Crystal Ball Question:
Marlene Gebauer 0:05
Welcome to The Geek in Review. The podcast focused on innovative and creative ideas in the legal industry. I’m Marlene Gebauer.
Greg Lambert 0:12
And I’m Greg Lambert. Marlene. I’m licking my wounds from this weekend because luckily, I didn’t have any money on it. But I have a big university of texas contingent to hit my firm and they were playing, playing University of Oklahoma. It did not go well for me your
Marlene Gebauer 0:33
alma mater. Yes, yeah. Yep. So
Greg Lambert 0:36
I’ve had to endure some of the treatment in the office this week with the with the blanking I think it was 47 and nothing shellacking that you took but luckily, I you know, I’m, I take it all in stride.
Marlene Gebauer 0:55
Well, I don’t know something else. Something was in the air because University of Houston actually won this week. Which is a change in pace from from how they’ve been doing lately. So, don’t know what that’s about. But this week, we bring in Tomek Jankowski, Director of ALM, intelligence PE Center Research, he brings in an experience perspective of the legal market and one that we may be seeing again soon, with all the economic and global conflicts that are happening. We also cover the news from EY consulting, that may have made more of an impact on the legal market than many firms are thinking.
Greg Lambert 1:31
Yeah, that’s something I think many firms have fear that’s not on your radar. Radar. Yeah. Well, first up, we have our friend Damien RIehl, from Fastcase on and he answered our crystal ball question from the recent legal value network experience conference in Chicago. So let’s go ahead and hear what Damien sees for the legal markets future. And then we’ll jump right into our conversation with Tomek Jankowski.
Damien Riehl 2:00
I will say that I with my two roles, I’m Damien Riehl. I work in Fastcase. And Dr. Lyon, where I provide analytics and raw data to companies. And then my other role is to Sally, where I’m helping lead the legal data standard to be able to have all the everyone in the industry have a uniform ontology. So that’s my context for my answer of my crystal ball question, which is, I think I see more law firms being data driven. And I think I see more law firms asking for raw data for them to be able to run analytics on their own side. So it’s not good enough to have a website to be able to say, Okay, you have beautiful analytics there, even though that is important. They also want to run things in Tableau. And they also want to cross correlate the data with their internal data. So one thing that I can see as crystal ball is a cross correlation of private internal data, say pricing data, let’s say timekeeping data with external data and be able to meld those and see correlations. That’s the number one. Thing number two is being able to have the entire industry say, Okay, for the data points for motion to dismiss, in the Southern District of New York for breach of contract claims for them to coalesce everyone in the industry to coalesce around common ontology. And it turns out that Sally is that common ontology that’s being adopted by Thomson Reuters. It’s being adopted by intapp. It’s being adopted by iManage. It’s being adopted by NetDocuments. It’s being adopted by really everyone in the industry. So I see in the next two years, firmly vendors adopting the ontology and then law firms essentially saying, Okay, we’re getting on board to to be able to say, I want to be able to talk with all the vendors, I want to talk to all the clients, I want to talk to Intel, I want to talk to Microsoft, both of whom are doing it. I think that’s probably the thing I see most happening in the next few
Greg Lambert 3:33
years. Damien, thank you very much.
We’d like to welcome Tomek Jankowski, Director, alm intelligence pacesetter research. Tomek Welcome to The Geek in Review.
Tomek Jankowski 3:45
Great. Thank you for having me.
Marlene Gebauer 3:46
Tomek. Not everyone may be familiar with ALM intelligence pacesetter research work. Can you give us an overview of the mission there at Pace Setter research and your most recent publication?
