PP: I agree.
JB: So what we need to do is effectively start creating organizational intelligence, which means that if we’re running experiments, the whole enterprise benefits from that intellect, from that knowledge, from whatever is learned. What happens right now is that I think we do a lot of those experiments and repeat them. That means that everything that could have happened faster following that learning gets slowed down. And so, if I’m designing an organization for the future, I’m probably less focused on strategy, at least for the near term, and I think this feeds into your point. I’m more focused on how I start giving the people in my legal organization the capability to run experiments and be more data-driven and ultimately flow more of that information back into the business.
Because to your point, one of the privileges that legal has, because of what we’re allowed to do is, we often have a horizontal view across the business. And what we do doesn’t just have intrinsic value because we’re helping to manage risk, and we’re making things go faster, and we’re doing all those good things. Still, we have access to business intelligence that can help the enterprise be smarter and make better decisions, both on an individual basis and on a macro basis. But going back to your point, you have to get people thinking about the work that we’re doing and the information and insights that can spin off that as having the capacity to contribute to that. And I don’t know that we’re all in that headspace yet. I think we’re going to have to get there. Alright, that was quite a rant.
PP: But I think what you’re saying now brings us back to something that we do fundamentally wholeheartedly agree on. Tell me whether you agree that the whole idea of us saying to a general counsel or a CEO what the role of the general counsel is quite simplistic. We’re here to drive value for the business, whether it be in the form of a 1% earnings per share increase, but we both agree, look, we can’t just be managing risk for the business; we’re driving value. And how we do that shouldn’t differ fundamentally from the rest of the business. And I think these fabrics, and I don’t know what the right word is, but the fabric for what we wake up and do every day for the business shouldn’t differ from anyone else in the business. All of my peers at the C-suite level shouldn’t differ; how we do it and what we focus on based on what area I sit in may differ slightly. But I like this idea, Jason, that what if there were a kind of a fabric or a template that included three things, right? One is, how do we look at our spend? Focuses on risk, like we talked about, assets and M&A and running the business. That fabric fundamentally is no different than any other fabric across the enterprise.
They deal with the same issues, and our job is to make sure that that mix of whatever we spend our time and money on matches what the business wants to focus on. That’s maybe one element of the GC office that we need to say, “Okay, why does that differ from the enterprise, frankly?” The other fabric that I think we focus on is how we do our work. Why are we doing anything different from the enterprise in helping the top line grow and flattening the cost curve? For the benefit of our well-being, I don’t want to keep adding people and hours and everything else just to match growing demand. At some point from a business perspective, we’re going to have to keep those two lines separate for the purpose of the business and our well-being. And I think that goes to your point about things like, how can we do things differently, how can we scale, how can we use anything from technology or process or whatever it may be, to disaggregate those two lines, not fully, but to an extent?
And then the third thing is how we practice law in the way we do to benefit the business. And I think that third piece is special. I hope that all general counsel aren’t in the business of creating the best in-house law firm, but I think we would be doing ourselves a disservice by eliminating the fact that this is a specialized area of support for the enterprise. No different, but it requires its own art in and of itself for what the company wants to do. Where do we want to spend our money? How do we want to do our work? How do we want to practice law? Within that, there’s all kinds of things like teaming and diversity and things that weave into everything. But those things all have to drive towards a very simple outcome, and to me, it is about, can I prove that I’ve driven value to at least the top line, but at best the bottom? Let’s say we agree on the fact that we can drive this 1% earnings per share increase, or we can probably even go beyond that. What do you think is going to keep us from doing it? What do we have to solve?
JB: The challenge is, I think for businesses, it’s going to be really hard to generate super normal returns. The challenge I see is one of culture and capabilities that is coming, as much as if you are a person who was excited about going to law school because you know what, I want something that’s steady. Then you went into the training environment and was like, “Hey, let’s look at what happened hundreds of years ago, and let’s focus on that”. And then you went into a work environment, it was like, “Hey, if you can find the least risky way to do this, you’re gonna keep getting promoted.” That’s great. So on some level, I think one of our biggest challenges is both a combination of culture and capabilities, and as much as we have systematically created a group of people who, by and large, they’re very intellectually capable, but they’re not often built to go seek out the new, the different, the weird, and that is where we have them operating at the top of their ticket.
Really smart capable people going out and seeing the new, weird and different stuff, and then analyzing that and figuring out, so what is the path through this? That’s where we as an enterprise get the most value; when we put those people on effectively being the operators for known processes and tasks, that is not getting the most out of this amazing capacity that we have. The challenge I perceive is that there’s still a skills gap.
