#63 Is 2025 The Year Law Firms Finally Transform?

Hello, everyone, and welcome to Pearls on Gloves Off. I'm Mary o', Carroll, your host and chief operating officer at Goodwin. Today I'm joined by Matt Sunderman, the CEO at Harbor Global, a firm that provides law firms and in house legal departments services related to strategy, legal technology, operations and intelligence. Harbor is the newly branded corporate name for the combined entity that you may remember of former HBR Consulting, LAC Group, Wilson Allen and others. As CEO, Matt's wide experience with global legal clients gives him a deep understanding not only of their challenges and opportunities, but also of the broader legal ecosystem supporting his vision for and leadership of the organization. We had a great conversation today. Like many of our previous guests, Matt's role allows him to have a very broad view of what's happening across the legal ecosystem. We talk about the spectrum of transformation readiness both in legal departments and at law firms. What's driving the change and sense of urgency, what's causing resistance and what makes it so hard for this industry to change. We cover the role of tech market consolidation. We ponder on the role of the big four and KPMG's recent news about entering the legal market in the United States. And we make some predictions about what the next year will bring. I hope you enjoy today's conversation as much as I did.

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How you doing, Matt?

Great, Eve.

Yeah, not bad. Thanks for being here.

No problem.

So you've been in this industry a long time. How long have you been in legal?

Actually, two and a half decades.

It's a long time. Long time because you're so entrenched in it. I know what harbor does. Working so closely with firms, tech companies, legal departments. I mean, you're all over the ecosystem. What's going on these days? Like, what are you seeing? What's changed? Has anything changed?

There's no change over the last two and a half decades now.

In some ways. In some ways, there is no change. In some ways, there's a lot. Right.

You're right. I was having this conversation with someone actually today, and you kind of have to mentally calibrate who your audience is when you're walking into a room. I'm sure you feel the same way with your partners or other operational leaders in the ecosystem. Sometimes it feels like you're talking to folks that are kind of, you know, 1998 oriented in terms of where tech and process was. And then sometimes you're talking to people who want to be in 2030, but they, you know, haven't done the work to do what they need to do in order to get from where they are today to what they think 2030 might look like. So it makes it super interesting to interact with the overall market, honestly, because it's. People are in very different places individually, and I think firms and corporate law departments and tech providers are as well.

Yeah. And why do you think it's such a big spectrum of where people are?

So on the corporate side, you would know this better than me living in house and being at a tech provider that sold to that end market. But our belief traditionally has been that just the increased volume for work and the need to serve ultimately their clients. Right. The stakeholders of the Fortune 500 organization or the business units just continues to increase year over year in a way that it gets hard for the corporate law department to keep up with that demand. So sometimes you're just stuck in, you know, BAU, as opposed to transfer transform, because it's hard to do BAU and transform concurrently.

Totally.

In an organization, you know, sometimes that has to be a bit more linear sequentially. On the law firm side, my oversimplification is if you look at, like, industries, sectors, and if you think a financial outcome is a driver for good performance, I don't fully subscribe to that, but there's very few industries that have performed like law firms have over the past 20 years in a consistent basis. So you're fighting the inertia of, you know, revenue and financial success versus the why change and why it makes sense to change and, you know, all those other dynamics. But I'm oversimplifying demand on one side, the other is success and growth. Right. That creates barriers to some willingness to change. Yeah.

This is Richard Suskin's famous quote of it's hard to tell a room full of millionaires that they're doing something wrong.

Right, Absolutely.

Yeah. But we are seeing a change now for sure, right?

Absolutely.

And it has. It's accelerating. I mean, I think we've been saying that for the last two decades, and every year there seems to be more and more progress. And I think in the last five years it's accelerated. And then even in the last two, one, you know, even faster.

Yeah. And the change is both, I think, real and the change also willingness to think about change has increased a lot. The conversations we're having with interested parties that want to understand the art of the possible or what are others doing, that's definitely accelerated. Have we seen like full adoption or implementation? No, but the conversations that, you know, prelude the work or the efforts that, you know. Is 10x what it would have been two years ago, honestly? Yeah.

And why, why do you think that is?

I think it's a combination of. I think the. The legal ecosystem is a tightly knit group which is great and pretty well connected even amongst the buy and sell side. But even within law firms or corporate law departments, there's a comb fear of missing out is one driver. The other driver is I think they all know, depending on where you sit, that it's a reality of something they're going to have to confront in a shorter time horizon than they initially anticipated. So if you thought the window for change you had a decade, I think most would say, okay, we've got two years or we've got six months depending on where you're sitting. So a little bit of they see some inertia and a little bit of. I think everyone acknowledges the time horizon at which you need to get from current state to future state is shorter than I think folks would have thought in 2021.

Yeah, I agree. I think people think it's shorter. But I am still surprised by conversations I have about how wide that spectrum is. You know, there's folks who are like the sense of urgency is high, we got to get moving, we are behind. And then I've talked to many of them who are like, you know, we see the change coming, it's going to take decades, it's going to take a long time. We're going to be very thoughtful about how we move forward. All fine, you know, all good approaches, but very different still.

