Process Before Technology

Gabriel Stiritz (00:00) Hello and welcome to the relay presented by Lexamica. My name is Gabriel Stirritz. I'm the founder and CEO of Lexamica, the leading attorney referral network. We're a group of leaders who are passionate about leveraging technology and AI to enhance law firm practices. Our listeners on the relay are owners and C -suite at Personal Injury, Social Security, MedMal, Consumer Class Action, MassTort, and other plaintiff law firms. My guest today is Bill Denninger, the CEO of Datavative. He has over a decade of experience running plaintiff law firms and now helps firms with their operational challenges and opportunities. Bill's the guy behind the scenes at the law firms whose names you already know. Today, we're going to be talking about how understanding process is foundational to the technology that you select. A lot of people like to talk about technology directly. And as someone who deals with technology day in and day out, we're here to talk with Bill about why understanding your process before you select technology is incredibly important. Bill, welcome to the show. Bill Denninger (01:01) Gabriel, thank you so much for having me on the show. I'm excited to talk to you. We've known each other for a bit. I'm happy to see the success in your company and I'm excited to talk about these things. Gabriel Stiritz (01:11) Yeah, absolutely me too. just to kick things off, would love to just get for our listeners, who you are, what do you do? What is your expertise and what are you passionate Bill Denninger (01:22) Yeah, so I've spent, I've been in the legal industry for about 15 years plus specifically on the plaintiff law side. I spent easily over a decade of those, of that time working within law firms and really filling an operational role. would typically be in most companies, you know, that kind of traditional operational role, understanding issues within the firm, what are the projects, what do you need to do to make the, to make the business run better, to grow and scale, be more efficient. at the end of the day, more in that profit. Nuts doing it for years and out of that and building law firms and some very, very large law firms. we moved on and started DataVated with my partner, Yaya. Gabriel Stiritz (02:05) Fantastic. So what we're talking about is why you need to understand your process before you understand or start making technology decisions. And I'm sure that this is something that's coming out of your personal experience. But why is this such an important topic? Bill Denninger (02:21) Yeah, you know, a lot of clients come to us and they say, hey, you know, we have this tech problem, right? You know, like this piece of technology, you can't do this. I can't get reporting. can't do automation, whatever it is. And a lot of times what we do is we sit down and we go, okay, yes, you very well may have a tech problem, but is that the symptom or the root cause? Right? So, you know, the way we approach a problem within these firms and other businesses that we work with is, you know, we look at three things. people, process and technology. So, you know, before we dig into the technology, we'll understand kind of, you know, what is the issue that's brought to us? And then immediately the first thing we go to is, well, what's the process, right? So this technology, you know, let's say it's, for example, something like ordering medical records, right? So what is the process for ordering medical records and who is ordering them? Do you have the right people in the right positions? Gabriel Stiritz (03:16) Yeah, absolutely. And look, I think that people immediately jump to technology and you listed technology third on the list. Why is it that people jump to technology rather than thinking about the process? What is the faulty thinking there that gets you down that road before you need to be Bill Denninger (03:37) think it's, I'm not exactly sure, but my kind of my theory is, I think it's the squeaky wheel, right? It's the thing that someone can easily point at. And typically within law firms, there's not, there's a lack in our industry of technologists, right? Someone who really understands how the law firm operates, how these tasks get done by the paralegals and the attorneys and the support staff within the organization and how the technology can interact and make that process easier and better. And because of that lack of skillset, people point to the technology because they're Well, I know how to do my job, it's the technology Gabriel Stiritz (04:10) Yeah, and I would say there's a little bit of a grasses greener approach, right? Which is, well, if something's broken, it's probably the thing that I don't understand, not the thing that I do understand. And if process is not fun, it's not a sexy thing, you can't go by process, you can go buy technology and look, listen, I'm a tech vendor, like I'm technology, right? And so but people will come and say, listen, like, this sounds great. Bill Denninger (04:32) you Gabriel Stiritz (04:36) But if the process isn't in place and you can't use the technology, you're not going to get a benefit out of it. And