Charlie: Welcome to the CMO Series podcast where we dive into all things marketing and business development in professional services. In this very special episode, we revisit a standout session from CMO Series Live. Featuring an esteemed panel of law firm leaders exploring one of the most transformative topics in our industry today. The AI revolution. What does AI really mean for legal CMOs? How is it reshaping strategy, client engagement, and the future of marketing and law firms? Tune in as we unpack these big questions and more in this must listen conversation. 

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Sam: Thank you very much for coming today, and thank you for staying. You've heard today about challenges. You've heard about opportunities. You've heard about dangers as a CMO, things that you need to know about. And I think AI, out of all the things you've heard today, presents, maybe, the most pressing concern of CMOs at law firms. You're gonna have to forgive me for reading the introductions for the people on the stage next to me because the wealth of experience that they bring is beyond my ability to memorize all at once. So sorry for reading these out. On my left, we have Jen Leonard.

She's a leading voice on AI in the legal market, and when she's not predicting the future, she's building it. She brings her background as Penn Carey's first CIO, and that gives her a practical perspective on AI that I'm sure we're all gonna be very thankful for. To the left of Jen, we have Darth Vaughn. He's an associate GC at Ford, where he is pioneering AI adoption within the legal department. Darth is showing how a global enterprise can and should move at pace in the market. And if we can have global giants like that; moving and adopting AI and being so forward thinking, I think we can all say that your organizations should be as well, especially if they're looking to bring on board clients like that. To the left of Darth, we have Bridget Mary McCormack. Recently published in the Technology Innovators Magazine, and you won an award as a technology -

Bridget: Apparently. 

Sam: Amazing to have you with us. She's the president and CEO of the American Arbitration Association, and a trailblazer in moving the whole industry forward. Bridget brings experience from previous role as Chief Justice of the Michigan Supreme Court. And from that role to her current role, she's been a champion of expanding access to law and innovation in this space. So thank you very much for joining us. 

Bridget: Thank you. 

Sam: And last but not least, we have Pittsburgh's favorite son. Jim Metzger. Bringing again a wealth of experience. I was blown away trying, this was actually when I started writing this was reading Jim's experience, and the different roles that he'd been involved with, but from large technology firms to all across the spectrum of professional services. Jim's been at that forefront of the financial side of innovation and driving companies forward and helping that bring that financial perspective today. We're very, very grateful to have you on Jim. Thank you so much. So if I could get a very warm New York welcome to our panelists.

So I'm gonna, Jen, I'll start with you if you don't mind. 

Jen: Yeah.

Sam: I’ll pick on you. To kick us off,  how is AI changing the conversations that you are having in your organization now? How is that shifting? The way that your firm is thinking about what it does as an organization. 

Jen: Well, our organization, the company that I own actually did not start to advise law firms on AI, It started to advise generally on innovation strategy. We spend about 98.4% of our time now talking about AI, but I think that those conversations have changed significantly even in the last year. Many of our presentations last spring, I would say, were designed to persuade law firm partners that this was something they should be paying attention to; and there were 30 slides of lawyer personalities and why this is important, why it's transformative. And now when we meet with firms to come in and talk with them, they're like, we don't need any of that content anymore. Maybe a slide or two. We get it. Now the question is what do we do about it? So that's how it's transformed in our work that we do.

Sam: So it's gone from being something that needs a lot of explaining to being something that's almost axiomatic - This is what we're having. We're coming in and to talk about it. 

Jen: Yeah. I don't know if any of you have met lawyers before, but that is a really, really fast change in a lawyer's willingness to sort of suspend disbelief and to bypass their skepticism to be open to this idea.

Sam: Sure. 

Jen: And I'm really encouraged by that. And the conversations as a result are much more engaging and fun to have. 

Sam: Or exciting. 

Jen: Yes absolutely. 

Sam: Very nice. Darth your perspective on that. How are things changing? How is AI changing the conversations that you are having internally? 

