Only Happy When It Rains (ft Jae Um and Ed Sohn)

Damien and Horace open season three of “Further Comments” with Lumio co-founders Ed Sohn (Chief Product Officer and general counsel) and Jae Um (Chief Growth Officer and head of knowledge). They discuss why legal AI sits on multiple, overlapping hype cycles and why market views diverge by buyer segment, work type, incentives, and user experience, creating fatigue and people “talking past each other.” 

Ed and Jae describe Lumio’s focus on using AI to scale scarce expertise in partners’ commercial acumen — helping them decide where to hunt and how to close revenue — by structuring systems of expertise, archetypes, and context so AI can apply judgment in real partner situations. Jae argues firms shouldn’t wait on master data strategies to change behavior and emphasizes near-term competition on wallet share, rates, and realization, while remaining optimistic that lawyers’ value and agency will endure through change.

00:00 Meet Ed and Jae

03:09 Legal AI Hype Cycle

06:37 Multiple Hype Cycles

11:19 AI As Personal Tech

16:11 Mapping The Confusion

18:10 Tools Builders And Claude

22:45 Lumio Commercial AI Teammate

25:03 Building The Expertise Moat

27:37 Jae's Career Backstory

28:06 Global Pricing Leadership

29:26 Human Centered Value

30:35 AI Beyond Master Data

32:49 Training Trusted Advisors

34:43 Compression With AI

35:18 Buyer Partner Archetypes

38:55 Rainmaker Teammate Stress

40:48 Next Two Years Battle

44:07 Counting It Depends

47:25 Lumio Expertise Systems

50:06 Headless Workflow Design

52:12 Optimism And Agency

Transcript

0:00

Hello everyone. Welcome to further comments. Really thrilled to be here with my friend Horace Wu. Horace, how are you? Hello Damien. I'm doing very well. It's great to see you. Uh, really great to see you. Uh, we get, we were able to see each other last week at LegalWeek, and of course, now here we are back in our respective homes, licking our wounds and, recovering from Legal Week. This is season three. Uh. Season three! So exciting. Uh, so the first episode of season three. We've talked about how we wanna bring smart people, uh, to be able to say smart things on our podcast, and we're thrilled to be able to have two smart people. Two of them! In a single episode! In a single episode to two for the price of one. Uh, Ed and Jae, uh, welcome to the show! And maybe you could introduce yourselves to people who don't know you. Great. Uh, glad to be here. Season three is historically, always the best season of anything. And so we're, we're glad to kick it off. My name is Ed. I am an attorney and a technologist by training. I'm a co-founder and the Chief Product Officer and general counsel at Lumio. I've spent my career after five and a half years as a practicing litigator at King& Spalding, in an oscillating career between managed services and product management, technology and innovation, um, at places like Thomson Reuters, EY, and most recently on the management team at Factor. But it's been, we are over a year into our world at Lumio, and I am based in Atlanta, and we are super excited about what we're doing. Awesome. Hi. I'm thrilled to be here with three of my favorite people. My name is Jae Um. Jae, like the letter; Um, like you don't remember. I am the Chief Growth Officer and head of knowledge at Lumio. As far as my background, it's a long story. I've done many, many things, but I think people know me, uh, primarily as a commercial analyst and strategist. I am a, uh, student of legal markets, observer and watcher of people on things. And I am probably best known for using lots of emoji as I comment on the future of the legal profession and the business of law. I also have, written for the American Lawyer's AmLaw 100 issue for the last five years. And, you know, I am the creator of the power rankings where I try to look into the crystal ball and gaze into what the future may hold for some of the best lawyers and law firms in the world. And one, one of the best things that I love about Jae and Ed is that a lot of people when they speak, the signal to noise ratio is quite low. That is, there's lots of noise to signal. I would say that with Jae and Ed, it's almost a hundred percent signal. Uh, if there is noise, I, I haven't heard it yet. Every conversation I have with them is, is high signal, almost no noise. And I, I expect this to be no, no different. I, I. Like super happy and honored that you guys have decided to join us.'cause I met you guys last week and saw what you are working on and I was blown away. And we'll get onto that in a little bit because I think like it deserves a lot of airtime. But it's cutting through the noise that was legal week, right? Like everybody was AI. Everybody, I think the more matured offerings are now integrated. And they don't really like flash AI in neon anymore. But there were still people who were doing "AI! AI! AI!" And I think what you guys have done is, is, it's an extremely mature application of, of, of AI. But before we go on to talk about what you are doing, what's your take on the current market in 2026? Like, in terms of the Gartner hype cycle? Where are we in that cycle? Oh boy. Well, I think that, one thing that is very interesting about legal, um, and I've written reams about how legal's not unique. It is an extreme market, but it, it is prone to some of the same behaviors and some of the same pressures and trends as other industries. Definitely is the case here. I think what is really interesting to me is the dispersion of viewpoints. Uh, depending on who you are and where you're sitting in the marketplace. Like there are still people who are very at the peak of you know, hype, like unrealistic expectations, especially when it comes to ROI. I said on my panel, ROI is the new black. That's what everybody's gonna be talking about. Um, and I think probably a lot of reductive thinking about what the path is gonna look like from tool purchase to, you know, being able to show a clean spreadsheet with like, what that did to the business. I think, um, so some unrealistic expectations, a lot of fatigue, generalized fatigue. People seem to get annoyed when they hear the, the syllables "AI". Um, so that tells me they're deep in the trough of, uh, disillusionment. But I think that, uh, some of that feels to me a little bit directionless and, um, atmospheric, rather than driven or triggered by, you know, specific experiences. So that, that dispersion is really interesting. But I will say this, real things are happening at great pace and volume. Lot of people are working really hard, to really understand how AI makes contact with lawyer reality, with legal services reality. Um, I think some of the comments I made on my LegalWeek panel, I, I repeat, you know, in a truncated way. Which is that I think we do ourselves and each other a disservice when we generalize to the wrong segments. Like, you know, what are clients doing? What are firms doing? Well, a handful of clients are way out front being very aggressive with, um, automation and sourcing. Um, most are actually, you know, way far behind. Like the, I would say the top five that I know of are, are many, many miles ahead of almost everybody else. Uh, firms are catching a lot of flack because, you know, they're not giving easy to understand, repeatable, viral answers on what it's gonna do to pricing. Um, I would tell you from my experiences in legal business strategy and, and pricing, that's gonna take a couple years to shake out. Um, you know, that notwithstanding a lot of firms are actually quite far, uh, in, in tool evaluation and lawyer consultation, pilots. And actually, you know, pretty structured studies as to what AI is doing, not only to the provision of services today, but the training of lawyers in the next generation. And then, so I think there's a lot of work ongoing, but, uh, people are talking past each other and then, so I think a lot of the disillusionment, a lot of the, the negative kind of backlash is really overinflated, um, in this echo chamber. So I, that is something I've been trying to shift through many waves of change in this industry. I think, um, clear eyed positivity is really important. More important now, now than ever, I think. What I'll add to it is a little bit more from the product perspective and looking at the, the kind of approaches that are in the market. Jae and I have talked about this before. We need to kind of write this down and put it into an article. There are multiple hype cycles and they're cascading on top of each other. There is not one hype cycle. You cannot say there's AI in legal and it is at a peak of expectations and then a trough of disillusionment. And it doesn't track quite so, neatly because there are multiple use cases. But actually what's more important than the use case, uh are... 