Episode 21 Jodie Baker on Visualizing Legal Department Data

Jodie Baker Legal Tech CEO Discusses Visualizing Legal Department Data and Legal Tech Trends

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Links referred to in this episode:

Jodie Baker’s LinkedIn Bio

Xakia Technologies

Hive Legal

Australian Legal Technology Association

James Odell and Elevate Services

SAAS | Software as a service

Thedocyard.co | Deal Management Software

Stuart Clout | Founder of Thedocyard.co

Steve Ghiassi | Founder of Legaler

Richard Susskind | Legal Prophet

LevelUp Ops | Data-Driven

The Hunger Games | Divergent | Delirium

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Audio Transcription 

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Hi listeners, this is Chris Batz, your host of the Law Firm Leadership podcast. Today’s episode I’m excited to share about my conversation with a forward-thinking attorney and tech savvy CEO from the Down Under. We discussed the Australian legal market, and the emergence of legal technology companies, her journey launching a disruptive law firm, and now as a scrappy startup software CEO in the legal tech world.
Just remember the PDF transcript of this audio is available to download. Go to LionGroupRecruiting.com/podcast.
As many of you know, we interview corporate defense, law firm leaders, partners, general counsel, and legal consultants. You’re listening to episode twenty-one of the Law Firm Leadership podcast.
Chris: Welcome to the Law Firm Leadership podcast. I’m your host, Chris Batz, with the Lion Group. Today I have the pleasure of speaking with Jodie Baker, CEO and founder of Xakia Technologies based in Australia.
Jodie is on a mission to make legal operations simple and accessible for law departments of 2 to 2,000. She is the former managing director of Hive Legal, an agile and disruptive law firm. She’s also the deputy chair of the Australian Legal Technology Association, also known as ALTA, and the co-chair of the advisory board to the Center for Legal Innovation, which was established in 2016 by the College of Law, Australia. Jodie received her law degree from University of Melbourne.
Welcome, Jodie, to the Law Firm Leadership podcast. It’s a pleasure to have you on the show.
Jodie: Thank you, Chris. It’s a pleasure to be here in Kansas City today.

a Disruptive Australian Law Firm Conceived in Kansas City

Chris: Well, let me jump in and jump on a part of your professional journey that I find quite poignant for the legal market in especially the United States. Tell us about Hive Legal and the genesis of it, you’re involvement of it, give us some background on that.
Jodie: Hive Legal actually has its own origins set right here in Kansas City. I lived in Kansas City from 2010 to 2012. While I was living in Kansas City, two friends of mine, Sophie McCarthy and Anne Post and I spent many an occasion talking about how fabulous is it to be able to work in a flexible environment while you have small children.
I was working remotely and virtually for an Australian investment bank at the time. I was working for Australian clients. I was analyzing Australian companies, was working with an Australian team, but I was doing that completely remotely. Sophie was working for a Chicago firm and similarly working in a very remote and flexible way. And Anne was running her own legal practice. What we over a period of time started to devise was the idea of a law firm that was run in a very flexible and virtual way, but doing work that was of the highest quality for really top-tier clients. We used to share some ideas and sit around late in the evening or over lunch and talk about pulling together a firm of that nature. That was really its origin.
When I was heading back to Australia in 2012, I took the plunge and resigned from my job and then spent really six months building a business plan and meeting with as many people as I could to understand how the legal market in Australia was shaping up. I had been a lawyer originally and so I hadn’t been in that line of work for over a decade. I spent a good six months reacquainting myself with what the market looked like and then built it from there.

Building a Law Firm today, how would it be Different?