Darth: Well, we got started with AI early. So in, we were using traditional artificial intelligence 2018, 2019, but it wasn't a good fit for language. Basically what happened in about 2023, the technology caught up with the language, right? Caught up with the words; and we got early access to GPT-4, helping case techs build what was the world's, firstly, AI assistant co-counsel, which they sold to Thomson Reuters. And we had an epiphany at that moment that we were going to be able to do more with less utilizing this technology, a little bit of you know, building the plane as you're flying it. But it quickly became apparent to us that the technology could replace a number of tasks that we were either internally working on or outsourcing to our outside council. So I think with that, what we've tried to do initially was to reverse engineer the use cases from our billing data to see potentially where we could add value,and then we got beyond that. And getting beyond that was realizing you had a super assistant sitting next to you 24 7, that could allow you to unleash a superpower, which is productivity upwards of 30%. So what's the end result of that? The end result of that is we are reassessing what it is we can do ourselves. What is it that we are required? or it, it makes more sense to outsource and where the value proposition is? And you know, we're in the middle of this, we're all in the middle of this, but I think the world's gonna look much different over the next two years. And I think the value proposition is quickly changing.

Sam: I think in the prep, the lead up to this, one of the things that we discussed was how your perspective might be a scary one for law firms, and I think we've just heard why that might be. 

Darth: I don't think it needs to be scary. I mean, I'm on record and saying I think the technology's gonna create more work, not less. It's gonna create more activity. It's bringing the cost of legal fees down, which, you know, means that people are gonna utilize legal services more and more. I do think the value proposition is gonna change. So we pay for two kinds of  tranches. The top is like advice and counsel, and we always want that from our outside counsel. We need people that have relationships that can help us see around corners and that can advocate on our behalf. And then we pay for a lot of the production of content and that's not a huge value add to our organization. Your 17 page brief is only being read by two or three people. You know, your discovery responses, while beautiful, have no value to our organization other than we're required to do it. And you know, most organizations have paid a lot of money for this low value, but necessary work. Now we're in a place where the technology can help create efficiencies in that tranche. And the value proposition on that tranche in my mind, is likely going to decrease. Now, does advice and counsel go up? Maybe? I don't know, but that's what we're gonna figure out over the next couple of years. 

Sam: Thank you. And Bridget, from the perspective of the American Arbitration Association, how is it shifting? What you're doing, and what you're talking about? 

Bridget: So the American Arbitration Association is an interesting space. I view us as more like courts. We're kind of the operating system where lawyers go to resolve disputes, but we interact with lots of lawyers. We did about, we administered over half a million cases last year. We're also almost a hundred years old, and we've done one thing well for a long time. So what this transformation would look like for a legacy successful legal organization might feel familiar to some of you in some of your law firms. And we've been undergoing a pretty significant change management operation for the last two years and a few months. We started, we empowered everybody with AI across the business with enterprise GPT licenses.

We recruited enough of our arbitrators to try out a number of the legal tools and we started building; we started building point solutions across our operations and across our arbitration process. All in service of leading to where I think we're headed, which is a brand new ways to resolve disputes. And for an organization that has administered as many cases as we have for as long as we have, we have pretty valuable currency in building an AI native dispute resolution platform. But it's been a large change management operation and I'm happy to talk more about it, but I bet we have a lot in common with some of your, some of your firms, 

Sam: I'm sure. I'm sure. And Jim, can I get your perspective as well? 

Jim: Yeah. I mean, it is, it is in every conversation that we have, you know, from how are we gonna use it internally? So from a firm basis, also on a client basis and, you know, where does that land from, you know, What are we doing in, you know, if you look at it on a spectrum, what are we doing in, how are we implementing it from a core perspective all the way out to innovative and, you know, what does that mean to the business model? What does that mean to, you know, the hourly rate and what does that mean to, you know, new products that we can sell and deliver? You know, what's the value to the client and how do we charge for that if it's not gonna be, you know, the old, you know, hourly model. 

Sam: Mm. So quite the, obviously very comprehensive shift across almost everything the firm is doing.

Jim: Absolutely. 

