On May 19, 2022, AltaClaro CEO Abdi Shayesteh was interviewed by Gregg Cohen on his podcast, Conversations with Cohen, where he chats with and interviews experts across all industries. In their conversation, Shayesteh describes how top law firms have improved their operating efficiency, reduced associate burnout, and facilitated mentoring in a hybrid work environment by providing their associates access to AltaClaro’s training courses.
Gregg Cohen: Welcome back to Conversations with Cohen. As a real estate advisor to law firms, I found my clients, who are mainly managing partners and COOs [at law firms], sharing with me the issues they faced running their organizations, so I created this podcast to help my clients by interviewing subject matter experts on the topics that matter the most right now to them. One of those topics includes improving operating efficiency, reducing associate burnout, and how mentoring can be done in a hybrid work environment. With that, I'd like to introduce you to Abdi Shayesteh, the CEO of AltaClaro. As we like to go at the beginning of every episode, Abdi, we'd love for you to introduce yourself.
Abdi Shayesteh: Good morning, Gregg. It's a pleasure to be here. Thank you for having me. I'm Abdi Shayesteh, CEO and founder of AltaClaro, and I practiced corporate and banking law for over 15 years. I worked in a variety of settings. I was at King & Spalding here in New York as a transactional lawyer, I was also a lawyer at the Federal Reserve in New York, and then I also went in-house as general counsel for a global bank, MUFG Bank of Tokyo. I'm also the founder of AltaClaro, which we'll talk about in a few minutes about the journey, the pain that I went after to solve.
AltaClaro’s Beginnings
Cohen: There you were, you're in big law, you're in corporate America, and what happens? You identify a problem?
Shayesteh: Yes, there I was in big law, in the middle of Manhattan. I thought I had arrived, and I graduated from law school and realized, "Geez, I do not know anything." I spent over a hundred thousand dollars on my legal education, and the stuff about contract review, due diligence, managing a deal from start to finish, they didn't teach you in law school. They taught you how to think like a lawyer, but there's actually stuff you're supposed to learn on the job.
We had well-intentioned mentors inside the firm, but they were all busy. They naturally were billing, they were trying to bring in business, they were managing a global practice. To be able to sit down and walk me through how this contract works, how this negotiation should play out, or how I should do this or that, it took up a lot of time for them to do that. I got lucky that I found some mentors, but that's when I realized, "Why should luck be the basis of your success, especially after investing so much in your career?"
There were others that did not get so lucky inside the firm. Some folks were getting deals after deals, which is great, but a lot of folks just by nature of unconscious bias or sometimes just natural reflexes, they wouldn't get the same exposure. I really started to wonder, wouldn't it be great if you had this place where you can go and learn through a mock setting and a mock transaction? Get feedback on your simulated work product, like a professional coach. Kind of like if you're in college, you have a tutor that helps you out. Why not have one in your professional career? At any rate, this was just a fantasy.
I realized I spent all of my billable time this week on training, and that's a lot of money on the table. Even if I did it in New York, I realized my colleague in Texas didn't have the time that I did, and so now we have this disparity across the firm. That's when I really started to look at this problem…and I thought we ought to find a way to solve this problem, certainly for the young lawyer, but also for the firm as they're trying to recruit, train, and retain their talent. That was the impetus behind AltaClaro.
I went on, had a great legal career, moved through the ranks and became a senior lawyer, and then it came time for me to train young lawyers. Boy, I saw how challenging that was because you can't do this just by giving. Imagine trying to teach someone how to swim by showing them PowerPoint slides or trying to lecture and say, "You know, when you're in the water, do this." It's not going to work. You’ve got to put them either in the water or at least in the shallow end and then teach some techniques and make them try it out before going out into the deep end.
That's what I was doing. I was taking old deal documents, taking away client names and creating fact patterns and running young lawyers through it, and it worked. Then, I realized I spent all of my billable time this week on training, and that's a lot of money on the table. It's a thousand dollars an hour that I was billing that I was foregoing to put together meaningful programs. Even if I did it in New York, I realized my colleague in Texas didn't have the time that I did, and so now we have this disparity across the firm. That's when I really started to look at this problem, Gregg, and I thought we ought to find a way to solve this problem, certainly for the young lawyer, but also for the firm as they're trying to recruit, train, and retain their talent. That was the impetus behind AltaClaro.
Addressing the problem
Cohen: You're in this seat, and you're thinking, "Okay, I've got this idea." You're probably at that point thinking, "Well, let me talk to some other folks about it who are in the industry." What was the initial feedback of like, "Hey, guys, hey, Sally, hey, John, I got this idea, what do you think?" What was it from your peers? What did they think?
