#75 - Owning the AI Narrative (Before Someone Else Does)

Hello everyone and welcome to Pearls on Gloves Off. I am your host, Mary o', Carroll, Chief Operating Officer at Goodwin. Today I'm joined by someone who is at the forefront of reshaping how in house legal teams engage with outside counsel. I'm thrilled to have Jim Telkousis on with us. Jim is the founder and CEO of Pursuit, a leading platform that helps to manage and select outside counsel by shifting the focus from traditional hourly billing to value based pricing and transparent business outcomes. Jim's deep roots lie in law firms as a Managing partner at Mallison's and then as head of DLA Piper's Middle East Disputes practice. In those roles, it led him to see firsthand how opaque legal procurement processes hinder both law firms and their clients, and this really fueled his mission to build a better model. Since 2016, Pursuit has grown dramatically with almost every global 200 law firm on the platform and over $17 billion in proposals flowing through it. Jim was in fact also honored recently by the Financial Times as one of their top 20 market shapers over the last 20 years. In today's conversation with Jim, you'll hear a little bit about what Pursuit actually does, how it scopes, benchmarks or runs RFPs, monitors matters and ties into firm billing systems. We'll also talk about what those real time insights and data trends look like. I love that 80% of matters on Pursuit are now using alternative fee arrangements, which is a full inversion of what we believe is the industry norm and interestingly, how less than half of the lowest price bids by firms are ultimately chosen. Some of the other big strategic themes we talk about are are the myth of the billable hours value in the age of AI, what it takes for GCs and leaders to run their departments like a business, how to pivot from a cost center to being a value creator, and how to own the AI narrative before someone else does. There's practical leadership advice on how to align your teams, change communication dynamics with the firms, and to elevate yourself into a trusted advisor relationship. If you're curious like I am about how legal procurement is evolving, what it means for law firms, for GCs, and the future of legal services, stay tuned. You're in for a great conversation from AI to M and a change is accelerating. Stay ahead of the curve with Exhibit A charts and graphics on the latest legal and market trends that are impacting your business. Visit goodwinlaw.com exhibit A to check out our data driven insights. I know you and I have been in this space, legal industry space, for a long time. We've told this story before, but we gotta tell the half story.

Yeah, the first story. I'll tell my bit and then we'll dovetail into yours. But it's about 2017. Right. I'd launched Pursuit the year before 2016 and doing my research about how am I going to get in front of gcs and what I'd learned this new position of head of Legal Ops and I'd learned about this organization, Clock. And you'd go on the Clock website and at that time it had all the Clock members, it had their email address and so forth. And it was one of the early Clock events in Vegas. And of course the ticket was probably a couple thousand dollars, maybe $1,500, and we didn't have $1,500 to spend at that time. So I remember there was a phone number. It was your phone number, Mary. So I literally dialed the international dial because I was in Australia at the time expecting to get some kind of help desk. And I got a Mary o'. Carroll. I stepped back a lot.

Oh.

And of course, at that point I then had to big note that, Mary, I'm the CEO of Pursuit. We're a very well established company in the outside counsel management space. I'm considering whether or not we will invest. We should invest in sponsoring Clock. What have you got for me? Anyway, I was just trying to talk my way into a discounted single ticket. So that was the first conversation, Mary, that you and I ever had, I think, back in 2017.

Yeah, it's such a great. I'll never forget because Clock was a volunteer army. Totally bootstrapped. We probably had just thrown up this website and said, we're going to have an event. And the first event was, you know, totally put on my personal credit card. Like it was a true Silicon Valley. You know, we're just going to start this and hope for the best. And it's true. We didn't have. We didn't have staff. And so we had to put a phone number on the website. We put my cell phone. And so when my cell phone rang, I picked it up. I don't. I usually don't even pick up. So I did pick up. And I remember you saying something like, oh, is this Clock? I'm calling the CLOCK number from the website. And I was like, oh, oh, yes, hello. Yes, it is. You know, how can I.

Okay, so we're both at the same time trying to play a bigger game than we're actually playing.

Yep, totally. Yeah. And you said you wanted to sponsor. I was like, oh, from Australia. Wow. Okay. We're big time now. Yeah, it's amazing. And then of course we met. You have grown quite a presence in this industry.

