Taking the Pulse of the Legal Industry Using High-Level Data with Mike Abbott, Head of The Thomson Reuters Institute

In this episode of On Record PR, Gina Rubel goes on record with Mike Abbott, Head of The Thomson Reuters Institute, to discuss how data and market insights are key to crafting effective law firm strategy in an ever-changing landscape. The Institute brings together leaders from across the legal, corporate, tax, and government communities to share data and insights, discuss market trends, and help shape the way forward for these markets and individual organizations.

Why does Thomson Reuters have an Institute in the first place?

It’s had a long and storied history. We did an event that you’re familiar with out in Pebble Beach with law firm leaders 19 years ago, and it took us a few years to find our stride and make it not feel like you’re attending a timeshare pitch. The key thing there was, “Let’s give you the forum to interact with other law firm leaders.” We learned over the years that the best thing we can do is have panel discussions, bring in speakers, facilitate the conversation, and get out of the way and learn.

It started growing from there. The Thomson Reuters Institute started out as the Legal Executive Institute where we said, “Let’s just bring a different approach to this and provide insights and content that you know is relevant to any law firm leader about how they operate their firm.”

We had some success with that over the years with the Institute from a content and programming perspective, and about three or four years ago they said, “Let’s make this the Thomson Reuters Institute and include tax professionals, corporate legal departments, and the government in there as well.”

All our content is geared around the business of law more than the practice of law. The same thing with the corporate legal departments. For tax professionals, we’re only a couple of years or so into that. We’re still finding our way here, but it is very much about the profession versus practicing and the tax space.

It’s been great. I appreciate the fact that Thomson Reuters allows us to do that. We are a little bit hands-off from the day-to-day commercial marketing activity of Thomson Reuters. I think that only lends to the credibility. Back when it was for legal, one of our former presidents said we occupy a pretty unique space in the legal market and in all the markets we serve. We’re at the intersection of academics, clients, law firms, and tax professionals.

We have a pretty interesting perspective, and we have the opportunity to work with these customers, help shape the way forward for them, and engage differently as Thomson Reuters. We’re not always trying to sell something. Instead, we inform them about their own markets. I’m thankful that we can do it, and I love doing it.

Gina Rubel: I have to say after having attended the last conference for managing partners that it was incredible. Just having the engagement with top economists and some of the key reporters globally was so different than what we’re used to. I have to say it was very eye-opening to be privy to those discussions and those trends to the point that I’ve repeated some of the information ad nauseam.

Mike Abbott: We’re lucky to host that event, and we do two others too. We do one for tax professionals, which happened the week after you were there, and before that, we had it for general counsel. They are the ones that really make it what it is.

Going back to helping us shape the agenda, too, we have an advisory group with all three of those customer groups, and they tell us, “This is what’s top of mind.” Plus, we have our own collection of data and insights that we gather on our own. Jointly, we create agendas that are truly about the things shaping and impacting their industries. When they’re there, they engage actively. They know it’s Chatham House Rules, and what we’re talking about there stays there. We can talk about the big trends, and it just works. We’re lucky we found that model, and it’s allowed us to branch off into some other areas as well.

Do you bring the insights engagement to Thomson Reuters to help shape strategy?

We do, and I will be honest with you – sometimes we do a better job of that than others. There are a lot of different components of Thomson Reuters, and yes, those insights will come back. Let’s use legal as an example.

We know that 40% of the GCs we interview every year say we expect to increase spend with outside counsel. Then we can take those insights back to Thomson Reuters and say, “We think there’s going to be more activity in the law firm space. Here are the practice areas that we think are going to be growing. Here’s what they’re talking about around talent and hiring.” Those types of insights.

We bring it back, but also in terms of the day-to-day engagement with all of those markets, that trend information is valuable to us as well. We’re active in the AI space right now, and we get a lot of insights from these markets around where they are in the scheme of things with AI. There was chaos a year and a half ago, but things settled down. We get pretty decent insights there, and it does help shape some of those product strategies for us, and to some extent go-to-market strategies too.

What are the trends you’re seeing in the industry, and how do you see them impacting business going forward?

