Speed, Stress, and Better Decisions | Winston Weinberg

Winston Weinberg is the CEO and co-founder of Harvey, the AI platform built for the legal industry. In this episode, Winston explains how AI is reshaping legal work, why judgment becomes more valuable as routine work gets automated, and how to build the prioritization muscle required to move faster, stay focused, and make better decisions when everything is changing. He also shares the operating principles behind Harvey’s growth: make decisions faster, treat most choices as two-way doors, use stress to build resilience, prioritize the one thing that matters most and the Google Doc that drives it all. Harvey began with a simple test: take real legal questions, run them through GPT-3, and ask experienced lawyers whether they would send the answers with zero edits. On 86 out of 100 questions, three out of three attorneys said yes. This is a conversation about AI, law, speed, resilience, and building in a world where the bar keeps getting higher. ------ Timestamps: (00:00:00) “The List” that Powers Winston’s $11B Business (00:02:20) How to Say “No” Like a CEO (00:07:26) The 3 Principles for Strong Decision-Making (00:08:18) How Harvey is Changing the Legal World (00:11:36) One Cold Email to Sam Altman that Changed Everything (00:12:56) The Demo Strategy that Shocked Investors (00:17:55) Advice Winston Didn't Take (00:19:34) The Deal that Almost Killed Harvey (00:21:56) How to Build Resilience to Failure (00:24:00) How Winston Hacks His Stress (00:29:36) The Key to Creating a Sense of Urgency on Your Team (00:31:29) The Kinds of People Not to Hire at Startups (00:35:09) How to Screen for Resiliency in Interviews (00:41:49) Winston's Advice for Law Students (00:45:28) Would AI Make a Better Lawyer than a Human? (00:48:54) The Future of Agent-Powered Law Firms (00:49:14) Will AI Cause Law Firms to Shrink? (00:52:45) Can AI-Only Law Firms Exist? (00:54:52) Why Legal Costs Aren't Going Down (00:56:48) Three Principles All Entrepreneurs Need to Follow (01:00:54) How Winston Defines Success ------ Newsletter: The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠fs.blog/newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ------ Follow Shane Parrish: X: ⁠⁠⁠⁠⁠⁠https://x.com/shaneparrish⁠ Insta: ⁠https://www.instagram.com/farnamstreet/⁠ LinkedIn: ⁠https://www.linkedin.com/in/shane-parrish-050a2183/⁠ Follow Winston Weinberg LinkedIn: https://www.linkedin.com/in/winston-weinberg/ Harvey: https://www.harvey.ai/blog/author/winston-weinberg ------ Thank you to the sponsors for this episode: +CoinShares: Delivering Reason to Digital Asset Investing. ⁠https://coinshares.com/⁠ +Granola AI, The AI notepad for people in back-to-back meetings: https://www.granola.ai/shane Check out the Granola Notes. +HeyGen is a message-first AI video platform that helps people and AI agents turn ideas into professional video in minutes. Try for free at https://www.heygen.com/tkp +LMNT: My go-to zero sugar electrolytes — get a free LMNT Sample Pack here: DrinkLMNT.com/TKP Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Speaker 00

  The next year, two years are basically going to define the companies that are successful for the next decade, probably, right? If not more.

• 0:12Shane Parrish?

  I want to double click on this massive 200-page, 400-page Google document that you have. How would you describe that to somebody and how do you use it?

• 0:20Speaker 00

  So basically, I can break down the whole document. So at the top, it basically has like the couple of things that I want to remember, right? You know, kind of like motivational things. Some of the ones that I care about the most are prioritization. Like, this is something I think people have a really hard time with is every, you know, like three to six months, you have to completely redo how you do prioritization as a leader, I think. And if you don't, you're really going to start messing things up. And then it has the top three documents that I care about, tracking. And so, you know, if I'm concerned about a certain part of the org, then it will have, you know, like a revenue tracker. If I'm super concerned about like post-sales or we need to do much better like customer service on the back and things like that, it'll have a document there that has like a bunch of stats on that, right?

• 1:05Speaker 00

  And then under that, it'll have, what are the three goals for the quarter? And almost always, it's usually like one hire, like one product feature. I mean, we ship now, we're getting to the point where we're shipping like four new products every quarter, which is awesome. But, you know, the one I care about the most or I need to focus on the most and then like one major area of the company I need to fix. And then after that, it will have my daily list. And I think the thing that's good about it, like all of the company dashboard stuff and motivation, like I think everyone has their version of that. The thing that I think is actually good is every day I rank everything I need to do. And so it's daily and then I refresh it and then I cross them out.

• 1:48Speaker 00

  And the reranking is, I think, really important because what I've found is the more times I click into that doc that's called the list and I rerank something, the more I think about what I'm doing, like meta thought about my thoughts. And that is really good. That's when I'm prioritizing the best, by far. That's when my schedule looks the best, that's when I'm performing the best, is how many times do I click in that doc during the day? Because it will make me reorg something, put something in first place in bold and ignore everything else. So it's more of a prioritization like document.