'Cause what is the hype cycle actually measure? It measures adoption and maturity, right? That's actually what it measures, right? And it's, it the inflection of attitudes that are kind of charted against the maturity of like where technology actually diffuses into a user base. Um, and really actually technically it's got buyer base. The thing about AI in legal is that the thing that phases the multiple hype cycles all kind of being phased on top of each other is primarily that people are on three or four different journeys. And so they're, they don't necessarily coincide. And that's where Jae talking about how people are talking past each other. It's because they're like,"man, this is a great trip." It's like, "no, I find it rather bumpy." It's like, "no, I find it rather smooth." And that's 'cause one person's in an airplane and someone else is on a train. Like they're, they're in different vehicles and they're also not even heading to the same destinations. Boy, there's a lot of turbulence. Mm No, it's completely, it's completely clear. That's 'cause somebody's flying to Vancouver and someone else is flying to Miami. Like there are different paths and different destinations on different modes of transportation. And so because of that, the hype cycles are kind of all at different moments of cresting. And you'll hear this kind of dissonance when you talk to, you know, providers on the exhibit floor, talking heads on panels, you know, buyers trying desperately to bring coherence to their AI strategy, what they're being asked to provide. And there's just a real need for some clarity. And adoption of oftentimes in the maturity of those products depends on multiple things. But one of them, uh, I'll just, I guess I'll mention two off the top. One is, um, the incentives. I know Damien talks about this all the time. Um, incentives matter to adoption. An environment that is conducive to adoption is not merely a matter of I have this problem and this solution fits it. It is not as simple as that. There is a broader context and a, an environment with conditions that are conducive to the adoption, where there's motivation among users and buyers and makers that are, that find some level of alignment. But the other thing is that the disruption is, and the technology that's being released, and we now can see, look around the corner a little bit. Because actually the technology and the rate of AI progress is far ahead of kind of the pace of adoption. We've been saying that for a little bit. I've got like a wonky line graph that kind of shows this. Claude Anthropic recently released kind of like a radar graph that kind of shows like where the potential disruption is and where the maturity is. Um, but that gap, um, is being traversed. And along the way a lot of the products that are desperately trying to make them make the case that they're indispensable will be quickly disposed actually. And so that's, that's the moment that we're in and that's why there's a lot of kind of talking past each other. The last thing I would mention, and we can talk about this, you know, sort of in more detail, is really the basic minimum viable quantities the assets that are required to actually have AI make contact with reality and stick. And those are not just the environmental kind of atmospheric conditions, nor are they sort of just the sufficiency of the technology and the ascertainability of the problem, but actually it has to do with the user experience. And that's where like a lot of product people like to talk about adoption, which is like, how easy is it to work with? How easy is it to adopt? And I think that because AI is a completely different beast, um, there are not, there's not one path to user adoption. Um, and there are a lot of people kind of all moving in different directions along it. It's not as simple as, well, it's a React web app and it's so beautiful and oh my gosh, people are just gonna know. There's tool tips. You hover over a button, it tells you what it does. Oh my God. Like we're not in that world anymore. That is like one of many canvases where AI can be expressed and kind of like, uh, the benefits of it can, can be, um, accessed by users. And so those are all different things that are happening at once. And that leads to a lot of chaos because I think all of those things compound on each other, so that someone's like, oh, I'm on an airplane to Vancouver. I'm on a train to Miami, and someone else is speaking like Italian and even the same language. And so these complexities all stack on top of each other to, to reveal a lot of noise and chaos. You might think that I get to do this all the time because Ed and I, uh, started a company together. But no, we don't get to sit and talk, uh, you know, interesting talk about the state of the world. So I'm, I'm reminded how much I miss it. Let me add on to some of the things that Ed is saying. Just to kind of help people make sense of why all this is the case. AI is, I think, the most personalized, you know, technology that's, um, ever been. And that's got lots of good to it, and it's got a lot of hidden, uh, I think pitfalls and traps. So when I say AI is fundamentally a personal technology, it means the, the actual user experience varies quite a bit from person to person, right? And that level of variation is something that is totally new to the change agents and managers who have set, um, adoption strategy before. I think too, to put like kind of concrete point on what Ed is saying in terms of, you know, people headed to Milan versus like Miami or Tampa. I think that, you know, a lot of folks are pointing AI at, you know, maybe known, known solutions to known problems, or new solutions to known problems. It takes a lot of thinky pain and sometimes thinky pain that is shared in a group to see white space for new ways to tackle new problems that you know, we haven't encountered before. Like either because they were too difficult with available technology. I think, you know, seeing that kind of like new Horizon is very hard. I see very few teams doing that. Um, but you know, some people are, and then, so depending on what you're trying to do with the AI, um, it, it goes beyond use cases because the, the, uh, bionic collaboration between user and technology is, you know, in a sphere that we've never really made contact with before. And then it takes a lot of active use and active thinking from the user, um, to think of, you know, the ways that AI can add value or create value in totally new ways. And then, so I think that is something that is creating stochastic variables. Like the jagged frontier of AI capability is one thing, but the jagged frontier of human imagination is another. And I think that actually is, is a far greater and more intense pressure to cope with. And, and in terms of user experience. I think that something Ed and I have, suffered a lot of thinky pain about, uh, before we decided on our user experience is that term and the concept U of UI is really fundamentally changing. A lot of... and I am a, a lifelong lover student of design. I think a lot of UI and UX, um, engineering in the past has gone into thinking about affordances and workflows, right? So the very mechanical, just collision of user to the technology. What does the user see? What was the user thinking before? What can the affordances signal to the user as to what, you know, functionality features are available? Um, and really because AI capability is so deep and vast. Right? And the interface that most of us made contact with first is really just like a cursor in a blank space. Um, I think it gives us, actually, yes, the challenge with the opportunity to really rethink what is the problem space that we could attack? What are the solution spaces that we can explore? Like the concept of solution architecture and problem awareness. These are actually deeply human problems, not necessarily technical problems, right? So understanding the human experience, the psychology that, um, users bring to the interaction, the business and work context around that user. Because we are generally in an enterprise space. And the work context that exists