Professionally Challenged Podcast – Ep 002 – Deconstructing the legal industry, a discussion of new entrants, substitutes and the growth of in-house counsel

Transcription

Paul Evans: Today’s guest is Pier D’Angelo, the Chief Strategy Officer of Allens Linklaters. Allens Linklaters are one of Australia and Asia’s oldest and largest law firms. Established in 1822 by George Allen, the firm now has 130 partners and over 500 lawyers.

Paul Evans: In Australia, the firm has offices in Brisbane, Melbourne, Sydney and Perth. And in the Asian region its offices include Hanoi, Ho Chi Minh City, and Port Moresby.

Paul Evans: Allens is part of an international alliance with the Linklaters Group, and the Linklaters Group is a network of 40 offices in 28 countries globally.

Paul Evans: Pier commenced his career as a lawyer with Allens, and in 2001, he became the Group Manager for the Business Development and Client Care team. From there, he became responsible for the firm’s pricing, and in 2018 was appointed the Chief Strategy Officer.

Paul Evans: Please note that these views are Pier’s only, and they are not the views of the firm. So, Pier, what does the role of the Chief Strategy Officer entail?

Pier D’Angelo: I think it probably varies from firm to firm, but what it entails, for me, at least, is focused on three things here at the firm. I still look after the firm’s pricing function. I look after the firm’s strategy function, and I also head up the commercial management group, which works with the business units or practice streams, to help them with their financial strategy and their financial management.

Pier D’Angelo: On the strategy side of things, that involves a few things really. One part of it is managing what you’d broadly call strategy projects that are cross functional across the firm. So often there are projects that just don’t fit in one of the functional groupings in the firm and involve many. And so it’s often useful to have somebody to coordinate that across the firm. So that’s one part of what I do. The other part of what I do is I work with the firms in the very broad sense leadership group, all those partners in leadership positions, to help the firm, help them develop strategy for the firm and perhaps more importantly, to then help them drive the implementation of that strategy.

Rob Patterson: Yeah, it’s an important role. I think the road to hell is paved with brilliant strategies that have never been implemented.

Pier D’Angelo: I think that’s actually quite an insight. And actually implementation is a major challenge in any professional services firm, simply because, well, there are actually lots of reasons, but one of them is typically because people are so busy. And so they’re so busy on the today, on servicing and meeting clients needs today, that it’s often difficult to set aside enough time, or space, to think about the future and to do those things today that are going to make a difference in the future.

Rob Patterson: Yeah, very, very true. All right, so, and I quite like the role. If you’re ever leaving, give me a yell.

Pier D’Angelo: I will.

Rob Patterson: How do you achieve the buy-in of strategy by the partnership?

Pier D’Angelo: Well that’s a great question. Look, the reality of it is that’s not my role. The reality of it is that that’s the role of the partners that are in leadership positions. Or the people that are in leadership positions, each of them, part of their role is to get the buy in and engagement of the groups that they lead. But one of the things I do is I ensure that there’s a process, a space, if you want to call it a space, for thinking about the challenges and opportunities that the firm faces and bringing those people together so that we can craft a response.

Pier D’Angelo: So that’s kind of how it works. I’m in many sense as a facilitator of that thinking, as opposed to leading that thinking, or being responsible for coming up with all the ideas.

Rob Patterson: Is it the internal challenges or the external market that [crosstalk 00:04:59]?

Pier D’Angelo: It can be both, but it’s almost always part of what I try and do is be responsive to external opportunities and threats, if you want to call them that. And that then involves internal challenges in terms of reshaping how you do things, but it’s usually in response to perceived external opportunities.

Rob Patterson: That’s great. I love that as a concept, creating that space. As you were saying before, I think very often in professional services firms, they don’t allow themselves that space to consider and go over strategy. So I think as a concept, that’s a really good idea. And maybe CIOs could adopt. Nice segue in terms of the external forces. One of my favorite tools is Porter’s Five Forces. And being in a larger firm you would have a particular line of sight over some of those challenges that are facing people in the industry. So in looking at some of the key elements of Porter’s Five Forces. Say for example, the bargaining power of suppliers. What are you seeing in that space?

