Cutting Through the Noise: Building Value in Legal Operations

Thank you so much, Daniel. Wonderful introduction. Thank you, Eric, for having me. I am very much looking forward to a dynamic and insightful exchange.

Thank you, Eric. Yeah. So first of all, it wasn't me, only it was a wonderful team effort at my former company, and I was really privileged when we decided in the late twenty nineteen, twenty twenty years to redesign our service delivery model to be chosen among two, three other colleagues to steer this transformation project. So Bayer obviously still is one of the front runners when it comes to digital transformation.

And there was a lot of, I'd say, change needed and mandated after the company had some major acquisitions primarily in the United States.

And it was a humongous effort to create the most efficient and effective organization and it's still going on in the world. We in the legal department redesigned a twelve hundred lawyer strong community into, I would really say, a digital powerhouse. And beyond the shift in the service delivery model, the key focus was really in job enhancement, in job satisfaction, and reducing the noise that we have all been experiencing in our profession that does not always make our jobs fun and exciting. So beyond this transformation on the operational side, we really looked into the impacts on the human side, and I know we will be talking about this and what makes me passionate is that I myself experienced the benefits of this change in this role as head of compliance and data privacy. Obviously, in a large organization with more than one hundred thousand people, there's always something going on, and you're always in action mode oftentimes in a reactive fashion.

With clearing out the underwood, focusing on real value services, leveraging technology and process automation, my portfolio became much more manageable. And as a leader, you want to lead people, you want to inspire people, you want to develop talent. Oftentimes, you don't have the time because you're constantly in a firefighting mode.

With this transformation for the first time at the end, I really had the time to spend to develop talent, to identify the next generation of leaders and to really sit down with them, listen to them, and help them escape the corporate grinder and also leverage these new opportunities. So this is what makes me passionate. I see the human impact. I see the benefits, and I hope that our podcast will incentivize and maybe really bring tangible impact into our legal profession so that others can follow along.

So we would not necessarily come in and convince people. I would rather prefer working with teams that have already identified the need to change, the benefit of change. So that there's already a bit of an passion and a spark out there because unless you have that intrinsic motivation, because of pain points, because of cost pressure, because of employee survey data, there's a lot of reasons why you want to enter into a transformation mode.

Super imposing this is an uphill battle. So first, I would say we are fairly privileged to work with general counsels, chief compliance officers, legal ops leaders that have already kind of paved the ground and seek external input and insight and backing to confirm their assumptions, to learn from our experience and to connect the dots. So that's one part of the answer. Once that foundation has been laid, things are obviously much easier when you talk to the top team, the top tier of an organization because you need tone from the top.

You need that backing also. Otherwise, it's gonna be a project that comes and goes and not a fundamental transformation. So answering your question, you have to get the leadership team and it's not just legal, ideally, other functions, ideally, the c suite on board that this is the way to go. Then on the second side, on the operational side, ideally you bring tangible benefit to the table.

Every organization knows where there are pain points. Some can be fixed quickly, some take longer. Once you have a pool or catalog of these pain points, you can tell people, look, this is what we are currently faced with and here is our roadmap to get rid of those pain points. Here are the toolboxes that we want to leverage to accelerate that process.

You have to have a what's in for me answer on a very individual level, not just aggregated and generic, so that everyone in an organization sees there is something better than the status quo and sees that I can contribute to this improvement because I ultimately will benefit from it. And then you have a motion, a momentum that's systemic, that's foundational, and that ultimately drives an organization and not just pockets of it.

Secret, I don't know. I would say there are different levels of pressure on organizations.

If you are on a burning platform and there is a lot of industries both in Europe, in US, and also perhaps in Asia challenged, So in those scenarios, you must really change your operating model. Otherwise, you're gonna have a very short runway to survival.

So with those, I think there is no secret. There is just the need to kind of reinvent the wheel when it comes to delivery of legal services by optimizing your processes, by pruning your service portfolio, by bringing in tech and having a mindset change. So for those, it's a fundamental need. There is hopefully enough, I'd say, clarity on those financial ramifications for organizations to just sail along.

There's another cohort of organizations that are not as challenged, not as exposed, and those are the more difficult environments. And they're potentially leadership, and we talked about this before, is more tasked with maintaining the license to operate, being an anchor of stability in organization, running efficiently legal risk management, and if that's being done, that's perfect. That keeps the company out of trouble and lets the business flow. So these two, I'd say pillars you need to contemplate and I think it's much more difficult to go into the second pillar where there is less drama and less need, as I said, for such changes.