one of the things that I really see in these firms is, like you mentioned this, undercapitalized on internal technology talent. And I think some firms have tried to fix that and have fixed that with outsourcing their technology. But if you look across other industries, they have far more internal technology to support staff. Bill Denninger (05:04) for being true. Gabriel Stiritz (05:05) IT staff, external vendors that are helping them make technology buying decisions and implementation. What are you seeing? you agree with that? mean, you're an outsourced technology support service. What are you seeing when you come into law firms? How much technology support do they have? How generally good or bad are things when you're coming Bill Denninger (05:29) Well, I can tell you the tide has definitely changed. I've been in this space for a long time and for a while, definitely in the beginning of my career and kind of working with firms, people didn't understand what I did and why it was important. That's changed now. think really COVID forced a lot of law firms to look at their tech stack because they were faced with the challenge of my people couldn't get into the office, my software is racked and stacked in a closet somewhere, and they had to figure out how to allow their employees to work from home, which led to a deep evaluation. And one of the things that I want to point out is not just the industry, I think, that has this lack of technology investment. If you look at it as, it's interesting, because I've done some work with some defense and corporate type firms, and they have those things. And why? Because their clients are corporations. Their expectation is Gabriel Stiritz (06:14) Mm. Bill Denninger (06:21) we're a plaintiff firm, you your client is a general public. So there is no expectation in their ability to communicate with you, to provide reporting and understanding of what's happening. So I think it led to this kind of lack of investment in technology. I'll also, you know, listen, lot of the technology that existed wasn't that good either. And if the question is, is it a chicken or an egg? Was it that the money wasn't being invested by these firms to kind of, you know, bring this technology in house or, you know, the tech, they just not, you know, invest, know, these companies not come into the market and address it. It's a complicated market to get into. but you know, there is definitely a change. You're seeing a lot more software vendors. Legal tech is a very, very hot space. I personally believe, and this is true for my business and a lot of my clients, it's the talent part that is really lacking because for such a long time, there was an investment in technology and you Also, technology people aren't cheap. When you find out how much a full -stack developer is, Gabriel, you know these are not inexpensive people to employ, and they're also very Gabriel Stiritz (07:31) Yeah, I think one of the gaps is you have lawyers who know how to run law firms and you have engineers over here. And there's got to be someone in the middle who can speak both of those languages. If you're great at running a business, it doesn't mean that you can go out and hire a full -stack engineer, even if you're willing to pay that cost and then immediately have that person be useful. in terms of legal vendors coming into the space, that's great. And it's really exciting. But I was at an event last week and one of the main issues that law firm operators were raising and these were these were folks mostly on the corporate and defense side, but also on the plaintiff side saying, listen, now there's so many new product offerings that I don't know what to buy. I don't know the difference between what's legit and what's not legit. There's no one to help I imagine someone like you can help law firms make better buying decisions around technology and even answer the question of should I buy technology or is it a process or a people issue? So we're trying to be super practically helpful here to listeners. Someone's, you're a CEO, COO in a law firm, you're feeling pain and your immediate responses, let me go buy some technology. Bill, help someone. navigate that and what questions need to be answered before you go out and make a buying decision on Bill Denninger (08:48) I think the first thing you need to do is you have to understand your problem. And I give this analogy a lot. It's kind of like buying a car. And what we see a lot in this space is a lot of attorneys will buy a particular software or an application because they'll be talking to their buddy and they'll be like, hey, I have this problem. And their friend says, well, we just invested in this piece of technology, case management system, whatever it is. And it's really helped us. But it was the process buying the software, right? Where they sat down and they said, okay, how does it work now? What's the best way for it to work? So they kind of did process engineering. And so it was that combination of when they bought the technology, they really rebuilt how their office works, right? And that just happens naturally, right? So if I were to say to you, hey, listen, I'm