#30 - How Salesforce Does Legal Ops with Léo Murgel, SVP Legal at Salesforce

Hi everyone and welcome to another episode of Pearls on Gloves Off. Today we have a very special guest with us, my old friend Leo Mergel, who is the Senior Vice President and COO of Legal and Corporate affairs at Salesforce. In this role, Leo leads the way by leveraging multiple strategies in operational excellence to Support the over 500 strong organization with best practices while generating significant cost savings for his company. Like so many of us, Leo fell into the world of legal operations when he was looking for a new operations role within the Salesforce organization. At the time, Leo was vice president for IT mergers and acquisitions where he was responsible for completing IT integrations for over 20 Salesforce acquisitions. This gave him great visibility across the organization and, and great cross functional relationships. Now this was a fantastic conversations, one of my favorites. And you can't tell from listening to the podcast, but we are recording from one of the top floors of the Salesforce tower in San Francisco, the tallest building in the city. And if you ever have a chance to go up there, definitely do it. The views are amazing. Salesforce, of course, as we all know, is one of the biggest and most innovative software companies in the world. They practically invented modern business software and they are absolutely leading the way when it comes to modern legal operations. With Leo, we are really lucky today to get a look behind the curtain to see how they're thinking about it. And as it happens, they recently brought on Ironclad to handle all their contracts. We talk a little bit about that, but really Leo's journey into the legal ops profession, the role of technology and digital transformation and, and the need for collaboration between different ops teams. We'll also touch on the role of AI in the legal industry. And as you can imagine, Salesforce has some thoughts on that too. All right, guys, this is a good one. Let's dive right in.

Let's start with your title. Your title is Senior Vice President. And as someone who has been advocating for the profession and for Legal Ops to move up in its scope and its stature within organizations, especially large Fortune 100 type organizations, it's always great to see it's a model for all of of us. That's a pretty big deal. And you are also someone who is not a lawyer who came into the legal ops profession.

Yeah, Salesforce has been quite unique and I give a lot of credit to Amy Weaver, who is our current cfo. Amy was the head of Legal, or what this group that we call Legal and Corporate affairs, which is Legal Compliance and Government affairs. And this was four or five years ago and she really understood that as our team we needed to transform. And she initiated a program called Moonshot, which was a program for folks to just collaborate and provide ideas on how we were going to transform, how we support the company. And a fast growing company would proportionally more efficiently, more effectively over time. I think her vision was that you wouldn't have an executive that was in charge of that journey. They're really enabling the department to do it. The department had a couple starts over time to do the same thing and it never quite took hold. And sort of her to some degree change of strategy was to really. Let's just hire somebody who's their job.

Yeah.

And really focus on it.

Your background. So you were already at Salesforce and they hired you from within. And from what you're telling me now, the role itself was already scoped out to be a senior level executive role leading strategic thought and execution. And in so many of the conversations I have with Clos and GCS trying to hire for this, they're like, that's what I want. But I don't know where to get this person. And I often say look within your company. Right. Because the skill set is transferable to other business roles, business operations roles. And it really helps to know the ins and outs, the workings of your organization already, how to get things done, what the culture is like. Is that kind of how you fell into this?

Yeah, that was very much how I fell into it. Actually. I give you and the Clock team a lot of credit for helping me learn the other part of the job that didn't have exposure in terms of the legal ops strategy. In my own personal journey. I started my career here at Salesforce in the IT department actually on the technology side, leading a transformation portfolio from that side. Then I went to M and A and then spent three or four years doing mergers and acquisitions for Salesforce, which really gave me a broader exposure to the rest of the business. And what I always love to do is digital transformation really help people do their job better. And one of the trends that I noticed while I was in M and A is that more and more increasingly that role that used to be back in the days in IT when IT really sort of owned all the compute resources was really being transferred to the head of operations of the various departments. When we did integrations with companies would acquire for often the folks that I would interface with in terms of understanding their processes, their opportunities, their tooling was head of ops from various departments, sales ops, marketing ops, et cetera. So I really started gaining appreciation for this kind of Role and really sort of crystallized in my mind that my next step after M and A was hopefully be head of Ops in some department at Salesforce. And I start looking around. And then it was around the same time that from your previous question, that Amy was articulating this need to transform the legal corporate affairs team and had posted this role. So as I tell people, I came into the Legal Ops from the ops side of the Legal Ops.

