The Exchanges

Q And so what happened next? You get this, you get the response from the lawyers and you're like, holy shit. And then what?

A We, so we got all of those outputs and, uh, the thing that was happening kind of like simultaneously is Gabe had some friends, um, that were thinking about, uh, joining this company called OpenAI. We basically said, hmm, we're using GPT-III to do this. Let's just cold email Sam, um, Sam Altman and, uh, the general counsel at the time, whose name is Jason Kwan. I think he's the chief strategy officer now. And we emailed them the results and we basically said the, I mean, the body of the email, Was basically, did you know that the models were this good at legal? And we emailed them that they got back to us like pretty fast. We met with Jason first and just kind of like went through what we did in the process with Reddit. We showed them like our chain of thought prompts and things like that. And then we met with the rest of the leadership team on actually the fourth of July and we pitched them our idea for the company and we raised money after that.

AI assessment note: “Let's just cold email Sam, um, Sam Altman and, uh, the general counsel”

Q Or do you capture it or do you just let it go? Like, what is that?

A When I get really bad at it, I ask my chief of staff to force me to write a paragraph about why I'm going to take a meeting, full paragraph about why I should take a meeting. And it's so easy if you do it that way, because for 99% of meetings or events or whatever, You start writing the first sentence and you're like, I don't want to do this. And if you don't want to do this and you're like, this is a waste of time, probably the meeting or the event is also a waste of time for the things that I think are really important when I'm like, I got to write that paragraph. I could write 20 pages.

AI assessment note: “I ask my chief of staff to force me to write a paragraph”

Q What was the darkest moment as you were building this when everything felt like it was just caving in and you were about to give up or quit?

A One of them was super early on. We thought, we, we basically thought that there was gonna be a way to, like, one-shot ourselves into, like, building the company instead of doing it the hard way, and the way we, this was, like, um, early twenty-twenty-four, so about, like, a year and a half into the company, a little bit less. The idea was basically we were gonna buy this company that ended up, it was 10 times bigger than us, people-wise, um, and about the same, like, we were gonna, trying to buy the company For the same, a little bit higher valuation than we are valued at. We tried to buy it. We kind of like signed actually the deal, um, before we had the money. So like what old, uh, private equity funds used to do, uh, right? Like KKR used to do this all the time, where they'd basically like sign the deal for the leveraged buyout, and then they'd go raise the money. Um, it was a very common thing they used to do. And that's kind of what we did. And so we got the term sheet. We like locked them up for a certain amount of time, and then we went to go, uh, get the money. And of the money we were short, uh, uh, we got like a lot of it. We were trying to raise, um, like around like seven hundred million or something like that. And we got, I think like 500 in clean equity. And then the deadline was there. And we had an option. We could have taken like a, a loan basically with like p…

AI assessment note: “One of them was super early on. We thought, we, we basically thought”

Q for a second. I want to tie this to psychology, maybe, and maybe not. You can tell me I'm wrong. But when you're saying no to somebody, why is it we have a problem saying no to people? You don't want to take this meeting, you, you, this paragraph, you're, you're stressing, you're like, oh, this doesn't make sense. I don't want, is that because we want to be liked?

A The reason I think people have a really hard time saying no is they say yes to a lot of things that make them look good in the short term instead of being able to take the pain of Ignoring it and then doing so well because you ignored it that people back off. So let me give you an example of this. If a third party or like an investor or someone like that says it's really important for you to hire a certain person right now, right? What you might end up doing is you take a bunch of meetings with that C-suite, right? And you take tons of those meetings because the investor says, you know, you're having revenue problems, right? And the reason you're having revenue problems, it must be because you don't have a surgency suite, right? But deep down, you're like, the reason we have a revenue problem is because there's a problem with product. It has nothing to do with, like, anything that's going on here, right? It's not because we haven't hired a chief revenue officer yet. It's because the product isn't good enough. But that has a delay. And so what people want to do is they want to start making improvements so that a third party can see it immediately. So they'll start doing the meetings, because every time you do that meeting, you get a pat on the back from your VC or someone that says, good job, you did that meeting, you're progressing. The alternative is you ignore everyone, and e…

AI assessment note: “they say yes to a lot of things that make them look good in the short term”

Q How do you maintain urgency? You're, you're sort of in a sprint here.

