In our latest Digital Legal Exchange podcast, Michele DeStefano sits down with Shahar Markovitch, Exchange Faculty Advisor and Chief Digital and Transformation Officer at Natural Intelligence, to explore why he joined the Exchange and his views on Digital Transformation in the legal function. Shahar shares his thinking on why digital and technology creates an opportunity that forces a change in the legal function, and he and Michele share stories about why the customer experience, and delighting customers is a critical factor in digital transformation. “Digital and technology creates an opportunity that forces a change in the legal function, because a modern organization has to be agile, they have to be nimble, they have to be faster and take risk, sometimes even work on the edge of risk. And that creates a forcing mechanism for legal to change.”
Michele DeStefano / Shahar Markovitch podcast transcript
Hello, everybody. Welcome to the digital legal exchange podcast. My name is Michel De Stefano. I'm a professor of law at the University of Miami, and also guest faculty at Harvard Law School, and the chief faculty advisor for the digital legal exchange. And I am your host today for today's podcast with Shahar Markovitch. We are so excited to have Shahar with us today, not only because he isn't a lawyer, but also because of his vast experience in digital transformation. Shahar is currently the general manager of the FinTech business, Natural Intelligence. And for those of you that don't know what Natural Intelligence is, it's a global leader in multi vertical online comparison marketplaces. Prior to that, Shahar was the former Chief Digital and Information Officer at EL AL Israel airlines. And prior to that, he was a chief digital transformation and Information Officer for Bank of Hapoalim and before that, a partner at McKinsey and before that, a former software engineer and the list goes on and on and on. There is nothing that Shahar hasn't done as it relates to digital transformation and entrepreneurism. And he's a startup advisor. He's a product builder. He's a transformer. Shahar is here to transform our worlds. And our understanding of digital transformation now I have set all of our expectations very high. What do you think about that Shahar?
What do you say after such an introduction? Hard to top that.
Exactly. Maybe we're just done.
Yeah, let's stop here. Let's stop here.
Let's just stop here. Perfect. Perfect. I just would love to let the audience know your background, I mentioned that you're not a lawyer. And when you were in undergraduate at the Hebrew University, you studied computer science and math. And it MIT that your MBA, so we are all shaking in our boots, because a lot of lawyers will say, they're not very good at math. So we're gonna learn a lot from you today. All right, you ready for my first question?
This one is an easy one. Why did you get involved in the Digital Legal Exchange?
Great question. I was always interested in law, my mother is a lawyer. So you could say I grew up on the knees of the law, it was very present in our home in the 80s. When we got there, first computer, my brother and I used to fight a lot over it. So my mom kind of encouraged us to write a contract between both of us that regulates how we use the computer. And that actually held up pretty well for a few years. Now other than that, I've been working very closely with internal counsel and legal professions as Chief Information Officer and Chief Digital Officer. driving innovation in many companies is something that requires a close, close lawyer, as I've been working extensively with these functions. And as someone that's very passionate about digital transformation, I'm very interested to see how digital transformation is going to shape up the legal profession. And I got involved in thinking about that. And that's how I got to the the legal exchange.
So tell me, how is it different working with lawyers when it comes to digital transformation, versus people that aren't practicing attorneys?
Interesting question. When you talk about digital, you think a lot about customer experience. So there's a there's a saying in customer experience, that people will never forget how you make them feel. And they you and I go to someone in a corporate and ask them how they feel when they hear the word legal? Will they get a warm fuzzy feeling with a smile? Or will it be more of a negative? Oh, no, I think you know, we can both back that direction, we probably on average won't be positive, because for many organizations legal is perceived as a place where you go to when things go bad. They're the guardians of risk that people that say no to, you know, you cannot do that. And is a big challenge in changing that. That's very different from someone you know, thinking about customer service and serving a customer. So the main difference is that for the legal profession, it's much more than a digital transformation. It's actually transformation of the legal function. Digital and technology creates an opportunity that forces a change in the legal function, because modern organization has to be agile, they have to be nimble, they have to be faster and take risk, sometimes even work on the edge of risk. And that creates a forcing mechanism for legal to change.
Right. So it's a double whammy. When legal departments are supporting the business in digital transformation and also transforming themselves. It's actually changing what the function of the legal department is. What do you envision the function of a future legal department or general counsel is after a big digital transformation effort?
