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Ep 108: Reimagining Law Firm Pricing: Ken Callander on Value, AI & In-House Strategy
48 Plays2 days ago
What happens when a former law firm CMO and Uber’s head of legal ops pulls back the curtain on the business of law? In this episode, Tyler Finn sits down with Ken Callander, Managing Principal at Value Strategies, to explore the evolution of law firm pricing, the rise of AI, and how in-house teams can save millions by shifting to value-based fee arrangements. From the politics of partnerships to actionable strategies for better outside counsel management, Ken brings unmatched candor and clarity on how legal teams must adapt in a rapidly evolving landscape.
Read detailed summary: https://www.spotdraft.com/podcast/episode-108
Topics
Introduction—0:00
How Law Firm Business Models Drive Political Risk-Taking and Brand Fallout – 01:49
Inside the Law Firm Model: Power Partners, Payout Structures, and Why Change is So Hard—09:02
Challenges with hourly billing and how law firm economics are misaligned with client value—16:32
Why Ken left the law firm world for legal ops at Uber—26:34
Moving to value-based pricing and how it impacted Uber’s legal spend—30:10
Why predictability in pricing is often more important than savings—34:21
How AI is disrupting law firm pricing, staffing, and the associate career path—37:33
How In-House Teams Can Improve Law Firm Relationships, Reduce Spend, and Drive Change—49:14
Rapid-fire questions—56:25
Connect with us:
Ken Callander - https://www.linkedin.com/in/kencallander/
Tyler Finn - https://www.linkedin.com/in/tylerhfinn
SpotDraft - https://www.linkedin.com/company/spotdraft
SpotDraft is a leading contract lifecycle management platform that solves your end-to-end contract management issues. Visit https://www.spotdraft.com to learn more.
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Transcript
Introduction to Value-Based Pricing in Law Firms
00:00:00
Speaker
It drives clients crazy that it took you you know this much, and you know, and I'm paying for the number of hours it took and you're paying for input instead of output, right? You're paying for hours instead of results, you know, and output. And that's where we get into the whole thing around value based pricing, right?
00:00:16
Speaker
Paying for tasks, activities and deliverables and results and not how many hours it take you to do it because it could take one attorney five hours do something and another attorney 10 hours to the same thing.
Meet Ken Callender, Expert in Legal Operations
00:00:35
Speaker
What lessons does a former law firm CMO have to share about the business of law How is the law firm business model going to evolve in the AI era?
00:00:47
Speaker
And how can you get better rates and outcomes from the firms that you work with? Today, we are joined on the abstract by Ken Callender, Managing Principal at Value Strategies, where he works with corporate legal departments to help them get more value and predictability from their outside counsel relationships.
00:01:08
Speaker
He's got a bunch of lessons about negotiating rates that he's going to be sharing today.
Ken's Journey from Corporate to Legal Sector
00:01:14
Speaker
Ken has been in the legal space for more than a decade, including as head of legal operations and chief of staff at Uber.
00:01:21
Speaker
And as I referenced, as the chief marketing officer at Davis Wright and Tremaine, which is a big, notable law firm based out of the Seattle area, if i remember correctly.
00:01:33
Speaker
Ken spent the first couple of decades of his career not in legal as a marketer, but at large companies like Agilent and HP. Ken, thanks so much for joining me today for this episode of The Abstract.
00:01:47
Speaker
Yeah, Tyler, great to be here. um Well, you're a pretty candid guy, i think. And so um'm and I'm not going to start with a light topic. a No note like softball right off the bat. um We're going to be talking a lot about law firms today.
Law Firms' Deals with Trump Administration
00:02:04
Speaker
Obviously, law firms at Big law has been in the news recently, as many of the largest firms, there's a few who aren't, there are a few who are fighting this, but a lot of them are cutting deals with the Trump administration, offering pro bono work that they say they would be offering otherwise, or they'd be doing otherwise, um in exchange for the administration not targeting them with executive orders around access to security clearances, government contracts.
00:02:34
Speaker
Yeah. mean What do you think about this? but But also in the context of the conversation we're going to be having today, how is this in some ways derivative of the law firm business model that they would feel a need to cut these sorts of deals?
Impact of Law Firm Business Model on Decisions
00:02:50
Speaker
It's totally derivative of the law firm business model, right?
00:02:53
Speaker
i This is a huge topic in the legal circles right now. Obviously, everyone is talking about this. um And, you know, obviously from the side, and it was interesting. I was just in a meeting last week, a long meeting in person with a whole group of lawyers. And, you know, in the in sort of the downtime, this was the topic that people talked about.
00:03:17
Speaker
Sure. And the interesting thing that. they said is, you know, and I said, well, how many of you have signed on to this petition, you know, and they all said, oh, we totally agree that, you know this was the wrong thing to do, but I'm not signing the petition.
00:03:33
Speaker
Right. You know, and it sort of is a a gateway into just how, you know, people think about this right in the sense that they're totally against, you know, being coerced yeah know and pressured by the administration.
Government Contracts and Law Firm Operations
00:03:48
Speaker
But on this other hand, none of them want to fall prey to, you know, and the big thing that came up was, you know, security clearances, ah you know, that really only covers certain types of work.
00:04:01
Speaker
Government contracts is a much bigger deal, right? Because so much work flows through the government one way or the other. But what each of these attorneys and they're all litigators brought up was hey, I can't be kept out of a federal courthouse, right? Right. so Being accessed to federal buildings, it he says it would destroy my practice, you know, and so I'm not signing on onto anything because I don't want to be targeted and, you know, being kept out of a federal courthouse.
00:04:30
Speaker
okay That would end my practice. So ah it's the fear piece of it, I think, more than anything. um From a law firm business model, you know,
00:04:44
Speaker
Obviously, every firm, just every firm out there does litigation being kept out of a federal courthouse would stop their practice, right? They wouldn't be able to operate.
00:04:56
Speaker
And I think, you know, and and obviously government contracts and also, you know, if you've got clients that are government ah clients are related to the government, you know, that could hinder your ability to work for your clients.
00:05:12
Speaker
And so I think a lot of the big firms, I see both sides of this business standpoint. I, you know, the firm say we wouldn't be able to operate, you know, and we would lose clients and wouldn't wouldn' be able to operate. We wouldn't be able to go into federal buildings, including courthouses.
00:05:28
Speaker
um And we would basically cease to operate. And and the other side of it says, Hey, these firms that you're talking about that they've targeted have, you know, PPPs, which is, you know profits per equity partner in the range of six to $8 million dollars per partner range.
00:05:49
Speaker
Right. Right. And, you know, really, you guys haven't made enough money so far that you, you know,
00:05:59
Speaker
that, you know, you to stand up for what you believe in. Right. Um, So I understand it. I understand where law firms coming from. Law firms are businesses, right?