Sam: What do you think, if I was to ask you for a moment to put yourselves in the shoes of the people in this room as a, as a CMO at a law firm, what do you think they should be thinking about as a result of that? That kind of - 

Jim: Yeah. I mean, I think for me it's how AI drives the marketing, but really drives that business development. When you look at what from, from my perspective as the CFO of a law firm, it's, it's about top line growth and where are we gonna get that top line growth from? And really that, I think the business development model, the marketing and, but more so the business development model of the law firms are really gonna have to change as AI comes into play.

Sam: Mm. Yeah. Bridget, have you got a take on that? What? Anything? 

Bridget: Yeah, I have thoughts and we all, I also hired, I have a brand new CMO actually who wanted to be here, but his son is graduating from high school, so he's in the, in the place he needs to be, but he's eager to meet all of you. He comes from media; not from law. You know, I think you - I think you have to figure out the ‘why’ before you figure out the ‘how’. And the why is, you know, what, what is going, what about this technology? Is gonna bring value to the clients we serve. And if you have a good answer to that, I think the ‘how’ gets easier. But getting a good answer to that I do think requires an all in approach.

Hopefully you have a structured and funded innovation program, so you're already, you already have the muscle to learn how to try things and fail because you should do a lot of that. Hopefully you can include lots of people who are not only on your marketing team and not only on your IT team. This is a general purpose technology. It's the printing press. It's, you know, the steam engine. It's not a something that you can hope your IT team will teach you how to do it. It will bring value across your business and you need a tiger team or a lab or a, like a center of gravity where you're figuring out that ‘why’ before you figure out the ‘how’. I could say a lot more, but these guys have good thoughts. 

Sam: Well, we'll get, we'll jump straight onto them. 

Darth: So it was a question if I was a CMO, like how would I be thinking about it? 

Sam: Yes. If you would've put yourselves in the shoes of a legal CMO. 

Darth: So I think what is going to happen is opportunities are going to present themselves that have never been there before. Only about 8% of the civil legal market is being met. The, I think it was, is it 8%? 

Bridget: It’s only about 8%. Yeah. 92% of Americans get no help for their civil legal problems. 

Darth: And basically that means all the law firms are fighting over the same, you know, 50 clients essentially, right? And it's, can we pay this hourly rate? Can we keep you busy with this amount of volume? That means 92% of the market is being unmet, and there's an opportunity now utilizing technology to scale in ways that have never been done before. And it's great for two reasons. One, it increases access to justice, but now all those pro bono hours, they can become low bono hours, right?

Do you need 70 clients that are gonna pay you a thousand dollars an hour? Can you get 7,000 to pay you a hundred an hour? Like I, I think there's an opportunity here to not just increase access to justice, but also increase the bottom line by changing your strategy and starting to scale to parts of the market that you haven't touched before. So if I was back in my partner seat that I sat in with my book of business, this is what I would be thinking about right now. How do I scale my operation? Utilizing technology so that time isn't the issue and the rate limiting factor and go hunt in the blue waters that exist that no one is competing over right now.

Sam: Can we maybe just say a show of hands is that a sentiment that echoes at any of your firms, that idea of scaling and, and hunting in different waters? No. There you go. 

Jen: Yeah. See, you look at that opportunity to dive and hunt. 

Sam: Or that maybe the secret sauce is too secret to be revealed today. 

Jen: It's to be discovered, I think, which is, I think the exciting thing about a transformative general purpose technology, like Bridget said, I mean, this is like electricity and when you go in, sometimes we're not thinking about it that way because we have not really lived through something like this in our lifetime. Unless you think about the internet, which was longer in terms of adoption. So people wanna know, what are the use cases? And one of the things that we try to do is move people away from that phrasing. Not because it's not something to know, but it's like saying, what are the six use cases for electricity and how should our firm be using it? And as Darth just said, I mean the possibilities are really only limited by your own creativity, and ability to have visionary leadership. And I think one of the most exciting things for marketing teams in law firms, especially small and mid-size law firms, I was just speaking with a CMO last week and he said “You know, for four decades I've been working in this and there's always been a ceiling because we only have eight people on our team, and now there's no ceiling anymore”, and that's how I feel as a startup founder. 

