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EP 13: Why Legal Operations Is Critical in the AI Era
7 Plays3 days ago
In this episode of Beacon Voices, Akshay Verma (COO at SpotDraft) sits down with Reese Arrowsmith to explore the evolution of legal operations over the last 25+ years.
Reese shares his unconventional journey from environmental science to becoming one of the earliest leaders in legal operations, and reflects on how legal departments have transformed through the dot-com era, the 2008 financial crisis, and the rise of AI.
The conversation dives into change management, legal tech adoption, outside counsel management, enterprise legal strategy, and why empowered legal operations teams are becoming critical in the AI era. Reese also discusses the future of legal engineering and knowledge management, and the importance of documenting the history of legal operations in the upcoming documentary Smooth Operator.
If you're interested in legal operations, legal innovation, AI in legal, or the future of in-house legal teams, this episode is packed with practical insights and industry perspective.
Topics
Introduction: 00:00
Reese Arrowsmith’s career journey from environmental science to legal operations: 00:57
Discovering legal operations through litigation support and problem-solving: 04:07
Early legal tech implementations and the evolution of data-driven legal operations: 06:23
Why change management is the biggest challenge in legal ops projects: 09:27
Building successful legal ops rollouts through stakeholder buy-in and communication: 11:02
Moving in-house: consulting, AIG, and learning legal department leadership during the financial crisis: 13:25
How the dot-com era, financial crisis, and COVID transformed legal operations: 17:00
The rise of legal operations communities, networking groups, and the ACC Legal Ops movement: 22:16
Evolution of the legal operations role from admins to enterprise strategy leaders: 24:46
The empowerment gap: why many legal ops teams still struggle to influence legal departments: 30:44
The future of legal operations and AI-driven transformation in legal departments: 32:50
Rethinking outside counsel relationships and the rise of legal engineering: 34:42
AI adoption challenges, legal department pilots, and the future of knowledge management: 38:30
“Smooth Operator”: documenting the history and future of legal operations: 41:41
Connect with us:
Reese Arrowsmith - https://www.linkedin.com/in/reesearrowsmith/
Akshay Verma - https://www.linkedin.com/in/akshay-verma-esq/
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 Beacon Voices
00:00:00
Speaker
i'm the killer of all hopes and dreams He works for a software company, a big, big tech, huge tech company. And he said, I'm the the killer of dreams of all things leave legal tech. Hi, everyone.
Guest Introduction: Rhys Aerosmith
00:00:11
Speaker
This is Akshay Verma, the chief operating officer at Spot Draft.
00:00:18
Speaker
everyone this is aksha verma the chief operating officer at spotdraft I'm also the host of our podcast, Beacon Voices. And here with me today is Rhys Aerosmith, who is the EVP of Legal Operations and Administration at Fox Corporation. Rhys, thanks
Journey into Legal Operations
00:00:34
Speaker
so much for being with us today.
00:00:36
Speaker
Thanks for having me. Looking forward to this conversation. Yeah. Tell us where where are you joining us from? How's the weather? how are you feeling? I'm in Philadelphia. Weather's great. to beautiful spring day, 65, maybe 70 degrees. Sunny. Yeah, it couldn't be better. and feel good. Looking forward to talking about legal ops.
00:00:56
Speaker
Awesome. I would consider you as would many others as an OG in legal operations. You've got an incredible, amount of experience in the space over the last 25 plus years. I want to talk a little bit about how you've seen things evolve over that time. i want to talk a little bit about how you see us moving forward in the space with all the new cool things that are going on. And then there's a big surprise at CLOCK CGI next week that'll be announced by the organization around the documentary. And I would love to get your thoughts around what was so special for that.
00:01:32
Speaker
of that for you to to take part in it and and kind of how that felt and what you hope some of the takeaways for the documentary are going to be. But let's, you know, at the risk of sounding slightly biblical, let's take it back to the beginning for you. i
Career Transition and Early Experiences
00:01:46
Speaker
saw that you came out of college. You had, you know, your kind of typical first job out of college in the insurance world.
00:01:53
Speaker
but then very quickly switched into legal operations. Take us back to kind of college Reese and how you were thinking about what i'm going to do when I grow up and and I can earn some money and and kind of how you got into the legal operations world.
00:02:08
Speaker
College. Wow. You're you're clearing. god take it back this um i Did not think I'd be in legal operations 25, 27 years later.
00:02:22
Speaker
I thought i would be studying the Great Barrier Reef, probably doing something kind of a hybrid between marine biology and environmental science and saving the planet in some way.