PP: Yes.
JB: There are a lot of people who were trained to basically run the trains on tracks, even though the trains are being more and more automated, so getting them to figure out how to build a new track is hard. But the harder thing is getting them excited to go build new track. If you built much of your identity and who you are and where you get value as being like, “I’m somebody who runs trains,” and somebody comes along to you and says, “How would you like to build some new railroad tracks?” You might be like, “I don’t know how I feel about that.” That is my biggest concern, and I think, ultimately, for me, it feels like the biggest sticking point on the how, because as long as the gravity is pulling people in a different direction, it takes a lot of effort to get them to go to the edge of town. If there’s comfort in the center of town, and there was like, No, I’m good, I’m like, Oh, it’s happy there. Figuring out how we get them to get excited about the new and the different is the thing we need to figure out to get them to really unleash their capability to bring more value to the enterprise.
That’s like half of it, but then there’s also another part of this: getting them to think differently about collaboration. So if you look historically at how people have created value in the legal game, it has been predicated on information scarcity, and that’s not where we are now. We’re now in this information-rich environment where it’s everywhere and it’s super plentiful. So getting people to embrace that, you will create more value in the future, not by being a gatekeeper, not by being the person who sits on like, “Oh, there’s a hidden path to the market,” but really being somebody who synthesizes things that often show up in different domains, getting people to re-imagine that their contribution is the synthesizer of information and a place where we share and have access to everything is again, antithetic to how the instruction and the culture works for allowed what we do. So those are some of the big kind of sticking points I see to getting to where we need to go.
PP: I think that’s right, and I know this was meant to be a debate, but I can’t say that I disagree with those points. I think there’s two other things that I’ll add that I’ve seen. One is who the customer is; some people view the customer as their internal customer. I think the ones who will truly add value to the enterprise will be the ones who drive their departments to see the customer as the end customer because then you can work backwards through everyone’s roles into how that customer experience materializes. And it may be that the law department isn’t doing anything differently, but something upstream is happening. But at that point, when you put your lens in and say, “Look, my job as a lawyer or a legal ops professional, more than a level that it is right now is to think about what the end customer’s experience is based on what and how I interact in that process,” is gonna be key, and that’s a hard thing to do.
And I think Jason, that’s come from just where the legal department general counsel’s office has been positioned in the past, and I think we’ve made a huge amount of progress in flattening that peer curve. Making the general counsel report directly to the CEO or making them be a part of that group, that doesn’t mean even though the org design has changed, that the law departments have come along with the journey of saying, While I may support Jason in XYZ sales function, or I may support Nicole in XYZ procurement function, my end customer is actually the customer. That’s one mindset shift we have to really work on. The other is the – and I don’t know what’s the right description of this – but it’s the entrepreneurialism and the ability that lawyers have actually to change the outcome. By nature, lawyers are trained to follow precedent, study the book of law, and some have a knack for deal-making and driving value or business.
We talk about this a lot, and I don’t know that it’s a new concept, but I’m increasingly learning that even the concept of how we call T-shaped lawyering and these kinds of horizontal and vertical axes may not be enough to actually drive the enterprise value. Now, I’m not saying that that makes our job impossible. That goes back to saying, “What are the bears around the corner, what are the snakes that may bite us?” And one of the snakes that I think may bite us is realistically, to drive enterprise value, you have to have a flavour of entrepreneurialism built into your training or your passion that allow you to see and move things that don’t necessarily sit in your constrained box. If I’m in a role, if I’m an in-house lawyer and you say my role is to manage a commercial transactions function, I may say, “Okay, that’s great. But guess what, Jason sitting over there. And therefore, I can’t touch with Jason does.”
No, I think the answer is, I can absolutely touch what Jason does, but through partnership and entrepreneurial deal-making and let’s actually do that together. I think that mindset, it’s almost who we look for in certain in-house functions such that they know their boundaries go beyond the law department itself, and that’s completely okay. Obviously, it works better in smaller organizations, but I think more and more as we look at digital transformation and all the things we hear in the market, that stuff doesn’t just sit within the four walls of the law department. It’s gonna actually require much more enterprise cross-collaboration, and that’s why I say whether it’s entrepreneurialism or some other quality that I’m not describing well, I think it just is some facet or characteristic of not letting the walls or the boundaries be the definition of where you can play. Well, it seems like we have a lot of work to do.