Financial Priorities and Ethical Challenges in Big Law
00:06:09
Speaker
And they need operate.
00:06:11
Speaker
But on the other hand, you know, a lot of people look at that and say you guys make so much money as it is, you know, really, you know, and that's where your focus is, is to continue to make that kind of money.
00:06:26
Speaker
And, you know, and you see these revolts by associates, you know, and and the branding. And I think going, there was just an article this morning about, What is this going to do to the branding and being able to um recruit new talent for these firms?
00:06:42
Speaker
Yeah. Saying, you know, I'm not going to go, you know, I'll go to another. There's a lot of, you you know, top firms like that out there. I'm not going I'm just going to different firm. here I'm going to leave you and, you know, as a a top associate and go to one of these firms that didn't came.
00:06:57
Speaker
Right. ah The firms, you know, the Wilmer and Perkins and and Jenner and the ones like that that are fighting this, you know, they're getting a lot of props out of that. Right. And sure.
00:07:08
Speaker
And I think you're going to see a lot of top talent say, hey, I want to work with you guys. Right. So, you know, like I said, I see both sides of it. I understand why they're doing it.
00:07:19
Speaker
But i it's, you know, there's ah it's going to cause it could cause them brand issues and things down the road that you we'll see. Right. You know, people's minds, you know, memories get pretty short and Yeah. you're You know, people will probably forget about it. But that's just you know i so I understand and I understand where people are coming.
00:07:39
Speaker
I feel like there's a calculus that they're making as well, which is that, to your point, the memories of GCs or other folks who are making decisions about who they work with, even if they don't like what's happening right now, when push comes to shove, maybe they still go to Latham for their IPO or their big debt rate. You're totally right. And a lot of GCs have spoken out and said, well, wish you know you shouldn't have. I mean, Paul Graywall just the other day, right?
00:08:07
Speaker
Yeah. Yeah. you know, as you all know, came out and said, you didn't you guys didn't ask me about this before you started doing that, right? So i they've come out and said, you know, um maybe I'm not going to work with you guys anymore.
00:08:23
Speaker
But like you said, you know, memories are short. And, you know, if you get to a point where you want to use K&E, right, because you're one of the top M&A firms out there and you're going to do a deal,
00:08:36
Speaker
know it's like okay you know they're still the best or one of the best and we or we've used them in the past and we want to use them again so you know uh when it comes to business you know it's like okay who's the best that we want or who would be used before that knows us and understands us and could do it again and you know so i it may just blow over you know over time and i think that's what they're kind of counting Yeah, um that's unfortunate, but i but but it makes sense in the context of the business of law firms, which is one of the things that we're going to be talking
Building a Business Development Team at Davis Wright Tremaine
00:09:12
Speaker
about today.
00:09:12
Speaker
um Okay, so you spent a bit of time both doing BD work, leading marketing, almost operating as sort of a COO. at Davis Wright and Tremaine, I mean, that must have been a really great education in how law firms work from from the inside um and getting to see all aspects of it. what What was it that led you there and away from sort of the more traditional corporate marketing that you'd been doing for a lot of your career? Yeah, you know, at HP and, you know, especially at HP, I was doing, i I started off in operations and manufacturing and ended up
00:09:48
Speaker
you know in the professional services area i was doing marketing and and business development and pricing of professional services and then i went over to agile and we split the company with hb and agile and i went over to agile in corporate marketing um helping run and their corporate marketing organization and um but that professional services piece when i left agile and i started doing consulting around professional services because that's what i knew Uh-huh. We've seen in business development and the like.
00:10:21
Speaker
And I did work for some accounting firms and architectural firms and stuff. And I started to work for some law firms. I'm not a lawyer. I'm a business guy. but Law is, you know, legal services are professional services. Right. And so um and it was interesting because when I started trying to talk with firms, you know, they said, oh, well, you know, legal is different. Right.
00:10:45
Speaker
And, you know, and I try to say, you know, it really isn't. It's still professional services. Whether you're talking about consulting services or engineering services or accounting services architectural services, you're doing the same thing. You're selling, you know, ah the services of a professional.
00:11:03
Speaker
Right. And and legal services is the same thing. And of course, lawyers think they're different. And, you know, so it took a little while to convince them, but I started to do some work for some firms of law firms.
00:11:16
Speaker
And that's when Davis Rice asked me to come in and build out their business development team. And that's how I started full time at Davis. Right. So it was it was an interesting change because, you know, I've always worked in the corporate space.
00:11:31
Speaker
It's a very hierarchical structure. You know, you've got, you know, the board and the CEO and then each it falls down, whereas you know, a law firm is a partnership, you know, right. That's the thing ah at Davis, right? Or at any big firm is, you know, I had 300 owners.
00:11:51
Speaker
Yeah. that you're dealing with Right. And I and that is ah challenge, right? Because you don't know, you're not reporting. And some, you know, every firm is a little bit different.
00:12:04
Speaker
Some firms truly are hierarchical where you've got a managing partner or a chairman that leads the firm and they lead it with sort of an iron fist and, i you know, and what they say goes.
00:12:16
Speaker
But then you have other firms where it's truly a partnership and that and even in the in the more hierarchical firms, you've got what I call power partners. Right. And these are partners with large books of business and they sort of have veto power over. Right.
00:12:35
Speaker
that, you know, the firm wants to do or the strong say, you know, because firms are afraid that they're going to, you know, if they're not happy, they're going to leave and go to somewhere else and take all their clients with them.
00:12:45
Speaker
Right. Yeah. It's revenue and it hits the confidence that, you know, firms are are built on confidence, right? theyre that They don't own anything. They lease their space. They lease everything. They lease equipment. You know, it's not like a regular corporation where,
00:13:01
Speaker
You know, if you liquidate, you've got assets, you know, all sorts of assets and equipment and right and everything else. Law firms don't have anything except really, you know, their AR. Right.
00:13:13
Speaker
And, um you know, they would say, well, our our contact list. Yeah. OK.
Challenges of Law Firm Compensation Models
00:13:20
Speaker
You know, you're but those are all belong to individual partners. Right.
00:13:24
Speaker
Yeah. Partners keep contacts in a lot of cases to themselves. They don't really they're not really the firm's clients. They're the partners. clients or the attorneys clients. So, um you know, and that's why when you see when you've seen in the past some of these firms that blow up like Heller or Howery or Thielen or whoever, you know, there's you know, it's like there's nothing left laugh except maybe they a are. Right. Yeah.