Shayesteh: Yeah, so great question because there were two points of inquiries that I started to make. One was looking at what the market was doing in other verticals, and there was this massive digital transformation taking shape in the education space in other verticals. But what existed in the legal sector were these brick-and-mortar old school conference halls where you go and you sit and you listen to someone speak for hours. If there was anything online, what they did was they filmed that session. Now you didn't have to go to it. They just posted that video with terrible audio and it wasn't engaging. It wasn't dynamic. It wasn't interactive, and it didn't take you in a simulated deal or environment.
Anyway, I saw that these things were happening elsewhere, so I knew that it was possible to leverage technology to find the best ways in education science to do this, but you're absolutely right. I needed to talk to folks, and so I talked to a hundred people, senior lawyers, junior lawyers, partners, firm administrators, professional development folks, just one by one. First of all, it just validated the pain, and then I tried to get feedback on how it was going to solve this issue.
Then, I tried to identify what the obstacles were in their mind. Firms are like, "Well, how are you going to teach them my way?" Well, listen, if you're trying to learn how to swim and you're a beginner, are you going to have Michael Phelps teach you the beginner stuff? No. There's certain beginner stuff that no matter where you are, it's bread and butter: what a rep is, what a warranty is, how operating provisions work. Let’s just talk about that layer first. We started to overcome those misperceptions in those conversations. They're like, "Oh yeah, you're right. I guess you get to Michael Phelps later after you've learned the fundamentals."
It Works
Cohen: Of the Am Law 200 firms right now, how many are clients?
Shayesteh: We have 60 firms in the Am Law 200.
Cohen: From an early idea to where we are now, to me, that 60 of those 200 offers credibility that there has been adoption of this. For someone who's listening to say, "Well, this sounds like a great idea, but it doesn't work for me." It's working for a lot of firms right now.
Shayesteh: You're absolutely right. There are firms that are now our clients and they've been our clients for over a year that are in the Am Law 25, Am Law 50. These are firms where people initially said there's no way, that this sounds fine, but it may not be relevant for them. It turned out that it is because of the way we do it, not only is it effective, but it's efficient. I talked to a lot of people to get the feedback, but then it was about creating the product and getting feedback from people using it. There's a lot of talk you can have, but once you start to get the product in the hands of folks, that's when you get real feedback on this stuff.
Our programs give diverse attorneys a leg up to raise their hand because we put them through mock scenarios and mock deals and give them feedback. Now, they have the confidence to say, "I can do this."
Who is it for?
Cohen: Who is your target audience? When you say getting into the hands of the people, who are the people who use your product?
Shayesteh: Our users are the associates, but the purchasers right now of our programs are the firms. Right now, we currently have courses in corporate, capital markets, and mergers and acquisitions, but we're also launching some courses this year in real estate transactions, technology transactions, startup law transactions, eDiscovery. In every course, there's a mock deal, a mock assignment that you normally would see land on your desk for your first few years. You go through it, you work on it, you get your hands dirty, you get feedback on it. Our focus right now are those associates in the years one through four categories. Eventually, we'll get into years one through 10. Then, there are those who have been there for a couple of years, but they haven't got a spectrum of experience. They need gap fillers or they need experience in a couple of other things in order to really advance in their competency trajectory. Then, there's laterals, folks who used to be litigators and they thought, "That's it, I can't. I've been in it for four years. I'd like to be a deal lawyer. Is it too late?" No, there are firms who put them in our program to get their hands dirty and learn this stuff.
Look, I think a big win for us are diverse attorneys. These are women. These are people of color. These are people that traditionally have left the firm, and one of the number one reasons they have left is because they weren't getting enough training.
Why is that? It's because the way you learn this stuff is getting thrown into matters, and so unconscious bias was causing this bringing in the same people on the same deals. A lot of people were getting left out, and then when they were given the opportunity, they didn't have the confidence to actually raise their hand and do it. Our programs give diverse attorneys a leg up to raise their hand because we put them through mock scenarios and mock deals and give them feedback. Now, they have the confidence to say, "I can do this," or, "I know what an asset purchase agreement looks like."
Anyway, we're helping them, and if you really look just at overall the new generation of lawyers, they're expecting these things. They're expecting to get trained inside these firms. Otherwise, they're leaving, and they have a lot of demands because they're used to training in certain ways, and so firms are recognizing that they got to make their associates happy. The number one reason associates leave after four years is because they didn't get enough training.
Internal Law Firm Training
Cohen: There are training programs in law firms, so does this supplement or complement those programs? Or both?