Tomek Jankowski 3:57
Absolutely. So it grew out of traditional market research that we used to do, particularly in the management consulting space. But after 2008, we began to hear more and more as we have conversations on the client side in particular, but on the provider side as well, for with the consulting firms, we would hear the clients would say we don’t buy consulting services. Now, what we need, we have a business problem and we need help getting across a certain finish line. We need an outcome. Consulting can be a part of that. But technology may be legal may be tax may be so we need somebody who looks at those solutions and how they’re how they’re bringing it together to help us get what we need. And that’s where the pacesetter research concept came from. It’s looking at innovation, in professional services across legal across consulting across investment banking, insurance, and young quite frankly, in part because all of these and other other professional services segments are kind of stepping on each other’s toes. So we’re looking at the innovation and how that innovation is changing both the competitive lens Pay for each of them. But also from the buyers perspective from in house legal procurement CFOs. What does it mean for them when they can get a very different type of engagement from a consulting firm? Or an insurance company, you know, for compliance? client facing compliance tools, for instance? What does it all mean for them in terms of cost in terms of how they use inter the engagement. So that’s what pacesetters is about innovation and how it’s changing professional services.
Greg Lambert 5:25
And what’s one of the latest surveys that’s that’s out there.
Tomek Jankowski 5:29
We are just on the verge this week, hot off the presses, we’re going to have a report on digital transformation and digital services. So how digital technology is changing, obviously, big topic, everyone’s looking at it, but how it’s changing what clients can do, but also how professional services firms deliver their services, how we engage clients.
Greg Lambert 5:52
So tell me, one of the things that may have flown under the radar of some of the law firms recently was the announcement, I think within the last couple of weeks of EY consulting, discussing getting rid of its audit business, and that it may focus more on consulting that will probably compete directly with with law firms. Now you have an upcoming presentation on that topic. So what are you hearing and should big law firms be worried about more of the Big Four competing with their clients work?
Tomek Jankowski 6:27
So the first thing I mentioned is that EY has been thinking about this for a long time, they’ve been talking to people like me, analysts like me for almost 10 years. So this has been definitely topical for them. And that means this is well thought out. It’s not a shoot from the hip type of thing. There’s been a lot of thinking in the background that has led to where we are today with this. There are a lot of ways to think about this. But I think from the legal perspective, the first thing is that the Big Four in particular, but they’re what we call a multi service firm, meaning they’re an auditing heritage firm that they they go to market with an integrated sort of Fallon’s of different services. It’s not one service at Leeds. But them and the more traditional multi management consulting world, they are focused on relationships, penetrating client firms, learning about how the client organization works at all levels, no matter where they’re if they’re hired by Treasury, they still want to understand the adjacent areas, including in house legal more recently. So that’s one part of the important part, that relationship element is a key part of their strategy. And in house legal is a big area of focus for them for the last five years especially. The second is that if they do separate out some of the plans we’ve heard, are really ambitious. They really see big growth coming from this. From the non auditing services. You mentioned the consulting. But it’s really that integrated element of consulting, tax legal technology. They’re bringing those all together and addressing problems like financial restructuring, m&a, cross border issues, supply chain, those types of things, they bring all of these to bear. And they are putting some really aggressive plans down that means that they probably want to be much more involved with legal departments in house legal departments. Other point is that this is a threat. This is something they should be concerned about, I think legal law firms, because they EY is thinking particularly among the Big Four, they are looking at much more of the operational elements of law before law firms, but also they did announce a legal element. So they are holding a service there that is looking at being a much greater part of what the rest of the organization is doing. And then finally, I just say, first of all, this is a threat. But it’s also opportunity, we tend to think about especially in the legal world, I noticed, they tend to think about things very starkly in terms of do we focus on our internal core practice of law? Or do we do something else, we add a technology group or an advisory group, there’s a third option, and it’s relationships. And that’s what both consulting and multi service firms do? Well, they develop third party external relationships, alliances, and they are very open to working with law firms. That is an opportunity for firms to help extend your relationships with your clients. And I’ll just finally mentioned that we’re talking about EY in particular, and of course, the extension is the big four. But the truth is, is I spent a lot of time speaking with a lot of other multiservice firms think CRO Grant Thornton BDO. RSM BDO by the way, in terms of m&a, they’re one of the biggest players in legal in m&a in Germany. So this is something that spans that spans the multi service side, and the consulting side FTI consulting stouts, which is an advisory or an investment bank firm, whether that be that sort of morphed into a strategy consulting firm, they have a big, Legal Operations focused offering develop. So it isn’t just a big four it isn’t just EY law firms need to be thinking about how they engage their clients. Because there are all sorts of other opportunities, alternative opportunities for clients out there.