Yeah, that gets back into acclimating like on our side, particularly where I sit or we sit in the, in the ecosystem, you really have to calibrate to the type of organization you're talking, to the type of work they perform, where they sit in the market. And this is on the corporate law department, the tech or the law firm side. And I do believe the sense of urgency and the need for short versus intermediate versus long term change is different depending on where you fall within those. We talk a lot about it harbor like the legal ecosystem. But when you're talking to a labor and employment firm versus a firm that's a funds formation or in venture capital as their primary growth, like what they're thinking about and the Opportunities that they need to disrupt themselves. I mean they're different businesses when it comes down to it.

Yeah, that's really true. So I've been curious and looking forward to this conversation because I know harbor does a ton of advisory and consulting work for all sorts of companies, firms within the legal ecosystem. What is like the top request or project that you're seeing? Let's start with the in house corporate legal side. I'm guessing a year ago was contract lifecycle management because that was anyone and everyone wanted to talk about. Is that still the case? What are the kinds of things that you're seeing now from that side?

Just that specifically, but just general improvement of the technology stack within the corporate law department remains active. So dlm, elm, just workflow, legal hold, IP management, just generally, how do we in part streamline and in part get the benefit of the technology investments? We're starting to see more conversations around adoption of enterprise tech in the corporate law department. So think about workflow, right? Like generally speaking, fortune hunter companies have large servicenow relationships or others that, you know, there's, there tends to be an increase on, you know, how might we get some utility out of enterprise versus, you know, legal specific tech? I don't think the pendulum is swung, but given the advancement in like AI or the use of how do you want to use AI or clm, we're starting to have more conversations like, like I felt was 10 years ago, which is more what do we do in house? How should we think about our organization and structure in house? Given the advancement of our tech stack and technology more broadly, what should we be partnering with third parties on and how should we be leveraging our strong relationships with law firms? Like we've started to have more of those conversations in the Fortune 250 in a way where it felt like that was a lot of the heartbeat of our practice 10, 15 years ago, but they're revisiting that. What do we do in house? What who do we partner with in the broader ecosystem and how do we leverage law firms? Because I think technology change has made them rethink. This is another time to revisit that mix.

Interesting. Still, a lot of technology over the years, I've always gotten a lot of calls from investors, VCs, you know, 10 years ago who were looking at the legal tech space and where, where they should start investing and such. And now I've said, you know, the number of calls that I'm getting from funds and private equity like later stage investments has increased significantly. And, and still when I talk to them they see such a big opportunity as tam. Right. Target addressable market in legal is so big because the penetration is still very shallow. You know we talk about clm, dms, E Billing, elm, the mature companies that we know that have legal ops like they're all thinking about it. But it's a, a very, very big pie that you know, is not using those technologies yet. Do you see that changing and faster or are they jumping towards enterprise tech and leveraging different types of tools? I guess like where do you have thoughts on where all that's going?

Yeah, so similarly we have a lot of conversations with that part of the, in the ecosystem. Right. The investor, the investor community and including Harbor. Right. We've got growth capital from a, from a private equity firm. And it is interesting, there's a lot of attention to legal. I think it's fourfold. This is an interesting one. So I want to make sure I hit the right four points. So let me think about it. I usually talk in threes. People have told me so I've added a fourth to my list. But no, the four that. So one is to your point, there is a fragmented and large TAM or SAM to use the, you know, the investment words which, which holds true on the services side as well as the technology side. Two, which I think is all of the, A lot of the interest is it's ripe for disruptions. Still. Yep, still. And that's an important part. Like the still part, it hasn't yet gone from, you know, the second inning of the baseball game. It's still in the second inning or the third inning from, from three. To your point, it's both like who's buying the tech today but also just generally there's unmet demand. So there's legal services that aren't being provided to not just of individuals which is a big unmet demand but down market. Right. Google Meta, no problem servicing their business units. But even when you go down to a hundred million dollar companies, they maybe have one person in their entire legal function and probably zero technology. Right. They're using enterprise tech. And then the last part is like regulation and consolidation. So deregulation maybe to expand what can happen in the legal, you know, ecosystem, whether that's Big four or others. That's been a narrative for many decades as well. But also just regulatory cycles enhance need. It's not contingent upon an event, it's just the ecosystem continues and it's proven through different cycles, different legislative changes. It kind of up into the right at a pace that out clips, you know, GDP and it's into recession slower and it's out of recessions faster. So when an investor looks at it, it kind of checks, you know, multiple different boxes. And then the last part, which is this is my belief, it's still hugely fragmented too. Like the AmLaw 100 on average has 1% market share. It's 100 billion of revenue. @ the top end you've got, I think Kirkland might cross 7 or 8 billion. Now at the bottom you've got, you know, upper 500. But within the AmLaw 100 on average they have 1% of market share. Within legal tech they're generally still point solution oriented versus true ERPs. So there's an opportunity for I think some consolidation on the services side, the technology side and then the services provider side as.

Well. Yeah. And we, I mean we are seeing a lot of consolidation. Right. And increasing even over the last 12 months on tech and service providers on, in law firms, I mean all, all of.

