Inside Harvey AI: $11B, $300M ARR, 960 Employees, 12 Offices, 13 Trillion Tokens a Month

Winston Weinberg is the CEO and co-founder of Harvey, the $11 billion AI platform now used by 2/3 of the AmLaw 100 and 500+ in-house legal teams including HSBC, Bridgewater, Carvana, and Blue Owl. "I think every single company is going to sell intelligence." In this episode, Winston walks me through Harvey's San Francisco HQ and then sits down to break down the state of the business: roughly $300M ARR (up from $100M last August), 2,000 customers, 960 employees across 12 global offices, and token usage that jumped from 1 trillion in January to a projected 12-13 trillion this month. "It feels like if you do not constantly change, you are just gonna get so behind that you die as a company right now." Winston covers the shift to cloud agents, why Harvey's real competition is the foundation labs (not other legal tech companies), how to reinvent a company every 6 months, the future of vertical models, the billable hour problem coming for every AI buyer, and why every company will eventually sell intelligence. Winston Weinberg: https://x.com/winstonweinberg Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊 YouTube: https://youtu.be/ekXJCDNEmOM 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • VCX https://fundrise.com/vcx—VCX is the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View The Portfolio at http://GetVCX.com http://getvcx.com • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery • Merge https://merge.dev—The leading provider of customer-facing integrations and agentic tools for frontier LLMs, Fortune 500 organizations, and B2B SaaS companies. Visit https://merge.dev Follow Sourcery for the latest updates! https://www.sourcery.vc https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time. 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Winston Weinberg, Co-Founder & CEO at Harvey (00:45) Inside Harvey HQ (03:17) Harvey by the numbers (04:11) How Harvey expands globally (05:16) Why Harvey employs 200+ lawyers (06:30) The philosophy behind Harvey's office (07:35) The loudest lunch culture in tech (09:03) Winston's favorite room (10:04) Eight Airbnbs before a real office (12:58) Inside a $300M ARR company (14:20) Tripling revenue in under a year (15:35) What $1B+ unlocks (17:36) Building an AI native company (21:10) Convincing lawyers to join tech (22:14) The biggest adjustment for lawyers in tech (23:26) Build vs buy (26:59) What SaaS got away with that AI can't (28:39) Financing 13 trillion tokens (30:05) Why the labs can't just copy Harvey (31:18) Competing with OpenAI and Anthropic (32:03) Will the labs start acquiring?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  The purpose of Harvey AI, if you're reviewing a million documents, is how do you check that its work is accurate?

• 0:06Molly O'Shea?

  So you were at 100 million in ARR last August, and now you're nearing 300 million. What's been driving that?

• 0:13Speaker 00

  It's 100% product. Our token usage in January was 1 trillion, and this month it'll probably be like 12 or 13 trillion. Our DAU over MAU at the beginning of the year was around 36%. Right now it's like 51, 52%. And then this year, most recently, the main switch we did is just went over to cloud agents. We switched our entire infrastructure to that. And once we did that, usage rate started doubling quarter to quarter.

• 0:46Molly O'Shea?

  You asked about a sword. We could start with this.

• 0:49Speaker 00

  We could start with this. So I actually, this is probably the best thing. I also personally have a replica of Frostmourne, but that's in my apartment.

• 0:57Molly O'Shea?

  I don't know what that is.

• 0:58Speaker 00

  It's Arthas' sword. World of Warcraft.

• 1:01Molly O'Shea?

  Got it.

• 1:01Speaker 00

  Wrath of the Wolf's Gage. Anyway.

• 1:02Molly O'Shea?

  Of course. My bad.

• 1:03Speaker 00

  It's an awesome sword, but I've seen too many people do sword things, and so I didn't end up doing it. But I do have it. It's great. You guys can, okay, well, that works, too. You can come through this way. It's totally fine. But yeah, this thing's fantastic. We've actually, we had a really small one. There was a, kind of like a running joke when we were all in an Airbnb, that we had this like little tiny gavel. And one of the biggest problems with the product was just like latency. And so whenever we tested like a new feature, we would basically just like hammer the gavel and be like, "Make it faster, make it faster, make it faster", which I think annoyed a whole lot of people, but we've stopped doing that now.

• 1:41Molly O'Shea?

  Oh my gosh. Okay, that's a good place to start.

• 1:44Speaker 00

  Yeah, we got a bunch of books, got some sculptures.

• 1:47Molly O'Shea?

  And you handpicked all of this stuff. Just for reference, we're on a tour of Harvey right now. This is Winston. And what are we gonna see today?

• 1:57Speaker 00

  We're gonna see the floor that's been renovated. So we have three floors here in San Francisco. And then one, the one we're on now, has been like fully renovated.

• 2:05Molly O'Shea?

  Okay.

• 2:06Speaker 00

  And then we're doing the sixth and the seventh.

• 2:07Molly O'Shea?

  And the significance of this painting?

• 2:09Speaker 00

  Yeah, so there's no significance of this painting. But I mean, I think like one thing about this floor in general is we've tried, and we'll take you up to the speakeasy after. We've tried to do like a combination of kind of like tech plus also like classic. And so you'll see like a lot of sculptures. We have a lot of like books related to law. This is kind of funny because it's John Grisham. But it looks like it's like some ancient text, like Hammurabi's Code or something like that.