Pier D’Angelo: That’s a great question. I think definitely one of the things that we are seeing and have seen over recent years, which is a new thing for the Australian market, is much greater mobility of partners. There are people who keep score on these things, but the number of partners moving from one firm to another, has increased and that’s very much the case for the US market as well. And I think obviously that started there earlier, and that, you know, that presents a real challenge for all firms because it means if you want to attract and retain the best talent, then you’ve got to maintain a compelling value proposition as a firm to attract and retain those people.

Rob Patterson: Yeah. Are you finding that, you know, like with technology the way it is now, you can dial up a server, dial up software and start up your own boutique firm tomorrow if you really wanted. Do you find that in the larger firms that’s where the mobility is, or is it between the firms?

Pier D’Angelo: It’s mostly between firms and from firms to clients, rather than necessarily people going out and starting up their own enterprises. I mean, it’s possible and you occasionally get that, but the majority of people would be going like laterally between firms or between firms and clients.

Rob Patterson: Okay. What about new entrants? There’s some large ones in particular that I think might be wading their way into your patch?

Pier D’Angelo: That’s the one that everyone writes about as well. The legal media is very interested in all of that, and much has been written about the accounting firms, and the challenge that they present for law firms. And everyone has a bit of a different view on what may happen there. I think they’re obviously very strong brands, and I think there’s a sort of an assumption that goes with them that somehow that scale and the breadth of services that they possess somehow is going to give them a sort of an advantage, and lead to some sort of an inevitable success. I just think you can’t necessarily make that assumption. I think within that assumption there’s work to be done. They have to effectively leverage those attributes in order to break into the market. Now, I’ve no doubt that they’ll find segments of the market in which they’ll succeed, but to what extent and in which areas actually remains to be seen. I mean, conflict is going to be continue to be an issue.

Rob Patterson: I’ve got to agree. I’m probably the oldest person in the room and remember when, you know, the last time all of the large accounting firms set up their own law firms internally and that was a huge issue, you know?

Pier D’Angelo: Yeah. And they had a particular issue there around, I think it was around consulting versus audit side of things and that’s different now, but you still have other conflict issues that come up and that’s already a very concentrated industry, both within Australia and globally. So that will present its own challenges. I think.

Rob Patterson: I think so too. I’m just kind of curious, where are they recruiting from? Like are they-

Pier D’Angelo: I think they’re mostly recruiting from law firms mostly. And they’re trying to take some of those laterals. What they’ve got to do though then is bind them together, into a group that works cohesively and collaboratively to deliver a great client experience.

Rob Patterson: Like a startup law firm would have to do?

Pier D’Angelo: Would have to do.

Rob Patterson: Bigger resources behind them?

Pier D’Angelo: That’s easy to say. Yeah, running around with a checkbook. You can do that. But then actually holding that group for five and 10 years to build something special, and to build the client relationships. It’s quite another thing.

Rob Patterson: Absolutely.

Pier D’Angelo: It takes a while.

Rob Patterson: Yeah. It will be interesting. And just sort of harking back against sort of to the conflict. If you’ve got a corporate advisory of PWC, then I’m presuming you can’t be doing the DD on the prospectus, you know?

Pier D’Angelo: Yeah. Well, I don’t know, but it’s certainly a question that you’d have to ask and answer with it, so-

Rob Patterson: It would be interesting.

Pier D’Angelo: And then the breadth of services just multiplies those possibilities out many times over.

Rob Patterson: Absolutely. What about new law? Have they fired a shot across the bow of larger firms at all?

Pier D’Angelo: I think again, much has been written about them and I think, you know, I think, a personal view, I think the threat is probably being overplayed. That’s without diminishing them in any way. I think it’s a question of what space are you playing in and what competencies are you leveraging to get advantage? And some of the new law entrants are really good at leveraging technology and process, particularly on work that lends itself to those things, or more routine work. Work that’s more predictable and there’s more of a flow to it. So there’s definitely a space in the market in which new law entrants can thrive. And some will do just that. Others will perhaps want to move up the value chain, but every time they want to move into a new space, there are incumbents in that space that will fight back and will compete. And the capabilities that they need to break into that space are different.