Yeah, exactly. Yeah.

And then. And Legal happened to be the team. And I was really incredibly pleasant and somewhat surprised, but incredibly pleasant to see that there was a whole ecosystem of Legal Ops already established or being established. And as I mentioned in the beginning, I really took advantage of the clock wheel and the framework and the learning community to really help accelerate my journey, specifically into this space. But one of the things, I do agree with you, one of the things that has helped us accelerate our transformation has been sort of the connections into the rest of the company and how the company work and how to. How do you activate the various components of. Of the system to propel the transformation of our team?

Yeah. In particular, in large companies, I think that's really important. And a question I got asked just the other day about my own experience. I'm curious to hear. Your experience is when you're in a large organization and there's multiple ops teams, particularly the GNA ops teams like finance ops, marketing ops, do you work with those other ops teams? Because they have a lot of the same challenges. But, you know, many times we often work in our own silos.

Yeah. Funny you mentioned that. I was just talking at a conference fairly recently. Ended up talking exactly about that. Oftentimes when I talk to folks in the Legal Ops community, there's a lot of focus, and maybe appropriately so, in the relationship between Legal Ops and the legal teams within the department, which I think is one dimension of it.

Yeah.

What I was advocating for with this group is that really, I think Legal Ops is we are at our best when we're really reaching out beyond our legal clients, so to speak, and really interacting with our clients.

That's right.

Through those fellow ops teams and really understanding from their lens and what does good look like in terms of supporting sales? How do we weave ourselves into those sales processes, how do we align ourselves to where they're going, and how do we build sort of cohesive strategies. So I think Legal Ops is an opportunity to be much more than an enabler within the legal department and really leading a strategy in conjunction with that ecosystem across the company. So connecting to Our clients through their ops teams and building cohesive strategies where legal has an element of the strategy.

Right. And that is exactly sort of what I call like the maturity of legal operations into strategic operations, where the client group that you start looking at is not just your lawyers, but it's going beyond the walls of the legal department to think about how can you serve your internal clients within Salesforce and then even beyond that, how do you start to then serve your company's leadership team in really becoming more strategic? I had a conversation with, actually several conversations on this podcast now, really, about how do you become more strategic in your legal ops role? I know that you are very strategic in your role. Was that a. Did it take time to get there? Did you have to lay the foundation for that? Or is that something you kind of walked in with from the beginning?

I think the short answer is it took time. Yeah. And I think there's several dimensions to it. First of all, you need to gain the trust of your most direct customers, which are the legal teams. Right. So you're bringing in new strategies, you're bringing new ways of working. Ultimately you need to gain their trust and their buy in and really ownership a lot of those legal transformation strategies. As any other transformation strategy, it's always best when it's perceived to come from within.

Yeah.

Right. So although we are enabling a lot of those strategies for the various practices within our, our legal team, for example, it's really best when that practice lead really sees that transformation strategy as their own.

Yep.

And legal ops is enabling. So one phase of that maturing is really gain that, that trust, that partnership with ahead of the various practices so we can cultivate together and build that transformation roadmap with them. The other component to it too, of the maturity is that as the practice matures within legal, those other ops teams that you spoke about before start really seeing recognizing in you a resource for them and them as a resource for you and you start building those bridges. Yeah. For the longest time we didn't have an effective legal ops team, so we just didn't have a voice on the table.

So.

And as you become more recognized as an ops team in general. Right. So now there's, there's a forum, there is cross. At the end of the day, legal is a support function like many others. So so much of what we do is deeply embedded in the processes and objectives of our customers. Right. So we're at our best when we're supporting our product team, for example, when we're deeply embedded in those product development processes. And very intuitively weaved into their operations and how they we flow into that and that workspace. So those were probably the two stages. And lastly I think from that strategy curve component to it. Another thing to we've been working through and still very much work in progress is the articulation of that a multi year strategy.