It. I think law firms have done better probably than the tech or services providers, but there's very few that can truly serve their clients General counsel's office on a global basis across kind of end to end services that they might need. And so I think you could argue that that consolidation is, you know, beneficial to that.

Relationship. And then the tech market, I mean it's just, it's been so fragmented as you said and just explosion of startups and not necessarily vertically or horizontally integrated. So there's a lot of opportunity there to not have a bunch of point.

Solutions. Yes. And interesting like outside of the investment community we're starting to see enterprise tech seems to be like every decade enterprise tech gets interested in legal like whether it's Microsoft or Workday or Servicenow or you know, insert the household names, Salesforce. Right. Right now they're all, all interested in legal as well. So you've got like investor community, you've got enterprise technology, you've got all these things kind of coming together concurrently right now.

So. Yeah, well it makes a lot of sense. Right, because legal as a function is in my opinion the most integrated and cross functional in the entire organization. You really can't get anything done without touching legal in some way or getting advice or a contract. And so it's part of the workflow of business for.

Sure. You know, so yeah, it's required for talent acquisition, it's required for M and A, it's required for contracting. I mean it touches all dimensions in a way that you know, finance might, but finance is more from like an FPA or compliance point of view, not you can't do work if you don't get your financial report on a monthly basis. You can still do your work. Yeah, hopefully helps you do your.

Work. Yeah, that's right. Well, what about on the firm side then again, as an advisor to a large majority of the law firms out there, you know, is there a most common engagement request that you guys are.

Hearing? It's that one I think is it's similar, but it's like a different flavor I would say. So it's twofold. One is we're talking to more firms like historically, I think we would talk to Goodwin. This is just an example for those that are listening. And folks wanted to talk about finance and a financial system project or risk, an implementation of a risk tool or a process redesign. I think one thing that we're starting to do a lot more is, you know, all of these core business processes of a law firm are multi departmental and multi system. So how are we looking at entire workflows? So like we talk about the client matter life cycle, which typically touches 25 technologies and five different departments from you know, how do you onboard clients to how do you get paid at the end of the day? And so we're having more, I would say like transformational conversations. We still have definitely point solution conversations, but more enterprise transformational conversations relative to how do we again optimize our processes and technology investments in a way that allows us to look at. It's really the handoffs between departments are typically where the opportunities are or the trades between the technologies. So more conversations on that front for sure. And then the second is most firms go into one or two buckets like how do we invest to accelerate growth or how do we manage the needs of the L side of the P and L, the cost to deliver on what we think we need to do to modernize the firm. And so some is what should we be doing to accelerate technology or process investments? And equal parts on the other side are some firms are struggling with. We're not used to our tech budgets going up by 25% a year for three years in a row. And we're not seeing a stop to that. How do we manage costs? We talked about like trying to assess who you're talking to. The Amlodip is 5050 in that boat. Some are we have to do it, we need to supercharge and figure out a way to invest. The other are saying, wow, this seems like it's a runaway freight train and we have to figure out how to manage the investment appropriately. So those are, you know, interesting conversations to have within one day with two different.

Firms. Yeah, it is hard. I mean having been on both sides, the firm side and the corporate legal side. Transformation and investment in these things, it takes time, energy, resources away from other things, it takes money and you often don't see the benefit of it for, I don't know, sometimes a year, two years. Right. You might be in the red. You have all these great ideas that you want to put in place and then all you have to show for it is a bunch of.

Red. Particularly in the in years like and law firms in the US in particular, cash based businesses. Right, so that's.

A.

Exactly. It's a challenging conversation to have to get complete buy in. Like I think again, everyone knows it's the right thing to do, but is it the right thing to do now this year within this fiscal.

Cycle? Yeah, that's right. It's, it's fascinating. And what about the collaboration across the ecosystem? You know, have you seen that evolve? What's, what's changed? Has it.

Changed? Yeah. I'm curious your take on this. Having sat in both, both sides in the last couple of years. But we do think it has, you know, we've always been believers that it's, you know, it's not a net sum 0 like 1 +1 +1. If you with the tech community can equal 5. Obviously there's different goals depending on if you're thinking about the general counsel's office versus the law firm. Right. One is managing, you know, the enterprise risk and hopefully accelerating growth and the other is, you know, a business that's driving the P side of the revenue. But our view is in particularly up market. So like we play a little bit more in like the Fortune 500 and the Global 300 space. We have seen deepening partnerships and even more alignment around how are we doing something from a tech or process standpoint to make both of our goals accomplished. Right. And concurrently and collectively, you know, is it happening in at scale yet? I would say no, but we're being asked more and more in like law firms in particular are trying to think about how do we provide services and how do we partner with our clients that make it easier to do business with because they see that as a strategic.

Advantage. Yeah, that's, that's absolutely the trend I'm seeing on the law firm side. I mean at my comment, having been on the client side for so long, you definitely are in much more of a collaborative environment because you're incentivized to constantly be what I call. Right, sourcing. And so you're looking at, you know, who. Who should be doing this internally, who should be doing it externally? Should I bring a vendor in? Should I bring tech in? And so you're getting advice and kind of like working and getting all these different parties to work together towards the single goal. When you're one of those spokes rather than the hub, you really have to be proactive, you know, as a vendor, as a tech company, as a law firm. And thinking about, all right, this is all about the client's needs and how do we drive value for them rather than sitting around and waiting for them to call with a request or a feature or whatever that.

