Laura Richardson is a former commercial litigator who moved to the in-house counsel world at Intel, which she calls “a world-class incubator for legal talent.” She joined Agiloft, one of the largest contract lifecycle management tech firms, as general counsel and corporate secretary in 2022. 

In October, the Corporate Counsel Business Journal named Richardson to its list of 50 Women to Watch in the legal industry. She leads an in-house team of eight.

Private equity giant KKR & Co. acquired a majority stake in the California-based CLM company last year as the company’s founders retired. KKR views Agiloft as a potential IPO candidate. 

Legal Dive’s conversation with Richardson has been edited for space and clarity.

LEGAL DIVE: Agiloft had a change of majority ownership last year. What prompted that?

LAURA RICHARDSON: It was just the natural next step. You want to have an experienced set of interested parties helping you achieve your growth objectives. And I think we were just lucky that the time was right to bring in new investors who are aligned with us in their desire to help us grow and scale. For us, it’s been a really positive change.

The CLM space is rather crowded in terms of the number of vendors. Are there too many?

No. I think competition drives innovation.You have the winners that emerge because they’re able to innovate faster, provide better solutions and scale. And so I do think we’re still in that “everyone’s-still-coming-to-the-table” phase. To me, that’s a great phase to be in, because it really is driving better value for customers, better innovation. It's going to mean that whoever emerges to be the top competitors will just get better because of it.

There are big changes in Washington. What does that mean, if anything, for the CLM market and Agiloft?

I don’t think it will have a material impact on the CLM market, other than it actually might encourage more people to start being serious and look for a replacement system or a new system of record for contract management. There may be some changes that are going to occur that will impact existing agreements or how people do business. And having more visibility into your contracts, into your processes and into your obligations is never a bad thing when there’s abrupt and rapid change. 

I think there was a good reason to start looking for CLM during the pandemic, because all of a sudden everyone was trying to ask themselves, ‘Well, what do we have in our force majeure clauses, in our agreements?’ And so that actually did prompt quite a few people to say, ‘OK, this is the right time for us to really get close to the data that’s in our contracts,’ and looking for systems that could help them do that efficiently and in a scalable, long term way. I think that the same might be true here. 

For your outside counsel, what type of billing models do you favor?

Like most in-house legal departments, we have a mix. We decide what type of firm we're going to use for specific matters. How we engage with that firm and decide to structure the fees is very much based upon the type of work that’s being done. And there is more flexibility now than there ever has been before. But also as in-house counsel, you have to be willing to do the work of really actively managing outside counsel, working with them to make sure that you’re getting the best impact for your spend.

Do you think AI tools will further erode, or even end, the billable hour? Is that naive?

I don't want to call it naive. I want to say that disrupting the billable hour structure is challenging, because it’s not just the way that clients are billed that depends on this structure. It’s the entire organization of the firm. It’s how credit is apportioned between attorneys. There are just so many factors in this and I think a firm that truly embraced something that was not billable hours would just look so different from the law firms that we have currently. Even with a fixed-fee engagement, people are still tracking hours and having to say ‘Well, this time was to this client and this time was to this client.’

I do think AI has the potential to be disruptive, but the question is, will it be the law firms that exist that change, knowing full well that they’re going to have to blow up how they've been doing things? Or is it going to be new law firms, new managed service providers taking this technology and using it to compete with the existing structures and replacing them? And in my head, it’s probably more the second than the first, because so much of the structure of law firms is based on that billable hour concept.

Do you sense that law firm inflation is moderating from the $1,500-$2,000 hourly rate for some partners’ time?

I don't see it moderating. Do I see it continuing to rise? I don't know. These are the A rates. They are, like anything else, negotiable, and if you’ve got a fixed-fee agreement, or you’ve negotiated other rates, those aren't actually the rates that you’re necessarily going to be paying. Also, how much time is that individual going to be spending on your matters? Are you actually going to be using them to be your outside counsel, or are they going to be managing senior associates, or other associates that will be doing the majority of the work? What you’re actually paying them for is a big part of it. And they have to be strategic. If you’re paying that much, that attorney has got to be more than just a doer. They have to be a strategic partner. They have to add value. And I do think that’s something that in-house counsel and in-house legal teams generally really need to be assessing: Am I paying the rates for this person’s work? And is that work justifying those rates? And that's an individual question that every legal department has to answer for themselves.

And I guess some GCs will seek a new firm if needed?

Yes. And I think a lot of legal departments are doing what their colleagues in other departments have done, which is more RFPs, more processes to select outside counsel, more vetting of those rates, of how they work. And that’s a critical part of the role – not seeing yourself as different from the rest of the business, but seeing yourself as part of the business. You still have efficiency metrics and bottom lines and a budget to manage, and that's important to the health and sustainability of your business. And if your costs start to grow exponentially you’ve got a problem.