LB: And in many ways, if you extend the way you’re thinking, it actually takes us back to the day when we can shake someone’s hand. When I shake your hand, Eric, it means this is what I agree to do and by when, and with some degree of specificity. To your point about the distinction between holding the shields and perhaps, on the other extreme, the handshake, you’re actually having people who are agreeing to get things done for each other. They are the right people to make the agreement. They’re the right people to deliver and hold each other accountable and keep track of how things are working. I predict that the kind of emerging changes you articulated will lead us away from a centralised command and control, ERP type into democratised relationships, as you say, between business people. In some ways, it takes us back to the code of honour rather than the shield.
EL: When you think not only about democratising the process of contract generation, that’s when we should be doing it. I think a leader is taking a stand, that is the way we’re moving. The other part of democratisation is the democratisation of data. The contract isn’t just held in some digital dead end, but the data is distributed to all the commercial processes, and commercial systems that the relationship managers own. And that’s why you see more and more contract data and contract creation even happening in other systems. At Agiloft, I can’t pretend that my system is the only system in the enterprise; it’s an enterprise software tool that’s connected to everything else.
LB: As people are using tools like Agiloft and you’re starting to have success in connecting to other systems, what starts to happen is you get transaction flow and data flow, and then things start to get interesting because there is a growing body of data that you can do some interesting things with.
EL: That’s when you’re connecting contracts to commercial processes. That’s when it happens, and I think that’s when the magic happens for the people in charge of contracts or contract analytics; in charge of understanding what’s in the data. Suppose they can now have access to insights about how contracts are interacting with the commercial processes. In that case, they can bring a lot more value to the business than they would have otherwise. I’m thinking back to my days at Serengeti Tracker. In the early days of legal operations, some folks were sort of growing into that role, being the early legal ops folks in the early 2010s, and they built entire careers. They became leaders out of, all of a sudden, having access to data that was more interesting than they’d ever had before. And I think that’s amplified 100 times in contracts because that data is now the commercial data for the company, which is quite amazing.
LB: On that note, are there any use cases or things users have done with the data that have impressed or surprised you? I ask that question so that we don’t dwell too much on the more obvious things we talk about when we say, “Here are the benefits of AI and ML, NLP.” Someone in your shoes, do you see anything that catches your attention? You say, “Wow! I never would’ve thought of that kind of use case.”
EL: Still interested in two things: One is risk profiling. And the reason I think that’s so interesting is that AI can help us understand what’s in a contract and how that compares to standards. What’s so interesting is it’s such a great spot to see the connection between the machine and the humans. As humans, we still need to decide how to weight those risks and think about what’s important to us as a business and our business strategy. And no amount of AI can do that part for you, but you need to get there. As you connect contracts into commercial outcomes, now, you actually will be able to get even closer to that and have the machine tell us, as a business leader, which of these risks do lead to bad commercial outcomes. That’s the path that I like that we’re going down right now, and that’s sort of within reach for certain types of use cases.
The other AI help that we all need – and this is in no way specific to CLM – we ought to be able to do a better job. One of our ideas is to do a better job in the interface, in the technology of saying, “It appears that you are doing this with this contract. Let me guide you through this process.” Or, “This process seems to have hit bottlenecks.” You don’t need to just look at dashboards and figure it out yourself. The machine ought to be able to tell you, “This is not efficient.” You’re going to end up using that clause anyway because nine out of the last ten times, you gave in on that. There’s just all these places where the interface can suggest ways to become more efficient, and those are the ways that I think are really exciting.
LB: Yeah, I really agree with you there, which brings me back to you becoming the CEO for the first time. What was that like? What caused you to go from “Wouldn’t it be great to be a CEO” to “I’m actually going to be a CEO.” What was that like? The going into it, the thinking about it, and then actually the reality of being your first CEO role.
