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Aaron Kotok

Aaron Kotok is Director of Strategy & Innovation at McDermott Will & Emery LLP, where he landed just before the pandemic, returning to BigLaw (in a business role) after over a decade of various consulting roles in and around the legal industry.

After starting his legal career at Venable LLP, Aaron built a series of legal, management, advisory, and leadership experiences at Gerson Lehrman Group. CEB Leadership Council for Legal Executives (f/k/a the General Counsel Roundtable, now part of Gartner), and AdvanceLaw (a GC cooperative vetting outside counsel for performance and quality).

Tell me a little about your background and how that has informed the work that you now do.

Like many liberal arts majors, I approached graduation from college with no clue what to do with my life.  And like many Penn undergrads in the late ‘90s, I was convinced that only two industries existed – investment banking and management consulting.  I narrowly avoided a career in the former (at a Wall Street bank that imploded within a decade), and decided instead to join The Corporate Executive Board (CEB) in DC.

CEB wasn’t really a management consulting firm, and it wasn’t really a research think tank.  Whatever it was, it was by far the best entrée into the business world for people like me (in my case, armed with degrees in International Relations and American History), who could research, write, and construct an argument, but had zero relevant experience.  [Close readers of your blog will note that Dan Currell, my good friend and former colleague (twice-over), described CEB (now part of Gartner) well in these pages a few months ago.]  Despite my complete lack of exposure to business at that point, I was set to work immediately on the task of writing research studies on best practices in corporate strategy for Fortune 500 clients.  That first gig set the course for my entire career in all sorts of unanticipated ways.  But the one that’s most relevant for what I do now was the study of “growth stalls.”

Within days of starting at CEB, the team introduced me to its recently completed flagship research called “Stall Points.”  It was a fascinating, data-based look at all the companies that had been in the Fortune 50 since it was launched.  The big headline finding:  161 companies had been in the Fortune 50 at some point across the previous 40 years…and only eight [eight!] experienced “unbroken” growth in that time.  Every other company – some of the world’s biggest and most respected brands – underwent some significant downturn, and only six [six!] of those ever recovered their previous growth rates.

Accounting bored me.  Finance vexed me.  But this I could sink my teeth into.  My bookshelves may have been loaded with tomes about diplomacy, war, national security, and terrorism (sadly, something of a “quaint” subject at the time), but the underlying theme of all of them was strategy – how to build, sustain, and protect power.  Just as I did when studying countries and political regimes, I loved learning about how companies grew, how they organized themselves and their people, and most interestingly, how they failed (and whether failure was preventable).

Back to Stall Points – the study identified 220 distinct causes for stalls.  83% of those were controllable, split closely between strategic and organizational reasons.  And primary among the strategic ones were things like innovation management breakdown (e.g., slow product development and over-decentralized R&D) and my favorite, “premium position captivity.”

You can probably intuit what this has to do with the legal industry, but here are a few examples of what “premium position captivity” included:  misreading customer needs, over-estimating brand protection, responding with higher premiums, being captive to gross margin.  These are themes that have echoed across the legal industry without most of us using those exact terms, and they’ve followed me for most of my career since – through law school (Harvard), BigLaw private practice (Venable), a return to CEB (where I led teams providing research and advisory services for in-house legal departments, and then the legal practice itself), time with AdvanceLaw building its market for legal services, and, now in a strategy and innovation role at McDermott Will & Emery.

Through it all, I’ve always gravitated less to the “what” of the law and more to the “how” – how does work get done?  How do clients evaluate and select counsel?  How do law firms compete with each other and grow?  How do legal services get delivered?  The answers to these (which I’m still pursuing, of course) are all based in strategy, including how to avoid growth stalls like those I studied 20 years ago, and how to prevent premium position captivity, among other traps.  And this seemingly random career path that had me traipsing through substantive legal training and practice, executive education and advisory, business development, and product development and management has all led up to my current role of trying to address these problems from within the heart of the archetypal organization, a 1,200+-lawyer international law firm, nipping at the heels of the AmLaw 20.

How would you describe what you do?

Great question, and I’m still trying to figure that out.  I suspect many in business roles at law firms feel the same way in 2020, as it seems every week brings a new development that shifts mandates and priorities.  I’m also a firm believer that it takes at least a full year until you’re REALLY comfortable hitting your stride in a new gig, and to actually know what you’re supposed to do each day.  So I still have a few months to go before I hit that milestone.

My title is Director of Industry Strategy & Innovation, which at least one person told me was a lot of words signifying nothing.  Point taken and ego wounded, but here’s what it’s supposed to mean:  both available industry data and my own past work directly with GCs and legal teams make clear that clients place a huge premium on deep industry expertise.  Lawyers have no problem demonstrating technical legal expertise and clients are pretty good at sussing it out.  Today, that’s table stakes if you’re even in the discussion to be hired by a client.  If you don’t have it, you’re not likely to win a client’s business and you certainly won’t keep it.  But building truly deep and enduring relationships that inure to the benefit of firm and client alike requires insight to help the client achieve their business outcomes.  This comes most naturally and effectively from applying a comprehensive, business-oriented understanding of the client’s industry.

