Jay Madheswaran, CEO of Eve, says plaintiff lawyers reject many small claims because a case must earn at least $5,000 in fees to be worth taking.
Jay Madheswaran says Eve lets some attorneys manage five times as many cases, and a Los Angeles firm grew from about 100 clients per attorney to 500.
Alex Rampell argues the software market for plaintiff law is far larger than investors assumed, and suggests a small firm could become a billion-dollar business.
AI agents let plaintiff lawyers take the cases they once refused
Plaintiff law is a market capped by lawyer time, not by client demand. Contingency lawyers only take cases big enough to justify hours of unpaid vetting, so most small claims go unrepresented. AI agents that run a case from intake to settlement let one attorney handle several times more cases, turning legal software into a revenue engine that could make small firms very large businesses.
Takeaways
Labor, not demand, limits plaintiff law. Contingency lawyers need at least $5,000 in fees to take a case and still lose money on many. Jay says 96% of labor and employment cases are rejected because vetting takes about ten hours of research, and car accidents below the deductible go unrepresented.
Eve multiplies caseloads rather than cutting costs. Eve's agents answer calls, qualify cases, gather medical records, send demands and prepare settlement briefs. A Los Angeles firm went from about 100 clients per attorney to 500, so the product raises firm revenue instead of trimming headcount.
Investors misjudged the plaintiff software market. Alex calls it a shadow labor market. Legal software chased defense firms where the budgets sat, while plaintiff law ran on a phone and an email address. The outcomes this software delivers are worth hundreds of billions of dollars a year.
Unpublished case outcomes create a data edge. Fewer than one percent of cases end in published opinions, so most useful data cannot be scraped. Eve does not train on privileged client data but tracks success rates, and its Auditor product reviews every page overnight, finding missed information in almost every case.
An AI arms race with insurers is coming. Alex predicts insurers will use AI to deny claims more effectively, forcing plaintiffs to respond in kind. Jay notes State Farm repeats the same defenses and insurers value injuries with Colossus software, while plaintiff firms lack resources to draft strong demand letters.
Outcome pricing should replace per-seat software. Eve started with seat pricing and switched to outcome pricing about a year and a half ago. Alex contrasts this with Zendesk's per-seat model, which reached $2bn in annual recurring revenue, and argues corporate and immigration law should price on outcomes too.
Where law is heading
Jay expects 99% to 99.9% of representation work to be done by AI, with human attorneys still making the difference.
Routine exchanges will happen between agents, and more disputes will move to automated mediation.
Attorneys will act more like data scientists and spend more of their time on trial work.
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On this episode 3
Show 1
Firms will resemble software companies and specialise by practice area, while large firms like Morgan and Morgan buy smaller ones. Alex suggests some small firms could become billion-dollar revenue businesses.
Eve is close to running a fully autonomous end-to-end case and is limited by engineers rather than demand.