A Yeah. The best way to do this is hiring. There's no other way to do it. Um, it is hiring and culture. And so what you need to do is hire a very good team that all feels the same way you do. And what your job then is, Is how do you instill a sense of urgency into the rest of that team? And then those leaders will instill it into their team, and then those leaders will instill it into their team, right? So it's more, how do you create a culture and a hiring process that hires and promotes people that have a sense of urgency and can instill that into the rest of folks? Because that will scale. If it's just you poking, you're just going to cause so much thrash that the company's not going to move in a good direction.

AI assessment note: “The best way to do this is hiring. There's no other way to do it.”

Q What do you think of the second and third order consequences of slight variations in skill being leverageable to a degree we've never seen before?

A I think it's the same thing that happens in sports, right? So like, in sports being a little bit faster, compounds, right? If you're a little bit faster than your opponent in basketball, right? You will just slightly get the ball in front of them every time. You will slightly put your hand up a little bit higher to get the shot off, right? You will slightly put your hand in front of their hand before they pass the ball and block it, right? Like, I think it's the same thing, where You can take those competitive advantages, and now, all of the sudden, you're winning most of the time, right? And I think that that's what's gonna end up happening in knowledge work, where, you know, if an attorney is, is slightly better or slightly faster, they're gonna get all the work. And that, that kind of already does happen, by the way. Like, you have this thing at a lot of the law firms where, you know, you call them Rainmaker partners. And, you know, there's an argument of, like, how many, how much better are they at every single task than everyone else? Like, Probably not that much better, but they're slightly better at a couple things, and then those things compound, and then the vast majority of work goes there.

AI assessment note: “they're slightly better at a couple things, and then those things compound”

Q I was talking to somebody in private equity a couple of nights ago who spends a fortune on legal fees, and they had mentioned one of the things that surprised them the most is they're not seeing those legal fees come down at all, despite the firms that they're engaged with using tools like Harvey on the back end. Why is that?

A I think that there's two reasons for this. One is the tools at this point do task automation, but they don't do, like, entire workflow automation, so it's hard to exactly say where the savings are, right? So my point with this is, like, the, the tools are not at the point where they can automate entire diligence, right? They can automate Bits and pieces of the diligence, and so I think it's hard for the law firms right now to come up with exactly how much time have they saved, exactly, you know, what are the benefits and ROI of these tools. That's going to change really, really fast, and we're starting to see that change fast now. The other thing that needs to happen, I think, is the in-house teams, as they adopt it more and more, they understand what the law firm could be using, right? And for a while, the in-house teams weren't really adopting this. They were about a year behind. And so they didn't really have insight into like, what could you do with the tools, right? Like how much of this work could be done by AI, et cetera. And I think that there needs to be a lot more communication between the two sides and a lot of what we're doing with our product. And this is what I was talking about earlier, where it's not just a product. It's basically like, how do you map the product onto like, what are the problems in the industry? And move the industry forward. A lot of what we're…

AI assessment note: “tools at this point do task automation, but they don't do, like, entire workflow automation”

Q How would you explain Harvey to somebody listening to this who doesn't work in legal?

A What we're doing is building a system for lawyers to use all of these models to do their work in a much better way and much more streamlined way. That's an incredibly broad explanation for what the company does. Another way to think about it is we are basically tracking the progress of all of these models in the system and applying it to an industry. Right? So in a way, what you're kind of doing is building like a legal brain, right? And it's the same thing that other folks are doing in other verticals, like in the medical vertical. It's like what you're trying to build over time is a medical brain. There are a lot of things to break down there where what you have to do is, okay, where is a model going to do a lot of the work? Where is a human going to actually be reviewing this? How do you change the processes and structures of legal departments and law firms? How do you change the Process of delivering these services. It's less just, hey, we produce a product. It's actually these products are transitioning to how does the product redefine how the, the profession actually operates.

AI assessment note: “building a system for lawyers to use all of these models to do their work”

Q What was the process from that not working out and the moment you knew this wasn't gonna happen, you see that as failure to getting to that point where you, what was your inner monologue?