Chris: If you think of Hive Legal as a footstool and it has these different legs that hold it up, what are the tenants that you’ve built Hive on?
Jodie: I guess my initial motivation for Hive was very much around seeing my peer group, who were smart, savvy, experienced women have children and then be edged out or even self-select themselves out of the top-tier law firm environment. I just felt like there should be a better way for those women and their skills to not go to waste. That’s really one of the personally most important aspects of Hive.
But when we were building it, what we had the opportunity to do was really have a completely blank canvas and say, “Well, if we were building a law firm today and we were ignoring a decade or a century of how law firm partnerships had been built, what would we do differently?” Some of those things were no time sheets, for example, not billing our clients based on time but on the value of the work, so fixed pricing, alternative fee arrangements are a critical part of that.
We also looked very closely at the idea that all of the structure around a partnership was not really appropriate to the sort of work that we wanted to be doing and for the employees we wanted to attract and the way we wanted to build the business. We wanted to think of it as a business rather than a law firm.
In Australia you have the opportunity to incorporate rather than have a partnership, so we wanted all of our employees to be shareholders and we wanted to really think of it as a long-term business. They are probably the critical things: the incorporation and the ownership structure, the time sheets and the value-based pricing, and the flexibility around how lawyers could work.
Chris: You mentioned that all the employees are shareholders, is that correct?
Jodie: Yes, all might be a bit of an exaggeration these days, but certainly in the early days we were bringing on really high-quality associates who were on the partnership track,, so it was great to be able to offer them a piece of the pie and they have some skin in the game and really invest personally in the future of the firm.
Chris: How was a model like this received by clients in Australia?
Jodie: The client reception was fabulous. Maybe to put some context around it, all of the founding principles, and principles is the expression that we used for the equivalent of a partner in an incorporated model, all the founding principles were from top-tier firms and they obviously had their own sort of loyal clients who were prepared to try out the new model.
I do have a very clear memory of the first day that we officially opened the doors and one very large energy client in Australia who said, “Well, how do I compare time-based billing with this notion of fixed-priced billing?” We said, “Well, why don’t we run two scenarios for you and we’ll do one based on time and we’ll do one based on fixed price and you can see what you think and if you don’t like the fixed price model, then maybe we’re not the firm for you.” Well, they didn’t look back and I think that for a long time they were the largest clients at Hive.
The clients loved the predictable pricing so that was really positive for them. They also really took to the notion of being able to support flexible working, new ways of doing things and also the really technology driven way that we approach the practice, so looking for ways to collaborate with them on technology platforms. There were a lot of aspects of that that were really welcomed by the clients.
Chris: You just mentioned technology and collaboration, what does that mean in regards to clients you are working with?
Jodie: Perhaps one of the other pillars that I didn’t mention is that one of the elements of the business model was to outsource all of the back office, so thinking about things like technology, marketing, HR, finance, all of those things were outsourced services. We wanted the law firm to be a law firm and nothing else. We didn’t want to be distracted or weighted down by the back office structures.
We had a technology provider who outsourced our IT and also provided us with a whole suite of tools we could use to collaborate with our clients for sharing of documents, for particular masses or even just explore some of the new legal technologies that are out there. That particular company in Australia runs a whole law firm focused innovation group, where they go out and they source legal technologies that are new and interesting and they take them to their law firm clients and suggest ways that they can be used – where the law firms can use it with their client base to find new and interesting ways to do things.
Chris: How many attorneys did you start with or how many people?
Jodie: We opened the doors with five, but by the time we hit the end of 2014 I think that number was at about twenty-five. I’m speaking a little bit off the top of my head here. By the time we hit the end of 2015, that number was closer to forty. It has stabilized there now and consolidated a little bit in terms of the practice areas that really appropriate for that model, but it was very rapid growth there for a couple of years.
Chris: Where would you say headcount is right now for Hive?
Jodie: I’m not involved with Hive on a day-to-day basis now. I think it’s around 40 lawyers, but I could be off by 5-ish on either side.
Chris: Do you approach how the lawyers practice differently than more traditional law office or where they work? Is that a part of the model as well?
Jodie: It sure is. Hive Legal as the name of the company is no accident. It works like a beehive. There is an office and a base where people can come and do their work, but they are also able to work anywhere and at any time that is appropriate to their working practices. The model is really based on the idea that you trust your staff. You employ people who are smart and hardworking and then you trust that they will deliver the product.
Obviously, there needs to be an expectation that people will operate within business hours sufficiently that they can collaborate with their coworkers and with their clients, but overall the idea is that you might be more productive at 2 o’clock in the morning than you are at 2 o’clock in the afternoon. We generally found during my time there that people liked to be in the office two to three days a week and liked to work from home two to three days a week.
We also spend a lot of time at client’s offices. But there was no requirement. That gave people an enormous amount of flexibility to spend time with their children if they were needing to do that or aging parents, particular hobbies, other business interests. What we found was that actually the commitment that people gave and the willingness to put back into the business and to deliver the end product to the client was exceptional and probably even higher than what we saw in some other large law firms.