Shayesteh: Our job is not to replace internal training. Our goal is to help augment internal training, and the way we see it is that when it comes to the fundamentals of these things, that's where we come in and do it. Then, that leaves space for any internal training to be done on the more advanced stuff, on the more nuanced stuff. That's where you could even train on the job. I mean, at 11:00 at night, you don't want to be explaining what a rep is or warranty is or how a confidentiality provision works. We do that, and now, at 11:00 at night, if you have to explain something, you don't have to start from ground zero.
That's why these firms are appreciating what we're doing. We're leveling out the playing field. We're increasing the playing field as well so that whenever there's on-the-job teaching or internal training, they now have to spend less time on it. The other thing is, associates spin their wheels. The first time you see an NDA, you may spend 10 hours on it not knowing heads or tails. We help bring that down to about three hours because now they've done an NDA. They've marked it up on a client scenario and got feedback on it. They know the heads or tails of what this document is. They're also able to ask the right questions when they're given the assignment, so there's a lot less time spent and wasted. Otherwise, you have to write that time off, write all this time off and correct the mistakes and mentor the young lawyer, and all that adds up. We're bringing these efficiencies into the firms, which is helping them a lot.
We help bring the fear level down because the confidence level goes up, and they're spending less time spinning their wheels so that we actually do help with the wellness element of your associates.
More Benefits
Cohen: If I have to simplify it, it adds the opportunity for either, A, more billable hours or, B, a greater work-life balance.
Shayesteh: That's right. I think you hit it on the head. First of all, your billable hours are going to be more... they're going to stick. Yes, you're going to become more efficient, but your billable hours are not going to be written off, when the client looks at that bill or the partner has to evaluate the bill. Then, you're right, there's a better work-life balance because one of the number one reasons attorneys burn out is because they're spinning their wheels and they're stressed. We help bring the fear level down because the confidence level goes up, and they're spending less time spinning their wheels so that we actually do help with this wellness element of your associates as well, too.
Success Stories
Cohen: Can you give us a real-world example of how this was implemented so that we can sort of see it from the beginning to where it is now in an organization, in a law firm?
Shayesteh: There's several. We're creating these success stories all the time. There are firms that started out with us and they started perhaps with a small pilot in an office and they got feedback right away from their associates about how helpful this was. Then, they deployed it firm-wide, which was not just the U.S., but it was also globally. Then the feedback they continued to get across the firm was, "This has really helped me get my confidence. This has really helped me spend less time. This has really helped me sort of now jump in the game." We create these sessions where they can ask instructors anything they want.
Now, this is another dynamic that if that training was internally with someone who was your supervisor, then sometimes people are shy to raise their hand and ask questions. They're going to get judged. So, we create this space in our program in the live sessions where you can ask highly-vetted practitioners any question you want about these things. We're creating this space for their associates to really kind of own their career trajectory, have confidence to do more work and better work. Now, the firm has come back and said, "This is great. What else can you do for us?" This is how we're developing new courses because they said, "We want courses in lending transactions. We want courses in real estate transactions." We're getting the wishlist, and we're going back to all of our clients and asking for their wishlist to create these new courses.
I see that as a big success. I've also seen where associates at one firm have told associates at another firm about what they got at their firm, and that other firm said, "I'm interested in learning with AltaClaro." I think that was really cool. We now have that other firm as a client. Then inside firms, too, where one practice group is... Right now, we have courses in these practice areas, and the other practice group says, "Oh, I want what they have." That's what's causing this sort of, "Oh, can you create more courses in any of the practice areas?" Yeah, so it's really good to see that. I'm very humbled and very grateful.
Cohen: It means you're on to something.
Shayesteh: Yes. Word of mouth is the best way, right?
Cohen: I guess I have a few questions that came up from that, but I would imagine one potential stumbling block or hurdle is some firm might say, "Well, how do we know you're going to be around tomorrow if we're going to implement your product into our infrastructure,” if you will? I don't know, maybe that hasn't come up in conversations, but if it has, maybe you can speak to that and what the response to that is.
Shayesteh: Yes, we've enjoyed 500 percent growth from 2020 and going into 2021. Now, in 2022, our growth plans are still... they're there. We're going to continue to grow. We've just recently did a major financing round with two leading VCs. One in the EdTech sector, LearnStart, which is family of Learn Capital. They are the backers behind Coursera, one of the leading EdTech companies. As well as Bryce Catalyst, which is a leading legal tech VC. We now are backed by institutional investors that not only believe in what we've done, but they believe in the trajectory of our growth. I've also been grateful that throughout this journey, we've brought on to our team and our advisors really established people from both the legal and education space.