Okay.

Today those again for those other ops teams, the more mature ones are building within their own function multi year strategies. And about two to three years ago we started doing that for legal as well. So it's a fascinating process. It's something that we do once a year. Typically in the back half of the year we consume the long range strategies from our product team. So really spend a lot of time studying where's our product going over the next three to five years from a capability perspective, market perspective, et cetera. We spent a lot of time understanding our distribution strategy over the coming three to five years. What are the markets, what are the vertical, what are the how we're positioning the product in the three to five years to go. We also then take a step that one of the fascinating things about our space is that even if somehow a company was completely static which is not the case of Salesforce, the world is changing around us.

That's right.

So the regulatory landscape is changing, the political situation is changing around us. And even somehow any company was completely static illegal department still wouldn't need to react to that changing geopolitical regulatory landscape. In our case both of them are changing. And I would argue that probably is the case for the vast majority of.

And the tech landscape.

Right. So you need to bring in those inputs together and really then try to facilitate a conversation. That's where that initial trust comes into play. The connection into other teams come into play to really align as a leadership team as to what are those core capabilities and think about capabilities as people process or tools that as a legal department we need to have developed three to five years from now.

That's right.

To succeed in that future state. And that's really ended up anchoring a lot of our roadmap work and initiatives that we built together a couple of years ago. When we did that we recognized that one of the things that we needed to do in that long range plan is have a different ceiling. And then so it took a couple of years to get that those things up and running. But we're excited to to be on that journey as so a little example of how those things come together.

Yeah. And is digital transformation still and or one of the biggest kind of focuses for legal right now?

Yeah, that's a great question. So we look at the back end of that strategic roadmap that we built. We tend to bucket our initiatives in three segments of it. Digital transformation for sure is the first one. There's a lot of work and I think on that space there's really three areas of focus and the third one being sort of somewhat complimentary. But the first one being it's matter management, case management in our case, implementation of service cloud really moving structuring all the work coming into legal into a matter so they can, so it can flow to the right places. You can have the write out attributes, you can do the automation. So forth on the contracting management obviously having a top tier CLM solution to complement that work. To degree that a lot of our work is obviously in contracts and in sort of underpinning both of those strategies, really creating the foundation for how predictive AI already supports those processes today and how increasingly generative AI will play a role in both of those processes in the matter management obviously in the contract as well. So roughly that's what we encompass in that digital transformation and we have a big portfolio in that space. Second to that we have a portfolio what we call right sourcing. One of the things that case management or matter management allows when you capture the work, the work is more portable and you can move the work around depending on the type of the work, the phase of the work. So increasingly we've been changing the makeup of our legal department to be a more tiered organization. We have a legal global shared services team. This position around the world doing a lot of the high volume first tier triage of a lot of our intake requests internally and to end from end customers as well. We have an increasing layer of functional experts, but non attorneys within our teams that also doing a fair bit of the sort of second tier triage. And in each one of those tiers not only forming the work, responding to work, but also being able to resolve a greater, ever greater component of that work that used to come in and all go to attorneys at one point and really positioning our super talent attorney team to really focus on the more bespoke, more complex matters. I try to think about as like a really thick soup. And so increasingly we look at our internal talent through sort of that right sourcing lens and we extend the same thinking to our law firm partners as well.

Sure.

The end we are increasingly thinking through are the right not only have a set of preferred partners that we choose to have a long term and deeper relationship with but even within that, which ones are the firms that should take on some of the more effectively take on some of the lower profile matters. Yeah. Which one firms are best positioned to take on some of those mid profile matters which make up the bulk of it? And what are some of those firms? That it's really, it's a, it's a significant investment, but that you want to match your highest profile work to those highest profile firms.

Yeah. Amazing. So I want to just recap because what you've said here is so valuable and we get asked all the time, Mary, when you say Legal Ops need to be more strategic, what does that practically mean? What does it actually mean? What does it look like in practice? And what you've just said, Leo, is, look, we have to work really closely with our product team. We have to know where our company's going. We have to scan externally and know what external pressures are happening to our company. And then we have to think, well, what does legal need to look like in three to five years to be able to support and to enable all of that to happen? Looking at your tech roadmap and your digital transformation as well as constantly. Right. Sourcing that. That's it. That is what Strategic operations is to me in a nutshell. I mean, you've kind of summarized it right there.

