Robyn:

Hi everyone and welcome to “LISI’s News + Views + To-Do’s” where we talk with legal industry professionals about what’s going on in their world, how they see our industry evolving and changing, and what their advice is for our audience. Today I am so beyond thrilled to have with me, Patrick Fuller, who is Vice President and General Manager at ALM intelligence. Patrick is, before I actually introduce him I’m going to say, Patrick is my favorite person for two reasons. One, we are both huge data nerds and get very nerdy about numbers, which is kind of fun. And two, Patrick is a huge advocate of Women Supporting Women. When I’ve been doing my whole shtick on LinkedIn about #FollowFriday and Women Supporting Women, Patrick is my number one cheerleader and always really passionate about what I’m doing there. So I owe him a debt of gratitude. So Patrick, thank you so much for being on with me today.

Patrick:

It’s an absolute pleasure and thank you very much for having me and I appreciate, as you and I discussed, I appreciate the work that you are doing to bring awareness around those issues because we’re far from done with that.

Robyn:

I know. We could probably do an entire episode like an hour and a half just about that one topic, but we’ll save that for another time.

Patrick:

Okay.

Robyn:

So I’m going to ask you my first question, which I mentioned to you before we started recording. I just learned that apparently I say this in a funny way, but my first question is, what’s news with you? What’s going on in your world?

Patrick:

Well and I told you I would answer it like I was from Wisconsin. Like the way that we do this with those guys up there all the time. No, so there’s a lot going on actually. This last year has been really interesting because when you stop traveling, you find more time to do more stuff. And so a couple of things inside ALM, which is where I work for, we made a decision that was rather difficult last June to take a business that was called Consulting Intelligence. And it was made up of very smart analysts, a lot of whom had backgrounds in the management consulting industry who would do a lot of work around market sizing, and evaluations, and ratings using different qualitative and quantitative models of various service offerings from the consultancies and advisory companies. We made the decision as about a 50-year-old company to change the direction of that business. And so we discontinued that organization, which was called Consulting Intelligence, and we launched something called Pacesetter Research. And the reason that we did that was, we started looking at the market and seeing that there was a lot of convergence of professional services providers. So not just that the Big 4 was coming into legal or that we’re seeing more of the management consulting, the McKinsey’s and the BCG’s, and the Bathnes coming into legal departments as well. But the way that they were approaching, when you would look at discrete problems. Things such as cybersecurity or around strategic sourcing or M&A. You know we had these providers that were coming at the same solution in different ways. And we wanted to look at how those providers were bringing some of that innovation to market. And more importantly than what it meant for each of the markets — what did the market look like? And what is the market map for these services? And Tomek Jankowski and Liz DeVito helped launched this. Two analysts, Liz, longtime background with Mercer and other organizations and workforce management. Tomek in the financial advisory space. Liz helped us launch it. She stayed on an extra year before she retired and she earned, worked her tail off in a career, and earned the retirement. We are lucky and fortunate to bring in Kristie Robertson who was late of Manzama and has just got an incredible background. And so Kristie has now taken off on that. And that’s really building the feedback that we’re getting, especially from the Big 4. And the advisory side is great. It’s not a pay-for-play. We do a lot of qualitative research through this and we do a lot of interviews. And the analysts are very, very good at breaking down the market and looking at who are the pacesetters, who are the market leaders. And we have an advisory council that we’ve established, from everything from GCs to consultants globally. And people on the financial advisory side that are giving us advice who we should talk to and why and who are really driving innovation in the markets. So that’s been a big change.

And then the other is that we launched Law.com Pro inside ALM. And that’s great. I get to work with somebody I know you know, Gina Passarella. And I get to work very closely with Gina who is incredible. And we do a lot of work marrying together the editorial side and the data side that is this offering that includes the intelligence products like Legal Compass and Law.com. And then there’s a lot of stuff that’s behind the scenes or exclusive features and data sets that go into Law.com Pro. And that’s been a real huge undertaking for us.

