How to Transform Legal Work in the Digital Age with Martin O’Malley of Wolters Kluwer - S9E20

0:00I think we should bear in mind that most lawyers don't really care about the technology, they care about what the technology does for them. If you start off with the premise of the solution is delivering the quality I talk about, it's secure, it's not violating privacy, that has to be given. The critical thing from there is identifying how do your processes, your internal processes need to change, how do you actually educate and actually change the way in which you work. Part of our expert solution strategy is demand knowledge combined with technology to ultimately help our customers be more productive.

0:35On today's Legally Speaking podcast, I'm delighted to be joined by Martin O'Malley. Martin is the CEO of Walters Kluwer, legal and regulatory division. He has more than 20 years of experience in operations, sales, customer support, product development and marketing. Martin has led businesses across Europe, the US, Asia Pacific and has extensive international experience. So a very big warm welcome to the show, Martin. Thank you, Rob. Thanks for having me. It's an absolute pleasure to have you on the show today. And before we dive into all the great work that you are doing, we do have a customary icebreaker question here on the Legally Speaking podcast, which is on the scale of one to 10, with 10 being very real, what would you rate the hit TV series Suits in terms of its reality of the law if you've seen it?

1:20Yeah, I have to say I do confess to having seen some of the earlier episodes. but I'm not a lawyer by background, so I haven't really been looking at that lens. But I asked my wife, and she said she would give Harvey a nine. There we go. Well, that's very high praise for Harvey. Very high praise for Harvey. He's a real skill, of course. Absolutely, absolutely. So let's get back to you then, Martin, as we move swiftly on. Would you mind telling our listeners a bit about your background and career journey? Yeah, so I grew up in the west of Ireland, so I've spent exactly half my life, I realised, in the West of Ireland, studied engineering, and I started my career at Relics, at the L-Sphere piece of Relics, first in operations, but I've been very fortunate to kind of move through different functions in the company, so operations, product management, marketing and sales, through to unit leadership.

2:14And I started at that very interesting point, which was the whole printed digital migration, seems like a long time ago. And in addition to the fact that I had multiple functions, I've also been very lucky that I started in Ireland, I worked in the UK, moved to Amsterdam, and from there I was sent to both Singapore and the US. So I've kind of done international exposure. I moved to Waterstour in 2017 and started out as the MD for the Benelux for Legal and Regulatory. In May of 2020, in the middle of COVID, I actually became the CEO. and I currently run the division. It's about 950 million euros turnover.

2:55We operate in multiple countries across Europe, the US, China and India. And I was really drawn to it because of its purpose, what's the purpose which is deep impact on what matters most. And it's this idea that we help our clients to be impactful but also that we also indirectly have an impact in the societies we operate in. So that was a very powerful thing and it still motivates me today. Yeah, absolutely. And we love having those voices on the show that really are inspired to make a real impact. Just thinking back to James Thornsson, who's one of the leading climate change legal professionals in the world and some great conversations we've had.

3:32But congratulations on becoming the CEO. And I know you're doing some fantastic work from your side. Could you perhaps give us a bit of a day in the life of a CEO at Walterscruer? Yeah, I mean, it's, you know, if you run a division at Walterscruer, we kind of work on a certain cadence and if you zoom out, it's like a three-year plan, which gets translated into your yearly budget. And then it's basically, you know, monthly reporting where you're kind of looking at it from an internal perspective, how is the business developing? But a big part of that is also looking at what we're doing with our customers and what we do as this mission, which is focused on what we call basically transforming our business towards expert solutions, where we combine our expertise and the main knowledge of certain segments in my case, legal and registry, so the legal professionals with technology, with content and data, to help our customers be more effective.

4:24So I would say in all of our internal meetings, there's always kind of an element of what we're doing for customers. We spend a long time looking at things like net promoter scores, but also how that's translating into business results. So you're always kind of toggling between those two. And sandwiched between that, obviously, is focused on employees. We have a very strong focus on culture. And culture is really, you know, I translate that into how good do we feel as employees at Water's Clure. So, you know, we measure our engagement scores every year because I have a very strong belief in happy customer.

5:00Happy employees translates into happy customers. And that's a kind of your financial results are an outcome of the two things you do for one of your employees and secondly for your customers. So their outcomes rather than just an objective in itself. And I love that. And I always say to people with my legal recruiting hat on, don't just hire people for a job, you know, get people to really buy into the mission and feel they contribute to the mission. They have a real purpose as part of that, rather than just coming to the do night five every day and just have a job. And obviously you're doing a great job of that.