moving you from a typewriter to a computer, right? The way you print something or create a document changes because a computer can do very different things. So I go back to the car analogy. If your neighbor pulls up in a Porsche 911, you're like, wow, that's a great car. I'd love to get one. But let's say they're single and you have a family with three kids. If you pull up in a Porsche 911 and that's your primary car, it doesn't make sense for you. So the first thing is we have three phases to kind of what we do. What's your current state? So we call it current state discovery. How is it working right now? Go through it, workflow it. step by step. This is the process. These are the exceptions. These are the things that happen on a regular basis. And what you're looking to do is like Gabriel Stiritz (10:24) That's particular. Like when you're doing that, are we talking about like a spreadsheet, a Word document, sticky notes, whiteboard? Like what's the medium that you're doing this in? Because I think that part of it is incredibly Bill Denninger (10:36) Yes, I'm not a stickler for medium. It's the conversation and the documentation of it. So I've done everything like I've done it in Excel, just literally putting things in cells and doing it that way. I've seen it done. There's a ton of whiteboarding applications that are available online. Every single office I've worked in, I always get a four foot by six foot whiteboard and that's what I draw on. And I just draw pretty pictures. Gabriel Stiritz (11:05) Yeah, because from my perspective, it's got to be really low fidelity. When you're in that phase, and we do this too, we have the whiteboards right over there, it's get it, you need good dry erase markers, and you need whiteboard, and you have to write it out because you have to be able to erase it and think visually. Like a huge proponent of low fidelity flow charts for process mapping and just getting it onto a piece of paper where everyone in the room is looking at the same thing. I think visuals are really important. Bill Denninger (11:21) Yes. Gabriel Stiritz (11:34) I don't like online whiteboarding because it doesn't give you the same freedom of I need to use my hand to write it down. So I think those little details are really important to get the whole team aligned around what's the actual process. And then for us too, we do a first pass and then you have to let it sit overnight a couple of days because you're come back and crap, there's this step two A here and then three C, these things we forgot about. You wanna get it all down, not in, miniscule detail, enough detail that it's functionally Bill Denninger (12:07) Yes, and it helps you identify A, what are your pain points, and really separate what are the symptoms and what's the root cause, right? And then you align in that, you overlay your people in there, who's responsible for what, and then if it's a long process, there's, let's say, multiple things, is it moving from one technology system to another? So let's say the process taking a signed retained case and moving it into a case management system, you have two different. So what's the system of record at a particular point? What is the Gabriel Stiritz (12:43) Absolutely. our approach, even we're SaaS, we are building software from scratch, even as we're building out our product. We view it in three distinct tiers and I think this applies internally. I've done this in law firms and the other companies that I've run. There's three phases to running any process. Phase one is do it completely manually. Like every step is done by a human being because that's the highest touch way you learn it the best, you know exactly what it is. I go to off -the -shelf tooling. Let's use a spreadsheet, a Word doc, Zapier, whatever kind of off -the -shelf products you can just build that are more generic tools, but they can start to help automate some of the process. And then the third step for us, it's build it into our product or go buy a product that's purpose -built for the application that you're doing. But I just don't believe in building or buying at that third layer until you have a perfect understanding of what you're doing and you're actually functionally doing in some kind of a lighter weight setting because you need to understand it completely before you go out and, because if you go and like hard code, build or buy a product that's bespokely set up, it's so hard to change that process, right? Like if you get something like, let's say you're doing a Salesforce or a Litify build, that is incredibly difficult to go and rebuild that. You really want to make sure that you've nailed the process down way before you start to build anything for it. Do you agree with set of phases or would you change that in some way if you're going into a law firm to help them Bill Denninger (14:13) Yeah, so we look at current state, right? And when we look at, when we do that current state evaluation, like we've been talking about is what's working, what's going right, right? Cause there's always things going right. So what's working really well, what's going right. And what is it, right? And what's