Shahar - I think it starts with the basic even even if you don't think about digital and working with a lot of lawyers that difference in my mind between a good lawyer and a great lawyer is that when you come with a legal document or legal problem or legal issue to a good lawyer, they will highlight outline all the risks and issues, all the problems, all the things you need to think about, you have a long list of all the potential areas that you need to address. But if you come to a great lawyer, they will help you actually crystallize the level of risk, they will help you focus they will not cover all the 100 things that go wrong and the legal issues with the contract or with the, with the problem at hand, they will actually help you focus and think about what are the way to take this forward. And I think that for the legal function, the change is, moving from something moving from a function that in essence, protects the organization or evolving into functions that is actually helping the organization move forward in a very challenging dynamic world that we're living in. You still need to do all the things that you've done previously. But you need to do them in with a different perspective. You need to do them with new tools and new new capabilities. I had many experience where actually the lawyer or lawyers that I worked with, were actually the enablers for me that allowed me to show me the path forward, right? Yes, we could do it and how, for example, in El-Al, we set up cyber bounty hunter program where the shape of the program was actually shaped and came up from the work with the lawyers.
Wait a second, wait a second, I must stop you there. So you're telling me a story of a time when the lawyers not only enabled but actually helped come up with a new idea. Tell us a little bit more about that how it worked.
So the lawyer was not was not a law, legal function. For me, they were a partner in helping us think about that. And they were involved in thinking about a whole program and their need. And the idea behind it and the objective behind it. And that allowed them to actually come up with the idea of how to do it. One of the challenges in the digital world, one of the critical capabilities for digital organization, is end to end perspective. And end to end thinking is, is cross cross silo thinking. You'd as you know, very well, traditional organizations operate in functional silos. But digital transformation forces organization to break the silos because customer because customer experience is such a critical a critical factor in digital transformation. As customer experience is the entire organization, they don't care that they had a bad experience at the call center, because that call center didn't speak with the with the servicing function. And what's interesting about the legal function, it's probably one of the only functions in the organization that has a really broad cross cutting perspective, around the entire organization, they basically deal with almost every aspect of the organization. And as a result, they have a lot of cross cutting insights. So working with that specific lawyers, she was very, very smart lawyer, she saw the problem for many different direction with all her her legal background. And as a result, she was able to come up with a solution that actually addressed all the different concerns of the organization.
So that fits very nicely with what the digital legal exchange is all about, which is helping General Counsel take those first steps towards digital transformation and truly becoming a partner with the business and utilizing the fact that it does have its fingers and toes in every aspect of the business to its advantage to not just enable the business, but to actually work together with them to come up with new ideas so that the company can make that user experience what it needs to be. You've talked about customer experience a few times in this podcast, and you also mentioned it in your LinkedIn, it's clear that focusing on the customer experience is something that's key to digital transformation. It's something that you are an expert in tell us a story about when you've delighted a customer, how did that go?
Customer delight can can come in many, many shapes and forms. For example, when we designed the airline app, you know, we built feature that when it's your birthday, the app kind of tells you it's your birthday, and there's confetti, and stars, that's a very small moment, moment of delight. The other area where you can delight a customer is for example, when you when a family is traveling with their children, the airline actually has the opportunity to identify that the family that you know, these are young kids and we actually have an opening in a better class. And then we upgrade the family to a better class and create better seats and give them presents to the kids. We really create an amazing, fun, delightful experience.
I love that that was really great example.
As you know I'm the founder of a nonprofit called law without walls and we've been part virtual for 11 years and are all virtual program has been running for eight years. So the world went virtual. And so of course, now we're all virtual, our blended program out the window. And I really thought long and hard my team thought long and hard about how do we make the customer, our sponsors, our client, our students, our participants or volunteers? How do we make their experience delightful, and different and unique given that we've been doing when everyone else is now doing for years, and that's not so special anymore. So we kind of went old school, and we developed an LWOW box of awesome, and we completely branded it. And then inside, we put various items that are branded LWOW. And everyone loves LWOW swag. There's something about the community. I don't know what it is. But we all love wearing our LWOW swag. I have to tell you that response was unreal. People are so sick of emails and virtual Hangouts, when we started tweeting that we needed people's addresses for an LWOW box of awesome of swag. Wow, people just poured in, I want my box of awesome, I want my and so it's it's interesting how you have to think about the customer experience not only from end to end, but also it's very situational.