• 2:41Molly O'Shea?

  How did you find them?

• 2:42Speaker 00

  I actually don't know for these particular ones. But in general, we've kind of tried to do like a combination of, when we were actually doing our brand in the beginning, we were basically like, could we do a copy of like the best tech companies? And then succession, like a show succession. My point was like, kind of a combination of like an ode to, you know, like classics, like Greek, first orators, things like that. Plus like, hey, we're a tech company. And we've definitely tried to do that a lot with our brand. And we've tried to do that throughout the office, too.

• 3:14Molly O'Shea?

  Seems to be working. It looks amazing.

• 3:16Speaker 00

  Thanks.

• 3:17Molly O'Shea?

  Okay, so we're gonna cover a lot of different things today.

• 3:24Molly O'Shea?

  For starters, on this tour, I want to talk about the evolution of the company. So you've been around close to four years now.

• 3:32Speaker 00

  Yeah, it'll be four years in August.

• 3:34Molly O'Shea?

  Congratulations.

• 3:35Speaker 00

  Well, not yet.

• 3:35Molly O'Shea?

  Happy birthday. I don't know.

• 3:38Molly O'Shea?

  You have nearly a thousand employees?

• 3:41Speaker 00

  Yeah, close. It's like 960 something.

• 3:43Molly O'Shea?

  And this office is one of how many?

• 3:46Speaker 00

  Twelve.

• 3:47Molly O'Shea?

  Wow.

• 3:47Speaker 00

  So we opened up offices pretty quickly. But the office here and then New York are by far the largest.

• 3:53Molly O'Shea?

  How many employees are at those?

• 3:55Speaker 00

  So in this one, I think it's around like 350. And then New York is around like 300, something like that. Yeah. And then the vast majority of EPD is here. But we are growing out the other offices, too.

• 4:09Molly O'Shea?

  Really cool vibe. Okay, so when you build out globally, you have 12.

• 4:15Speaker 00

  Yeah.

• 4:16Molly O'Shea?

  How do you figure out which cities to go into first? Is it like you have your customers and then you build around them?

• 4:21Speaker 00

  Yeah, so it's actually, yeah, so we did it first based off of just like reacting to like big customers. So like we'll sign like Deutsche Telekom and it's like, oh, wow, we need an office in Germany. Right, things like that. There's actually something really interesting that we had a problem of in the beginning, which is because we process sensitive data, a lot of the countries, we actually needed like an Azure instance in each one. Right, so like in Australia, you can't process financial data outside of the country. And so we had, we would set up these offices and then we'd set up like Azure instances too. And it was almost like we set up an Azure instance and then that would be like a pretty good indicator that we'd have to set up an office pretty soon afterwards, just because like customer demand.

• 5:02Molly O'Shea?

  Yeah.

• 5:03Speaker 00

  But another way to look at it is kind of like the legal TAM overall too. And so we kind of base it off of like, you know, how many lawyers are there in each country, etc.

• 5:16Molly O'Shea?

  And there's how many lawyers in this company?

• 5:17Speaker 00

  Yeah, in this company, we have over 200. Yeah, and so, and then on the commercial side, like actually, I guess, doing what a normal lawyer would do, there's only about like 25.

• 5:31Molly O'Shea?

  Really?

• 5:31Speaker 00

  Yeah, and then the rest, I mean, obviously, we use Harvey internally for a lot of stuff. So we're trying to scale that up. And then the rest of folks, either they work on product or they like help with go to market and things like that too. We don't have this anymore, but you used to, if you would have visited us like a year or two ago, you would have been able to tell who's a lawyer and who isn't because.

• 5:53Molly O'Shea?

  Why? Because they would dress differently?

• 5:55Speaker 00

  Yeah, so there was like a phase.

• 5:57Molly O'Shea?

  Should we play a game right now?

• 5:59Speaker 00

  Yeah, you won't, uh, you won't be able to actually, I don't think anyone on this floor actually. But basically, like, the first week, they would wear a full suit and a tie. And then about like, maybe the next Monday, the tie would come off. And then like three days after that, it's like the suit came off and then it would eventually be like hoodie and sweatpants.

• 6:20Molly O'Shea?

  Yeah, yeah, naturally.

• 6:21Speaker 00

  And you, but you would be able to tell like. Basically, like which lawyer had been here for which amount of time? And you could always tell, which is kind of funny.

• 6:30Molly O'Shea?

  So as we walk through this, like, how did you set up this new office? Like, there's obviously a lot of conference spaces.

• 6:36Speaker 00

  Yeah.

• 6:37Molly O'Shea?

  Desks. This is a huge communal area. Do you guys host lots of?

• 6:41Speaker 00

  Yeah, we we host a lot of, I mean, I host like customers and things like that. We also, I mean, it's a little bit past lunch, but we were talking about this earlier. We have like an insanely loud lunch culture.

• 6:51Molly O'Shea?

  Yeah, we walked in at like 12:30 and I was like, this might be.