5:30Now, you didn't think we could get away with this podcast without talking about that little thing called AI, did you, Martin? Yeah. So, you know, we've got listeners of all sorts of levels of AI, you know, some very, very, very highly advanced, some obviously just dipping their toe in and some curious. So let's start at sort of the simple level to begin with. What's your definition of Gen AI? And with obviously a number of months since its arrival, what's the current state of adoption for the legal market for 2025 in your view? Yeah, I think there's probably a few different pieces to that. So let's break it out.

6:01I think Gen.AI obviously has had a huge impact in a relatively short period of time of just kind of getting the general interest in AI. You know, if I sit at the table with my kids, I talk about AI to the point of where they say it's boring. But I think if you kind of zoom out and you look at AI from a world's view perspective, you know, we've been deploying AI for multiple years before Gen.AI came along. We've got multiple solutions in the market that actually uses AI. I think about 50 % of our revenue have some AI built in. But for us, the driver has been really, when we look at AI, we look at how can it help demonstrably impact customers.

6:44And there are principles we apply there, which are really focused on delivering the highest level of accuracy for our customers, where we're taking, I think, two things we look at. One is how we combine human expertise and validate its content with AI capabilities to ensure that you can deliver something that's of a high quality level. And quality translates into it does what customers expect, but it also operates in a secure and private manner. I think those are things that are important for us as a company, but also for our customers. and at the same time provides the transparency to our clients that the results they see, they can trace them and that they're validated.

7:26So I think that's a very important piece. Now, if you look at where we are today in that charity, there is huge interest. I just came back from a trip from China last week where I met law firms. I was talking to corporate lawyers, but also at government level. and the conversations I was having there were some conversations I had in the Netherlands or in any of the markets we operate in and they typically hinge around things like what can AI do to help improve my productivity? How can I do it in a safe way? How can I be sure that quality is confirmed? And I think they're looking to parties like WaterScore to actually deliver on that.

8:07So it's a very exciting time because it's not just about the technology. AI at the end of the day is just the technology, whether it's Gen AI or other forms of technology. They are only a means to an end. And the end is, I think, for our customers, is how can we help the customers be more productive? So I think that is really the key focus. And that's where, frankly, the way we look at it across our business, it's part of our expert solution strategy, which is domain knowledge combined with technology to ultimately help our customers be more productive. Yeah, absolutely. And I think another big part from the conversations we've been having on the show is obviously AI coupled with PI, the people intelligence as well.

8:48You can go out and buy all these amazing pieces of technology without getting the people on board and educated and seeing the value. And I guess you talk very clearly there about the benefits to the customers. Is there one that you see time and time again? Because, you know, let's be real, you know, Walter's Clear has been at the forefront of integrating AI for a long time. It's only really been sort of table stakes in the last couple of years or so in terms of the mainstream. But, you know, from over the years of sort of customers responding to you regarding Gen AI, is there sort of a core key theme benefit for those that might be less like at that stage at the moment in terms of thinking about buying that you'd really want to kind of hammer home?

9:25Yeah, I think there is, the way we think about this, if you kind of take a step back and you look at it from the customer's perspective and the bigger trends, and particularly for legal professions, I think if you take other professions that you serve as an office peer, some of the same principles apply. For legal and regulatory professions, whether you're a corporate lawyer or whether you're in a law firm or working currently in the legal profession for government, you have an increasing volume of regulatory requirements that they have to comply with in a decreasing amount of time. So what our customers are looking for are solutions that help them actually be more productive.

10:02We do that in a way for safeguards policy. And we look at it in a number of ways. So if you look at my portfolio, the products we serve, broadly speaking, about 70 % of the business is digital content, so research content, 30 % is software. So when we look at the research content, and it's really looking at how can we help improve the discoverability for clients. So typically a corporate lawyer is looking at precedent. Sorry, a law firm lawyer is looking at precedent. Corporate lawyer might be looking at what regulatory changes are, how do they affect my business. But essentially what they're doing is they're doing document search.

10:42They want to find a specific piece of information. Sometimes they know in advance what they're looking for. They just want to get a confirmation. and what we're doing there essentially is we're implementing AI in a way that helps them get more effectively through those documents. It's sometimes via conversational search instead of keyword search. You're looking at summarization capabilities. You're looking in some cases where translation services are being built in. That's obviously very easy with J-AI. But the key focus is on helping them get more quickly to develop an information. That's one use case.