Marlene Gebauer 10:09
So Tom, I know you’re talking about how you know, ey consulting and you know, potentially others are being very thoughtful in their approach about how to engage clients differently. But you’ve also talked about maybe the flip side in the past. So I wanted to talk to you about, you know, what you’ve seen in this industry regarding law firms and legal departments falling victim to trends, and I get the the image of dog from it, where it’s like squirrel, you know, what you call shiny object syndrome? What are some examples of what you’ve seen?
Tomek Jankowski 10:43
Probably, there are two ones that come to mind. Particularly one is around. So it’s confusing looking at something like digital technology, which is amazing. We all know, we can do amazing things. But the technology itself is just a tool. And that gets forgotten a lot. So we see that the we see all too often that law firms, others as well, this is not exclusive to law, but others, they see and think I need to get an AI tool, or I need to get machine learning in here. It’ll really impress the clients, they’ll see that we’re advanced, we’re forward thinking. The tool is not the point, you need to be addressing a client, very specific client need a client problem, what are the problems where it’s tripping up, and we have the opportunity to speak to a lot of in house legal departments, GCS and legal ops people in particular, for for our research on the digital report, we have a huge number, those people almost universally told us one of the biggest problems for them is when a law firm comes to them and said, says we have digital capabilities, don’t you worry, that for them means terror, because what it means is something like e billing, for instance, that is an area where there’s huge frustration, and to be sure, it goes both ways. But you develop a new billing system where you buy any billing platform, you bring it in house. But then what happens is, you need to have the capabilities to quickly plug that E billing system into your clients, data system data environment, quickly, and you need to be able to make make that work in a way easily for the client. So that becomes that it becomes seamless. That’s not what happens, what happens is they show up, we have this platform use it, you know, here’s where you put your inputs. And then things break down. rules aren’t followed, your data doesn’t match with their data, it doesn’t map to their data. So it becomes a problem where they end up spending a lot of time and a lot of extra money fixing making the E building platform work. When it just becomes an added element of frustration. We simply hear that in the data side, law firms that will have some data analytics capabilities, but they’re not really able to quickly assess and plug into the client data, environmental, they don’t really use external data sources very well. And it again, it becomes a cost sock and a time suck for the client. So I think the focus for law firms going back to your shiny object syndrome point is they need to not think about the technology, they need to think about what are ways that we can improve our client experience? And how can we make it better, cheaper, quicker, more effective for the clients. And digital technology can definitely be a part of that. But I’ve heard many examples of digital projects with clients that actually had an impact, just looking at process, even before anybody applied any technology to that. Just rejiggering processes, standardizing processes, developing them to be easier to integrate quickly with the client. That alone has a big impact. So that’s, that’s, I think, the major problem with with digital technologies, we’re all wowed by what it can do. But we’re not focusing on really what it can do.
Marlene Gebauer 14:11
Why do you think that happens? You know, that you you kind of have this disconnect. And what do you think can be done about that?
Tomek Jankowski 14:19
So why does it happen? I think it’s again, it’s a very common problem. And if you look at I think one of the big four thinking was KPMG, maybe one but one of the big four, in this on leadership says that north of 70% of digital transformation projects fail. And it’s because people focus on the technology, not on the process. And on the people. That’s the important element. There’s a human capital element, a lawyer element to making things work well. So I think that’s the, the real area to look at is again, what is the client problem? And what how do we solve that internally? And that’s how do we get our people on board to do things differently? How do we redevelop the process? And the technology can be built around all that, you need to do that thinking first. And then the goal needs to be better outcomes, whether it’s internal clients or external clients, it needs to be here’s a very specific problem we have, how do we fix this, and technology may be a part of that
Marlene Gebauer 15:16
solution. Good technology in a bad process is still bad process.
Tomek Jankowski 15:22
That’s often, as I say,
Greg Lambert 15:25
Well, that leads really well into the next question, which is the most expensive and the most valuable resource that the legal industry has is isn’t the technology that we’re using the rather the people that we have? What are some of the tips that you have on how to leverage that the legal tech that’s available along with the human capital within a legal organization?