JB: Yeah, I’m wanting to disagree. Again, I’m having a hard time. The one thing I would add on to what you just offered is it’s a mindset thing that I observed. By the way, I love the idea of really activating entrepreneurialism, that is the thing that if you can do, a lot of stuff gets solved. If people feel like they have the agency to make an impact, if they feel invested, they drive change. Where I see people getting stuck, they behave like craftspeople who are responsible for one thing. They’re these amazing critical thinkers who are really good at saying like, Oh, this is why this is broken, this is why this is different, this is why this does not apply, so forth and so on, what they really struggle with is systems thinking, and so they have a really hard time. They can, but it is not their native delight to do what you were talking about, which is reach upstream like, “Okay, so where did this come from? And why did it matter there? And what’s gonna happen after this? And how could I change what I do to make that better?”
What I observe is there’s a lot of people who really love the craft of the thing that they’re doing, and so what they do is they put their heads down, and they do that craft, and then they look up 30 years later, and you know, they’re like, “Oh, hey, I guess I manufactured 10,000 contracts,” what have you, and I’m not exactly sure if it’s T-shaped or if it’s a skills thing, ultimately, it may be, to your point, how do you attract people who solve and see the problem space differently and who solve problems differently? And there is a small, and I shouldn’t say this, there’s a tiny experiment that I run on occasion when I talk to people. And it seems innocuous, but it is a diagnostic that I use, and it sounds something like this, “Hey, Pratik, what are you doing? Yeah, what are you doing over there? You look like you’re working on something.”
PP: Hanging out with Jason.
JB: “Okay, I’m just curious, how does that connect to the thing that we were trying to do here?” It is not like, “Please stop doing it,” it’s literally just if you apply that lens to the effort that you apply when you’re doing your work, then it tends to re-orient you towards the top line stuff that matters. And if you have to basically say like, So let’s do this exercise on me right now, so I am talking with Pratik, we’re supposed to be disagreeing about stuff, we’re doing a terrible job, but what I’m doing right now is I am thinking about what is the future that we would need to build that would enable us to really empower Microsoft business, I have gained access to one of the preeminent experts in the world who thinks about this, and I’m basically getting free advice and consultation from one of the world’s experts.
And so I’m going to go back to my work, and now I’m going to be able to do that more effectively. Similarly, because we’re having this conversation and you’re gonna share it out, we can effectively condition the market to receive our theory of value as something that is valid, and that will hopefully accelerate some of the systemic changes that we want to see, so that we as a direct employer, but also as a buyer of services, will have greater access to what we think we need to be successful in the future. And so I don’t know that you have to do that for every single task you do in the day. Still, as a general matter, I’m always wanting to tell a good story that explains why the efforts that I am going after on behalf of my employer are aligned with the mission. And my concern is that I’m not sure that everybody has access to that, and I don’t even know if they ever even think about it.
Microsoft is actually really good at this because we go through these periodic processes of asking, “What are we doing?” But I’ve had many conversations with colleagues at other shops, and it sounds like their departments are basically on zombie behaviour as much as at some point in the past, somebody said we should do this and nobody ever asked why, and when you go ask somebody like, “So why do you do that?” They’re like, “Oh, ’cause we’ve always done it like that.” I’m like, “What? That is not an explanation.”
PP: It goes back to the purpose, and I think that’s what we’re trying to do here. The purpose of why are we working so hard? Why are we doing things inefficiently, why are we spending our nights and weekends working? Whether it be that we’re trying to drive that 1% that we talked about or something else, I think it’s incredibly important at some point for this market to identify its purpose. And then one thing I’ll leave you with, Jason, maybe for a different time is what if you’re that person that says, “Well, I’m not in a transactional practice. Velocity, that’s not something that I can impact. Guess what; I’m the person who actually sits there and takes on the litigation.” Now we go into the realm of, “Hey, if you’re there, do you have the ability to generate and drive that 1%?” I would say yes. I don’t know what you think, Jason, but maybe we’ll leave that for a different time and a different topic. I know that it’s been enjoyable. So thank you, Jason, for debating, sharing ideas and topics, and joining us today.
JB: I think I’ve done a terrible job of debating you. I don’t think I honored the mission at all, but I appreciate that you gave me the opportunity to learn from you. And I have absolutely some thoughts on how litigation intersects with what we’re talking about, and I look forward to picking that up at a future time.
PP: I know you do. Thanks, Jason. I appreciate it.
