Well, thank you, chat.

Last week’s question: who staffs your technology?

The Sidebar question was not about AI on purpose, because members have said they want tech questions that are not always AI. It asked how firms staff their technology function: in-house, MSP, or a mix. Mid-size member firms overwhelmingly have an MSP relationship in some form, often with the MSP placing someone in-house and handling the rest. The gap members named is the strategic piece. Even with in-house staff and an MSP, a COO, CEO, or managing partner without IT depth leaves nobody leading the strategy.

Why the MSP model won

Debbie’s read: firms that hired everyone in-house ran the risk of one person holding the keys to the kingdom, with nobody knowing what to do if that person left. Outsourcing the foundational infrastructure fixes that, and an MSP on a month-to-month footing has to keep earning the business. She also sees IT shifting from a cost center to part of the service delivery team, which needs a different skill set, and tells the story of an equity partner who left for a technology company and came back as the firm’s chief innovation officer.

Budgets are moving, headcount is not yet

From the ALA Florida statewide retreat, Amanda says the conversation centered on IT’s growing share of the budget, historically 3 to 5 percent and now 5 to 7 percent. For mid-size firms she does not see it touching headcount yet. Her partners have heard that AI will replace first-year associates, but at her firm’s size she expects the effect to show up in dollars, not in the number of people. Debbie adds the catch: the people who can lead AI work in-house are exactly the people legal tech companies want to hire away.

AI adoption in 2026 is still messy

Rob asks whether firms have become more strategic after a 2025 of buying AI with no plan. Debbie, fresh from an ALA chapter event for administrators and managing partners, says the adoption stories are rough: mistakes, money spent, frustration. An hour of training does not transform a practice, and more training has never made people more proficient in Word or Outlook either. Most firms have pockets of experimenters who make it work. Rolling it out firm-wide is not a solved problem yet.

Additive spend on the same foundation

Rob’s question is whether firms are replacing technology with something more AI forward or just adding new categories of product on top. If it is additive, on the same infrastructure, governance, and data access, the same results should be expected. Debbie’s example: in a room of firms with a document management system, not one said it was their single source of truth.

The note-taker that converts skeptics

Amanda used AI note-takers at her firm’s partner retreat, fed the summaries into Claude, and is building the post-mortem from them. Partners who were opposed to AI saw it work and started asking for the devices. Her point is about finding the one problem a tool solves. Next she plans to show them how the same notes can reach the document management system, the legal assistant’s inbox, and practice management activities.

Wearables, consent, and the client who said no

With everyone carrying a recording device, Rob raises consent in two-party states like Florida, privilege, and what happens when a device gets lost. Recorders have moved from visible meeting bots to background desktop apps, which makes consent easier to skip, and Centerbase recently set its own internal guidance on them. Debbie describes a financial institution client that banned every note-taker on a thirteen person discovery call, and Rob wonders whether AI and recording terms end up in engagement letters.

Strategic planning: one connected problem

Amanda puts hiring at the top of the planning agenda, and expects mid-size firms to raise rates. Debbie connects the pieces: firms struggle to attract and retain talent, associates miss their billable hour targets while everyone says they are too busy for more work, and AI is supposed to make the work faster. Firms keep solving those separately. For one firm she listed eleven ways to close the gap between expected and actual revenue, and basic business hygiene, like everyone hitting their targets, closed most of it.

Transcript

Back after a few weeks, with a visitor

Rob: We are officially live. Sidebar Live. It’s been a few weeks, guys.

Amanda: It has been a few weeks.

Rob: Yes. And it’s been a few weeks, or only two, but that seems like a long time when you’re doing something every single week. Oh my gosh, Debbie, you have a surprise.

Debbie: I have a visitor. He’s going to talk to us about AI. This is my little buddy. Show him your cast. All the people on LinkedIn Live want to see your cast. Anyway, he’s hanging out here because he can’t go to school, because he has a cast.

Rob: You don’t want to club somebody with it, right?

Debbie: Exactly. So he can’t really talk to us about AI, but you know, he probably knows more about technology than half the people I work with. So can you put him on? I’m kidding, I’m kidding.

Rob: Amanda, this is a live conversation, just so you know.

Debbie: They know I’m kidding. They know I’m kidding. It’s like we haven’t gone live in a few weeks. And when I say half the people I work with, I’m really talking about, like, you.

Rob: Me.

Debbie: Yeah.

Rob: I’m always here to be your scapegoat.

Debbie: Thank you. Appreciate that.

Last week’s Sidebar question: who staffs your IT?

