Opening Remarks With Steve Gunby: Navigating Artificial Intelligence

May, if I could, I just think next time we don't need quite as long an introduction, but if you could record that and play it for my kids, I really would appreciate it. Thank you, and welcome all of you to coming, those of you here for the first time and those of you who have returned. I think it's an amazing program tonight. I just want to do three things up front. One is maybe frame the AI question, not as an expert but as what I am: an interested, worried, excited non-expert. And what are the questions I bring into this room? I suspect they might overlap with some of the questions you're bringing into this room. So let me take a minute on that. Second, if I can, I'd like to explain this series that this is a part of and why we thought, in the midst of all the legal education each of you get, this might be something different that not only talks about the legal challenges you face but some of the business pressures you all are being asked to confront at this point in time in many of these major issues that are going on. And third, maybe I'll add a little bit to her advertisement about FTI, okay, if that's all right. All right. So in terms of the AI, let me look around. I don't think anybody here is 22 years old. Anybody here 22 years old? We have all heard many forecasts of transformative change because of technologies, right? And I think most of us, when we hear that, have a degree of skepticism, right? I mean, I am by now supposed to be able to read my favorite publication, The Wall Street Journal, sitting in the backseat of my car with nobody driving it, right? And I don't do that, by the way, in case you're worried. For those of you who live in Washington, I do drive my own car. We don't... AI, I am sorry, virtual reality. It's a fundamental technology for my kids' computer games; it's not affecting my life right now. Blockchain is affecting a lot of technical applications; hasn't changed my life so much. So I think one of the things we first hit when we hear these fundamental technologies are going to revolutionize the world: really? And how fast? I think we then go beyond those questions, if you're anything like me, and say, and in what form? Do we even know if it's going to be revolutionary? How is it going to be revolutionary? My wife was, for a variety of technical reasons, at the beginning of the internet. I will tell you that nobody at the beginning of the internet had heard of a name Google. They weren't thinking about search engines. Nobody thought there would be a trillion-dollar market cap of Google, of Facebook, of Instagram. And I don't think anybody at that point in time thought about the social issues that were going to come out of those and the need for regulatory attacks on those issues. I don't think most of us in this room would be here if we thought it was a total fad and a total hype. I think we all know this is real. But the question of how this actually unfolds, does it unfold the way people are predicting on a radically different mechanism, is critical to what happens. Even though none of us, I think, believe this is a fad. I did think there were two quotations I couldn't help but read because, I don't know if you saw yesterday, two people were given the Nobel Prize for basically fundamental research. It was basically people who did the origins of neural networks, which is the conceptual underpinning of AI. And I thought the quotations they said were important, and so I thought I would share them. Geoffrey Hinton was one of them. He left Google not because he doesn't think AI can be a powerful positive force, but because he's also worried about the negative forces of AI, and he wanted to be able to speak openly about both of them. What he said about the power of AI hit me. He analogized it to the beginning of the Industrial Revolution. He said, 'The Industrial Revolution, for the first time, machines could be stronger than humans. The steam engine allowed machines to be stronger than humans.' And you can think about what that insight actually translated into: essentially all the wealth we have today in the last several hundred years. And he said, 'AI is comparable to that. Instead of exceeding people in physical strength, it's going to allow machines to exceed people in intellectual ability. And we have no experience of what it's like to have things smarter than all of us.' His colleague who won the Nobel Prize, John Hopfield, said, 'The state of AI today is like the state of the world when we split the atom. You had visions of nuclear fusion, of energy that is free and safe and environmentally sound, and you also had the fears that all of us know about of nuclear.' I assume all of us have gotten past the first set of questions: is this really fundamental? But this still leaves us with the second and third set of questions: how is it going to unfold? How fast is it going to unfold? In what way is it going to unfold? And I feel stupid when I have those questions, and so I thought maybe some of you also feel like maybe I'm the only one in the room who doesn't fully understand this. So I wanted to give you a little comfort, not from a statement from me, but a guy who has better tech credentials. How many of us have heard of Bill Gates? Bill Gates in 1995, which I understand is a million years ago in tech, talked about a different technology, but he made a generalization about all new technologies that are fundamental. He said, 'You know, when there are real revolutions in technology, they tend to have one thing in common, which is that we always overestimate what's going to happen in the next two years and we dramatically underestimate the multiple ways it's going to affect us in the ensuing 10.' We have a terrific set of speakers here tonight to help elucidate where we are today: Rob, Beth, Kay, Luciano, Shannon, Danny. They are incredible speakers, they're incredibly smart. I don't think a single one of them will sit here tonight and tell you they know exactly where this is going to be in the next 10 or 12 years. What I think they can do is, if you remember your Platonic reference from college, get us closer to the front of the cave, through some of the potential distortions, a little closer to understanding what is real and what is not real, and position us to stay abreast of this as this changes and be nimble and help our companies be nimble and react to those changes. I'm excited about this. I'm hoping it adds to your thinking as we go forward. Let me switch briefly to the second topic: this series. Why did we start this series with The Wall Street Journal? You have plenty of opportunities to get legal education, and we're not lawyers. Our sense is that there's been a phenomenon that has made a major difference for the general counsel's life, dramatically different than when I graduated from law school and had that hapless and brief legal career that she referred to, which was the general counsel's role has become increasingly important and broad. Let me give you an example of that, a very prosaic example that I suspect you can resonate with and generalize from. How