not only around the user but around the enterprise as well, right? And then what is the opportunity space that they can attack? What is the value proposition that we are bringing? I think these are all much more important questions to answer now. Because each of us has an insanely scalable, powerful kind of capability and an army of agents to do our bidding. Making these tough choices about what we're gonna do with that and how we're going to communicate and show that value. These are all deeply human and business problems. A hundred percent. And, uh, one of the things that I love about you, Jae, is that, uh, not only your, uh, emoji, but your verbal emojis, like "thinky pain". I, I love, love, love that. Life is a PowerPoint, so this. Is a PowerPoint, uh, that is, it relates to what we're talking about, and it's actually got Jae and Ed, uh, featured on it. So there is a different hype cycle for the world versus governments versus, uh, you know, industries, uh, main street, law departments, everyone is in their different path of the hype cycle. And uh, and also the populace might not even be near peak, peak hype. They might not even know what's going on. And then you can say, okay, uh, maybe if you put them in this kind of list, you could be able to say, okay, this is where maybe everybody is along that list. But then you also have, you know, talking past each other, which, uh, you talked about is that, you know, is it, are we talking about advisory work or we talking about transactional work, or we talking about regulatory work, or we talk about litigation. Here is Jae Um and Ed Sohn, which I show to almost every person that I have say, what type of work are we talking about cream work or core work or commodity work? Uh, and because then, you know, what can AI do? What is the current corporate spend? And I'm sure you have different, uh, different numbers for this now, but, and how much can AI affect each of these? We can't talk, uh, we past each other to say, no, it's never gonna touch cream. And then you're saying, no, no, no, I'm talking about commodity. Uh, so each of these, you can think of almost like a, um, an X, Y, and Z, uh, where, you know, everyone is talking about a different thing, different parts of the, uh, the elephant. And so you can say like, the X axis is for whom is this happening? The y axis might be what is the type of work advisory, transactional, regulatory. And then of course, the Z is what value, what is the cream core and commodity? And you can imagine, as we discussed this, that's, that's maybe a way to be able to think about us thinking, uh, past each other and talking past each other. But I'm gonna add one more axis. So we're gonna enter four dimensional space. I think the thing that I'll add is, the, to what end almost. It's almost like what is the, what is the thing around which there is hype? Like even that by itself is a question.'Cause we keep saying it's like AI and it's vast intelligence and it's an army of agents and like, all true for sure. Like that is, there is something at the core of AI progress and something that has been invented and we can define it and point to it and look at it and it's moving super fast. Here's what I observe. Let's like get outta the theoretical for a second. I talk to law firms, when I talk to legal teams, when I talk to leaders of innovation and people whose job it is to really inflect a change that can be reduced to some kind of KPI on which they're evaluated. There is this idea of like, well, let's go try and buy some tools, Yep And like that's still in the mix. And that is absolutely. And, and like that's a familiar arena. People can talk about pilots stacking up on their desk and they can talk, you know, like, oh yes. Oh man, there's so much more now. And oh, there's so many new entrants. And then like Horace was saying, oh no, but like some of these new entrants, it's really just a feature on a bigger platform. And like, oh, there's consolidation in legal tech and et cetera, et cetera, et cetera. Now these two competing solutions are at the same house or whatever. Like there's like all of that navigation of the kind of legal technology procurement. Like view, right? But now there are builders and uh, that's kind of getting a lot of traction. You see some of those kind of building firms that are out there, um, that are making a difference in terms of getting better in-house solutions. We're not talking about sort of slightly rickety power apps kind of like stringing together some like real basic automation logic on the backend. Um, or like, you know, a little, kind of like a SharePoint page that's got a little bit of kind of, uh, power query behind it. You know, that might, I mean, look, some of those things were actually super powerful, but were not in the hands of like, really competent citizen developers. And like, couldn't actually kind of reach their thing, nor did they scale. Like, someone would make this one thing for this one thing, for this one place, for this one person. It'd be like, great, now can you do this? It's like, sure, I just have to start over from scratch. And so then the, but then there's this, the builders now have a completely different, it's a completely different ballgame for builders. And like, see, e.g., all of the advances in software development everywhere, vibe coding, you know, uh, Karpathy's auto research and like building a model from scratch now. And, OpenClaw and Claude work cowork and so many things now, right. But then that blurs the line to this third kind of user experience of like and the what of like what is the hype cycle? And that is like. Every once in a while, someone in like a management committee or the board of directors or you know, a senior executive is just like, well, I just heard that Claude is "legalling" now, so let's all just do that. Right? What is this Claude thing gonna replace? Like all the things that you guys are shopping and all these things that are stacking up on your desks. And I say that with caricature, but that's a very real thing. That's a very real voice happening where innovation chiefs who are like kind of meticulously putting together their kind of like tranches of strategies and use cases and what tools they're gonna pilot against them and how they're gonna prove ROI, are being confronted with like a leader being like, but what about this Claude thing I keep hearing about? You know? And uh, they, they released a legal thing and that dropped, you know, market value. And you guys have talked about that and we don't need to kind of like redo that conversation. But I guess what I'm saying is that some people who have taken the approach that AI is a more, uh, at large general capability. And the products in which it is interacted with require competence from its users no matter what shape or form, what pane of glass they're interacting with. And so then that journey is one of training, that's one of adoption, and like AI mindset and all of that. And those three things are themselves at odds a little bit because product makers are oftentimes like saying, you don't need to worry about prompting. You don't need to get that great at AI because we're going to hide that behind our wrapper. And you're gonna have a very consistent experience all the time so that all the wild variances on the backend, the product maker will bear the burden. Of like, you know, uh, evening all of that out and making that into a consistent approach. And frankly, some of the legal tech platforms out there have a lot of adoption and familiarity and people already know how to like, kind of work their way around them. And so installed user base, familiar experience, power of AI, like that's a good thing. So then why do we need to hammer these people over the head with like how to start using AI and like talking to machines and like natural language and whatever. And so even that fourth axis of like what is the what? Not just the work, not just the value profile of the work, not just the actors and like who, what they're, and not just the kind of business concerns. But even like when we say AI, like it means three people have three different visions for what that's actually gonna look like. And that, and where they're putting their effort and time and capital against. And I think that those are also disparate journeys. As we think about Claude"legalling" these days, something that Claude doesn't have is data. That is data that is, is stuck in Ed's and Jae's brain. Maybe we