A It's like, 24 hours. Um, it was really fast. And I think, like, The reason it was so fast, and by the way, I've had a lot of periods like this. Like, I've had other times when we've, like, failed massively, and I have, like, 24 hours of, like, it's all over. And then you, like, wake up the next morning, you're like, we can do this again. I mean, hell, that happens once a week, probably. You get used to it. And, like, I think I've had a lot of times in my life when I thought everything was over. Like, when I, like, kind of basically failed out of my first, like, high school I went to. I was like, this is over. This is done. I remember when, like, I took the LSAT for the first time, and I didn't quite get what I got. I was like, okay, well, that's over. But my point is, you just have to get used to this, of like, it's over, it's over, it's over, it's over, and then everything's fine. And now, you know, you take those moments, and then you just get like a, you build resilience. Like, you build resilience for, for losing, for, you know, suffering, things like that. And I think you get the same thing in the company. And one thing that gives me I'm more confident in the company today than I've ever been confident about the company, which is weird because externally we face way more threats than we did last year. It's not even close. Like, it's 10 times the amount of threats as we did…

AI assessment note: “I have, like, 24 hours of, like, it's all over.”

Q We've talked about a lot of things you got wrong today. What do you think you've gotten right?

A I'm really proud of my team. Um, like insanely proud of my team. And it's, it's hard because I, I like, I have very high standards and I'm harsh. Uh, and the, actually, if they listen to this, this is probably the first time I'm, I'm saying I'm proud of my team. Uh, no, I, but, like, I can definitely be, like, pretty harsh. But I think that, like, we have built a very resilient group of folks, um, and they really care, like, about the company. And it feels like, if, to me, if we can survive the next, like, kind of chaos years, I think that we are really set up for the long term. And I'm really proud of that because I'd rather that be the case than we're like a flash in the pan company. And we've done a lot of things that are really good for like short term growth and all that. Um, but we haven't set ourselves up for long term. But I think that because of the choices that my co-founder and I have made and a lot of the choices on who we've hired and how we've thought about structuring the team and what we've thought about building and how we've done our brand and like all who, which customers we want to work with. How we treat our customers, all of those things. We're really trying to think about the long term. And we've sacrificed some ground on the short term, by the way. Like, we've sacrificed a decent amount of ground to competitors because, you know, we really wanted to land…

AI assessment note: “I'm really proud of my team. Um, like insanely proud of my team.”

Q How do you assess resilience when you're hiring somebody?

A You can ask them, like, I, I try to spend a lot of time on, like, tell me about your life, like, what do you want to do? What do you like doing? Like, tell me mistakes you've made, things like that. Like, you can do it in the hiring process, right? What I like to do a lot is I go through, like, a Google Doc, and I do, like, a live editing process, um, so I'll, like, come up with a Google Doc that has, like, a bunch of questions or, like, a project to do, and we'll do it live async. Part of that is because I really like to work async, and so I need to be able to work with someone async, and it's a good, like, litmus test to tell that. The other thing that it does is, You can tell when some people, like, take too long. Like, they'll write, like, a 20, you know, paragraph response to something, and you're like, you're just hedging constantly. Like, this was basically a, like, option A or option B question, right? And you can tell that if they're massively hedging like that, what are they gonna be like in high-stakes decisions?

AI assessment note: “tell me mistakes you've made, things like that. Like, you can do it”

Q I like that. Do you think stress focuses you?

A Yeah, massively. Um, I think it's less It's less stress. It's going through stress. And then that reduces it for the next thing. Like, I think like one of, one of the things that I've, I'm good at for, this is maybe not even good at, it's just, I do it a lot and it's could be good or bad. I make decisions really fast, like really, really fast. And I do that for two reasons. One is I really care about knowing what's going on in the company the entire time. And part of that is just because I've never Taken any time off really. And so you just, all you have to do is update my contacts window from like the one day to the next. That's it. Like, that's all I have to do. And the other part of that is I've also done every part of the company. Like I've played every single role at the company at one point, like I've run everything at some point and then hired somebody to take that. And so that gives me a lot of com confidence and I know what's going on and I have a good pulse on the company. And then the second reason is Everything that I regret at the company or whenever I regret something, it's not making a decision fast enough. It's not, I made the wrong decision. What I've always regretted is sitting at the bottom of the stairs for too long instead of jump up a stair and then I'll figure it out and then jump up a stair and I'll figure it out and then jump up a stair. I figured it ou…

AI assessment note: “Yeah, massively. Um, I think it's less It's less stress. It's going through stress.”