kind of like usually like three buckets, right? Really good. Okay. Bad. Right. Great. And that gives you to the point and that by doing that, and then you go, okay, what's, what's the ideal state? No holds barred, right? We can make anything we want happen. and you kind of design that. And usually you end up somewhere in the middle and there's, believe it or not, that future state ends up being very different. So I'll go into two firms, exactly the same problem, and I'll give you two totally different solutions. And those solutions change based on values of the firm, based on their risk tolerance, based on their skills in -house. We very rarely end up building full custom solutions because a lot of our clients can't support They don't have the infrastructure underneath them to really support it. So we use off the shelf with some combination of customization in there to really make it fit into what they want it to do. Gabriel Stiritz (15:21) Which has a lot of upsides because off the shelf is easier to change that and to tweak it. And I think something that people underestimate too is who is able to affect those changes? Like if you buy a custom tool, then the person who can make the change has to be a highly skilled worker or if it's full custom, it's an engineer who has to make a change. But there's a lot of value in being able to say, the end user can make small tweaks to the workflow as you're going through. Because you want to iterate quickly. You don't want to give the keys to the kingdom to someone who doesn't understand what's going on. But it's also really frustrating if the person trying to do their job has to go through three layers to get to an engineer just to make a small tweak to the process so that they can improve it. That's the lean methodology is anyone should be able to stop the line, make a change, and then iterate toward a better version. Bill Denninger (16:05) Yes. Well, think, and I also think I really, mean, very rarely do I come across a law firm that I say, Hey, this is really a custom solution that you should build in house. Look at case management systems, right? You you file line, Litify, Smart Advocate, they have hundreds of clients and they're solving these little problems. So, you know, when two or three law firms come up with an issue, they solve it for them. That pushes over to you. So that product will continue to evolve and get better. I mean, you're starting to see it this year. you know, all of these vendors were able to layer AI into their applications, into their service offerings, right? And that AI, that development, that technology, what problems to solve is from the feedback of their entire client base. So you get the benefits of that, of that evolving product without having to pay an AI expert to sit down and say, okay, what's the solution here? So the cost of ownership is even, you know, most people don't think of it that way. They're like, well, I'll just build it and then I don't have to pay for it anymore, but you have to support it. Software is never done, right? You have a SaaS business, you know this. Software is never ever complete. The process changes, the business changes, the technology changes. There's so much that has to change and these systems have to evolve with the industry. Gabriel Stiritz (17:27) Absolutely. And, you know, our typical listeners probably not looking at building custom technology themselves, but I think, again, it's helpful to understand that the custom solution is not just the best way, if you have a million dollars, you should throw money at technology, right? The best solution is, like you're saying, is often going making sure your process, your vendor, everything lines up. And then I think it's undervalued how much time you should spend on training and implementation and adoption of the tools that you have. I don't think that very many of us actually lack for having the right tools. I think for most of us, all our tools are so overpowered. Like if you look at what Google Sheets can do, if you really like went in on that, right? Like that actually, Bill Denninger (18:13) us. Gabriel Stiritz (18:17) could be an entire application itself. Most of us aren't using our tools to the full capacity. It's that we don't have the training, the adoption, and the resourcing to fully adopt and implement the tools that we do Bill Denninger (18:30) And that's exactly why we, what you outlined is exactly why we started our company. We are not beholden to any, we're partners with everyone in the industry and all the different software vendors, but we are aligned to our customers. So we sit down and try to understand, okay, what are the problems you're trying to solve? What are the goals for your business? And then we bring in the technology vendors that make sense and we allow our clients to decide who to pick. But more importantly, when they're sitting there and talking to them, they have a list. Must have, nice to would be amazing if it hadn't. So they don't end up picking the wrong solution for them. And that's really an important thing. And then we help them, sometimes we help their implementation. But a lot of times we come