00:02:36
Speaker
I got a job, I worked briefly, and I mean very briefly, at um and a local environmental site cleanup company. And loved it in theory.
00:02:50
Speaker
college, books, but I didn't like it in practice. Now, in hindsight, I probably would have liked policy setting. And if I had gone in that route, it would have been a very different career. However, um i knew I liked business and wanted to figure out how to combine the two.
00:03:07
Speaker
And I ended up getting a job working for a claims company slash litigation support oversight company. um And they were looking for people who could take somebody with an environmental science mind, a chemistry mind. and help solve lawsuits, settle lawsuits, do site cleanups faster, better, quicker, kind of putting those two pieces of the puzzle together. And at the end of the day, I was exposed to litigation, law, the process, what happens. and picked it up very quickly i had um frankly a family friend who had a who got a job at metrotech and he had a very similar career path actually and he said you know this seems like something you might be interested in and i started talking to um the individuals at metrotech and next thing you i
The Role of Process in Legal Operations
00:04:04
Speaker
had a job i was on a plane flying to la
00:04:06
Speaker
Yeah. and And I saw you that you you know early on at least, or maybe through your tenure there, a lot of the work that you did was implementation, which is very process heavy. What about what about process really kind of draws you in? and you know When we think about it in our world, you've got the law, you've got the practice of law, then got the business of law. One is very kind of regimented and risk analysis and this and that. The other is very process oriented. it actually a value taking risk and things of that nature.
00:04:38
Speaker
What about the two kind of did you juggle in your own mind and and what drew you to the legal operations side? Yeah, I'd actually add even one more thing to it. It's the process, the process of law and the problem solving. You know, so much of what we do on a daily basis is truly solving problems. Some are small problems and, you know, spot problem fixing and some are big macro process, systemic problems in the legal industry and how the legal industry functions and works.
00:05:11
Speaker
And
Challenges and the Role of Software
00:05:13
Speaker
a lot My first client said to me three quarters of the way through my project, Reese, you showed up with a tool belt on and you've just jumped in to start fixing things. And I really kind of did. I picked up the legal side of it fairly quickly yeah um and just kind of ran. Yeah.
00:05:36
Speaker
And it's it's interesting to hear you talk about problem solving, particularly in the context of your early experience with litigation. One of the things that I got so frustrated with as a lawyer was that these pieces of litigation would just go on forever and ever. yeah And I remember thinking, we're not solving anything.
00:05:52
Speaker
We're not fixing anything. And I remember, you know, like you, I spent the first seven years in consulting after my lawyering days and Even there, yeah yeah arguably, you're not exactly fixing things, but you're a lot closer to that solution and actually rolling it out. And in legal operations, if you don't fix stuff and you don't solve those problems early and often, not only do you not get the credibility and trust of your colleagues, it's tough to really succeed long term. Was there something about that for you as well, just particularly given that you had the experience and exposure to litigation? You're like, hey, there's a tangible start and a finish to this thing, and I really like that.
00:06:34
Speaker
Yeah, I mean, just implementing those early days software solutions was fun. i loved my job. i loved what I did.
00:06:45
Speaker
I still love what I do. But as a consultant, you just have so many opportunities. You know, i am. I had a couple early on projects, uh, uh, uh, big box store hired us to come in and put software in place to better track their claims. And really it was about the data.
00:07:08
Speaker
It was about tracking the data, monitoring the data, identifying trends and looking at ways to prevent the problems from the first, in the, in the first place. And we, this was in maybe 2002, 2003, We ended up building this collaboration site between in-house counsel and outside counsel that I was just fascinated by what was possible in better leveraging even tools that were available back then. Now, I've said many a time that immediately after that project launched, it was hugely successful. The general counsel forced them to use it and the the usage did. I mean, we could track the statistics. Yeah. Went
Change Management in Legal Ops
00:07:50
Speaker
straight up.
00:07:51
Speaker
I pitched that to every one of my clients that this is the wave of the future and nobody else bought it. like i was knew It was the only one that was focused on this. But we're we're finally getting, i think, to that place with, you know, this is jumping ahead and we'll come back to this, but with knowledge management and really leveraging all of the legal know-how that that is tied up in documents into knowledge management.
00:08:22
Speaker
But anyway, yeah, it was really just kind of the problem solving the art of the possible, the back then lack of focus on outcomes and total case cost by firm, by matter type, by region, by Judge and how do we kind of leverage all of this to make decisions in the future? Because nobody was really doing it. at the Yeah, it's that's really interesting point. I was I remember who I was having this conversation with, but it was around litigation in general. And imagine having at your fingertips, you're about to you know either file a case or defend a case.