Is. Yeah. How do you remain front of mind? How do you remain educated about their business? If you're talking about the law firm, like, we've run a survey for 30 years and the dimensions below this have always changed over time. But the number one reason, and you should tell me if you disagree with this, but the number one reason, you know, the GC's office selects a firm always has remained one, expertise of the lawyers, and two, knowledge of my.

Business.

Right. Cost matters, technology matters, focus on, you know, diversity and other dimensions always are on the list. But the number one and number two is do I think these attorneys are the best at what I need them to do? Whether that's a deal, a fund formations, labor and employment, a litigation dispute, IP followed by do they understand my business year over year, whether it's 60% of the decision or 80, varies, but it's always 1 and.

2. And so I couldn't agree more. I think, number one, like you said, the actual aptitude is just table stake. You know, you're not even considered if you don't have that. Number two is how they make their decision. Ultimately, it is on, like, who knows my business best and who can help me with it. And when you're a client, you're constantly assembling the best team to be an extension of your own team to help you. A piece of advice that I give to everybody that I didn't totally appreciate when I was a client is how much these vendors, these consulting firms, these tech providers, your law firms can add value, how much information and data and perspective they can provide. I mean, think about your seat at Harbor. As soon as I started here, we had a conversation. I'm like, what are you seeing? What's everyone talking about? What's everyone doing? And that just the visibility that you have across the ecosystem is huge. When I was at Ironclad, it was the same thing where I thought, oh, my God, for the first time, we know contracts. We know this process better than anybody. You know, I don't care if you've been at your company for 20 years working on contracts. We've done it for like hundreds, hundreds of different sizes, different industries. We've seen it work, we've seen different models, we've seen, you know, what the challenges are. And if you are not leveraging all these resources as a client to like, this is free, right? This is free information and like, insights. And that's what we talk about when we say you're picking a partner, not just a.

Provider. Yeah. And that's critically important. The ecosystem should be an accelerator to you, helping you make decisions, whether or not they're the right person to help implement for you. Or that's a separate piece. That's what, you know, we try to be squarely focused on across the entire ecosystem for that reason. It's just, how can we bring to bear some knowledge or expertise that even if it's just two or three reps, it's typically three more than the person that's having to do it for the first time, accelerate speed to execution or de risk success. Because when you were talking about investment, the other thing that I don't say this in every meeting because I don't think people would respond well to this. But also, like investments in strategic decisions and consumption choices, you have to also know that you don't have 100% success rate. So when you think about transformation as an organization or you're assessing which projects to do or which providers to work with or which technologists to select, like, nobody bats a thousand. Also. So, you know, when you, you know, the law firm R and D mentality around doing it, it's kind of new for some firms. But then there's also to softly remind folks that 75% success rate's pretty darn good on your strategic initiatives. It's, you know, no one bets a.

Thousand. Yeah, that's right. Everyone still looks around at what everyone else is doing. I mean, I find that to be the case. Are you guys hearing.

That? Yeah, there's a lot of that. I think what we also find is there's a lot of flames, but not as much fire as you might believe too. And like, we try to bring normalization of that. If, like, all you did is read a Law360 or the American Lawyer headlines, you would think that everybody's operating, you know, 10x more efficiently. Than you are. My analogy is always there's a lot more flames and smoke than there is true, true fires happening. There's incremental change happening, but it's not generally yet at enterprise, like the entire firm or the entire tech stack or the entire general counsel's office, it's pockets and it's specific areas, which is good, that's where you should start. But it's not like the whole business has transformed.

Overnight. It's so true. That is true for, you know, GCS and legal office folks I talk to who feel so behind and I'm like, oh honey, everyone is behind. You're not the tech companies that come out with all the hype of all the things they can do and then yes, every article about everyone's revolutionized everything. And you look under the hood and it's yeah, it's a rapper, oh, you're doing some things well, but play not everything. How, how do we all navigate.

That you're where you're supposed to be. Let's start with that mentality as opposed to behind or ahead. Right. Because you don't want to be complacent. But I think that to your point, like the thoughtful assessment and prioritization and consumption choices, so like really thinking about what are the things that can transform or allow us to achieve our strategic objectives and focus on those handful of items as opposed to the entirety of what you could do. I think that is a challenge in our, even our advisory work because there is a list of things that you could think about or your peer groups doing. But that doesn't necessarily mean it's the right things for you to do at this juncture. So I think that that is a challenge on the general counsels and the law firm side. Right now it's just prioritization given all the opportunity for change, disruption, transformation. So I think that is unique too. Traditionally it was a bit more of a we'll do one project a year. You know, one big project a year or one major systems upgrade a year. Now you might have to do multiple and they're interrelated much more than they used to be. Right. The data, the information governance, the security, the workflows, like all the tech and is information is intra related. So it's one ongoing project as opposed to a project stop. A project.