For example, over the years, McDermott has built up one of the strongest healthcare practices in the country (if not the strongest).  I work very closely with this group and marvel not just at the lawyers’ grasp of the arcane and rapidly evolving regulations addressing treatment, insurance, reimbursement, etc., especially during our pandemic times, but also just how broadly and deeply they understand the industry’s value chain, key players, and evolving business models.   As digital health and telehealth have their “moment” in 2020, it’s been fascinating to watch how quickly the group could respond – and only because they’ve been in the trenches of this industry forever:  with mature traditional hospital and health systems, MedTech start-ups, physician practice management organizations, healthcare private equity investors, and even large Fortune 500 retail and consumer tech companies that are edging into providing medical or quasi-medical services.  Nobody understands the industry better and I see it in the quality and breadth of our client relationships.  Most importantly, our clients see us as supporting them in their healthcare business objectives, not just providing legal advice on the margin.

So, I’m helping that group to maintain and build from that position.  We’re shoring up our strengths, building industry-focused strategy and business development plans, and ensuring that our clients and others continue to see and rely on us as true industry experts with whom they can partner in their pursuit of business outcomes.  Over time, we plan to identify other industry-focused areas that are ripe for the same disciplines and approaches.  We have some in mind, as they are sectors where our strengths are already recognized but could perhaps use some rounding out and more coordination, especially around a go-to-market strategy.

How do you see legal innovation within the context of practicing law?

Right, because the other piece of my remit is that innovation thing.  It’s funny, for all my exposure to both the buy- and supply-sides of the legal world, I hadn’t realized just how much people reflexively tie innovation with technology.  To me, technology is a subset of innovation and, more often, “innovative” is the modifier (i.e., “innovative technology”).  Meaning, what I’m looking to do at the firm is to help find ways that we can innovate across the legal service delivery value chain.  How can we be more efficient and collaborative?  How can we make our services more outcome-oriented?  What options can we provide for clients and what “products” can we use to deliver our advice and insight in ways that narrowly target solutions at specific client problems?

For good reason, it’s with rare exception (matters of first impression, novel defenses, and the like) that clients seek – and firms choose to deliver – “innovative law.”  What we look for in counsel is safe, sound, rock-solid, dependable advice.  Otherwise, we’re just asking for trouble, especially if we’re asking for an innovative response with a wink and a nod.

So, in the context of practicing law, innovation becomes an enabler, both for the lawyer and the client.  For the lawyer, it’s about being faster and more productive, so you can get more work done and serve more clients (or…spend more time with family and take a vacation?).  And for the client, it’s about achieving business outcomes more efficiently.

And therein you can see why it is so difficult for innovation to take hold and at speed in our business.  You don’t need to hear me dig up all the “killable hour” talk, so I’ll just say this:  so long as the predominant economic model within the legal industry remains cost-plus pricing, investing in innovation will continue to be a steep uphill battle.  There again is that gross margin captivity from Stall Points, with the added component that those who operate BigLaw are also its owners…that margin is very, very personal to them.

Answering those questions may end up pointing us in the direction of technology (and I’ve had a ton of fun kicking the tires on some cool stuff our technology and strategic solutions teams are working on), but to me, that’s a secondary point.  You must first have in place unique and valuable knowledge, insight, data, and communications before you can even consider putting it through a technology solution.   If not, you’re just amplifying and shining a light on an underlying problem or a broken process.

What have been the key skills you rely on every day that you didn’t expect to be using within the legal profession?

I’m going to answer this in a weird way – because I’m now using a set of skills that I originally wanted and expected to use in the law, but found difficult to deploy early on.  I’ve long since left the practice of law, but have returned instead to the business of it, and now I use them almost every day:  things like change management, creativity, and process and decision mapping.

To be fair, when I was first in private practice I was a young associate and required the oversight, direction, and pathing that I was provided at the time.  But among the many things that made me restless back then was a deep curiosity about how we were doing things and why.  It was hard to break through the “this is how it’s done” approach, but I wanted to do more.  At that time, I certainly had very little authority and credibility to drive change or to fix things (or even break them) and I struggled with staring down a career path that seemed pre-destined and static.  There were other factors at play when I decided to leave private practice, including a story my then 2-year old told that featured the plot twist that “Daddy lives at a place called work.”

A decade-plus later, every day in my current role is remarkably different from the last, even if the scenery of remote work never changes.  It’s challenging and fun, and all in service to being better (or, to be properly on-brand at McDermott, #alwaysbetter) – improving our processes, services, and products.

To those just entering the legal profession, what be your advice?

Go wide before you go deep.  Especially early in your career, look for opportunities to be exposed to as many different practices, industries, and areas of law as possible.  At the time that I entered BigLaw, there was a lot of pressure to know exactly what you wanted to practice, even when you interviewed as a 2L.  Many firms have since offered programs that provide rotations through multiple practices or deferring the need to declare a “major” until a year or two into a career.  Take advantage of these chances.  Even with time spent in a firm’s summer associate program, very few of us have compiled enough experiences and collected enough data to properly assess different practices, the firm’s teams in those areas, and the available career paths and opportunities.  Even if you end up in exactly the place you suspected,  exposure to other areas of law – like cross-training for athletes – will only benefit you and your teams with flexible thinking, adaptable muscles and perspectives, and ways to connect the dots in solving problems and growing the firm’s business.

Beyond choosing a practice to settle into, look wide at the industry itself over time.  There was a time where the claim that a JD was “very versatile” seemed like a joke – private practice, public service, and maybe, eventually, in-house roles seemed like the only viable paths.  But today it’s never been more true.  My own career is a good example of that and I love where it’s landed me.  The journey has been fun, but only because I never felt handcuffed to some preconceived notion of what I was supposed to do with my law degree and what it meant to begin a career in BigLaw.



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