Rob: Okay. I have a few topics. It’s been a few weeks. I want to start out actually with our Sidebar question from last week. I thought the results were really, really interesting, and I think it’s showing a shift in the way firms operate. Amanda, since you sent the reply out, want to educate people on a high level what it said?

Amanda: So it’s a question that I’ve heard many times over the years, and it’s asked in a bunch of different ways, and it’s not AI related, because we’ve heard feedback that people don’t always want AI. They like tech stuff. And it was, how is your firm staffing your technology function? Is it coming from in-house, is it coming from MSPs, what’s the makeup? And overwhelmingly, mid-size firms, those that are our vendors, I mean, our members, have a relationship with an MSP in some way.

Almost everyone has an MSP now

Amanda: And that’s a huge shift. Debbie, you’ve been in this industry a long time. You know that, because firms were like, well, we have to have somebody in-house. And MSPs are responding by putting people in-house and then handling the rest of it. But the gap that we identified, that our members identified, that we’re still having a hard time filling, is that strategic piece. Because even if you have in-house, and even if you have an MSP, where a COO, CEO, managing partner doesn’t have the IT knowledge or can’t lead the strategy, there is a gap there. And so that’s what our members have found. But the staffing being pretty consistent now is different than it always has been, right?

Nobody should hold the keys to the kingdom

Debbie: Yeah, I agree. And I think that there’s a few things driving the MSP side of things. So you’re right. Lots of firms were anti-MSP. We’re just going to hire the people. We’re going to have them all in-house. But you run that weird risk of, like, one person has the keys to the kingdom, and nobody knows what to do if that person leaves.

Debbie: Whereas if you’ve outsourced foundational infrastructure to an MSP, one, you can have one that has to earn your business every thirty days, instead of signing a long-term contract, right? And so they are incentivized to keep you happy. And two, if someone internal leaves, it doesn’t make everyone feel like they’re completely vulnerable and exposed. So I think that’s part of the strategy, which I fully subscribe to, by the way. You know, I talk to clients about this all the time.

IT moves from cost center to service delivery

Debbie: And then the second thing that you mentioned, I think it’s a really important point, and we might have actually talked about this a few weeks ago, but making the point again: IT for many firms was a cost center. And I think the shift we are already seeing, and the shift we’re going to see even more, is that IT is part of the service delivery team. Internal IT, they are actually helping people think differently about how they get their work done, which means we need an entirely different skill set than what we’ve been accustomed to having.

Debbie: I’ve seen in larger firms where lawyers are moving into the IT and innovation department of the firm. We have some size issues, right? If you’re twenty lawyers, you’re like, how would I ever afford to do that? If you’re forty lawyers, you’re like, wow, that would be super interesting, how would we make that math work? But I think that there is a world where that math really does work.

The equity partner who came back as chief innovation officer

Debbie: One last thing I’ll say is, we have a client in the Midwest that had a lawyer, an equity partner at the firm, very, very technology focused, technology forward, was all up in the AI stuff before AI was even a thing. He left the firm to go work for a technology company, and came back as the firm’s chief innovation officer. Not as a practicing lawyer. Was an equity partner, left, came back, with a job as chief innovation officer. I think we’re going to see more and more things like that.

AI jobs inside law firms

Rob: And that has been one of the results. If you’re paying attention on LinkedIn to anything related to the results at ILTA, it’s the number of AI focused jobs in technology teams inside of law firms. It’s like twelve times what it was five years ago.

From the Florida statewide retreat

Rob: Amanda, for you, as you’re going into planning, right? And I’d love to hear about the Florida statewide retreat you were just at with the ALA. As you’re going into planning, are you thinking about this from a headcount standpoint? Or, you know, what you can share, what you heard others say, are you shifting some of that budget?

Amanda: Yeah, we’re not. You know, first of all, the statewide retreat was great. Shout out to the planning team. Two of the members of the team are at my firm, and they did a great job. The whole group did. If you’re familiar with ALA, or if you work with ALA at all, these statewide retreats are a great way to get a condensed amount of education, to meet with business partners, to build relationships without having to go to a big conference. So it was great.

IT spend, budgets, and headcount

Amanda: A lot of the conversation was around the impact of IT on budgets, and what that’s looking like, and whether that percentage is increasing. And I’ve said this before, right? Historically it’s three to five percent, and now it’s five, six, seven percent, IT spend as a portion of your budget. I don’t know that for mid-size firms it’s having a direct impact on headcount yet. But, you know, it’s funny. We had a partner meeting not too long ago, and they quoted something that they had read, which was, AI is going to replace all these first-year associates. Does that have an impact? You know, we had the conversation around how we feel about our firm, but people are still saying that all over the place. So I don’t know if at our size it’s going to have an impact on, of course, dollar amount, bottom line, yes. But number of people, no. Not yet.

