00:01:38 · Alex Rampell
[00:01:38] S1: Hi, everyone. I'm Alex Rampell, partner at Andreessen Horowitz, and I'm very happy to be here with Jay from Eve, cofounder and CEO. And everybody knows a lawyer. Right? Everybody knows law. But most people, I think especially in Silicon Valley, when they hear law and legal, they kinda think about corporate law. Like, really big, supposedly white shoe, I guess, is the term law firm is where you go to Harvard Law School and you bill $2,000 an hour. But there's like another side of law which actually is bigger, more distributed, and I guess we would call that plaintiff law. So like every time you drive on 101, see all these billboards, and maybe kind of talk about what is Eve, what form of law and legal AI do you focus on, and maybe a little bit about the industry in general. Because I feel like most Americans are familiar with it, but they don't necessarily realize... And especially for people, I think, here in Silicon Valley, they've heard of Wilson Sonsini, but they haven't heard of Morgan and Morgan. Right? And Morgan and Morgan is probably a lot more profitable than Wilson Sonsini, but like, what is plaintiff law, and also kind
00:02:40 · Jay Madheswaran
[00:02:40] S0: of maybe explain Eve in your own words? Absolutely. One, thank you for having me here, Alex. Always fun to talk about Eve. What Eve is, is legal AI for real people. People like you, me, not institutions, not in house legal, not the people that already have all the resources, but how do we actually provide legal services to people that otherwise can't afford it? And this is how the plaintiff law industry really came about. Because what ended up happening was, you talked about how Wilson Sonsini might charge $2,000 an hour, and that's really the business model. Lawyers' times are expensive, and you're trying to point lawyers towards more and more expensive time. The same is true for most lawyers. They have a lot of bills to pay, and today, legal work, the more work you put behind it, you can represent your facts better. You can get a better outcome. That is the state of world we live in today. To account for this, lawyers understand people can't pay 500, $600 an hour on a blank check for however long the case might take. So the plaintiff industry came about on working on contingency law. So what this means is they only get paid when they win the case for the client. And this is what's allowed them to even have any sort of leveling playing field with people versus institutions. And what Eve was aiming to do is really handle that whole thing end to end of how do you represent a client all the way from the very first call to getting them a settlement? How do you do that end to end thing purely with AI? And give that to the lawyers to then amplify the outcomes that can actually provide. And that's what Eve is doing, and think about giving David a slingshot to take down Goliath. That's what we're doing.
00:04:24 · Alex Rampell
[00:04:24] S1: So what I find fascinating about this is you really... I kind of think about Econ one zero one, where you have a supply curve that goes up into the right, and what does that mean? Because remember, there's price and quantity. So here's quantity and here's price. So as the price goes up, right, then the quantity supplied goes up. Mhmm. Right? So if I can make a $100,000 by doing something, wow, I'm totally in. But the demand curve is the opposite direction. That's right. So price and quantity go this direction. So the demand, the number of the units that I want... Actually, should say this this is quantity. This is price here. So price goes down, quantity demanded goes up considerably. And if I think about applying this to law, like, what if I have a thousand dollars of damages? Right? I can call a lawyer even for contingency. Right? They might not wanna take my case because if they take a third of the outcome, it's like they want a bigger case, and it's gonna require a certain amount of work. And AI really... It kind of liberates these market failures to a certain extent Because you mentioned kind of giving David a bigger slingshot. Lot of times, David just... Well, number one, if I have a thousand dollars of damages, I certainly can't pay $1,200 an hour for a lawyer. So, like, I'm out for that. We'll enter contingency law. The problem is that the settlement might not be big enough. So the lawyer might wanna serve me, but he or she has paralegals that they have to pay and so on and so forth. But if the software can do the work, now the market opportunity is so much bigger. Right? You can actually deliver justice for a lot of people that otherwise... They weren't priced out of it because how are you priced out of contingency? But it's not really in the interest of a lawyer. They want to serve a thousand customers that they get, but they can't. They have to focus on the biggest ones to the detriment of the smaller ones, because again, it's kind of to the right of that equilibrium point. And I don't know if you agree with that or how you
00:06:18 · Jay Madheswaran, Alex Rampell
[00:06:18] S0: think about that. That is exactly right. I think that is the actual market problem we have today, which is if you go back to first principles, if you're a person, you deserve a great lawyer to represent your case. And usually only need a lawyer when your back is against the wall. The best of us, the worst of us comes out this time, and we don't have the skill sets to represent ourselves. That's why this whole profession exists. That's why the legal system is about third of our government. It's for this reason. And today, what's happening is because lawyers still need to get paid, it's still bottlenecked on legal work. Today, if a lawyer doesn't make at least 5,000 fees off a case, they do not take it on. That is the market dynamics today. And even at 5,000, they're losing money on a lot of cases. They're really banking on few cases paying out very large. [00:07:09] S1: Because they're not even guaranteed to win, period. That's exactly right. So they already take that, that's the contingency aspect. That's exactly right. But it's kind of like, even
00:07:15 · Jay Madheswaran
[00:07:15] S0: if I win, I lose, because my costs of carrying the case are gonna be higher than the actual potential outcome even if I win. That's exactly right. I mean, think about, like, most people here have been in a car accident, fender bender of some sort. If it's below the deductible, no lawyer in America will touch that case. It's just not economically worth it. Even if deductibles 3,004 thousand dollars to an individual, that is a difference between a paycheck being gone versus not. And there's no representation they can get for that. And the reason is actually, from their side, we have to understand it from their side too. So let's say you've been getting harassed at work, and your employer could stop it. Like in hospitality industry, let's say, you could tell your customers, Hey, don't harass my employees, and change processes to make that happen. Today, that doesn't happen, because when that person gets calls, the lawyer on the other side has to pick up a call, field that call that's about thirty to forty five minutes of work, and then after that, go do legal research, because in employment in America, pretty much everything's at will, and you have to tie a problem to a protected class of some kind, and it's called causes of action. So you have to tie it to a cause of action, and that work requires them to go spend ten hours to go research your case law, research the facts, go back and forth, ask them more follow-up questions to see if they qualify. And while they spent all that time, they might still realize, Hey, this doesn't even make me $5,000 So that is why ninety six percent of cases on the labor and employment side, for example, gets rejected.
00:08:54 · Alex Rampell, Jay Madheswaran
[00:08:54] S1: So you can never find anybody to represent you unless you come out of pocket, many times people don't have money to come out of pocket. [00:09:00] S0: That's exactly right. So you just kinda take it, unless something really egregious happens. And that is the current state, and it's all bottlenecked on legal labor. And this is what Eve is meant to do, is to how do you now take that ten hours, is now immediate with Eve. A call comes in, Eve actually answers the call, and automatically uses his insights on the law firm to know whether or not this is a case the lawyer has to take on or not, and then hit the ground running with a demand or the initial preliminary work done. And that completely changes the economics of that type of case, and we're still at the very beginning stages. What's happening is Eve is getting more and more capable of handling outcomes end to end over a very long horizon. These cases take six months, a year to launch, and through them, probably a thousand actions back and forths that are happening. And as accuracy of Eve is getting higher and higher, this long horizon becomes possible. So the more this becomes possible, even more complicated work gets amortized down to a constant case. So now all these people without representation get representation. And if you really ask yourself, how many times in your life if asking for legal help wasn't a friction point, would you have asked it? That number is way higher than we think.