in after the fact and really take that application that's been implemented and put into the firm and make it fit into the entire ecosystem. Because we don't just do case management or report. We do all of the technology that makes law firms run. And I think that's one of the things that really sets us apart too. Gabriel Stiritz (19:00) and Bill Denninger (19:29) And it's honestly, it's really needed in the industry. These firms have made tremendous investments in technology, but they're still siloed in kind of how they've been implemented and how they're operating. And that's one of the things that we do a lot of times. mean, that's a lot of our engagements is coming in, making these applications communicate with each other, moving data back and forth very efficiently and aligning them very closely with the process of the business and the people Gabriel Stiritz (19:56) Yeah, absolutely. And that's really needed whether that's internal support or external support. It's a lot easier to buy technology than it is to get that fully implemented and built into your processes. But I think as someone who comes from more of a design background, that understanding of what your process is, where you want your process to go, and you can't boil the ocean in a day, but you can say, What are we doing this quarter to move toward our desired end state? As long as you know what that state is, then you can figure out from a top -down approach, from a design -oriented approach, what is it that we need to do? Is it buy technology? Is it implement? Is it adopt? Is it get someone to bring things together that don't talk to each other right now? Once you're looking at the desired end goal, which is what you're talking about, then you can make good decisions toward that end goal. But if you're just going around saying like, this hurts, maybe I'm gonna try something to assuage the pain. You're not looking at the root causes and you're not looking where you wanna be. And I think that's really important. And look, as someone who loves to self -implement and do things DIY, you can get a lot done that way. And also, if they're gonna work with someone like yourself, why not do more of that work on the front end, know where you're trying to go, and then bring in someone like Datavative to close the gaps that you can't do yourself because yes, mean, the idea might be like, okay, we have five different systems and the real problem is that they don't talk to each other. Well, that's not something that any product is going to solve for. You need someone who can come in and integrate the products with each other. So I just think the further down the road you can get in that design process, the better, period. You're gonna know more what you need. You're gonna know who to bring on board. And then also if they come to someone like yourself, Look, I think anyone who's trying to do something really well is you're like an athlete, right? Like athletes have coaches. Olympians aren't out there trying to go to the Olympics by themselves. They have whole teams of people that are getting them better. And I think, you know, I hear a lot of people who are not as sophisticated telling me like, hey, like I don't need a coach. I got it myself. I'm like, okay, but look at the best people. They have coaches. They have consultants. They have advisors like NFL guys. If you're an NFL running back, You're not going to go do your taxes yourself or make business decisions yourself or you shouldn't. You need to build a team around you. And I think law firms are the same way. If you're going to run your best game, your best operations, you're going to hire the best people and those people are still going to go out and find the right people to continue to build what they need. So I think that it's not a question of like, is it internal or external? But it's both and, but you have to know what the end goal is. And I especially with the advent of AI and all of these new features that are coming out day by day on all of these platforms, people need more advisors rather than less to leverage the technology, especially because the total ROI on that is higher than it's ever been. If you go back 20 years, the best you could get was spreadsheets running in servers, right? And it's like the cap on that investment was, it was what it was, but today it's like, all right, now we're talking about, can we replace Bill Denninger (22:55) Yes. Gabriel Stiritz (23:07) human beings with AI agents, can we get advanced analytics that are surfacing signals that we would never have been able to do five years ago. Now it's actually worth it to go out and hire more people to invest in the technology because if you don't, you're going to be saying like, well, AI sucks because I fired my intake team and got a chat bot. And it's like, no, no, no, no, that's not how it's going to work. You're going to have to really spend a lot of time integrating. And because the processes are more flexible from a technology perspective, if you don't understand what core business needs are, it's going to get real ugly if you just hop in there and start buying technology willy -nilly because someone