00:09:04
Speaker
and you have questions around the judge and the district and the decision making and the why and the how and the when and the what percentages and things you can get that stuff at your fingertips now.
00:09:15
Speaker
And but at the end of the day, to your point, that's the data that's always been around. It's the access and the visualization maybe of that data now that is is so, so powerful. um you You pretty early on after college started working with lawyers.
00:09:32
Speaker
what was What was that experience like and and how has that evolved over the last 20 years and um how you think about working with lawyers?
00:09:40
Speaker
You know, i don't I often attribute this to it being lawyers, but I don't know, maybe it's just people in general. You have to spend a lot of time on change management.
00:09:53
Speaker
I, my experience is that is the number one thing that kills initiatives and projects. I mean, you can spend all the time in the world, preparing, planning, building, training, but if you don't take the time to educate people early and bring them along,
00:10:13
Speaker
You lose them and you don't get them back. Yeah. and I, my sense because lawyers are busy, extremely intellectual, there's something tied to the the, the need for extra kind of care and attention to bringing them along to to get them to change the way they look at and do things.
00:10:43
Speaker
um i I had a couple early projects where we didn't take the time to do the change management and the projects failed. you know It was really hard to get people back at that point. um And those were big. I've had a lot of lessons learned over the years, but those were some of them.
00:11:01
Speaker
Yeah. Is there anything that you think works particularly well when it comes to change management outside of the the early kind of education and kind of getting people on board?
00:11:12
Speaker
what like What kind of advice would you give to somebody who's going into legal operations or about to do one of their big first rollouts of a CLM or an ELM or e-billing tool or something like that?
00:11:24
Speaker
specifically with respect to the the change management peaks, because I wholeheartedly agree that it's the hardest thing for us to really crack and solve. like Are there any tactics that you have found that work really, really well?
00:11:35
Speaker
Yeah, um I would focus on the team, the the core project team, and getting people from the business who are going to be champions for the project involved in the project to bring them along for them to bring their peers along. They're going to have to bring their peers along for it to be successful. I mean, the only other thing I would really say is the the early and often communication and leverage that team even for the communication, the training.
00:12:09
Speaker
But I do, i I think the number one, um thing that I've seen is to get the people on board. Now it's a combination of if the project is big enough and when I've worked in larger legal departments, I have learned that sometimes you think, Oh, I'll just go fast. They're all busy. Everybody can absorb, they can't. And
From Consulting to In-house Roles
00:12:31
Speaker
when you have a big legal department, if you only have the people that are interested in the project and interested in the success of the project, you lose the voice of the naysayers and why the naysayers are the naysayers. So you you can go, oh, I'm just going to get all the people that are interested in this and get them in a room. They volunteered. No, you need the people that don't want to do it to better understand why they don't want to do it and then solve for that as you bring them along to hopefully get them to to bring their colleagues along as the project goes on.
00:13:02
Speaker
Yeah, I like that that waterfall cascade kind of and picture in my head of of of bringing people along almost like a phone tree. I call one people and get them to buy in one person, they call two of their friends and so on. And and pretty soon you you generally seem to have consensus provided the messaging has been has been consistently rolled out. um So talk to us a little bit about kind of you know what what really drew you in to go in house after Meet Your Tech to try legal operations. Was there anything? was it Was it the company? Was it the job? Or was like, you know, I've been kind of doing this from the outside a little bit and I really want to see what I can do on the inside.
00:13:42
Speaker
Yeah, um I loved consulting. I loved working at Mitratech. I loved the team. i loved the company. i loved the software. But I wanted to do more than just software system implementations. i decided to leave Mitratech, went to Duff & Phelps to do broader management consulting-ish stuff.
00:14:03
Speaker
My first big project and main project for for several years was AIG, which was a fascinating time to be at AIG. It was about a year before the financial crisis started.
00:14:16
Speaker
And so a year in the project was set to end. We had done a system implementation. The project was successful. It was rolled out. The financial crisis hit and the legal leadership team kept extending me and the team. I was there for probably two more years, two and a half more years, working on everything and anything that came up that just needed to get done. and because of working with the government, the financial crisis, everything that was happening, it was
00:14:50
Speaker
the busiest time of my life by far. yeah um But I also learned more during that period than I ever could have imagined. And it was things like how to draft a really impactful communication. Like at that time, i was communicating with hundreds upon hundreds upon hundreds of people in the legal department around the world.
00:15:13
Speaker
And I was drafting those communications in the voice of the general counsel for her to send out to the team. So it was all of those, you know, I often talk about um different general counsels look at legal ops in different ways. Some look at it as purely an ops function. Some look at it as a chief of staff and some look at it as both that hybrid head of ops, chief of staff.