It's like there is no ceiling. Really what you need to do is get in there and play around with the technology and think through, if you could get rid of all of this work, that's not adding value, like Darth said, just like the legal services component.What would you do? What impossible things couldn't you do two years ago that are now possible with your team? So thinking about how to design activities, where your team is thinking of having co-intelligence on the team and how that can scale all of the work that you're doing for the pharma and add value.

Sam: I'd say it's a mind boggling opportunity. I think we haven't really explored it yet, but where do you think the readiness is at, for the wider market? So for clients of law firms to accept AI in their, either from the marketing of the firm or in the actual practice of law, 

Bridget: I think Dart should probably, as a client of the firm.

Jen: Yes. Oh, 

Darth: It comes down to your individual client and their position right now. There are some industries where you don't wanna be first with this, right? They're heavily regulated. I understand why some people are dipping their toe in the water, and I understand why some have jumped all in. And I think we're all experiencing the same pressure though, and the pressure for us is that every year our firms come to us and they ask for a 10 to 20% raise. They don't offer to do anything faster or better, but they're saying “We need this to be competitive”. And it has no, you know, relation to inflation or anything else. It is becoming an issue where the purchasers of legal services are now looking at this unsustainable cost pressure and trying to figure out ways to get around it.

And you're seeing more and more insourcing, and if I was in your position thinking about how to utilize this technology, I would approach one of your clients and say, “Hey, you know what? We're so good at this. I think we can cut our rates in this area by this amount, and we want more volume”. That would be music to everyone's ears. So in terms of the individual risk appetite for utilizing technology, that depends on your clients, but I think the industry is hungry for solutions that curb these kinds of runaway costs. And if you can provide those, you have a very, very competitive advantage. 

Sam: Darth. You've spoken on this topic fairly regularly, is that, do you think that sentiment of there being an appetite for use of AI to increase volume and, and low cost. Do you think, is that, do you see that as something that your colleagues maybe in other firms who are not as fluent in the topic as you, is there an appetite there from them you think as well? 

Darth: Yeah, I believe there's an appetite.I believe the same education and, you know, change management issues that the entire industry is dealing with are also there. So, but I also, you need to balance that with the fact that the technology's evolving so quickly. You do not have time to sit and wait. I am a lawyer. I provide, you know, my clients with advice, I have clients, I also purchase legal services. So I'm a client, right? I'm also your competition, right? So if I have a three year headstart on this technology and the ability to insource more and more work while you sit back and wait. I think you're putting yourself at a disadvantage to then come back in a few years and be like, “Hey, we caught up” -  too late.

Like we've moved on to something else. So, you know, I wouldn't benchmark against the other firms right now. I would benchmark against the needs of the industry and whether or not you're going to be able to keep pace with the speed of business. And every three to six months we see an evolution with the technology where it's literally like, we did not think it could do that before. If you're two years behind, I don't know that you're gonna have the ability to catch up. I really don't. 

Bridget: Two data points on that. This morning I presented on this topic at a meeting of arbitrators, but they also had practitioners and in-house teams. And the in-house lawyers in that room, it's anecdotal, but we're far and away further out on their AI work product and sort of figuring out what it meant than, the outside counsel and certainly the arbitrators who were sort of lagging behind, I would say. But I see that in, in lots of different industries. I think Darth is right about heavily regulated industries, they have a little bit harder time, but I do think that the GCs office often ends up being the key to the rest of the business. And if the GCs office is all in, then the rest of the business is pretty all in. And then this morning on the technology moving so quickly, OpenAI added functionality to your enterprise GPT license or even your Pro GPT license that it will now work across all of your documents, all of your inboxes, your Dropbox, your SharePoint, it will literally work across everything in your, in your stack. And I, that feels to me like we, I mean, I don't even know what to do now. I feel like I have to leave here and go build things. Like right now, like - 

Jen: Yeah, you gotta go. 

Bridget: Yeah. 

