00:38:36 · Alex Rampell, Jay Madheswaran
[00:38:36] S1: So get good at something locally and then expand That's right. Just across the entire country because you have such high confidence around that one field. That's exactly right. [00:38:44] S0: And so I think we're gonna see that type of specialization, and I think we're also going to see the opposite, where some of the large... We're also working with some on the scale of Morgan Morgan. Like, some of them actually are coming together. So those ones that got us big are actually going around buying other law firms, because they realize with Eve, they can very quickly consolidate what used to be a very painful reintegration process, now can be done on exactly what the client wants, which is, hey, the client wants a legal outcome, and Eve is made just for that. So by doing that, they get to largely work away from a lot of the change management, workforce changes, operation changes, because Eve handles a lot of that for them, they can speed up their time to making that acquisition worth it. Well, the funny thing is that there's this movement underway to outcome oriented pricing. [00:39:37] S1: So like software, SaaS used to be per seat per month, and I used to joke it was like the tall, grandi, venti model that software is selling. It's like you go to, like, any SaaS company's website. This is why, you know, Claude can clone them all so readily. They all look the same. It's like $79 a month, $99 a month, $1.29 a month, you know, tall, grandi, venti. And it was per seat. And look at a company like Zendesk, which had $2,000,000,000 of ARR when they were
00:39:37 · Alex Rampell, Jay Madheswaran
[00:39:37] S1: So like software, SaaS used to be per seat per month, and I used to joke it was like the tall, grandi, venti model that software is selling. It's like you go to, like, any SaaS company's website. This is why, you know, Claude can clone them all so readily. They all look the same. It's like $79 a month, $99 a month, $1.29 a month, you know, tall, grandi, venti. And it was per seat. And look at a company like Zendesk, which had $2,000,000,000 of ARR when they were [00:40:00] S0: last a public company. [00:40:01] S1: They were taken private by Permira and Hellman and Friedman, and now they're like, uh-oh, how many seats do you need? Maybe zero. We need to deliver outcomes. So everybody in the software world is kind of... Like, in a lot of AI companies, we deliver outcomes. We charge for outcomes. The interesting thing is that the form of law that you focused on was always outcome oriented from the very beginning. But you have other types of law that are not outcome oriented where I guarantee all the clients would much, much, much prefer that it [00:40:28] S0: was outcome based. Right?
00:40:28 · Jay Madheswaran, Alex Rampell
[00:40:28] S0: was outcome based. Right? [00:40:30] S1: I mean, sometimes it's tricky. Like, I have a trust in a state attorney at McDermott, Will and Emery. She's very, very good. She's, like, so expensive. Like, I guess my outcome... The outcome is my death, so I don't know if I want that. But, you know, you you would prefer to just say, like, there is a fixed cost, but there's often this data... You know, in in their defense, the reason to charge by the hour is not so much to rip off the client, but there's data asymmetry between what I want in my head and how I articulate it. Maybe the the the scope of the project is changing over time. But, you know, other forms of law, I would argue they probably should look more like plaintiff's law. They should have outcome oriented pricing as well. Mhmm. Right? Or, like, immigration law, that should be outcome oriented. But, like, everything should be outcome oriented pricing, but it's hard because there's a data deficiency, if you will, in terms of, like, how... Will I win this case on behalf of the defendant? But I guess, like, how do you think other forms of... Like, you could probably expand well beyond plaintiff law. I don't know if you agree with me. But, like, how do you think about just, like, law in general changing? Because I kinda feel like plaintiff's law was ahead of everything that we're seeing right now. It's like everybody wants outcomes. Nobody wants to pay for the ingredients or the inputs. This was the only kind of field probably of business where it's like it was always outcome oriented, but kind
00:41:45 · Jay Madheswaran
[00:41:45] S0: of shouldn't other parts of law work that way? That is our exact belief as well. So the hard part has been, it is hard. When you're on the defense side, or even the plaintiff side, the question around a new case, is it ten hours of work, one hundred hours of work? In many cases, you really don't know until you take it on. And for plaintiffs, that is why we had to go so deep into each practice area, into achieving outcomes. And we were doing what is now coined long horizon agents last year. That's just what was needed to drive results, and now it's getting better and better to actually drive legal outcomes. And ultimately, I think what is needed for democratizing of law is from a set of facts, you need to know how much compute resources you need to arrive at a outcome. And that happens through both aggregation of, and better usage of data, and better usage of actually running the compute to achieve set outcome. And so we're doing both. So that is why we're laser focused on outcomes, and we want to drive outcomes. And eventually, this David versus Goliath thing is happening everywhere. It's not just big law or in house legal, those are just where the budgets are. So they actually can write basically a blank check for an interim period of time. And the forcing function around how much is this actually worth in outcomes to me is not known. You know this, when you go fundraise, you might get hit with an 100 ks check. What is the exact outcome of that? It's very hard to know what the value of this, but that is the only way they can price today. And that's because they don't know what the expected value of their work actually is.
00:43:31 · Alex Rampell, Jay Madheswaran
[00:43:31] S1: Well, that's the asymmetry as well. Like, It's don't like, okay, you need to hire a lawyer for your series C, man, what does that mean? Well, it could be very, very simple. It could be very complicated. So it's very hard to have a flat rate That's right. Because they could get burned in... Well, they can't get burned in the low direction. Right? [00:43:48] S0: It's like, [00:43:49] S1: oh, I charge you $25,000. I spent an hour on this. But they could get burned if it's like, I have to now spend four thousand hours of attorney time. I can lose money on this, which, of course, every single firm they... Oh, we... Well, actually, like, as you know, in corporate law, these are loss leader products, and then you try to make it up on the M and A or or IPO or something, but obviously a little bit different than plaintiff How do you guys charge? How did you think? Because I imagine you had a, it's not like on day one when you started the business, you knew exactly what you were gonna charge for what type of customer. I imagine your thinking has evolved on this as well. Absolutely. [00:44:19] S0: So I mean, actually weirdly enough, from day one, we started probably with the, what was it, tall grande? [00:44:28] S1: Tall Tall grande yes. Venti
00:44:28 · Alex Rampell, Jay Madheswaran
[00:44:28] S1: Tall Tall grande yes. Venti [00:44:30] S0: model? That's what we started with, because we didn't know any better. And then as we dug into it, we realized what they care about is outcomes. What they care about is how do I serve more clients? So that actually forced us to be outcome based from very early days. We're talking like a year and a half ago, which is pretty funny that's early in today's world. [00:44:51] S1: AI talk. Like dog years times 100, yes.