Awards and The Media

Chris: Tell me about awards. I mean here in Kansas City or in the legal market, I’ve heard of Hive Legal winning awards. Was that something that surprised you?
Jodie: It was actually. It wasn’t something that I had anticipated at all. That happened quite quickly. The media loved Hive Legal from the first day.
Chris: Why was that?
Jodie: I think there was an appetite for understanding that things could be done differently.
Hive was not necessarily the first of its kind. When I was living here in Kansas City, I looked very closely at Axiom and Clearspire as two examples of law firms doing things differently, took learnings from those two companies and really shaped Hive off the back of some of the things that I was seeing here.
What Australia had not quite done was consolidate all of the different learnings from around the world into one firm. Where it had done a little bit of that already, the type of work being done was very narrow. It was often in one vertical or one particular area of law. What Hive managed to do and do really quickly was get a very A-class list of clients and the quality of the work, the transactions that were being done were really at that highest level.
The media loved the notion of big firm partners who were coming into a brand new model, bringing very large clients with them, taking some risks, frankly, around things like time-based billing, taking risks around trusting the staff, really shaking up the discussion around flexible working and not just for women, but for men too.

Xakia – a General Counsel’s tool for Company-wide Visibility & Communication

Chris: Tell me about Xakia comes into the picture because you had shared with me earlier that Xakia is actually a product of Hive.
Jodie: It is. As we settled into the latter part of 2015, so Hive had been up and running for about 18 months, the idea of Xakia had started to germinate. I did a research project and spoke to as many in-house counsels and general counsels as I could to understand what was missing from their toolkit and what they found was irking them on a daily basis about their setup.
When the answer came back fairly consistently that they just lacked visibility within their chain, so in-house legal departments were struggling with who was working on what and for whom. Even for the individual lawyers, often they would just comment on the fact that they were losing track of what they were doing, when it was required, who it was for. It really led to an opportunity with one specific client where we could build a prototype of Xakia. We did that and simultaneously started to build a business model for Xakia.
We had three clients on the prototype, but the difficult thing was that as much as the clients loved the product, it did not belong inside a law firm because they wanted something that was sitting independently of that. They really pushed for Xakia to be an independent and separate company, so we spun it out, raised some capital, and the rest is history.
The word Xakia comes from the word sakia. It’s actually spelled with an X, like Xerox, for example. It is a play on the word sakia, which is a waterwheel that creates an efficient fall of water. One of the things that we feel quite passionately about is helping in-house legal departments to find more efficient ways of doing the increasingly complex and voluminous pile of work that they have, so continuous improvement and efficiency really drives some of our philosophy.
That said we have built a technology that we think is super easy and intuitive to use. The idea being that you can pick it up and run with it without really any training at all. It’s an intuitive system, but it gives that visibility across the team about who is working on what and for whom. It automates reporting, which is something that all lawyers hate. One of my favorite lines is that I was a lawyer who became a financial analyst and I happen to be married to a CFO, so I know that lawyers talk in useful words and the rest of the world talks in charts and numbers. We tried to automate some of those reports and dashboards that everybody finds so difficult to do on a monthly basis.