Tomek Jankowski 15:54
Oh, just get rid of the people not.
Marlene Gebauer 15:58
work would be so nice if we didn’t have to.
Tomek Jankowski 16:02
If only Okay, so I’m gonna go back to an old colleague of mine who’s no longer with ALM, Nathan Simon wrote a brilliant series of articles in LinkedIn about what was called the trusted advisor idea in consulting. And it was the notion that you have these really sweat, you hire these people, because you have a problem, a consulting firm, some really smart people show up, they look at your problem, study it, ask questions, poke around, then write a report and leave. And then you get a really big bill in the mail later. His is the gist of his articles is that that world is going away that the fact that a person who has industry experience, and has been through these problems before Yes, that is valuable, but that the technology is taking away a lot of that trust, a lot of that need for instinct, and intuition that we’ve relied on, quite frankly, for centuries. He, he goes into a lot of depth on the technology investments that the Big Four are making. So I really recommend those those articles, naked with a smart guy. But I think in the end, he was onto something while he’s kind of being a little hyperbolic, he was onto something and that the consultant of the future, and I think this applies in law as well is going to be a cyborg, in the sense that no doesn’t mean you’re gonna hack off your right arm and get a bionic arm. But it means that you are going to need to be able to work seamlessly, you need going to need to understand digital technology and digital capabilities. And you’re going to be able to need to work with them seamlessly and integrate them where appropriate, into your job when it when it will help the client outcome. And if you look at the big four today, if you look at the marketing, they use this word trust again, but what they’re saying now is you don’t have to rely on our really smart people anymore, alone exclusively, that’s still an important element. But we back with their thinking we back their their thoughts and their experience up with data, both internal data, your data we’re going to use and other external data properties, data and analytics, and then that applied with technology, we can do scenario planning Wargaming, we can help you really understand your problem now and how that may, you know, different potential scenarios of how to resolve that. So I think as we look at people, you know, my joking at the beginning of the side, the truth is, this is all human. You know, human endeavors, human civilization, and humans are the point we are the point, lawyers are never going away. And lawyers are key, they’re important, their training is important. The experience they bring from industries etc is important, and their ability to interact with people that’s important. But they need to be able to integrate technology more closely. So it’s not that there’s going to be down the hall a, you know, an IT department, you go there, when you need some help with data, you need to understand data, you need to understand Analytics, you need to understand the implications of AI of AR, AR and VR of IoT, all of that stuff, you need to understand that, and sometimes you’re gonna have to be able to use that. And you’re gonna have to be able to do that with your teams. So again, the focus is on the client outcomes. And you’re looking at doing things faster, cheaper, and more effectively. Like I said, we’ve talked about are not we’ve, there’s talk out there about T shaped lawyers and oshri, IP lawyers, we can have all those discussions, those are all important things to be debating. But they are right about the fact that the lawyer of the future of lawyer now and 2022 needs to have a better understanding of these technologies, both to use them, and the impact and the implications they’re having on the client environment and the problem as well as the solution. And I know there’s a challenge, you know, that I just spent. I was at a conference in Boston Legal conference and One of the big topics was getting lawyers and non lawyers to play well, nice together, you know, in house legal departments struggling with having hiring operations and financial people, and having them work effectively with a GC, both in terms of how they communicate, but how they work, how they see problems, and, and recognizing the value in each other. That’s a struggle. And it’s something we’ve got to, we’ve got to figure out, I don’t think a lot of organizations have really cracked that nut very well. Again, it’s not exclusively a legal problem. But that’s just an example of some of the challenges to human challenge where a problem that’s thought of as a technology problem, but yeah, at the end of the day, the lawyer of the future needs to be able to use technology seamlessly. Think back to 1985, when the first desktop computers were becoming available, you were a star if you knew how to use a desktop computer. And then later in the early 90s, you were proud to put that you could use the Office Suite, you know, you knew how to use Word and you knew how to use Excel and you’re a rock star than today, if you put that on your resume, you know, I think you’re gonna get bounced. So
Marlene Gebauer 21:00
how is it that well functioning and profitable firms are integrating technologies so that it doesn’t just speed up the delivery of legal services, but it’s also contributing to the bottom line of the organization? You know, I think about the billable hour. And, you know, if you’re integrating technologies that make things more efficient, you know, isn’t that counterintuitive? I mean, how are firms? You know, how are firms adjusting to this?