Stop. It is overwhelming how much opportunity or initiatives or projects we could all be working on. And again, that sense of urgency varies depending on where you see yourselves and where you see how quickly things are changing. You mentioned at the, at the beginning of this conversation that we should all be getting ready. What are some of the things that we should be doing or thinking about? Or do you have advice on how do we get.

Ready? Yeah, I think the one thing is like we're trying to have folks think about is it is project with multiple different initiatives and so you don't redesign your business services organizational chart and then think about what technology do we need to support it and then think about how does that then change the tasks or processes underneath it. It's like how do you think about where you're trying to get to. And this is a project with multiple different work streams. I'll go to tech specifically but for law firms, most are still predominantly on prem environments in large law across their enterprise tech stack. So to us that's your Microsoft plus your marketing technology, your documents, your intake, your finance HR. Like maybe you're 50% of the way through the journey. How do you think about all six of those things becoming integrated, modernized with you know, aligned data, aligned workflows, aligned outcomes that you're looking to get to as a project as opposed to five projects that are going to be run by five different direct reports on your team that have a start and stop. It's kind of, it's an ongoing evolution that is across the entirety of the organization as opposed to functionally led. I think that's a new mindset for, for professional services organizations at large. Yeah, we do work in accounting and consulting as well and they have a similar, you know, project oriented, functionally oriented as opposed to enterprise, you know, interrelated initiative mindset about.

Transformation. Yeah, and everyone goes to tech automatically. Is tech kind of the place to start or how do we, how do we think about that and what role does does tech play in legal.

Innovation? I think it's not typically the place to start. It's an enabler. So like, you know, if you think about a continuum, there's the planning and like how does this map into our strategy? Ideally you're starting there or you've made some decisions for internal reasons or budget regions of this is the way in which this needs to roll out. That's okay, that's like slightly downstream. Then it gets into systems for us, like systems implementation, systems alignment, systems integration, data cloud security, changing of words, processes, changing of your talent model as an outcome of the new tech. And then as you get through that transformation then there's like, which is different than how do we now support it post. So like the latter two steps are tech enabled but talent model and all these Business strategy. All those other pieces also are thought of or should be thought of in parallel with the systems upgrade or the new system.

Selection. Yeah, I couldn't agree more. Although, you know, I, I like to think tech is such a great driver. You know, people, people see the shiny object and they're like, we want some of that is such a great catalyst for the conversations and that like, you know, all the other things that need to happen that go hand in hand with, sure, we can have the tech. In order for that to be successful, we got to do all this other stuff too. And let's, let's talk about that. So tech to me is probably an AI even more so. Just such a great driver of the right conversations for us all to be.

Having. It's a great change management.

Tool. Yeah, right. On the flip side though, the thing that's probably hold organizations back and I think this is true not just for firms, but for really all professional services organizations. You come from one as well. I'm actually curious to see how you think about this in your own org. That law firm operating model, the partnership, the incentives that to me has been a challenge for all these services companies. And you know, we can talk about KPMG's recent announcement that they're entering, you know, the law firm legal services market in the United States. Historically, I think the big four have been challenged also with moving quickly because of their partnership model. And now you're hearing that from the CEO of McKinsey that, you know, that's a challenge for them. Do you have thoughts on this and how does this play out in your own.

Organization? I wish I had the silver bullet internally at Harvard, but much better at giving advice. The real challenge that we find internally, and I think I would imagine is the same in law firms is the two from acclimation of where we are at today and where you want to be. At least in our world, 80% of our effort, energy and revenue in the short term is continuing to support clients on things that we've traditionally done. The fact that there are new solutions or new things that we need to be advising or technologies that we need to be implementing for clients is critically important and we need to be doing that. But it's reminding ourselves that it's still 80% of on prem upgrade or on prem to cloud like that is still the core of the business. Right. And it's operating as it was a year ago, two years ago, three years ago. Legal service delivery is the same from what we see on the law firm side. But then there's also thinking about okay, if you click out a year, two years, three years. Yes, some of this needs to change and we need to build some new capabilities and markets for ourselves. But how do you one, invest around it right amount of time and two have the right amount of people focused on intermediate and long term. While still the historical BAU is what the companies like accounting consulting firms, law firms, marketing firms, professional consulting firms, like they're still need to be focused on the current state while also having some sort of eye towards intermediate long term disruption of yourselves and what's going on in the market and what's the right balance of focus on those different pieces. And so you know, I've always thought about it, or we're trying to get super intentional about it is 80% is a lot more similar to yesterday than it is three years from.

Now.

Yep. And that's.

Intentional.

Yep. We want the right 10 on new markets, new things and the right 10% of the people focused on two, three years out because we feel like if we over index to one or the other, you kind of miss the short term opportunity or you get too focused on the shiny new object as opposed to what's, you know, the current state operating model. Yeah, that's hard to transition from.

That. Totally hard. And you guys have grown a lot through acquisition in the past, right. And is that an ongoing strategy and has it.

Worked? Well? Yeah. So we're similar to like the law firm, I think the law firm community and the legal tech providers. It is an intentional and we see it as a future outgrowth opportunity. So like equal parts building, extending what we do today and thinking about new things and or markets that we can go into from a geography standpoint in particular really to help serve the Goodwins or the ironclads of the world. Like how do we help serve where our clients are, which tend to be global in nature. And so how do we match that in all of our capabilities while still having integrated and consistent service delivery? So that's the journey of harbor in the short.

