Looking from the outside in, the legal industry may appear slow to change and innovate. But for those working within or alongside law firms, there are constant innovations happening within the industry that are driving it forward.

Someone who has been at the centre of innovation within law is Michael Hertz, Chief Marketing Officer at White & Case. Ed Lovatt is excited to welcome Michael to the CMO Series to discuss innovation and how leaders in law firms can approach it successfully.

Ed and Michael discuss:

• Michael’s journey to CMO at White & Case and how it’s influenced his approach to innovation 
• How Michael’s deep experience with the knowledge function within law firms influences his approach to innovation day-to-day
• How leaders can ensure that innovation is cohesive and benefits the firm 
• How to distil what innovations will benefit a specific client  
• The key challenges in scaling innovations within a law firm
• When and how firms should build their reputation in the market as an innovative service provider
• Advice for others looking to be successful in leading innovation within law firms
  
  

Transcription:

Intro: Welcome to the Passle Podcast CMO series.

Ed: Welcome to the CMO series podcast. Today's topic is leading innovation in law firms. From the outside, the legal industry might seem slow to change, but for those working within or alongside law firms, there are constant innovations driving the industry forward. Today's guest has been right at the centre of that innovation and we're excited to welcome Michael Hertz, CMO of White & Case, to the CMO series to discuss innovation and how leaders in law firms can approach it successfully. Michael, welcome to the series.

Michael: Thanks, Ed. Thanks for asking me to participate.

Ed: Absolutely. We've spoken before a couple of times and I know a little bit about your background, but for the benefit of our listeners, what were the steps on your journey to becoming a CMO and specifically getting to your role at White & Case? And how do you think maybe the previous roles have influenced how you approach innovation within your current role?

Michael: Yeah, sure. I mean, it's a little bit of a long and winding road, so I'll try to be quick. I grew up at Latham in New York out of law school, so I'm a lawyer and was a litigator at Latham - it was back in the late 80s, when Latham was just getting going in New York. Most people will know that Latham was originally a big LA firm and then went national and then ultimately went international and it's also very involved in pro bono as I was growing up there and I was very interested in pro bono. In the early nineties, I took a leave of absence to explore how the new web tools could be that were just emerging, could be used to connect all of the pro bono lawyers together and connect the lawyers to the opportunities to do pro bono work. There's a whole ecosystem around the New York legal market, but the country as a whole that we're actively trying to recruit, train, monitor, and volunteer lawyers doing work in the public interest sector. I thought it was going to be a relatively short live of absence. George Soros gave us some money and we ended up starting a nonprofit organization called Pro Bono Net, which I'm still on the board of, and the organisation is still extremely active in the nonprofit legal sector in the US. And basically, they work collaboratively with a whole network of hundreds of organisations, state courts, et cetera, to increase access to justice and to use technology to increase access to justice more specifically. It was very much a startup. I mean, I didn't make millions of dollars because it was a nonprofit, but it was very much a start-up from scratch. And certainly one of the most innovative things I've done is to start up that organisation and lead it for a number of years. And really all of my experience in marketing, at least, came from doing Pro Bono Net, because if you didn't raise the money, the organisation didn't survive and the employees didn't eat.

Ed: Very important.