00:13:51
Speaker
And that's sort of what. But so the firms know that and they're definitely afraid of power partners, you know, or any large numbers of partners leaving because everyone starts to panic and say something's wrong here. What's going on? Maybe I should be looking, you know, and so they do everything they can, which is why we get into the whole thing around pricing and, you know, what I do in value based pricing and and the like, because, you know, moving to fixed fee type arrangements, you know, based on value,
00:14:23
Speaker
verify doesn't mesh well with most of the firm's comp models that are based on hourly billings. Right. And, and, um and because of that, you know, you end up with sort of a, a conflict there between how you're pricing something and how you're compensating, you know, the people that are providing those services. And so that, you know,
00:14:48
Speaker
causes an issue, but for them to change their comp models because law firms are basically a zero based dollar business where, you know, at the end of the year, you zero basically everything out and you pay out the total revenues to, you know, after your, all your expenses and salaries everything else, you know, the partners share the equity of the firm and they get paid, you know, uh, the profits of that, um,
00:15:17
Speaker
you know, that zeroes out at the end of the year. And so if you change a comp model, because it's, you know, it it's a zero based structure, you know, some attorneys are going to get paid more and some are going to get paid less in a new model.
00:15:31
Speaker
And the ones that get paid less aren't going be happy and they're going to leave, you know, and take their clients with them and nobody, you know, and so it's sort of the third rail of law firm. new stuch Compensation.
00:15:42
Speaker
Yeah. Because it's such, a fraught, uh, area. And so it's really interesting, you know, and again, is ah that partnership model. And again, the fact that, you know, they have, they're based on confidence, you know, I sometimes say they're sort of like a house of cards, right.
00:16:00
Speaker
And you see, you pull out one card and the whole thing can become unstable. Right. You know, and so they, they really worry about that. And so you're going back to our first topic, you know, you know, you start, you know,
00:16:15
Speaker
hampering people being able to do their work because they can't go to courthouses or they can't you know they lose contracts with comp clients because they have government work, whatever, you know and people will start leaving. right And then the whole thing falls apart.
00:16:28
Speaker
you know So um you know last one out, turn off the lights. Yeah, it's not lost on, I think, myself and others who are reading about like the Paul Weiss negotiations, which were covered in much more depth because they were
Influence of Significant Partners on Firm Stability
00:16:42
Speaker
the first one. And of course, their top corporate partner who they pay 20, 20 plus million dollars a year to has huge book of business around M&A.
00:16:52
Speaker
Right. I mean, he's personally involved in all the negotiations because they're looking at that and they're like, if this guy leaves, that's a... material hole in like annual revenue and what profits for per partner looks like drops like that right yeah people go oh geez well i'm gonna but get paid less because you know that's yeah you know that revenue goes to me and geez who else is gonna leave right and then you know maybe i should be looking and it just it's become a snowball effect yeah that's what i mean it's all based on the confidence of the firm that they are a solid firm right and if that starts to erode
00:17:29
Speaker
you know, people start bailing and once, you know, that starts to snowball, it's a hard thing to stop. Are there, okay, we'll we'll talk about sort of value-based pricing in a minute. And I think that it's it's a great topic for all the in-house folks who are listening to to learn more about and think more about.
Comparing Law Firm and Consulting Firm Models
00:17:47
Speaker
Are there good things about this sort of partnership model or this comp model? I mean, you know i mean i suppose it evolved over time, but it also probably didn't evolve entirely in a bat and a vacuum. Like, do you do you have thoughts on whether or not there there are good things about this approach or does it just really need to be blown up and...
00:18:05
Speaker
So, you know, it's obviously done well, right? Yeah, that it is. And so in the sense that, you know, it operates well and, um you know, and it served as clients well, you know, and good value, you know, and they feel, i mean, they're paying it, you know, there aren't a lot of other options, you know, but still, but if you look at other professional services industries,
00:18:33
Speaker
isn' enough So take accounting or take um consultancy, right? Corporate consultancy like, you know, the Bains or the McKinsey type ah organizations or your like I said, your big four you see firms, they sort of got off hourly rates decades ago.
00:18:55
Speaker
okay You know, when you go to McKinsey, you know, and you say, hey, we're going to do an M&A integration. We just bought this, you know, buying this company. I want to integrate them in We want you to help us do this whole integration.
00:19:08
Speaker
You know, they come in and say, well, it's, you know, it's eight and a half million dollars. Right. You know, I I had a long conversation with the head of that used to be the president of KPMG, and he's the one that sort of took them in the 90s off of hourly rates and over to a salary model. Right.
00:19:27
Speaker
He said it took about three to four years. It was a very painful experience because you had the same thing where people you know, didn't get paid the same way and some made more or some made less, you know, and people left.
00:19:40
Speaker
um But he realized that this is where they had to go. They had to move to a salary model. And what they did is you know, for their consultancy group, for example, is they had U.S. health care you know group, you know, that and they moved to each of those people got a salary based on experience and everything else.
00:20:04
Speaker
And then the group as a whole, based on the profitability of that group, was paid a bonus at the end of the year based on how they did against their profitability targets. Right.
00:20:15
Speaker
Interesting. And the interesting thing about that, which very which is very different than law firms, is that in law firms, you know, there's the whole eat what you kill sort of, you know, program that they go with.
00:20:32
Speaker
Whereas and And and so the partners and lawyers in a law firm tend to be, you know, soloists that all sort of have their own practices and they're under one sort of one sort of roof, you know, of ah of of an organization, you know, as they're for, you know, their overhead and everything else. that Yeah.
00:20:58
Speaker
But but they still tend to you know be individual lawyers and they all you know and a lot of firms, you know it's tough to get lawyers to share their contacts. you know And they want you know when they bring in a new client, you know they want to be the relationship partner, even if it's true and base you know that they're good with, you know because they it's their contact. And and they they get very ah protective of their contacts.
00:21:27
Speaker
And that's because, you know, again, that structure that you've got where you get, you know, your compensation is based on, you know, these formulas i that include, you know, billing hours, you know, and so um when you move, when KPMG moved to this model, all of a sudden now this group of, for example, like I said, the healthcare care group, yeah they realize that They will make more money as an individually with their bonuses if the whole team works together and gets as much work as possible done as fast as possible and and good quality and everything else.
00:22:15
Speaker
And they'll back each other up because they all know. And they also will call people out that aren't pulling their own weight. you know Right. very different than a law firm, right?
00:22:25
Speaker
Because law firms tend to be a lot more siloed, right? And they'll, you know, even though firms work with what they call client teams, you know, where they try and bring, ah you know, all the different partners that are working for a particular client in different practice areas together to talk about how we basically work together.
00:22:43
Speaker
There's still this sort of tension about, well, you know, this is my practice area and my work and my clients and my relationships and the people I work with. Whereas if you move to that salaried model, you change that dynamic where everyone actually does want to work together because, you know, the end goal is the same for everybody where everyone's going to get compensated based on the group.