We were talking earlier about the groups of customers who attend our events and consume our content. Just to put it in a little bit of context, we do over 2,000 interviews a year with general counsel, and we want to know what trends are impacting their business, where their priorities lie, how they feel about their career and their profession – a whole host of issues. We asked them, “Are there any standout lawyers with whom you work among your outside counsel?” They’ll give us two or three names of individuals, and we’ll follow up and do another 2,000 interviews with those lawyers. We get a pretty interesting perspective on both what we would consider to be the buy side and the sell side of legal. Now we’ve started to do the same types of interviews with tax professionals.

We get together with this group to plan the event. We asked them, “What do you want to talk about?” These are three separate meetings that we had and the consistency among the trends and the themes was amazing to me. I’m not saying agenda planning for those is simple, but it streamlined it. Because the things that they’re wrestling with the most are geopolitical and economic issues that are impacting their business or that will be. Gen AI and other technologies are huge for them right now. Not everybody’s in the same place in terms of their readiness or willingness to deploy, but they’re all wrestling with that. From that rolls into some other areas, like talent decisions, hiring, and retention. Organizational culture is a big one.

The other big one is the evolving role of the leader. I don’t care if that’s a law firm leader, a tax firm leader, or a leader in a legal department and GC. The role is different today than it was three or five years ago, certainly 10 years ago. They’re being called upon to do some things or provide commentary on some things that they never dreamed they would have to do. It’s a real challenge for people. It’s like, “I went to law school to be a lawyer, not to be a CEO of a small corporation, and all of a sudden the expectations on me are very different.” Those are some of the key themes that we’re seeing for sure.

We do a study. This is our second year of doing it. It’s called Future of Professionals, and we interview professional service firm leaders across different industries. We asked them, “There’s a lot of change happening around the world in the professions that you’re in right now. A common thread in all of that is the emergence of AI and other technologies. What do you see over the next 18 months? What are you seeing for the next three to five years in terms of change?”

It’s something that they’re all trying to get their arms around right now and from the Thomson Reuters perspective, one of the reasons we engage with firms through the Institute is to help lead the way and provide a perspective of the next three to five years, at least from our point of view. That’s very much what they’re looking for as it relates to the future of professionals’ work in the AI space.

You have a new hire Raghu Ramanathan, who was a phenomenal presenter and talked about some of the things happening at Thomson Reuters. Can you talk about what he’s spearheading?

Raghu is the president of our legal business and he’s working hand-in-hand with others, but with our product team a lot. The product strategy for us is moving more into this gen AI space and allowing AI to enable and inform and pull together a lot of our offerings.

If you are a law firm practitioner, the tools that you’ve always been able to leverage from Thomson Reuters are being combined so sort of one-stop shopping for all your research needs. You’re drafting a document and you’re pulling other pieces into this, so it’s really about combining all of this.

We’ve hit the accelerator with our AI product development over the last 18 months and I’ve never seen that. I’ve been with Thomson Reuters a really long time, going back to West Publishing days, but I have never in my career seen a faster-paced environment in terms of product development. I’ve never seen the strategy coming together more effectively. I’ve never seen more enthusiasm, both internally and within the markets that we serve. That’s not a Thomson Reuters commercial. That’s just the nature of the beast and how we’ve been evolving.

When everything hit the fan with ChatGPT 18 months ago and it was all you heard and there was a lot of hand-wringing and enthusiasm and everything else, the folks here from the product team put their heads down and said, “Let’s get this together. Let’s get this out the door.” They’ve done an amazing job with it, and that’s the way a lot of organizations are acting right now.

It’s a very interesting time. In the Future of Professionals results, 70% of the people think there’s going to be massive change over the next five years. 93% think it’s going to be great for their organization and careers. 70-some percent say overall this is a positive thing, and I think that’s what we’re seeing across all of the markets we serve. Not everybody’s at the same place in terms of how they’re evolving their businesses or how fast they’re jumping in. There are always going to be laggards and people that feel like, “If I ignore this long enough, it’s going to go away.” But it’s not going anywhere. It’s truly a fascinating time to see everybody working on the same thing in the same ways.