Pier D’Angelo: And so I don’t think you can just assume it’s an inevitable march. I think there’s every battle and you’ve got to watch how every battle plays out. So I’m not as pessimistic, because I think one of the things that actually, that just generally speaking is, you know, whether it was foreign firms coming to Australia, the Big 4 new law. I think one of the things that all of the new entrants have done is they’ve actually spurred on the incumbent law firms. And if you look at a lot of incumbent law firms today, I think they’re very different to what they were 10 years ago. And I think they’ve evolved and become much more competitive. So I don’t think things have stood still quite in the same way that some of the consultants and media might like to say when they’re voicing their opinions.

Rob Patterson: Yeah, and having had a little bit of experience in that space myself, I think the other thing too, is as I move up the value chain, they then start to almost take on some of the attributes that, you know, some of the overheads and some of the systems and infrastructure that they don’t have. And so it gives them a cost advantage or a, you know, a speed advantage. All of a sudden they have to start taking those on and then they start almost looking like, you know, the people they’re competing with. It’s quite interesting.

Pier D’Angelo: Well that’s right. I mean, in order to be… you know, it’s challenging to talk about this in abstract, but in order to be successful in that particular space in the market, you need to have certain competencies and systems and processes and structure. And as they move into those spaces and seek to compete with the incumbents, the incumbents have probably over time, optimized those systems, and so they’ll gravitate to looking more and more like those people.

Rob Patterson: Correct. Yeah. So it’s quite an interesting space. Okay. So that’s new entrants. The other side of that in terms of Porter’s Five Forces is the threat of substitutes. What are you seeing in that space?

Pier D’Angelo: There’s a lot of commentary on the growth of inter house counsel, and I think, you know, that’s a really interesting story in the sense that it’s… The metrics show that it’s probably the fastest growing segment of the legal market. And if you were a writer, this is what I’d be writing about. Because it’s where the growth has really been. And I think everyone has different views. Some older practitioners have seen this as a bit of a cycle, in house getting bigger and smaller. Look, I think overall though, the in-house teams will continue to grow where it makes sense to do so. And then the other thing we’ve seen is they’re becoming more sophisticated over time, but I don’t think that’s the end of external firms.

Pier D’Angelo: But I don’t think that’s the end of external firms, because I think what it means for external firms is they’re going to be much clearer about what needs they’re meeting and what value they’re adding, and excel in those areas. And there are spaces in which external firms can excel, which are harder for in-house teams to excel in. So for example, an external firm can bring the experience of doing a particular kind of transaction across many sectors and many clients.

Pier D’Angelo: And I actually think that rather than see them necessarily as competitors, see them more as complimentary. One of the things we’re seeing, it’s certainly in our best… One of the things we’re seeing as sort of best practice is the effective melding or molding, or coming together of internal and external resources so that you bring the strengths of the in-house team together with the strengths of the external team to bear on whatever challenge the client’s facing and create real value that way. And that’s, to me, I think the future or one of the great challenges in the future, and a place where where we can create a lot of value.

Rob Patterson: Yeah, it is interesting. I’d never heard of this term until yesterday, but someone was telling me about CLOG, which is…

Pier D’Angelo: What is it, the… Cheap Legal Operations Group.

Rob Patterson: Yeah.

Pier D’Angelo: Very well established in the US and relatively new in Australia.

Rob Patterson: Yeah. And it seems that a lot of their focus is around that and seems like also some of the larger firms are collaborating around things like technology as well.

Pier D’Angelo: Well I think, I’ll probably go slightly off piece, but I think it’s actually a good development. I think one of the responses to the more for less challenge that clients have faced, i.e. doing more with the same resources, or less resources, is to try and negotiate better deals, better pricing, which is completely understandable. That will only take you so far though.

Rob Patterson: Yes.

Pier D’Angelo: And that led to procurement becoming involved in the buying relationship as another player, another actor. What is happening now is that it’s becoming more sophisticated, and the advent of legal operations is trying to create more win-wins solution and more value, and bringing a degree of sophistication to that. Not only the procurement process but also then the management of those resources once they’ve been procured.