Michael: I had to raise the money. You had to go out and pitch a lot, I learned a lot. Branding, all the various aspects of marketing you had to kind of do yourself. And then in 2005, I went back into big law firms, primarily because I had young children and speaking of having to feed them, I had to feed them. My wife is a human rights activist. So we decided I had more potential to go back and make more money. So I went back into big law firms, but not as a lawyer. So I went to FreshFields as the Chief Knowledge Officer and then took on the marketing function as well. And then in 2010 I moved over to White & Case as the Chief Marketing Officer and now also have the knowledge function. So twice now I've had both those underneath my umbrella. Ideally, both those functions work really well together. I think in many ways they work together a lot just in the normal course of the business. But getting them to collaborate even more effectively around innovation I think is a real opportunity. I can talk about that later. How did that journey impact my approach to innovation? I think since I've started in the legal sector as a young lawyer, I mean, there's been tremendous change in the way the services are delivered. I always tell people that when I started Latham, they had a box of stationery and a dictaphone on my desk. They didn't give us a personal computer, which we found a little bit astonishing. So it's changed a lot since then. And there's been, you know, not because the legal industry necessarily has been innovating, but they've been adapting to the new technology which has taken over the world, basically. But it has changed tremendously the way lawyers work. So the idea that lawyers can't figure out new ways of working I think is kind of not true. Lawyers can change and have changed over the course of my career. Second, you can innovate because of the work I did on Pro Bono Net. I mean, you don't need tremendous resources to innovate, right? Very small kind of investments can generate lots of change. So sometimes I think at big law firms you always think, oh, we've got to move this big ship in this direction. But actually, I think a lot of the changes are relatively small changes and can be done with relatively small investments. And then I think the other thing is a lot of innovation does come from borrowing ideas from other sectors. So when we were doing Pro Bono Net, there was just give an example of that. When we were doing Pro Bono Net, the community that we were working with was like, okay, great that you're linking all the lawyers together, but can we actually provide information out to the public? Low income, other vulnerable populations? About their life, where they go for help or if there's no lawyer for them? Can they help themselves through legal education materials and doing things online that can help them navigate the system? And we felt pretty worried about whether we could do that effectively. Right? And so one of the things that we put in place which still exists on the site is how if I could go to a consumer site and the little chat pops up and says, hey, can I help you? So they do that now on the sites that Pro Bono Net has that are publicly facing so that somebody can help the person navigate through the site. Because no matter how usable it is, there are still some real tech literacy issues and other literacy issues and multilingual issues that you have to tackle. So, I mean, again, not like a new innovation, but it's just taking something from another, from kind of the consumer website world and trying to use it in a nonprofit context. So I think a lot of times if you're kind of scanning what's happening in the larger tech and innovation world, you can find some good ideas and apply them within your firm. So those are the three things I would point to.

Ed: Brilliant answer, and more in-depth than I was possibly expecting.  

Michael: I told you it was a long journey.

Ed: But an interesting one nonetheless. And you said innovating with the technology that's also been coming along the way, it's changed a hell of a lot since we first started. So there are big changes just from the technology alone. You mentioned your time at Freshfields, and I know you had the knowledge function on the legal side there and it's now part of your current remit as well as CMO. How does the combination of those two roles work in practice in regard to the firm's approach to innovation?

Michael: Yeah, so I think it's often the case that the solutions to our clients’ pain points right, are the solution is a combination of some change in process content. So it could be content from the knowledge team or it could be content from our research team. I have both those now underneath me and some technology, maybe some alternative resourcing. So it's kind of in many cases you've got all these different approaches and resources, but it's kind of putting them together in a new way that addresses the problem. Right? So if you're building some sort of decision-free tool on how to navigate, I don't know, CFIUS or something, which is kind of investment kind of regime in the US that protects certain sensitive assets from foreign investment and you want to put that up on the website, right. It's a combination of technology, the knowledge function, lawyers, all kind of contributing to that. So it helps to have those teams all working together more closely so that we can draw on those different resources that we need to solve the problem. So I do think there is a very close day to day relationship between the two teams and it's just kind of bringing them more closely together around the innovation agenda. So I think it's a pretty natural thing.

Ed: Yeah. And something that stuck up for me right at the beginning, at the beginning of that answer. Sorry. You said the solutions to your clients' needs or your clients' problems, which is key, one of the things that maybe gets forgotten too easily.

Michael: It's the best thing to focus on, honestly what the clients are looking for. That can drive a lot of good stuff happening on the innovation front.

Ed: Do you think there's a way for you to describe your firm's approach to innovation or maybe give an example of it? Is it too in-depth or is it easy to no examples?