Lifting the Visibility & Importance of the Legal Team to the Whole Organization

Chris: Tell me about some of the responses from your existing client base that started adopting this tool once you spun off in Australia.
Jodie: Our client base in Australia is a range of everything from airlines to Telcom’s, government, banking, so it’s industry agnostic. Our smallest user is one person in a team right up to probably our soon to be largest client is in the hundreds. We have a really wide range of sizes and industries.
The reaction is incredibly pleasing to be honest. We have had a couple of conversations here in Kansas City with clients this week that have been particularly pleasing around really improving the communication amongst the team about who is working on what, finding opportunities for shifting some work around for the people, get the opportunity to develop their experience and careers into new directions, and even develop some better communication about learning from different types of work.
But perhaps the piece of feedback that I’ve received just last week that I enjoyed the most was from an airline who was talking about the fact that the reporting is used now in a very regular and automated fashion to inform the board, the executive team, and the heads of every business unit about what the legal team is doing, so the visibility and the communication about how important the legal team is to the whole organization and the strategic direction of the organization has become something that is just normal and really highly valued in that organization. That’s very pleasing for us.
I do find, Chris, that lawyers are not always very good at talking themselves up, that sometimes they don’t demonstrate their value as much as they should. There’s a self-deprecating approach to being – perhaps it’s a personality type that often lawyers can be a little bit backwards about how they describe their value. Sometimes it’s a little bit of a black box, the art or the science of law, when in actual fact, lawyers, particularly in-house lawyers, are often across many aspects of the business and so they are uniquely positioned to be able to pull all of the different competing requirements and risks and challenges of an organization into one solution. Being able to really communicate that value to every one of the senior leaders in an organization changes the conversation quite dramatically.
Chris: Tell me is this software being used by multi-nationals or say over in Europe or other parts of Asia, United States, are you finding it being adopted in other countries too?
Jodie: We’re really just starting that journey now. We have quite a few companies who are part of a multi-national whether it’s here in the US or in Australia or in Singapore. They’re the three countries where we have the greatest penetration at the moment. All of those organizations that are part of the multi-national, there’s a whole range of them who are right on the cusp now of saying, “Right, how we roll this out to our other jurisdictions?”
The technology is 18 months old, so it’s probably about the right time for us to be having that discussion and we’re ready to go. We’re cloud based, so we’re able to spin off instances of Xakia in any of the locations where they’re required.
Chris: I’m sure you’re on the forefront of cybersecurity. How are you guys addressing any kind of security threats with the information?
Jodie: We built the software from the ground up, acknowledging that this was always going to be a huge priority for our client base. There’s industry best practices that we had to comply with and as I mentioned some of the industries that we’re dealing with are very focused on some of those issues, so that’s something we’re dealing with on a constant basis.
At the end of the day though, I’m certainly not an information security expert, so it’s important to us to make sure that we get independent penetration testing of our software, that we have consultants who are constantly giving us advice about new threats, the thing that we have to consider and we have to protect against.
Chris: Software is kind of the quintessential entrepreneurial venture these days. Tell us a little bit about the Australian legal market, knowing that it’s different from the UK and from the US.
Jodie: Everything that you think about in the US, you can pretty much assume that Australia is about 10% of the size. We’re very comparable to Canada in terms of some of the cultural and legal structural issues and in terms of size.
I think the thing for Australia is that it is quite a sophisticated market and so we do not really lag the US or the UK in terms of the way that we think about things, in terms of the technologies that are available to us or in terms of the sorts of practices that are going on. But the sheer geographic isolation, I guess, means that sometimes technologies can take a little bit longer to come to Australia. That said, Australians are very open to innovation, very keen to adopt things, and be at the front of the discussion.
You mentioned in the introduction about the Australian Legal Technology Association, a relatively new organization and really was born out of an informal group that I put together with James Odell from Elevate Services, where we really wanted to pull together people who were building things and wanting to really shake up the industry and have it right there in Australia because that appetite for adoption is really quite active.
When we put this group together, very quickly we found a huge number of legal tech startups and we thoroughly enjoyed the discussion. Just to answer your question directly, the thing that I’m seeing in that market at the moment is a huge appetite for discussions around legal technology.

Legal Tech and the Australian Market

Chris: What are some of the pitches and angles that you’re finding out of the legal tech kind of ecosphere in Australia?
Jodie: I think that there’s a lot of discussion around AI, machine learning, block chain, crypto currency. But what I see most activity around is that since SAAS, software as a service cloud-based technologies have made software and technology tools accessible to everybody because we can scale down to a team of one or a sole practitioner of one right up to teams of 2,000 or law firms of multiple thousands. With these SAAS-based technologies, suddenly it’s available to everybody.
I think that where the everyday lawyer, who is not technology savvy, is starting to get engaged in the conversation is that tools are suddenly available to them that make their lives easier that they had never thought of before. Three years from now or five years from now, they’ll be using things that they thought were only available to the very largest companies or firms. To me that’s where the really exciting shift is, is in the mass adoption of some of these tools.