Term. Yeah. Going back to the comment, I'm curious your thoughts on the big four and sort of KPMG's big move that was news this week or last.

Week? This week it was at the turn of the calendar. It was in.

25. Is it a big.

Deal? My personal belief, you know, I'm speaking on behalf of Matt Sunderman, is I don't see it being tremendously disruptive in the short term to what, you know, I'm talking to you as the CEO of Goodwin like in Global 200 firms. Right. If I look out into the shorter in the intermediate term to us like tax has always been shade of gray. Are you going to, you know, your CPA or your LAWY on some dimensions of tax advice as just one oversimplification of, you know, I'm not at kpmg but where they might start. But I think it can be disruptive to the legal ecosystem at large. But I think those that, you know, we tend to work with and where you sit in the market or where a lot of our tech partners sit in the market, I don't see tremendous amount of change here in the, in the short term. A little bit of the leading indicator for that is like what we've seen in EMEA.

Where.

Right. Seen deregulation already for a number of years. And I don't think, you know, if you were to talk to fresh fields or link ladders or A and O or you know, Withers who's like a top 25 firm in the UK they would say it's tremendously disrupted our, our business.

Model. I kind of feel the same way. I kind of look at, sure this is new to the US model but they've been operating in this way in some shape or form outside the US for some time. And I kind of wonder if the big four also look at law firms or other services providers as a threat and not just the other way.

Around. You know, it could be. Yeah, I never thought about that, but it could be. And to your point around tech, this could be another change management tool for the Global 200. Just to think about what should we be doing proactively. Right. We've got to figure out how to work with new technologies that are emerging and there might be a new entrant and if there is a new entrant, how do we respond to that? So it could spark, you know, opportunities for the Global 200 firms to rethink some dimensions on how they practice. I would argue would be a positive accelerator and maybe even more differentiating than current.

State. Yeah, exactly. There's so much happening, there's so much pressure on this industry. Do you have predictions, thoughts about what happens next or even where we all are going to be focused on in the next year or.

Two? Yeah, I think 25 is the year of seeing like meaningful advancement on transformation, both tech and process related for both corporate law departments and law firms. 23 was the start of the conversation. 24 I think was a little bit more of market scanning of what are others doing? What should we Do. How could we get benefit? How does this change our model? And I think sense of urgency is there, but I think also, like, I felt like folks were kind of scared 18 months ago of, like, how fast or what might change. And now I think a lot of folks that we're talking to are thinking about, like, this is an opportunity for us now, but we have to start to make some incremental progress. And I think 25 is incremental progress here along all those fronts for all parties.

Involved. Yeah. What's so interesting to me is in my conversations, a lot of folks are exactly where you. What you just.

Said.

Right. They're starting to think about it. This is our planning. We've got to enter the next phase of transformation. But then I hear we don't know how to do it. We don't know where to start. We don't know who should lead this. We don't know who should work on it. Like you said, we've got the 80% of what we do. Do we then split it up or do we create like a whole new group to think about it on the side, or do we hire a consultant like you? This is not a muscle that anyone's been using. Right. For the last however long. Hundred years, maybe.

Even. Yeah. Oh, yeah, absolutely. And it's tough because the traditional mindset is. Tends to. Tends to be. I'll talk on the law firm side, practice and. Or functionally.

Oriented.

Right. Like the Goodwin Funds formation team or your private equity practice focused on healthcare. I'm making all this.

Up. Yeah.

Exactly. Did a lot of things to progress their practices over the past 10 years. But historically in firms, it tended to be more practice centric or functional centric. So talent wanted to change their processes to make onboarding and exit better so that your alumni network gets stronger. But it was a talent exercise, just a new investment also. So you've got tech investment and now you've got strategy, execution, investments. How do we think about that? Interplay too. And like those that we're seeing make meaningful progress on it. Generally, this is an oversimplification. Has to have an enterprise hat. It's hard to do if you're wearing a practice or a functional hat to really drive the, you know, the interdependency change that's required within the other functions or within the practices. So that's also a new investment that professional services firms aren't used to having to do because harbor is a victim of that as well. Like tons of initiatives that we did that drove more value internally for Our clients. But it tended to be, we call it enterprise operations or one of our practices, not for the business across all of the practices, across all the functions. And I think creating those roles in that space and that autonomy, authority, remit to, to drive that change is, is new and challenging as.

Well. Yeah, the remit isn't. Yeah. It's one thing to hire someone, it's. It's a whole nother thing to know how to work with them or to allow them to set up for success.

Right? Yep. And like we had two in law firms, we've been doing this for a while. First it was innovation. Right. So there was innovation roles that technically sat across the org, whether they were focused on business services or the practice of. But they had non functional remits. And yep, firms, some did great, some struggled with how do we do that effectively. And then the next piece of it was data. Who owns data? Well, everyone owns data accuracy and the firm owns the data. But who owns the data accuracy in the firm's data horizontally? Law firms and general counsel's offices had a couple reps on this in the last five years. Relative to those two roles. This is another opportunity to maybe learn from how different firms tinkered with how do we create enterprise roles with enterprise remits that aren't the managing partner or the coo? Because it's easy when you're one of those two roles for others to see that. But if you're not the managing partner or the CEO or the coo, it's harder for organizations to adapt to like what's this role and why are they coming in, you know, messing around with my department or my.