Tomek Jankowski 21:27
First of all, my boss, Patrick fuller is gonna be very happy to hear this question.
Greg Lambert 21:32
We’d like to keep Patrick happy we do.
Tomek Jankowski 21:35
He’s a nice guy. Yeah, we get to talk about billable hours. So there are a, that’s a wonderful way to look at it. And that’s one of the complaints that we also heard about from GCS. Talking about digital technology, they said that, okay, these law firms develop these digital capabilities, they tell us about them, whether it’s around eDiscovery, or contract management or something, they’re going to bring these things to bear, but they charge separately for them, they take the health care approach, and you get separate bills, because you’re using technology. Now, instead of here, we are solving this problem. And oh, by the way, we’re using technology to solve it as well, it’s, no, you’re using our lawyers, that’s the practice of law stuff, you’re using our support staff for the legal services that separate and you’re using this technology unit that we’ve developed, you’re gonna get another build separate bill for that. And it may be even at billable hours still. So that’s a complaint that this isn’t an integrated approach, it’s seen as a separate side tool. And it’s a G wiz tool, kind of like when you first got air conditioning in your car in 1975. So that’s, that’s one of the problems that firms need to be willing to think about the client experience. And again, they’ve got to focus on solving the client problem. I don’t mean to keep comparing them. But when you when a technology firm comes in, or I’m sorry, a consulting firm, they’re bringing technology, they’re bringing an integrated approach across many different domains, X domains of expertise industries, you’re getting a raft package, and you may not even be aware of the people in front of you what specifically, they’re there to do, but they are going to bring that all together, and you’re gonna get a single bill at the end of it that will be negotiated, there may be what we call value based in a legal consulting world has a slightly different meaning than the legal world. I know the starting to talk about value billing. But it basically means the consulting firm the provider, put some skin in the game, and guarantees we’re going to get you to this outcome. And we you know, in our building is based on us delivering that outcome with you partnering with you. That’s an important part of it. But it means I know AFA is becoming a bigger thing spoke to some really interesting people over the past week about them. And I think that’s an important step forward. But it means integrating your offering better and and recognizing that the billing isn’t just about cheaper, it’s not just lower the cost because you’re saving internally, when you use our technology, why shouldn’t I get some of that savings? Actually, the bigger thing that I’ve heard is, yes, we’d like to, we like to lower costs, we’d definitely like to, but we’d like to predictability as well, if we’re going to be using you over the long term, we want to have a more predictable cost element that we can go to our bosses with when we know we use you That’s something that’s more important, rather than the traditional billable hours that can as you know, can accordion in and out depending on all sorts of factors.
Marlene Gebauer 24:29
So I have a follow up question on that, because I thought it was interesting when you’re talking about the consolidation that some of the the accounting firms are doing and you get one bill, and you use ediscovery as as an example. And, you know, a lot of the extra cost associated with those platforms is the storage cost. And that’s something that the firm itself is billed for. Do you have any sort of understanding or experience in terms of like, you know, how do you sort of consolidate this? How do you predict this Mmm. And is it just sort of the size of some of the accounting firms that sort of allows that? Or maybe they can negotiate something better with with some of these providers?