• 2:21Shane Parrish?

  What do you say no to?

• 2:22Speaker 00

  Most things. And I think an increasing amount of things as the company goes on. I used to say no to not, almost nothing.

• 2:29Shane Parrish?

  What's your inner monologue when you're sort of looking at something and you're trying to decide, does this make my list?

• 2:35Speaker 00

  Yeah.

• 2:35Shane Parrish?

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

• 2:38Speaker 00

  When I get really bad at it, I ask my chief of staff to force me to write a paragraph about why I'm gonna 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 gotta write that paragraph, I could write 20 pages, right?

• 3:11Shane Parrish?

  And it's easy.

• 3:12Speaker 00

  It's really easy. Yeah. And so, again, I think this goes back to like, how much of your week and your day are you thinking about what you're doing? Seriously. Like, what is the goal of the company right now? Like, what is the main bottleneck? What is the main problem? And I think like, a good founder, and I'm not saying I am anywhere close to one yet, but the ones that I've, I've seen, it seems like what they're really good at is two things. One is they've built a machine. And so, because they've built a machine, they have time to only focus on what is the main bottleneck with the machine, right? And so, those are two different skillsets, I think. And you have to have both, right? Because if all you're doing is like bottlenecks before you've built a machine, it's like,

• 3:56Speaker 00

  you're never gonna hire the right staff, you're never gonna have the processes right, you're never gonna build the right product. And so, you have to be constantly, how do am I building out the machine? And then, once that machine is somewhat built out, I think the number one goal is just, how do you improve that machine constantly? And you kind of have to think about your company that way. And I think that that's hard, because that means you are going to be in pain 24/7. Because if something's going well at the company, you are not going to be working on it. Like, if there is a part of the company that is running super well and there are no bottlenecks, I ignore it entirely, like absolutely entirely. And I try to only focus on the things that are like burning. And I try to focus on like the number one thing that's burning.

• 4:39Shane Parrish?

  I want to come back to meetings for a sec because 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, this paragraph, you're stressing, you're like, oh, this doesn't make sense. I don't want, is that because we want to be liked?

• 4:56Speaker 00

  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, the 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?

• 5:39Speaker 00

  And the reason you're having revenue problems, it must be because you don't have a certain C-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 everyone thinks it's getting worse and worse and worse and worse and worse. And you go fix the issue that's actually an issue?

• 6:24Speaker 00

  And then in two quarters or six months, all of a sudden, the company's doing really well. And that's just so hard to do. Like that is, you face so much pressure as a founder that it's really hard to do until you've kind of proven yourself. And what I've found is a lot of the best founders that I look up to, they've had tons of moments where the entire outside world is like, go do this thing, go do this thing, you need to improve something. And they just put blinders on and they completely ignore everyone. And they go do the hard thing that they know is actually going to fix the problem long term. And then six months later or a year later, I mean, hell, sometimes it's 10 years later.

• 7:01Speaker 00

  They're right. And I think that that's the reason people have a really hard time saying no is because you get instant gratification from doing the, from making progress in the way that people think progress is made. You don't get instant gratification from being like, I think you're wrong and I know the business better than you do. And really, I need to go do this other thing, but that's going to take me six months to prove you wrong. It takes a lot of conviction and a lot of discipline to be able to do that.

• 7:26Shane Parrish?

  If you were to create a Google document of your principles for decision making, what would be in it?

• 7:31Speaker 00

  So determine if something's a one way or two way door immediately. Like, that's the first thing, right? With the idea that baseline 99.9% of things is a two way door. The second thing is, what is, go back to what is your number one priority right now? Like, what is your P zero? Right?

• 7:51Speaker 00

  And based off of what your P zero is, does this help the P zero? Does this hurt the P zero? Or is this irrelevant to the P zero? Why that's important is if it's irrelevant to the P zero, it doesn't matter that much what decision you make. And so just do something and go. If it's negative to the P zero, as in it like takes distraction away from the P zero, the decision is no. Full stop. And then three is be realistic about who is going to be doing it.

• 8:18Shane Parrish?

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

• 8:22Speaker 00

  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?

• 9:07Speaker 00

  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?

• 9:23Shane Parrish?

  So was there a moment when you were an associate and you're like, oh my God, we need to start

• 9:28Speaker 00

  Yeah.

• 9:29Shane Parrish?

  this firm. What happened?

• 9:30Speaker 00

  So I got very lucky where I met my co-founder.

• 9:34Shane Parrish?

  Gabe.

• 9:35Speaker 00

  Yeah, Gabe. And he had a background in AI research. So he was one of the first folks at the, at Google Brain. He was the first Google Brain class, actually. And then he worked at Meta after that. And we became really good friends. We lived together for a while and he, at the time, was trying to kind of push LLMs at Meta, like, pretty, pretty hard. And at some point, I was like, can you just, like, what is an LLM? Can you show me one of these things? And what was available at the time was a public access point API to GPT-3.