00:15:36
Speaker
And that job really kind of evolved. It was very much an ops function. It was an ops consulting role in the beginning. And it became more of a chief of staff. I was i was interacting with the team and solving problems and drafting the communications, which were ultimately coming out from the general counsel to people, frankly, around the world in the legal department. And when I did all of that, going into that job, I would have said to you that I love problem solving. i love being a consultant. But that taught me that being an empowered in-house ops person, can it's like a full-time consulting role. yeah
00:16:18
Speaker
And the one big benefit to going in-house versus consulting was when you consult with a client and you leave and you see them at a conference a year later, you say, how did it go? And they say, we didn't do it. And so frustrating, right?
00:16:36
Speaker
It's so true. yeah But going in house, you get to pick and choose the order in which you do things to actually implement them and get them done and see them across the finish line, not just talk about it.
00:16:50
Speaker
Yeah. I
Impact of Global Events on Legal Ops
00:16:51
Speaker
think seeing that vision come to life is a very different feeling than say, this is what you should do. And then you actually have to go out and and do it. but One thing actually is just also came to mind, you you like me have been around enough to have seen what I would call like three major world events that had an impact on the way that we think about legal departments and legal operations. One was the dot-com bubble ah in the in the early two thousand s The second, obviously, and probably the most impactful for what it meant for legal operations was the financial crisis in 2008. And the third, and maybe less so, but I do think there was a huge digital transformation that either this this event was the gasoline on the fire for that or the impetus, whatever you want to call it, which was COVID and and everybody having to work from home remotely for for two years, which I think had a huge impact on the proliferation of legal technology. um
00:17:47
Speaker
How would you say that kind of altered the way that you thought about legal departments in each one of those segments? And one would be kind of pre-financial crisis in that time between the dot-com bubble and the financial crisis. And the second would be after the financial crisis up until COVID and then obviously post-COVID to now.
00:18:05
Speaker
I think my answer, especially in the first part of that, is driven by the fact that I worked for ah small software startup that had an enterprise web-based application when web-based applications didn't exist yeah and selling it to the legal department of all places. yeah I mean, it is the one place you would not expect to be the first adopter of of the web-based application. so And in those early days, pre bubble 2000 ish, there was no one in the legal department that was doing an ops role, right? you
00:18:43
Speaker
Corporate legal departments would buy this because somebody had a vision, sold it to their general counsel, but they didn't have someone in charge of making it happen yeah and successful. And it was really hard to make it happen and successful, partly because people didn't know what an enterprise web-based application was or could be or how to even think about it. And then you have this global platform.
00:19:07
Speaker
like everybody was looking at the dot-com crisis and that what can these systems do and how do they work? And like it was just this kind of vision of, I think people were forced to wake up to what tech could be.
00:19:21
Speaker
yeah and um And then you saw people start to use these applications in it in different ways. And won't go into specifics, but some some companies had public policy financial issues. This is way before the financial crisis, but they they had public financial issues that stressed them and forced the legal department to not just look at these systems as a way to pay bills, but also track reserves and apply process and rigor
00:19:57
Speaker
to all of those kinds of things that were not, that nobody was leveraging matter management to do and, and to pull reports based, based on that information. So you had this like multiple things I think going on. And when, when savvy individuals at these legal departments heard about other legal departments going through these situations, it was, well, how am I going to prevent that?
00:20:21
Speaker
Yeah. Because more often than not, they weren't wrongdoers. It was just, poor process and poor communication and lack of exposure to but to things that were going on in the company and in the department. and And there was a way to kind of harness that information and then report it out and see in aggregate what was happening.
00:20:42
Speaker
Yeah. From there, you know, the financial crisis, certainly. I mean, everybody coming out of that was focused on legal spend and That was probably instrumental in in companies, whether it was an ops person at the time, or it was still kind of early to call it an ops person, but that's when they had a finance minded person in legal start looking at, wait, where are we And it was and it was because it was a push from the CFO.
00:21:14
Speaker
right The CFO was saying to the general counsel, where are you spending money? Where where is all this money going and what is it for? And, um you know, it really started to raise the questions that forced general counsels to get people in place to look at that spend and figure out, is there a better way to do this?
00:21:32
Speaker
Yeah. it's
Evolution of Legal Operations
00:21:34
Speaker
a I remember being at Axiom in 2012. I had just left the law firm world, and this was a huge part of the narrative that we were carrying out into the market. Back then, Axiom was still very much a startup feel. I think we'd hit $150 million in revenue by then, but still very much a startup feel. Still a lot of education out there in the market.