11:17The other use case that we see, and they're multiple, by the way, so I'm just going to pick a couple of examples. But if you look at, for example, in Legisway, which is our contract lifestyle management product, there we've been using AI, not Gen AI, by the way. That's more, I would say, traditional AI to search through contracts and extract relevant details from contracts. So, you know, I mentioned I started in the COVID period. and what was one of the most solved after and solved for questions at that period was I got leases in my buildings, where are those leases up for renewal so that I can make sure at the time I have renewal, I'm going to shrink my amount of office space because I'm not going to hybrid working.

12:01So that type of, that's high value information at that point in terms of major corporations that have lots of different locations, how you get very quickly to where you have opportunities to potentially save costs and actually have a business on that. So that's, I would say, examples on the software and the content side. But the other area that we see at the moment as being very exciting is where you have, on one hand, research products, like a lot of other content products, where it's coming more closer to the workspace of the client. and we call that the legal workspace where you're looking at internal information sometimes client specific information or the clients of the client information and increasingly our customers are looking to us and say okay I'm working with third parties it might be a Harvard, it might be a Legora it might be Microsoft how can we take what you bring to the table bring it closer to internal information and that's creating some new use cases and I think the focus there again is on efficiency.

13:12So, you know, document creative, due diligence reviews, data analysis and at the same time where sometimes they're pivoting between, let's say, task-related work internally but also using external sources and I think that's where you're going to see a lot of developments over time. but despite the huge interest what we see is that the pace is going to be very measured so we try to look at we try to in a way reflect the cautiousness of our clients in adapting ai and technology in general to the speed at which we bring it to them so i think that's a continuous effort in collaboration yeah and i i love that word collaboration my listeners will be fed up of me saying it but collaboration is domination and i love that you talk to efficiency as well i think it's an important lesson for anyone when you're thinking of rolling out products and keeping your customers at mind there tends to be three factors time quality or cost where they'll look to buy or see the value and you articulated that brilliantly there in terms of those efficiency gains which is clearly going to free up a lot of time um from other tasks um let's go back to i think it was about september 2024 where walters cluers introduced a new gen i functionality called vital law so i think this is the company's legal research platform so again this combines the power of innovation with Wolters Kluwer's in-depth expertise across 15 practice areas.

14:34That's quite a few. So could you tell us a little bit more about Vital Law AI? Yeah, I think Vital Law AI is probably the first of our research-related AI options we brought to the market. In the meantime, we brought it into, frankly, all of our other content products. And if it's not in it, it's coming in the next couple of months. And it's just an example of what I mentioned, where you're essentially making the way in which lawyers in the U.S. search right a lot easier. So as you said, you've got 50 different domain areas and multiple documents. I think what's often forgotten with a company like WaterSkewer, it's not that we have just the authenticated content, but we have authenticated content that goes back years and years.

15:20So, you know, in some of our databases, we have up to 200 million records, just to kind of give an example. So what you're doing really, what we're doing with ByteLay AI, ByteLay AI is essentially deployed AI in a way where you can more quickly extract relevant information. You may get a list of results coming back from the product, which AI then actually summarizes, it extracts. I mean, you can basically manipulate it in a way where ultimately it's getting faster to the relevant piece of information. It's not more complex than that. I think that's what often they see. What is highly valuable for clients because it translates into time reduction loss.

16:00And I think that's the other thing that is, I would say, differentiates us is it has to deliver a result that's reliable. So the answer that the customer gets has to be of a high quality, and it needs to be secure and comply with privacy regulations and so forth. So we have been very measured in deploying AI and trust solutions. Quality has been for us more important than speed, which is kind of interesting and inert in a market where you see a lot of new players come in. You see press releases go left, right, and center in terms of all this exciting stuff. you know you ask them of you know what does my day look like as a ceo it's sometimes providing that perspective of guys you know we don't respond to press releases but we need to keep focused on those two solutions we deliver to our customers actually ultimately have an impact and if there is an impact that will translate into you know you get our sales better retention levels upsells and i think that's where the focus has been and the white laws i said was the first product we rolled out on the research side we've taken those learnings now and we're deploying them across the west of our research practice across europe and china and i love that you talk to quality and again our listeners probably a little bit bored of me saying this but i always talk about jeff bazoff delivering a really interesting piece of insight in terms of in a world of constant change and new things and people being fast out you need to think about your client's expectations that won't change what are the things that won't change and in his world he couldn't imagine an amazon where people want to pay more for their products and get them slower So he's understanding that his clients' behaviors are they're going to continuously want to get their products faster.