• 10:08Shane Parrish?

  Okay.

• 10:09Speaker 00

  This is like early 2022.

• 10:10Shane Parrish?

  Yeah.

• 10:10Speaker 00

  And so everyone had access to this. This is very public. Very confused at why not more people use this in like other industries or just were talking about it. And I started messing around with it. And the first thing I actually did with it was I used it to like help run a Dungeon and Dragons game. It was like the first thing. I was actually really good at that. And I used it for that at first. And then I was on a pro bono case and it was for landlord-tenant law. And I don't know anything about landlord-tenant law, or like I learned a little bit in law school, but I didn't remember it. I started using it to do very basic, like, here's a fact pattern, here's a statute in California. You know, apply this fact pattern to the same statute or the statute to the fact pattern.

• 10:50Speaker 00

  And it got really good outputs. Then to kind of like test it even more, we went on r/lethaladvice, which is a subreddit where people ask a bunch of legal questions. And the end is almost always like, can I sue somebody? And we grabbed a bunch of landlord-tenant questions in California and we ran this chain of thought prompt over them. And we basically gave it to three landlord-tenant lawyers. And we said, somebody asked this question. We said nothing about AI, just somebody asked this question and here's the answer from a lawyer, right? Would you send this? Like, if you were the lawyer here, would you send this with zero edits? On 86 out of 100 of those questions, three out of three attorneys said yes. And that was the, oh my God, moment for me and for my co-founder, where we said, we need to do something in this industry.

• 11:36Shane Parrish?

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

• 11:42Speaker 00

  We, so we got all of those outputs and the thing that was happening kind of like simultaneously is Gabe had some friends that were thinking about joining this company called OpenAI. We basically said, hmm, we're using GPT-3 to do this. Let's just cold email Sam, Sam Altman and 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, 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 then things like that.

• 12:24Speaker 00

  And then we met with the rest of the leadership team on actually the 4th of July. And we pitched them our idea for the company and we raised money after that.

• 12:32Shane Parrish?

  And they were your original investor?

• 12:34Speaker 00

  Yeah, we didn't go to any other VCs or anything like that. I mean, I don't, I don't have a tech background and I'm not from the tech industry. So, I mean, this really was, hey, like we experimented with this. We think this is an incredible direction. Like if these models get even slightly better, this is going to change this entire industry. Did you know how good they are right now? And do you know anyone doing this?

• 12:56Shane Parrish?

  Talk to me about how you used to convince lawyers that this was viable and good product.

• 13:03Speaker 00

  Yeah, the hardest thing to do in the beginning was actually get lawyers' attention. And so what I would do is I started, I was a litigator. So I'd started, started with litigation examples. And there's, there was a nice advantage where a lot of what you file in, if you're in federal court, it has to be published online, right? And so I could go and I could find the last thing, like argument that they made. And I could actually find the document where they made that argument. And so on the demos, what I would do is I'd grab that and I'd say, what's good about this argument? Could you argue against it? Like, how would you, how'd you poke holes in this, you know, this contention and things like that? And you'd go from the lawyer, like, I used to have demos in the beginning where lawyers would literally be on their phone.

• 13:48Speaker 00

  I would show them, I mean, at the time, I thought it was like AGI. Itself and I'd show them this and they would just like look at their phone and not pay any attention. And when I started saying, hey, you filed a brief last week and you know, Apple the whatever case. And you want to see how Harvey would analyze that brief and argue against you? I mean, they were completely, you know, it's like that meme where the guys with his video games like this and then all of a sudden. Yeah, it's like that. And they would just watch the screen and read every single word that came out of Harvey. Uh, super risky because you know, a decent amount of time it hallucinate and get something wrong. And if it hallucinated, the lawyer is like, okay, this is useless. Like get me off this demo. But when it worked, it worked super well.

• 14:32Speaker 00

  The riskiest version of this is we did it during our uh, series A pitch to Sequoia. Where Sequoia grabbed a bunch of lawyers that they knew and they had us demo to them. And I just, I remember Pat Grady emailed me afterwards and was like, is that what you normally do? Because it got them really riled up. And you know, it ended up working where we picked a use case, it worked, but we found like a argument that they had done. And I showed basically like analyzing that brief and it was a good analysis. Um, and so I think like a lot of what we had to do in the beginning was literally just get lawyers to pay attention because they're super busy, right? Um, and it was just figuring that out.

• 15:15Speaker 00

  The personalization of all these demos matters so much because I don't think you get it until you really feel it on something that you work on.

• 15:22Shane Parrish?

  I feel like so many people tried chat GPT on like the first week.

• 15:27Speaker 00

  Yeah.

• 15:28Shane Parrish?

  And they were like, oh, it's hallucinated and they kind of wrote it off.