Yes. I love the story. I think in fact, what I find very inspiring the story even more than just delighting the customer is the fact that you had a vision and a plan. And this is something that I sometimes find lacking. You know, when you talk, we talked a lot about legal functions. You know, if you want to transform, right, we said that the digital transformation is is forcing a transformation within the legal function. If you want to transform, you need to have a Northstar. And you clearly had a very clear Northstar, right, some sort of vision and a plan and roadmap to get there. But in a big organization, many times you know the business guys have a strategy and a plan. You know, that idea has a strategy and a plan, you know that servicing has a strategy plan of operation. Many times in the legal function doesn't have a vision plan, it's actually quite critical. If you want to transform you need to know, where are you transforming. There's actually a great a great example, coming from slightly different direction, but very related to kind of the vision that you had. There's an Israeli company called monday.com. They're a startup, but they're a unicorn. So they're very successful startup that sell software as a service. I heard the podcast with their head of legal where she talked about how she created a vision for her legal function around compliance. So they realized that instead of talking about compliance, and making sure that you know, everything is compliant with FTC rules, etc. Compliance is a negative word, right? You want to enforce compliance. That's not a very inspiring vision. Instead, the vision that you build was around trustworthiness, how do we make sure that the customer actually can trust us? That's the core thematic idea behind the regulation that we're looking at. So their vision, defined that the goal of the legal function is actually to be the ambassador and catalysts for building trustworthiness in everything that the company do. Right? So again, it's thinking about the customer. And kind of that's what I refer to when I when I spoke earlier, flipping kind of the mindset of the legal function on its head. We are now the ambassadors of building trustworthiness in the company. And how do we do that, and that creates a completely different direction, versus coming with the mindset of, okay, we need that we are there to enforce compliance and show me what you've done, and so on and so forth.
It's interesting, I have a background in advertising and marketing. I did, I was at Leo Burnett, and then at Levi Strauss and company for almost eight years before I went to law school, and people always say that's a crazy career change. And I say, absolutely not. Law and marketing are really similar. And I think in today's world, what you just said to me was the way we were taught in marketing and the way you use your words, and what words you use, to inspire people to behave differently. Because you have to first understand what how they think, and how they behave and how they make choices. And you have to you have to envision how you want them to think and how you want them to behave and how you want them to make choices. And then you've got to figure out the right words, and the right feeling and the right emotions to get them there. Now, I was doing that with cereal and jeans. You're talking about compliance and trust.
Exactly. litigators. Do it amazingly well, right litigators do it amazingly well. But in some areas of the of the law profession, you don't see as much focus on, you know, it's not just the letter of the law. It's actually how you communicate it and what you do around it.
There's studies that show studies on 1000s and 1000s of lawyers, and it's very depressing to hear this. We test. We don't just test low on empathy compared to other professionals. We test really, really low but litigators actually test higher than other lawyers. And that makes so much sense.
So you gave us a positive experience, we're feeling really good, I want you to bring us down, tell us a story when things have gone wrong a company or there's been a situation where the clients have not been delighted.
So you know, that's easy. Let me frame it as kind of the way I think about the big opportunity. And again, I'm focusing a lot on internal costs. And most of my experience has been with the internal legal function of corporate connected also to what we talked about in terms of digital transformation. As we said, one of the core things that is critical for any organization in a digital world is going to speed agility, nimbleness, time to market. One of the biggest negative experiences working with legal is exactly, you know, they are one of the main reasons why sometimes time to market is being delayed, right. So I had multiple experiences. Unfortunately, we had great people with all the best intentions, that closing a contract with a key supplier or a key customer had to go through a million legal reviews, I even had a case where I worked in bank [name], where we wanted to do the first cloud based project to creating a CRM, Salesforce CRM, where the legal team insisted on analyzing and reading all of the 1000s of terms and condition behind the cloud service that Salesforce provided. And they came, of course with 1000s of remarks. And guess what, none of them, you know, Salesforce didn't change anything, right. So there's delays in closing contracts, with customers, or suppliers, you know, you need to go through legal every time you launch a digital campaign or a new feature into app to make sure everything is compliant. Or many times when you go with a new system, or you propose a new business idea, you need to go for the full business and legal review. So actually, you made the legal function in that process in every process that you do, as a business. And in more often than not, the legal function is not an enabler or a catalyst or accelerated it's actually Okay, wait a minute, you know, we have only three lawyers, there's already dozens of contracts that are being reviewed. And you know, you have to kind of escalate to the head of legal to make sure that your specific contracts get reviewed first, or worse, delay. So it's it's not a great experience many times, right. By the way, I think that if we flip this on its head, what digital technology do is the potentially enable the legal function to address this specific challenge? Because the legal and technology tools create capacity for lawyers to to accelerate some of this kind of this bureaucratic work to focus on the value because we said great lawyers, they focus on the value, they show you how to move forward, and they distill the key points. And to accelerate the organizational clock speed.