Area. Yeah, very true, very true. How did you get into this space? You said it what, two, two plus decades by mistake. And you're not a lawyer. What was your.

Background? So I was at a consulting firm in Chicago that was industry agnostic, but speaking of audit relationships, was the former auditor for Sidly in Chicago. And they did one of the first transatlantic mergers way in, you know, the late 90s, early 2000s. And we had a team of people that worked on merger integration, expense management, post merger. I didn't even realize that there were at the time a big law firm was probably north of 2,300 million, not billions. I wasn't a lawyer and I thought being a lawyer was more from an individual basis or the plaintiff side. So that was Project one and then had Project two in Chicago and then went overseas and did some work in the magic circle side and then have looked back and I spent 90% of my time in law firms, corporate law departments, with a little bit on the accounting and consulting.

Space. Got it. So you were servicing law firms just by accident. You kind of fell into it at the.

Time. At the time it was an audit relationship with probably the managing partner of Sidly and like, wow, you've got a big international integration. You need to think about or do very different though. Like the digital transformation was indexing boxes and deciding whether it was too costly to scan them or not. You know, like, is it worth the investment to scan the client matter file, to digitize it? Because where does it go then and how do we search it or you know what I mean? That was the. Those were the technology.

Questions. Are we all still asking ourselves that question.

Too? Yes, still are spending a lot of money on boxes in.

Warehouses. Yeah, I dealt with that. I have that here. I dealt with that at Google. This is not a old problem that everyone has solved yet. The boxes still.

Exist. Yes. Then we would go like, we literally had a service dude that would go in and see them. That was like part of it. And you'd find shoes and.

Coats. Exactly. Vitamins and.

Vitamins. Gold lunch. Like that.

Was. And you're paying to store that and you don't. No idea what's in those.

Boxes. It's fascinating, but it's maybe 5 to 10% of the spend these days. That was a big chunk of your ip. At the end of the day, that was your.

Ip. Yeah. So you did you just love this world and you wanted to stick with it or did it just happen by.

Chance? No, we did. I mean, we started to focus on it as an outcome, as like the organization I was part of at that time, which was Huron, and then wanted to focus on like we like the professional services nature of it, like the sophistication of the, the environment of law firms thinking about like how, you know, they've run and managed their business and you know, at the time it was run by only lawyers for the most part in major metro areas. So like probably like the wrong reasons why initially, but then really found this to be like a. Similar to why the investors are still thinking. It's exciting. An industry that was ripe for change and technology and other disruption and that's continued to be the case for 20 plus.

Years. Sue, I'm curious because I talk to investors all the time. Do you think this is a good space to be investing in as an.

Investor? I do. The reason I paused for a second is like where I was thinking.

I was thinking I Paused too. I paused.

Too. I was thinking like are you talking about investing in like disrupting the practice of law? Because some of them are thinking about that right. Like you know, trying to form a tech enabled law firm in Arizona right now that waiting for deregulation or tech relative like the ironclad type or harder professional services. Yeah, I think there's opportunities across all. The biggest thing we'll look out 10 years is there will be massive consolidations though I look at law firms technology stack and I'm not going to pick any providers because we work with most of them. There's 10 that have large meaningful install bases right now and like I have a hard time looking out 10 years and saying like it would be rationalized down to five or.

Four. I could not agree more. Yeah and even on the corporate side you've got so many different solutions and you know there's the idea of elm right the enterprise legal management one one stop shop. But those, I mean let's be honest, they don't really service not best of best in breed or best of class for all the things that you need to do. And so you do still end up buying a bunch of solutions trying to orchestrate the data to make it all talk to each other but they are very different products and functions and specialties and so it's not hard to see why we are where we are today. But yeah, the future's gotta look.

Different. Yeah, I still think there will be a place for point solutions. Like I don't think like all of those things that you just rattled off are big businesses at scale and I think there will be a place for point solutions but in like the core it's hard to imagine it couldn't be less, less than what it is presently from just a common well and.

Then does it fit I mean to the earlier conversation does it start to fit in as one part of a larger enterprise solution? Does you know, is it part of your Google suite or your Microsoft.

Suite? Yeah, yeah.

Absolutely. Makes a lot of.

Sense. Yeah. Like I think right now at least what we see because we track this really closely because we do a lot of the advisory implementation work and like Microsoft for example they're hugely interested in legal but mostly for consumption they want domain specific technology providers to create the UI and the workflow and the you know, the interface that you Goodwin gets to interact with iManager, Intap or Elite, you know like that's they have good relationships for sure but at some point does that change or not? Maybe it doesn't right Maybe it is. There's different workflows, AI embedded that is specific to industries and tech with the large providers on the back end. Or maybe it's not, but it'll be interesting to see how it all plays.