Now I tell story about that very first clock event and I was super excited, of course. And it was me and a laptop. It was me and a laptop and a couple of design. We did have technology. There was a very basic RFP workflow. And I tell a story about almost harassing anyone that I could get my laptop between them and me and swing it around and say, this is what we're doing, this is the vision, this is what we believe. And that's what it was. And I'll never forget it. It's part of the early hustle to work out. Are you solving a problem? Is there pain out there? What does it take to get those early few customers? So yeah, I kind of remember it like it was Both yesterday and 100 years ago at the same time.

Totally. You know, we have a pretty broad listenership now. So for those who don't know what pursuit is, you know, tell us quickly what it is.

So pursuit is essentially an end to end outside counsel management platform for in house legal teams, particularly the larger in house legal teams that are dealing with significant spend at significant external spend. External spend on average is 50% of the total cost of legal. And when looking at a Fortune 500 company that's in the 10, that can be in the tens of millions of dollars. And so what pursuit does is applies, essentially an operating model, if you like, around that external spend. Right. End to end. And end to end essentially means right from the time that you're thinking about who should I be engaging, let's say from my panel firms, how should I be engaging then? What kind of fee arrangement, how do I select, how do I run a process, essentially some call it as an RFP process amongst the panel firms. Then beyond that, once I've got an alternative fee arrangement, how do I make sure I can track the matter? And we can now do that with a recent acquisition of Aperio, tracking the matter and the billing against that matter. And that's in a unique way because we tie into the law firm billing system too. So we have real time right through to the invoicing, making sure the invoices are aligned to the fee arrangement right through to payment. We think of ourselves as both a relationship management platform between in house teams and their law firms and an end to end workflow to really bring some transparency and rigour that hasn't existed before in external spend as well as Trying to improve the relationships between in house teams and law firms, the transparency around that, the way they communicate and drive, hopefully for both parties, the best value and the best fee arrangements. So that's it in a nutshell.

Yeah. So that's really helpful and I think it's helpful because it's an important backdrop that you have a really unique vantage point. Right. Because you're seeing the intersection of the law firm, the outside counsel as well as the in house team insights. You've got a ton of data about pricing and where things are landing, how the negotiations are going and a lot of just what's important to folks as they're going through the RFP process. And over the years you said you started in 2017, I imagine a ton has changed. And you know, one of the reasons I wanted to bring you on now is because I feel like that topic, you know, it's always been really important, but at least in my own seat now, you know, from the law firm side, alternative fee arrangements, whatever you want to call them, effective fee arrangements are becoming more and more important and part of how we want to partner with clients to be much more value centric.

Yep. And some context there, of course. My background is from the law firm side. Up until 2016, I was a partner of several firms, King Edward Mollisons and more recently DLA Piper. So my career up until 2016 was very much from the law firm vantage. And here's a few things that I'd seen. One, it was very clear that the, if you like the marketplace for between in house teams and law firms, it wasn't transparent at all. I had relationships or our firm had relationships and we work those relationships. But I could see from the, from the general counsel in house team side, they struggled, struggled to identify who was best placed not only within Jim's firm, but other firms to do our work. And also the other thing from my perspective is there was never any, there was often not any real reason why we, I could understand why we were winning or not winning work. And I remember doing a whole lot of work to get on a panel. This would happen time and time. We do all this work to get on a panel and then it would be crickets. And so there was no way to effectively really manage in a transparent way for both parties what work was happening, what was I seeing, not seeing how could I get invited to more opportunities. So that was from the law firm side. So when moving over essentially to establish a to found pursuit, it was how can I improve that? Both from the law firm Perspective, So they had better visibility around essentially the client's wallet share. And how could I provide the client with more transparency, more tools, more strategies to get what they were after? And a lot of what they're after is just certainty around their pricing, you know, certainty and predictability and of course a level of competitiveness too. They wanted to make sure that what they were agreeing to pay was fair and reasonable.

Yeah.

And that hadn't existed in the market. So that's a long winded kind of backdrop. But there was clearly a need to bring those requirements together. And that's I think certainly part of what pursuit has been able to do since the time of launching. I think now we're at about $18 billion worth of data that has run through the platform over 10,000 individual matters which essentially have been RFP'd. Typically RFP to the panel firms rather than to a broader marketplace. So what does all of that data tell us? Lots of things, but there's always been a bit of a panacea around. Is there such a thing as what something should cost? Can we get to what should an M and a matter of this kind of size in this kind of jurisdiction cost? In the past that information has never been captured. Typically it was time based billing and it was captured in any billing system, but it could never be extracted to provide that kind of what we call now price benchmarking, what should something cost? So that's something that we've learned and now we have over time now we can tell you what a particular piece of work or type of matter in a jurisdiction of a level of complexity, what it should cost based on the data that we've got now that will continue to improve and refine and more and more categories as you meet minimum requirements to be able to provide that level of data. That is a great benefit both for law firms. Who can leverage that, what should something cost and how should I price something as well as from clients perspective getting a level of comfort that what they're agreeing to or what they're negotiating is in what we call within the pursuit benchmark. So that pricing, that's one.