00:23:10
Speaker
Right. In the law firm model, the comp is a different structure. Right. So you're you get origination credit everything else that goes into it. Mm hmm.
00:23:21
Speaker
based on the profitability of that client as a whole, right? It's your matter that you're doing is going to base your compensation, not how the client does. at all So it changes that and makes everybody work together a much more like an in-house team, right? And it works.
00:23:40
Speaker
They all get paid. You know, I had this conversation where, well, you know, that's how people get paid by our, you know, our lawyers get paid by hourly. That's so always been that way. And I said,
00:23:51
Speaker
You realize that half the attorneys out there work on a salary basis. They don't get paid by the hour and they all work much more collaboratively in-house because they all have a goal in mind, you know, for their corporation to do well, back each other up much more, you know, they're, they're working together and they get paid a salary and they don't, you know, they don't get tracked in most cases by how many hours they spend.
00:24:18
Speaker
And, and And they don't you know, if they have to get a deal done over the weekend, they work over the weekend and they're still get paid the same. Right. So, yeah, um it's a very it's a completely different model and it it changes the dynamics of how people work together.
00:24:34
Speaker
Right. So, i you know, obviously. so I think, you know, that's why.
Resistance to Change in Traditional Law Firms
00:24:41
Speaker
the big four and, you know, the big consulting companies, management consulting companies moved off of hourly rates because they saw the benefit, I think, of that.
00:24:51
Speaker
To get the law firms, if its so a lot of the newer firms that are starting up are <unk> are in this model. They realize this is the best model. But to take an old-shove law firm with the old model and convert it is very fraught with it not being successful, right? Because- Right.
00:25:11
Speaker
you know, you'd have to go through that process where people say this doesn't work for me. And there's so many other firms that still use that old model there. are They just kind of go, well I'm just going to go across the street. They're going to pay me, you know, on this model.
00:25:25
Speaker
And the other thing about firms, and when I tell this to younger partners, they always agree with me. i Law firms are run by the senior partners.
00:25:39
Speaker
Sure. And the senior partners have no incentive to change anything while they're there. Right. as That's it worked for them. That's how they are getting, you know, got to where they are and how they're, you know, they're doing well under the model that they've got.
00:25:56
Speaker
And they all will sell you, you know, and I ran into this with a lot of firms. They'll just say, Hey, when I'm gone, you can do whatever you want. This is how we're doing it. Right. And it's frustrating, I think, to a lot of the junior partners. It's like, we need to change, make changes. i assume The senior partners run the firm, and they're the ones that are going to make those decisions, right? So, i you know, when I'm gone, you can do what you want, you know, and that's sort of what I hear, you know, a lot of them say.
00:26:23
Speaker
And it's like, hey, I'm not changing it. It's, you know, because it works for me. And that's, again, partnership model creates that sort of dynamic. So you developed this understanding of how law firms work.
00:26:38
Speaker
It's worked for Davis Wright and Tremaine for a number of years. ah But then you decide to go, we' we'll call it in-house, ah right? and And go to Uber and lead legal ops there.
Ken's Transition to Uber and Legal Team Efficiency
00:26:51
Speaker
Tell us a little bit about why you wanted to make that shift. And also, I'm curious about you know how do you apply this knowledge then or apply this understanding of how firms work to to help Uber and and their legal team run better?
00:27:06
Speaker
Yeah. you know I was about you you know seven years, I think, at Davis Wright. And law firms, you know I loved it. Great people. um Really enjoyed people I worked with there and all.
00:27:19
Speaker
ah But you know some of the other dynamics I mentioned, like the fact that you have 280, 300 people you're dealing with.
00:27:28
Speaker
you're dealing with i all different personalities. but You get that anywhere. You get different personalities. um But because you're not a quote unquote owner or a partner, even though you're a C-level executive, you're still considered staff. Right.
00:27:45
Speaker
So it's, a you know, and I decided i wanted to go back to the corporate world um because, you know, again, that ownership structure is difficult to manage.
00:27:59
Speaker
um And so going back to the corporate world where you have that more of that hierarchical structure works better, I think, at least for me.
00:28:10
Speaker
And so going in house at Uber in the legal department is head of legal operations. um Having, especially when dealing with outside counsel, knowing how law firms think, how they work and how law firm economics works was hugely advantageous for me when dealing with negotiating with law firms, because you know, sort of where, you know, the hot buttons are right. You know, and how to manage that.
00:28:43
Speaker
I don't want to use the word manipulative, but it's, it's, you do get to i understand, you know, how they think, right.
00:28:53
Speaker
What's important to them. So um and I, you know, And it's not just all compensation, you know, lawyers, in-house lawyers really care about their clients. Right. And they want their clients successful.
00:29:06
Speaker
Right. So it's not like it's just all about the money. That's not true. Right. They really do care about their clients. um But, you know, there are hindrances that get in the way, you know, in terms of making that work, you know, because the hourly rate doesn't incentivize firms to be efficient.
00:29:24
Speaker
i And a lot of people would argue that it, incentivizes firms to be inefficient, here you know, so and you can't really argue with that. Right. You know, even though people will try to argue with that, it's you know, it doesn't incentivize efficiency.
00:29:40
Speaker
Right. Clients, you know, it drives clients crazy that it took you this much, you know, and I'm paying for the number of hours it took and you're paying for input instead of output.
00:29:51
Speaker
Right. You're paying right instead of results. you know, and output. And that's where we get into the whole thing around value-based pricing, right? Paying for task activities and deliverables and results and not how many hours does take you to do it Because it could take one attorney five hours to do something and another attorney 10 hours to do the same thing.
00:30:10
Speaker
So how did you go about both sort of implementing more of a value-based pricing approach when you were at Uber, and then how do you do this today for for clients? Because would imagine also convincing in-house teams to shift the way that they think about their relationships with firms,
00:30:31
Speaker
is not always an easy part of the puzzle to make fit. I'm sure sometimes it's very simple and the attorney right says, I absolutely want to do this and this makes sense.
00:30:42
Speaker
And I'm sure sometimes you know you might have someone to raise their hand say, yeah, okay, maybe we're wasting 20% on this firm, but having that partner pick up the phone at nine o'clock on a Saturday night is really important to me. So is that really what we care about? I'm curious how you go about doing this both practically at Uber and today with with clients.
00:31:05
Speaker
yeah Yeah. Yeah.
Success of Value-Based Pricing at Uber
00:31:10
Speaker
The way it started was you know about six months in at Uber, I went to our general counsel. And I just said, you know, we're spending way too much on outside counsel. And this was back, you know, when I started at Uber, I think we had 14 lawyers, right? Now they have hundreds of lawyers.