• 6:54Speaker 00

  It's it's crazy loud, like to the point where I don't schedule meetings during the lunch hour.

• 6:59Molly O'Shea?

  Really?

• 6:59Speaker 00

  Like I, or I don't do customer meetings during the lunch hour. Like, it's literally like a band, like from 12 to 1:30. I just will not do external meetings because it is so loud and you can't. It's loud everywhere, so people will eat lunch here, but it's like loud throughout the whole thing. I think we we just have always had that. We started in Airbnb and then whenever we moved from office to office, like we'd always eat lunch together. And it's somehow like spread out to the, you know, hundreds, almost a thousand employees. And so we want to keep that, I think, forever. I don't know. I think like you need like a couple of those instances where like everyone gets together.

• 7:35Molly O'Shea?

  We've done a handful of these office tours so far, and you might have the most employees in office.

• 7:42Speaker 00

  Really?

• 7:42Molly O'Shea?

  Yeah.

• 7:43Speaker 00

  Well, don't tell them that.

• 7:47Speaker 00

  I mean, I I think like, it's something we care about a lot. I think that if you have to try to force it, you're probably in trouble, right? Like, it's not going to work that well. But I think like the thing that does it the most is stuff like this, where it's just like, you get to meet everybody from, like, if you go to here during lunch, and again, you wouldn't have been able to hear anything, so maybe not as helpful. But you you can't be like, oh, that's the team that works on this, that's the team that works on. It's like everyone is all mixed together. And so I think people like coming into the office because we have a very like culture of everyone working together. And people are really good friends that are like a cross functions. So we have people like, like you can come here on the weekend and there will be people on the weekend.

• 8:30Molly O'Shea?

  Really?

• 8:30Speaker 00

  Yeah, all the time. Yeah, yeah, and it's it's funny because no one works in offices. And so. People usually work in like a corner. And then you'll have like just a small group of people in a corner, but like I notoriously lose like my card 24/7. I think I have my with me right now, but this is like my 19th. Like I I just constantly go through them. And so I know that there's people on the weekend all the time. Because I'll come on the weekend and I'll post into SF General like, yo.

• 8:55Molly O'Shea?

  Cause someone let me in.

• 8:56Speaker 00

  Yeah, and there's no one too.

• 8:57Molly O'Shea?

  Maybe they think that's a test.

• 8:59Speaker 00

  Exactly. And so every single time so far I've been able to get in. Yeah.

• 9:03Molly O'Shea?

  Okay, so what's your favorite room?

• 9:05Speaker 00

  Oh, yeah. Good question. Um, okay. Favorite room is definitely a speakeasy and I'll show you that in a second. I'd say my second favorite is I really like to work actually on the couch, like on the couch when people come in. And I think part of that is I I used to travel a lot. I travel a little bit less now, but last year I almost entirely didn't work out of an office. I just worked on the couch and it's because I get here early and I like like saying hi to everyone for a couple hours and then I have meetings. Um, but in terms of actual room, it's a speakeasy. So I can show you that. It's up here, actually.

• 9:36Molly O'Shea?

  Oh, cool.

• 9:37Speaker 00

  I'm surprised by being in office. I'll take that, though.

• 9:39Molly O'Shea?

  It's a, I mean, it's a good compliment.

• 9:41Speaker 00

  Yeah, no, no, I want that.

• 9:43Molly O'Shea?

  I'm trying to think like.

• 9:47Molly O'Shea?

  The only other company that has was applied intuition.

• 9:51Speaker 00

  Oh, yeah, yeah.

• 9:52Molly O'Shea?

  They were packed.

• 9:54Speaker 00

  They're young, though. They're like 40 people, right?

• 9:56Molly O'Shea?

  Oh.

• 9:56Speaker 00

  Oh, no, applied intuition, not applied compute, not applied compute. I like applied computer. Gabe was just there like last week.

• 10:04Molly O'Shea?

  Okay, so what's the biggest lore here?

• 10:07Speaker 00

  Biggest lore of this office?

• 10:09Molly O'Shea?

  Yeah.

• 10:09Speaker 00

  This office actually doesn't have, the Airbnbs have like way more.

• 10:13Molly O'Shea?

  Oh, I would imagine.

• 10:14Speaker 00

  Yeah.

• 10:14Molly O'Shea?

  How sketchy as it is.

• 10:16Speaker 00

  It was, I mean, so Airbnb is, we went through, I think, eight. So basically what we did is.

• 10:23Molly O'Shea?

  At what point did you realize you needed to get?

• 10:26Speaker 00

  20 people.

• 10:27Molly O'Shea?

  Okay.

• 10:28Speaker 00

  So we, what happened is we basically kept getting like a larger Airbnb each month. When we just added more people. Um, and then it got, we got to a point where it was like, okay, this is definitely a problem. Um, at like 20 ish.

• 10:44Molly O'Shea?

  What is the deal with people in SF? Startups getting like townhouses and houses to build out of.

• 10:53Speaker 00

  I would like to say that there's like some beautiful reason for this or some smart thing. To be a hundred percent honest, it's just easier.

• 11:01Molly O'Shea?

