Eric Wangler: The other stat that I think is interesting is 24% of firms say staff turnover is affecting billable hours. So that says, when we lose these tenured folks who know what they're doing and or we don't have enough talent to process the work that we need to get done, at some point it's got to get done and a lawyer does it themselves.

Duska Frink: Let's talk about the latest report and the latest data points. Let's talk about how they compare to last year, the year before, five years ago, and where we are today. So I'm going to kick us off with a stat that I found super interesting: 95% of firms are reporting increased client attrition. And I feel like we've been talking about that for the last five years, so it shouldn't be a surprise. Along with that stat, 33% cite service delivery concerns as a primary driver. So what I think is interesting here is that even though we talk about legal support in the background, I still don't think we realize how important it is and how much it contributes to the cost of the matter.

Eric Wangler: To me, the interesting part about that is it's completely controllable by the firm, right? There's pressure in the industry on pricing. AI is factoring into everything. But at the end of the day, the service delivery that the firm provides its clients is completely within their control. And your point about the back office staff being critical to that: that's very often who's interacting with these clients, whether it's a tenured legal secretary who's dealt with a client over years and years and years, or the billing group, the AP teams, whatever it may be. That is the piece that's, to me, easy for the law firm to fix because it's within their control.

Duska Frink: Yeah. And if you think of the hierarchy of the firm, it's always the lawyers at the top. And of course, that's the way it should be. But there's so many other people that are underneath that contribute to these costs. But I still think that they're overlooked completely. And then you've got AI, which I know we're going to touch on in a second, that's distracting everyone. And we're still forgetting like the legal support function is the most, to me, the most important function. And we're still treating it like we did 20 years ago in a lot of firms.

Ben Jennings: I think they forget, or sometimes it's forgotten, that they're often the people speaking to the customers on behalf of the lawyers to make sure things are lined up and that everything is running as it should. And that speaks to that statistic. A third of firms said in the feedback that service delivery was a reason clients leave. I guess what they're saying is that clients must be getting a better service elsewhere, or at least be in a position where they think there must be a better service elsewhere, based on how they're interacting with these firms.

Duska Frink: You know what's also super interesting is that client service internally in a firm is really important, and lawyers historically expect a certain level of client service. So maybe that is why it's so hard for them to shift from a traditional model. If you think about it, because they're used to a certain level of service, and I think it's scary when we think about disrupting that with a more centralized model.

Eric Wangler: I might make the counterpoint to that, which is if you free up those tenured, experienced legal assistants from all the basic admin work they're doing, and give that to centralized teams or more junior teams, you're freeing them up to provide better service to the client. Where there's a relationship built, they understand how the client wants to be billed and they understand who makes things happen. But right now they're so buried in basic work that could be done at a lower cost and more efficiently. I think that's part of why the service suffers.

Ben Jennings: Yeah, I don't think it's necessarily “could” as well. “Should” is probably a way of thinking about it, because most of the firms we speak to have people in place to do those things that the PA probably shouldn't be doing. That might mean they're not at the desk when the phone rings. They're not replying to that e-mail as quickly because they're away from the desk doing something else that really should be with the facilities team, or with an admin-type person who's supporting those support staff, to free them up to be that client-facing part of their jobs.

Duska Frink: And you said the word buried. It's like people don't realize: if you can't see it, you can't measure it. And if it's buried or invisible, it's still there. It's still happening. You need to be able to monitor it. And if you can't monitor it, you can't measure it. You can't change the model.

Eric Wangler: Yeah, I mean, there's pressure on price too, right? So firms are moving to more fixed pricing, FAs, and the cost to serve includes support, right? It's not just the lawyer expense.

Duska Frink: And I think that we still forget that, cost is there. It's just not typically on the bill. But that's why we end up with all these write-offs, because either the associates are doing admin or there's a lot of admin happening down here, but it's not reflected in the bill. However, it's still costing the firm.

Ben Jennings: There was a stat in the report this year that actually draws a line between support staff not being focused on the right things, or being overstretched, and profitability. So maybe there's a point here that firms are starting to make that connection, whether it's through the point we're talking about here around service or, ultimately, profitability — the two areas that might draw their attention to this.

Eric Wangler: We're going to come on to AI in a minute, but one of the stats in the survey is that lawyers are doing more review work. They're spending more time on admin than ever. Intuitively, you would think the more technology and process we throw at it, the more that should improve, not get worse. But it's getting worse.

Duska Frink: And there's a cost, like a major cost to that, to the firm, if the lawyer is doing the admin, right.