00:31:28
Speaker
Wow. And so, and we were litigation coming out of our ears, right? Sure. And so basically the in-house team really didn't have the ability or the ah time to really do legal work. They were just managing outside counsel, know? Yeah.
00:31:46
Speaker
Right. Um, and so i just said to our general counsel, I said, you know, we're spending way too much on outside counsel. If you really want to be innovative and creative, you know, let's think about getting off hourly rates onto value-based fee arrangements. Right. And she said, okay, what's that?
00:32:06
Speaker
You know, and I said, well, we were using it at HP back in the 1990s for professional services. And I tried to get the law firm to go there. Yeah, in some cases, but we just couldn't move the needle. And that's whole other story.
00:32:18
Speaker
um But I like being on the, you know, on the buy side here, um I think we might be able to you know make some traction. So she said, OK, let's try And we started with corporate, you know, an M&A sort of space.
00:32:32
Speaker
And over the next year and a half, we moved almost everything off of hourly rates across Uber. OK, save it. Wow. Millions of dollars.
00:32:43
Speaker
um Again, because you and the the savings come from the fact that you're forcing the firms to become more efficient, parents paying for that value and not the hours anymore.
00:32:55
Speaker
And so you gain that efficiency. What I what I find with most of my clients, all my clients, the savings are between 20 and 50 percent in really that high.
00:33:08
Speaker
Yeah. Oh, yeah. So. Because, you know, and that's that efficiency gain, you know, and there's some other pieces to it, too. But um and and, you know, you just think about it, you know, again, firms don't have that incentive. And when you change that incentive and the whole thing around value based pricing is trying to align the incentives between the client and the firm.
00:33:32
Speaker
i know um So. But yeah, so that, you know, at at Uber, you know, we started to do that. This was back in, you know, 2013, 2014, when based pricing hadn't really been seen by a lot of these firms. And because Uber was using some of the biggest firms out there, you know, this was a little bit of a you know shock to them.
00:33:57
Speaker
Yeah. Pushing this. Now, you know, 10 years later, i All these all the big firms have seen this. And this is, you know, and we'll get into this discussion we talk about AI.
00:34:10
Speaker
Yeah. This is where I think it's going to sort of go anyway. So we won't ever get completely rid of the hour, the billable hour, I don't think. But I think a lot of it is going to change.
00:34:21
Speaker
Does this work for, i guess the question or the way I'd put it to you is, is there a minimum sort of threshold of spend where like beneath this, it doesn't work? Because you know we've got listeners probably who are at companies that spend tens, if not hundreds of millions on outside counsel every year.
00:34:42
Speaker
We've also got folks who have an outside counsel budget of $1, 650K, right, for the year and are working as a solo GC. or So how do you how do you counsel folks or or how how should you think about value-based pricing?
00:34:59
Speaker
like like Are the gains really for the sort of like top-end companies or could this work across a whole spectrum, startups and up? The answer is it can work across everything and every area, right? So you can do it.
00:35:13
Speaker
you know, across the board. Yes. You know, if you're spending hundreds of millions, having a savings of even 20 or 30 percent, it's a really big number. Right.
00:35:24
Speaker
um And i so that, you know, obviously can drive a lot more of it than if you're spending, you know, ah half a million a year, you know, the effort to to make this happen, you know, is it really worth the savings?
00:35:41
Speaker
hey father that's up to you to decide, right? I still have, you know, some very small clients that just, they, the, the big piece of it besides the savings is the predictability.
00:35:53
Speaker
Right. And so there's a lot of value in that predictability. So I think for the smaller clients, you know, that are on tight budgets and are being held to a budget, the difference today versus 10 years ago was, you know, a lot of general counsels and CLOs,
00:36:13
Speaker
you know, 10 years ago, they kind of got a pass when it came to ah their budgets. Right. because I mean, they were given a budget, but they could always say, oh, well, we had this big deal or had this big litigation matter or we had this big thing come up, you know, so we've gone over budget and yeah.
00:36:29
Speaker
And the CFO would kind of give them pass. In a lot of companies nowadays, you know, they're like every other manager in the company. They've got a budget. They've got to stick to it. Yeah. And when I was at HP, it's like,
00:36:41
Speaker
This is your budget. And if you can't manage it, we can find somebody else who can. So i and so there's a lot more pressure, I think, now on most GCs and CEOs to maintain their budget. So predictability and I have clients that will pay more to have a predictable budget than they might have paid on an hourly basis because now they know that what they're going to be paying And they don't have to worry about, you know, having an open PO that can go way over the market.
00:37:14
Speaker
That's interesting. Yeah. so there's ah there's value in that. So for the smaller clients, it may not always be about the savings as much as it's going to be about that predictability.
00:37:25
Speaker
one And the the savings the soft savings you're going get in terms of administrative costs. Mm-hmm.
AI's Impact on Law Firm Operational Models
00:37:33
Speaker
let's um Let's talk a little bit about the AI piece.
00:37:37
Speaker
ah and You know, i think I think, well, one question is, it doesn't seem like many, although maybe smaller firms ah are making these sorts of shifts proactively, but people seem to think that the rise of AI is the ability to use AI for legal research, initial drafts, et cetera. I mean, this is going to deeply sort of affect the pyramid model of you've got a lot of associates and the associates bill a lot of hours, right? So I guess, you know, a question is,
00:38:15
Speaker
is the pressure still going to come from the client side for how long is the pressure going to come from the client side? Or is AI going to really force a rethinking of the way that law firms operate and their, and their business models and then how they price their services ultimately. Right. You know, obviously this, you know, and I get asked this question a whole lot, right?
00:38:36
Speaker
I mean, this is ah obviously the big topic these days. um It's interesting. If you think about, law firms and the way they work.
00:38:47
Speaker
um You know, let's take. Let's take litigation and you're doing a motion to dismiss, right? okay Currently, you know, or in the past, the model has been, okay, we're going to put four or five associates on this to do the research, i you know, look at case law, look at, you know, previous similar cases, we had you know, um and the like, they're going to put together an initial draft, it's going to, you know, they could spend
00:39:21
Speaker
tens or hundreds of hours, you know, doing this. We get a first draft of this motion dismiss. It goes to the partner who then reviews it. It goes to another partner, goes back and forth and finally goes to the client and revise, you know, et cetera, et cetera. Then it gets filed with the court. You do the hearing, you know, cetera, et cetera.
00:39:42
Speaker
So and we're not quite there yet, but we will be there. i'm I think ah where you're going to have an AI, a closed AI system that's got, you know, and most of the court records are public, right, in terms of filings and everything else that goes in there.
00:40:00
Speaker
i You know, every complaint, every motion dismiss for every matter out there um in every jurisdiction against with every plaintiff attorney and every judge, you know, that knows and the outcomes, you know, and how they all of that's in there.