What else are we seeing, Mary? We are definitely seeing a continued shift to value based pricing. So outside of Pursuit, the data roughly is about close to 20%. It's about 19% of matters alternative fee arrangements and the balance is the traditional hourly rates. On Pursuit those figures are reversed. So on Pursuit we have from all the matters running through about 80% are alternative fee arrangements and the balance is traditional hourly rates. And of course the pursuit platform helps its users create and think about, create those alternative fee ranges. But it's been doing so clearly because there has been a need in the market.

Totally.

There's been totally. And just a set the idea of moving towards outcome driven, much more certain fee arrangements. You know, it is not a difficult one to sell on. It's just been really difficult to deliver on it and achieve on it. So that's what I really think, that's what we spent the last eight years continuing to work on, continuing to build not only our muscle, but the muscle of the industry, our customers in how best to scope matters and achieve the optimal essentially fee arrangement for, for the kind of outcome they're looking to achieve.

Yeah, I'm really excited about the work you're doing and the data you're able to hopefully at some point surface in a way that is helpful to both sides. And just, you know, when I think back, I started my legal career at a law firm, you know, 20 plus years ago and remembering how much information we had on, you know, tons and tons of matters and experience and we'd done this type of work a million times, right. And then of course, then I went in house and became the client and we were doing things like having all sorts of, you know, patent litigation at Google. And I remember being like, this is, this is the first time, as you know, our company was very young, we were embarking on this kind of litigation or this new kind of case or matter and we had nothing, no idea.

Yeah.

So when someone said, how much is this going to cost? The only lever we had was to go to outside counsel and ask them, you know, what do you think it's going to cost? And I remember our GC going well, is that the right number? You know, and all of us would just shrug and be like, I don't know, let's ask another firm. The way to find out if you're getting the right number, so to speak, was just to ask a bunch of firms. Now, you know, you're nodding, but I think both of us still go, does that actually mean the right number? And as this industry has tried to move towards, you know, the non billable hour, the alternative fee, the question of how what is the right price? Keeps coming up. And I remember early days at a big clock meeting and we're doing this kind of brainstorming workshop session and they said, yeah, what is it going to take to solve this? And I'll share with you what I said because I'm curious your thoughts on it. And I said it's like when you buy a house or any sort of real estate, right, the same house with the same fixtures and the same wood and the same, you know, if you take the exact same house and you move it from San Francisco to Kansas to London to Singapore, that same house is going to be priced differently.

Differently, correct.

But what is great about. In the US we have something called the multiple listing service, which I think that's who does it. They surface the asking price and the closing price of every single house that gets sold, and then you can see what neighborhood it's in, the square footage, how much the outside acreage is, and you're able to see the actual value of that house based on, you know, what it's sold for. And then you have comparables. And so because of that transparency, when another house in that neighborhood comes for sale and you're interested in buying it, you have a pretty good sense, you know, of what it's worth.

So it's exactly the same principle. It's exactly the same principle. Correct. So it is. It's like any. It's a marketplace. Buying and selling of legal services is also a marketplace too. But there's never been any transparency in relation to the pricing. And because the industry hadn't in the past developed the muscle around the scoping and the defining, essentially, what is it that we're delivering? And then if they did, we hadn't captured the data around that, it can't be done overnight. That's why it's taken years to collect that data, to see what is actually being scoped. Now you know what the house looks like and now you know where it's being built.

Yes.