And then probably the two other things that would fall into the news category. And since you mentioned news, with plural, I had to go with more than one. But the other two things I think really away from ALM, one is the Cairo project which I know you’re familiar with as well too. And that’s Jen Bankston and Heather McCollough, Jill Hughes to put this together. And that’s an incredible platform. And we’re involved with it in the pace that our research side a little bit too by helping them with some surveys. And it’s really just, it’s a mission to create effective women leaders by applying really humanitarian values to the workplace and teaching the adoption of really complementary disciplines in empowering strong female leaders. And that’s something I think is necessary inside of organizations and we have to continue shining a light on it.

Then the other is the Changing Legal Organization that I was lucky enough to be a board member of. And that is really geared towards taking on some of the long-held challenges and barriers to change within legal. Things like the billable hour and looking for ways to move beyond that and change the market for the better. And there’s a strong diversity component into that as well. So it’s been a busy year, both internal to the organization and external as well.

Robyn:

You have so much news, you have so much going on. And actually, I’m going to go back up to Pacesetter and some of the ALM stuff for a second because I read an interesting article today, just talking about on the marketing side of things. 10 years ago, big data was supposed to revolutionize the way that marketing organizations handled their campaigns, handled their initiatives and strategies. And that, here we are 10 years later, and there are a small percentage of organizations that have really matured in their data collection and analysis and implementation of results and findings. And I’m curious if in the research that you’re doing with Pacesetter and across ALM, are you finding that when you’re finding these leaders in the market, is it really a small percentage and there’s still a lot of firms and organizations that are struggling to kind of catch up or what is that maturity spectrum in terms of some of the best practices you’re finding?

Patrick:

I think it’s a really interesting question. I think it’s driven a lot by the industry and the adoption within a legal is always a little bit late to the party in that despite being awash in data in through there, the marketing, the metrics, and things, along those lines and the data that’s associated for marketing purposes, that’s been a huge component of, for example, adage and their CMO database for many years now. And there is a lot more information on that, but within legal, because it’s such a finite audience, and you’re appealing to a different audience, I think it’s were little bit slower in some respects to really embrace a lot of that.

The other part that’s really interesting is how, for us, the data is more driven around how buyers use it and what they’re looking at. How they will use data to evaluate providers, and how law firms are utilizing it for pricing or to assess what markets they should go into or they’re evaluating laterals. So things like this. I think the thing that’s really interesting in the last 10 years is, that I’ve seen is that there’s a greater acceptance by buyers of legal services to utilize a lot of data that they have had now for about 10 to 15 years. Where there’s a significant history where they know how long matters are going to last. They know how much they should cost. They know how they should be staffed and what’s optimal. But a lot of that was all driven by fee engagements that were billable hour related towards not always on those efficient but they have a baseline for what everything should be. And I think it makes the challenges of marketers then a little bit more difficult because now, you have an audience that has predetermined expectations around what should be, how it should be priced, how it should be sold, what the value of it is. And I think that’s what made this last year really unique in many ways is that a lot of the legal needs shifted from where it was typically run the company work. As we refer to it, there was a lot of things that were brought on by the pandemic that we got into an area where it was not things that we had is a lot of historical data on. And organizations we’re kind of back to where they were 10, 15 years ago. Where they were working without a lot of data when they were procuring services. And so I think, if anything this last year drove home the need for greater adoption and usage of data in everything that we do.

Robyn:

Yeah, I mean, you know me, as I said at the top of this, I’m a huge data nerd. So the more that we can utilize and leverage that data, it’s kind of like what we were saying before, if everybody has that education and that understanding and is able to use it, how much more advanced could we be? Obviously, that conversation was in a different context, but it applies here. How much more advanced, how much further along could we be in this process, and how much more could we serve our clients on in every sense of that sentence.

Patrick:

Yeah. And I think this will be something we’ll probably hit on a little bit later too. But I think what it will do is it makes the internal sales process, I think a little bit easier, right? Because the one thing that, data became my best friend years ago because it enabled me to sell more effectively. It became something that was, I hate to say like a differentiator or a secret weapon, but it was. What made that difficult is that I was coming from a perspective where I had to be really good at presenting the data in a way that everybody else could consume it to understand it. Now, if we start utilizing the data more effectively and more people start buying into it, and this is what we’re seeing with a lot of startups. For example, Away From Legal. Or we’re seeing it within law firms with younger attorneys who are coming up and they’re used to making more data-driven decisions. Is that now, you don’t have to sell as different, because they’re looking at the same information and drawing similar conclusions to it. And so, creating that shift in strategy or facilitating change becomes a little bit easier when you’ve got an audience that has already prepped a little bit, or is bought into the notion of utilizing the data to make decisions. And so I think that’s where we’ll see the greatest impact in years to come. Is that as this continues to gain acceptance, it’s going to be a little bit easier for people who are driving really smart strategic change inside organizations to sell that those initiatives internally. Whereas before, you really had to figure out interesting ways of presenting data differently to different people because of how they process information and how they buy into things. And that’s what made it difficult. Even I can look at spreadsheets and we can probably see shapes that pop out of it. Whereas sometimes when we’re presenting to a certain audience, we’ve got to create very explicit visuals in order for them, for that data to really, the point that we want to make really to hit home with it. And I think that is in part because there’s only one side that has access or is bought into the use of that data. That I think is what’s slowly changing right now.

Robyn:

But, you’re right that we’re going to touch on that ’cause that sort of leads me straight into my next question. In terms of how you see the industry evolving and sort of, what is the impact of those changes? Obviously, data is going to have a huge impact in people’s fluency with data and understanding of it. But also, more on that to the degree, you have more thoughts on that, but also what should be changing in the legal industry and is probably going to take longer than we’d like?

Patrick:

Well, the last question is the easiest one, and that’s probably going to be compensation structure because I think you would probably agree with this given you have experiences in-house as well too. I mean, to be very clear, be very fair, it’s not just related to lawyers. I mean, in any organization, if you have salespeople that you put a sales contract or a sales compensation plan out there, you are incentivizing very specific behavior. Variable compensation drives very explicit behavior. I used to, when I would work with legal departments and we would go in sometimes and we’d have conversations around, “Okay, are you looking at, you want lower rates or do you want lower total matter cost?” And you would hear, “Well, no. We’re just interested in lowering the rate.” You kind of got a pretty good idea at that point how they were being compensated from a variable comp perspective, right? It’s like, “Hey, you lower the rates a certain percentage. This is part of your variable comp.” I think for legal, the biggest thing that has to change in order for other things to change is that the compensation structure has to change. It’s very difficult for us to say, “Well, we want to move to a fixed fee billing and we want to be more efficient.” But yet our compensation system is really driven more towards utilization and hitting billable hour targets. “Well, we want to bring automation and we want to make better use of innovation and technology.” I was like, “Well, that’s great. But then that has to align with the fee arrangement which then has to align with the compensation structure.” And so I think a lot of that comes down to compensation and we’ve seen it in recent years as Tim Corporen’s really good at this, with a lot of his work on compensation structure and benefits and pension or really getting into the post-retirement aspect. And that is when you’re going through succession. Putting together the types and incentives that will that will enable smooth transition of clients that are not impacting the revenue and the profitability of that client. And so I think a lot of it comes back to the behaviors that we’re looking to incentivize and how we go about doing it. So I think that’s the thing that I think is probably needs to change. It’s probably going to take the longest to change.