• 15:31Speaker 00

  They're still not using it because of that. Like, I think there are still folks that have tried this like three years ago. And they had a hallucination one time and they're like, yeah, we're not going to do that. I mean, we had this with Harvey where we had, you know, we've had so many folks that said, we trialed your product like three years ago. We didn't think it was good enough and we don't, we had, we're unsure if it's improved. And then they log in and they're like, I don't even remember trying the product three years ago. Like this is so different. And I think that also that. State of technology change, people aren't really used to, and especially folks that are not in the tech industry, right? And with what's happening in AI right now, every release is a massive step change. And I think it's hard for people to wrap their mental model around that and think about,

• 16:17Speaker 00

  oh, how do I create, how do I become, you know, anti-fragile where I'm okay with making different choices? And really think about the future when everything is changing so quickly.

• 16:27Shane Parrish?

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• 17:05Shane Parrish?

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• 17:55Shane Parrish?

  Is there any advice you've been given but not taken?

• 17:57Speaker 00

  Yes, I think like hiring senior executives, I've been very up and down about it. I think I was told to, I was told to hire senior executives very, very early on and I refused. And then I refused too long. I refused like, I'd say about six months too long. But if I would have taken the advice when it was given, I think it would have been a huge mistake.

• 18:18Shane Parrish?

  How did you know that you were late?

• 18:22Speaker 00

  I saw the impact of what happened when I hired them. The main advantage of being a founder of a company is if you are always on, which I tried to be,

• 18:32Speaker 00

  what you have is you have the context from day one, right? And if you're always on, your brain, all your brain has to do is do the delta between day one and day two, right? And so the reason founders are so valuable, I think, to understanding their business and looking forward and both, and looking forward and looking back is actually just because the cognitive load of taking everything about the business day over day makes it so you can kind of understand everything that's going on. And it's not incredibly difficult to do that. Whereas if you're a newcomer and you just come into a company, you don't have that. And so you're starting from zero and you have 10 years of context that you have to somehow absorb, right?

• 19:15Speaker 00

  And so my, my point in answering that way is you just have a very good pulse on the company. And you can tell, oh, if I would have made this change about six months ago, this would have moved these things forward and this problem about hiring the senior exec wouldn't have existed. And I waited a little bit too long to do that, right? You just have a sense for it.

• 19:34Shane Parrish?

  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?

• 19:42Speaker 00

  One of them was super early on. We thought, we basically thought that there was going to 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 2024. So about like a year and a half into the company, a little bit less. The idea was basically we were going to buy this company that ended up, it was 10 times bigger than us, people wise. Um, and about the same, like, we were trying to buy the company for the same, a little bit higher valuation than we were 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?

• 20:23Speaker 00

  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.

• 20:31Speaker 00

  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, we got like a lot of it. We were trying to raise, um, like around like 700 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 loan, basically with like pick. The problem with those is if you take that debt, if you don't fulfill the debt obligation, somebody else can own the company.

• 21:00Shane Parrish?

  Right.

• 21:00Speaker 00

  So it's not in, in dollars. It's actually in percentage points of the company. It's called payment in kind. And we decided not to do that. And when that happened, and I remember just pulling it off and telling the other side, we weren't going to do it and everything like that. I thought the company was over. I was just like, I don't think, I don't think like we can build fast enough. I think the model providers are just going to eat us. I think that like without this other company, we're screwed. And it forced us to basically go and like build the company, like actually build the company. Like go hire the right people, put the right work into product, do the correct scaling processes, do all of these things.

• 21:37Shane Parrish?

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

• 21:49Speaker 00

  It's like 24 hours. Um, it was really fast. And I think like,

• 21:54Speaker 00

  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 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.

• 22:35Speaker 00

  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 last year. But the reason I'm so much more confident in it is I now have a team of people that I have failed with so many times. Like we have taken crazy risk.

• 23:16Speaker 00

  We have massively butchered product lines and then recovered them and made them much better. We have made the wrong hires. We've tried to buy a company super early on that would have collapsed us. We've done all of these things, you know, we've had tons of folks be like, it's over. And because of that, I just feel very confident in my team's like resilience and their ability to adapt and strive and get through the next problem. And, you know, I don't like wish this upon the company. Like I don't wish like that tomorrow there's also like a crazy chasm and we're in a huge amount of trouble. But I kind of do in the sense of. If we get all of those done now, then we'll get better way faster.

• 24:00Shane Parrish?

  Not everyone sort of buys into like Zen being the best way to unlock yourself. How do we make stress work for us? Because when I listened to you talk about stress before this, I almost think of like stress maxing in your head, like you're actually intentionally seeking out stress.

• 24:18Speaker 00

  Well, I mean, you want to maximize it before it does too much damage to you, right? So if there are 10 things that you're really stressed about, right? You should probably try to do those early on in the company. Because if you get really good at them and you, every time you do one of those things, it should reduce your stress, even if you do a bad job. And it's the same for any sort of decision. So like firing people, right? Like that's a stressful thing to do in the beginning. But the impact of firing someone when you're a 10% company, right? It's probably not going to destroy your company. If you avoid firing an executive or something like that, that's a huge problem when you're a massive company. It could kind of implode your company, right?