In other words, you know the matter, you know what the jurisdiction is. Not only that, now we can tell you, well, an Amlor 1 to 25 firm prices it at this range, an Amlor 25 to 50 firm prices at this range. And that's the kind of granularity that we can now provide. And that's what the industry needs. Because, as you know, you can decide whether or not this is the kind of work that I'm happy for those on my panel that are between Amlaw 50 and 100 to do, because it's, let's say, it might not be bet the company. Oh, I can see that it's 20% less with that cohort of firms than it would otherwise be with the 1 to 50. That is the kind. And so that when, when the GC then does ask, what is it going to cost and why you've Got defensible data, which is only over time going to get better and better. The kind of example you gave for your early days in Google. Multiply that literally hundreds of thousands of times across in house teams, that is without data. And certainly in the past that has been the case. So part of our mission is to basically get us all to the position, get all the in house teams and the law firms to the position where you can see what is a fair price. What should I expect to pay for a clearly defined scope of work? And there will always. We hear a lot. Oh, the scope always changes. Of course it does. Of course you'll agree that you want to at a bedroom.

Totally.

But that's okay. That's okay. You know the price of the house, you know what the materials cost. Okay. If you want an additional bedroom because you've got all of the other, that's the extra. Yeah, there's one bedroom. What's the size? Excellent. But the fact that you, the fact that you might ask for an additional bedroom doesn't mean you should say I don't want to be able to do the work to price the house in the first place.

So do you think, is there a world where you all become the ones that surface the actual prices or set standards for the industry and make it clear?

Is that 100%?

Yeah.

So right now, for example, we have products that do that certainly for the in house teams and that we provide those to, we're providing those to law firms too. We call that price benchmarking. And of course it doesn't cover every single matter across every jurisdiction. We're very strong in some areas, not so strong in others. Waiting for the data to meet a particular threshold before you can have a level of confidence in relation to that day. But that is absolutely the objective and. But that won't be fixed in time. Why is that? What a particular matter might have cost last year may be different now when you can strip out three of the activities with AI or, or streamline three of it actually. So that it's going to be a constantly evolving data set, constantly enriched, but over time I think more and more useful. And Mary, one of the things we want to really do is take price out of the equation. One of the best comments I've ever had, this is a few years ago and this was from a GC when I was demonstrating pursuit and we have what sometimes the controversial feature, what we call the reverse auction, which is just an ability for law firms.

Talk about that.

Yeah, yeah. It's an ability for law Firms to revise their price real time and to see anonymize where the competition is. There's different levels of transparency that clients can provide. Clients can provide the actual pricing transparency. So law firms can see where other law firms are priced and they can revise price real time. And typically what you see is the beginning of the, let's say 30 minute window. You'll see a very large spread and then that spread during the 30 minutes narrows down to a much smaller spread where essentially the higher price firms often, not always, but often come down. So the spread narrows. So then you have a much narrower spread. So the comment that came back to me when I demonstrated this feature, the GC said to me, and I'll never forget it because it just it rung true. I oh, Jim, I understand by putting price into the equation, you take price out of the equation. And what he was saying there was you've run a fair process. You know now what the market price is. You know, there's a spread. I'm comfortable with picking any within that spread. Price isn't the sole factor I've taken that I know what the market price is. I can now choose on what is most important to me. What whether it's local expertise, whether it's the relationship I've got, whether that's their knowledge of our business, whether it's diversity, whatever it might be. But you've run a process to identify what the range and it's always a range, but what the range of pricing is for that kind of matter, scoped in that way, let's say in that particular jurisdiction.

I totally relate to that. And having been on the client side, I now that you've explained what that means, it totally resonates.

Right.

Because once you feel comfortable with, okay, at least we have an idea again that predictability on the client side, it cannot be overstated. Like you can't really need to know how much things are going to cost. And then after that you don't often, and I'm curious what your experience has been, you don't often, as the buyer of legal services, go with the one who is just presenting the lowest cost, 100%.

So on Pursuit data, and this is the most telling on this issue, we only have, it's just less than half, it's around about 48% of occasions is the lowest price chosen. So that tells you it's certainly not all about price. You know, less than half is the lowest price chosen. Yeah, and that's remember that's in relation to essentially it's all panel work, in other words, sending work and getting prices from firms that you know and that you trust in the future. We think that will expand to a more open marketplace where you'll invite more and more firms that you might not have worked with in the past, but the data today is based essentially on firms that you've already worked with.

Yeah, you're always going to choose the firm that you think is the best fit qualitatively and then you have some idea of what the right cost is. And so I kind of want to put out a public announcement to firms. This isn't about a race to the bottom. So when you're doing these things, don't go out of your comfort zone. You know, we feel like, oh, you know, pursuit is the enemy because I got to go below where, you know, we think we can make money. And you're actually hurting the entire industry when you do that.