Michael: Yeah. So like I said, like we just were discussing, right? I think for me, it's like listening to the clients, right? So we do a lot in the marketing business development function. We do a lot of client listening. We do a lot of client feedback. As part of our current strategy, we're trying to ramp that up even more, be even more comprehensive with the feedback that we get on our big relationships we have a team that's organised around that relationship that's hopefully very close to the client. So you're getting a lot of, like, info, right, about what's happening with the client, what are the things they're struggling with in-house, what are the things that they would like to see between the two organisations happening better? So I think that listening to the clients is really the North Star of innovation. It makes sure that whatever you're doing is very rooted in delivering kind of value to the client as opposed to just making up stuff and hoping that somebody will like it. So I think that's really the approach we try to take. And a couple of examples would be like, it's kind of astonishing how much pain and agony e-billing causes, right? So on both sides. So it's an area where in our big relationships, we tend to spend a little time trying to figure out how to make it less painful for everybody. So there are just some basic kind of steps that we try to take now to iron out the process and make it less painful for everybody. So that's a very good example of kind of a pain point for both us and for the client. We see a lot of in our big relationships where in house, like, the general counsel is struggling to kind of just stay on top of everything we're doing for them. So we've created some really nice dashboards that can like, where the general counsel can see all the matters that are happening, who's working on them, roughly, how much is being spent at any given time. So, again, clients often say law firms are kind of rubbish at communicating with them about where things stand and what the costs are. Right? So anything you can do to address that is valued by the client tremendously. It's like one of them, I would say, the most frequent complaints about the big law firms. And I think there are some simple things you can do to address that. Another area is like, just we do a lot of big cross-border work and both on the dispute side and on the transactional side, and we often have to employ local council that are not part of our firm but people we've worked with in the past. So that whole process of identifying the local council you're going to work with, onboarding them, getting them to work together on an assignment, we're trying to work through kind of that whole process and make that a much easier, smoother experience. And there's a lot of things through collaboration, technology, and other things we can do where, you know, that whole group of law firms that are working for the client on that cross-border matter can be collaborating and sharing information and the client can go in there and see where things stand and comment on documents. So that, I think, is an area that we're looking at that, again, has come out of a number of different like, we were sitting there looking at a couple of different experiences we were having with clients where it was like, why is this like, why is this so clunky? And so we've been trying to make it less clunky.

Ed: I'm sure that there's probably some of the listeners listening to what you've just said and nodding as well. They have the same pain points.

Michael: Yeah, they are. But the clients, I think the client drives the innovation and stuff. I mean, it really helps drive the message within that front too.

Ed: With innovations happening in so many different areas along the way, how can the leaders of the firm, including yourself, how can they ensure that it's cohesive and it is of benefit to the firm? I'm sure that there are some along the way that don't work out, but how is it best practice to figure out that they are cohesive and they are beneficial?

Michael: Yeah, I mean, it's a struggle, honestly. And the thing we're trying now is to have a defined innovation committee that oversees the whole portfolio of innovation work that we're doing across the firm. So a lot of times, I don't know, Americas M&A group will kick off something which won't be necessarily visible to anybody outside the Americas M&A group. So we're trying to kind of have some oversight and support for those different innovative efforts that are happening across the firm, have visibility over what they're doing, what they're trying. Are they learning from other practices that have tried something similar? So the committee is basically helping make sure that kind of existing tools and existing things that people are pursuing at the practice level are shared and are connected to each other and get some support from the centre. Obviously, we're trying to stay very engaged with what's happening at the client level, and then I think we're also trying to have a central point of intake on new ideas and it might be a new idea that doesn't belong in the innovation committee. Right. It should be done by the IT department. But we'd like people to, if they've got an idea about how to improve something to come to that central intake point and let us figure out whether is it really a new idea. Is it something that would really have an impact and deliver value for the larger firm or is it just something a single partner wants to do on their own to improve their life? Right? So we have a process for kind of evaluating those new ideas, make sure they have the right set up and support, and ultimately, whether we're going to invest in something new, which could be acquiring some new tool that's out in the market that we don't have, or it could be building something new where there's just no solution. Right? So the committee now has a process for making sure that all happens in a coherent way.

Ed: And you mentioned just then staying engaged with the client. Do clients ever come to you with specific capabilities that they're requesting or are they a bit more general in what their requirements are?