Yeah, we've been excited with the transformation and we've been able to partner with a team and enable within our group or we grew in terms of headcount. And it's interesting on the positioning of Legal Ops as well as a function for sure, more organized and more established. But also I think as in terms of specific professionals, I feel like five years ago, which maybe in Legal Ops land feels like a billion years ago, there was really a greater desire by the industry to truly identify themselves as Legal Ops professionals at all levels. And I think to some degree, maybe through some of the right sourcing strategies as well, Legal Ops became more of a, in some degree, a portal, an entrance through which other professionals have come into the legal department to bring their own special skills and specific training to fulfill specific parts of the work structure. I often think about and use the analogy of how hospitals have evolved, which I think there's a lot of synergies between those two industries and parallelisms that can be established. If you look at a hospital today, it's a highly orchestrated set of different professionals. They're still working towards the same outcome as hospitals have always had health and wellbeing, but today that gets done through. Obviously, every hospital has doctors would be Kind of silly not to, but it also has a plethora of other professionals in the healthcare system.

Right.

That are specifically trained and well positioned to deliver specific components of the work in that health journey. And I think increasingly legal departments are journeying towards a world where that's more and more the case.

Yeah, I would agree with that. I want to go back to something you said about the transformation that's happening in your organization and recognizing over a two year period you said to try and figure out that the systems and tools that you currently have were not what you needed for the future. And CLM in particular, was that something that took a long time to decide that what we have is not going to work for us in the future and that we have to sort of do a rip and replace which is at your size of an organization, not a minor feat. So how did that thought kind of happen?

It was. It's something that we've actually been thinking about since I started in this role for about five years.

Yeah. So it takes a long time. Okay.

When I started, and I think like every system it's a lot of the success has to do with the implementation and how people use it.

Right.

And I think far too often technology A or brand B ends it up taking the blame for bad implementations of it. When I started we used a CLM system but weren't in reality we weren't really great users of it. Yeah. And there was a bit of an emptus of like we should look around and see what else is out there. And a lot of that building the trust and the partnership came through a lot of dialogue about what are the opportunities for us to be better users of whatever we have. And it turns out there was a lot. Yeah, we, our templates weren't granular enough. Too many of our templates were actually not in the clm. We didn't give the opportunity for our internal clients and sales in this case to self service enough. And we weren't capturing enough of the metadata or the commitments for those agreements in a way that was useful. And all of those were well within the capabilities of the tool we were using. And so we really focused those initial two or three years on. On becoming good users. And every time you think about moving on to a next technology and we see that too being, having the opportunity if you've come in with processes that are. Or templates that are not well formed or not thought through. It's a lot to put on. And adoption of a new technology if you really just having to significantly forward Step your processes and adopt a new technology. So part of the idea was like let's take this one technology we have to what do we think that its limits could be and mature our own processes in that journey. But we knew that there were areas that we were focusing on. We thought about the CLM roughly in sort of three.

Value streams and sort of speak. There was the agreement generation, the ability to empower our teams and our sales and distribution and alliances teams to generate the right agreement for the right situation. With the. They're the closest to the customer, they're closest to our partners. Let's give them as much tooling as possible in their hands to generate the right agreement for the right situation. And there was a lot we could do and there was a lot that we did in that space. We knew that on the obligations management, sort of the third component of that there's more that we could do in terms of empowering the rest of the organization to really execute to the commitments that we've made to our customers. Drive strategies, treat customers in a differentiated way based on the commitments we made and so forth. And we also knew that the middle value stream is the one that we felt like that we had to the greatest opportunity which is really then let's help the legal team negotiate this better. Let's be the tool the lawyers and contract negotiators really use to accelerate their processes. So we focused initially on the two flanks and but we knew that to get to where we needed to go in terms of enabling and assisting our contracts team to move more efficiently, more effectively through the negotiations, there were some capabilities that were missing and we needed to look elsewhere. And that's really what sort of prompted this, this journey. The capability is a method. Back to that example about two years ago that we identified in that multi year strategy is that we needed a more effective negotiation assistance.