  Really?

• 11:01Speaker 00

  It's just like I can go personally book an Airbnb.

• 11:04Molly O'Shea?

  Okay.

• 11:05Speaker 00

  And then you just don't think about it because you're doing so many other things.

• 11:08Molly O'Shea?

  Is that legal?

• 11:09Speaker 00

  What to? Yes, it is legal to do that. Yeah. And then you, I mean, you basically just like personally book a new Airbnb each time. And it's like, then you don't have to worry about like that overhead.

• 11:20Molly O'Shea?

  What's the most illegal thing that you've done?

• 11:21Speaker 00

  Oh, I'm not going to say that on camera. Nothing. We're a bunch of lawyers. Are you kidding me?

• 11:27Molly O'Shea?

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• 12:43Molly O'Shea?

  Turing builds realistic reinforcement learning environments and data systems based on real operational traces, the kind of infrastructure Frontier Labs need to train superintelligence. Visit turing.com/sourcy. We just did a little walking tour of the office. Now we're going to go deep into the business. Are you ready?

• 13:04Speaker 00

  Yeah. Let's do it.

• 13:05Molly O'Shea?

  Okay. So where is Harvey at today? Give me the full stats.

• 13:09Speaker 00

  Yeah. So we're about four years old, August. That'll be the birthday. I think it is birthday.

• 13:14Molly O'Shea?

  What's the day?

• 13:15Speaker 00

  August 4th.

• 13:17Molly O'Shea?

  It's a Leo. Holy crap.

• 13:18Speaker 00

  Wow. Actually, I didn't think about it that way.

• 13:20Molly O'Shea?

  Yeah.

• 13:21Speaker 00

  Well, that puts like everything into perspective for me. I gotta like take 20 minutes to have like deep thoughts on that. I'm a Capricorn, so I don't know if that works. Is that a problem?

• 13:30Molly O'Shea?

  I have no idea.

• 13:31Speaker 00

  I don't either. I have no idea. Leo's like a lion, right?

• 13:34Molly O'Shea?

  Yeah. Fire sign.

• 13:35Speaker 00

  Fire.

• 13:38Speaker 00

  So yeah, about four years old. And we're around 900 folks, 950 people, 960, something like that. We're at around 2,000 customers, somewhere around 300 million ARR. So we're growing really fast. I think like it's mostly just a crazy experience, like how much the product has grown. I think that in the beginning, like we had this product roadmap. And our product roadmap has actually like weirdly been pretty consistent. The main thing that's collapsed is just like how long it takes to build these things. And so I think the thing that's actually moved the fastest is how much we are starting to basically build a platform for all of these different pieces of the product.

• 14:20Molly O'Shea?

  So you were at 100 million in ARR last August. Now you're nearing 300 million. What's been driving that?

• 14:27Speaker 00

  It's 100% product. I mean, like I'll give you some metrics. Our token usage in January was 1 trillion, like for the month of January. And this month it'll probably be like 12 or 13 trillion.

• 14:39Molly O'Shea?

  Oh, my God.

• 14:40Speaker 00

  Yeah. So the usage is getting pretty insane. Our DAU over MAU at the beginning of the year was around like 36%. Right now it's like 51, 52%. Our queries per user have basically been doubling up quarter over quarter. Our spent is doubling quarter over quarter. I think that's better than queries. The problem with queries is As you build a more complex product, you're gonna have these outputs that are like crazy long. And so you might have people like using this like querying less, but the output is like a hundred page document. And so they're like in your system reviewing and collaborating on it. But like everything is just product improvements. I think like last year, last year, we had some moments where we just kind of had to like rebuild a lot of our product.

• 15:24Speaker 00

  And then this year, most recently, the main switch we did is just went over to cloud agents. Like we switched our entire infrastructure to that. And once we did that, usage literally just started like doubling quarter over quarter.

• 15:35Molly O'Shea?

  And you've raised over a billion dollars now? So have you used most of that capital or where's? Are you using it on tokens? Like what is?

• 15:43Speaker 00

  Yeah, yeah, now we're using it on tokens. Now we're using it on tokens. No, we actually, we haven't used a lot of that money. I think like the, the interesting thing that we always wanted to do was actually do a lot of post-training on the models. And there was a couple of problems in legal that makes this like really hard. One is the data isn't available. So like, i- if you went online, you're like, I want to go find a bunch of documents that are related to like a random fun formation by Blackstone. They don't, they don't exist. Like you'd have to go to Blackstone for those documents, right? But the thing that happened with like the last generation of coding models is you can actually take sets of documents and create synthetic docs that are so good that the lawyers can't tell the difference between whether

• 16:28Speaker 00

  they're created, you know, by an actual lawyer or they're created by the coding models. And so with that, we've now actually created basically like a pipeline for creating synthetic data sets across like every single legal use case. And because we have that now, now you can start actually class training models. And that's going to be expensive.

• 16:44Molly O'Shea?

  Wow. And so what are the main categories of your customers? And I think you said it's forty-two percent is in-house corporates?

• 16:51Speaker 00

  Yeah, forty-two percent is in-house corporates. It's growing faster than the law firms technically. Cause I think we're, we're at like almost seventy percent of the.

