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.
00:10:17 · Alex Rampell, Jay Madheswaran
[00:10:17] S1: Yeah. So it's a funny story. This is a true story. I was in Blue Bottle, a little coffee shop in Los Altos, and I was explaining Eve to somebody probably nine months ago. And I was explaining it because most people think of AI as like, oh, you're gonna fire everybody and cut costs, and it's all about cost savings. And it's like, no. Actually, like, if I use Eve, I make a lot more money for my firm. And it's not because I'm cutting costs. It's like I can take on more cases. It's actually revenue expansion. So I'm explaining this as as an outsider investor can, so not as well as you probably would. And at the end of this... I mean, we were talking about many topics, but Eve came up. And this guy comes up to me. He looks a little angry. He has a big dog, and I'm kind of afraid of big dogs. And he's like, what was that company you were talking about? I was like, uh-oh. Is he gonna get mad? He's like, I'm a trial attorney. I wanna try it. [00:11:01] S0: Oh, great. [00:11:02] S1: So I got you a new customer there. [00:11:03] S0: Thank
00:11:03 · Jay Madheswaran, Alex Rampell
[00:11:03] S0: Thank [00:11:04] S1: you. But the whole point is that you expand the revenue opportunity. But maybe kinda walk through, like, what do the dynamics... Because everybody is driven on 101 or I 95. I 95 is the corridor that goes from Florida all the way up to to Maine or something, you know, up and down the Eastern Seaboard. And it's like, I've driven almost all of that, and it's like, I feel like half of the ads are for trial attorneys, plaintiff's law. So they're obviously advertising there because you want... They they wanna get called. It's like, hey. I I I have this accident or I have this issue, but what do the economics look like? So, like, I I spend all... This is why, again, I think Eve is so fascinating because I have to turn down 90% of the leads that I'm getting, I assume. Right? Or, like, what what do the numbers look like? I spend money on a billboard. I get lots of inbound. How many of those turn into cases? How many of those cases turn into revenue? Maybe kind of like a before and after because you are, you're not a cost savings play for lawyers, you're a revenue expansion play for them. That's from the legal side. But what do the economics look like for