So the experience for the lawyers. Right.

Experience for the lawyer, that redlining experience needed to be uplifted.

Yeah.

And that's what sort of launched us in this journey. But I feel we're just starting this next phase of our journey with Ironclad and we're excited to, to be embarking on that. I feel like we've learned and we've mature our own processes ahead of that and then now we're just ready to sort of launch into this new journey.

Yeah, we're really excited to be working with you. And I think it's a pretty ambitious plan. Right. A year Salesforce intends to put all types of contracts into Ironclad.

Is that we look at our portfolio. We have, as I mentioned to you, hundreds of templates in the current CLM system. And we're. We deeply believe that an effective CLM in conjunction with a CRM system is really empowering the organization to.

To both best serve our customers, best serve our partners, and take action on those commitments. At Salesforce, we have deployed, as I mentioned, CLM through all our contracts, almost all our contracts with the direct customer relationships over that period. We also extended that CLM implementation to all our partnership agreements, resellers, OEMs, ISV partners, et cetera. And then most recently, we extended that CLM relationship with all our suppliers. So we have a CRM instance where we manage all our suppliers relationships. And in that we deployed a CLM as well and then manage all our procurement agreements, both our governing agreements with our partners, as well as the transaction level, like sow components to it. So it's in all facets of our business. We're already users of a CLM solution. So for us, the task that you mentioned earlier, coming into a CLM solution, depending on where you are, could be a different journey.

Mm.

If you're just growing into it, it's easier. Step your way to it. For us, it is a tall bar because we've been ever better users of a CLM solution over the years and those solutions are deeply embedded throughout our sales motion, our partnership motion, and even our relationship with our supplier. So we're excited with that journey, but we recognize that we have a lot of work ahead.

Yeah. So I, I think you're also, you have a very unique perspective, being that your Salesforce and a lot of companies will embark on the CLM journey because they want to get their sell side contracts into a clm. Salesforce integration is what we hear a ton about from our customers or our prospects at Ironclad. Curious how you guys are thinking about it. I assume everybody in Salesforce works on Salesforce all day and they probably love it and so they want to stay within their system. Right. And how do you think about how that works with your clm? Do they work in the clm? Do they stay in Salesforce? Have you guys thought about the user experience from that perspective?

We thought a lot about it, but I'm quite convinced that we're going to learn a lot from your team and from our experience in the years to come. But I think how are we thinking about it at this point? Obviously, one of the reasons we chose Ironclad is it does have a native integration with the Salesforce platform and As I mentioned before, one of the key value propositions for us is that ability for the seller, for the person managing our relationship, our supplier management team, to really generate and maybe to some degree adjust that agreement because they're really best positioned, they're the closest to the customer, they know what the situation requires and to the degree that we have templates and preapproved clause that can let them generate that within the environment that they work, yes, I think we're all in a better position. So we hope that set of interactions are largely Salesforce centric because that's where those teams are doing their work and then we want to meet them where they are.

Yeah, no, I totally agree with you on that. And I beat my saying to death. The best change management is no change management. And when you're thinking about your stakeholders who are so important and they've got this system that they live and die in every day, to ask them to move somewhere else is friction and we try to eliminate the friction. So I agree. If they want to work there and they want to interact with contracts through Salesforce, they can do that. Right.

We're seeing the core users and this is a piece that we're going to learn along the way. Really the core users of the. Like those folks logging into Ironclad day in and day out really be our legal team.

Lawyers.

Yeah, the lawyers, the contract negotiators really managing those agreements, negotiating and getting that assistance from the generative AI and all that, a great experience in that space are extracting those commitments once those agreements are finalized and then those commitments that are pertinent to folks outside of legal. So SLA commitments, notification commitments, other those types of commitments are really to be executed by folks outside of legal proactively. Those we're going to again mirror them back into the Salesforce environment. So on both of those flanks, we're hoping that the agreement generation and the commitments management that's pertinent to folks outside of legal will continue to happen. In the Salesforce layer.