sold you a great vision for Bill Denninger (23:48) Yeah, and actually make an excellent point because I can tell you in our business right now, our biggest clients with our biggest projects, they aren't it's not a firm that doesn't have any technical resources. These are firms that have developers, front end developers, back end developers, IT staff, project managers. They actually have full dev teams and they bring us in because of the expertise and to your We get outside knowledge from the other firms that we work with. We understand the industry. We talk to all the different vendors in the industry. So we understand what's happening. Plus we have the experience of working in the firms and running the actual departments. I've built a dozen intake floors and run them for years. All steps through the litigation process and help kind of construct those paralegals. But we work with firms that don't have any tech resources, but a lot of our bigger projects are actually ones that have full tech resources. Gabriel Stiritz (24:44) Absolutely, no, that makes perfect sense and if you are a small mid -sized firm, understand that the bigger firms are hiring up on the technology. So as the technology gets more powerful, they're not replacing their tech teams with technology, they're bringing on more tech teams. I'm talking to these large firms, they're hiring more people to build more technology because there's more leverage there over time. And if you're a small mid -sized firm, you can't just be sitting Bill Denninger (24:59) Yeah. Gabriel Stiritz (25:11) hey, I bought Filevine three years ago and now I'm good. It's like, no, no, no, you need to be figuring out what Filevine's new features are doing, leverage those, integrate more of your solutions in your systems, and you need to be figuring out how to resource the tech side. Like, your tech budget's going to go up, your overall budget's going to go down because the tech's more powerful, but you should be looking to spend more money on technology today, generally. Like, everything else aside, because the tech has more capacity to handle, Legal is the most disruptible field via LLMs because LLMs are large language models. Law is just language. we are now in a position where it's not math anymore. Like spreadsheets are very mathy. Like we had other industries that were disrupted when we had spreadsheets and a lot of this like, you know, algorithmic stuff. Now that we have large language models, like this is law's time. Like, we're ready to go. And so if you don't want to get left behind, you need to be figuring out how to incorporate that into your firm. via internal technology talent, external tech talent, products, but it's not just one of them. It's all three of them all the Bill Denninger (26:17) You've touched on a point that actually I think is really interesting, which is at the end of the day, AI relies on data, right? And if you want to tune and train that AI model specifically to the way you want to work and your processes, you put up like on guardrails, right? So like this is, get it, this is the way this firm does it, or this is the way the AI models program. I want to tweak it to the way I see the world, the way I want to run my firm. To do that, you need to feed it data. To feed it data, you need really good systems. That really good systems need really good process. So, you know, it all builds on each other. And I think that to your point, yes, LLMs are gonna really disrupt legal in a lot of different ways, but the technology adoption and execution of its adoption is still lagging so far behind in our industry that there's still so much more of an upside, right? mean, workflow automation, transparency and reporting. I still walk into huge firms and smaller firms too, that still have siloed data. They can't combine their marketing data from let's say Google, Facebook or whatever to their actual side cases. And then from their side cases to the ones that actually ended up settling, right? To do a full retro on their profitability. Why? Because their data's siloed. So using those systems. Gabriel Stiritz (27:30) That's right. And and the most cutting edge stuff, you're saying, look, like to get to where an LLM is gonna be as useful as it can be, you've got a bunch of other things that you need to do to get your house in order so that it can then go. It's like, look, everyone, if you wanna work on a car, everyone's first thing is, I'm gonna do an engine swap. Well, guess what? If you engine swap your Miata to a V8, the brakes are gonna fail, the transmission is gonna blow and the whole car is gonna fall apart. You can't just go throw a super powerful AI agent into the middle of your law firm without getting everything else in order, because it's going to catastrophically fail and bad things are gonna happen. that I think is a whole discussion unto itself that we will talk about. We're coming up on time. Bill, I really appreciate you being on the podcast today. Always a pleasure talking with Bill Denninger (28:12) Yes. always a pleasure. Thank you so much for having us, having me on and I really appreciate Gabriel Stiritz (28:26) Absolutely.