• 25:01Speaker 00

  And so my point of the, the stress maxing is you want to keep stress maxing because you'll reduce your stress for that thing long term.

• 25:09Shane Parrish?

  I like that. Do you think stress focuses you?

• 25:12Speaker 00

  Yeah, massively. 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.

• 25:57Speaker 00

  Like I've run everything at some point and then hired somebody to take that. And so that gives me a lot of confidence and I know what's going on and I have a good pulse on the company. And then the second reason is.

• 26:09Speaker 00

  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 out. And I think like the, the problem with that is that can be really thrashy. And so a lot of what I'm trying to do is like, here are the principles for how I make decisions. And as a team, can we come together on those principles? So we all make faster decisions. And I think that's like the next scaling challenge that I need to do, to be honest. Where like, I think in a way, the operating system kind of right now is like, okay, what is my anxiety? And then I push on different parts of the company

• 26:54Speaker 00

  based off of that anxiety. And the, the way I want to transform the company, and I think we're starting to do it, is here are like the general concerns. And this is how, as a company, based off of these principles, we approach them. And I'm just starting to do that, but I think that's like the next step.

• 27:11Shane Parrish?

  Would you say you're hypersensitive to threats?

• 27:14Speaker 00

  You have to be to some degree, right? But you don't want to over rotate either. So one thing I think I did wrong last year was there were like a multiple threats to the company that I overreacted to, right? And one thing that happens to you as a CEO is the diameter or the amount of pressure that you can exert increases massively. What do I mean by this? When you're like a 50 person company and the CEO is stressed about something, right? Everyone kind of knows each other. And so they all kind of like know how to react to that stress and they can kind of absorb it and we all move on. When you're an 800 person company, if the CEO gets too stressed about something,

• 27:56Speaker 00

  the whole company will move, like based off of that stress. And that is such a big problem. Like, that's how you create thrash. You create thrash by you get overly stressed about everything. And then people don't know. I mean, it's like the boy who cried wolf. Like, they don't know what actually matters, what doesn't matter. And so a lot of what you have to do, I think, as a founder is figure out. You know, how do I manage my own stress? And then how do I explain and diffuse this stress throughout the company in a healthy way?

• 28:26Shane Parrish?

  How do you take care of yourself?

• 28:28Speaker 00

  It's a good question and it's a work in progress. Like getting enough sleep and working out are the main things for me. It's not even close. If you wake up right in the morning and you go on a run, I found that that's like incredible. Because everything else through the rest of the day, you get like a shock, basically. And then the rest of the day, you're like calmer for everything else. So I think that works super well. The other thing too is prioritization. So a lot of the reason people get stressed is because they're doing too many things and they can't. Everything feels like chaos, right? But if you prioritize things correctly, I think that you can actually know and have like a very good handle on all of the problems at the company, right?

• 29:08Speaker 00

  Because what you do is you take the stuff that isn't really a huge problem and you just put that somewhere else. Right? And so all you're paying attention to are the problems. And if you do that over time, you're way less stressed. Because you might be stressed about one thing, but it's again, not as thrashy. You aren't poking as much because you're trying to fix the same thing. And you don't feel like there's a thousand things that are going wrong. You feel like there's one thing that is terminal, right? But you can just focus on how do you incrementally improve that terminal issue.

• 29:36Shane Parrish?

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

• 29:40Speaker 00

  Yeah. The best way to do this is hiring. There's no other way to do it. 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.

• 30:23Shane Parrish?

  What's the one thing you look for when hiring people? Like the most critical thing?

• 30:29Speaker 00

  Right now, when I'm hiring executives, the thing I look for the most is they have to believe the same thing that I believe. Which is. The next year, two years are basically going to define the companies that are successful for the next decade, probably, right? If not more. You have to be able to think about kind of all of your decisions is that way, right? So one of the main things that I've found that's hard with hiring people is people think too many things are one-way doors. Oh my, way too many things are one-way doors. They just aren't. And I think, again, this goes back to the stress or making mistakes. You have to just make tons of mistakes with things that you think are one-way doors to realize that not everything is a fricking one-way door, right?