Yep.

And really we'll have our core users of the Ironclad directly in the tool be our legal team.

Yeah, I think every organization is different, but I like to think that's a best practice where you're. We have the single source of truth. Lawyers are living in it, legal team is living in it. But your internal stakeholders can kind of stay where they are and get the information they need out of the system that they're used to working in. And a lot of times that is going to be Salesforce.

Yeah. And I'm also excited and I know we spoke about this through the sales cycle, but increasingly since the acquisition of Slack, Slack is really becoming more and more engagement layer.

Interesting.

Yeah. Folks are spending a lot of time in sales in the Salesforce proper, but inquisitive people are spending more and more time in Slack to really run their business, collaborate, transform their organizations. And as Salesforce, we've been enabling more and more interoperability and actions that you can take within Slack that really are reflected back on your CRM system. So we expect that there's also that layer of some work gets done in Salesforce proper CRM. But some of those typically. And typically those smaller interactions create an opportunity. Maybe reviewing. Proving a contract or proving a clause.

Yep.

That those could flow all the way through that ultimate engagement layer. Because people do spend most of their time today in Slack.

Yeah. Yeah.

And we hear that from our customers as well.

Yeah, I spent a lot of time in Slack. Now I never worked at in Slack until I got to Ironcloud, but that is how we communicate.

Yeah. It's been, it's been transformative. It's obviously been transformed for us as to how we work internally, but obviously transformative since the acquisition to how we understand the technology landscape and built this vision that Mark has been putting forward of how you exactly meet the customers where they are and create this transformative, easy, intuitive work experience.

Yeah. I always talk about least friction. Make it easy, make people want to engage. I remember back in 20, I want to say 2019, you and I were conversing. I was still at Google, you were obviously here at Salesforce and you had mentioned kind of in passing that you have change management professionals on your team.

Do you still do.

Still do.

Actually grown that team a little bit and it's been a fascinating journey is actually one of the areas that I find. I think there's opportunities throughout the industry in that space because the one thing that's constant that we hear from our peers was often that change is hard. And you have a team of attorneys who are professionally trained risk managers. It turns out that's the deep end of change management. As a matter of fact, actually the lady that runs that team for us, I used the exact phrase when I was hiring her or trying to recruit her to join us. It's like she's an accomplished change management professional that joined our team. I was like, here's an opportunity to do what you do on the deepest end of the pool because we can change this group.

Changing with lawyers is like a PhD in change management.

But, but joking aside, it's incredibly important that in those journeys, right, we think about the human element.

That's right. That's right.

So that one of the things that I love about change management, and this is the actual third change management team that I lead, is that deep empathy, right. It's a deep empathy for the user, for their experience. And often when we were very process oriented. So you see this boxes that somewhat look linearly through an agreement generation process or negotiation process and so forth. But the reality is if you turn that 90 degrees and you really do put all of an empathy for. In that role, those people, how's their day?

Yeah.

What else they're doing? What else they're worried about, what else? How does this stack in their priorities? What's the degree of change for them? And really develop a very thoughtful program, help them go through that journey. And change management has often two, two halves of it, Right. The first is about the heart and then the mind. In any change curve, first you gotta bring people along on the journey so that in their heart they wanna be part of the change.

Be part of the change.

Yeah, they wanna be part of that journey. They see themselves as part of that journey.

Yeah.

And they want to be a contributing component to that. And as a matter of fact, actually that is the hardest part of it because once, once they're in and, and they, they want to see themselves as part of it, the rest of it is actually a little more straightforward because you, you just got to tell them what to do.

Right, Right, right.