Jen: And I would say in addition to the general purpose nature of the technology, it's the most democratized technology of our lifetime. You don't need tons of infrastructure to stand up a project or a pilot in your corporate legal department. So I think for a long time, firms were really in control of the technology and how it was integrated into their services. And like Darth saying now, for the first time, all of your clients or many of your clients, and increasingly more of them will be experimenting in house. I've heard stories of clients requiring that their firms use certain tools that the firms hadn't vetted before, which is new or the sort of idea that the clients can use the technology to review your work product and send you critiques back with it. So I think the clients are really taking this moment, the ones that wanna drive change in their firms to use the technology and figure out its capabilities and then pressure the firms or to think will all accelerate this pressure. 

Darth: The incentive structure's different though, and I wonder about that with you. Like how do you align? You know, you have people that have, you know, things are going pretty well for me. I've got a great business model. I'm not really interested in changing what I'm doing because it's working for me. Yet now you have this disruptive technology that's coming on board and you can't ignore it anymore. 

Jim: Yeah. Coming into law 18 months ago, you know, it went from almost all clients saying, no, don't use, versus now it's almost, why aren't you using. But we've gotta pull, and again, I'll speak for myself, not my firm, but we've gotta pull some of those clients along with us. Right? We, we can't wait for them to say, yeah, go ahead. Because we'll be two years behind. 

Sam: Jim, do you think there's sort of a reticence? There's a bit of a shyness about appearing AI forward as a law firm because there's a sort of mixed reception. Possible among the client base with some risk adverse clients may not be ready for that, but some are demanding it kind of now.

Jim: I do, I think it's a double-edged sword right now. I think though, six months from now, 12 months from now, it's gonna almost be a requirement. 

Sam: What kind of conversations broadly are happening then to you, you need to be there in six months, but you obviously need to start moving now. So what, are there conversations that are happening internally? How do you get ready for that? How do you sort of build in for that? 

Jim: I think it is about the pilots, right? What can you experiment with? Some of them aren't gonna work, but if you can pilot some things and experiment and have those incubators. But I think that's something as a legal industry, coming from other industries, other professional service firms, I do think they have more of a DNA in doing some of that experimentation. Where that's gonna have to really be brought into the legal industry, DNA, to do those experiments and, you know, fail two times out of five or six.

Bridget: Don't be afraid to call it a BETA. Don't be afraid to measure whatever you can measure about it, and then talk about that measurement. Don't be afraid to do it transparently. Show the world that you're doing it and talk about how you're doing it. I mean, I think you're right. That's not necessarily like the first muscle that lawyers show up to the fight with, right? But I think, but it is what's needed in a moment like this, we have no; we don't know what they're gonna release tomorrow. And already, I'm gonna be up all night tonight. So it's exhausting.

Sam: There's this, you, you've both mentioned it there, but there's this idea that AI to be done well requires that iterative approach. You have to start those BETAs. You have to be prepared to fail. Do you think there's a conflict? They're between the culture and the nature of the business of law where you are either correct or you are incorrect. There's sort of a culture there that you're either right or you're wrong. Does that conflict with needing to be iterative, needing to, needing to fail, needing to have those, those moments where you say, look, we needed to try this, but it wasn't successful, but we have other things, other ions in the fire. Does anyone want to take on that? Jen?

Jen: I mean, I think it depends on, there's a lawyerly answer. It depends. But I think that the way most lawyers, at least in the beginning of these presentations that we would do, the lawyers would go to the exact tasks that they bring value to as lawyers immediately and I just learned about these hallucinations that Bridget shared.

Bridget: Yeah. There's this thing called hallucinations.

Jen: I had no idea.

Bridget: I know we can talk about it later. 

Jen: Okay. I  need to know more. 

Bridget: Yeah. 

Jen: But they would hallucinate case names or, you know, you're an expert real estate attorney and you're drafting a lease and you're not satisfied because it doesn't draft it the way that you do, but that's the value that you bring to the task right now. That's what you're compensated for. There's this whole world of big hairy problems in a firm that lend themselves well to probabilistic technology, where you're not looking for a precise answer where the the answer set is open-ended enough that you can produce output and then say, oh, okay, directionally this looks good, and here are some new ideas we hadn't thought of.