Tomek Jankowski 25:10
The answer that so size does have something to do with it, but not as much as a lot of let me believe. So, the answer is that they’re not, when they’re competing with you, you are a law firm. We in a client legal in house legal department, they didn’t most of the time, the vast majority of the time, it didn’t begin for them as a problem with the legal department. For them, it began with something else something operational something. Usually a restructuring events, like an m&a event or something like that. The legal is just one more one part of their service delivery pie. And for them, they are looking at it as just building relationship and legal, they can act often add a lot of capabilities for in house legal, often they competent, because they’re doing something similar adjacent in finance, or in, in compliance or in procurement. But the answer really, is that the way they build that is not specifically, here, we’re providing you with this legal capability around ediscovery. We’re helping you with this service, think of Deloitte to de ice, for instance, that tool I don’t know if you’ve heard of it, sort of contract review and sort of pre ediscovery tool. They’re not thinking about in terms of you’re using this tool, so we’re gonna bill you for this tool, X number of hours or something they’re thinking is we’re using you for or you’re using us rather, for all of these different elements, we’re helping you with this much larger problem, that’s just a part of it. This, the eDiscovery phase is just a part of it. Or it may be a foot in the door for other further downstream services, including managed services. It’s a big area and legal that they’re getting into now. So for them, it’s not a single standalone element. They’re not thinking in terms of here’s what it costs us to run this tool, how do we pass that cost on to and make sure that it’s profitable for us to call, pass it on to the client, it’s, we are engaging them among all these different service lines. That’s just one of them. It’s absorb that cost is totally absorbed and not a problem
Greg Lambert 27:19
coming. I know you’ve done a number of surveys and analyzed a number of firms. And I kind of want to go back to the technology human interaction. And see Do you have any examples of firms that are actually doing things right when it comes to both their technological assets, as well as their their human assets of being able to truly merge? Those in haven’t haven’t worked together?
Tomek Jankowski 27:46
Sure, there are firms are doing a lot of interesting things. And I’ll say that, as far as pacesetter research is concerned, and we’re about two years old, with this research, we tend to find more in the UK and Australia for some reason. Well, not for some reason. There’s the market has been liberalized there in those markets. So there’s just simply a lot more competition for the for law firms in those markets. But it is happening here in the US as well. And we’ve seen some definite interesting things happening. So I think one I’ll call out is Nishimoto, and Asahi. And if you’re Japanese, I apologize, I probably just loaded that. But this is a Japanese firm that was kind of bog standard, obviously one of the big names in Japan and law firms. But when the Japanese government mandated that all corporations have to begin some sort of digital journey, they basically forced all firms into some sort of digital technology environment. What Nishimoto and OSI did is they opened a digital transformation practice, they brought in lawyers, so it’s not a separate off to the side practice, there are lawyers involved. But there are also technology, people involved data center across all the different technologies. They focus on specific issues like using drones, for instance, or IoT, or those types of things. It’s got a few hot button issues, but they also bring in scientists or behavioral scientists, they and also strategy consultants, quite frankly. And so this unit is tying all these different elements together, and helping these clients who basically look like you know, the standard deer in the headlights in the middle in the middle of the road. We were being told you need to be digital companies. Now you’re going to be digital organizations to figure out not just the, you know, the technical compliance elements that a law firm would normally deal with, but also tie that into technology, tie that into operations, tie that into a larger strategy around something like data, you know, data governance and data compliance, obviously a big issue. How do you develop that sort of strategy when you’ve got retail firms and you know, all over Southeast Asia etc, so on It’s an area where they’ve got these elements to play together really well. Another example will be Thompson Heinz, in a slightly different area of the developed the supply chain focus that brings together so it’s, you know, on the surface, it looks like well, they’re helping you develop contracts. Well, yeah, that’s a that’s definitely an important issue with supply chain chains. Third party risk is big nowadays. And supply chains are going crazy, obviously. But they’ve developed a sort of accordion doubt or telescoped out this practice that looks at helps clients develop transparency and sort of a growth agenda. We’ll also having these sort of living contract management elements that helps you actively be aware of of all of the relationships both with your you know, your supply chain partners, and all their partners that they’re dealing with, obviously, all that extension, fourth degree as it were. And so there’s a strategy and management element that goes into just the the compliance side of it, the contract side of it, that brings in risk management as well, that’s a key part of it, it helps clients get a sort of a dashboard, overview of, you know, daily snapshot of what their supply chain is looking like, where the threats are, how they need to be thinking about these relationships. And the final one, I think, that I mentioned is ropes and gray. They are, they’ve developed the insights lab recently, within the last couple of years. But it’s really expanded, I looked at it, particularly for m&a where they’re applying it, but they’re using it much further afield, bringing together behavioral scientists, data scientists, and compliance specialists to look at compliance not just from the perspective of here’s where you need to dot i’s and cross T’s. But also looking at the behavioral component. When you look at something like cybersecurity, for instance, you know that the majority, more than half of all cyber events are not outside bad players hacking into your environment, it’s your employee screwing up. And so it’s how to develop that the human and the operational side of whatever compliance element you’re trying to address, to really ensure that you are building a as bulletproof, a compliance environment as you can and help you manage it going forward. So again, bringing in lawyers and non lawyers, getting them to work together effectively focusing on client problems, these firms are what we call faces. They’re knocking out of the park.