The secret for both scenarios, however, is and I would say statistics and our daily experience proves it, the happiness in our profession is, I'd say, an average level. These are data that I as a general counsel, I as a legal ops person or chief compliance officer can leverage to reignite the spark in an organization that may have come into more of a saturation mode where there are some complacency, some inertia, you have exits, you have higher sick levels, you want to really bring passion and energy into your organization. Those data will help you a lot whether you are on a burning platform or not.

Thanks for the question, Eric. And I think this is a good starting point. Rarely do you see in house legal departments, whether small, medium sized or large, really having tangible KPIs in place to measure efficiency, quality of services, client satisfaction, cost of goods, output pays and so forth. So this is a starting point to, for example, as you said, look into NDAs, look into third party risk assessments, look into data privacy consulting, look into compliance investigations. Who does what?

How efficiently, at what quality, with what help and collaboration? This is a phenomenal point and this is how we did it also in my prior company and in our current client base to put on the brakes. I'm sorry to say this, it's difficult to really do open heart surgery when you're running a marathon. So you have to have dedicated resources and here comes the tone from the top interplay as well to map out your service portfolio, to create these data points. Because in my both newsletter and LinkedIn posts, I always say, you cannot transform what you cannot measure. And measurement data is just not present in many legal departments because it's gotten into a status quo modus operandi where this was not necessarily needed. But you are hitting the nail on your head, data is rare, data is needed, and we all know AI is a model that runs on data, and if you don't have them, your AI tool as beautiful as it may be, is going to operate in the dark.

Oh, I need to remember all three questions now, Daniel.

You may need to help me with the third Well, let's start first with those five KPIs and why is it that legal departments suffer from not being able to identify those KPIs that they need in order to measure the effectiveness of their legal department, the effectiveness of their own lawyers? So the first question is one that gets us into uncomfortable territory, Daniel.

Because once you start measuring the efficiency and effectiveness of your organization, you may find out that there is a lack thereof.

So you are generating data that might expose individuals in your organization to questions. For example, why does it take you that long? And what's the quality level of your work? And why is a client permanently asking me as your supervisor when something is being delivered that he or she doesn't understand?

So there is certainly a level of discomfort when you start looking beyond the shoulders of people, and you're capturing the good, the bad, and the ugly of your organization. So I honestly think there's a fundamental dilemma when you start looking into your service portfolio, and you we did Hoshing Kunri and other exercises in my former company, and there you see how much services the league department has accumulated over the years, which are not really core legal services. So that's one thing. Secondly, once you have these data points, you wonder what am I doing with this?

So one one, I think, fundamental challenge here answering your first question why we don't see this is you lift up the lid of your organization and you're exposing yourself as a general counsel or as a chief compliance officer or legal ops person to, again, the unfortunate truth that your department is not run-in the most efficient way, and once that's being determined, the consequences could be stark. Secondly, why did we settle on those? I just gave you an example. There were many more KPIs that we defined.

For example, when you channel legal service demands into a central intake platform, you see what questions come up all the time in a repetitive way. You see where no questions come up, what jurisdictions seem to not need legal, what jurisdictions overutilize legal. So there's a plethora of measurements that you can enter to us. The key one was client satisfaction.

And there's another topic that we need to discuss at some other point, user experience in the legal service delivery network is not something that is as present as in other areas like in sales and marketing. UX design is something that we blended into our measurements and that was great to see that this new operating model was actually very much welcomed by the organization. People got answers twenty fourseven. People got consistent answers twenty fourseven.

People in the organization, the legal organization did not have to deal with the same question over and over again and reinventing the answer.

So long story short, these were KPIs that backed our new service delivery model both on the legal side as well as on the client side. And then I hope your third question is rephrased properly, how to generate the data. Again, you need to have a dialogue with your team, you have a dialogue with your organization, but you can also look beyond the curtain of legal. There are other departments where those KPIs have already been identified and you can probably copy with pride a number of them.

Yes. But I think what you're talking about is, you know, business and client satisfaction, how the law department actually functions with the lines of business. And I've seen different ways in which that actually materialized. So you do surveys and you do feedback loops, but you can also get into application use and how much people share and work together. So when you talk about I think the biggest thing that I am concerned about is that when you start to bring all these efficiency models, the general counsel really has to have an open mind.