17:38They're going to continuously want to get them at a lower rate cost point. And so focusing on the things that won't change in that quality aspect, like you say, not just necessarily getting something out because of some breaking news and sticking to your North Star and your mission is what's going to separate you apart. So thank you for sharing that. Yeah, that's critical. And I think the other thing that we see is that it's not just about actually taking the solution to customers. you also have to help them work with it. And one of the things that I think is only estimated always with technology advancements is it's not just about the technology.

18:14There's a change in how people need to work. It has to happen as well. And so a big part of what we do as Morgan's New Solutions, not just AI, is to help our customers actually work with them. I think that focus on guiding them through the change, but also changing their behavior, that's critical. Because ultimately, you know, we can make a great selection in terms of the technology investment, but it's not used. It's not doing what it should do. And I heard a shocking statistic recently, which is that 50 % of law firms, corporate lawyers, are investing to some extent at the moment in AI, but only 20 % of it has been used effect.

19:01And there's a huge potential there. And I've heard this time and time again. Also, I heard last week from clients that, you know, you look out there, you know, you sit at the table with the managing partners and they're all excited about the AI. And then they take you for a tour around the premises and you see lawyers sitting between piles of paper. And so I think that's, and I don't say that in a way to mock lawyers. It's absolutely not the case. they're my customers but i think it just reflects that there's still a gap between where the aspirations are and where the practice is and that's going to take some time to change and that's a human behavior i mean it's you know it's like um we all search uh with keywords in google as we as we've been kind of doing that for the last 20 years um but i'm finding if i look at myself just as a user outside of book i use chat gbt because i take a picture and i say okay i'm I have a problem with the watering system in my garden.

19:59And it's much more effective at helping me than Google. But I have to train myself to make that step every time. And I think it's the same in law firms, even more complex and corporate lawyers. Because you have boundaries around expertise. So people are kind of a bit territorial about their expertise. So I think there's a big element of knowledge management and change management here that's been underestimated when people think about how AI is going to change the world. Absolutely. And I feel like, you know, a lot of what you said there is, I'm just sitting here nodding. And I also just remember you saying, taking a photo.

20:37I remember our washing machine at home had an E39 error or something flashing. And I took a photo of it and then just went straight to JackGBT, explained this to me. And it was a simple blockage. You open the thing, you take it out and, you know, you actually get the solution. So yeah, no, thanks for that. And you touched on, I know we talk a lot about this when it comes to adoption of Gen AI. So I perhaps want to talk about some of the less obvious ones, you know, people and getting them to change. And if you want to share anything that, feel free, but, you know, explain to our listeners the challenges, but also opportunities when it comes to the adoption of Gen AI.

21:10And if you do talk to it on the people side, any things you would say that you've learned that's worked well to get people to understand and actually adopt gen ai yeah so so i think the um you know if you if you start off with the um the premise of you know the solution is delivering the quality i talk about it's secure it's not violating privacy and that has to be given that's the the basics well i think the um the um the critical thing from there is identifying how do your process need to your processes your internal processes need to change, how do you actually educate and actually change the way in which you work?

21:53And I've seen this countless times also when we implemented systems within our office, you know, you'd have to Salesforce.com or Workday, unless you make it the way you work and you say, okay, all of your HR processes of how I'm now going to actually put a request in to open a new position, you cannot just email your HR person and say, okay, I want to hire somebody no you have to actually go into update open the position and and kind of make it make that the way what you work and i think that is a big big barrier for legal professionals because they have to make that step so uh but i think that's a that's part to educate them as well and i think it's also um i think focusing on what is the impact for them whether the impact is time-saving, what the impact is, you know, you're going to get more quickly to a high-quality recommendation for your client, you're going to get your memos out faster, and you're going to do that in a way which, frankly, focuses you, you know, gets some of this productivity gain that we're trying to seek.

23:00But not just, you know, measuring efficiency only is one thing, but I think also that they're working more effectively. So I think it's also showing by doing as it were, and I think that's where that support of helping them get it working is critical. It doesn't end with the customer taking the solution. It ends with, frankly, I always say we're a business that's focused on renewals. We want to sell products. We start a relationship with a customer. We sell something. That's a relationship that we want to continue. The renewal starts with the sale. Everything between the sale and the renewal is what you do to support the customer so that the next time around, when you come back, you're going to say, okay, I'm getting so much value from your solution that I want to continue it.

