Having immigrated to the United States as an 8-year old, Akshay Verma - Director, Head of Legal Operations at Facebook learned risk-taking at a tender age.
Since then, he has traversed a spectrum of key legal roles at law firms, in business development and as a consultant for in-house teams before taking on the responsibility of leading legal operations and championing diversity at Facebook.
For episode 9 of #LegalMatters, we speak with him on the radical changes across legal ops and the legal industry, Facebook’s commitment to diversity and inclusion, his motivations throughout his career journey, and discuss a few trinkets from his personal life.
I went to law school after a long time of wanting to - become a lawyer and practice in the environmental field but didn’t enjoy the practice as much as I hoped I would.
And in 2012, I stumbled upon a company called Axiom and started learning more, as I talked to them, about the business of law. I worked for about 7 years at Axiom in a variety of different areas but mainly helping our clients run their legal departments better.
In 2018, Facebook was thinking about expanding their legal operations teams, and given my experience of working with a variety of legal departments, asked me if I’d be interested in the role. It didn’t take too much thought to realize the opportunity I had in front of me, and it hasn’t disappointed me one bit.
When I started at Axiom, we used to talk a lot about how entrenched the legal industry was in precedent. In fact, the economics of how law firms worked with their clients hadn’t changed, even as other industries continued to evolve and were in their 5 or 10-year evolution cycles.
The legal industry has come quite a way in the last 10 years. I attribute much of this change to multiple external stimuli, one of the most notable of which, is the global financial crisis of 2007-2008. It led to pathbreaking changes for both buyers and the sellers in the market.
Before it happened, General Counsels were favorably poised to get whatever they wanted from their CFOs with almost no questions asked. That model did not incentivize legal innovation, and it was convenient for legal leaders to use their firms for every matter.
There certainly was no concept of leveraging technology. Even e-Discovery was in its very nascent stage. And the thought processes around work segmentation or rationing time and resources for projects didn’t really exist.
Post the economic collapse, there was a shift in that dynamic. CXOs were more judicious about their spending and their generosity for the GCs started to wane. If you got $10 to do X amount of work before, not only was your budget cut to $9, but you also had to do X+Y amount of work. The idea of having to do more with less was sown. This was an important shift among in-house legal teams - the largest buyers in the segment.
Legal leaders could not go to their law firms for everything and needed to approach every task from a cost or resources perspective. That is a forcing mechanism and required the legal industry to innovate at a greater level than ever before. This really set the stage for legal technology and alternative legal service providers to gain far more traction in the market.
Legal technology and innovation have scaled a steep upward trajectory in the last decade. To put things into perspective - 3 years before I joined them, Axiom was a $50million company. By the time I joined Axiom, they were already a $120 - $150million company. That has been the scale and velocity of law firm challengers.
The number of companies reimagining legal processes started to proliferate. For example, SpotDraft and other CLM providers, which reimagine the contracting processes for businesses, or Axiom, which reimagines accessibility to legal expertise.
This meant that buyers in the legal market suddenly had more choices. And that has been the biggest driver of change - more options meant more competitive innovation. And this growth in legal technology and ALSPs has also encouraged in-house legal teams to think more deeply about legal operations.
Absolutely. And this change will be manifested by client-side pressures. Clients are now smarter about their options in legal services delivery. Not just are they aware of their options, they also know how to leverage them, and this is pushing law firms to change their dynamic.
For example, at Facebook, we’ve moved most of our litigation and regulatory work off of hour-based fees to a value-based pricing model.
With better technology and data at our disposal, there is a significant impetus at changing the way we conduct the business of law.
What helped me is that I was not hired into an amorphous role. And although complicated, my remit was very specific. Facebook wanted me to look at their external legal spend and recommend a way for us to control cost without compromising results and client service.
At the same time, I was walking into a company that had 37,000 employees at that time. We have also been aggressively growing in these 3 years, and we are soon going to be 65,000 employees strong.
But, this is a huge organization to walk into. And my first approach - for every single organization I have worked with - is to build relationships. This is critical, especially in the legal operations domain, because there are very few standards or mandates for legal ops as yet.
I started with making sure that I was engaging, building relationships with, and educating my stakeholders. This meant that I had to clearly communicate our goals and strategies and bring them along in this journey. Once you get that “buy-in,” it’s much easier to set up programs and engage in the necessary change management.
As early as possible. I truly believe that by the time that a company needs to have a head lawyer, one of the first few hires for the legal head should be - the head of legal operations.
Irrespective of the size of the organization, legal ops can bring in a lot of value by integrating technological expertise, knowledge management, and process optimization.
By delaying the foundational setup, many organizations leave the power of legal operations unrealized. And as an organization grows, it can get harder and harder to focus on strategic growth plans, and you’re left playing catch-up.
One of the things that people generally don’t consider is the opportunity cost of not solving a problem at the right time. Let me correlate this to a non-business phenomenon.
I have been passionate about environmental law and climate change since 1989 when I was in eighth grade. The issues back then were nowhere as serious as the issues we see in play today. Even back then activists and environmentalists argued about solving a problem that went largely unresolved and created compounding effects.
It is no different for legal teams. To help them understand the value of legal ops better, we need to communicate with them on the opportunity cost. Legal teams need to analyze the cost of their efforts versus the opportunity cost of not employing legal operations in their everyday practice. We need to talk to them about why the status quo is going to be an exponentially larger problem down the road if the fundamental issues aren’t resolved earlier in time.