Because let's face it, they fight for headcount, and they fight for territorial domains that often when you start peeling back these layers of efficiency and effectiveness, you see that they might not need that type of headcount or they don't need the volume and counts of headcount. So how do you get to this point where you start to convince general counsels like, it's okay. It's gonna be fine. We're actually not just thinking about effectiveness and efficiency, but back to your other point, we're trying to get people to be happier. We're trying to develop a more humanistic model in which people, lawyers and law departments can come to their job and not face what might be drudgery every day doing rudimentary things. How do you get the general counsel on board with that when they've really never been trained to do that?

So I would say every general counsel wants to do his or her job in the most perfect way both on the legal side as well as on the human side and we all want to be ethical leaders. So I challenge some of my clients here and there a little bit and say, look, do you think you are an ethical leader if you keep burning human capital by not removing those mundane tasks from your team, by not improving your client satisfaction or job satisfaction survey data, by maybe reducing your sickness numbers?

And many see the point. And many want to build a legacy that's remembered after they leave, and it's an opportunity like never before to, as I said, look what we are doing now, look what we want to do in the next year or two, and look where we want to be in the next three to five years. So you have to have a master plan, Eric. I think what I see is a lot of opportunistic tech deployment.

So the best clients for us are those who really have a long term vision, who see what you've just described, capacity needs, over regulation, doing more with less, and this is the time where you can really do it. This is the time where you may not need to hire new people, you just have to redeploy what you have. And those who are really smart and have the time and that's the biggest challenge for many. You know, the GCs themselves are absolutely drowning in activities. You've seen portfolio extensions like the tariff, like ESG.

So this is something I see really as a dilemma. They would love to, but the difficulty is really just finding the time, putting the brakes on, and engaging into this dialogue, defining the road map, having this workshop with the stakeholders. That's where an organization needs to provide the GCs with help either by having external support like you or us or dedicating capable people and not just I'm not saying just not legal ops alone, but ideally lawyers from the trenches with those pain points as part of the design team.

What you're really seeing at this point is the first wave of AI getting into legal, it's very much a tech push. People are very jazzed about, oh, I'm gonna basically try to sell this AI to a lawyer who can change the way that they work. And we've seen some effectiveness and success there, but I think the majority of what we're seeing around AI adoption is weak. It's not quite there yet.

So let's first talk about what the issues are with AI adoption in law departments. Law firms are a separate issue.

But why do you why do you think it there it's just slow to identify and adopt these new great tools?

So I give you an example out of my former world. We, as I said, had a central matter intake tool. We routed all data privacy related questions into this tool.

But before you can do that, you need to set up the technology, you need to have an activity model where people know that they have to log onto this tool, they have to type in their question, it's being recorded and it's being answered in this platform. So when I left, there were eight thousand data privacy tickets on that platform. You could read out the categories, the jurisdictions, sometimes really the functions that were asking those.

This gave us a set of structured data to deploy AI end of twenty two, early twenty three. But before you can do that, you have to clean your kitchen. You have to get your house into order and that's what we've been talking about just the last twenty minutes. It's not just painting fresh white paint over a, I'm sorry to say it, wall with a lot of mold on it.

The mold will break through, the paint will not stick, and at the end you are ending back at square one. I think this is really the dilemma I want to bring tech in. It looks like everybody is buying tech. If you look into media, every law firm, big law firm has partnered with one of those known brands.

I don't want to be left out in the dark. So I have to create these news, these headlines to be seen as an innovator. But as I said, that's the second part of the game. You know, we are playing the seventh innings without having started the real game in the first inning.

And that's what now shows. You have deployed you have purchased these licenses. You may have deployed them, but I also see the measurements are not really hitting the nail. I hear about utilization.

So let's just look into this.

What does it tell me if my team uses AI one hour or two hours per day? Nothing. What is the productivity gain by using AI? Are you speeding up your contract approval process? Are you producing two MAMOs in two days rather than just one?

Are you needing twenty percent fewer attorneys for an internal investigation? We are just not really dipping below the surface of those improvement opportunities, which again enter into this discomfort because then at this point, we are talking about capacity, we're talking about performance, we're talking about cost reduction, all the consequences why I'd say big law big law tech receives these humongous funding dollars because there is the assumption that the money will shift away from the human to the machines, and that creates anxiety like nothing else, and I completely understand it.