It's a, it's a too narrow a view of what the, what the process is there for and it misses, if you like the broader picture, what the current expectations are on an in house team. There's lots of expectations around the way they're managing the function, but there's particularly now there's really, I call it a new but there's an absolutely growing expectation in relation to the way that they're managing their external budget and the visibility and transparency around that budget as well as the being able to communicate the why behind why decisions are made, how money is essentially being allocated and spent, why the more expensive firms are being chosen and that context, an understanding by law firms about the pressures and the expectations on in house teams around the way they are managing now the budget is really important. It is not, frankly, it's not about the law firms or in a sense this is not directed at we're doing something to you or there is something being done to the firms. Not at all. It's around about aligning with what the current expectations are around essentially how the legal department's being run like a business and what that means in relation to financial discipline. And what we found is the firms and the partners at firms that best understand that and that really make time and effort and put themselves in the shoes of, of the general counsel and in house team. They're the ones that typically perform the best, if you like, on pursuit, win the most work and recognize it is a really important development, if you like, of the in house teams, the way they manage the budget and the way that law firms can align with those new expectations and being Even better partners because it is a. I always say they are key strategic relationships and you have with your law firms. This is not about getting between or trying it anyway. If we damaged those relationships, we would have a very short future. And that's part of. We're spending a lot of time now working on how do we even deliver more value to law firms. How do we make pursuit a real strategic relationship management platform. Law firms want three things. I've learned this. They want three things. One, they want to win more work of course like any service provider. Two, they crave feedback. If that's one thing that clients and maybe none of us are very good at sometimes is providing feedback. Why did I lose? Why did I not get invited? What can I do better? And three, of course law firms want to get paid now working on those two, it's super important for Pursuit. How can we help law firms win more work and how can we help clients or incentivize clients to provide more feedback for how law firms can be better, can win more of the wallet share and we take that responsibility really seriously, put together a law firm team, really spend a lot of time on site with law firms to understand, trying to understand their pain too. You could, you know, when you're at the receiving end of lots of RFPs and you've got short deadlines to respond that can be painful and you know, try to improve all of that trying to communicate the requirements of clients and part of the why is pursuit here? Pursuit doesn't exist because of its own requirements. We like to think we exist and been successful because there's been a need in the market and an expectation and a requirement for in house teams around their way they're managing with better discipline their external spend.

There's a lot of change management that's taking place right now. Right. And the shift towards more just a different type of partnership and relationship with in house counsel and outside counsel in that trust and partnership is just is so important and that's, you know I could get on a soapbox about why I think reverse auctions are a terrible thing because they really erode the trust and the relationship between both sides. But let's not get into that.

Let's explore. You want to go on that a little?

Okay, let's explore.

We did that a little bit when I was at Google. We spent some time doing some reverse auctions and for everyone's benefit this is a literally a live auction where you say, you know, at 8:00am I all the firms log into this system and for the next 30 minutes, we have this graph, and we see your dot moving down until we call time. And, you know, whoever's at the bottom, you know, that's where your. Your lowest and final it is.

Correct. Yep.

And what we found in doing that from the client side was like, oh, great, we're going to, like, milk out every penny of them because you can watch the firm squirm. And during this 30 hours, and they're seeing their competitors and, oh, isn't this fun? And. And what we heard back from our firms who, again, we really cared about our firms. They were an extension of our team. We wanted them to be trusted partners. And they all came back and said, you know what? We really didn't like how that made us feel. We don't want to be a race to the bottom. You're making it feel like it's only about price, and we have to keep undercutting. We don't want to be seen as the most expensive. We believe that we deliver a different kind of value. But this makes it almost feel like very impersonal and, you know, like we're asking you to undercut your own price. And so that sort of left a really bad taste in some of their mess, such that some of our best partners turned around and said, we don't want to participate in these anymore. We would love your business, but if you make us do a reverse auction, we will just tell you right now, we're not participating. You know, it made us go back and say, gosh, that's not the relationship. That's not the message we want to send to our firms. Price is not the most important thing. And so let's rethink how we do this.