Greg Lambert 32:29
Well, I know this was happenstance, but we actually had Dr. Caitlin handwritten from ropes and gray on last year talking about that. So if anyone wants to learn more about that, I’ll put a link in the in the show notes for that episode, as well.
Tomek Jankowski 32:43
But I’ll just mentioned that these are these are really dramatic examples. But again, it can go down to, you know, basic client engagement, you know, looking at FAS, and looking at ways of just engaging with your client in a way that’s, that’s effective from a technology and an operational standpoint, and get them to the goal as quickly as cheaply and as effectively as possible. It doesn’t have to be building out an entire technology division or, you know, so again, these are really dramatic and successful examples. But simpler ways of just ensuring your clients get what they need. That moves the needle.
Greg Lambert 33:19
Yeah, so the I mean, the the key there is communication with your with your client.
Tomek Jankowski 33:25
Oh, you got to talk to him now.
Greg Lambert 33:26
Oh, I know. The thing we don’t like to do, but we should this shouldn’t be, shouldn’t we do?
Marlene Gebauer 33:34
So Tomic? We ask all our guests to take out their crystal ball and look into the future for us? What do you see as a change or a challenge facing the legal industry over the next two to five years?
Tomek Jankowski 33:47
I think very broadly speaking. And unfortunate. Fortunately, I have to put my old foggy head on as somebody who lived through the Cold War and the end of the Cold War. And I actually was I was living in Poland in Hungary at that time, when, when the communist regime so I was able to see in detail what the impact was for those societies. One of the interesting things is we went through a period after 1991, sort of a post Cold War period, where and in the beginning of the 1990s, there was one country that just everything, it dominated the planet, its economy, its culture, its society. And that faded after about 2000 When other places like China, India, Brazil, began to rise. But we’re in a period now there was this amazing level of stability across most world systems in the post cold war era. That’s done. That’s gone. We’re done. And that, I think, is the primary element. Looking forward volatility at extreme levels that we haven’t seen since the 80s, where every trade relationship gets screened by governments where interest rates go up and down a lot, you know where inflation was in 1981 or 82, I think we had 14.7% interest rates here in the US. And that was trying to slow down this, this massive double digit inflation. Many managers out there many, across the corporate world and private equity, haven’t lived through that those times. They haven’t seen that kind of volatility. And it’s impacting everything, it defines all of the different ways. You know, Forex, where do you keep cash? Do you move it across borders? What about your people? What about your, you know, your your real estate, all of these decisions are being impacted by volatility, geopolitical, economic volatility that isn’t going away? In m&a? One of the interesting things I found was how difficult it is suddenly, in 2022, more so than even 2021. To just identify value, you have to nail down what is the value of this asset, and what kind of values are going to have in two years or five years depending on these factors. So I think the challenge for all professional services firms and the opportunity opponent, put it for law firms is developing a go to market strategy that is sort of a handheld holding element that helps your clients deal with this volatility, volatility, to deal with the fact that things are going to be changing rapidly, that their risk profiles are changing constantly, that compliance is not a one year exercise anymore. They’re going to need help in being able to more actively manage these components of their business models in the graph to be able to be nimble with their business models. And there are all sorts of implications for that. So law firms have the opportunity to step up and to play a greater role in have a greater voice in client strategy in client risk management, and client operational thinking. And that human capital element, we were joking about it earlier, and you know, the technology is coming to take your jobs. It’s not for some it has most of it, I think is really happened already. Yes, that’s gonna keep happening. But you know, it’s like working in a typewriter factory 1989 You were doing. But for the most part, the reality is technology is going to enhance our jobs and change our jobs, the way we do our jobs, are going to help us do those jobs better. You need to be you can be a leading voice in that as law firms, and you can be the partner with the clients. And that, of course, means looking beyond the traditional transactional relationships you have with clients, but you can be that partner. And I think that’s what’s going to, that’s where the client need is going to be. It is here today, but even more so is going two years, four years, five years, looking out. You need to be one of the parties that they can turn to that can provide them with informed advice that helps them make decisions, constantly make decisions and to be agile, to build resilient futures, to start lapsing into consulting speak for the organization so that they’re able to navigate this world.