• 17:00Molly O'Shea?

  Is it easier for them to adopt? Is that why?

• 17:02Speaker 00

  No, they were just slower to adopt. Yeah, so the corporates adopted like they started like a year after the law firms. And so and then our fastest growing of like the of the verticals in general is financial services is number one for sure. So like banks, private equity, asset management. And then pharma is actually growing pretty fast, too. And what we're starting to do is actually like we're going to verticalize our product too. Where we have to actually like have different parts of Harvey that are different for each vertical, right? Because like the compliance and legal needs of a bank are very, very different than even private equity.

• 17:36Molly O'Shea?

  So I want to go into deeper building the company out today. Like, what does it take to build an AI forward company? So I reached out to Pat Grady and he said the one thing that he emphasized was that you've been able to reinvent the company over and over again. So what was it like from the beginning to now? And what do you think was like, what are the key unlocks along the way that you think are critical?

• 17:57Speaker 00

  Yeah, I mean, the key unlock is hiring for sure. Like, that is it. And when I say hiring, I don't just mean hiring new people. I mean, like also development, right? And like promoting people, putting them into different roles, things like that. Or honestly, in some instances, they get out scaled and like figuring out a better role for them. But every six months, I'd say, I start to get like this weird feeling of like things are just breaking, right? And I feel it's like a pressure that like builds up.

• 18:29Speaker 00

  And then usually, so far, what has happened is every time that has happened, there's been like three big changes that I need to make. And I realize I need to make them. And then I make them and then like the pressure like flows off. And that happens like literally every six months, I'd say. Maybe three to six months, something like that. And it feels like if you do not constantly change, you are just going to get so behind that you die as a company right now. And I think a lot of that is actually like, who do you decide to promote? Who do you decide to hire?

• 19:06Speaker 00

  That is more important than anything else because a lot of people can't do that. Like, it is really hard for every six. Months for someone to like massively change how they operate. It's even simple stuff like when I see somebody like mass starting to really break. The first thing I do is I'll go and we'll do like a calendar audit of just like.

• 19:25Molly O'Shea?

  Really?

• 19:25Speaker 00

  Yeah, seriously, that's like the first thing. I mean, it's, I know it's so stupid and it's so simple, but you go in and you do a calendar audit. And you come up with like really good ways to be like, do you have to do any of these things? But tell me, what is the main prior this week? Are any of these related to that prior? And you will start seeing people and I do it myself, like you just come up with so many excuses for why you're doing stuff. And at the end of the day, it's like, no, that's not relevant. That's not relevant. That's not relevant. And I think that like finding people that are really good at doing that themselves. And I think there's a decent amount of people at this company now that have learned how to do that. That's how you scale. Like that is how you scale at this like crazy rapid pace that normally, you know, companies need to like reinvent themselves, maybe every like. Five years, 10 years, something like that. I, I think you have to do it every six months.

• 20:09Molly O'Shea?

  So what's your framework for prioritization? How do you determine if you should cancel something or not?

• 20:14Speaker 00

  Yeah, yeah. Um, so I mean, for me, I, I have like a bunch of different rules. One of the really simple rules is. Like my chief of staff, whenever she sends me something, I have to write a paragraph for why I would do it. Not kidding, like.

• 20:28Molly O'Shea?

  And you don't use an AI for this?

• 20:30Speaker 00

  No, it's actually, it's really important because um, if you start. For the stuff that like is really, really, really important. And again, this is outside of like ordinary, like there's like, I don't do this for like product reviews, right? That we do weekly. If you sit down and you can write an entire paragraph about why you're gonna do something, you definitely are gonna do it. If what happens is you go, oh, it's so annoying that I have to write this down. Like, why would I ever need to do that? You probably don't need to do it. It's not that important, right? And then what I've found is the stuff that is really important, I could write like a hundred pages about why I'm doing it, right? And I know it's, it's like kind of a small, silly thing, but it helps a lot. You get a massive unlock for just blocking things.

• 21:10Molly O'Shea?

  So you have a quarter of your company as previous lawyers, former lawyers? How did you convince them to come to a tech company that's completely different than a traditional career path?

• 21:22Speaker 00

  It was really, really hard in the beginning and now it's uh, like I think quite easy.

• 21:27Molly O'Shea?

  You show them equity? What, what works?

• 21:29Speaker 00

  Oh my God, it was, I mean, most, it was difficult to explain equity in some instances, right? Like what is the value of equity and things like that? I think really like. We hired, in the beginning, we hired a lot of people who I think really wanted to like, they love law. Like, they loved the practice of law, but they didn't love working in big law. And so they wanted to do something adjacent. And I think that was really, really attractive. And then, over time, like, we have so many lawyers that are now just full-time PMs. Like, literally, they just, like, transferred and other PMs. We have so many different, like, career opportunities that I think that now it's a really attractive place to be. Because you could have a legal background and then you end up doing something else, right? Like, you don't actually have to be practicing law or anything like that here.

• 22:14Molly O'Shea?

  What's the biggest complaint of people leaving law firms?