Gina Rubel: I have a theory that without COVID, the legal industry, in particular, would not have adopted generative AI as quickly as it has, because with all the same firms that were afraid to let people work from home, the pandemic accelerated exponentially the mindset of how the practice of law can work and still be productive and profitable. And now we have generative AI and it’s within the same five years, not even a decade. My head is spinning. I’ve been in the legal industry my whole life. I’m a third-generation lawyer. I was what we used to call a Xerox girl. I used to be in the copy room when I was 14, and I remember having to talk my dad into getting a fax machine. Now we’re talking about this thing called generative AI, and for anybody who thinks that it’s going away, my gut is those same firms that think this is going to go away or that law is going to be done the same way that it’s always been done are either going to get acquired or go out of business.

Mike Abbott: I couldn’t agree with you more, honestly. I’ve said this before. The amount of change that we’ve seen since the pandemic – we thought we saw a lot from 2008 to 2010 and into 2012 after the financial crisis, but the same level of change wasn’t implemented. Everybody talked about it, everybody worried, and everybody talked about change. There was change, no question about it, but not at this pace.

For all the terrible aspects of the pandemic, a couple of the positive things that came out of it were the ability, willingness, and eagerness to adopt technologies and not be afraid of them. All of a sudden, literally overnight, you went from going into the office to using Zoom or Teams or whatever it was going to be. You’d never seen that before. It would take months or years to get that and then all of a sudden it was like, “Okay, we can be pretty productive with people working from home.”

Not everybody feels the same way, I get it, but the technology was an enabler. We saw a relatively short period of a downturn in law firm demand or hours worked per lawyer right at the onset of the pandemic. Then all of a sudden it jumped back up again and they had a couple of amazing years.

It was a catalyst and an accelerator for work to be done differently, and for operations to be handled differently. When I compare today to 2010 coming out of the financial crisis, what we heard all the time, if we would do a conference or have a conversation with GCs or law firm leaders, was that there was a disconnect between law firms and their clients. It wasn’t a huge one, but clients were saying to law firms, “You don’t really get it. This is about efficiency. I want you doing things differently. I want you leveraging technology. You’re not listening.”

There was always a rub, and we did panels where we’d have a GC on a panel with a law firm leader and it wasn’t confrontational, but it was very direct around “This is what we expect, but this is what we’re getting.” Fast forward to today and I think because everybody’s trying to figure this out, the state of those relationships is far better than it ever was. There’s much more of a collaborative environment.

The relationships are stronger and that’s a very good thing. The willingness to change and adopt technologies and leverage them effectively along with the state of client and outside counsel relationships helped us come out of that in a healthier place for sure.

What do you see the two- to three-year horizon looking like for law firms in particular?

We’re starting to already see firms looking at things differently. I was at a roundtable not too long ago, where we discussed some of the things they’re trying. Some of those are Thomson Reuters solutions, some of them aren’t. But we’re also looking at hiring decisions differently. We’re starting to look at data scientists or associates who have AI skills or general technology skills. That kind of surprised me that they’d be looking at recruitment, hiring, and talent that way. But they are.

I think what we’re going to see over the next 12 to 18 months is firms continuing to find their footing and putting their strategies in place. If you look three years down the road, it’s going to look dramatically different in terms of firm structures and the way they hire. I could be wrong in this, but I think the traditional pyramid structure of a law firm looks more like a rectangle over the next three years with different roles.

We’ve talked for years about how firms will bring in people from other industries to be CFOs or CEO or marketing leaders or technologists, and for a long time, they would bring them in, but they didn’t really have a seat at the table. That’s changing, too, for sure. I think that’s only going to change more once structures and the way work is being done change. We hear a lot about when you can take away some of the more mundane things or the things that people just don’t like to do or aren’t good at doing, it creates room for higher-value work to be done. That’s a possibility for sure, and it probably will happen to some degree.

I had a couple of people say, “I’m not sure who’s going to be doing all this high-value work because right now they’re not in the organization.” I think that changes things too. The landscape changes, but I think the other thing too is better work-life balance and the other areas that get opened up because of those savings. It’s going to be very interesting to see, but I think three years looks very different than today and I think 12 months from now looks very different too. Everybody’s running at this at a similar clip and they’re figuring it out.