Ben Jennings: Yeah. And I suppose it's about categorizing that admin correctly, because some of that is right. The lawyer needs to have their eyes on the right things, but you want to get it into a state where it's ready for their eyes.

Duska Frink: Yeah, like the reviewing could be the last review, not the five reviews.

Ben Jennings: Exactly. So how do we get the right eyes on the right things?

Eric Wangler: And it gets back to transparency and understanding what's there. In most firms, this is all in e-mail and an opaque system that nobody understands. Nobody can identify where the holdups are occurring or where the inefficiencies are happening because it's just completely opaque.

Ben Jennings: Yeah. And again, I don't know if this is a new number for this year, but 67% of firms rely primarily or in part on direct e-mail. They're part of their delegation.

Duska Frink: Which still boggles my mind.

Ben Jennings: And it's always interesting, because we've been working with some firms this year around e-mail, right? Seeing some of the e-mail sprawl is really eye-opening when we start to look at that. So yeah, like you said, it boggles your mind how much time is spent just making this work.

Eric Wangler: So, you know, we touched on it a minute ago: the impact of AI on the back office. I can't believe we got this far without dwelling more on AI. But the stats in the report were interesting. Ninety-six percent of firms are using AI in some capacity in the back office, but only 27% of firms have reported redesigning their support roles or their operational structures. So to me, it's taking bad process, bad structure, and overlaying technology to improve the output in a bad process. I think there's a lot of opportunity there. Obviously, a big focus of most firms with AI initially has been the impact on the actual legal work, not so much the back office work, but it's certainly coming there. The report would indicate firms are using AI in the back office. My guess is it's a little less organized, a little less prescriptive, and the legal staff or the support staff are trying to figure out, “How can I do things better, faster?” But the clients that I speak to, nobody's necessarily got a process built around how we're going to impact this across the back office at a global level. Again, I think it speaks to the other stat, which was that lawyers are spending more time reviewing output from AI, which may or may not be billable. Everybody's trying to figure that out. So you put all that together and you say there must be a better way. My sense, which maybe you guys would disagree with, is we've got 25- and 30-year tenured legal assistants who have been working in legal for years and years and years. I would maybe get them into that legal process as a review step prior to asking the lawyer to do that work. Now, I think there are other arguments that say they may not be as technically competent as you would need, but at the end of the day, we can make better use of those very senior staff versus the kind of basic work that a lot of them are bogged down in.

Ben Jennings: I guess unless you capture some of that and are able to see that it's happening, you'll never know. One of the things we talk to firms about a lot is that when you're capturing this information, you can identify training opportunities as much as what's good and what's bad. It's not necessarily about what's happening now; it's about what you can do in the future. So yeah, from a legal PA perspective, I think that could be key to getting them into that ecosystem of work. And I suppose we don't know yet because it hasn't really settled, but with the lawyers and what they're doing with AI, some of that is fairly contained in them working in the document, working in the thing itself. The reality is, do we see them being able to do everything themselves in the long term as a positive or not? I think there's a perception that that's the best way to do it. But as you said already, it's surfacing some of these issues: “Oh, hey, we're spending more time than we might have realized because we have to do the checking and the overview.”

Eric Wangler: The abundance of content to review is becoming evident. And I think, yes, we're talking about back office services, but there's a dynamic with the associates as well. So how are they going to engage in this process? We could speak for days on how they're going to be trained and everything else. But at the end of the day, your most senior attorneys shouldn't be bogged down reviewing first-pass content, right? There's a better process for that.

Duska Frink: And also, we were talking about tenured support staff. And maybe it isn't about teaching them more about AI, like you were talking about. Like, they're the ones that know the practice. They oftentimes run the show. So maybe they don't need to really necessarily know AI that much because your new staff coming in are going to already know it. Let them do the efficiency piece and get things done faster so that those with the right skills can then jump in and make sure it's right going out the door before it gets to the lawyer. I like that.

Eric Wangler: Yeah, and I think, again, these senior folks have relationships with the clients, right? So freeing them up to do more of the work that's meaningful to the client relationship we talked about earlier — client attrition being driven by poor service, essentially. So put them front and center, on the coal face, interacting with the client, doing the things that they're good at, and make sure the client's feeling the love.

Ben Jennings: Maybe one other question. We started on support staff and AI, and the stat here around 96% using AI in some capacity. I suppose when you drill down, what capacity? It could be quite a narrow use case, or it could be quite a broad use case. I think we do have some stats on that in the report. But without drilling down into that now, how superficial versus how in-depth, deep and value-add are these things? I'll speak to it internally. We've built things like agents as a first pass that have been rolled out, and then actually, that wasn't adding enough value, so people didn't want to engage with it in that way. I think it's the other way of thinking about it. How can we put the tools in front of the people in a way that they want to interact with? And then also, is it adding value? Because if 96% are using these tools, we're not necessarily hearing 96% of our firms say, “Oh, we've got this great, really valuable way of using AI with our legal support teams yet.”

