David Haber, General Partner at Andreessen Horowitz, explains why AI software drives top-line revenue for contingency-fee law firms, unlike traditional billable-hour practices.
Insight
Haber: AI hurts hourly billers but multiplies contingency legal revenue
“If you're a corporate attorney, you know, and your, you know you know, junior attorney is 50 times more productive, you've just eroded some of the revenue that you can actually charge to your end client. Again, in this case, if you can make your attorneys, you…”
Insight
Haber: AI capabilities offer product differentiation, not long-term defensibility
“But the source, the AI-ness of that capability, in my opinion, is not a source of defensibility. It, it's largely differentiation. The defensibility of a software product resides, in my opinion, you know, from owning the end-to-end workflow, you know, from the…”
Insight
Haber: Contingency law firms have an unlimited appetite for AI adoption
“In lots of areas of legal if you make your employee 50 times more efficient, you're eroding your billable hour. In their business, they operate on a contingency basis. Meaning, You know, they only get paid if they make, if they win. So there's no sort of limit…”
Prediction Not checkable as stated
Haber: AI wedge features will commoditize and model moats are ephemeral
“Is that wedge product alone defensible? I would argue no, right? Today, it feels like magic to the providers that they're working with, but I think that capability is going to become commoditized over time. They may have an advantage because they've trained a …”
Prediction Not checkable as stated
Haber: Every healthcare company will eventually become a fintech company
“Certainly one of our core theses at ASICS and Z has been that every company is going to become a fintech company. And Julie and I have been riffing that, you know, Either every healthcare company is already a fintech company or is certainly going to become a f…”
Assertion Supported
Haber: Block executed a 40% workforce reduction driven by AI
“And recently Block executed a roughly 40% reduction in force. And they've been pretty candid about AI being a critical component of that decision.”