• 31:13Speaker 00

  I moved multiple high schools, right? I guess technically when I got kicked out of. But I moved multiple high schools. It was not the end of the world. Each time that happened, I was like, yeah, probably like we're done, right? And I remember, you know, I got like really bad grades in high school and my life wasn't over. And I think that there are just so many folks that have these such prestigious backgrounds and they've never gotten a B in their entire lives, like ever, probably, right? And so they think everything is the end of the world, right? You can't hire people like that because they will break. They will massively break because the reality is these companies are moving too fast. The world is too tumultuous right now. You're gonna lose, like you're gonna lose so many times and you're gonna lose a bunch

• 31:55Speaker 00

  and you're gonna win a bunch and you have to have a tolerance for doing that or you're just gonna break. No one at the company ever has been let go because they made too many mistakes. It's never happened. I have personally never done it. I have never, ever fired someone or anything like that because they made too many mistakes. They always broke. And the thing that broke was they started to get decision paralysis. They started not be able to scale. They didn't hire a good team. They were afraid to hire people that were better than them. All of these things that I think, again, were just, it was scary and they didn't scale throughout, right? And that's like what I'm looking for a lot is are you able, like what is your rate of learning? What is your, are you gonna be okay with making mistakes?

• 32:40Speaker 00

  Can you have failures? Can you learn from them? What is your resilience? That I think is really important too. And what is your company's resilience? Like that, I think, is something that a lot of companies are gonna face pretty soon.

• 32:52Shane Parrish?

  I think people often, they don't step their decisions.

• 32:56Speaker 00

  Yeah.

• 32:56Shane Parrish?

  It's like, I'm going to walk to the top of this flight of stairs. And they don't think about, well, to get to the top, you're actually going to take one step and then another step and then another step. Why do you think that people look at decisions that way?

• 33:08Speaker 00

  It's less scary. So I think there's actually another problem with that. Like to use your analogy of you're walking to the top of the stairs, right? And they will basically plan out, these are the stairs that I'm going to walk on.

• 33:20Shane Parrish?

  Right.

• 33:20Speaker 00

  Each way to the top.

• 33:21Shane Parrish?

  In this spot.

• 33:22Speaker 00

  In this spot on the, yeah, yeah, maybe there's like 10 options of stairs. And it's like, I'm gonna do this one, then this one, then this one, this one, gets to the top before they start walking. What's even worse that I've seen is A, people do that, which is bad in itself. B is they start walking and you can imagine that each step in the stairs, you can see more, right? You can see like more about your surroundings and you'd see more about the path ahead of you. And they're stubborn and they go, no, I won't change. And I'm step three in and I've, I can see being step three in that like, I only need to take one more step. But I'm going to keep doing it the way I said I was going to do it because I don't want to be wrong. I don't want to have to adapt. I don't want to have failed.

• 34:05Speaker 00

  People are just so afraid of failure, like they're so incredibly afraid of failure. And they think of the wrong thing as failing. Like, building a company is a thousand failures and then a couple successes. And I think what people don't realize is that you have to fail constantly in order to succeed at bigger things. Right? Like you have to make a million bets and then one of them pays off. And people are really unwilling to do that because they think each one of those bets is a failure and then you're done. I think Elon has tweeted something about this too, where it's like, the first 50 times you fail, it like really sucks. It's awful. And then he just like, don't care.

• 34:46Speaker 00

  And there are some people, again, maybe this is going back to like the optimizing stress, optimizing failure, optimizing these things. You want to build that tolerance really fast because if you don't build it fast for the smaller things, like the baby steps, then you're not going to have it for the big things. And if you can't do that on the grander scale, right? And the grander stage, I guess, then you're going to fully collapse.

• 35:09Shane Parrish?

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

• 35:12Speaker 00

  You can ask them, like, 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. 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?

• 35:57Speaker 00

  And you can tell that if they're massively hedging like that, what are they going to be like in high stakes decisions?

• 36:03Shane Parrish?

  It seems like we now live in a world where a very slight difference in skill is leveraged to a degree. It's never been leveraged before. Talk to me about that.

• 36:12Speaker 00

  Yeah, that's what I'm seeing across our company just massively, where, like, the people who were, I already thought were like 10x, are now 100x. And so I do think you're, you're seeing like the power law of ability just increased by a lot, right? And there's a couple of reasons for this. One is the communication, like getting rid of communication gaps. Because sometimes it was hard to tell if someone was good. Because really what was happening is they had a lot of good ideas, but they couldn't communicate them, right? There's, I know so many people that are like geniuses, but they have such a hard time communicating to other people. And the coding models are incredible at this. I'll give you a really simple example.

• 36:54Speaker 00

  Something I do a lot now is the models have gotten so good that I can use a really complex, like something that's really complex and legal, right? Like multi-jurisdictional fund formation, and you have to do like the, how you do tax exemptions and all these things. I can just say, can you give me an example in engineering that's similar to this?

• 37:13Shane Parrish?

  Yeah.

• 37:14Speaker 00

  And the models are so good that they'll come up with like a one pager that is like a perfect comparison.

• 37:20Shane Parrish?

  Yeah.