Pier D’Angelo: So I can see that provided you’ve got the scale to be able to afford that sort of a resource, I can see the value that might add.

Rob Patterson: It’s good.

Speaker 1: Is that like legal project management and…

Rob Patterson: It’s types of [crosstalk 00:17:37].

Pier D’Angelo: It’s all those things. I think what they actually do might depend a little bit on the client, but certainly on the procurement of it, making sure that selecting the right firms for the right jobs and that then those jobs are staffed in the right way. But then also, and this is the bit where traditional procurement would then leave the paddock then.

Speaker 2: Yup.

Pier D’Angelo: Whereas the operations people are, as I understand in the in the US, will tend to, if there’s a large deal or transaction or litigation, they’ll keep an overview to make sure that the thing’s running well.

Speaker 1: Okay, yeah.

Pier D’Angelo: And that the budgeting is properly being done, the resources are being properly used, there’s no waste. It’s been delivered as it was contracted and described, all that sort of stuff. So it’s an ongoing management of the resource role rather than just the buying of it up the front.

Rob Patterson: So are these lawyers that are…

Pier D’Angelo: Some are ex lawyers, some are ex BD people. Then I think there’s at least half a dozen in Australia now.

Rob Patterson: Okay.

Pier D’Angelo: And I’ve met a few of them. They are very, very accomplished people. Usually with deep legal industry expertise, and providing… If you’re an organization with a large spend, providing real value in terms of making sure that you’re getting value from that spend. In the right firm, right people.

Rob Patterson: Cool. All right. Something that I think you’re probably well versed in, is the bargaining power of buyers, particularly in your pricing role. How’s that going? You often hear about the downward fee pressure and everybody talks about it, it’s sort of become like an urban myth. Is that what you’re seeing?

Pier D’Angelo: At one level, absolutely. So at one level, I don’t know how far back you have to go, but there was a time when procurement were not involved in the purchase of legal services and now they almost always are. And that’s part of their function. I mean it’s broader than just pricing, but part of their function is to try and drive a tough bargain. And that’s fine, because that’s understandable. I think one of the things that our clients face is more regulation, and the need for greater productivity within themselves. And the legal function is not immune from that. So it’s quite natural that they would seek a contribution from their external providers to that.

Pier D’Angelo: But the and, or the but, is that having struck you bargain when it comes to the pricing, it’s only one lever and there’s probably, you could argue not the most important lever.

Pier D’Angelo: I’ve sort of alluded to it already. It’s how your lawyers then combine with the client and the client’s resources to deliver the outcome that really makes a difference, and the selection of the right people to do the job. If you get those things right, the cost of, I won’t say it’ll take care of itself but the value created is such that the cost is in perspective.

Rob Patterson: Yep.

Pier D’Angelo: And so just managing price, i.e. the rate, is actually, to me, you’re actually not managing what really matters.

Rob Patterson: Which is the outcome.

Pier D’Angelo: Which is the outcome and getting a better outcome for the organization.

Rob Patterson: Totally agree. That’s often lost in that whole equation, particularly around pricing, is the outcome.

Pier D’Angelo: Yeah. And I think the other side, it’s a two sided story. It’s also incumbent upon lawyers I think, or any professional firm to help the client understand, if you want to be paid greater rate or greater price, help them understand why that’s justified. What are the reasons why, terrible analogy, but why by the Merc instead of the Holden. If safety matters to you then maybe you buy the Merc. I don’t know, I’m not trying to be disparaging to anybody here, but there are features and benefits attracted to every offer and it’s, if you have a particular offer it’s incumbent on you to communicate them and to find clients who value them. And I think we need to get a little bit more sophisticated at that as well.

Rob Patterson: So the greater use of alternative fee arrangements, again, it seems to be one of those things that they, [inaudible 00:22:08] has been out there forever and I’m not… I think it seems to be honored in the breach rather than the observance, retainers, et cetera, et cetera. What’s your view on the alternative fee arrangements that are actually being used in practice?