00:40:18
Speaker
where you could just say, here's the complaint we have in this jurisdiction with this judge and even against this plaintiff attorney, what is the best argument we can make you know for this motion to dismiss?
AI-Driven Changes in Legal Service Pricing
00:40:32
Speaker
Give us a first draft. Right. And it can you know almost instantly give you that first draft. Okay. In the past, you charged a client maybe tens or hundreds of hours of associate time to get that research and the first draft done.
00:40:50
Speaker
Now you've got it done in minutes, right? Right. i What are you going to charge for that? Right? Yeah. um What is the law firm going to charge for that?
00:41:05
Speaker
Now, there's been some ethics, ABA ethics ruling around the fact that you can't charge, you know, ah more than the hours it took you to do that. Right. Mm hmm.
00:41:16
Speaker
um I, you know, I saw something I think was out of Texas that ah ABA that was talking about this. And so this is a big topic. So, you know, the idea then is, well, that's going to really hit our revenue numbers because we used to get X number of dollars for this type of research.
00:41:36
Speaker
Now we can't charge for this. And, you know, course you're going to, it's still going to go to the partner to review, et cetera, cetera. So that piece is the same, but that whole research piece up front, um,
00:41:49
Speaker
The idea then is the firms have to start thinking about, well, what's the value of this research to the client? Right. Right. And to charge for that initial draft for the value that we're delivering to them. Right.
00:42:03
Speaker
And then we all of a sudden now are moving away from hours because that's how we got. But if those hours, if you're getting super more efficient here as you're using ai that efficiency is going to dig into your hours model.
00:42:18
Speaker
Yeah, and you're going to be able to bill as many hours. So your revenue is going to go down considerably because you are is forcing you to be more efficient. So in order to maintain your same level of revenue you know that you were having in the past, you're going to have to come up with a different model to to to charge for that.
00:42:38
Speaker
Right. Right. And you're going to have to say, well, the value of this is a very difficult case. You know what? And we've got our professionals and we have this initial draft, you know, but we're to have modify et cetera, et cetera.
00:42:48
Speaker
So that value is x and we're gonna charge you X for this motion. um I think that AI, you know and that's just an example in that, you know think also that about advice and counsel, right?
00:43:03
Speaker
You have, and I like to use the example because I know of a law firm that's doing this, building out basically a chat bot for employment advice and counsel in all 50 states.
00:43:13
Speaker
Interesting. Right now, you know, if you have ah if you're a large employer and you've got employees in any or all of yeah you know the 50 states, you have you have to go to an Oklahoma employment attorney to ask an Oklahoma employment question because employment law is mostly state specific.
00:43:34
Speaker
Right now, if you have a chat bot that you can go to to ask those questions that knows all those laws in all 50 states and is backed up by attorneys, but to make sure that because there's always nuances and everything to it, but as those nuances get built into the training, you know, as you go through it, it'll get better and better. Right. um What would you charge for that?
00:44:01
Speaker
Right. Right. you know There is one large firm out there that's figured out that this is a problem for them.
00:44:11
Speaker
And before some third party builds out this you know, chat bot or advisory council, they're going to build it out and back it up with their employment attorneys.
00:44:22
Speaker
Right. Right. So, i but then, and then be able to sell that as a service, right. but Right. Just like they could sell their attorneys.
00:44:33
Speaker
But if you think about all of this, where does that leave associates? Right. Right. If you have a lot of this work, you know, Think about doc review, think about contract review, you know, all the stuff that, you know, that's how they learn how to be. asked yeah They don't learn in law school. and That's just book work, right?
00:44:56
Speaker
Textbook work. um How to be lawyers. And i if you don't need as many associates, because a lot of that work can be done with AI, where do the future partners come from?
00:45:09
Speaker
Yep.
AI's Effect on Legal Work Distribution and Partner Development
00:45:10
Speaker
You know, it's a real, you know, ah question that's going through the legal community um right now. yeah And it's it's a big one.
00:45:23
Speaker
And um so, and I don't know the answer that. Now, I did sit in a panel several months ago where had lawyers, it both in-house team and law firm lawyers in there.
00:45:37
Speaker
and There was a lawyer there from big firm and he said, oh, that's not what's going to happen. What's going to happen is we're just going to get more efficient and we can do 10 times more work for clients than we currently do because ai is going to help us do that.
00:45:50
Speaker
And we'll still build by the hour and do. my question back to him was, so you're telling me that 90% of the work that comes in, you turn down because you don't have the bandwidth to do it.
00:46:06
Speaker
or Or, I mean, yeah, or to like maybe, or maybe the client can't afford to send the work to the firm, potentially. Yeah. The thing is that that means that you've got to do, you've got to get 10 times more work coming in to than you currently are doing.
00:46:25
Speaker
And I don't know really hardly any firms that turn down work that isn't conflicted out, right? They'll do everything that comes to them. So, you know, this gets back to the the musical chairs model where, you know, there's only a certain amount of work out there, you know, and and at some point, you know, you're not going care to sit down when the music stops. So, you know, you've got to, you know, if all the firms are going to take on 10 times more work than they currently have, where's that work going to come from?
00:46:56
Speaker
Right. So that, you know, that's the fallacy in that train of thought is that we'll just be able to 10 times more work. Yeah. Then you have to take it from somebody else, you know, that's doing it. Right. Because there isn't an it's a finite amount of work out there.
00:47:13
Speaker
Right. And yes, you're right. You know, at at cheaper rates, you might get more work, you know, but those firms aren't going to be charging cheaper rates. Right. Right.
00:47:24
Speaker
In fact, the hourly rates for top partners may go up, ah I think. potential bright and But already, you know, they're hitting $2,500, $2,800 an hour. Right. Some of your top firms, you know, and I already have clients just say, where does this get to be ridiculous? You know, $5,000 $10,000? Yeah. you have, know, 7%, 8%, 10% increase. Yeah. And at $2,500 an hour. That's big increase.
00:47:50
Speaker
yeah and you're already at twenty five hundred dollars an hour that's a big increase Versus, ah you know, someone at $200 now worth a 10% increase, right? It becomes exponential. Yeah.
00:48:01
Speaker
You know, and that curve, that exponential curve, there's a point at which, you know, and the other thing that law firms don't understand is the the higher their rates get, and this isn't true for all practice areas, but the higher their rates get, the easier it is for the in-house teams to do things business case models that can bring the work in-house.
00:48:28
Speaker
Sure. You know, if you can say for a, you know, 250, 300,000 fully loaded FTE attorney in-house, we can pull an X number of dollars, you know, 800, 900,000 dollars with outside counsel work.