• 22:18Speaker 00

  Oh, I'll tell you, by far, the, like, the biggest thing that they need to get used to here is, and maybe that's your question if it isn't, gonna answer that one anyway.

• 22:29Speaker 00

  Because I think this is actually super interesting. Law firms very rarely fire people. Very rarely.

• 22:35Molly O'Shea?

  Okay.

• 22:36Speaker 00

  And so, actually, I think one of the most interesting things to get used to is that, like, tech is very fast-moving. And it is, like, I try to make it a meritocracy. And so, if you aren't doing well, like, we're gonna have to let you go. And I think that's really hard for some people that have been in a situation where, like, you get promoted every single year. And, and that's how it works in big law. You get promoted, like, every single year to exactly the same level as everyone else, despite your performance. And you don't really get pushed out, right? And I actually think that's one of the weirdest things. And I remember in the beginning, we, like, there were a couple of people that we had to let go and things like that. And people freaked out.

• 23:21Speaker 00

  And it's like, you know, from the tech world, that's like very normal. But I remember that being like a huge issue in the beginning.

• 23:27Molly O'Shea?

  Thinking of how fast you're growing the company, I don't know, maybe you still have a billion dollars in the bank. How are you thinking about buying, or sorry, building out?

• 23:39Molly O'Shea?

  The company itself or buying, there's like a now, there's like an onslaught of M and A within all these AI companies and buying up smaller startups for talent and all this kind of increased competition. How are you thinking about that?

• 23:51Speaker 00

  Yeah, devalue, like higher value on team and lower value on what they've built in terms of like, I do not believe that it is a good idea right now to go around and buy legacy technology. Like I don't. I think it is a much better idea to buy like really, really good teams regardless of if they worked in your space. Doesn't matter, right? And so that's like, if you look at the aqua hires that we have done, they actually haven't been in the legal AI space or like legal tech. They've been outside of it, but they're really, really good teams that could work on a problem that we have, right? And that doesn't mean that I won't do legal tech acquisitions in the future, but I do think

• 24:33Speaker 00

  that right now, if you're making an acquisition, like the number one thing you should be looking at is just talent. Cause you can build things so much faster now, right? That it should literally just be talent. Like, are you buying a team that is really, really good? And are they going to align with your cultures? Cause the other problem is like, we're four, not even four years old. If we go and absorb a bunch of teams, like our culture is still being built, right? And so you're going to just like collapse yourself, right? And so I think it's a really bad idea to go out and buy like a bunch of companies and then they end up being like half of your company is that. That's a terrible idea. I do think it is a good idea to go out there and like aqua hire or acquire some companies for really good talent.

• 25:14Molly O'Shea?

  Today's episode is sponsored by V C X by Fundrise, the public ticker for private tech, allowing investors of all sizes to invest in venture capital. Learn more at getvcx.com. Some of you may not have heard this yet, but our sponsor Public just launched something called Generated Assets and it brings AI into investing in a way I've honestly never seen before. Here's how it works. You type in an idea like AI powered supply chain companies with positive free cash flow or defense tech companies growing revenue over 25% year over year. Public's AI then Batches a swarm of agents that scan every single US stock, evaluates them and instantly builds a custom index around your thesis. What really stands out is how clearly it explains why each stock is included.

• 25:59Molly O'Shea?

  And before you invest, you can even backtest your idea against the S and P 500. So you're making decisions with real context, not just guessing. And beyond generated assets, Public lets you invest in stocks, bonds, options, crypto, all in one place. They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com/sorcery. Paid for by Public Investing. Full disclosures in the description. Enterprise AI runs on Merge, the AI infra platform for integrations, agent tooling and model orchestration, so your team's ship product, not plumbing. Mistral, Dropbox and Drata already trust Merge in production. Start building at merge.dev.

• 26:43Molly O'Shea?

  Founders scale faster on Deal. Set up payroll for any country in minutes, hire anyone anywhere, get visas handled fast and get back to building. Visit deal.com/sorcery. That's D E E L dot com slash sorcery. So you started this company post-COVID. It's nearly four years old. And it was AI-nated from the start. So I just want to know, like, what is fundamentally different about building a company today in the AI era versus the SaaS cycle?

• 27:16Speaker 00

  Yeah. I mean, I think pace is really important. And one thing with pace that I think people struggle with is like, you have to just assume that most things are two-way doors. And people really hate this. Like, they really like to kind of like think about a decision, get to like 90% certainty and then make a decision. The reality is like, you're probably going to have to make a bunch of decisions at like 51% certainty, which means you'll be wrong, right? Right? And can you deal with being wrong and then quickly pivoting, right? And I think you have to do that way more than you used to in the past, A. B, I think there's a huge difference on enterprise, like massive difference on enterprise.

• 27:58Speaker 00

  Which is, you cannot get away with like going in a room, building some product, and then selling it, and then never improving the product over the next like XYZ years. The users matter so much. Like, the alternative is Quad, ChatGPT, these other things. Like, those are great products too. And so I think that the product bar for enterprise is astronomically higher than it used to be. Where, like, you a hundred percent have to be constantly innovating and creating the best product for the end user. And I think in the past, you could kind of get away with doing some things like really long sales cycles and things like that.