Pier D’Angelo: There is definitely steady growth in the use of alternative fee arrangements. It depends on how you define them, because different people define them differently. But if you allow capped fees and fixed fees based on, that have been built up on an hourly rate basis to fall within the definition of alternative, then they’re growing strongly. Because there’s a great swing towards, one of the most valued attributes of pricing that clients are looking for is certainty and predictability over cost.

Pier D’Angelo: And so that can be delivered on an hourly rate basis with really effective budgeting and good communication, but it can also be delivered by agreeing a fixed price where that’s possible as well. And so we’re definitely seeing a steady growth in the use of fixed pricing and capped pricing where the scope allows that to happen.

Pier D’Angelo: What hasn’t happened though is again, the much hyped end of the billable hour.

Rob Patterson: Yep.

Pier D’Angelo: And again, I’m probably a little bit contrarian on this, but certainly the billable hour is alive and kicking and doing really well. And there’s a lot of reasons for that. Sometimes there’s work that actually is hard to scope. Sometimes you have to get to work really quickly and you can’t spend two weeks crafting an alternative fee structure.

Pier D’Angelo: All sorts of reasons why people will revert to hourly rates. Sometimes the trust between client and the organization is good and high and they know that they’re going to get a fair outcome operating on that basis.

Rob Patterson: Yeah.

Pier D’Angelo: There’s a minimal, I think the economist called transaction costs in that, you put in place in that arrangement and so it works well where you’ve got that transparency and that trust. So there will always be room for hourly rates in my view. And then that’ll only be part of the mix.

Rob Patterson: Yes.

Pier D’Angelo: But tackling the whole value billing movement, just at another level, and again it’s a view that not everyone would subscribe to. I would say that even in hourly billing, value billing is still present because not all firms charge the same hourly rate.

Rob Patterson: No.

Pier D’Angelo: So implicit in a firm that charges higher hourly rates is the idea that they’re going to deliver more value for each hour.

Rob Patterson: Yes.

Pier D’Angelo: And ideally you want people to live up to that promise, but that’s why clients will shop, we’ll go to different firms with different kinds of problems. Because the value delivered is commensurate to the hourly rate.

Rob Patterson: Is that price value perception or price quality perception…

Pier D’Angelo: Is there. So for my mind, value billing doesn’t equal use of alternative fee arrangements. It equals matching the value delivered to the price paid.

Rob Patterson: Yup.

Pier D’Angelo: In my mind.

Rob Patterson: [inaudible 00:25:14] to the professional services firms attention to the benefits of fostering collaboration between practice groups in your firm. It struck me that collaboration is particularly effective in a larger firm environment where you do have pockets of skills and really detailed niche areas of knowledge. Have you seen examples of collaboration working to the benefit of the both the firm and the client?

Pier D’Angelo: Almost every day. I think collaboration is just… Call it different things, teamwork, collaboration, working together. But it’s really important and it’s the bringing together of people with different attributes, different skills, different perspectives to create a great solution for clients that’s fit for the purpose that is required. I think that, as you’ve pointed out, particularly in larger firms where there’s been a drive towards specialization. The ability to combine those specialists to create a solution is actually a core competency and it’s actually something that can differentiate firms, and certainly the firm I’m in does it really, really well.

Pier D’Angelo: So I think collaboration is absolutely key to driving value. But it’s not only collaboration within the firm, it’s also collaboration with the client and working with the in house legal, working with the executives and how you do that. That’s really important. And joint problem solving with your client, and trying to create value that way is really our real key.

Pier D’Angelo: The other thing I’d say in terms of a tangible example is, you see it a lot in the innovation space. And it’s a particularly interesting one for law firms because if you think about a situation where you do identify a client need or problem to be solved, and that client need does lend itself to the application of process and technology to bring down costs and make it more efficient. All of a sudden sitting around that table to create that solution, okay, you still need the lawyer with the legal input, but you also need the guy with the IT or the lady with the [inaudible 00:27:37] perspectives.

Rob Patterson: Yes.

Pier D’Angelo: Apologies there. And you may need some process experts. You’ll need a project manager to knit it all together. You might need a pricing person at the table to work out how on a, you’re going to charge for that innovation and capture some of the value that you create.