Tech CEO’s Predications of Future of Law and Innovations

Chris: Forward thinking, the legal industry ten years from now, what kind of innovation, what kind of function of the legal service/legal industry in and of itself and frankly the disruption that could be coming too? What do you see coming, Jodie?
Jodie: I think that the regulatory environment that we operate in by virtue of increased globalization is changing so dramatically and the requirements for all companies and law firms to comply with that increasingly complicated regulatory environment means that the quantity of legal work being down is constantly increasing and probably increasing at a faster pace than the number of lawyers who are equipped to deal with them or to deal with that environment.
With that said, I think that we will see greater and greater use of things like artificial intelligence, but I’m not putting my hand up and saying I think there’s a replacement of lawyers. I think it is merely a tool that will be used by lawyers to cope with that increasingly complex environment.
If I put my Xakia hat on and I look at where companies are going and what they’re doing to cope with that, I think that what we will see are more and more tools being put out to the business where triaging legal intake will be first met with questions and answers AI driven that allow the business to answer those questions for themselves or to even generate the legal contract or legal work themselves so that the work by the time it gets to legal is true legal work. I think that legal department creed, if you like, will be about legal work, whereas at the moment there’s some really rudimentary stuff that’s making its way through to lawyers in in-house teams that is distracting them, frankly, from the things they want to be doing, that they’ve been trained to do.
Chris: Right, so it sounds like a formulization or more streamlining of the funnel of getting things done. You talked about documentation and systems, that’s going to be more systematized if I heard you correctly.
Jodie: Yes, I think that that’s precisely right. I think that that will be AI driven a lot of the time, machine learning driven. I think that some of the tools are already there and they are truly very fabulous, but I think that change only happens as fast as change management and adoption. I don’t think in the legal industry we’re talking about a very fast moving group of people.
I think that on a three to five year view, I can see there being mass adoption of this cloud-based technology. In the next half of that decade that you’ve asked me to look at, I see there being more use of AI tools and systemization as you rightly described it. I think that at that point, we’re probably at bursting point for the quantity of work that can be done by the lawyers that we have in the market and so those tools will help those lawyers to cope with that increasing regulatory environment. But at the end of the day, I don’t think lawyers are quite ready for AI, really sophisticated mass adoption or mass adoption of really sophisticated AI tools just yet.

Advice for Adopting New Legal Technologies

Chris: What advice would you give listeners, particularly US law firms but even corporate legal departments, as they’re grappling with the changes in the legal industry and considering innovation?
Jodie: My concern with the notion of innovation is that people think that they have to get it right the first time. I think that just doing something is actually where most organizations should start. Technology is, in many circumstances, not very expensive to adopt now, so you can have one or two people try out a system and make an assessment very quickly. But searching for the albino unicorn is probably going to take you ten years by which time you’ve tried nothing.
No systems out there are going to solve all of your problems, but you’re going to learn an enormous amount just by trying something, rolling up your sleeves, getting your hands a little bit dirty and just giving something a go. There are plenty of systems out there that you can pick up off the shelf and try out tomorrow.

Innovative Legal Tech People to Follow

Chris: Excellent. Who else out there, Jodie, is either inspiring you that are doing legal tech, kind of cutting edge, and also let’s call it the legal tech prophets? Who else out there do you follow, whether in Australia or around the world?
Jodie: In terms of people who are doing legal technology it’s a growing pool. In Australia there are probably two or three that I’m very close to where we share a lot of information and a lot of ideas. One is a company called Thedocyard, which is like a transaction management system. It’s actually like a work flow tool and a completion checklist and all sorts of other bells and whistles. Stuart Clout is the founder there and I spend a lot of time with him. He’s very impressive.
Then I look at Stevie Ghiassi. He’s also in Australia. He’s running a company called Legaler. He’s using the cryptocurrency technologies to build what’s called Legaler aid, which is about using cryptocurrency to get some legal funds to organizations who need it without it having to touch all of the other layers of administration. More money gets through to the people who need it, which I think is just absolutely fabulous and driven by motivations that are quite different to building things for law firms and in-house legal departments. That’s in Australia.
We see quite a lot of groups in the US who we are interested in and collaborating with in various ways. We are very tuned in to some of the legal consultants here who are scouting the market, in particular Mosaic and UpLevel Ops, who we have spent some time with.
In terms of commentators, it’s a little bit harder to pin that down to be honest. I think that – everybody follows Richard Susskind and his thoughts on the legal tech market, but I think that here in the US, I’ve spent some time with Jordan Furlong and Mitch Kowalski in Canada, Ron Friedmann. I think that’s probably covering the field, but I think that there’s not one who springs out at me.