00:21:53
Speaker
And one of the biggest pieces of conversation I used to have with their GC is like, yeah, my CFO is not giving me what he or she said that they would last year because they just can't. and they don't think that we deserve it. So how do I do all of this work with at best a flat budget? And and legal operations was really kind of ah at the center of of the answer to that question. um So when did legal operations first as a kind of centralized function or role, when did that first started getting on your radar?
00:22:23
Speaker
would say 15 years ago, probably 15 to 20 years ago. i you know, it was about the time A group of people approached the ACC and said, we want to start a and a legal ops group within the ACC.
00:22:41
Speaker
And i came on at the tail end of them selling the ACC on this idea. um Somebody called me one day and said, hey, did you know this is happening? You know, it was one of those kinds of things. Yeah. so I flew to Orleans and um met with a group of people who were kind of working on this and that evolved and and at the same time,
00:23:06
Speaker
what What kind of led to that? and I think this is an important point. What led to that, and you kind of alluded to this earlier, what led to that was there were these in-house folks that were starting to talk to other in-house folks and realize that there were other other legal ops people, even though it wasn't called it yet, that were focused on the same thing.
00:23:27
Speaker
And then you had these little networking groups develop within various cities around the country and click clock, you know Northeast um Texas, which frankly became Texas and beyond because I needed a home in Philly and they added me on to their group. So it became Texas and beyond and was anybody that wanted to join. And you saw what was kind of happening. And then we started leveraging consulting firms and law firms to donate a space. And, you know, in those early days, we all i remember, um
00:24:04
Speaker
some of the first bigger conferences to call it a conference, you know, we all flew to Chicago and got in a conference room and just kind of talked about what we were doing and focused on. And frankly, it was fun.
00:24:17
Speaker
It was exciting. so the genesis of that, yeah that timeframe is pretty much on par, I think with what most people say, the kind of cool thing is It was a thing before it was a thing. People like you said, people who were doing it, ah not really realizing it was what other people at other companies were doing.
00:24:36
Speaker
And then you just start reaching out and lo and behold, there's a little community out of it. And then it has obviously blossomed into into the the profession that it is today. um Let's talk a little bit about kind of how you've seen the evolution of the role over the last 15 to 20 years. Early on, probably very kind of siloed in one vertical or maybe two. Now, just taking a look at your role at Fox, it's got finance and technology and strategy and possibly even government relations and policy. You mentioned earlier, that was something that really drew you and something that could have been a part of your your career back in the day.
00:25:15
Speaker
but But talk to us a little bit about how you've seen the evolution of that over the last 15 to 20 years. my My first inclination is to say it didn't exist when I started. And and that that is not fair to, there were a few and not a lot of people who were really focused on legal ops in the ninety s They didn't call it that, yeah but it it it was about legal ops, but there were so few of them.
00:25:39
Speaker
it it set the groundwork for people, but but it wasn't the upswelling it it soon after became. So you go from that to me working at MitraTech, being hired to implement corporate legal software.
00:25:56
Speaker
And these legal departments would have, in most cases, a it could be a lawyer, a paralegal, or an oftentimes an admin who was responsible for working with the IT t team and getting this massive change project implemented and successful.
00:26:16
Speaker
And that just didn't work. The one exception to that was insurance companies. When you went into an insurance company, It was their business. It wasn't a cost center.
00:26:29
Speaker
It was a fundamental part of the business was settling cases and claims. So even in those early days, they had project management professionals on both sides, to the business side and the legal and the IT side. So in legal, meaning business as legal.
00:26:49
Speaker
And they had rigor to this. And and I will say, i think some of those early projects were eye-opening to me on what it could be within the corporate legal departments. So when a client would say to me, hey, what do we need to do to make this successful? Or if I saw that they weren't doing what they needed to do, forget about my project and forgetting about the software configured, spun up,
00:27:17
Speaker
rolled out it was hey you could be doing this you need to be you know getting those people in here and oh by the way that's really not going to help you like you know so many people would overbuild these applications and frankly all kinds of projects not just tech projects and be like nobody's going to use it just go back to simple get simple in place get it up and running and then we'll expand it from there and I think that has really kind of helped a lot. But anyway, so back to your point, like it started as it started with these, you know, maybe an admin, maybe a paralegal, maybe it was driven IT, which frankly, at times was even harder because they weren't inside the legal department. And then it slowly evolved. You started to see, to your point, somebody was focused on a a pillar of something within the legal department where it was probably budget minded, internal operating budget out to council spend. um And then TAC,
00:28:15
Speaker
maybe maybe one person assigned to both. um But it still didn't have the enterprise view. You know, that person was reporting to the head of litigation or the head of corporate law or some niche area that they still had like kind of an insulated view of the world or a narrow view of the world.