That's when you teach the mind like, okay, now I'm in. Tell me what to do. Right. So now you click here and here's like, then that's sort of the more traditional LND space. But I think that a change curve and getting people sort of emotionally on board with that change is a big component to it. Yeah. That group actually has. Has grown in a new area as well. As we developed our strategy, one of the components we didn't speak about earlier is what we call compliance at scale. But it's really a program that's largely anchored in this group. If you think about Legal's overall risk management objectives from the company, you can do the things we talked about. You can do your matter management, you can do your contract review, but it's really the behavior and just like physical security or digital security, it's the behavior, in our case, every one of our 70 or 80,000 employees that really ultimately profiles the risk for the company, both from an efficiency, but much more from an effectiveness perspective, there's a whole portfolio of disciplines that we'll continue to build on. How to influence the behavior of that 70 80,000 Salesforce Strong employees to perform their job in the appropriate way and following the right procedures and so forth so that they can protect the company as they do their work. So in that book of the portfolio of work for our change management team now we also include the portfolio of work through training, through messaging, through. We have a little slack bot that kind of nudges people just at the right time. But there's a whole set of tools in that toolbox to try to facing outward from legal, but really trying to shape the behavior of the whole company.

Yeah, super interesting. What is the. What is. Tell me what your whole team looks like. So I know. So you have the change management team. How many is that?

And so that change management team is five people. We have a.

And sorry, they came from change management backgrounds, not legal specialists.

Just as a specialized fact. Actually the vast majority of my team came from as I mentioned, in some ways legal ops is a portal for other professionals to come in the vast majority with the fact that with exception maybe a few paralegals in one group, the vast majority of professionals came from different areas, came from finance, came from, it came from change management professionals came from project management teams, came from data science.

And is that intentional? Do you think that's important? Because I do.

I think it's important because I think that as we spoke earlier, increasingly there are things that need to be do to achieve. The hospital analogy is human health and well being for the legal department is the regulatory health, the legal health of a business. And I do believe that there is a set of professionals that if orchestrated appropriately and positioned well within that ecosystem can bring really the best of that talent to a new level. For example, one of those teams in our team is a project management team. They help facilitate when we have large complex matters that are multidisciplinary within the legal team they really play that project management role as you would in other groups and the teams find incredibly effective.

Yeah, I had a team like that too. So good.

Yeah, so it's been a journey. We've been. We have the traditional outside council management component. We do have a group, what we call the legal shared services. So that's a small team of analysts and we partner with a global service provider to extend that team and through offshore locations for around the sun support that do a lot of the level one work. That team is quite large these days and we've been Able to transition a lot of the work that used to be done by lawyers in our team to that first year triage.

And is that for a specific practice area or for everything?

We started with a specific practice area, started with our commercial team and the contracts. But today we support many of the compliance functions, our privacy functions, our product legal team trademark really just have expanded their portfolio of work. Amazing support on that.

So how big is your direct FTEs and then with, I guess with contractors.

Yeah. So overall salesforce, the LCA team, what we call legal and corporate affairs, somewhere between 5 or 600 total professionals.

Okay.

We are in my team about 30, 35 employees and we have another 35 ish contractors in that shared services team. So globally positioned.

Okay, great. And what is kind of the biggest challenge you're facing these days as an organization or as you look? We're in October, end of October, November right now, it's time. Annual planning. What's kind of on your radar or what's the biggest challenge that you guys are facing as a team?

We have some significant projects ahead of us. As I mentioned, we started out, we have a significant CLM implementation ahead of us. So we're incredibly focused on that. We're also looking at continuing other aspects of our transformation. If I look at our relationship with law firms, I think that's an area of continuing opportunity.

Yeah.

Both in so many dimensions. Right. Understanding how firms can better price their work in a more outcome based way that would fuel the very transformation, I believe, of how firms do their work and potentially create some upside opportunity for the firms to become increasingly more profitable over time. But there's some transformation there and I think just more tactically now there's a lot of pressure. It's been a difficult year for a lot of the technology companies, have been a difficult year for a number of folks and there's a lot of things happening around the world. So aligning the expectations of rate increases and so forth with firms and with our reality. So that's the big area of focus for us as we turn into the year. And I think that lastly for us is really the partnership. We do have a new clo, Sebastian Alice came on board. We're excited to have him join the team and lead us reporting directly to Mark. So obviously looking to continue to help him on board and build a strategy with him for what all legal can be. I think that's been one of the areas that we've been balancing. There's one element of it, if a lot of it is about efficiency and how can we do things for less, be more efficient? And I think there's tremendous amount of space of opportunity in that space, but it also continuing to probe into how can we be better business partners can be a more active and more ever more influential part of the business.