I yeah. So yes. Yes. Yes. I think you're creating the perception of a superimposed solution if legal ops purchases, I'm not going into names here, one of those prominent tools, there is a big splash, hey, we have these licenses, they will help you with research, they will help you with contract drafting, reviewing, all these beautiful things, But at the end, we are creatures of habit.

We know what we do and we know that what we do as we do it, we do it well. So I think that you have to really engage with your internal audience, help them utilize these tools and help them utilize the features of these tools that are very simple. I have a few newsletters out there, the Ferrari fallacy is one where I'd say all these beautiful bells and whistles that maintain the competitive edge of a legal tech tool do nothing good to the ultimate user that is currently in a PowerPoint or PDF era still and not yet in AI agent mode.

You always have fifteen percent early adopters in every legal department, the most traditional ones. You have folks who just joined from somewhere else, who have been undergrads in tech whatsoever. So you have a cohort of supporters no matter where you are. So this is the starting point. And I would say this is your team of catalysts that you should engage. We call them change ambassadors, other clients call them differently. So these are your ends that walk around and work, work the system.

That goes back to tangible impact. These people then with their enthusiasm for tech and their understanding of tech and hopefully also their standing in organization will hopefully embrace those who are not there yet. Sit down with them. Explain. Also, think this whole current cycle is at a pace that is not sustainable.

You you need time, you need faces, you need vision, you need clarity, you need really kind of a, I'd say, de acceleration strategy also so that people don't feel being left behind. So the answer to your question in my view is, you will not be able to bring everyone on board. That's also a clear learning for me. You may have five percent, you may have fifteen percent, you may have even more.

You need to have a strategy how to cope with this cohort, that's another discomfort zone, but you can definitely expand the early adopter cohort with the tactics that we just discussed, and then you create a critical mass that will drive change.

Thank you. Global overview of legal tech. That's what GOAT.ai with the t stands for. And it has been built by people like me and cofounders who have been in the trenches or are still in the trenches.

If you look up our team, you'll find folks from AB InBev, Microsoft, Bayer, Merck, and others. So when we designed our new service delivery model, we didn't have any knowledge platform. Fortunately, in twenty twenty, there were not four thousand tools out there, but I'd say forty maybe, there was no AI out there and there was really not this hype that we are in right now. So it was much easier for us to select and decide.

Now, it's a bottleneck. People really are challenged to find the right tools with a platform that is not squeezing tools into categories, with a platform that ideally deploys AI for the search like gold dot ai does, where you simply enter your problem statement and our service will help you finding the right tool with much less, I'd say effort, with much more confidence. We do test legal tech software as well, so you may save the time and effort of a proof of concept, for example. So we've built this Gold AI platform to help our peers and former peers to navigate through this jungle, this ocean of legal tech solutions in a very user friendly way, and in a way where legal tech vendors don't have to pay to be on GoldAI, they don't have to pay to enhance their data on a regular basis.

So we are also trying to democratize the access to legal tech tools. We try to also bring in those who cannot afford paying for services. We try to be global, but also regional. So you can look for jurisdictional support.

You can obviously do what other competitors do as well, but the key differentiator is the simplicity, the intuitiveness, and of course also the backing by folks like me and others if you have a more detailed question to help you not tap into the same landmines that we have tapped into.

Yes.

Going back to what I had said before, Daniel, we enable efficiencies by helping organizations map their portfolios and prune their portfolios first and foremost. So the tech part, I need to repeat myself, is a secondary step in the cleaning the kitchen exercise.

By identifying the use cases within a legal or compliance team, you are identifying the pain points, you are identifying the must keeps, but you're also identifying the let goes, so you're pruning. And then as a next step, you can look for legal tech deployment. We also ideally look at the low hanging fruits at the beginning and then move to more complex challenges, which is also sometimes confused when it comes to tech.

I hear AI, legal tech solutions are tools that look for problems. Well, it should be problems identified, tools being matched, not the other way around. Giving you real world examples also from current client engagements, but also past experience.

We all know the mundane work, gift approvals, policy creation, policy governance. You have third party risk management, you have the contract drafting.