00:28:35
Speaker
Yeah. And then yeah
Empowerment and Expansion of Legal Ops Roles
00:28:37
Speaker
so you had the the general counsel who started reporting I really realizing that they they needed to look at the enterprise strategy as a whole.
00:28:47
Speaker
Do you feel like that is becoming more prevalent of a viewpoint with GCs and CLOs, or do you feel like there's still a pretty large gap for us to go? I think there's a gap. How big do you think that gap still is? Boy, if I was consulting, I'd have a better handle on the broad.
00:29:03
Speaker
You know, i i think it's big. It's still a lot of people that will say to me at conferences, new new new new people that I don't necessarily have relationships with, that will say, you know, at the end of a, you speak at a conference and at the end of the session, they come up and say, hi, my GC created the role, but I don't have the influence I need.
00:29:24
Speaker
What am I doing wrong? And through you know some of those conversations, you can tell that the individual just hasn't been doing it long enough. they they They don't have the expertise to get the trust that they will ultimately get in need. But in other situations, the the general counsel really isn't behind it and and is not empowering them to do what they need to do.
00:29:47
Speaker
yeah um the other example that is yeah you know and we see these with our peers is you have an individual and this happened to me um you have an individual who's working for a general counsel who empowers you and has you running the department and then they leave and you get a new general counsel who doesn't yeah and um you know it leads to frustration within the department because the department is no longer getting the support that they were getting before.
00:30:18
Speaker
And more often than not, the spend goes up. You know,
AI in Legal Operations
00:30:22
Speaker
it's, it's impossible for the department to attribute it, nearly impossible for the department to attribute it to that change because the number and types of matters changes so much, but that is ultimately what's often happening I 100% agree. You've used that word a lot in our conversation, which is empowered.
00:30:43
Speaker
And I think to me, as I think about the gap that you just mentioned, I think the biggest gap is the one where the the top lawyer, GC or CLO, whatever the title may be, does not truly empower their legal ops leader to be able to do the things that are necessary. And and yeah oftentimes the the tangible impact of that, even if attribution is an issue, is spent. It's almost always the way that it tends to go. because that's something in in the hourly billing model, which still dominates the engagement with law firms, is the first thing to start creeping up because no one's really keeping a watch over it.
00:31:20
Speaker
Which is kind of a perfect segue as you think about the evolution. and you know I'll ask you to kind of get your crystal ball in front of you at this point. Where do you see our profession going in the next five years? And I'm i'm sure there'll be an aspect of that for you that'll have AI associated with it. And and and we'll talk a little about that as well.
00:31:38
Speaker
Yeah, I think the biggest piece is AI. I think any department that hasn't rolled out an impactful ops function is going to have to. I don't know how a corporate legal department is going to wrangle AI without legal operations.
00:31:56
Speaker
Yeah. Even if they don't call it that, if if you have a general counsel who's against it, someone is going to have to be responsible for implementing the software, training the teams, setting policy. And i think the I think as big as a lift as what I just said is within a legal department, I actually think the bigger lift is further down the road.
00:32:21
Speaker
And the collaboration between inside counsel and outside counsel on how and where to use tools so that they're in sync on where those tools are being used and for what,
00:32:36
Speaker
And then if that is all successful, which I certainly hope it is, I think it's further breaking down the work and corporate legal departments taking more work in house that would have gone to outside counsel today.
00:32:51
Speaker
And only giving the outside counsel, the very bespoke pieces of that work that they don't have the expertise to have a human in the loop successfully in house.
00:33:04
Speaker
Yeah. to To me, this is kind of that golden opportunity. a lot of my early work at Facebook and my first kind of true legal ops role was around spend.
00:33:16
Speaker
And that was ah a role that was specifically created by the CFO at a time when Facebook's spend was going through the roof. And so much of that early work involved exactly this kind of a conversation, obviously did not have the tools from a technological perspective to be able to solve it with technology. But understanding the economics and what a true relationship with outside counsel should look like, where they should historically over time have been given the I don't know, the the number can range between 5% to 15% because that is your really high priority, high risk.
00:33:54
Speaker
You are not systemically structured internally to solve those problems or to deliver that work. You may not have the experts internally and so forth. And then the rest of that, if you want to call it a pyramid or whatever you want to call it, the rest of that, whether it's 95 or 85 or 80 or 75% of the work is generally your your run of of the mill work that drives the company forward, whether it's your commercial work or or something else of that nature. But but historically what's happened is that you know firms will get 50, 60% of the work because It's such a relationship oriented business. In-house departments are filled with lawyers who came from law firms. So they drive those relationships because trust.