could pivot a little bit to talk about what you're building and how, Claude won't be able to do what you're building. Well, uh, you're setting us right up into the thing that we are really excited to talk about all the time. One of the things that we believe is that while legal work is a frontier that is about to be transformed, there's a different sort of as Jae mentioned, kind of like a new problem space or a new area that is, uh, something that we can now approach with AI that wasn't possible before. And that is the development of law partners in their commercial acumen and their ability to understand the business of their clients. And that is expertise that, Jae is very famous for, that I have some insight to as well in service, the general counsel's office for the last decade or so. And, um, understanding how we can take that kind of scarce expertise and deliver that. We know that it's delivery. We know that those insights as applied into the realities of, uh, buyers and sellers on both sides can be really effective. But we've never been able to scale it before. We've never had the means to scale it with excellence. And so what AI provides for us is the ability to do that. Now, how do we get that expertise out a way that isn't just out? It's not just like, well, Jae write a book, go into a cave and write a book. You're like the Dale Carnegie of legal and they come out and then you've got it all written down and it's perfect and beautiful. We know that that's not that, that we have an opportunity to structure expertise in a way that AI can command it. So that it can approximate the intuition and incisiveness of the insights that somebody like Jae walks into a room and everyone immediately acknowledges. They feel it like it's an art or like, it's an, it's an emotional quality, it's a temperament. Um, and how do you replicate that? Because partners can tell the difference, right? If we're really trying to change the lives of partners, partners can tell the difference. They know expertise when they see it. Almost every single one of them is one of the world's leading expertise in their area of technical performance, which is in legal work. But when it comes to commercial acumen and when it comes to their ability to actually grow their relationships, it's something else completely. So, our goal in our product is to create an expert AI teammate that helps partners decide where to hunt and how to close new revenue, profitably and with confidence. Uh, we think that's so important. I, I'll let Jae talk about why that's so important in this current moment in sort of the market. But I think the thing that answers your question, Damien, is, um, we have gone through the work of not just extracting and putting onto paper. And sort of like getting Jae to sort of author hundreds and thousands of pages. We have structured it in a way that we have these systems of expertise. Those systems both parse the unique contextual factors like what firm and what partner and who's this client and what sector are you in and what is your platform and like what quarter of the year is it, and what's happening like on the macro economic backdrop of the world, and what do they talk about at Davos and who just got fired by the Pentagon or whatever. Uh, and also on top of that, getting a read into these very local situation. Of like, here's a partner that is being summoned by their client to come in and answer the question, how are you applying AI to my work? And that is a commercial question that is not a question of legal work competence. That is a question of expecting you to inflect a change into our business relationship by virtue of the capabilities that are now coming forward. And a partner is saying like, how do I make sure I'm positioning myself, not just defensively and trotting out, you know, whatever kind of perfunctory or obligatory experts that we may have in the house, but how do I turn this into an opportunity to cultivate the relationship? And to deepen and to find new ways to communicate how our value is different. And to do that, to do all of that, we have systems of expertise that we've authored around, you know, all of these different categories of context. But also a, a map of all the commercial journeys such that every commercial situation can be located, in terms of like a commercial journey and a phase in that journey. And you know, that provides an ontology essentially of legal buy that connects it with the jobs that must be done by that partner in that situation. And puts it up against the very unique dials and contexts and different values and fields of the, uh, firm and the partner and the client and the, and the practice and all of that as well. And so we have spent the last year, so fun, the last, the past year extracting that expertise and hammering it into structures that are, you know, mutually exclusive, collectively exhaustive, and equip AI to be able to then come in and with that sort of spooky intuition, be able to assert and apply that expertise into a situation. And that's what we believe is important and that's what we think is the moat. That's what we think Claude will never have access to. Uh, but that in a way that we can educate AI to its maximum effect, um, has been our mission and really kind of like our excitement. Jae, how did, how did you get your brain, your data into that moat of a box? Well, okay, let me, let me actually back up because I think, you know, I hardly ever really talk about my work experience inside the, the four walls of a law firm. I played a number of different roles. I've been very fortunate in my career. Since I was 27 years old, every job title I've ever held was new to me and new to the firm that gave it to me. And then so I have had the opportunity to really, facilitate uh, legal buy and service delivery at the matter level. At the client relationship level, uh, I've had the opportunity to manage that. The partner book level, I have done performance reviews at the practice group level. And then, you know, culminating kind of my W2 career, um, as the global head of pricing strategy for Baker McKenzie, I oversaw pricing for 46 countries, $3 billion a year. So that is really a full service, uh, global perspective of how clients want to buy legal services, why they need lawyers in the first place. And the, what is the value proposition that's the partners actually create and deliver with their teams. How do they explain that? Right? Um, when I walked into Baker McKenzie, I was 35 years old. Uh, I had only worked in the US market, although I think I was quite well known for work across client service, operations, delivery, as well as innovation, um, and, um, pricing for value. But still, it was a very broad scope. And I think the only reason that I was able to discharge the role is because I, I think I brought a completely different perspective than other commercial advisors working in the space. And that is, um, a fundamentally human centered view. Um, that it is a relationship business. It always will be. And that I, uh, I think I brought a, a more open-minded attitude to the lawyer answer of "it depends". Um, it absolutely depends what is, you know, an engagement worth? It depends on who the client is. It depends on, you know, where they are in the company life cycle. It depends what's going on in the world around them. It depends on who we are as a firm, uh, and, you know, kind of the whole lineup of other viable providers who could, you know, offer something similar, better, worse, in different ways? It depends who the partner is, what the relational history that partner has with the people making the outside counsel selection decision. It depends how much we know about them as people, how much we know about them as teams and as a business. And then, so all of these dimensions... you know, firms and partners have intuition. They have information that is trapped somewhere. And, uh, here's something, uh, I get to a big topic where I would like to shift the industry discussion a little bit. And I think both of you really liked this point when I saw you in New York last week. There is a great rush toward master data, kind of, uh, strategies, different ways to evolve, how the firm organizes, catalogs, all the data that they have in their systems. And that is a necessary endeavor. I'm not saying that it's not. But the idea that firms have to wait for that journey to progress before they embark on, you know, the much more difficult journey of getting