And then asking the AI again, like, how would we set this up if we were gonna try to do this as a firm? And to me the risk there is so low that it aligns nicely with legal culture. It's sort of like we are problem solving. We're not taking this to a client in their work product. We're using this to improve our business. So I think it's a matter of helping them understand probabilistic versus deterministic and core practice activities versus business strategy and thought partnership. And once you can sort of carve off that slice that they're really worried about. Then you can start to open their eyes about what's possible and they feel -  you could feel them relax in the room and have a little bit more fun with it. I think.

Sam: Bridget, I saw you nodding. Is there - 

Jim: Yeah, I was gonna say we're looking at using it for the monthly financial narratives. If there's a mistake in that and there's a wrong, you know, I don't want a wrong number in my financial report - not the financial, but the financial narratives, but the risk is so low, so let's test it. Let's, yeah. And if it doesn't work after two or three months. We'll shut it down and go back to having one of my analysts write it and me review it, but I'm gonna have to review it anyway. So, you know, the analyst makes typos, the, you know, I've made typos so you know, the hallucinations of it, picking up a wrong department, or, you know, spitting out a sentence that doesn't make business sense in our environment, that risk is really low.

Darth: Compared to, what is the question I always ask, like the risk of. First of all, I don't know that your clients need a hundred percent all the time, like 85 in some areas is really good depending on the price point. The second thing is this idea that, like we're batting a thousand as lawyers. I think Tica, they had a product called Clark and they did a study of the top 20 law firms in California and analyzed 500 of their briefs. And they found that like 40% of those law firms misspelled the name of the judge that was deciding the case. They found that like 30% of the briefing misrepresented a precedent or a statute intentionally. So this idea that we're batting a thousand, the question is as compared to what do large language models to loose it? Yeah, they do. But compared to human cognitive error. Like, I walked into a room this morning and forgot why I walked in there. I literally forgot my doctor's name this morning. I have all kinds of errors that I make every day, but we forgive ourselves. We don't forgive the machine. So I always think you just need to keep that in mind compared to what, what are we talking about?

Jen: It's also funny that lawyers really want that to be solved right now. When in reality, if it were 100% accurate right now, things would really change. 

Bridget: Yeah. We'd really be in trouble. Yeah. 

Jen: Yeah. So be mindful of the limitations. Recognize that, as Bridget said, every single day, this technology gets better and better. What you're working with is the worst version of it that we're ever gonna have. And as humans, we're not perfect, but right now, how can we use the flawed version of this to get ahead of our peers, to serve our clients better? 

Darth: And here's the bigger risk. People in your firm are using this, whether or not you're giving them access to it. Like us, there's an AI accent and when you work with it enough, you can kind of see, you can kind of hear it. I see the work product where the firm's like, no, we we're not. We're not utilizing it. Your associates are. I see the work, I know they're using it, but it means you're taking my information and now going to a publicly available large language model and utilizing it there because the pressure to be productive is so great in these environments. They're gonna turn to the tools that allow 'em to be more productive. Give them a safe place to do this, especially with our work. Like that is the responsible thing to do. It's not to ignore the fact that this exists, it's to give them the opportunity to do it in a safe place. 

Sam: Just coming to some maybe specific examples or are there anything that you've seen, are there any specific deployments of AI that you found? Particularly exciting, Jim, you're using it as part of the financial narratives, but -

Jim: Yes, slightly different. But the law firm where I'm from in Jacksonville, just spun out a group that does nothing but NDAs. It's a chat bot and AI, and will generate NDAs for I think they're doing it for $500 a pop. And he said it takes, in legal time, five to 10 minutes to review. So you look at that on a per hour basis, not a bad return. And most of the time the clients really don't even know that they're interacting and trading emails back and forth with AI generated, and chatbots.

Bridget: I was actually, I had dinner recently with the in-house team at Bosch, and they built a similar, they just built it in-house. They grounded their own GPT around their, you know, perfected NDAs because they found that too many of their business clients were not. We're just like, you know, thinking like, eh, I don't think I have to ask them about this. You know, like sort of avoiding legal, avoiding their legal team because it was easier.