Pier D’Angelo: So all of a sudden the successful launch of any legal tech product is actually of necessity an effective collaboration between three, four, five disciplines. And that’s a big change. And so collaboration in my mind is growing in its importance.

Rob Patterson: It’s kind of exciting, I think in a way in that, I think of how law firms once tended to behave, which was sort of that black box mentality where, give it to us, we’ll solve it and we’ll give it back. It’s a real move away from that.

Pier D’Angelo: Yeah.

Rob Patterson: To almost being sort of embedded in a client in a way.

Pier D’Angelo: Yeah. I think what’s happened is the ways of, certainly the best of us, we’ve become more flexible in the ways of working. So there are circumstances in which a client might want just a black box approach. “I don’t have time to engage very much on this, I just need you to solve it. You run with it. Just come to me when there’s key decisions to be made. Thank you very much.”

Pier D’Angelo: That’s okay. That’s fine. That’s one way of dealing with an issue. But there are also some problems that are actually really complex and where you just need the client experts as well as your own experts around the table kicking the idea around, and you need collaboration in order to solve it. So one of the key things I think to understand is what’s the nature of the problem you’re trying to solve, and then what’s the most effective way of tackling it.

Pier D’Angelo: And I think there’s probably more flexibility in the delivery model now than there’s ever been before.

Rob Patterson: Yeah. That’s a good way to put it.

Speaker 1: Do you think there’ll be non-lawyers going to these meetings that are part of the law firm now? Or do you think that’s-

Pier D’Angelo: It’s already happening.

Rob Patterson: It’s already happening.

Pier D’Angelo: It’s already happening. It’s already happening. Obviously I have to speak a little from experience, but I’ve seen, well, there are people who are technology experts who drive AI type engines over documents to save clients money by not having to review such a large proportion of them.

Rob Patterson: Due diligence.

Pier D’Angelo: Due diligence type of stuff. Any number of… So there’s a lot of actual cross-functional service delivery that’s going on already.

Pier D’Angelo: It’s functional service delivery that’s going on already. And that’s just not a necessity, involves more people coming to the table, and being client facing.

Rob Patterson: Yeah. Cool. And again, it’s probably a nice segue into innovation, or creating an innovative culture. Innovation’s a bit like sex. Everybody claims to be doing it, doing lots of it, but few very genuinely are. What’s your experience around innovation?

Pier D’Angelo: Look, I think there’s a hell of a lot. Look, firstly, just to concede, the negative, perhaps, there’s a lot of innovation by press release. So someone goes out, has a meeting with someone, they have an idea about something, and they put a press release out.

Rob Patterson: Or a social media post.

Pier D’Angelo: Yeah. Or social media post, or whatever. And you just get the impression that everyone’s just doing all this stuff, and it’s all amazing, and it’s all really easy. So yeah, I think it’s overblown at the moment. The market’s a little hot. But I think it’s becoming more mainstream now. It’s a part of what we do. I think all of the larger firms, in one way or another, are seeking to address the challenge of innovating, the challenge of bringing the new technologies that have become available into practice, and putting them into practice in a way that that’s beneficial. And I mean, I can only see a little across the top tier, I suppose is my best vista. And I can see genuine effort in there at trying to innovate, not only with the use of technology, but also in the nature of the services that are provided to clients. You’ve seen firms moving to different adjacencies. So I don’t think it’s one dimensional, I think actually it’s gaining momentum, and I think it’s something that firms are going to get better at as they become more, and more competent at doing these things.

Rob Patterson: In terms of innovation, as you were saying earlier, some of the difficulty around implementing things in any law firm is just having lawyers focused on doing chargeable work, and getting their time and space. So I know some of the larger firms now do have specific innovation roles, including your own.

Pier D’Angelo: Yes. And there’s a balance to be struck there. So I mean we’re all learning how to best organize these resources, and people are experimenting, I think, with different structures. But I think you need … Yeah, I think you need some dedicated resources, because otherwise it gets crowded out by other things. But you also need the partnership with the lawyers that are front of house, and are dealing with client problems every day, and who are spotting, and seeing the problems that need to be solved. So it’s getting that balance right, which I think is one of the drivers of whether this is going to succeed or not. But yeah, I think it’s definitely a factor.