• 28:39Molly O'Shea?

  And token usage is compressing margins. So how are you financing thirteen trillion tokens?

• 28:47Speaker 00

  Yeah, I mean, so there's a lot of, okay, a couple of things. One, I think every single company is going to sell intelligence. Like, that is going to be the core of the company. And so like, eventually, like, we are selling legal intelligence. We're selling legal intelligence to lawyers, right? But it's still like selling intelligence. And so what I mean by this is like, we need to get to a point where we have models that perform as well, if not better, than the frontier models, but cost significantly less. Like, I basically think of this as like an intelligence allocation problem. Where, if you look at like a model, you know, the new model's coming out. It's like Mythos, like 5.6, all these guys, right? Those models come out and they're incredibly expensive and they're general.

• 29:29Speaker 00

  And if you use them across every single legal task, like, maybe they do decently well, although on our benchmarks, like, a lot of them fall apart. But they're insanely expensive. And so the better thing is, can you actually create models that like do diligence? Do change of control review, do contracting, do these different things at the level, if not, or better than the frontier models? And they cost a hundred times less, right? And so I think that every single company is going to sell tokens. And I think that they're basically going to be selling intelligence. So you'll have like the product layer and everything like that, double up your data, and then you're going to be selling intelligence as well.

• 30:04Molly O'Shea?

  How do you compete with those large models that are offering competitive service? Services, like what is the thing about Harvey that you cannot copy?

• 30:12Speaker 00

  Yeah, I mean, the the best way to think about this is like, there's the product side and then there's the intelligence or model side. And and you could say on the product side, it's like the harness side. I I think that's like conflating things a little bit too much. On the product side, you just go very vertical, right? So you build solutions that are really good at like diligence in a particular space, like all of those things. And I think it's gonna be hard for the labs to get to that level of specificity on the product side. On the model side, you actually do a similar thing, which is you basically build a bunch of models that are really good at specific legal tasks. And then you optimize them for cost, right? Like, there's a world in which G P D ten is more expensive than a lawyer.

• 30:55Speaker 00

  There's a that's like a very possible world, right? And so where we have is basically you can think of like the frontier models here, commoditized models here. I think a lot of the economy is actually in between these things, right? Because the frontier model might be like too expensive to basically put in terms of every single piece of work. And so you have this massive space that is like all these vertical companies.

• 31:18Molly O'Shea?

  In terms of other competitors, Legora is fast moving behind you. How do you think about, I mean, you are global from the beginning, but they are dominating Europe. So how do you close that gap?

• 31:29Speaker 00

  Yeah, I mean, I would say in Europe, I think our win rate is like over seventy percent. So I don't think it's as much dominant there. To be honest, I think like our main competitor is the labs. I mean, you saw Clock for legal. There's a rumor that like Codex for legal, right? I think that the reality is like the labs have an incredible amount of resources, right? And so it is a race for how quickly can we build the best product that is verticalized? And then how do we build the best vertical models, right? And I really do think at the end of the day, it is a race against the labs. And I think every single company on earth is competing against them.

• 32:03Molly O'Shea?

  Do you think they're gonna start acquiring?

• 32:06Speaker 00

  Like in legal specifically? I think that they will start acquiring in any space where they see a significant amount of traction, like one thing.

• 32:14Molly O'Shea?

  Have they tried to acquire you?

• 32:16Speaker 00

  One thing that like I think is like crazy, I'm not gonna answer that. One thing that I think is. Like that people forget about is the more success that any of these verticals have, they'll just keep entering them again and they'll re-enter them. And so I think like people, you know, Clock for Legal came out recently. And I think a lot of people were like, oh, okay, well, it was this release and now that's kind of it, or whatever. The better we do, the better other companies do, the more the labs will be like, oh, okay, we're going to put more resources into that. And so it's not like a one and done thing. It is like a constant competition.

• 32:50Molly O'Shea?

  What do you think the biggest question right now is that people are not asking?

• 32:55Speaker 00

  By far, I think the biggest thing that people are not paying attention to is what I was talking about earlier, which is, do you need frontier intelligence for every single task? I mean, this is the best example of this is like, what happened with Uber recently? Right? And it's like, we are going to get to this point. This is actually a weird situation where, I'm sure you know what the billable hour is, because people like talk about that a lot, right? Weirdly, the billable hour problem is the same problem that I think the entire world is about to run into. Like the billable hour, for those that don't know what it is, it basically is when you get a bill from a law firm, it says in six-minute increments what people did, and then the hourly rate, or the six-minute increment for that task, right?

• 33:39Speaker 00

  Why do they do that? It is because they're trying to show ROI. They're like, hey, your legal bill's a hundred grand. We're going to break it down into six-minute increments, right? This is kind of like the main problem that I think the entire world is about to hit, which is, I just spent a billion dollars on tokens. Where's my ROI? Right? And I actually think that like, there aren't enough companies that I know of that are starting to think about, how do I actually show ROI in every single vertical use of these things? And I think that vertical companies are going to have a huge advantage here, where you can start to get to the point where you basically can show every single token and what the ROI was of that token for your particular task in the vertical.