Do you know of any organization that has a robust cross functional knowledge management or even an intra functional knowledge management? I have the benefit of or privilege of working with a few, but I cannot tell you probably more than ten in my global network. Compliance checks. So many, many more when you say cutting out the noise, cutting out the mundane work, these are the transactional services that you have to identify and that's how we did it and that's how we do it because those are the services that go into tech or first into a shared services center.

This is also an interesting analogy. There have been shared service centers in many multinationals for many many years, including my former company. Functions like AR, finance, procurement, accounting, they were all in. One function was rarely in, the legal function.

So that shows that the legal function was not a process driven continuous improvement centered function.

That's what you can create now with the tools, strategies, the people that we have identified, and then you can definitely become a more agile, a much more value adding, and a much more, I'd say, human centric legal department where just going back to Gold dot ai for the legal text selection, for the claim validation of a software provider, for the implementation, we cover all these spaces and that's where I think we add a little bit of a comfort level to this journey which for sure is a rocky road.

It's really difficult to answer it because there are also cases where those big names have been deployed very well and with proper training and internal hackathons and tone from the top, there has been value created, period. I could give you a couple of examples where because of a innovative an innovative general counsel, there definitely is value and ROI measured. I would also say that you have law firms that have good data with some of these tools.

So in some respect, we fortunately have lighthouse cases that need to be more prominently presented to have others copy those. The CLM tools, they usually contract for three years and longer, In a worst case, they lock your data into their ecosystems and it's very difficult to get the data back after the end of this contract term, hence you may stick with them.

This is phase number one we are in right now and there will be a phase number two, and you see this in CLM. You see there is a new category emerging where you do not need to create templates of contracts, where you don't really need to identify your template portfolio that you want to use, where AI algorithms are capable of segmenting unstructured contract data and creating this landscape of structured contract data.

This is going to be an interesting category in my view because some of the bigger players that are not necessarily AI native, they are coming now with some AI agents, but they are not as bolt on with those promises and probably really promises that are substantiated to invest much less in cleaning the kitchen when it comes to this deployment than these AI native tools which just soak in the data and create a structured data lake with proper templates and whatnot.

So I think you will not be able to, especially if you want to equip your organization with one tool across the board to test and validate it.

In any software development, you have user acceptance tests, you deploy MVPs, you have test pilot cohorts. That's how we did it as well. In fact, in my former company, we rolled out these use cases and tech deployments in ways, geographical ways and also functional ways. There are certain jurisdictions that are super digitally interested.

I can tell you Colombia was one country I learned they love tech. They they are easily, you know, the guinea pigs of an organization, and those then generate the enthusiasm other less prone functions or geographies may need. So long story short, test it for sure, pilot it for sure, scale it, but also make sure that you can exit a tool, especially one that is brand new with some contractual clauses including data retraction. Otherwise, you may really face challenges.

Now I tell you a little bit of a secret. In my former role, and I was privileged to be a part of the ten person global leadership team for the Legal and Compliance Department.

At the beginning of my journey as chief compliance officer, I did have to undergo an assessment, an HR assessment.

And one trait that was underdeveloped was active listening.

So I was privileged that I got a coach in New York City, I'm still a friend with him until these days, which who walked me through this humongous challenge, especially if you're in such a prominent role where you are expected to talk, where you're expected to lead by talking, where you're expected to express the vision rather than listening to others and let them design it. It's a complete change, a flip by almost a hundred and eighty degrees to go from purely extrovert to smartly introvert. And I was privileged to really get this guy become my partner, friend, coach, and you're absolutely hitting the nail on the head.

As a general counsel, legal ops person, you need to listen to the people you're going to impact with legal tech, and this is not just your function, it's your clients. I can also tell you some internal clients did not feel very comfortable with shifting human approvals to machines because if the machines make a mistake, the regulator will still come back and who's gonna be held accountable. So there are some dynamics and ramifications from a liability and regulatory perspective. You need to contemplate when you plug in technology and you have to have a comfortable conversation with those people on the hook in the worst case, that they also back your tech solution because this will not take their liability away and they don't trust the machine that comes brand new, they trust the legal or compliance person that has been in that role for the last twenty five years.

So active listening, and I take this away and you've been really diligently listening, I admire you for this insight and analytical skill. Absolutely on point. Listen, engage, slow down, credibly substantiate, and communicate, communicate, communicate.

Thank you. Thank you, Eric.

Thank you, Daniel. It's been a privilege and a pleasure and I learned a lot during your interviews and your smart questions. Thank you.