• 37:20Speaker 00

  That's, I know, like kind of a silly example, but there's so many ways to do translation now. And because there's so many ways to do translation, you can, you can really see like who's coming up with the good ideas. And that's maybe one reason. The second reason is you just don't need to communicate. Like you can just go and on the weekend on a Sunday, if you're a really good engineer, you can just go build something and then just shoot it off into, you know, the general Slack and people can see what it is. And so you don't even need those communication barriers, right? Some of, some of the best producing people on earth are terrible at communicating and terrible at working with others. And a lot of what you sometimes have to do as a company is how do you create a situation for those folks to succeed? Because they can't manage

• 38:03Speaker 00

  up, you know, they don't look as prestigious, they maybe not, don't have like the resume that everyone likes. Um, they aren't as good at communication, they can be hard to work with, but they're geniuses. They're like incredible. They're so good at what they do. And how do you create an environment for that? The coding models are going to make it so that those folks can do better, like better than they've ever done before.

• 38:21Shane Parrish?

  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?

• 38:30Speaker 00

  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, 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 going to end up happening in knowledge work where, you know, if an attorney is, is slightly better or slightly faster, they're going to get all the work. And that, that kind of already does happen, by the way.

• 39:15Speaker 00

  Like you have this thing at a lot of the law firms where, you know, you call them rainmaker partners and

• 39:22Speaker 00

  You know, there's an argument of like, 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.

• 39:35Shane Parrish?

  I was thinking, as you were saying that, one of the, I don't know, my mind just went off here, but you can identify who has good arguments and who has bad arguments

• 39:45Speaker 00

  Yeah.

• 39:45Shane Parrish?

  in law firms. So you could identify as like junior associates who actually have the strength of argument.

• 39:52Speaker 00

  Yeah.

• 39:52Shane Parrish?

  Of maybe a senior or partner level associate.

• 39:56Speaker 00

  And this is a really good point is, right now, in law firms, it's basically lockstep. So if you're better than everyone else in your class, you get promoted at the same rate everyone else does until like year eight or nine. And then they decide like if you're going to be partner or not, right? And I think law firms are gonna, they're gonna have to change this. Like, they're going to have to say, hey, this associate is better. Like, this associate is better at XYZ and we're going to promote them faster than the other ones because that time to partner is going to matter. And I think there are a lot of industries that are lockstep and you basically get rewarded by how senior you are, not how

• 40:38Speaker 00

  good you are necessarily. And I'm not saying that like wisdom and knowledge from being, you know, more senior isn't important. It can make you better, but in some instances, it doesn't, right? And I think that's something that we've tried to balance a lot at Harvey, where we hire a lot of like execs that have been there, done that. But we also promote a lot internally, right? Because sometimes folks are better than executives that I could have hired that were more senior who have seen that, done that, because they just have higher raw talent. And so it's better to invest in the junior because the slope is just going to keep going. And in Two years, three years, they're going to be way higher than the senior exec that you would thought about hiring.

• 41:21Shane Parrish?

  Totally. It's almost like an equalizer or meritocracy, or bringing more merit base

• 41:27Speaker 00

  Yeah.

• 41:27Shane Parrish?

  to firms that are.

• 41:29Speaker 00

  I think that's right. And I think like, my gut is firms are going to start thinking about that more. And part of it is because, you know, the, how fast you can learn, how much you can adapt, how well you can interact with clients, those things can compound, right? Versus, oh, I've just been doing this for a long time, and so I understand the law better than you.

• 41:49Shane Parrish?

  What would you tell people in law school today?

• 41:52Speaker 00

  The weird thing is, I would actually tell them the same. The first year of law school is, I think, perfect. It's like, really good. Because the first year in law school, you take like, basic like contracts, con law, all of these things. And most of the cases you read about, and the law that you read about, is not good law anymore. Like, it's law from like, 50 years ago, or something like that.

• 42:11Shane Parrish?

  Oh, it's not relevant?

• 42:12Speaker 00

  It's not super relevant, no. But why it's helpful is it teaches you how to critically think. It teaches you how to make arguments. It teaches you how to do research, all of those things. That's super relevant, right? And I don't think that's going to go away. It's maybe a little bit kind of like, you are learning how to do, create the critical skills that make you a good lawyer, right? And you're building that muscle, rather than you're learning anything about the actual law. And then the second and third year of law school, I think those need to be massively changed. Because the second and third year of law school, you kind of take like, some specialty courses and things like that. I don't think it's as relevant anymore. You need a hands-on experience, I think, starting then. So, the thing that I would tell law students is actually pretty much the same,

• 42:55Speaker 00

  which is, I think that if you can understand cut, like, your clients, super well, and you understand an industry super well, you're going to do great. Like, AI isn't going to massively impact you. If you think that your competitive advantage is, you are the best at writing briefs, or you are the fastest at doing research, or something like that, that was never your competitive advantage. Like, I don't think it ever was, right? And if you look at like, the top lawyers who succeed really well, those are the ones who I think have mastered what you mastered in the first year of law school, plus- Understand a business and understand their clients really well. And I think that that is only going to have a premium, right? And I think this is going to happen across every single industry.

• 43:36Speaker 00

  Where whatever the top things are in that industry are just going to get compounded. I don't think that those things are not like no longer going to be the top skills. I think it's just the other skills really don't matter. Does that make sense?