Yeah. So I agree that digital transformation and digital tools will help the legal profession speed up because some things that currently lawyers are doing the some tools will help us do them faster, or they'll do them for us. And I also agree, and part of our charge in the digital legal exchange is this focus on how how lawyers approach the jobs that they do. I have a story from when I was at Harvard Law School. I took my torts exam, and back then we couldn't answer our issue spotting essay questions on a computer, we had to use what we called Blue Book. And it was a long drawn out question with tons of issues. And I must have filled out seven blue books to make sure that I covered every single issue every single in and out of every single issue. And my professor gave out the sample a answer. And I looked at it. And there wasn't one issue that I hadn't uncovered, and that I hadn't analyzed as thoroughly in the answer. And I had gotten a B plus. So I went in to talk to the professor to find out how I could improve. And I explained to him that I had covered all the issues. And you know what he said to me, he said he didn't care, and that he had stopped reading after the third blue book because a good attorney, sees the forest through the trees and focuses on the issues that matter. Wow, what a lesson that was for me. And believe me, I took that to heart.
That’s very, very interesting, very interesting.
And it was a great lesson.
You know, when I think about the potential that even in this story, where the digital tools can can can bring even to a story like this in helping you focus on the forest from the trees. I see the impact of digital technology on the law it's like a pyramid. So on the bottom of the pyramid is sort of what I call, you know, the general productivity tools that everybody use these days, like document management, collaboration tools, OCR, time management, e signature, workflow, you know, everybody uses them. But in fact, we all know that there's still a lot of potential to get out of them, right. The second kind of layer is what I think about as legal specific productivity tools. So those are productivity tools that are specific for the legal function like matter management, billing and deal closing, compliance tools, some board management tools, there's you could put their discovery databases or ruling databases where you can search through, but the tip, the tip of this pyramid, which is just emerging, right, together with all AI professional is gonna be automated, legal or AI driven legal, right, things that are relatively new, but they're very exciting could be anything from automated issue analysis, automated contract generation, or automated contract analysis, or automated risk analysis or automated compliance. For example, I recently started working with a startup that actually monitors all the electronic communication of the organization and does automatic compliance and edification. But this, this kind of tip of the spear is very exciting, because it actually automates a lot of their kind of blue book, activity that you described, right in, lets the lawyer really focus on not only the forest from the trees, but also the tallest trees in that forest, and really get the maximum value out of their time.
And like that visual of the pyramid for digital transformation. And that is actually one of the reasons why we are so excited to have you Shahar as part of our organization for helping us envision the future for legal departments and digital transformation, and partnering with the business. I'd like to close with one question that we close with all of our podcasts. And that is, what do you like right now about digital transformation as it relates to your world or the legal world? What do you wish for digital transformation as it relates to your world and or the legal world? And what do you wonder?
That's a broad and deep question. You should you should have warned me in advance, I could have prepared.
No way. There's no warning here.
Yeah, that's true. I like the fact that you know, digital is putting the world at our fingertips. Everything from you know, ordering food, or ice cream or, or groceries, to watching whatever movie you want, at the click of a button to connecting with friends and family, which has been you know, the digital has been a lifesaver in the corona times, right? Imagine Corona times and stay in place without being able to do zoom video calls or video calls with your family. So I think that I love that. That fact, I do wonder in terms of kind of wondering forward, how much how much of that is going to stay with us post Corona? Are we still gonna live in zoom based world? And to what extent we will get back to our old lives? I guess that's probably the answer in many, many people's mind. Definitely on top of mind for me, as someone coming coming from the travel industry, you know that's one of the core aspects I'm thinking about.
I agree, I think we all can agree that we wish that life will return a little bit back to normal, and that we can be safe and healthy. And well, and be in person sometimes. Shahar This was so great. Thank you so much for taking the time to share your thoughts with us and for being a part of the Digital Legal Exchange.
My pleasure. Thank you. Thank you for having me. And thank you for your time.