Eric Wangler: So interestingly, the other stat was that 41% have completed a formal review of support tasks and the impact that AI can have on them. That leaves 59% who haven't looked at it. So I think you're right. It's probably, “Look, we've made these tools available to our support staff. We expect them to get more efficient. Figure it out more or less on their own.” Others have taken a more prescriptive approach and said, “Look, these are the tasks that we have happening in the back office. These are the pieces we think we can automate, maybe as a long-term goal, but as an initial pass, let's throw some automation at it with human review.” And I think we see the evolution of this on the support side as, today, it's human-to-human delegation; tomorrow, it's human to agent with human review; and then ultimately you'll figure out what tasks can be fully automated. But you can't do that in e-mail and you can't do that by dropping a piece of paper on somebody's desk. You've got to have a system by which to manage this.

Duska Frink: You know what I find really interesting is the volume that say they're using AI. Why is that not reflected in cost? Why are clients leaving firms then? If that high a percentage are using AI, wouldn't you expect some efficiencies from that to be impacting cost? It's almost the opposite of what you would think would happen.

Eric Wangler: I think, yeah, a lot of the firms we speak to, I don't necessarily think are viewing the use of AI in the back office as a cost-cutting experiment. I think it's back to: how do we get more efficient? How do we get the right work to the right people with the right skills at the right cost? You know, the basics. Because so many firms haven't figured that out yet. So again, throwing AI at it is...

Ben Jennings: And also doing more with fewer people. Because as we're going to move on to, there are future challenges in back office support that mean, unless something changes, there are going to be fewer people in the PA role over time.

Duska Frink: There will 100% be.

Ben Jennings: Unless there's this kind of talent pipeline built that either replaces that, or you end up doing things in different ways, or you spread those who are there more thinly across the really valuable stuff that they need to do, that they're good at and skilled at, then there's always going to be an imbalance in the future unless something changes.

Eric Wangler: Yeah, and I think we're going to get on to it, but that is a dynamic. It's not going away. It's just getting more difficult to manage.

Ben Jennings: So yeah, we'll go on to the next stat. Retirement is creating operational risk. Fifty-one percent of firms expect to lose 21% to 50% of support staff to retirement, which is up 10% on last year. And that is a stat that, from memory, has increased year over year.

Duska Frink: Yeah, no, it has. What was interesting though, because I remember looking at the five years' worth of data, is what COVID did. It kind of shifted the dynamic in firms; it shifted the culture. But I feel like there was this point in year two or three, maybe four, where you could see the stats going back a little bit because I think firms were like, “Oh, we'll just go back to the way things always were.” But then you get the retirement and the difficulty to hire, and you can't go back.

Ben Jennings: Yeah, because there's the supporting stat around kind of attrition outside of natural attrition of people choosing to leave, choosing to go to another firm.

Eric Wangler: Oh, the firms are recruiting from the same pool of talent. Oh yeah. So at the end of the day, there are only so many folks who have the experience that some of these very tenured legal assistants have, which is very valuable, and firms are picking each other's talent off. We spoke to someone yesterday and said, “How are you going to deal with this retirement challenge?” The immediate comment, which I get all the time, is, “The average age of our assistants is 55 to 60,” and that's an average age. Most firms are trying to build structure around, “I've got junior folks who can come in and be very efficient doing admin work, and then I spread different work to the more senior legal assistants who have these client-facing skills, etc., and the legal knowledge.” You may turn those junior staff over every couple of years, but that's okay because you're not facing them in front of clients. But the traditional model of, “I'm a legal assistant, I support these four lawyers,” hasn't changed. The story hasn't changed in the five or six years we've been doing these surveys: there's a supply challenge. There aren't a lot of people coming into this market with interest in doing these types of jobs, and the folks leaving the market through retirement are typically leaving ahead of the lawyers they support. So change is going to be driven with or without a structural change or by design. They're going to have to deal with it. And again, I do think using AI, as we spoke about earlier, can impact throughput and maybe, as you said, do more with less, because you're going to have to.

