you find, especially in the states, that some of the general counsel are thinking, the Europeans aren't coming after me, ergo GDPR is not really important on my radar.
So if the GDPR was, you know, if compliance with the GDPR was was lax or if felt like, well, it's a it's a problem over there, then the CCPA will kind of fill in any of those gaps. And as really, and as you start to see other states pass legislation that also provides for some of this And as there are examples made given the private right of action, given given any of the enforcement opportunities in the CCPA, once people start down this road, they will just end up adopting the highest level of privacy protection, and it will create this c change. It's just that's what's going to happen. These provisions will be built in. You see websites all the time now giving notice of collecting different bits of information.
It will become commonplace. Designers will just design in opportunities to information. So while right now, we're in this transitional period, once we come out of it, I think that a lot of organizations will be addressing this. They will have, you know, technology in place. And in fact, the number have been adapting discovery technology or other existing legal tech tools to use as an opportunity for when they are receiving data access requests or when they are getting other kinds of notification.
So this will quickly become a much more commonly addressed issue.
You know, Ari, you mentioned the adaptability there, and, that is a I I think a really important point. And, talking about that adaptability as well as how technology is just changing so much of what we do One of the respondents noted that, you know, I'm just gonna read a verbatim quote because I think this GC said it best. I think the internet has changed and is changing the profession. You can find answers to many legal questions online for free. As a result, lawyers need to really scrutinize and identify their value add.
Lawyers need to highlight what they are adding and figure out what others need that they cannot get themselves. I thought that was a beautiful point because as someone who has been an industry analyst and a lawyer, before the days of the Internet, you really needed a learned professional to guide you the process because the information wasn't available. Now, heck, you can probably even get the rule against perpetuities off the internet. But, that doesn't mean the legal profession is dead because just because you have the information doesn't mean you know how to use it. There's that meme you've probably seen with the mug.
Please don't confuse your Google search with my law degree. But, this really is an issue on adaptability and how technology is changing I thought this response was great. But, Ari, in talking to them, how are you seeing them change and oh, well, first of all, number 1, are you seeing them change? And number 2, How are they going about doing it?
So, look, we're we're in a in a period of perpetual pivot. You know, there's this change that's that's kind of occurring. I mean, some really interesting things are the the trade environment. Right, driving a lot of disruption in in a very confusing way where people are trying to make choices. Certainly, at the end of the year, they're trying to plan for the year to come.
There are, you know, the though there are some issues that, you know, change is just you know, it's it's not necessarily working out in their favor in terms of, you know, how we can plan and people are are struggling. So the best thing that people are talking about is just being nimble, being adaptable, having the law department be able to adjust as things come. And one of the things I will say was that I thought was fantastic, and I'm actually building a whole training series around this for next year because I thought it was such a great idea of the general counsel I spoke to, when I asked about his his key to success, he said, I attribute my success to talent stacking. And said, oh, I've never heard of that, but what does that mean? He said, well, I've I've accumulated an array of skills over the course of my career.
And in each in themselves, you know, haven't been that great, or or have all been valuable, but when you compile them in the aggregate, I'm really much more capable and qualified. And I think that anybody that adopts that is, you know, so I created this talent stacking 2020 kind of series. And I think that that's such an important element, and that was a really important takeaway for me personally from this entire, project.
Thanks, Ari. Wendy, what are you seeing on this issue of adaptability? And, number 1, what do you see the council demanding. And number 2, are you finding that their lawyers are becoming nimble and adapting? And I'd like you both to congratulate me on not using the word innovation because we've had innovation thrown down our throats the past 12 to 24 months, and everyone's talking about it.
This is adept ability. And are you seeing it?
I I am. And I think what we've talked about in the common theme here was staying in front of these topics and not becoming complacent. And so innovation, I think, is absolutely the wrong word. A lot of this is becoming table stakes now. I think adaptability is table stakes.
Again, things change so rapidly that impact, an organization from a a legal reputational financial perspective that it's no place for the nonadaptable or the complacent. I I I just think that it's it's going to be a critical characteristic of any successful lawyer and, in particular, the one that is going to have a business role in their organization.
Can take there a couple of quotes that really sum it up. These are lawyers and executives and the executives who happen to be lawyers. And, one of the, closing thoughts is, generally in the past in house council, we're passive advisors waiting for our customers to come. Today, we are strategic advisors designing processes. Ari Kaplan, your 32nd takeaway on what you got out of conducting this survey and any advice you could give going forward?
I'm just so grateful to all of the general councils who took time out of their schedules to speak with me. And I think it's really important for people just to go through it. There's just a tremendous amount of qualitative data advice offer in house counsel advice for law students, advice for housing counsel, advice for service providers, I mean, there's just so many different pieces that will help dictate strategy. And I hope that this report gives people an opportunity to adjust their view as they begin and continue planning for 2020. So I just wanna end by saying how grateful I am.
Thank you to you both and to all the people who spoke with me.
Thank you, Ari. And the final word from Wendy King, your 32nd takeaway.
No. I I would echo it already, so I think it's been, really interesting to see the responses to see how far we've we've come, from a legal perspective and adoption perspective, and how far we have to go. So I I look forward to the continued conversations with clients about the way that we can use technology to help them for proactive and, reactionary on the litigation and investigation side. It's been it's been a pleasure. So thank you both.
Absolutely. And, rest assured, we will in fact be continuing that conversation. On behalf of the whole team at FTI, as I mentioned, Kate Holmes had a lot to do with this. Jeff Bracelin was involved. And, of course, our speaker went King, Ari Kaplan to you.
And, of course, our team at Relativity and geocasic, my colleague had a lot to do with putting this together. We'd like to thank you for spending part of the day with us on the screen, you can see a link where you can download the whole whole survey, get the entire result, on behalf of FTI Relativity and, of course, Ari Kaplan. Thanks for being with us for spending part of your day with us, and enjoy the rest of your day.