00:48:41
Speaker
you know, you can and the higher those rates go, the easier it is to make that business case. Yes. So they sort of are putting themselves out of work by doing that. Now, you know, there are certain practice areas where you can't do that.
00:48:57
Speaker
again You know, certain litigation. Sure. i You know, you need specialists in certain areas, but you don't need them all the time. Yep. There are other practice areas where that is very true.
00:49:09
Speaker
here so So attorneys have to think about that. Maybe a last sort of substantive question for you before we get to a few closing ones that I like to ask all my guests.
00:49:21
Speaker
um Given this landscape, I guess, and think about your clients, right? um How do you advise in-house teams to evolve their outside counsel relationships to sort of take advantage of this moment or the moment that that is coming? Like, what are the things that...
Optimizing Outside Counsel Relationships with AI
00:49:43
Speaker
that in-house counsel should be doing to make sure that they're sort of leading and on the vanguard and pushing their firms to do better work, better outcomes, lower cost, right? Like what, what should folks be doing?
00:49:58
Speaker
So one thing, so going back to AI a little bit, I recommend my clients um for each new matter to ask the firm, how are you going to use AI in this matter?
00:50:13
Speaker
if If at all, you know, if you're going to use it, how are you going to use it? And how is it going to benefit me two And how is it going, you know, to affect the price that I'm paying for this work?
00:50:29
Speaker
Uh huh. That's a new thing we've started now recommending we ask the firms because otherwise you don't know if they're using AI or not.
00:50:40
Speaker
Right. Unless you ask. Right. So. um And in many cases, they may be right. And so and you want to know that I think even outside of the pricing and everything else, I think you'd want to know, are you using AI for this or not?
00:50:54
Speaker
OK. i And we're starting to put that in outside counsel guidelines, too, as well. So that's number one. i also think ah it's important to really have better communication with your firms.
00:51:08
Speaker
And so I for your top firms, I always recommend that you at least do an annual ah review with your firms where you have the firms come in and you talk about all the matters for the year. What went well? What didn't go well?
00:51:22
Speaker
What could we do better? What could you do better? you know, and it's ah and it's a two side conversation, right? It's not just, you know, the client asking the firm, but also the firm asking the client, hey, you know, here's where how you could do better for us, how we could work better together.
00:51:38
Speaker
Hey, we send you stuff. It goes into this black hole. We don't hear anything from, you know a week. We don't know what's going on. You know, that sort of thing. um I think that really helps relationships and it really helps both sides to understand each other better and work better together. Right.
00:51:55
Speaker
Like a partnership arrangement between the two. um In some cases on big matters, I think it's useful at the end of a big matter to have that conversation.
00:52:06
Speaker
Hey, what went well, right. Like take a big transaction. You know, hey, we, you know, we'd like to maybe use you again, but here's the things that we had a problem with. Right. one And again, two sided conversation.
00:52:18
Speaker
Right. Those are things I think when you talk about quality and, you know, working together um and firms are typically happy to do that, but clients don't often ask for it.
00:52:30
Speaker
Interesting. And everybody's busy and doesn't have time to think about it, right? So, i but purposely doing that um either on an annual basis with your big firms or after big matters close up to have those conversations, I think is really useful.
00:52:46
Speaker
When it comes to, you know, reducing spend for in-house teams working with lawyers, i one of the first things that's pretty simple, and even without even getting to value-based fee arrangements to think about is,
00:53:00
Speaker
to have a matter intake process whereby you really think about aligning the matter value, the value of the matter, both in economic and risk value and and brand value to the value price point of the firm.
00:53:17
Speaker
yeah In other words, have a process whereby lower value matters go have a, you know, are funneled through specifically to regional or super regional firms or smaller firms ah with, you know, lower hourly rate structures instead of just giving, you know, everything to the most expensive firms.
00:53:42
Speaker
Right. By doing that, you save a lot of money. Okay. Okay. and just having an intake process that filters them through. And then you're, you know, you're bigger, more expensive, strategic high cost matters. They go to your big firms, smaller ones, smaller firms, just doing that, you'll save a huge amount of money.
00:54:00
Speaker
The other thing that is really helpful is, and I was just talking to another client about this yesterday or last week um is in-house having part of the review, that the, the,
00:54:17
Speaker
the personal review process, the performance evaluation process of the in-house attorneys to have outside i spend management or legal spend management as one of the factors they get graded on.
00:54:33
Speaker
A lot of companies don't do that. And so the in-house attorneys, because they're not being measured on savings, don't, don't think about it. Don't care about it. We'll just, we'll go back to that big firm because, you know,
00:54:46
Speaker
they get good results and that's great. ah But you can get also good results from a smaller firm, especially on lower cost matters. So having that as part of your performance eval process for the in-house team, um and it it doesn't have to be anything, you know, hard, hard coded with 5% or 10% or anything like that. Just like what are the three things you did this year to reduce outside counsel spend?
Incorporating Legal Spend Management in Performance Evaluations
00:55:12
Speaker
Right. Just having that in there will make them start to think about it because if you don't measure it, people don't pay attention to it. i So and but and a lot of companies don't do that.
00:55:25
Speaker
I said majority don't do that. And so the in-house team doesn't. And this is gets into the whole change management thing, right? Of how did you get the in-house team to do something different? hey Getting the law firms to do this differently is not a problem.
00:55:40
Speaker
Okay, it's good because, you know, they want to please the clients and the the clients, you know, you know what the client says is, you know, is law, right? So by getting the in house team to do something different and that they've always done is, you know, internal change management is the toughest thing I face.
00:55:59
Speaker
And just by and and if they're not being measured on it, they're not going to think about it. So you measure it. all of a sudden people pay attention to it. Right. So that's you know one thing, simple things you can do align you know matter value to so value price point of the firms and putting that in the in the eval process ah for the in-house team can make a big difference.
00:56:26
Speaker
Really great advice. um Okay, I've got some closing questions for you that I like to ask all my guests that are a little fun, I think. more The first one is if you have a favorite part of your day-to-day ah running the consultancy.
00:56:46
Speaker
You know, what I love is i get to work with so many different companies. Yeah. Every company is different. You know they all have different structures, different friend ah cultures, i you know, what they do in-house versus what they send outside.
00:57:06
Speaker
you know, I've had, and there are different industries, everything from very large university, you know, to a high tech company, to an oil and gas company, to a power company. I mean, and they all are really in different spaces and have different legal issues.
00:57:23
Speaker
Yeah. A healthcare company, you know, i HIPAA and, you know, all the regulatory things they have to deal with and and the like, very different than, you know, ah retail company that is selling apparel, right?
00:57:40
Speaker
The types of issues they deal with and a university that deals with First Amendment issues, right? You know, pepper sprayed protesters, you know, or they have police departments, you know, so they have police practices.