23:47And frankly, I want to expand my users. So there's a very logical fit between the business objective and the client objective. Well, you're helping your customer be successful because if you help your customer be successful, you're also being successful as a business. So it ties back to what I was saying earlier on about the net promoter scores. We use those continuously to measure is it hitting them up? Because that's ultimately what the robot hits the motor. Yeah, and you obviously inevitably increase your customer lifetime value with that approach as well. Absolutely, absolutely. That's the key.

24:22Yeah, and people don't think about that. It's so hard to get a new customer. So doing that work to get them in, you want to extract that lifetime value and then those customers become your instant referrers, your fans, your super fans, if you like, and actually going out there, championing your product and big advocates for your product. And then the new business floods in from there. So yeah, again, just really smart, really encouraging for other CEOs, business leaders, entrepreneurs, lawyers, thinking about business like that, really getting deep into understanding the relationships and offering value throughout that time.

24:53You're going to increase that customer lifetime value tremendously. Okay. A bit of a tongue in cheek question here, but will Jen and I bring fundamental or incremental changes? Tell us your thoughts. I think it can bring fundamental changes, but it can bring them in incremental steps. And I think that's mainly because of the nature of how really professionals operate. I think that cautiousness that sits in their nature, I would say exceedingly delivers and provides them to their implementations. I think you have to take them on the journey in steps. but keeping very much focused on ultimately the long game, which is helping them be more effective.

25:39And I think it's not just a measure of business effectiveness. It's also, I mean, if you look at the quality of life, the work-life balance, I think there are still a lot of gains to be led there. And that, I would say, applies both to the corporate lawyers as well as law firms. They have that same struggle. So I think it'll take time.

26:28and see what Clio Duo can do for your firm at clio.com forward slash UK. Now back to the show. It'll take time. And I was reading the article just the other week about Bill Gates predicting a two-day working week with the advent of AI. Who knows whether that will become a thing or not? Yeah, that's a whole other description. But I do think that the firms that are now kind of embracing and starting to kind of put their toes in the water and test them there, those will be the ones that are best positioned to actually really adapt it if it becomes like a matter of best practice. So I think that's where I worry most about firms where they're kind of saying, well, you know, this is not a beer.

27:14I think it has to be a beer in some shape rather. And that measured approach and engaging is the best way to work with it. But what I also see is that interest is also very uneven within firms. So you can have, you know, I guess you always have the leaders, you have the laggards, but it's also about getting the champions within firms who kind of have that disposition. I have an interest in technology versus the, you know, the partners who will say, okay, you know, technology to me is a little bit of a, you know, technology. and because i think we should we should bear in mind that most lawyers don't really care about the technology they care about what the technology does for them and and that we shouldn't lose sight of that it's it's it's ultimately a means to an end and it will become more understood it will become more day-to-day you just think back to dial up internet we still used it it was slower it wasn't complete it wasn't brilliant then obviously fiber and everything out you know an evolution i I think I try and encourage people to almost think the other way, that it's almost being lazy now if you're not adopting AI.

28:21You're not thinking about how we can be as efficient and how we can enhance our client experience and be as client-centered as possible. Because if you're staying in a lane which has always been on and other people are going there, to your point, you don't necessarily need to be the first out the gate with something and it not be of a quality. But you need to be reimagining, rethinking. You know, we're going through not just an industrial revolution. We've had Piers Linney on the show, who's a former Dragon's Den investor and lawyer, talk very openly and said knowledge-based work will go to zero, whether lawyers like it or not.

28:51You need to think of the value pyramid with technology coming in. Where does your human touch come in? Where does your value happen? Because this isn't a once in a revolution. This is a once in a species time opportunity. So, you know, I love, again, that you talk to the importance of, you know, being curious, but also thinking of things through methodically and ensuring that you put your client first. I think that's such a key message throughout this podcast for anyone thinking of launching anything. Really do put yourself in the seat of how your client sees it, because then you'll deliver more value and more trust.

29:19So let's stick with some of the benefits and risks then. You've talked to it a little bit, but let's go a bit deeper in terms of some of the key benefits, but also potential risks associated with the adoption of Gen. AI with the legal field. I guess putting a shoe on the other foot, I'm saying go for it. But there's obviously, you know, let's say they've gone for it. What are some of the potential risks? And then how can people go about mitigating the trust in regards to the importance of trusted content or things that are put out there? Yeah. So I think the risks, if you look at the quality aspects, the risks are that young lawyers will actually take for granted the quality that the models, that one delivers that actually is actually quality.