people to think differently with AI: 31:12

I reject that premise completely. Um, because I think the, the pricing exercise in particular has to do with extracting the intuition and insights that reside within partners' minds. Within clients' minds, right? And the idea that we have this natural language interface, where we can give those people a teammate to really embed into their daily experience the lived experience of work. And to figure out the proposition together, to figure out the positioning together. I think that is an application of AI that is completely missing. And the experience that Ed and I are trying to bring to rainmakers everywhere, current and the next generation of rainmakers, is to give them a teammate who is really deeply invested in their success. Who, you know, rides alongside with them, learns them, what they're good at, what they're about, the expertise and the client that they apply to, the client problems they solve. What is the value of the platform and the synergy that the partner gets from being on that particular platform? How do they engage in meaningful dialogue with clients to really get at a shared understanding of what the problem is and how the firm can help solve that? Right? And then, so to me it is less about a data crunching problem. It's less about a data aggregation problem. And it's more a communication and collaboration issue. And then, so when I think about readying the next generation of lawyers, um, to practice as practitioners and that kind of hallowed trusted advisor role, right? How do we prepare them to take on that mantle? Well, listening is one. But like, you know, listening real hard is not enough. They have to listen and hear and understand what it means, right? So when I talk about noticing skills that, you know, junior lawyers, senior associates, new partners need to develop, it is the ability to actually quickly locate the client within a complex matrix of situations, right? How do you orient yourself and the client to where they're sitting? And then what is the range of probable, kind of, uh, situations that are going to develop from the current situation. And then, so being a trusted advisor really means understanding how to apply, uh, quickly your deep expertise to the specific concrete, uh, situation that this particular client is in. And in order for our AI to help partners do that, we have to teach our rainmaker companion to quickly locate the partner in the commercial situation in which they find themselves right. So a lot of the expertise extraction, which has been fascinating and, and, um, I have to tell you, very difficult work. In my career I have rarely been cognitively taxed in this way. Um, I have to say, the jobs that I had at Seyfarth and Bakers, and in my consulting practice for Global 50 firms, I have come across a lot of complexity. But most of the, what I found taxing was relational, political, social, emotional. It was not like cognitively taxing, like this kind of work. It is really about, uh, compression. So I, I think that's an issue that we're not talking about enough. What AI enables us to do is compress a huge set of possibilities, a huge set of variables. And to help process through that and then narrow down the range of possibilities. And to help people navigate complexity in a completely new way. And then, so in order to compress my understanding of the global legal market. You know, I'll give you an example. Uh, we reduce, kind of the universe of legal service buyers to, uh, first 12 and 10 buyer archetypes. Um, this is not a demographic segmentation. It is truly a demographic and a behavioral profile. Depending on the sector, the composition, the nature of their business, the range of needs that they would typically experience. And then the range of buying behaviors that I have seen in 10 years of analyzing, uh, legal market dynamics. We have defined these archetypes of, of legal service buyers, the organizations themselves. Um, we have, through really deep thinking, defined six archetypes of partner roles in Rainmaking, because rainmaking is no longer a solo sport, even though it still feels that way to so many partners. Rainmaking at the highest level is not just a team sport, it's actually a position sport. And being successful means really understanding where your strengths lie, uh, as it relates not only to your disposition and your skills. But your practice modality, the career phase you happen to be in, where you shine now and where you need to develop. So these three dimensions that you see to the right expertise, origination account, this will map to a phrase that many people have heard