We knew it was going to take a year for everybody to just get their bearings, weed out the extremes on either end, and figure out what’s right for them. We’ll see stops and starts. Things will work and things won’t work. They’ll keep trying it.

You might have heard this comment before, and I can’t even attribute it to any one law firm leader, but they said for law firms, it’s a race to be second. I think that’s the place we’re in right now is, “Hey, I’m going to wait a little bit. We’re still looking at it, but I want to see what’s worked and what hasn’t.” I think that’s what the next 18 months brings.

Gina Rubel: Right. It’s the tail wagging the dog.

Do you have any questions for me?

You asked me at the onset, why did Thomson Reuters invest in the Institute and why are you going in this direction? I know you work with a lot of other organizations. What is your perspective on that? I assume you think it’s a positive thing, but do you see that a lot?

Gina Rubel: I don’t see it a lot and I think a lot of organizations have conferences, events, or meetings that are very heavily focused on track after track and meeting after meeting and selling CLEs and all this stuff that by 5 PM you’re completely wiped out and you don’t want to talk to anybody. It’s not as high level. I go to a lot of conferences and support a lot of organizations. I’m paid to speak at a lot of places, and the ones that I see doing it right are the ones who are engaging in collaborative conversation and sharing new insights, not the same thing over and over again.

It’s the marketing theory of value add. What are you getting out of it? For me as a CEO, 23 years running my own business, I can tell you that walking away and having insights from key global reporters and economists helps me as a business leader to not only look at my own strategy moving forward, how we as a company are going to handle whatever is happening in the global economy when we do business globally. We could also share the resources of those insights and say, “Thomson Reuters has the data around X,” because when we do any strategic planning for a client, it’s very different than what Thomson Reuters does. I’m talking strategic marketing planning. I’m talking message management. Whether or not you should speak about geopolitical issues publicly. That data helps us also to go back to the client and say, “Here’s the data behind the recommendation, and here’s why it’s so important.” One of the things I heard from a lot of the C-level executives and managing partners who were in attendance was that they take the data back and it helps drive their conversations with their executive committees. That’s very different than getting a CLE.

Mike Abbott: It is, and there’s very little that we do from an Institute perspective that isn’t based on our own data. We have the data through those interviews, but we also have financial performance data for law firms. If they’re subscribing and send us their timing and billing information each month, they can compare themselves against other firms, but we can roll it up and say, “This is the health of the legal industry based on the financial performance of 200-plus law firms.”

Those insights are really valuable. They are the core and the foundation of all that we deliver. We’re a big part of the markets that we serve, and if we can make our customers better within their own market, it makes us the same. We learn from all of that. We’ve had this question at our Pebble Beach event. Somebody will say, “How do you measure your return on an event like that?”

If we do this the right way in terms of the way that we engage and the data, the insights we’re putting in front of you, we are pretty confident that the commercial piece will take care of itself in time. If it doesn’t, we’re still informing the market and helping shape the way forward. I’m proud of that. I’m very thankful that Thomson Reuters continues to support and invest in this.

Gina Rubel: The data speaks for itself and the non-sales approach speaks for itself as well. I’m not fond of a sales approach and never have been. As a former practicing attorney, I want information. You deliver information, you deliver insights, and you help people to guide their decision-making. When I say people, I mean big law firms globally. That’s the sector we’re mostly in. While our agency does work with other professional service firms, we’ve been doing legal for so long that it’s our primary space. That’s what I know.

Do you have any parting thoughts or tips for our listeners?

If you’re in the legal space or the tax professional space or even a GC or somebody in the legal department, visit thomsonreutersinstitute.com. The resources are free there. Blogs, podcasts, white papers, and all of our conferences are on there. Take a peek at it and then I would say buckle up for the next 18 months to three years. It’s going to be a pretty quick change of pace for sure, but I appreciate you having me on and being a part of this. It was great spending time with you at the event as well.

Mike Abbott

Learn more about Thomson Reuters Institute

LinkedIn: https://www.linkedin.com/in/mike-abbott-4821932/

Gina Rubel

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