Greg Lambert 38:10
Yeah, I think I think you’re right. There’s probably people in leadership positions that have never seen interest rates above 6%. And cheap money has been a norm for for 15 years plus. So yeah, I think I think you’re right, it’s going to be a rude awakening for some people on how to handle double digit, not just inflation, but interest rates as well if it comes to that. So Tomek Jankowski, Director at ALM intelligence and pacesetter research, thank you very much for coming on and taking the time to talk with us today. Thank you Tomek
Tomek Jankowski 38:48
Greg Murray’s been a lot of fun, really, thank you for having me.
Greg Lambert 38:53
But sometimes you need someone that with enough experience to remember how things used to be to get ready for how they’re going to be again. And and yeah, I hadn’t, you know, I really hadn’t thought of it. But you know, it takes someone from that perspective, especially someone that went through the Cold War and all the issues that happen with the fall after the Berlin Wall and the rise of the ex Soviet countries, you know, that we’re seeing a lot of that take place, and I hadn’t I hadn’t really thought about how that affects the legal market, but it makes sense that that’s something to worry about.
Marlene Gebauer 39:28
Yeah, absolutely. And, you know, I also like sort of the contrast of of being very methodical and thoughtful about your planning and and basically solving problems with new processes and new technologies rather than sort of looking at the shiny new objects and just sort of focusing that way. Like his his example of how, yeah, we have digital technology, and it sounds great, but nobody’s sort of taken the time to go behind the scenes and figure it out. Hey, does this integrate appropriately? And I mean, it made me think about like this, this is actually goes back to what we talked about about legal teams. Like if we want to do something like this, then you got to bring in, you know, the people as you were asking about, you have to bring in the people, and and you know, who have the expertise to be able to point these things out, so that you can thoughtfully address them.
Greg Lambert 40:23
Yeah. And were you proud of me that I didn’t use my favorite saying of all problems or communication? I
Marlene Gebauer 40:28
was really thinking you were gonna do it.
Greg Lambert 40:31
I thought about it, but I have to hang back. So. So. Yep. But yeah, that was, again, when it comes to problem solving. Identify the problem, you identify the problem by talking about the issues, and finding out what pain points your clients have. And it’s one of the things that lawyers hate they and they won’t, there’s, you know, they’re very reluctant to put their people that can solve those problems in front of their clients. So, you know, I think, again, this is just one more example of all problems or communication problems. So sorry, I had to do it.
Marlene Gebauer 41:07
And speaking of communication, I want to thank all of you, our audience for taking the time to listen to The Geek in Review podcast. If you enjoy the show, share it with a colleague. We’d love to hear from you. So reach out to us on social media. I can be found at @gebauerm
Greg Lambert 41:22
on Twitter, And I can be reached @glambert on Twitter,
Marlene Gebauer 41:25
or you can leave us a voicemail on our new new geek and review Hotline at 713-487-7821. And as always, the music you hear is from Jerry David DeCicca Thank you, Jerry.
Greg Lambert 41:40
Thanks, Jerry. All right, Marlene, I will talk to you later.
Marlene Gebauer 41:43
Okay, bye bye hey, take me back to back days, devils backbone. Devils back