EL: There were times in my career where I thought, “I really would like to be a CEO.” And then, not too long ago, only a few years ago, I thought, “I never want to be a CEO.” [chuckle] And I think I then came back to, “I have an opportunity to be a CEO, and it feels just right.” And I realised that the CEO that I didn’t want to be was the CEO of a $40 billion public company that didn’t really get to know the team, understand the clients, and be their driving culture with the team. Once I was able to squash that notion of CEO and get back to, “I can work at a company of a meaningful size that has a huge growth trajectory that can make a big difference, and I can know most of the people on my team by name.” As I do now, I can have a weekly meeting with my entire team on Wednesday at noon, where we get on and sort of make fun of each other’s Zoom backgrounds, and I can be that CEO. I don’t have to be the giant public company CEO.” And I tell you, when I realised that that’s the kind of CEO that I could be one day, I was so wrapped up in the company itself that I didn’t feel disconnected. Then I got really excited.
As much as I love Thomson Reuters, I love this job a heck of a lot more. It is very fun to be a part of this group and to know that we’re building this thing together. It is just us; we don’t have any fallbacks. There’s no transition to another business if it’s not going well. We’re all into this, we’re doing it, and we all feel really good about it. So it’s great to be a CEO in that position. I’ll tell you what – I do feel really fortunate.
LB: Going from an executive-leading business (but in a larger corporation) the mothership has capital so you have to manage a P&L, but you don’t have to manage cash, to being the CEO of a business where not only do you have to manage P&L and cash, but you also have to manage for value creation. This whole notion of you having a business of a certain value at point A in time, you have objectives for developing and growing that. I know it’s a little easy for you, but how has that change manifested or felt for you?
EL: In many ways, it feels more concrete, more real, so it’s easier for me to get my hands around when I think about value creation for the business, for example, and cash. For me, as a growing software business, those are in constant balance. When I strip it down and simplify things, how much cash am I burning, and how fast is my ARR growing? And if I get those two things right, everything else is working. There’s a lot in there, but those two metrics can really do it all. My ARR won’t grow unless my customers love my product, stick around, and help us get new customers. My cash won’t burn at the appropriate rate unless I make good investment decisions, and my team understands the value of the money they’re spending and spends it wisely. It focuses on a couple of critical things, and I think that’s great. I’ve spent a lot less time asking other people for money, which frees me up to think more about how we use the money. Every business will have moments where they’re raising capital. We raised capital last summer just as I was joining. The first thing Colin Earl, the founder who offered me the job, said was, “Let’s go get money, and then I’ll announce you as soon as the money comes in.” We did that, so that was great. The growth is funding things right now, which was fantastic.
LB: You’ve got a pretty unique industry experience given the arc of your career. You’ve worked with alternative legal service providers, and you’ve worked with the Big Four. You’re now working in legal technology. What do you think about legal ecosystems competition and collaboration? How do you think law companies – whether they are services law companies, technology law companies, consulting law companies, the Big Four law firms – how do you think they’ll play together over the next decade? I realise that’s a very big open question and there are lots of different answers to it, but what comes to mind when you think about that, the competition, collaboration for the players?
EL: The first thing that comes to mind is the people that we’re really talking about. Companies are just people. So many of us have moved around. We’re on our second or third or fourth company, yourself included. I know people on your team, and you know people on my team. There is a really nice level of collegiality in this ecosystem that I have appreciated. I think it facilitates partnerships, so I think that’s the first thing that I liked about it. I think we’re going to enter into a spot now where we’re going to get better and better at partnerships. I think that’s important because there are a lot of players in the ecosystem that are still taking on little bits of the challenge. From our customers’ perspective, they want us to get together and be better at partnerships; whether it’s Elevate and Agiloft or any other technology partners you can think of, we need to get better. And I think there’s a cross-fertilisation of people who will facilitate that. That’s the first thing that comes to mind.