Yep. So that's super helpful. But what I would say there is that is all in the communication. All in the communication and the communication to the law firm. So I understand this isn't a race to the bottom. We're not interested if it's the case in the cheapest price. But we are interested. We are spending millions of dollars. We're interested in a transparent process that identifies what is the true market process. Price. Okay. And if the firm does understand the changing expectations I talked about in relation to the financial discipline and the firm does understand it's not about price, but not just about price, but it is about running a transparent process. There are three firms that can equally do the work, and we want to ensure that we've demonstrated to finance and team, given the cost pressures that we're under, that we're essentially doing the Right thing now communicated in that way. If I had a partner say, I'm not interested, you let me know. I'd say, okay, I'm not interested in sending work your way. There are plenty of other law firms who understand what the expectations are in relation to spend and understand that it's not just about a race to the bottom, but one of the requirements that we as a department are under is to prove and demonstrate that we are actually spending. We're demonstrating financial discipline that is applied across the rest of the functions. So that's the way that's the pitch, essentially. And that is really the case. And that's the only. That's the, in a sense, the only reason our customers use that because of the requirements. Not because they want to inflict any pain and certainly not because they want to damage a relationship. They want to do the opposite. But the communication around that, the understanding the why is, as I said, is key.

So I totally appreciate that. And that's why I think it's a lot of education, it's a lot of alignment and change management. Because what sometimes happens, and I still see this. Again, curious of your thoughts. You do, even if it's not a reverse auction, you do that kind of RFP or some sort of back and forth and one firm eventually just goes, we'll do it for half. Half of the, you know, half of what? What someone else says. If your neighbor, you know, sells their house for half the current value, even if you're just sitting here in your house and you're going now, you've ruined it for all of them.

Yeah.

And that client who's got, you know, they're only going to go to the firms that they think can do the work. So it's not firm is really terrible. But when one says we're going to do it for half, it makes it very hard. Even if they're not the best one or the ones you wanted to go with, you almost have a responsibility to go, okay, I'll go with them. And now what happens is their next matter because they're trying to get your work is going to be a lot higher. You know, you never are going to win win. But what that's done now is and even in within your data set, we've now ruined it for the whole industry.

Isn't the market a wonderful thing? Isn't an open and transparent and competitive market a wonderful thing? And Mary, honestly, they are to me, they're the best examples because the firms that want to win the work the most and of course You've got to assume a level of the ability to deliver. But our clients, they're only working with firms who typically are in their panel sometimes. Absolutely. They see new. That they're encouraged to invite new firms, and new relationships are built. But the example you've given, I love in a. In any marketplace as a buyer of the service or as the buyer of whatever it is that is actually. And you've got new competitors coming in. That's actually. That's the market working. Yes. The other market players might say, damn, we don't like that.

Yeah.

But, yeah, I reckon that is a great illustration of the market working, particularly when you've got the new. The newer entrance or there might be existing players, but they want to get into a new practice area.

Yeah.

Or they want to. And so forth. So anyway, we could talk about that for days. But they're great examples.

Yeah, yeah. Okay. And then what about just what types of alternative fees? You know, people are always like, what's in vogue right now?

Yep, yep. Look, no surprises, but litigation continues to be our strongest practice area. I think it. It makes up for a significant portion of the matters that go through. And again, what's funny, people's instinctive reactions is sometimes, oh, it's not for litigation.

Yeah, it's more for transactions.

It's more for transactions. But when you think about litigation, you think about the way it's structured and all of the steps and all of the activities that have done. Being done time and time again. It's actually perfectly structured for alternative fee arrangements. As the. Let's say your assumptions might get less certain further as you go further through the matter, because, you know, by the time you get to trial, you don't know whether you're going to. So you're going to have to make assumptions there. And those assumptions can change. But in terms of structuring and driving alternative ferry arrangements, you know, litigation is a classic one. Then the buckets are the more transactional M and A.

Let's stick on litigation. What are you seeing there? Is it success fees? Is it.

Oh, I see. It's a combination success fees. Yes. But success fees are still typically the exception rather than rule. Okay. What we typically see is either is either capped or fixed or fixed fees per phase.

Yeah. Okay.

Dependent upon, of course, number of assumptions. If the assumptions change materially, then of course there's a mechanism to change the price. But yeah, fixed fees, certainly. And not surprising. We see quite a lot of discounted, if I can put it that way, for the early phase work to Win the work, let's say the early case assessment. Sometimes we see very low pricing at there to win the work. And if clients are confident of course that the matter is not going to run the entire, then they'll weight more heavily on the discounted pricing at the earlier phasing. So yeah, litigation is one. What else?

And then you were going to say.