What’s on Jodie’s Book Shelf

Chris: Yeah, thank you. I just want my audience to get to know a little bit more about you personally, Jodie. One question I want to ask is what’s on your bookshelf? What are you reading right now?
Jodie: I don’t get a lot of time for reading. Unfortunately, when I read it tends to be in very obsessive compulsive fast fashion whilst I am on what we would call holiday and you would call vacation. But instead of reading, if I’m looking for some downtime, I actually write novels.
Chris: Oh, you write novels. No way.
Jodie: Only for myself. You will never read them, so they’ll never sit on your shelf.
Chris: Okay, very good. It’s not about like teen vampire love stories or something like that?
Jodie: No. I’ve read the Hunger Games, Divergent, the Delirium series. I think I’ve done most of those, but I tend to read them in blocks. I think that a holiday in the south of France with a group of friends of ours a few years ago and I think I read the entire Hunger Games and the entire Divergent series in the space of a week.

The Life of a Legal Tech CEO

Chris: Okay, so I guess you kind of eluded to this already, but assuming you don’t work 24 hours a day, how else do you spend your spare time?
Jodie: I do, unfortunately work far too many hours. I usually get up at about five and spend a couple of hours liaising with Anne Post who runs Xakia here in the US and then I spend about one hour trying to get my children out of bed and off to school. Then I work obsessively until they are finished school for the day and spend a little bit more time with them and then back on Zakia. It doesn’t leave a lot of spare time. I’m sounding like a workaholic and that would be because I’m running a tech startup.
It’s probably not conducive to a lot of hobbies, unfortunately. But we had a debate recently about whether work could be a hobby or if you aren’t working if you love what you do. I really do love what I do. I love jigsaw puzzles. I’ve always loved jigsaw puzzles even when I was a child. I think about these as very similar to a jigsaw puzzle, where you have to put the frame together first, so you’ve got the foundations and you know what you want it to look like and then you have to make all of the little parts, the flower over in this corner and the building over in that corner and each piece comes together.
You have to understand the technology obviously, the marketing side of it, the sales process, the finance, the corporate structure. There are so many elements to building not just a tech company, but a business. I quite enjoy watching all those pieces of the puzzle come together.

US and Australian Differences

Chris: That’s fabulous. What are some of the fun differences you have found between people say from Australia and from the US, knowing that you’ve lived in Kansas City for a stint, spent most of your life in Australia, you’re back in Kansas City for a little bit for business?
Jodie: Probably one of the most profound differences and the reason why Hive Legal got off the ground is the sheer enthusiasm of the American people. When I started thinking about Hive Legal and the idea of a completely virtual and flexible law firm and spoke to people while I was living here in Kansas City, the reaction was always very positive, “Wow, that’s fantastic. Tell me more about it. How can I help? Can I introduce you to somebody?” It was a really positive momentum to the beginning of that idea and it was my first entrepreneurial venture that I was putting some serious thought behind.
When I got back to Australia, Australians are much more critical, are much more, “Really? You really think that’s going to work?” It took that positivity that I had had at the beginning to really carry me through to get to the point where I could build a business, plan and take that out, and try and attract some of the founding principles.
But that difference in terms of the level of enthusiasm, it’s cultural and it’s something that really drove that initial business model. I really, really love that. What, of course, is fantastic about Australia is that once you get past that initial perhaps overly critical approach, they really get behind you. That’s a really important part of obviously getting a business off the ground. But that’s a huge difference.
Chris: Let me ask kind of one final question for you is who has inspired you to take these entrepreneurial leaps in your life?
Jodie: Without question that’s my husband. He has a very demanding job himself and he travels an enormous amount of the time. We have two children who are 11 and 14. He has never wavered from saying, “You can do this. We can make this work. Yes, it’s tough. No, we don’t get enough sleep. We probably don’t see enough of each other, but we can do this.” He’s always pushing me to find that next little bit of energy and never stop. Even the financial risk that we take over and over again with these sorts of things is something that he’s on a journey with. He’s been an incredible support.
Chris: Jodie, thank you it’s been an honor and frankly, a pleasure to have you on the podcast. Thank you for your time today.
Jodie: Thanks very much for having me, Chris. It’s been a great discussion.
 
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