Got it.

Help move the needle overall sometimes maybe beyond some of the traditional spaces that legal has.

Okay. I was just reminded that there's two things I really want to ask you that hopefully we still have time for, which is AI, of course. How do we not talk about AI yet? How are you guys thinking about that, if at all? And is that a big focus of the year or is it kind of back burner compared to everything else you got to get done?

It's not backburner. And this is. It's been a fascinating year of transformation with AI. Both our own product bring a lot of generative AI capabilities to our customers, but also in the whole industry. Right. So as a legal department, we look at our AI engagement across five pillars. First of all, obviously we engage through our government affairs team, in which we think it's fundamentally incredibly important that evolving regulation around that space matures and matures in a responsible way. So we're actively working in that space as an actor there. We're obviously continuing to counsel our product teams as we build responsible and effective AI solutions for our customers.

Right.

We have a continuing role and also, and I think an important role in guiding our customers into the appropriate use of AI, at least with our product, because it's a very incredibly powerful tool and there's some real risks in that space. So we think it's important for those who provide.

Those types of solutions to have a role and a position in the dialogue as well in the product development. Just to go back to it a little bit, there's immense capabilities in this space, but there's also a fair bit of risk. So we've really been focusing a lot of our time in the partnership with the product team to build a trusted AI layer that really can bring to the enterprise the promise of the generative AI revolution without some of the risk. And we're incredibly focused on that. And lastly, we're focusing on guiding and counseling how other departments within Salesforce are using AI. And lastly, and they were in the area that I spent a lot of time on, what are the AI tools that we as a legal department should be adopting?

Right.

So today we're focused on primarily two areas. So there's a lot of emphasis based on our own product on how generative AI can help us in the matter management space.

Okay.

Both deflection in terms of agents as well as enabling the lawyer contract negotiator to move faster in that matter management space. Obviously the partnership with you all an ironclad in the contracts management space. How generative AI can play a role and should play a role in that contract negotiation. Redlining component of the agreement and also exploring areas. What other areas? Legal research, for example, seems to be translations. Another area that we've been focusing on in a number of other areas. I feel like this market every time you blink.

Oh yeah. It's changing so fast.

We've been spending a lot of time trying different tools and assessing it and again and adopting where it's appropriate.

Okay. And then follow up question. Because I got this question yesterday and I wasn't sure how to answer it. Do you think that AI is going to change the way law firms bill or what their billing arrangements look like and to turn into much more of a value based approach model?

I think it for sure will create the incentive for the law firms to build differently. Right. Because there will be an opportunity. So if they don't, they will see this as an erosion of revenue. Yeah. Which is absolutely not the opportunity. Right. So. But really be able to capitalize on what this technology can deliver. Law firms need to continue to pivot more towards an outcome based fee structure and then which creates headroom for them to both benefit as well as pass on to their clients ourselves.

Yeah.

Some of the benefits of that technology. So I think those things are hand in hand. And another interesting topic I think that goes hand in hand with that is that will this technology start pushing some of the rules around ownership of law firms. There might be interest from. From technology investors to play a role, but they're limited to how they can take ownership shares.

Yeah, Very interesting.

So they may push that boundary as well. And also ultimately what are the roles around who can provide legal counsel. Right. Pretty soon how do machines play? Increasingly rolled at it but in an appropriate way within the regulatory framework. So I think there'll be a real lot of interesting pressures in the law firm side both on how they price, but even I think more broadly about how they structure how they see the business and how they think about the business more broadly.

That's great perspective and I like how it is opening up conversations to kind of force pressure on the industry that way. Leo, it's been a pleasure. I think we have to wrap this up but it's been so fun. Thank you for being here. Thanks for inviting me to the Salesforce Tower and for having this conversation.

Super amazing. Thank you, Mary, for being here and looking forward to our next conversation.

Absolutely. To our listeners, thanks so much for tuning in. Until next time.