before: 36:43

finders, minders, grinders. Expertise, though, is the way that I would express production. Production is a key driver of partner compensation in all firms still. And I expect that to actually increase in importance because of the impacts of AI on leverage. Um, but it's not really just the mechanics of producing hours and, uh, time entries into bills, right? That is the application, and leverage of, of important expertise to issues of consequence. Origination obviously is a very lionized aspect of the partner job. Something that is not well understood. But the third one that I think people don't talk about enough is account management. Once you land the first matter, how do you get the next 10? How do you build a accumulating and compounding set of trust, not only in you as a, an advisor, but institutionally between the client enterprise and the firm platform that you happen to be on. And then depending on your balance, and most partners in my experience, they have a primary strength and a wing. And then, you know, over time the balance of their focus on expertise and origination, it does need to shift, uh, depending on firm strategy, the partner's personal kind of goals as to earnings and, you know, work life balance and the way that they wanna spend their hours when they're at work. These are choices that the partner makes, consciously or otherwise. And what we are trying to do with the rainforest archetypes, and we call it that because we think firms really need to build themselves into ecosystems where it rains more reliably. Um, instead of you know, always depending on the mythical powers of the five to 10% of partners typically bring in 80 to 90% of the firm's profits. Uh, we believe that firms can actually grow new rainmakers better and faster than other firms. We'd love to be that competitive advantage. I think that what these archetypes do, and generally our approach of really highly granular context engineering that we bring to the partner's desktop. It is to reduce cognitive load without being reductive, right? It's not just task offloading. We are reducing the, the cognitive load and the emotional distress that many partners feel when they're staring down the barrel of a, of an RFP response that they don't know how to respond to. Like a panel pricing bid. They don't know how to respond to, uh, maybe a difficult conversation with a client where the relationship's going a little bit sideways. These are critical stressors and what they need is better judgment, exercise under stress and time constraints, right? And what they really need is a thinking partner that is fully, fully invested in their success. Someone who understands the world they operate in. Someone who understands the social and cultural context of a very high-end relationship based, buying environment. How to navigate all of the different interests that really go into a $20 to$30 million enterprise relationship. These are things that I think have been, hidden away behind closed doors for a long time. There are not a lot of people who have really worked within these relationships, have facilitated transactions in those relationships, who are not themselves an interested party in that ecosystem. And then, so what we're trying to bring to partners is that teammate. And I think that the psychological, emotional, relational aspects are just as important as the economics. Although, of course, if people wanna vet that, there's a great body of work that I have put out on the internet for free in terms of the, the economics of legal buy. I think uniting all those things is incredibly important, especially in this moment. So now I will say a little bit of, of what I think is happening to the legal market in the next five years. Everybody wants to know what's gonna happen to the pricing model. And everybody wants to know what's gonna happen to lawyer compensation as a result of that. Again, I, I know it's frustrating, but it's gonna depend. Depend what kind of lawyer you are. It's gonna depend what kind of firm you're at. It depends what kind of client problems you solve today, and it depends how you solve them. Most of all, it depends how much you're willing to change the way you apply your expertise to deliver outcomes and experiences for your clients, right? So there's a lot of variables in play, but I will tell you the most important thing. Um, the battlefield for the next two years is not actually gonna be on profit margin. It is going to be on wallet share. The firms that win on wallet share, the firms that anchor enough of the right relationships with the buyers. Where they can figure out the AI enabled future together with a handful of house accounts. Where there is sufficient trust to figure out the AI delta together and an equitable split of the new economics, they're gonna be ahead. Even in market share, where there, there aren't those sizable, chunky relationships, partners really need to secure revenue at increasing rates. Yes. Rates will go up. They are going up a lot this year. They're gonna go up a lot next year. Right. The partners who are able to secure, uh, a flow of work at those rates, they will have an advantage. Right? So the next two years is really gonna be wallet share, market share rates and realization. That's the, that's the battle. And it's gonna be a street fight for demand the next two years. The pricing model innovation that will shake out in the years following. Now, the firms that are gonna be ahead in that race, they are looking at leverage impacts of AI. But unless you can win the work, unless you can get clients to trust you with work that still needs to get done at an extreme level of excellence. You're not gonna have as much ground to defend in that pricing and profit fight. Right now we believe that winning work and winning revenue ought to be the top priority of every partner in the AmLaw 200. I have personally spoken with scores of law firm leaders and they all agree. Um, and then so I think rainmaking is, is an important, important skillset that is also shifting dramatically, right? Uh, one of the things that Ed and I have been saying to many lawyers is that the last three classes of partners that have been promoted, and the last three classes of associates that have been hired, into the Global 200, they are quite possibly the most important classes of lawyers that have ever been. Together, those two groups are going to define the future of the legal profession and, and the business of law. I love it. So I'm gonna reflect three things back that I heard that are really important that I want all of our listeners to think about. Number one is that, rainmakers are like Willie Sutton said, they said, why did you rob banks? He said, well, that's where the money is, right? So you by chasing rainmakers, business development equals rainmaking equals sales. And so you can imagine that if I'm a rainmaker, I will spend $1 on Lumio to make $10 in rainmaking. So number one, kudos on chasing the right market. You're going where the money is, like Willie Sutton did. Number two, your point about compression, being able to take your brain and. Be able to then, offload your brain, in a way that is systematic. Any particular data point, you might only use one rifle shot of that in a conversation. But what you're doing is not just rifle shots. You're essentially doing a Gatling gun of all the things that you've ever learned and trying to offload that into an artifact that is a software. To be able to then offload your brain. That is incredibly taxing and exhausting. And I think that, Jae today, Rob Saccone today, who you and I know, like we were just talking. Rob and I were having a conversation about how each of us has five different things that we're doing with Claude Code. Five different tabs that we're constantly going and taxing our brains in ways that we haven't been before. So I think this is a precursor of what lawyers are gonna be doing. Is that we are gonna be offloading our brain and compressing our brain in ways that we've never before. That's point number two. Point number three is you're talking about, you're counting all of the "it depends." Of course, every time somebody would say to me... well, a lawyer would say, "well, it depends," I would say it depends on what? And then whatever comes outta their mouth, I put it into SALI. And these days I put it into FOLIO. Right? So the counting of the, "it depends." Counting all of the "it depends" is of course the most important thing. So maybe I'll do that as a leaping off point to be able to say, knowing we only have four minutes left, what are all of the "it depends" that you're really counting. And how do those make their way into the system? That's one question. And then, before we close, we also wanna know about optimism. So maybe you could do those both. How do you count all the, it depends and leverage it in Lumio? And then what are you optimistic about? I take optimism and let Ed tell you about all the it depends. Uh, so the it depends. And you know what I would characterize by the way to even make it more reductive is, um, on your first point, Damien. Yes, the money matters, but like it's a system of incentives that lead us at Lumio to play in a space where firms want this and partners want this too. And I'm not sure you can say that about AI everywhere else. That firms want it and partners want it, that they inherently are incentivized to really want it. And that's both institutional, that's economic, but it's also personal. Like, there are partners out there who are willing and able to understand and grow their client