00:34:38
Speaker
Trust is a huge component of how lawyers do things. um I agree with you. i think I think AI has the ability to really change that. One of the interesting titles that I've seen pop up in legal departments. So I'm not talking about legal technology companies like mine. I'm talking about within legal departments. And maybe they borrowed it from legal technology companies. The legal engineer is now starting to pop up in-house in legal departments. And some and we've talked to a few of those folks. They are starting to um ah architect and orchestrate how agents get deployed across the legal department. Is that something you've come up against at all or or something that you guys are thinking about?
00:35:23
Speaker
um I am very focused on how to deploy AI within the legal department. And, you know, one of our, mutual colleague, we you you would also know, recently said at a conference, I'm the killer of all hopes and dreams. He works for a software company, a big, big tech, huge tech company. And he said, I'm the the killer of dreams of all things leave legal tech. And i get it. I'm kind of on board in that I think this needs to be thoughtful and methodical and not just give it to everybody and see what happens. Yeah.
00:35:58
Speaker
But it's really coming down to, and and I've been on a mission to, I've been doing interviews and I've been gathering use cases to figure out what the tool is. And I'm kind of thankful that that happened because in the six months that I've been doing this, the tools have really changed a lot.
00:36:15
Speaker
And I'm not sure I would pick the same tool today that I picked then. And I'm about to kick off a pilot. And you know those use cases in that pilot will give us the fit for purpose tools that we will use.
00:36:33
Speaker
And then it will be about very much to your point, like the legal engineering to build what each team needs within the tools that make the most sense for that team. yeah um So it's, ah but it it it's, our you know, even just saying that it's a Herculean undertaking. And, yeah you know, we did an employee engagement survey and the the results are interesting. I asked a couple of questions about AI just to get a feel for how the average person is feeling.
00:37:02
Speaker
And you've got a handful of people that are saying, and they're open-ended, some of these were open-ended questions. So you have a handful of people that are saying, ah just get give me the tools, tell me which tools I can use. And then you have more than a handful of people that are saying, it'll never work, don't even talk to me about it, go away.
00:37:20
Speaker
And then you have a lot of people who are seemingly don't really understand it and need the training and they're open to it. And it's going to be interesting. Like I'm interested to see how this actually goes when,
00:37:35
Speaker
And I know I'm probably saying something controversial. I mean, we knew we know these tools are never 100% accurate, right? Inherently, it's never 100%. So how does legal ultimately adopt it?
00:37:46
Speaker
How long does it take? Or do they just throw it out? You know, um the crystal ball is hard. But I have been wrong before. i told you I sold this project to a company in 2002. I thought I was going to sell it to everybody and nobody bought it. um but But this is different. I mean, this is really the opportunity to finally, and and every GC has said this, like, how do I tap into the knowledge of everything I did before?
00:38:15
Speaker
And this is finally the opportunity to do that if done right. You know, there have been moments in our profession where new technology comes along and it feels like the antidote to a particular point of pain.
00:38:30
Speaker
For me, knowledge management, wherever I have been, even when I was not in legal operations, has been a constant pain. Where is that memo that remember the thing, the when and like that firm that told us X,
00:38:47
Speaker
All of those kinds of things. It lives somewhere. um It probably lives in this moment in someone's brain and that person has since left the company, so it's gone out with them. And good luck finding it in the ether of your Google Docs or whatever, however good you think the G Suite search second search function may be. It's not that good to be able to give you the kind of search that it needs. And now along comes AI and this one Genitive AI feels like a real antidote to that one specific problem, whether it's um the operations and policies within a legal department.
00:39:22
Speaker
This is how you engage outside counsel. Here are our policies around witnesses. Here's how you pay bills. Here's what's required of you when you're reviewing an invoice, whatever those may be. But then also the substantive stuff, like especially highly regulated companies, they get so much advice on a regular basis from all these different kinds of firms.
00:39:41
Speaker
Being able to synthesize that and and trusting the output at some extent, man, that feels like a true silver bullet. Is that something that you think about a lot? Yeah, I i had a general counsel who was very forward thinking in 2004 or five. who said to me, hey, we have this knowledge, how do we tap into it? And he he went so far to say to me, let's i want to invest in matter management and tie those matters to documents and overlay an e-discovery tool to try to harness the information that was in these documents.
00:40:18
Speaker
Well, that was great in theory, except the tools just weren't there. I mean, there was no way in... 2004 to roll these tools out to the broader department.