My COO, Rick Rattray, is a former executive of Kaplan. He also was an executive at Barbri. He really comes from the education side in scaling companies to a global level, and I’m really grateful to have him on the team. Also, former President of Bloomberg Law Scott Mozarsky is on our Advisory Team. Also, LexisNexis Executive Alex Withers. Also, we have folks on the education side. Ahmed Haque, one of the co-founders of Trilogy, which was the largest EdTech acquisition by 2U. We're poised to take this for the long run and continue to grow in the legal sector. We want to be there in all years of a lawyer's career trajectories. As you start to become a senior lawyer, skills you need to learn there. And, as you become a partner, we want to be there to help you with that journey.
We're teaching them with our vetted practitioners – they've all practiced for 10 years or more in an Am Law 100 firm. They've all been vetted for their teaching ability. We put instructors through a mock teaching session. We evaluate their ability to explain things, to have empathy skills, to have engagement skills. We really make a safe place for folks to learn.
Overcoming Objections
Cohen: For the segment of the legal community who you're meeting now or have been meeting in the last six to 12 months, I'd love to hear what their biggest objections have been and what your responses to them are. There may be people who are listening who have some of those objections, and I want to give you the opportunity to be able to respond to them so that it's just not a dead end before it's an opportunity.
Shayesteh: The natural initial objections come, "Well, we could do this internally, right?" That's when you do that cost-benefit analysis and you realize, "Well, senior lawyers are busy. Trying to get them to create a program with this level of depth is challenging for them with their billable hour requirements and so forth." Then, as I mentioned, for them, once they realize this is the bread and butter of things, the fundamentals of things, and that we're teaching them with our vetted practitioners – they've all practiced for 10 years or more in an Am Law 100 firm. They've all been vetted for their teaching ability. We put instructors through a mock teaching session. We evaluate their ability to explain things, to have empathy skills, to have engagement skills. We really make a safe place for folks to learn.
They start to see the level of engagement and the number of firms that have signed up for this and the feedback from them. Their objections go away because they realize, "Yeah, this is something that if I were to create it, I would do it this way, and these guys are doing it. They're doing it successfully." Firms are spending on average – this is actually data I don't know if you're familiar with – $400,000 for every associate. This is in the firms in the Am Law up to 400, but they're spending about $400,000 over a period of four years in recruiting, training associates. Then, they're seeing their associates walk out the door. Firms are telling us it's a strategic imperative for training and development. They know they got to do this, and they see us doing it well and doing it with others.
The other part is in our live sessions, Gregg, we invite leaders from the firms to sit in on the sessions to add to the conversation. Every class has that three-pronged approach. You watch an hour's worth of self-based on-demand videos. That's where you're learning the principles and concepts of things. The second part, you're doing an assignment based on the real world. It's self-paced. Here's your client. You're about to engage in this transaction. You’ve got to dive in and markup documents and review documents and submit in the portal, but that third part of the class is when you enter a live session. You get feedback from our vetted practitioners on the simulated work product. We invite senior leaders from the firm to sit in on the sessions to add to the conversation. Once you’ve learned what a rep is and what a warranty is, now, let's talk about what the firm sees.
We invite the firms to get involved, and that also eliminates the objection because when they sit in, they're like, "Oh, wow, that's great. That was a great session." Some senior lawyers would say, "I learned a lot in that session myself, but I was able to add color. I was able to say, 'At our firm, we see these types of clients, and so this particular thing we may come at it this way.'" That creates... Now, we're saving them time. We're also ensuring it. They get a chance to participate in it, so that's another thing that kind of eliminates any objection.
The Meaning Behind the Name: AltaClaro
Cohen: That's very helpful. I appreciate that insight. I want to say thank you so much for taking the time to spend some time with us today. Abdi, how do people get in touch with you if they want to reach out?
Shayesteh: Yes, abdi@altaclaro.com. You can also go on the website, altaclaro.com, where you can see our course list and how our programs work, and then I’m happy to connect. You can book a call, and It'll come to me. I look forward to the opportunity just to have an exploratory conversation.
Cohen: How did you choose the name AltaClaro?
Shayesteh: I was in Spain at the time. “Claro” means “clear,” and everybody when you're talking to them, they say, "Claro, claro,” – “Clear, I understand." “Alta” means “high,” and I thought, "Yeah, you know, this is about getting highly clear on what you know and what you need to know,” and that's where this idea came. It was like, "Yeah, that's what AltaClaro does – it helps you become clear on what you need to know and what you know.
Cohen: What a great way to end the show. Thanks again, Abdi, for joining us today. This has been Gregg Cohen with Cresa and this is Conversations with Cohen. Don't forget to leave a comment to share with us what topics you'd like me to cover next. Connect with us on LinkedIn and Instagram, and we'll see you next time. Thanks again.
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