many of us have done cyber breach simulations? Right? You get the piece of paper, you sit in a room. So this is a ransom note. You got the ransom note, okay. You have a whole series of questions. I got the ransom note. Some of them are legal questions. A lot of them are not. Is it real? You have an investigator in your room saying, 'Yeah, I don't think they really have that much. I wouldn't pay the ransom.' Do you trust that person? Do you think they're competent? Should we hire somebody else to look at it? Should we talk to the FBI? And you have a million communications questions. What do I say to the board? What do I say to the regulators? When do I say it? What do I say to clients? What do I authorize the IT help desk to do? Some of those are legal questions; a lot of them are not. I get in a room, I listen to everybody. I turn to Curtis. Curtis is my general counsel. I said, 'Curtis, what do we do?' He's not the general counsel; he's the chief line manager, my chief line manager in charge of a crisis. And that wouldn't be interesting if that's the only crisis and it's just me and Curtis. I think that's true more generally. Two things have happened besides that role broadening. One is the number of potential crises and corporate events that can affect a company have soared. When I graduated from law school, I wanted to be a general counsel. I was like the only one in my law school class. I was actively discouraged by every professor, even though at that time the leading lawyer in America, Nicholas Katzenbach, had just taken the general counsel role of IBM. 'It'll be boring. They have nothing to do.' How many of you feel that way? Why is that changed? I think part of it has to do with the purpose of this series. There is this burgeoning number and type of crises. We did a session on the black swans. Black swans are supposed to be rare. Are cyber breaches actually rare? They're not. And more to the point, there's 35. My colleagues and I put together a list of 35 potential things that keep general counsels up at night, whether it's cyber breaches, supply chain failures, the effect of a hurricane, foreign government seizing your assets, blah blah blah, Me Too events today, being asked about whether your predecessor's predecessor handled a Me Too event 15 years ago. 35 different potential things. Crises happen. They happen more regularly, and the consequences of handling it well or not... Sales crises. How many companies have sales crises? A lot. Or challenges. How many of us remember the American Express? Nobody, because they handled it well. How many of us remember Wells Fargo? The number and potential number of crises that a company can hit in major corporate events has soared. The consequences of getting it wrong has magnified. And the general counsel is being asked many times to be the chief line manager in charge of the crisis, a legal issue and a broader issue. So we thought an opportunity to have that broader discussion might be of use to you, not just with panel experts but with an ability afterwards to share your experience with colleagues. So we have consciously after this session an hour downstairs for you to go and meet colleagues and talk about what you're worried about at night and how you're dealing with it. And we hope this is useful. By the fact that some of you are coming back, we assume we're doing something right. But if you have thoughts on how we can do this going forward, we'd appreciate it. Last bit of advertisement. Many of you haven't met us before, and this is part of the reason why we're changing this. But I think as a consequence, a number of people say, 'Yeah, I didn't know FTI did anything having to do with AI.' So I am forced to do a little bit of an advertisement. The way I get it to be of interest is let me make a bold statement that will make you roll your eyes and then see if I can justify it. Okay. It made everybody else roll their eyes last time I made it, so I'm predicting. Okay, which is that my company, our company, is involved in helping companies on more major corporate events and crises than any other professional services firm in the world. The reason you might roll your eyes is you say, 'If that's true, I should have met you before.' So let me explain the gap and see if it's convincing. The reason we haven't is because historically we've gone to work almost entirely through outside law firms. We did the Wells Fargo investigation with Sherman & Sterling, the American Express with Debevoise, the Fed Bank with Clifford Chance, I don't know who with Wirecard, I think it was WilmerHale, with... Theos is with WilmerHale, Luck and Coffee we did with Kirkland & Ellis, we did the bankruptcy of Hertz with White & Case, the bankruptcy of PG&E with Milbank. We encourage our people occasionally to go meet our ultimate clients, but that's not been the history of our company. We have 6,500 professionals around the world, which I suspect is larger than almost any of the law firms you work with, and all of them are working either helping prevent those sorts of events or after those events. Just to be a little clear on who we are, we have a bunch of different segments. Compass Lexecon, which most of you probably don't know is part of FTI. How many of you knew Compass Lexecon was part of FTI? Nobody raises their hand. It is the leading group of economists in the world for testifying on big cases and the leading group of antitrust clearance every place around the world. So you can think of AT&T Time Warner, colleague was just testifying in the Kroger case on the West Coast, and so forth. That's our group of economists, Compass Lexecon. Our restructuring business is not number one in every market around the world, but we're now number one or two in more markets around the world. So 15 years ago we didn't get Lehman Brothers, but now we get all the major global cases like Hertz or Steinhoff and so forth. Our investigations group, I gave you a set of examples of the investigations we do. We play a couple roles in investigations. We have deep experts in individual tech elements like cyber breaches. We have cyber. Where's my colleagues who do cyber in the room? They're okay. Cyber breaches. We also have underpinning that core data analytics and e-discovery capability so you can find out what happened 15 years ago in that sales practice and provide that to the FBI in a way that's credible. Okay, that's what we do in investigations. And across all of that, we have communications. Colonial Pipeline had a crisis of figuring out what was going on. But in every one of these things, you and the rest of the C-suite not only have to figure out what's going on, you immediately have a communications issue. And so we have crisis communications that attach all that. Notwithstanding our history, I've gotten some of our shy people to say it would be okay to meet our ultimate client. And so therefore we decided we would do this. We thank you for joining us. Please participate in the conversations. Please engage. Please stay after and meet each other. And if you have ideas of how we make this be more useful going forward, we'd appreciate it. Thank you for coming.