00:40:30
Speaker
It was virtually impossible. So here we are 20 years later, 22 years later, and we finally have it. We finally have a tool that may be able to do this. And it's almost crazy to think that pretty much anybody with a little wherewithal can go and build it themselves, build the tool.
00:40:55
Speaker
One of the other pieces of this that I think we've been especially mindful of is the tool is powerful, but obviously it's only as good as the data and the access to information that it has. And I think that will probably become the second layer of complexity now to address because, yes, this thing can go and find and synthesize and summarize and provide an output to you that is really, really powerful because it can dig around and find areas that you don't even recall or didn't even know that they were there because it predates you or for whatever other reason.
00:41:29
Speaker
But what it comes back to you with is at its very best what's what it's looking at. And so that data hygiene component of this, I think, becomes a ah really, really critical next component. All
Documenting Legal Ops Growth
00:41:40
Speaker
right. I want to talk a little bit, then we'll wrap around the documentary. Smooth Operators, the Business of Legal was an opportunity for us to tell the story of legal operations its inception, its birth, a little bit about its growth. Tell us a little bit about why you are so interested in in being a part of it and why you thought it's such an important story to tell. This industry grew
00:42:06
Speaker
so fast and organically, that no one has stopped to document anything. yeah right This is an opportunity to capture, certainly in it in ah in its first form, in the the earliest first episodes, what has happened. How did we get to where we are today?
00:42:28
Speaker
um I think there are a lot of people who have put a lot of effort in. yeah You know, I think about even the Association of Corporate Counsel starting the Legal Ops Network and tapping me on the shoulder to be the inaugural chair.
00:42:46
Speaker
And I agreed. And none of that was about me. It was... I had been doing this long enough and I had been saying to people, we all need to get together and we need to collaborate because we need to learn from each other. So we're not all starting from scratch because everyone was starting starting from scratch in their companies, but doing very similar things. Yeah. And but let's collaborate on what's working, what's not working, which which is why there was this, you know, I had an interest in when I started, when I agreed to take be the chair, I,
00:43:21
Speaker
interviewed legal ops people with a different perspective, right? I wasn't just collaborating and complaining. It was, what do we need? What does the industry need? What would have made your life better and easier?
00:43:36
Speaker
And what came out of that was instrumental. It was, we need a toolkit. We need a maturity model. And we did, we built, the the ACC Legal Ops maturity model. And then we we built a toolkit and then we did training seminars. And then we did the bootcamp for newbies to get up to speed very fast. and you know, it's been super exciting and exciting.
00:44:01
Speaker
Honestly, i can't wait to see what comes next with Gen. AI. And, you know, we're talking about knowledge management, but we there's there's another layer to this, which is we haven't been able to tap into invoice line item data and bills to figure out how matters should be staffed with what what what gets you the best outcome at the end of the day. yeah And hopefully we can put, excuse me, all that into a database and get something out of it. But It'll be interesting to see where all this goes for sure.
00:44:31
Speaker
Yeah. For people who are going to take the time to watch the movie, what do you hope they take away from it? And and let's let's talk about two categories of people, those that are in legal operations or interested in going into legal operations. And then there are the lawyers, the GCs and the CLOs who will, generally speaking, be the ones who will be managing those groups.
00:44:56
Speaker
I really hope the GCs and the CLOs who do not have a legal ops function to today or have legal ops function today, but haven't empowered them to make the impact that they're capable of making do that.
00:45:16
Speaker
I hope they see what it can be, the impact it can have, they figure out how to leverage individuals within their legal department to do those things to do these great things yeah that would be ideal that i i agree with you i hope they have that exact same reaction and for anybody who's even thinking about they get a chance to see a movie like this i mean for me It's little corny, but I went to law school in part because I was enamored by courtroom dramas. So like A Few Good Men is still like near the top of my list. And there is something to be said about seeing this as part the reason that I think the documentary was so important is the visual medium. mean, we are, we love movies. I don't care what society you're in. We all love movies and we learn so much from them. To me, this was an opportunity to give the profession that. So I fully agree with you. I hope there's somebody out there that takes away that. from the movie
Conclusion and Gratitude
00:46:10
Speaker
itself.
00:46:11
Speaker
All right. That's a wrap for us. Reese, thanks so much for joining me. That was a great conversation. Great to learn a little bit about your career and your path and how you're thinking about our world today. Appreciate it.
00:46:22
Speaker
Yeah. Thank you. Thank you. Thank you. Thank you. And I'll see you next Tuesday. I will see you on Tuesday.