And they found that by building their own N-D-A-G-P-T internally and giving it to their business clients and saying like, oh, hey, you can just interact with the bot. You don't have to like, you know, you don't have to call me the human who, you know, you think I'm a pain in the ass. But it made their practices significantly better.And then, you know, by using the bot, the business clients were finding like, okay, well maybe I do have to figure this one out and like I don't wanna, you know, mess it up. And it was a game changer for just how they interacted with their internal business clients. And you know.

Jim: He said the volume of clients who have put more through and on the NDA side versus just saying, oh, it's not that big of a deal, I'll sign it.

Bridget: That's totally constant. That's exactly it. Yeah. Yeah. I mean, I'm excited about all of it. I can barely sleep. I'm so excited. So, you don't wanna get me started.

Darth: I, the thing that excites me is very geeky, just given my background, but it's our ability to create our own tools. At this point, generative AI isn't just creating the briefing or, you know, creating images. We're using it. We're coding in English. We're using it to build applications, to automate things.We don't have to go out and hire a development team for 18 months or find a solution out in the marketplace by some vendor who's got a startup that eventually wants to sell it to this company or that company. Internally. We are able to build tools now and it, it's not taking months, it's taking weeks, and that is a game changer for just about every organization. When I can sit there and say, you know what? I want my matter management system to look like this, or I want, you know, my billing system to look like this. Let's make it, let's build it. That kind of changes the game for just about everybody, including law firms. Thus, I would be thinking about the operational side of our law firms with respect to all of that.

Jen: And I would say the thing that I'm excited about is I, I really love human-centric design of systems, and the legal system is the most poorly designed system. If you were gonna think about the humans we're meant to serve, whether it's corporate clients or regular people, or small businesses, and now 2025, Bridget and I present all the time together, and I feel like last year we didn't have any tangible outcomes. Where firms were achieving previously impossible outcomes for their clients. And this year we're starting to see these case studies and there's one that's my favorite out of Georgia. These litigators who had 40 years of experience, some of them on the team and the two sides were negotiating between a $600,000 and $700,000 settlement, could not agree on it.So they went to trial and the plaintiff's lawyers used just chat GBT Deep Research and they uncovered an article that directly contradicted the defense expert's testimony, and ultimately the verdict return for the plaintiff was $7.2 million after the defense didn't wanna pay $700,000 in settlement discussions.

Bridget: Oops.

Jen: And so you start, oh, that one hurts. So you start seeing these compelling stories that are more concrete and tangible for partners to understand like, oh, we really have this ability to achieve these outcomes, and why would we not want to do that? And then to Darth's point, thinking about what that means for the rest of society and how we can start being really more human-centric because of how democratized it is.

Sam: Thank you. I see we've come to time now. We might not get another opportunity to see these people together and to pick their brains on this such important topic. Has anyone got questions? 

Audience Member: A fantastic panel thanks to everyone. My question, and maybe geared more toward Garth or Darth, sorry, just because -

Darth: I get it all the time.

Audience Member: Sat, sat in that intersection of the client journey and now being in house. But we work in a firm with a pretty liberal set of AI tools in a pretty secure environment. But the one thing that keeps coming up is our ability to train and develop associates and really focus on that critical thinking. So I'm curious really from anyone how you're tackling that or thinking about that. 

Darth: And we think about it and you know, I've heard that, yeah, we're no longer gonna have first years, or you gonna get second years, we're gonna get third years. I get it. It's tough in this time of change to figure out how we train people. But I also think a lot of the things that we used to emphasize probably weren't as valuable as we thought in the first place. And the analogy I like to give, we call it the blank page problem, and I got in a debate with a writing professor from law school about how the critical skill set is organizing your thoughts before you get them down on paper.