Rob Patterson: Cool. Okay. Just on technology, many large international law firms are making huge investments in technology. In most instances, it’s being used to create new, and bespoke service offerings. I noticed Allens’ have got a real estate due-diligence app, Hall & Wilcox, I know, have an insurance claims triaging app. So it seems like there is a focus around that. You and I are both on the [ALMG 00:33:26] Committee, and about two years ago we had Professor [Karim Lakhani 00:03:31], from Harvard, present on creating new industry platforms. And at the time I was sort of really excited about it. I thought, oh, how does this relate to law firms? But it strikes me that firms aren’t adopting he sort of suggested wholesale approach to almost restructuring themselves. By and large they retaining traditional structures, still largely employing lawyers, and utilizing technology to sort of create add-ons, rather than revolutionizing the way law is delivered. Am I being a little bit harsh?

Pier D’Angelo: I think maybe, and maybe it’s more of a little bit about the perspective you’re coming from. The perspective certainly that I come out when I look at it is not the degree to which you’re adopting these new innovative structures, et cetera, but the real question for me is what are the problems we’re solving for clients? And are we providing the best solutions for those problems? And I think that the existing … Well I think that with the change that’s been happening in the existing law firms, they’ve, to a very significant extent, been evolving to meet those needs. Now obviously there’s always going to be a bit of a gap, and a bit of chasing the puck, or trying to move with where the market’s going. And so there will always be people saying, “Oh no, they should do more.” And that’s probably fair.

Pier D’Angelo: But I would argue that, to a very significant extent, there’s been a lot of change that’s been happening in the legal industry, and in law firms. And, as a result, we’re still delivering, in most cases, great services that are fit for purpose. And if you look at the industry benchmarking type stuff that goes around on client satisfaction, there’s one study that benchmarks satisfaction across four or five different professional services industry, and the highest scores are still in law, by a significant margin. So that’s not to say there’s any room for complacency. You’ve got to keep evolving. And I think the speed of change has been accelerating, but I don’t think we’re missing … I don’t think that there’s a need for a wholesale revolution in the short term. I think it’s consistent, meaningful, and thoughtful evolution.

Rob Patterson: Yeah. No, I agree. I think it’s interesting, because people throw up examples like Uber, or Airbnb, but that’s just great areas. And I think perhaps the false assumption is that therefore technology is going to sweep through everything, and change it. But if people are by and largely happy with what they’re receiving, perhaps where it might change is more at the bottom end, I wonder. There’s a statistic that sort of 85% of legal needs aren’t being met by law firms.

Pier D’Angelo: I think that’s right. And I don’t want to say it’s all about them, and not about us, because clearly we have to play our part. But I do think that in the B2C world, there is a real cost issue, and a real affordability issue. And as a result, people aren’t receiving, or obtaining legal assistance where they might need it, and might benefit from it. And I think there is great scope for some of those legal platforms to help people. And so yeah, I do think that … I saw one app a while ago, which was help me challenge my parking fine. And you can see that could help a lot of people, there are a lot of parking fines issued every day. So I think at that B2C level, we could see some very significant businesses, actually, developed by the time.

Rob Patterson: Yeah. Great. I hope so. I was just thinking on the Airbnb, the Uber, they’re quite commoditized products really. Accommodation, a taxi, compared to the brain surgery of law from the top end.

Pier D’Angelo: And they’ve managed to do some clever things. So in both the case of Uber, and Airbnb, they’ve managed to get access to, and get rents from, the use of other people’s assets. And I’m sure if there was a similar play, opportunity in law, that someone would have invented it. But it doesn’t quite work the same way.

Rob Patterson: No it doesn’t.

Pier D’Angelo: As far as I can tell. There’s certainly lots of … I mean, there’s certainly examples of lots of new things being tried. So it’d be really interesting to see how things develop over time.

Rob Patterson: Yeah. Cool. All right. You’re a pretty deep thinker. How do you stay abreast of current developments? What are you doing around thought leadership to make sure that you’re across where things are?