The second is that many software markets tend towards having one or two big players. And you saw that in the legal content market. Where I came from, that happened over time. In the legal technology world and the legal company world right now, we generally don’t have that; we don’t have the dominant folks. I would be very curious to see how long it stays like that. Obviously, the more money and the more PE-backed acquisition Fed. platforms that come into the market, you can see a lot of consolidation happening. That’s my question. When we start getting to a point where there’s one or two big players in every market, it might become a little less collegial. I don’t know about you; I do feel that most of us in the law company world believe that the market that we’re fighting over today is the tiniest little speck of the market that it will be. The two of us, we can open up, can spark our clients’ creativity by showing them alternative ways of doing things, and alternative technology that allows them to visualise those things they can do. And so we can do those things together as partners; we’ll just grow this market. So that’s my hope for us for quite some time.
LB: I couldn’t agree with you more. I think this whole notion of professionals’ mobility is such an important way of thinking about it. So it becomes, “Yesterday, I worked at a law department, and tomorrow, I work at a law company.” We didn’t get to talk about COVID and digital and all the things that are, I’m sure, at the heart of your business. I’ll move to some ending questions that I always like to ask. The first is, and I’ll let you think about it after asking you: “Leadership in tough times requires… dot, dot, dot.” Please finish that sentence. While you’re thinking about that, I’ll ask, are there any books on being a CEO that you would recommend to other executives in legal?
EL: I will admit that I don’t consume a lot of business books. My wife consumes quite a bit, and she tells me about them. But what I will tell you is that one of the more interesting books that I’ve read recently was Designing Your Life, which is about taking a prototype approach to your life. And I think the same thing you could apply to your job as a CEO or any executive, which is to imagine what would make you happy or make you successful or whatever it is. Figure out how to prototype that and make it work. We always talk about prototypes in product or process. When I was reading that book, I was thinking about what my next job should be, and I was thinking, “Actually, I wouldn’t mind going out on my own and doing consulting. I should do that.” And I just thought that was a fascinating thing that we could apply to any parts of our lives, rapid experimentation.
LB: Before you give me the other answer, I just want to comment on that. One of the aha moments for me as a CEO was, there’s no such thing as a baked, done CEO. I’m thinking about my early venture capital or private equity investor colleagues.In fact, there’s some I didn’t work with, but I know them from your fund, who will have given the feedback, “Liam was sometimes a bit too defensive or protective. He had the answers. He wanted to be seen as a baked CEO.” Now that I’m older and a bit more comfortable with that, I like your idea about designing your life and thinking about things as a prototype. That means that you actually prototype things in the same way in your business or your product. It’s okay, isn’t it, as a business leader, to say, “I’m going to prototype this, so I’m gonna try this.” Especially if you communicate that to your board and your executive team, it’s okay when they see that you pivot away or some of those experiments don’t work out. It doesn’t reflect that you aren’t capable.
EL: You often project that sense of a success or a failure as being very black or white, and you can’t set the world up that way because that’s not the truth, yeah.
LB: So now that you’ve had a chance to come up with some good answers, it’s been an interesting last 12 months almost to the day. “Leadership in tough times requires dot, dot, dot.”
EL: Strong connections. And I don’t mean strong connections as in your network outside the business or whatever. That means stronger connections, as in, you have to feel very connected to all the different parts of your business. And I think this goes back to what I told you earlier, which is my fear about being a disconnected CEO at the top of a giant public company. To me, if you’re going through turbulent times and you don’t feel those connections, those little tremors here or there to tell you what’s going on, you’re going to miss something, and you’re not going to guide the business in the right way. Connections to your customers who will tell you what’s really happening, connections to the data, the sort of instrumentation of your business, connections to all of the people. Those connections give you that sense of what to be paying attention to and which way you can pull levers. If you don’t have that, you’re blind and flailing around. So to me, it’s all about that connectivity.
LB: There’s a couple of things that you said today that I might bring into my own leadership, so thank you.
EL: It’s been great talking to you, Liam.