And my retort is, you know what? I don't know how to do, I don't know how to make a fire. And that's a survival skillset. And if I was left out in the woods in Michigan during the winter, I would die. But I use fire every day. Right. I use it to make my meals. I use it to push my car along and the time I save in not making fire means I probably make better meals. My wife might disagree, but I have time to do more things. So I think we just need to change and put our focus on what is actually important. I think the most valuable time for an associate is like the apprentice time. Those 15, 20 minutes you get with a veteran attorney that has subject matter expertise that can actually guide you.

It isn't writing a thousand contracts. It's not reviewing, you know, doing document review or having responded to like a thousand discovery requests. It's the instruction you're getting kind of one-on-one and I think the focus probably needs to go back there. 

Sam: I saw we had one more. We probably have time. Is there another question over there? 

Audience Member: Hi there. I'm holding everyone between fun cocktails. Sorry. So my question is a little bit more on the implementation and rationalizing the cost of implementing AI with the CFO of the firm and rationalizing those costs. How are you guys having those conversations if you are having them? And also from the client perspective too? 

Jim: Yeah, I think for me the ask is, you know. It's not so much what's the, the old fashioned, what's the ROI? What's the use case? It's how much we can do and pilot and test and what's going to drive us forward in the future because again, for me to sit there and say, I don't know the ROI on that use case, I don't know what all the use cases are really gonna be. This isn't an ERP system or a CRM system where people have done that before and you have that mathematics. I think it's really about, this is the block of money we're willing to commit to trying new things, and kind of again, what I said, where are we on that core, all the way out to innovative and where do we wanna spend that money? So where is that capital allocation for me is the important part. A lot of it right now I think is more towards the core and getting that core right and developing that muscle. But we are gonna have to test things out on the innovative end of the scale. 

Bridget: It's another place though, where I think the law firm business model is in a bit of a, in a bit of conflict with the R and D that I think everybody needs to be doing because, you know, a lot of the folks that are running a firm at a certain point are close enough to retirement that thinking about putting, you know, capital towards R and D, which is exactly what everybody has to do right now. Is not necessarily aligned with what they had planned for the next five or 10 years. So I do think leadership comes into play at this point. I really think law firms with bold leaders are gonna be able to differentiate themselves in the next few years. 

Jim: And I do think the model, I mean you, KPMG just got there.

Bridget: Yep. In Arizona. 

Jim: Arizona, yep. You know, private equity is, you know. I think coming from private equity, I know I'm biased, but private equity is going to happen. They got into the accounting field, they've gotten into other professional service firms.

Bridget: I have had two calls from private equity firms in the last two weeks about my business.

Jim: It's only a matter of time. Yeah, and the investment. If you look at say, A-K-P-M-G or a Deloitte, or the investment that they've already made in the infrastructure to automate offshore, whether that's Poland, the Philippines, India. The big law firms haven't done that yet. So there, there's this, there's gonna be a catching up that has to happen in big law, and I think that's gonna, that's really what's gonna drive that private equity investment.

Darth: I think the cost of doing nothing means that your phone may stop ringing. If you look at other disruptive technologies, Rideshare, in 2014, the taxi cab industry had the ability or the opportunity to adopt the technology early on, but they refused. And over a four year time span from 2014 to 2018, the value of a New York City taxi cab medallion, I think went from like a million dollars down to $130,000 because Rideshare increased exponentially and displaced them, and now they're using the very same technology. So I would rather be on the front of that wave and adopting the technology and keeping up than on the back of that wave. 

Jen: And I would just underscore what Bridget said about leadership is we get to talk to lots of different firms and every firm is worried that they don't have a Harvey license or a co-counsel license or the license of the day. And I would say the thing that separates the firms that I think have the right idea, directionally from the ones that don't, is the leadership and the messaging that they're sending. And you can craft all sorts of safe activities to educate your entire workforce using frontier models with anonymized hypotheticals to get a sense of the capabilities because the cost of technology always comes down, and this technology is already sort of remarkably accessible in its current most powerful form. 

Sam: Wonderful. I think for time, we're gonna stop it there, but thank you so much. We appreciate you guys coming. Thank you.

Charlie: You can follow the Passle CMO Series podcast on your preferred podcast platform. Thanks for listening, and we'll see you next time.