As far as the industry, and you’re probably very familiar with this, but I’m a huge believer in Porter’s five forces. I’m a huge believer in Porter’s five forces. And I’ve written a lot about this. I’ve spoken a lot about it. I think it’s really interesting ’cause legal has dealt with a lot of this. If you think about it sort of on an access, and for those that aren’t familiar with with Porter’s five forces, Michael Porter is a professor at Harvard who in 1979 wrote a book called “Competitive Strategy.” And within that book, he outlined the five market forces that shape and influence strategy. And basically, what it was was you have an industry rivalry, the things go around. And then if you think about sort of like a compass where you have East and West on either access, you would have the bargaining power of suppliers and the bargaining power of buyers. And then on the North and South, you would have the threat of new entrance. And then the bottom would be the threat of substitute products or services. And legal has always dealt with the industry rivalry. We’ve always dealt with that, right? Firms compete with firms. Companies compete with companies. The vendors compete with each other. The West, the Lexus, the Bloomberg, right? That stuff’s always been there. We’ve always had new entrance. We’ve had spin-off firms. We’ve had new mergers. We’ve had two firms merged, and there’s a couple of groups that are conflicted out, they go out, they formed their own group. We’re seeing a lot more of that now, actually with spin-offs from larger firms that are putting together newer firms that are attacking the market in different ways. They’re doing comp different. They’re incentivizing different. So we’ve always dealt with that. The one thing that legal has never really dealt with that others have, and we were talking before we started filming a little bit about blockbuster, and that’s always a great example with this is that threat is substitute products or services. And so when you see, whether it’s the ASPs that are coming in or the Big 4, and their use of efficiency driving automation and compensation driven more by, through efficiency than utilization. Or I think one of the big things we’ll end up seeing is pure automations. So things like legalmation, which is really doing a lot of work to automate, in their case, the initial response to, they started first with single-plaintiff employment filings and they would automate that response. And you’re starting to see legal departments say, “Okay, you know what, it’s actually, if you prefer us to do this, then utilize outside counsel for this.” That’s the sort of stuff that I think really is, it should be a little bit more worrisome. I don’t think it’s ever going to take away the bet in business. It’s probably not going to take away the bet the bonus work anytime soon. But it’s some of that run the company work that a lot of firms rely on in part to for the younger lawyers in part to just sort of, if you think of baseball analogy, it’s the singles that keep you going station to station. That sort of work that separates decent years from very good years. And some years just because of demand and keeping in everybody’s hitting their targets. That’s the thing I think is really, probably going to be the biggest change. And we’ve seen it a little bit more in the UK. We’ve seen it in Australia. I think that’s, it forces firms to compete a little bit differently as well too. And so that probably is the one with within quarter that I think will be the biggest driver of change here. Will be that threat of substitute products and services that becomes more real as time goes on.

Robyn:

Yeah, it’s an interesting point because I have been saying, so I’ve been in legal for, oh, 15 years. And so I lived through the financial crisis and various other sort of things that have been happening over the past 10 years. And my biggest takeaway, and I was much more junior in my career during the financial crisis. But my biggest takeaway from that was just the evolution of exactly what you’re saying. Those sort of, I’m going to call it routine and that’s probably not the right word, but routine keep the doors open and keep them company working. That type of work is going into these in-house departments that are growing much larger because it’s more cost-effective for these corporations to have their own legal team in-house. They don’t need 47 different providers across a panel. And there are so many forces here. I talked about this with Melissa Prince who’s the Chief Client Value and Innovation Officer at Ballard. I talked about it with her all the time. How are we able to exactly, to your point, how are firms able to create a structure and create a plan for how to service their clients in an efficient and cost-effective way, but also provide that client value and that client service? And I always sort of joke, I listened to Melissa and to a certain degree, I listened to you talk and I get what you’re saying, but it sort of as these large concepts that are almost too hard to wrap your hands around, because these challenges feel insurmountable to me. How do you take a behemoth of an industry like legal and completely change the way people feel about doing business?

Patrick:

Yeah. It’s not sometimes about the, and Melissa’s brilliant. I love listening to her speak. And she’s been at the forefront of a lot of this. I remember seeing her speak for the first time years ago at the P3 conferences and when she was talking about a lot of this. I think one of the things that you will see is really with repetitive knowledge tasks. That’s kind of the low-hanging fruit. And there’s a lot of, there’s not a lot, but there’s aspects of law that are very rules-based. And so it sets up very well for automation. And it also creates an atmosphere where you don’t necessarily need perfect, you need good. And so we would see that, see if you think about things such as regulatory, certain regulatory or compliance aspects, or big one that you will see is the do’s and don’ts with country rules for investment bankers and things like this where you don’t necessarily need global law firms doing that work or a 50 state survey done by ABC law firm. You can go to an ASP and you can have those, the underlying legal opinions in that work done at a fraction of the cost. And then you build a self-service automation tool that allows you to scale the expertise of your lawyers. And at the same time, ask questions in a way, so it’s a self-serve application that pushes this word back into the business. But you’re scaling the legal expertise, and I think that’s something that’s really the low-hanging fruit for a lot of that. And there’s a lot of organizations that if you think about retailers, for example, just in the States and doing a 50 states surveys. So grocery stores or big box retailers that are dealing with the various liquor laws. That’s a great example because where I lived in the Southwest, where I lived in Oklahoma so it gets us a central plains. But if you get down into Texas there in Arkansas, there are still places that have dry counties or parts of municipalities that are dry. And so your liquor laws of Europe, a large big box retailer, they’re going to, the compliance that you have to have is going to be different. From municipality to state, to city and county, et cetera. So having that underlying database where you’re not constantly having to go back to people inside a legal department or compliance office and get approval, and get sign off, and everything else. It makes it easier to do at once and spread it out to many. It’s no different than when we’re doing updates to operating systems. We don’t build a computer to computer and rewrite the code on each computer. We do it once and we blast it out to everybody. That’s how we achieve economies of scale. And so I think that’s the sort of stuff that will be low-hanging fruit in many ways. We’ve seen it already with e-discovery. We’ll see it more with due diligence in M&A deals. And I think that there’s, we’re seeing it now with things like traffic tickets and do not pay. And I think it’s going to be a huge piece in the access to justice puzzle as well. ‘Cause it’s going to create accessibility to some form of scaled expertise for people that ordinarily, they have a hard time getting in to see lawyers or affording lawyers. So I think that there’s a lot of upside in through this. But I think for a lot of firms, there are firms that are attacking it. I think appropriately, they’re looking at ways of building these tools. And they’re looking at ways of not practicing law differently, but how they deliver legal services to their buyers. And I think those are the firms that are likely going to be a little bit more ahead of the game as more of this takes off.

Robyn:

Yup. I completely agree with you. So my last question I like to ask everybody is, and it’s a really large question, which is, what is your advice for our audience? We have our audiences, legal marketers, lawyers, legal industry professionals, you know, any type. So if you could either for everybody, or sort of a subset of that group, what piece of advice would you like to share with our audience?

Patrick:

Well, I think, for me, I mean, you’re going to get a lot of advice around resiliency and curiosity. The number one thing I always look for when I bring people on is curiosity. I want people that are not afraid to go down those rabbit holes. Because I think that there’s a great act of discovery in through there. There’s a Proust quote somewhere that comes to mind about the real act of discovery I think is not in finding new lands, but in seeing with new eyes. And I probably butchered that six different ways to Sunday. I think the biggest skill is probably twofold. So I think one is the ability to sell. But it’s also understanding behavioral economics. I think that’s the one thing that is been probably most eye-opening to me in the last 10 years I’ve really gotten into is getting into behavioral economics and seeing things a little bit differently through a different lens when applying psychology to everyday situations. I think that the number one skill period is the ability to sell internally. I don’t care if you’re in sales or you’re not sales. If you’re selling ideas, if you’re trying to change decisions, especially cause we live in a world, and most people that are watching this are going to work in legal where everything is based on precedent, right? Everything is based on precedent. So we’ve all heard that phrase repeatedly, which is, “Well, we’ve done that before and it didn’t work.” And so I think that the ability to overcome that is critical for anybody. So what data? What information? What examples can you use? How do people process information? This is really where a lot of the psychology comes in and the behavioral economics component comes in. Because reality of it is nothing really starts until something is sold, right? So if you think about a lot of the work in legal, the contracts, things along those lines, even disputes around things that deals in some point with a sale. The other part too, I think, and I bring this up a lot, but, picked it up up years and years ago and kind of modified it over time, but people buy with emotion and justify with logic, right? So when John Carter, the famous Harvard professor on change, always talks about, you have to connect with both the head and the heart. And I think that he’s absolutely correct on that. A lot of us buy with emotion and we self rationalize. But the reality of it is that we also have to then deal with logic. And so I think that that’s where, and look, we do this intuitively selling legal services. So if you think about how a lot of buyers buy, it’s like, “Well, do I like this person?” and then eventually, “Do we think we can trust this person?” But then it’s like, “Okay. so what’s the logical justification?” “Well, here’s our experience and look at all this work that we’ve done handling similar matters.” And that becomes a logical justification. And so I think for a lot of people selling internally, that’s probably the biggest thing I would tell them is understand that people buy with emotion and justify with logic. Especially people when everything’s based on precedent, you’ve got to appeal at some point to that logical component of it. So that’s where data, that’s where information, that’s where research really becomes front and center and through that. And then the other part of it too is understand the motivating factor. I would urge everybody to go read the book “Nudge” by Richard Thaler. I think it’s brilliant and I think it hits on our professions so eloquently and so directly. And we talked about this offline too, but even the notion that for many of the people that we deal with, but the pleasure from gaining something is not nearly as great to them as the fear and the pain of losing something, right? So we have too many people that are really motivated by fear, but they’re not motivated enough by the gain of something. And we deal with that all the time. We go to a lawyer and say, “Hey, you can change your, if you change this, this and this about your behavior, you can make 10% more.” And it’s, you’re talking to somebody that’s already making $1.5 to $2 million, they’re looking at it and saying, “Well, you know what, the work I have to do to change those two things is not worth the minimal gain that I’m going to get off of this. It’s not going to change my life one way or the other.” But if they lose that client, that’s 60% of their book of business. That is a massive motivating change. So understanding how people make decisions and what drives those decisions I think is important. And the last thing I would say to you is invest a lot in courses on how to read people. I think one of the things that’s really going to change, you know, we spent so many years and we’ve all done this before. You’ve done it, I’ve done it. We would get in conference rooms and immediately you’re sizing up the room. And you’re looking at people and your understanding, “Okay, who’s looking at who when I ask certain questions?” And based on their body language or based on what they’re wearing, can we get clues as to what’s important to them? It’s a lot harder with Zoom, especially when we’re all looking at “The Brady Bunch” screen. And you can’t really tell who’s looking at who and who they’re defaulting to. And if they’re looking over here, is it because they’re looking at something else or they’re bored? Or do they have monitors on either side, and they’re just being distracted right now. So it changes how you read the room. So now it becomes more auditory-based as opposed to visual-based. And so I think those are the things that I would say moving forward. That’s what I want folks I work with really getting into a lot as well is learning how to adapt to the changing market. Always accounting for variable change and making sure that they’re prepared to sort of be ahead of where things are going next. So understanding what drives decision-making, how to sell internally, and really understanding how to read people, now digitally, as opposed to in person.