Duska Frink: You know what was interesting? I was talking to a firm the other day as well. They can hire at the junior level because they are bringing in admins. They're not getting a huge influx of people coming in and going to school to be a legal assistant, but they're like, “We can get people to do admin.” And then they have their experienced assistants, but they struggle with the middle because people coming in don't see a career path and they don't want to be in your typical legal secretary or PA role. They can't keep people. And then they've got these people who are retiring. So something has to change.

Ben Jennings: Because there's a vacuum there, isn't there? Firms are going to have to say, “That talent pool we're bringing in, the admin role, has to have a path. We need to find a way to get them through that pipeline up to being able to backfill some of that loss, or find a different operating model that means they don't have to backfill that.”

Eric Wangler: The other stat that I think is interesting is 24% of firms say staff turnover is affecting billable hours. So that says, when we lose these tenured folks who know what they're doing, or we don't have enough talent to process the work that we need to get done, at some point it's got to get done and the lawyer does it themselves, which is the worst case today.

Ben Jennings: Yeah, and the question there is: is it the lawyer consuming the admin tasks, so the widgets get written off or never billed? Or is there something billable that the support staff are doing that's delivering revenue in the firm as well? We do see that in some firms. So how much focus does that get in those firms as well?

Eric Wangler: I think the answer to your question is yes. It's on both sides, right?

Duska Frink: If you can see it, you can measure it, and then you can bill for it. So 62% say they have workflow systems or technology in place, which is actually really interesting when we think about, years ago, the percentage that didn't. But this is very contradictory: only 21% use a structured workflow or request system. Doesn't that not make sense? They're saying they use it, but then they're not.

Eric Wangler: Yeah, I think — by the way, in my notes, I just wrote BS. Sixty-two percent have workflow systems or technology in place, so they have technology in place. It doesn't mean they're using it in the back office. Yeah, that's true. It could be a lot of different things, but with the firms we talk to, there are a few options on the market. We're one of them, of course, but so much of this is right through e-mail. So, from a process perspective, it's not visible at all.

Duska Frink: You say we're one of them, the best.

Eric Wangler: Well, there you go.

Ben Jennings: I think the difference with us is that we've designed it with the lawyers in mind. If you take something off the shelf and try to build it out yourself, one of the challenges is making it fit for the space that we play in, because lawyers have unique requirements, requests and habits. And most firms don't necessarily want to change that because that's disruptive. So how can we fit into that world in the best way? I think that is really...

Eric Wangler: That's the point about it being contradictory. The other point is 67% of firms are saying that most of this work travels by being directed to somebody to do the work. And so our view is that's how lawyers are used to working. That's how lawyers want to work. So you've got to meet them where they work. Right. We focus on: let the lawyers do what's simple and easy, because getting back office support should be simple, easy and fast. Get the work in the e-mail, we'll ingest the e-mail, we'll throw an AI engine at it, we'll fill the form, and we'll get the right instruction to the back office without the lawyer having to think about it. Then the workflow system will route it to the right team with the right skills at the right cost without a lot of thinking.

Ben Jennings: I wonder whether the reason that happens is because not everybody gets the same level of support. Therefore, when the more junior lawyer is looking for support, they go, “So-and-so helped me last time. I'll go back there.” Or they're not confident that the normal path or the designated path is going to work for them. So yeah, providing that confidence, I think, is a big part of what we can help with.

Eric Wangler: I think the offshoot, if that's the right word, of firms that have moved to centralized support is that when they were in a structure where a support person looked after five attorneys, three partners and two associates, guess whose work never got done? The associates'. Exactly. And then when you pull resource around your associates, very often they get improved service. They're much more comfortable delegating to a system than they are to a person. There's an age dynamic; there's a maturity dynamic there. Somebody who has spent 30 years in legal versus somebody who has spent three years in legal — it just gets to be a bit awkward. So eliminating all of that and just simplifying the process, I think, is where it begins and ends.

Duska Frink: Can we talk about e-mail again? Because I remember the three of us at one point talking about the product and where we were going with it. When I came to BigHand, it was all about filling out this form and getting lawyers to fill out the form. But then firms were telling us, “They're not going to fill out a form.” And then we were like, “Why don't we just meet them with e-mail?” And now we can. We don't have to change that behavior. I think with the associates, that behavior does change because, like you said, maybe they don't want to delegate to a person, but they might say, “Hey, I'll just tell them what I want.” That can be via e-mail or a form, however you like to work.

Eric Wangler: Yeah, I think we've got to make it simple. Got to make it simple. And that's not a negative comment. It should be simple.

Duska Frink: Yeah, it should. It should.

Eric Wangler: No. And we've got lawyers focused on other areas.

Duska Frink: Yeah, just meeting them where they're at. If e-mail is the best way no problem.