Out. Yeah. My hesitation also when I try to give advice is, look, it is, you know, if we think about technology side, it is not like every other SaaS solution that you're selling in because lawyers and legal departments buy differently and their budgets are constrained and the change management is hard and the incentives are not always there. I mean, it's like one thing after another that makes it much more challenging. Which is why I'm always surprised that there's still so many startups entering this space who. Who don't come from legal. You know, they're just like, wow, there's a big market for this. And I see dollar signs. Yeah. And I'm just gonna go in and try to address it. And it's like, it's not what you thought. It's not. It's not just like all other.

SaaS. Well, and also from the investors, like, the easy answer is like, if you pick the right ones, the right management teams, the right tools, like, yes, this is a great area to invest, but you need to be thoughtful. You need to understand the end market. You need to understand the.

Dynamics. That's.

Right. Because like, I have to explain to people still that are coming in, like, why are there only 500 large law firms and like this, you know, like, you know, why is it 2000 and like, no, like, if you think about, you know, north of $100 million of revenue up through 8 billion, there's 500 of them and, you know, just folks that haven't been in the ecosystem for a long time just can't wrap their heads around. You mean there's not 5,000? No, it's 500. You know.

So. Well, on the corporate side, every procurement team that gets involved with legal spend for the first time is like, what? What do you mean? Everyone has a different rate depending on what office they're in and how. How many years they've been in this. What do you mean? Why, why is it pricing different? It's like, that's how it works in legal. Very different.

Beast. Why do you pay more for a tax person than an M and a person than an IP person than an M.

Person? Why do you guys have your own AP system called E billing?

Right. And your own, like, procurement.

Department? Totally.

Totally. Yeah. So.

It'S. In a lot of.

Ways. Yeah, it is. Yeah. I mean that to answer your question, and that's why I've stayed in it, honestly, is because all these little nuances that. And intricacies that I think me and like the team enjoys navigating. Right. It's.

Exciting. Yeah. And that's why it's so it's great talking to you guys who have been in it versus just general consultancies that are new to the world. There are all these intricacies that are valuable to. And the history and you know, why it is this way. And while we all know it doesn't need to look like this in the future, there's just a good. You need to understand how we got.

Here. Yeah. Now, how about yourself though, because you've been in two AMLA 25s and in a Fortune 20 and in a leading legal technology provider. So you've got an interesting 360.

View. Yeah. There's no better time to be in legal. This is why I haven't left. It's something I know you and I share. It's a passion. There's so much opportunity, there's so much changing, there's so much pressure. It's dynamic. It's never been the same job or even the same industry. It feels like, you know, in any of the years that, that I've been in this world, I like lawyers. They're special people and they're fun to work with and they, they're challenging in their own ways, but I feel like I get them and I want to help and make their lives better and help the clients. And it's been a really fun industry and the community is fantastic. You know, like you said, it's a tight knit group. My work is not done. So that's why I'm still.

Here. That's the. I'm in the same boat. I'm in the same boat. I like the way you said it too, like when you were talking about your experience and your most recent in house. It really is a business accelerator function. Wherever you sit in it, it should be viewed as such. And I think those that haven't played in legal don't, don't think of it that way at all. Yeah, they think about it as, you know, slowing down or risk mitigation or. But I'm assuming, like the advice your attorneys are giving to clients and the advice your clients are seeking from your attorneys and the tech that sits between it is meant to drive growth, you know, at its core for all the organizations. So it's a business accelerating part.

Of just the economy 100% and I mean, that's a lot. A big reason why I like having this podcast is because I can find the people who are doing that and who are thinking that way and try to get that message out there and, you know, share their stories about how. How do you accelerate and not be holding everyone back? It's. It's.

Important. Yeah, it's a giant. It's a giant, but tiny, tiny, tiny world in like, legal, you know. So the other thing that I'd like wrap my head around is because we both operate so closely with it, but the last I checked, and I'll be wrong, so don't fact check me on this one. But, like, you think there's just, you know, everyone's a big partner, right? Like, because I. We interact with so many of them and you Forget there's like 25,000 total. Total in the US partners, if it's defined by AML.

100.

Sure. So also, you talked about, like, the procurement function of a GC's office thinking about dynamics around just supply and demand. Like there's 25,000, not millions of law partners in the United States. So there is a interesting supply demand dynamic too, which drives the financial outcomes as.

Well. It's true. And then you go down the path that they're. They're not all.

Interchangeable.

Right. They're specialties and industries and. Yeah.

Yeah. Industries and practice of law. So if you really get down to it, like, we need a specialist in this jurisdiction with international experience for this specific area of.

Law. You're down to 20 who's not conflicted, then half of them are.

Gone. Right. There is a lot of options depending on where you're playing and depending on what stakes you're talking about. There's really not, if you want, you know, the right business, accelerant, legal.

Advice. Yeah, fascinating. Well, Matt, I can't thank you enough for this conversation. Yeah, this was a lot of fun. We're already out of time, but I knew this was going to be great just because you see so much across this whole ecosystem. So thanks for your time and for being.

Here. Yeah, thanks for asking. And we'll.

Talk. Sounds good. Keep an eye on this.

Space.

Right. Okay.