relationships. And we say it's a relationship business. And maybe they're not among the kind of like, those that are so highly extolled inside of law firms. Where they're like, it's a relationship business means Jack over there is gonna get all the business. There are people, there are partners who are hungry 'cause and they're willing and they're able to do more. But the second thing that, I'll just combine your second and their points is like, humans couldn't do this before. Before AI, humans just couldn't do this. And so you're asking like, what are all the, it depends. And how do you... how do we leverage vast intelligence to stack all of those lenses on top of each other? Every single time we encounter every single partner question that comes in about any single commercial moment. At every single moment, to bring the richness of, of everything that, like, it's all, it was nearly impossible for a human to ever do, even once on our best of days. And we're living in a world of like, a lot of very stressed days, you know? And so how do we, how do you bring that all together? Um, and I would just break them into kind of three things that, this is how we talk about the expertise at Lumio. One is that context, the firm, we've got archetypes for the firm. So it's not just these six commercial personas for partners, but yes, there are partner archetypes as well. And so there are like any number of kind of permutations and combinations of seeing them in combination. Um, there are clients in how they buy, what, like Jae talked about. There are some similarities because of the business constraints and the business demands that actually are very much inflected into how legal buyers buy. And yes, there's some variants like Dell and HP might buy weirdly very differently, even though they're very similarly positioned companies. But actually there's still enough in common about like, you know, the industry and their business model that actually informs how legal buyers buy and what their business interests are. Uh, there are things around the, um, sector at large, which is different than the buyer type that have to do a little bit more with kind of like the trends of the sector and what's happening in kind of asset class transformation and like in the rise of pri private capital, both equity and now credit. We also have kind of systematized opportunities themselves. For any micro opportunity that comes in for anything that's like, there's an engagement, it's here. How do we approach it? There's actually something around the objective and purpose of that engagement itself. So a lot of times a challenger trying to displace an incumbent and get takeaway work. They view the opportunity with a very different gross margin profile than, for instance, an incumbent that's this is engagement number 35 for them. And so like the opportunity types themselves have their own kind of like taxonomy, um, ontology that that informs them. And there's countless other things I'll just say that are really about the context. We try to separate that a little bit. Although there's tons of overlap. And you could say, you know, tomato, tomato, around the actual situation and like, what is the play to be called in this situation? And what is the partner actually asking? What are they dealing with? Are they focused on the right thing? Do they understand what step of what journey that they're actually in? And what a win actually looks like for them? What is their passing range? Like, what's available to them? Which is a little bit different than just kind of like, you know, what's on the field, but it's a little bit about like what's the play to call. And then once the play is to be called and run. The, then the third thing that we actually think about that's very important when dealing with partners at law firms is, uh, what do you say to them? Like, what is the first smallest step to change? Like, what is the first thing that we put in the response to the email? Because here's what AI does. It shoots from the hip to generate as much text as possible to answer as many questions as possible and satisfy them completely in one shot. It is generally the case. Now, I know that there's like ohoh, like, you know, different models get a little bit cuter about clarifying questions and things like that. But in general, there's this desire to satisfy every possible thing on one shot. And what we know and what, like the UX design choice by the way that we made, is that we have a headless UI that just lives in the communication layer. Email and over time Teams chat, right? Because that's where partners, it turns out know how to do things, is, is what our research reveals is that they're okay at email over many years it's, it's taken to get there. So, um, what is the first response that will actually engage them? We've done a ton of user research. What energy they want to meet them back when they have these questions actually is half of the battle. Of getting them engaged and actually getting them into this conversation and, increasing their commercial acumen and developing, um, their thinking around these things around the relationship. And so the context, the situation, and the kind of response mode is, these are all systems that we have authored where there is a, as much meia as possible. And then they all intersect and have the beginnings of a graph where they all kind of tie together. And then that sort of dictates essentially what goes back into one email. Response to one partner that asks us one question. And that's what we're trying to bring in terms of the richness of expertise as applied through an AI teammate in the communication layer on an everyday basis. So, um, we're very excited about those systems of expertise. There are probably like 20,000 more waiting for us. We're trying to make them as elegant and as simple as possible. One of the ones that's coming very soon is actually pricing expertise. And we know that that's something where there's a huge amount of demand. And what partners have to do to both kind of get the price that's been set by their rate card and like apply that to the situation negotiation. Um, and also to manage that price, both sort of for the account level and for the engagement level. These are kind of the next systems of expertise that are coming online. So stay tuned for that. But that's part, that's all part of the commercial acumen story as well. I love everything you just said and what I like most about yours is headless. And for those who don't know, headless is like, you don't have a website. You just have, uh, interacting via Teams or via email. Smart for a lot of reasons 'cause one, that's where the lawyers are. Number two, that can't be scraped. That's really smart, that essentially nobody can scrape your website to be able to get all the stuff from Jae's brain. Kudos to you on that choice, both from a UX standpoint and a can't be scrape point. With that, Jae, what are you optimistic about? I'll, I'll build on everything Ed said and do a teaser of things we will never publish. One dimension of the expertise are the, uh, legal business value propositions that, you know, express why clients need lawyers. Um, and then 34 elements of value in, in terms of like, what, what is valuable in the entire relationship, in the, you know, advice, the solutions, the outcomes that are delivered and how it's delivered, right? We will never publish those.'cause that is probably part of the crown jewels, uh, in the, the brightest jewels in the crown. And, um, something that will anchor pricing advisor. I mentioned those two things because the, the buckets of business legal value propositions are not going away. So this broad, generalized fear of lawyer displacement is ill-founded. Um, in terms of, you know, the, the ways in which, uh, you know, trusted advisors deliver value to clients, that's not going away. The basis of my optimism is this. I, I have stayed in legal for many years despite having very portable skills, because lawyers are some of the smartest people I could ever hope to work with. I love lawyers, I love partners, and, you know, I love legal business. But one of my deep beliefs is that lawyering is one of the eternal professions. Um, no matter where you go in this world, no matter how far you go back, there are things that people just need. People need, you know, healers, people need teachers, and people need advocates to help them pursue what is fair and equitable. And then, so, okay. Lawyers are the second, second oldest profession. Yes, and the oldest profession will, will innovate and persist as well. But, um, you know, I think that is all cause for optimism. But the, the main message of opt optimism I have is this, change is inevitable, suffering is not. I think that, you know, I don't wanna overvalue kind of the Jevons' Paradox and say like, there will be more jobs, so don't worry. Because that, that kind of implies everybody who has jobs will keep them and the more people have new jobs that don't exist, and that's not gonna happen. Jobs will change, right? Like AI displaces tasks, not jobs, but jobs will change significantly. And, you know, the tasks they're a like asked to discharge, uh, how they're measured, how they're paid, how they work with others, like all of that will change. And that change is coming for everybody, right? But the way you respond to the, the, you know, challenges and opportunities that emerge will determine your fate, right? It is in your hands. And the ethos that we bring to product design and the overall experience working with Lumio that we wanna deliver to lawyers and partners is