The transactional and look the transactional type, the for example, M and a corporate transaction work. There's lots of things like registration of let's say global trademarks and so forth or patent, patent filings or and so forth. That's quite easy to identify price across multiple jurisdictions. So we see a lot of that too, but there's very few things. It's funny, it didn't take us too long before we created essentially scope work templates. We have well over a hundred of those. But Mary, it's very rare now that something comes in that we haven't seen before. Okay. I thought it would take us longer to get to a situation where let's say the templates we'd created had covered most of the work. But we're actually always we're there and when something is new we hadn't seen before, the great thing is we can grab that, templatize that and then make that available to everyone so that your customers and law firms get the benefit of what's been tried and tested before.

Yeah. What about the subject trends in the subjects? So in other words, what have you seen in terms of what's keeping GCs and in house teams up at night and what kind of work is coming through? Is that changing over time at all?

So if you think about the political climate and the broader global issues that we're seeing, you do see some of those matters start trending on pursuit, but no particular insights I think that are revealing. They're typically at the margin, if you like, of any real insights for trends.

All right. But you probably agree that the role of GC and in house counsel have been changing significantly over time.

Oh, absolutely. Here's what I think where we've currently landed in terms of what those expectations, what that role looks like. There are three or four pillars. The one, the first one is, and we've heard this before, the way that department is being run like a business, what does that mean around financial discipline, around what we now call the in house team becoming a buyer, an expert buyer of legal services when almost half or sometimes half of the legal budget is external spend, you've got to be really good at managing that External spend. But so that running like the business, that's like the foundational bit of a legal department. What are the other things? Strategic value. What we're now seeing and the strategic value bit is shifting the perception of the in house team from a cost center and that sometimes exists to a value creator. Now why is that so important? If the perception of the business, you're a cost center, then there's only one way to add value to the business and that's cutting costs. That's the only way you contribute if you're only a cost center. So one of the things that we see and really resonates with gc, how do I shift any perception there might be that legal is a cost center to a value creator? Running the legal like a business is one of them. The second is around just technology and particularly now AI. There is an expectation in the community, in the industry, amongst the C suite, amongst CEOs that legal is doing something if not leading around AI. Some of the GCs we work with talk about, it's so important that I as the GC or the CLO and my team, it's so important that we own the AI narrative, that we have one and that we own it because if we don't, somebody else will. And so we've got running like legal life business, you've got the strategic, adding strategic value, you've got legal, tech and innovation and then you've just got kind of leadership and cultural change.

The industry is rapidly changing, the function is rapidly changing. The relationships between in house teams and law firms is rapidly changing. How do I as a leader essentially equip my team to not only be ready for that cultural change, but to drive it. And that when you put all of that together, if you like, that's leadership, that's innovation and that's what the expectations today are of legal leaders and their in house teams.

Yeah, I started thinking about, you know, drivers versus passengers and you really need to have, you know, be in the driver's seat, know the direction, know the speed of travel, know where you're going and not just wait, see what things happen.

Absolutely. You know, it's owning the narrative, controlling it and having a real story. Everybody loves a story and sometimes the story wins. Okay. And the story of the in house team, the way leadership in the in house team basically creates and drives that story both internally and and externally is key so that everyone within the organization knows this is a strategic value creating center, not a cost center. That doesn't come easy. That is deliberate, that is planning around that and that is executing and the cultural change. We talk about the legal technology, the AI that is all part and parcel of being able to own drive that narrative and BC as a strategic value creator.

Yeah. And the AI piece is interesting because we hear from so many GCs that they're under pressure from their CEOs leadership teams to say, what are you doing? And that is a result of so much media hype around. Legal is going to be the first area that gets correct.

Absolutely, fairly or unfairly. That is the perception. And so that's why the question is being asked, what are we doing?

Yes.

Because within the CEO community the discussion is what are all the functions doing when they come back and when somebody hears. Shannon Kligger is a fantastic example here. The CLO at Moderna Moderna partnered with OpenAI very chatter on. Oh, is that right? Okay, I haven't listened to that one yet. I've known Shannon for some time. She was an early, she was one of the earliest adopters of Pursuit. So a very soft spot for her. But what I was really proud of is when Moderna went to market, talking about the partnership with OpenAI, you had the CEO on video first and he had the CEO talking about what Legal was doing. Yeah, it's a great story. And so it's a great opportunity for legal leaders to really to shine because there is that expectation in the market. I think it's probably a well founded expectation that AI is going to transform parts of what Legal does. What are we doing to take advantage and if not be at the forefront, make sure we're certainly not falling behind in the way that we're running our own function.