Pier D’Angelo: I would say it’s a real challenge. The demands of just everyday working can make it really hard to keep abreast of stuff. And there’s so much stuff being produced, and written that it’s almost an impossible task. But you do a few things. One of the things I do is, probably like a lot of people, I subscribe to the McKinsey, and the Harvard, and the Sloan newsletters. And I try to make a bit of a discipline, and practice of reading those particular, the ones that seem most relevant. I do spend time with really smart people like, Joel Barolsky, and Colin Jasper, and others who have got deep experience, talking about what they see in the market. That’s a great way to get your head across material quickly. And when I can, I also go to conferences, and talk to people who are facing the same problems, to see what their perspectives are. But it is absolutely a constant challenge.

Rob Patterson: Yeah. Agreed. Okay. What’s the number one strategy book you would recommend for professionals?

Pier D’Angelo: Well that’s a big question. There’s a lot of strategy books. Look, I can’t say I’ve … I can’t say I read them all. So it wouldn’t be fair to say there’s a best one, but there’s two that I’ve read in the last couple of years that I found personally really useful. One is called Dual Transformation, by Scott Anthony, and some other authors. And the reason that’s an interesting book is it’s about how an incumbent can also become very innovative, and trying to run the two in parallel. Because there’s a school of thought that says it can’t be done, and there’s a school of thought that says a can, but there are some conditions that need to be met. And that’s really quite interesting.

Rob Patterson: Yeah, I agree. I actually saw Scott Anthony talk once and yeah-

Pier D’Angelo: Seriously impressive.

Rob Patterson: Yeah, very interesting.

Pier D’Angelo: Seriously impressive. And then the other book that I use a lot, because it’s just such a simple model, and so easy to use, is the Playing to Win book by Lafley, which is just a great way to come up with a strategic plan for any group. What’s your aspiration? Where do you want to play? How do you want to win? What capabilities do you need to win? Just sort of this cascading set of questions that are all interlinked around which you can build a strategy. And I’ve found that really useful thing.

Rob Patterson: Well thank you for being very generous with your time, Pierre, we’ve really enjoyed it. What we’d like to do is just hit you with some closing questions, just to get to know you a little bit better. If someone knew you really well, what is the one thing they would know about you, that others would not?

Pier D’Angelo: I think one thing would be that I love [Barroso 00:41:11] Reds but can’t sauv blanc.

Rob Patterson: I think we’re all, in here, at agreement in this room. Very good. Can you nominate another legal industry leader, that you hold in great respect, that you think we should approach to help us with our podcast?

Pier D’Angelo: Look there are a lot of people here that I work with, that I hold great respect, but if I’m thinking sort of outside the firm, two of my mentors over the years have been Joel Barolsky, and Colin Jasper. Real veterans of the industry, and really know their stuff. So always interesting to have a chat to.

Rob Patterson: Great. I’ll definitely have a chat with them both. We might change this, if you could lead any organization in the world, except for Allens, what would that be?

Pier D’Angelo: Look I think there’s no doubt it will be absolutely fascinating to be a leader in one of the global firms. Because just having to deal with all the challenges we deal with, but then multiplying that out by country after country, after country, and all the different cultural norms, and the laws, and all the rest of it would just make it … The complexity would be amazing. But I actually also think, in many respects, I’m quite happy doing what I’m doing, because I think Australian firms are as well led as any in the world. And I think that that … I think you could find that if you set up shop in London, you’d be dealing with very similar issues to what we’re dealing with here in Sydney.

Rob Patterson: Yeah, it’d just to be colder.

Pier D’Angelo: So it’ll be cooler. Yes.

Rob Patterson: As I said, thank you again. It’s been grand. If people want to connect with you, what’s the best way to connect with you?

Pier D’Angelo: LinkedIn is the best.

Rob Patterson: LinkedIn.

Pier D’Angelo: Yeah, definitely LinkedIn.

Rob Patterson: Tremendous. Pierre. Thank you very much.

Pier D’Angelo: It’s a pleasure. Thank you for talking.

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