this: 55:13

you are in the driver's seat. Like we really want to put partners in the driver's seat of their books, the kind of work they bring in, the kind of work they lead, the kind of career they wanna have now and in the future. That level of agency is so important that people feel empowered and equipped and supported to chart their own future. And my stake in pricing and the reason that I have poured so much of myself, um, into understanding how things are priced is because the ability to articulate and advocate for yourself. The value of the work that you put into this world is so central to people's sense of worth, sense of fulfillment, and sense of accomplishment in their career. I consider it, of course, yes. It is a driver of economic activity and it's, it's a very lucrative thing to know a lot about. But truly the, the value that we return back to the partners when they feel in control of their careers. When they feel confident and excited to go pursue business, when they feel equipped to really explain this is why our team is worth what we're asking. That level of engagement and just kind of the light in their eyes is worth more to me than you know, all of the praise in the world. Kind of like the light in our eyes as we're listening to you speak right now. Uh, so with that, we're gonna run the analytics at the end of this episode, but I think this might be the highest word count that we've ever done on a "Further Comments". I think the amount of signal, uh, lack of noise that we've done, I think we've now reached the words per minute, the highest episode. Horace, I'm gonna leave it to you to, to close this out. But, uh, thank you so much, Ed and Jae for your brilliance. Uh, this has, this has been a great fun and I'm really thrilled about what you're building. Uh, Horace. Just echoing all of that. You might have noticed I said basically nothing this entire episode is because I didn't want to contribute any noise to to this enormous volume of of signal and information that you guys are just dished out. My mind is blown. I'm gonna listen to this episode again maybe a few more times to see what I can pull out of it, but everything you've said just resonates so deeply. And thank you for sharing it with us, with the audience. And I can't wait to see the next iteration of your tool and this pricing tool that you'll be releasing. Thanks, Jae. Because conversations that you guys have is are great. We're glad to be part of it. So thank you so much. Thank you. you for listening. And, uh, yeah, if you want more, uh, more people like Jae and Ed, uh, please let us know who you'd like to come on. thanks What a way to start season three! Amen.