Michael: Both. It's both, honestly. So it happens a lot of different ways. So in some cases we're like going to them saying, hey, we've got this new thing that we could do together, let's try it on this next matter, let's use a piece of technology that might make it better and more efficient so we might be coming to them with some ideas. And then in some cases the client will be like very specific. Like do you use the search engine? Or do you know anything about this document management system? Or like a very specific question that they're obviously wrestling with and want some help on. And if we do have any expertise, we'll try to share that with them. And then sometimes it's a much more vague kind of we're struggling with developing our knowledge management system internally, right? And it's like, okay, what does that mean, you have to spend some time with them and figure out what it is that's really driving that and whether we're well situated to solve that or help them solve it. So sometimes it takes a little work to really figure out what the problem is that they're trying to solve. So it comes in a lot of different ways, honestly.

Ed: Would you say that there's a preference between the two? Is it easier to have more specific requirements than a broader search?

Michael: Well, I think you always would like it to be very specific right? But I think in many cases we have a little bit of a mantra, which is kind of what's the problem? As opposed to what's the solution? Often we jump, I think, as lawyers, but also as innovators to solutions. And I think you first need to spend a little time really making sure you understand the problem that you're solving for. So we try to pause and just have that conversation.

Ed: I thought that might be the answer, but I wanted to give you the option just in case. When we spoke previously, before the podcast, you took us through a progression from the early stages of innovation to then scaling that across the firm and creating it more as a firm-wide innovation. What do you think are the main challenges in scaling innovations within a firm?

Michael: I guess there are several. I guess knowledge is one, right? We have lots of great tools and people don't know about them. So there's a big educational kind of element to this, which is like, make sure everybody understands what's available, who to talk to about using those tools. So right now we're like really trying to make sure that the practices in particular know kind of what tools are available in our suite and like what they could be doing. So we're working very closely with the practices around that. I think the other thing is just to avoid getting bogged down, it goes to back to that point that you don't need to necessarily make these huge investments to drive innovation. Like, make sure you get quick wins, can demonstrate some progress. Try not to just get totally bogged down in some massive complex thing that it's going to take years to solve. You need a decision-making mechanism. When we first kind of were working at this about six months ago to put the committee together, people are like, well, do we have enough ideas? Do we have enough ideas to keep you busy? And we are not having a problem with new ideas. So the question is, can we say no to the ones that don't make sense? And can we say yes and invest in the ones that make sense? Right. So it's like in a big law firm that can be tricky, who makes the decision? And so I think we have worked out that we're still kind of seeing how it works in practice, but we wanted to clarify the decision-making process and then lawyers are busy, right? So you have to be a little bit careful. The last challenge is just prioritising because you have to be sensitive to the lawyers ability to digest like, how many new ways of doing things can they absorb at one time. So I think you need to be very careful not to drive too much change and make sure that some of the things you're trying to do get really embedded before you move on to the next thing.

Ed: You have a little bit of insider knowledge having started off as a lawyer as well. So you kind of know that operational part before you got to where you are finally getting towards the end of the recording now, but when and how do you think a firm should try to build its reputation within the market as an innovative service provider? It's probably quite a long winded answer, but is there a way that you're able to pinpoint?

Michael: Yeah, I mean, I think well, right now we're really focused internally on getting people to understand what we're trying to do, what's the Innovation Committee doing, what is our mission? Again, going back to that thing of, like, we've got a bunch of really exciting tools already, like making sure everybody understands what those are. Right. So I think you need to kind of nail the hearts and minds of the people internally first. So if you tell, like, a young lawyer you're trying to recruit, there’s like this really massively innovative culture, and then they arrive and they're like, this doesn't seem very innovative. That doesn't work very well. Or you go out and tell a client, we're, like, super innovative, but then the partner team that's working with the client doesn't understand what that means. Right? And kind of put you in an awkward position or something like, we saw it on your website. Tell us more about that. So we need to make sure that internally people understand how to talk about it. Right. I mean, it's not that different from, like, if you're, I don't know, an M&A lawyer and your client says, oh, we've got this potential dispute. You may not be an expert on disputes right. But, you know, like, oh, there are people internally at the firm who can come talk to you about that. Let me bring in another partner right? From the disputes group. It's similar here. Right. So client raises something about, like, is there a way we can do this more efficiently or do you have any tools that help us collaborate more effectively? The partner doesn't have to know the specific answer to that, but know that we have stuff that we can deploy and people that we can deploy to help do that. Right. So I think right now we're very much focused on that internal piece before we start blasting out how innovative we are externally. But I think it's increasingly important. We see it in almost every pitch we do. We do talk about it a lot with clients, kind of one on one, but it's very much targeted to the client. And we think we have a compelling story, but it's not like something that we're putting on the website and making statements that are too grand at the moment.