00:57:56
Speaker
I mean, Things that, you know, normal corporations don't even think about, you know, the tenure issues with professors and IP, you know, a lot of clients have IP. But when you have researchers that do IP and they, you know, yeah and and and they have Nobel Prizes and they want their patent, you know, ah to be, you know, prosecuted, you know,
00:58:18
Speaker
even if you you think it's not worth it, you you got to do it anyway, because they would go to another university, right? So, I mean, these are all things that i make it really super interesting to work with all different types of companies in different industries and all the different people. They're all just great people.
00:58:35
Speaker
So then, you know, day to day, that's what I love is just the variety you get versus when you live, when you work in-house, you know, in any one company, you're just immersed in that industry and that technology into that Yep. nation You don't see that.
00:58:51
Speaker
um Where I get to work with all these different companies in different industries and different spaces and different cultures, you know, it makes it really interesting. Do you have a professional pet peeve? You you know, I talked a minute ago about um change management and getting e-commerce teams to do things differently.
00:59:16
Speaker
I probably the pet peeve and I've had this ever since I've been in work, you know, even back at is, you know, the answer being, but that's how we have always do it.
00:59:28
Speaker
Right? Sure. Nuts. Right. Because that's, you know, you're not thinking about doing something differently or being innovative. It's like, oh, but that's we why did we do it that way. Well, that's how we always done it. You know,
00:59:40
Speaker
That sort of answer, you know, is probably drives me crazy. And because it's people get entrenched in the way they do things and they don't want to change. ah And that's just human nature, you know, the not wanting to change.
00:59:55
Speaker
But i because ah you know, the way we've always done it is not a good answer. Yep. So um and most tech, companies you don't get that out of most tech company employees because they don't,
01:00:09
Speaker
tend to be pushed to be more innovative. But your old school companies, you know, which I do a lot of work with, you know, you get that answer. It's like, really? yeah Yeah. But it's, you know, that I just can't. And I've, you know, I've heard that for decades. It's not something new.
01:00:27
Speaker
Do you have a book that you would like to recommend to the audience? And this does not have to be a legal book or a business book, but it certainly can be. It can just be something that you've read recently that you think would be fun for folks to read as well, too.
01:00:41
Speaker
You know... There are so many books out there. I'll tell you the book when I started to get into pricing that um sort of changed the way I thought about pricing.
01:00:55
Speaker
And it's a very wonky book. It's very technical. Because I knew were going ask. It's called The the Strategy and tax and Tactics of Pricing. The Guide to pro Profitable Decision Making by Thomas Nagel and Reed Holden.
01:01:10
Speaker
And it was great. written about 20 years ago okay 25 years ago and when people ask me ah getting into pricing and that's pricing of products or services or anything it's sort of like what i always thought was the bible of pricing have um and so if they people get into pricing i say you know i would grab a book this book and read it it's a slow read okay it is very technical and detailed it is not
01:01:41
Speaker
you know, a light novel. ahha So, but from a technical standpoint, and really understanding what is price, you know, versus value and understanding all of that.
01:01:52
Speaker
i It's, it's super helpful. And my last question for you, Ken, it's my traditional closing question for for my guests.
01:02:04
Speaker
So if you could look back on sort of the earlier days in in your career, and I'll let you kind of pick. Do you want to like start at the beginning of your career or when you started to work more at a law firm?
01:02:15
Speaker
um Something that you know now that you wish that you'd known back then? yeah.
01:02:27
Speaker
You know, something I sort of learned over the decades was, you know, and this is kind of off, completely off topic, but in every organization you have to deal with politics.
01:02:45
Speaker
Sure. And politics, you know, people try to escape it. You can't escape You know, whether you're in law firm or corporation or any larger, even a nonprofit, you know, anything,
01:02:57
Speaker
there's always internal politics. sir And I have, it took me years to figure out how to sort of navigate that. i and I finally decided I, you know, at HP and even at, in the law firm, I had a little Swiss flag I put on my desk.
01:03:20
Speaker
And I always said, a don't take sides in political discussions. Okay. People will try and get you to, you know, go to their side on a particular political issue or internal issue.
01:03:36
Speaker
ah Now, there's some things you can't take, you have to take a side on. But in a lot of things where they, you know, there's sort of two factions out there, you know, and one more group wants to do this, the other group wants to do that, or, and they try and get you to be on their side.
01:03:48
Speaker
hey i would just tell them I don't take sides. Yeah. And ah by doing that, the ah they'll be pissed off at you that you didn't take their time.
01:04:02
Speaker
But they're also not upset because you didn't take, they're you know, they're not upset that you took the other side because you didn't. And you tend to get, you can end up being the mediator of the two sides. and um And they respect you for the fact that you didn't take the other side.
01:04:23
Speaker
Mm-hmm. Because once you take one side, the other side, you know, they'll never forget. Yeah. You know, you are against them on this and that person can be your boss.
01:04:36
Speaker
By not taking sides um and and always take the high roads. Number rule. Number two. Number rule. Number three is always maintain confidence. And somebody tells you something.
01:04:47
Speaker
Don't ever repeat what people tell you. there And once people realize that you don't take sides and that you take the high road and that you don't repeat anything that someone tells you, people will tell you everything.
01:05:04
Speaker
there is They'll come to you and close your door in your office and tell you what's going on and vent, you know, this way and that way. And it actually will give you an advantage because you'll know more about what's going on in the organization than anybody else.
01:05:21
Speaker
And People will come to you for advice, you know, and how do I deal with this person? and you know, they're being a jerk and yada, yada, you know, and you can sit there and, and you know, and the idea is, and sort of, i brought it up when we talked about that very first topic.
01:05:37
Speaker
Yeah. I see both sides of this. Sure. I understand. I understand your side and I understand the other side, right? I understand where you're both coming from and you both have good points and bad points, you know, and but I'm not going to take a side.
01:05:51
Speaker
Right. And and I found that in corporate politics and in any sort of organizational politics, you will survive much better.
01:06:03
Speaker
Those three rules. ah than anything else. That's probably different than any answer you've gotten. I have not gotten that before. And I love that. That's great.
01:06:13
Speaker
Great advice um and great advice all the way through. This has been super interesting conversation for me, Ken, and I hope our audience thinks so as well. I think, you know, understanding how law firms and professional services are going to evolve when they're such a big part of,
01:06:32
Speaker
training for a lot of folks, but more over the day to day that in-house counsel deal with. um I think, think you got to understand the future and what's coming in order to, to adapt to it. So thanks so much for joining me for this episode.
01:06:46
Speaker
Well, thanks for having me. I, this was a lot of fun. And to all of our listeners, thank you for tuning in and we hope to see you next time.