Not every firm has someone like Amanda

Debbie: Amanda, your firm has you. And that’s a difference, right?

Rob: How much did she pay you?

Debbie: I mean, maybe not. Literally nothing. This is genuine, absolutely genuine and organic. Not everyone who sits in a chair like Amanda’s has the same ability to strategically lead their firm through AI adoption. And if you don’t have that, you have to either outsource it, bring in a consultant, whatever that looks like, or you have to think about how to staff that in-house.

The most poachable people in the firm

Debbie: And the thing that is terrifying about staffing it in-house, and this is something I’ve talked to every client that listens to me about this kind of stuff, is those are the most poachable people. So go ahead and get those people on a call with insert legal technology company here. There’s some percentage of a chance that if you bring on someone who’s got the legal process knowledge, they’re a trainer, a translator, a builder, they’re interested, that is someone who is poachable. And the amount of money that these legal software companies are willing to pay for that.

All the money in the world

Amanda: It’s law firms. I love my job. I would not go work in legal tech for all the money in the world.

Rob: So I’ll just say, all the money in the world?

Amanda: All the money in the world.

Rob: I mean, well, there’s a certain dollar amount. Everybody has a price, Amanda. Everybody has a price.

Are firms buying AI more strategically?

Rob: So, we’re talking about an IT shift. Amanda, you mentioned that you’re seeing firms spending more, from that three percent to five percent. I would say 2025, for me, looking at AI, was very much a, I’m just going to buy it. No planning, no strategy. I’m just going to buy it, add it. You’ve seen a lot of churn from that. Are firms really being more strategic? Are they understanding that maybe the approach last year wasn’t the right way to bring it in? I’d ask both of you that. Do you feel like something’s changing for the better?

The adoption stories are terrible

Debbie: Listen, I feel a little bit jaded. I always feel jaded, because I’m sure that there are firms that are doing it really well, and my joke is always that people don’t call me and say, everything’s great, can you just come around and see if there’s anything we could be doing better. But yesterday I was at an ALA chapter, at their administrator and managing partner event, and the stories about AI adoption in 2026 are terrible. The mistakes, the amount of money people have spent, the frustration around adoption. And, you know, it’s the same story. You can’t just train someone on a tool and expect them to then take that one hour of information and go transform their practice. It’s just not how it works.

More training does not make people proficient

Debbie: And we’ve talked about this, that we’ve proven that just giving people more training doesn’t make them more proficient in how they use insert product name here, including things like Word and Outlook. So I think most firms have still not quite figured it out, and they have pockets of people who are experimenters and dabblers and risk-takers and are excited about the technology, that figure out a way to incorporate it. But rolling it out firm-wide, I think, is just not a solvable problem right now.

More money, same outcomes

Rob: So what I’m hearing from you is, in 2026, the way firms fixed it, or leaned in more, or the way they’re going, is throw more money at it with the same outcomes.

Debbie: I think that’s, I’m sure maybe we have a listener out there who’s like, you guys are wrong, we have rolled it out firm-wide, it’s like a well-oiled machine over here, you should see what we’re doing. We would invite you, at two o’clock on any Thursday, two o’clock Eastern, to jump right on this call with us and tell us how you did it. My experience has been it’s pretty messy still.

Replacing technology or adding to it

Rob: Yeah. And the way I think about it too: are firms spending the money on technology they’re replacing, with something that is more AI forward? Or are they really intrigued by these new lanes of products that AI is creating, and it’s more of an additive spend? Because if it’s still more of an additive spend, and they’re still on the same infrastructure, with the same governance, with the same back end and access to data, arguably, it’s going to continue to happen.

Nobody’s DMS is the single source of truth

Debbie: Yeah. And in that room yesterday, I said something like, how many of you have a document management system? And almost everyone raised their hand. And I said, how many of you, a hundred percent of the people, that is your single source of truth? Not one firm raised their hand. Not even one. You just look at something like that. The fact that we can’t even agree that all of our documents should live in one place, without exception. Like, what year is this? I’m sorry. It’s just, yeah. Amanda is like, I’m living this, I’m living this.

AI note-takers at the partner retreat

Amanda: I’m not living this. I’m just saying it’s funny that you invest in tech and people don’t use it. But Rob, to your point and your question about lanes, I am seeing that more people are willing to try AI than they were a year ago. More people are willing to take bite-sized pieces of it. Prime example, we used AI note-takers at our partner retreat this past weekend. I took all of the summaries, I uploaded them into Claude, and created our post-mortem report. Working on that now. That report will be better than anything we could have created by handwriting notes. Capturing action items, capturing all of that.