Yeah, that's right. The pressure is there and I think you made a good point of fair or unfair is there. We have all thoughts on that.

Correct.

In our last few minutes and I think we've touched on this a little bit. I'd love to know what should our call to action be here? You know, you again, you have the client side and the firm side. What is, what would be our message to them where we just want to shake that group and be like, ah, you got to do this.

So I think the key message is, is this, each is taking effect action, not against the other. It's to meet requirements that each have of their business in particular. And I've said this before, of what the new expectations are or the changing expectations of the legal function. So the ability to be able to communicate more and understand nothing's being done to anyone, you know, in house teams aren't doing this to their law firms. It's not personally directed in that way. But how do we all align and be open to and really understand the pressures that everyone is under, the expectations that each have, and how do we align and communicate so that we're super clear on those expectations and we're doing everything that we can to not only meet those expectations or help those expectations be met, but to improve the relationship? We only ever want to work with people we want to work with. You don't want to work with people just because they're the cheapest. And so the relationship bit continues to be key. And that's why, as I said, we're investing more and more in how we improve those relationships. But I think my takeaway is the openness and being understanding why. The why behind essentially, we need to essentially improve the process, make it more transparent, make it better for both and get that communication to underlie. Get the why communication underlying the, you know, the relationships.

Yeah. So aligning, aligning and just having that trusted advisor relationship with your law firm is probably one of the most important partnerships and vendor relationships you have as an organization. And I just remember showing up at a law firm for my first legal industry job 20 plus years ago and thinking, this is the business model. This is how we price things. We charge by the billable hour. The incentives are completely misaligned. And I just remember saying the words, how are we getting away with this?

How do the clients think this is okay?

And certainly in the past, Mary, I think everyone in the past has said, look, everyone hates it. We haven't been able to work out a better. That's been in the past.

That's exactly right.

And sometimes you take comfort from. We've always done it this way. You know, we used to joke that. And you might remember the early days of pursuit and the killing the billable hour. Okay, so we had this. We had the mission, the Kill Bill campaign and so forth. And of course, then ChatGPT came along and basically, any idea, I thought the pursuit was going to kill the bill of Bill. And we did a pretty good job chipping away at it. There's no doubt now what we've seen with large language models, that time is no longer a currency of value.

That's right.

Okay. How long it takes to do something cannot be the measure of its worth. It was a poor value initially. It's one that can't be justified now. And if that's right. So you've got a few things happening. There's no doubt that AI is a bit of an accelerant to the thinking around how do we better price? It can't now just be on time. And particularly now that we can see that things can be done in, you know, a lot shorter period of time. So there is a real. I think this is the time. We're in a sweet spot now for a real rethink of the way legal services are being valued, around what alternative fee arrangements are going to look like, around what outcomes really mean and how I value outcomes.

That's right.

Because as you know, Mary, you might an outcome that you as a client can receive in an hour might be worth tens of thousands of dollars. And you're happy not to pay an hourly rate.

That's right. I might used to say, if you can make this go away overnight, I'll give you a million dollars for the phone call.

Correct. Okay, that's value. And if we can continue. One of the takeaways again that you asked about, if the industry can continue talking about value, what do you value? What would that. What does that look like? Okay, let's price. Yes, that value. That's got to be better for everyone.

Everyone can win. You can find your incentives. You can not erode the trust between this, you know, very important part.

Correct. You don't have to justify number of hours worked and so forth and people doing things that they probably shouldn't be doing.

And then it allows for, you know, people to do the work that actually matters, which is taking the horizon and thinking about things. But you can't put on your bill. Sat around thinking about my client.

Right, Correct. You might be able to put on deliver this awesome outcome. A hundred thousand dollars, that's what you want.

That's right, Jim. This was a super fun conversation. I just really appreciate your time and really hope that we can start to unlock some of that really valuable data that you're seeing from both sides.

I certainly hope so and I think we certainly will. As I said, I think it's a really, it's an incredible time to be part of the ecosystem and part of the solution around unlocking value, you know, improving those relationships, really finding a new measure, a new measure of value, one that's not linked to time, one that is linked to delivering outcomes. So it's a super exciting time. Thanks so much, Mary. I really enjoyed the chat.

100%. It gets more and more fun every day. Thank you, Jim. Everyone listening. Thanks and catch you next time.