Ed: Now we've got to the end of the podcast where we do a quickfire round, slightly different to the topic that we've just been covering. But if you're ready to go, what's your favourite business and non-business book?

Michael: Business: David Maester, The Trusted Advisor, which is probably the bible of building trusted advisor relationships. So I love that book. I think it's like something every BD person should read.

Ed: I think it's been mentioned before as well.

Michael: Probably every partner and then non business would be there are these books by William Manchester on Churchill, which I love.

Ed: Okay. I jotted his name down, so I'll have to check him out. What was your first job?

Michael:  It wasn't my first job, but it was my first union job, was when I was growing up in northwest Indiana as a high schooler. A lot of the people in the town work in the steel mills up in the northwest corner of Indiana, Gary, Indiana, which is where the Jackson Five came from, which is where most people know Gary, Indiana from. But it was a big steel mill area, and I worked in the number two blast oxygen furnace for a couple of summers, which was the name. It was a scarier place, as the name would suggest, flames and flaming steel flying all over the place. But you got paid, like United Steelworker wages. It's a great job as a high school student.

Ed: Yeah. Not without risk, maybe. What makes you happy at work?

Michael: Having a great team. Yeah, it's a great team and lots of different types of skill sets, right. From creative to technology to lawyers to media relations. It's a very diverse set of skills, and it's a very big team. And I think we've got a great senior leadership team within the group, so it's fun to work with them.

Ed: Good answer. What is it that you're listening to at the moment? Be it a podcast or maybe a specific music artist or an audiobook?

Michael: Yes. My favourite podcast is called The Knowledge Project. I don't know if you've ever heard of it. It's run by a guy named Shane Parish, and he has a website that's also worth checking out, which is called Farnham Street. And it's basically a collection of books and thinking across all sorts of areas of leadership and finance and various other things. He's very kind of quirky guy, but he's got quite a following. It costs about $100 a year, I think to join the site. And Farnham Street refers to the street in Omaha, Nebraska, where Berkshire Hathaway is headquartered. And he's a bit obsessed with Buffett and the way he thinks. But his podcast is great because he just interviews these amazing thinkers and thought leaders across all these different areas from sleep to leadership development. He attracts a lot of really interesting people to have conversations with. So I would check that out.

Ed: I have written that down as well.

Michael: It's really great.

Ed: Got to check that one out after this as well. Where is your favourite place to visit and why?

Michael: London.

Ed: Okay. Good choice.

Michael: I lived there for a number of years and have great friends there. And I love the city. So I love London. If I'm not going to live in New York, I would want to live in London. In terms of a place to visit would be Paris. And I don't think I need to explain why. It's obvious.

Ed: Both of them are great choices. I lived in London for nine years, so I would back you up on that decision as well.

Michael: Yeah.

Ed: And we always finish off the podcast with a question, which is, what would be your one piece of advice for others looking to be successful, in your example, in leading innovation within law firms?

Michael: Yes. Stay really focused on your clients, and what's causing them pain, and then help them reduce the pain. Right. So I think it gets pretty simple if you kind of really stay focused on the clients. And, I mean, there are just so many examples of clients driving change within law firms, so there has to be a change in terms of mindset and culture, and in many cases, the clients can really help you drive that.

Ed: I think that's a fantastic answer as it circles back to something you pinpointed really early on in this conversation.

Michael: Yeah, I think it's key.

Ed: Michael, it's been an absolute pleasure to have you on the CMO series. Thank you so much for joining us. We'll keep in touch of course. Thanks again.

Michael: Thanks for having me. Great. Thanks, Ed.

Ed: Thank you.