It is necessary to leveraging data and metrics to evaluate costs and the potential of legal ops in the business.
A lot of it has already started to take shape. Not only are organizations more perceptive to legal operations, but this consideration has also percolated to academia.
I was not taught legal ops in law school. But there are now courses across law schools about legal operations, technical and strategic thinking. I helped one of the law schools in the area put together a course for legal operations. And I think you are going to see more of those in the upcoming years.
The Finance Team at Facebook has been one of my strongest partners since the start of my tenure here. And one of the most important things that come to light is that the core issue isn’t around overall legal cost reduction, but the judicious use of budgets.
We focus on cost savings on a per-matter basis instead of looking at aggregate cost reduction. The reason is - Facebook is growing aggressively. And, naturally, legal costs will grow with it. And it is important to look at the quality of this growth to ensure we’re spending wisely.
One of the very first models that I worked on with the Finance team, was to gather some data around what we had generally spent on different kinds of litigation matters. I used this data to show how the new model would reflect around 30 - 50% cost savings per matter. This is a significant change.
Once we have implemented the new model, we have continued to use it as a benchmark to measure our progress.
This data also helps generate follow-through cost savings. Because we are sending signals back to the law firms who are now engaging in competitive bidding for a contract.
I look beyond substantive experience to see how well a person fits into the overall goal of what we want to accomplish here. While still really important, substantive experience is the precursor to the interview.
During the interviews, I look for values like - grit and resilience, because we operate in a world of constant innovation and my teammates are expected to follow through on back-and-forth communication. I also like people with the ability to think creatively and critically. It helps because, for many of the issues we are trying to solve, there is no one-size-fits-all solution.
Another important factor is the growth mindset. People who can identify gaps, learn about them, and improve on them. This helps bring fresh perspectives to the team. Of course, another non-negotiable quality is the willingness to learn and know more.
Facebook is passionate about its diversity initiatives. Maxine Williams our Chief Diversity Officer has been working with us for 7 years now and we are going to make our Annual Diversity Report for 2021 public pretty soon.
We set some very lofty goals as a company. One of the biggest projects that I worked on when I first started at Facebook, was to take a look at our diversity initiatives with our outside counsel and figure out - what we needed to implement, what we needed to develop, where we needed to improve.
That has led to an annual program where we survey our top 40 firms by spends, across a variety of different diversity metrics. And then, we have an annual event where we recognize our champion.
Making diversity a data-driven operation goes a long way - instead of providing partners and firms anecdotal feedback on diversity, it helps us present the information to drive continuous improvement.
Incentivization goes a long way over penalization. Stakeholders should be made to feel that they are a part of the growth story instead of being coerced into the diversity narrative. Nothing is an intrinsic issue until the people who are involved believe it themselves.
Even companies who have instituted fee holdbacks or discount slashes for not meeting minimum diversity requirements haven’t been able to affect much change in diversity where it actually matters - equity partnership ranks at the world’s largest firms.
I have learned a lot about instituting thoughtful change through parenting. The rules are the same - force and coercion don’t produce results. And even if they did, these results would only be temporary. To build long-standing change, diversity needs to be an ongoing conversation, not a liability.
At Facebook, we hold annual feedback conversations with our firms about why diversity is important, discussed where we wanted them to improve, and inspected progress across all parameters. And now, it’s rare when one of our firms does not meet our minimum diversity requirements.
That’s not easy because we’ve publicly pledged to ensure that 50% of the billers on our matters have to be diverse under the ABA diversity model.
Instead of penalization, we have set up many structures to incentivize law firms to staff our matters with diverse lawyers. This ensures the lawyers get meaningful, high-value opportunities so that they can better develop client relationships. And if they want to make partners, they will be able to leverage their experiences and build a case for themselves.
Beyond my efforts with Facebook, I am also working on some initiatives around the industry that will get more large buyers of legal services to engage in a similar process. This can help funnel large market players to collectively push the AmLaw 100 firms to improve their diversity metrics within their highest ranks.
Facebook was one of the first companies to go fully remote back in March 2020. In fact, I am moving to a fully remote role.
The world has seen how seamless remote work can be if you put some intention behind it. Of course, there are new challenges - for example, building relationships, something I talked about earlier, becomes a little more difficult when you are onboarding virtually. But with the availability of technology, I am sure we can solve that problem too.
But that being said, look at every single earnings call since the pandemic started. Facebook has done a great job, which means that everyone working remotely has been doing a great job. We bypassed the challenges of commuting and can hire from a more diverse talent pool.
My father picked up our entire family from India and moved to the states in 1984. It was a brave choice to leave our entire support structure and enter a new country with no money. And while it wasn't my decision, I was still tangentially involved in that decision as a son. So I think that rubbed off a little bit and I have always had a high tolerance for risk.
This has certainly been true for the decisions I have made in my career as well. When I left the law firm, I was taking a 50% cut in my salary and my wife was pregnant with our first son. So while it took some thought and convincing, both of her and of me, I really anchored on the potential that was in front of me, as well as the fact that During the time I evaluated the worst-case scenarios and realized that none of the risks were life-threatening or life-altering.
This is also something that my team at Facebook hears from me. Whenever we have a change management exercise we need to consider, there will undoubtedly be uncertainty surrounding it. In those moments, it’s so important to ask yourself – what’s the worst-case scenario and work back from there.
If the worst-case situation is that something we do doesn’t work, we can always learn from there and move ahead. The fear of uncertainty or failure should never be a deterrent to innovation.