• 34:23Molly O'Shea?

  So before we started recording, I asked you what you're most excited about, and you said benchmarks.

• 34:28Speaker 00

  Yeah.

• 34:28Molly O'Shea?

  We're going to be interviewing Gabe after this. What question do you think I should ask him?

• 34:35Speaker 00

  I think that the best question actually is, why are benchmarks, like why are, why are the current benchmarks for most verticals bad? Right? And if you, if you look at like the benchmarks that have existed for legal for a long time, I mean, half of them are like, can it pass the bar? Multiple choice questions on like, community property law and things like that, right? And I think that we haven't actually until now had, here is a very like, very good set of data that does an illegal task from end to end. And we're missing this in most verticals other than coding. Basically, coding is the only one that has like a good saturated benchmark.

• 35:13Molly O'Shea?

  Wow, okay. When are you gonna do a collaboration with Kim Kardashian?

• 35:17Speaker 00

  Soon. She didn't pass it, she gave up.

• 35:19Molly O'Shea?

  I think Kanye passed it, or maybe that was a joke, I don't know.

• 35:22Speaker 00

  I think it was a joke. I think it was a joke.

• 35:24Molly O'Shea?

  Damn.

• 35:25Speaker 00

  I think it was a joke.

• 35:26Molly O'Shea?

  I think it was.

• 35:27Speaker 00

  I don't know, I'm not sure.

• 35:28Molly O'Shea?

  Well, thank you so much, Winston.

• 35:29Speaker 00

  Yeah, of course, thank you. Because it lives, you know.

• 35:31Molly O'Shea?

  Why do you have a hippo?

• 35:32Speaker 00

  Well, because they both live on land and in the water. So they see both sides of the world.

• 35:38Molly O'Shea?

  Oh my god.

• 35:40Speaker 00

  That kind of works. Ducks fly, and then ducks fly.

• 35:43Molly O'Shea?

  Ducks do fly.

• 35:43Speaker 00

  And then hippos eat people.

• 35:45Molly O'Shea?

  Hippos have eaten a few people.

• 35:48Speaker 00

  Yeah, so that's not as good.

• 35:49Molly O'Shea?

  I don't know why you want.

• 35:50Speaker 00

  Runaway jury, that's legal, John Grisham.

• 35:53Molly O'Shea?

  How many, I've noticed you have over 1,200 books in this office? Have you read all of them?

• 35:58Speaker 00

  Every single one of them, from front to back. And I could recite any part of the book.

• 36:02Molly O'Shea?

  Even the culinary cookbooks?

• 36:04Speaker 00

  Mostly those, actually. I'm like more well versed than that. Now, it's been a long time since I've cooked. I am really bad. It's, I'm a chicken and rice DoorDash guy. And it's actually the same, it's a place called Cholita Linda, and it's around here. And I, there was actually a time, I was interviewing someone and I asked them, like, hey, do you want lunch? And I pulled out my phone to do DoorDash, and they'd seen that I ordered it 467 times.

• 36:29Molly O'Shea?

  No.

• 36:29Speaker 00

  Yeah, it said like the, like the little number.

• 36:31Molly O'Shea?

  Do you order multiple times a day?

• 36:33Speaker 00

  Yeah, twice, lunch and dinner.

• 36:34Molly O'Shea?

  Oh, yeah. So you're one of those types, you just eat the same thing every day?

• 36:38Speaker 00

  Well, so, and then breakfast, there's a Bluestone on like Folsom. And I get there exactly when they open, like it's 7:01. And I get, it's like this keen green smoothie that's really good, with extra almond butter. And I look like a psychopath, because I'm like, I have a spoon and I'm literally eating.

• 36:55Molly O'Shea?

  You eat out of a spoon?

• 36:56Speaker 00

  Yeah, it's kind of terrifying.

• 36:57Molly O'Shea?

  I eat smoothies with forks, so you're okay.

• 37:00Speaker 00

  How do you even do that? Wait, actually.

• 37:04Molly O'Shea?

  I'm literally not even kidding.

• 37:06Speaker 00

  How?

• 37:07Molly O'Shea?

  Well, I like to put like granola on top, so I eat it with a fork.

• 37:10Speaker 00

  But then you, so is it like you fork out the granola? So it's like granola doused in smoothie. Okay, so it's granola doused in smoothie? And you do that with a fork and then you put a straw in?

• 37:21Molly O'Shea?

  It's like a smoothie parfait.

• 37:23Speaker 00

  Yeah, that actually kind of makes sense.

• 37:24Molly O'Shea?

  You know?

• 37:24Speaker 00

  That's not that bad. A spoon seems like it would work better, though.

• 37:27Molly O'Shea?

  But I'm making you feel less bad about the whole spoon thing.

• 37:31Speaker 00

  I guess that makes sense. All right, we welcome or whatever we're doing here?

• 37:33Molly O'Shea?

  Yeah, let's, let's start. Okay, so.

• 37:35Speaker 00

  I like the duck, though.

• 37:37Molly O'Shea?

  We do, the duck was great. I mean, might as well. Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.