Yeah, I- That’s a lot. Sorry.

Robyn:

And it’s a lot. I was just thinking, that is a lot of advice. But it’s really sage advice. I mean, you’re going to think I’m full of it, but literally, this morning, was thinking how frustrated I am by digital communication vehicles like Zoom. Because I’m really good at reading body language. I can get into I’m, yes, I’m sizing up a room, but I can also tell when an idea that somebody has made somebody uncomfortable but they’re not going to necessarily say that out loud. So figuring out how to give them a platform to voice their opinion or disagree or whatever. I’m really, really good at that. I suck at it on Zoom. And it’s really hard and I truly, just this morning was thinking how can I leverage the thing that I’m good at and figure out how to do this digitally, ’cause I need to brush up on that skill. So I’m going to take that advice to heart and I’m absolutely going to put it to practice. And I know that there’s so much valuable information in this interview. So I know our viewing audience is going to get a lot out of this conversation.

Patrick:

Well, it’s been a pleasure. The one final thing I guess I’ll end with too is the one benefit that we’ve got especially as we advance in careers and things like that is the diversity of opinion from everybody. And the different experiences that everybody brings to the table. I found that to be probably one of the most rewarding things in working with different people from different backgrounds is that the way that they look at, they’re seeing a lot of problems for the first time with new eyes where we’ve seen it repeatedly over the years. And maybe we become a little bit jaded about it. I think that’s one of the biggest things is getting new perspectives on things and forcing you to look at information and do things a little bit differently. I’m a huge proponent of getting consensus and getting everybody’s opinion on something. Because the one thing I’ve learned over my career is there’s a lot that I don’t know. And presuming to know does nobody any good. But learning it and getting those diversed opinions, and getting different perspectives from people and their take on it, there’s a ton of value into that. And it probably facilitates more growth than anything else right now because it opens your eyes to new possibilities.

Robyn:

Yup. I couldn’t agree more. That’s a perfect way to end this conversation. Thank you so much. I really appreciate it. And I appreciate your time. I know how busy you are so thank you so much for being on today.

Patrick:

Are you kidding me? This has been fun. So I appreciate it very much. Thank you very much for having me.

Robyn:

Absolutely. Thanks so much.