Amanda: Just seeing that in action, so many of them are like, you’ve got to get me one of these devices, because I can do X, Y and Z with it.

Rob: And so, was it a Pocket?

Amanda: No. I bought Pockets, and they didn’t come in time. We bought the Plaud devices. I don’t like them as much. We’re going to return them now that the Pockets are here. Blah, blah, blah. I’d love to hear from people who picked one or the other. But anyway, seeing it in action, all of a sudden there were so many ideas about how can I use this, how can I run a meeting, how can I take notes from a client and get them to an associate who’s working the file. And so they might not be all in on agents yet, but this one thing solves a problem in their practice.

Find the one problem, then the tool

Amanda: And when we’re talking about implementing AI as a whole, it is finding, we talk about this over and over, finding that one problem in there that can be solved, and finding the tool that can solve it. And this is, again, a very small scale, just dipping our toe into the water. But people who are adamantly opposed to it see something like this in action and think, okay, well, I could see how I would use that. And then my goal is to get them drinking the Kool-Aid, and then I’ll show them how to put it into Claude, and how it writes directly to our document management system, and sends emails directly to their legal assistant, and action items directly to the activities part of their practice management. I’ve got all that planned. They just don’t know it.

Pockets, Plauds, and wearables

Rob: Well, yeah. I mean, Debbie is the one that put me onto the Pocket, which is what we’re all three using. I have my Pocket with me all the time. What I love about it is it has a desktop app, it has a mobile app, and it has the physical device. It’s interesting, because more AI companies are going into that hardware space. Just yesterday Facebook rolled out a new Tamagotchi type item, if you remember those, that you hook on to your belt loop, and it’s your AI with you always.

Debbie: Yes. I mean, I’ve seen the necklaces and the rings and that.

Rob: Yeah, yeah, yeah. It’s becoming more and more about wearables. And then, I’m not a lawyer, there’s the whole consent and recording. You’re in any session, you know, any meeting, and there could be four or five people who have Pockets in their pocket.

Consent, recording, and two-party states

Debbie: Mm-hmm.

Rob: And wearables. And, you know, if you live in a two-party consent state.

Amanda: Florida.

Rob: That’s dangerous, right? And so people are being recorded all the time and they don’t know it. Well, how do we deal with that? And then you have, from a legal perspective, lawyers who are really worried about privacy and attorney-client privilege, and where are those recordings going? And what do you do? I mean, I actually don’t know the answer to this. What if someone loses their Pocket? The Pocket falls out of their pocket and gets pocketed by somebody else.

Debbie: Right. So some of those things are just, it’s cool technology. I don’t know what I would do without all of my note-taking devices. It really lets me pay attention and focus.

Rob: Would it look like this?

Debbie: Yes, it does. It looks just like that. It looks like any random one of these little pieces of paper. I mean, I still do love writing things down, so I still have some of that.

Recording devices in an AI policy

Rob: It’s really interesting the way it’s going. Actually, as you’re thinking about AI policies, we recently, as of two weeks ago I want to say, at Centerbase had a conversation with the company about the proper uses and how to use recording devices. Because the other part of it is, it’s become easier. A lot of these have moved away from bots that join meetings into desktop recorders, therefore there’s less consent, and they’re recording in the background, which has its own set of problems.

The client who banned every note-taker

Debbie: Okay. And I mean, we have clients, I was just on a call before I jumped on here, who was like, stop all note-takers. And it was an initial discovery call with a client. There were thirteen people on the call. It’s the perfect call to record, to really understand. And it’s a really complex financial institution, and they’re just like, nope, nothing. No recording, no AI summary, no note-takers, no anything.

Rob: That’s interesting. Really interesting. I wonder, is that something that ends up in an engagement letter, around AI usage and recording, as it becomes more and more popular?

Clients arriving with answers from chat

Amanda: If we could just get our clients to stop putting their stuff through Claude and through consumer available products, we would be in great shape.

Amanda: I mean, it’s interesting, though. I’ve noticed all of the intake emails that come in to our firm, I see them, right? And now I can see a huge shift, even from a year ago to now, in clients describing the legal help they need, and it’s come straight from AI, straight from chat. And in some ways it’s helpful, because it now helps me direct things better, me or my marketing person. Oh, they clearly need this type of litigation. They clearly need this. But it is interesting how they’re already making their case. This is an open and shut case. And also using it to negotiate fees. We want to do a flat fee for the first half, and then we’ll go hourly after that. And it’s like, oh, okay. Well, thank you, chat.

What is on the strategic planning agenda

Rob: That’s interesting. So with our last eight minutes, I’ve been dying to go into these topics, and we can keep talking on it, but firms are starting to plan. We sent out the Sidebar email last week, and it felt like everybody was at a strategic planning session. What are we talking about in strategic planning right now? Debbie, you do a lot of these. Amanda, you just came off one. For firms, what are the hot topics, and what directions are people going? What are the themes?

Debbie: I want Amanda to answer first.

Rob: Amanda, what did you hear at the retreat?

Hiring is still the biggest one

Amanda: I think hiring is still the biggest one. Getting good attorneys that will do quality work is a struggle for mid-size firms. And it’s across the board. It’s not just our firm. I think that’s probably the biggest struggle, and we talked about it, but all firms are talking about that. And it’s funny, because that’s something AI can’t fix. It actually makes it worse, right? Because if AI is reviewing resumes, it’s been found to kick back people, doing a really poor job at that. So that’s something AI can’t help us with.

When does AI force different moves?

Rob: So you’re still adding attorney headcount, spending more on AI. When does it force itself into making you make different moves?

Amanda: I don’t know, Mr. Joyner. If I had a crystal ball, I’d boot it up right now. Law firms are going to be raising rates, mid-size firms, that’s for sure. I don’t see how they do it otherwise.

Connected problems, solved one at a time

Debbie: Yeah. And I think that this actually came up in the session that I did yesterday, too. There are a lot of connected issues. So, attracting and retaining talent: big challenge. Associates meeting expectations as it relates to billable hours: big challenge. Everybody’s busier than a one-armed paper hanger: big challenge. And then we have AI that’s supposed to help get our work done faster. So we’re struggling with attracting and retaining. We have additional capacity, because we have associate attorneys who are not hitting their targets. Everyone’s so busy that they’re throwing their hands up and saying they can’t take any more work, but when you look at the hours reports, you’re like, busy doing what? This is a challenge. And then we have this super magical tool that’s supposed to help us get this work done faster. It seems like that’s a one plus one plus one equals four situation, except that we keep trying to solve them all independently, but they’re connected. So how do you connect them together?

Eleven ways to close the revenue gap

Debbie: Right? Like, I did this analysis for a firm. I was supposed to do their strategic planning tomorrow, and they ended up having to postpone, because somebody had something, whatever, who knows. And there’s a ton of data here, but one of the things that I shared with them is there’s a gap between how much money they think they should be making and how much money they’re actually making. And so I gave them eleven things that they could do to close the gap, and they were things like, it was about rates, it was about, if everyone just hit your billable hour targets, gap closed, done, and now you have two million extra dollars to go do the thirty-seven things that you want to do.

Business hygiene before drastic moves

Debbie: Some of what I’m seeing is, there is an opportunity for AI to help us, and some basic business hygiene and basic people management things can help us close some of these gaps. And I think that these are the topics for strategic planning: attracting and retaining, motivating people and incentivizing people to get them where we need them to be, whatever that looks like for you. And then how do we talk about basic business hygiene practices that let us increase our revenue without doing drastic things, so we can pay for some of these other things.

Amanda: That’s funny. You know, when you go through strategic planning, sometimes it is just those small things that you really don’t want to do, or you really don’t want to enforce, that make the difference.

The Saturday newsletter, and joining Sidebar

Rob: I just say that law firms are getting, Debbie, thirty minutes of free advice from you that they should be paying thousands for. If you’re not watching our Sidebar Lives, you’re getting the free truth right here.

Rob: Yeah, all right. Speaking of Sidebar, if you guys missed the last time we went live a few weeks ago, we have started releasing a Saturday morning newsletter. Now, I know Debbie keeps saying there’s so much noise out there, but we were sending this newsletter internally, there was a lot of value, and we decided just to extend that to firms. Taking some of the top AI articles around legal, but applying them to what it means for a mid-size firm. So, just another reason to join Sidebar. We’re continuing to expand the topics we talk about. We would love, love, love feedback on questions you want to ask. If you’re not a member yet, go to gosidebar.ai, fill out the form, and Amanda might let you in.

Amanda: I think you’ve declined more people than me, but.

Debbie: Tough crowd.

Rob: But we’ll be back next week. Thank you guys for joining us. We’ll be back next week to talk more about AI, technology, and everything mid-size law firms. So we’ll see you then.

Rob: Not letting me stop it.