• 43:49Shane Parrish?

  Yeah, so it's sort of like slight variations in your skill or your argument will be amplified.

• 43:54Speaker 00

  Massively, yeah. And but your ability to read a room, your ability to understand, you know, it depends on the practice area, right? Like if you're a trial attorney, um, my sense from the best trial attorneys that I've met is, you know, a lot of what they're very good at is like coming up with a story that makes sense to a jury. Right? And I don't see how these models are necessarily going to make that not relevant anymore. Right? I think that that's still, you have to understand each jury member. And yes, there's tons of AI you can use to like get more data and things like that on what works and A B test, et cetera. But at the end of the day, I think that that's a very human ability to kind of like sit in a trial in a courtroom and understand, ah, I think that, you know, this is the type of,

• 44:37Speaker 00

  this is the, the way that I should argue this case that makes the most sense. And then the same, you know, if you're an M and A attorney, the, the folks that I've met that are the best deal attorneys. It's like they're not the best at like drafting SPAs or going through diligence rooms or anything like that. What they're the best at is the two principles, you know, the, the folk, one person's trying to buy a company, the other one's selling it. They're really good at, oh, we're arguing about something. How are we going to figure out how to mediate that argument? Or, you know, there's 10 things that they're asking for, but I think to be honest, they only want number two. Right? And the other ones I think are smoke screens. That's the type of skill set that really differentiates lawyers today. I don't see that being any different tomorrow. I think that it's just going to compound the amount that that it gives you an advantage as an attorney.

• 45:22Speaker 00

  And the value is going to accrue to those decision points instead of all the work that's being done to make the decision. Does that?

• 45:29Shane Parrish?

  Because a human is doing the decision point, is that why the value is there?

• 45:32Speaker 00

  Yeah, exactly.

• 45:33Shane Parrish?

  But do you think a human will? I mean, in the foreseeable future, I'll always be doing that. Or does AI get to a point where it's actually better than humans at that?

• 45:40Speaker 00

  Yeah, I think maybe a good way to think about this is in professional services. I think there's two types of work. There are, there is, I want work done, which is like I deliver a work product, right? And that is going to get fully commoditized. So if it is, you know, I need this contract, I need a thousand contracts reviewed. And then after I've reviewed all those contracts, I'm going to make a decision. The reviewing of those contracts is going to get automated for sure. That decision at the top is not. And so you have one side, which is basically, you know, here, here is the work product, right? Or I need work to be done. And then the decision or advice. The decision or advice is not going to go anywhere.

• 46:23Speaker 00

  In fact, my guess is it's actually going to be more valuable over time.

• 46:27Shane Parrish?

  Why?

• 46:28Speaker 00

  Because you only really get that from a bunch of experience, right? And the experience is usually something that will be very difficult to distill into the models. Right? So an example of this is when you're doing a large M and A. A lot of the very good, like top M and A attorneys, what they are good at is they actually know personally all the other folks, like all the players. And so what they're ending up becoming is actually like deal advisors of, I know that this is actually what they want. I know that this is what they're going to push back against, et cetera. And I think it's going to be very difficult for the models to get that data over time.

• 47:07Shane Parrish?

  I wanted to see what it would feel like to have an AI version of me challenge my own thinking. So I built one with HeyJatt. Let's see how this goes.

• 47:15Speaker 00

  Hey Shane, I've read every podcast transcript, every newsletter, and every book you've written. I know how you think, probably better than you do right now. What do you want to know?

• 47:26Shane Parrish?

  Invert this for me. After almost a decade of doing the Knowledge Project, what would quietly make this show worse without me noticing? The best interviewers get worse over time. They stop asking dumb questions. They get comfortable. They start performing instead of listening. The risk isn't that you fail. It's that you don't notice when you have. Okay, I can't really argue with myself on that one. That's HeyGen. Record yourself for 15 seconds and get an AI avatar that delivers professional video on demand. No camera, no crew. In over 175 languages. Already used by 30 million people, including 85% of the Fortune 100. Your first three videos are free at heygen.com. H E Y G E N dot com.

• 48:11Shane Parrish?

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• 48:54Shane Parrish?

  If you had to guess, what does it look like in five years?

• 48:57Speaker 00

  My guess is we're going to get to a stage where agents are running a very large portion of this and humans get really good at reviewing the outputs of agents and understanding where they might have made a mistake. This is also what senior lawyers are really good at already.

• 49:15Shane Parrish?

  So law firms, and what it sounds like is they'll be getting smaller.

• 49:18Speaker 00

  Yeah.

• 49:20Shane Parrish?

  And doing more work.

• 49:21Speaker 00

  I don't know if law firms are necessarily going to get smaller because there's actually a world in which... Because AI allows you to institutionalize your knowledge faster and work across a lot of different projects faster, you might actually be able to scale faster as a law firm than you used to be able to in the past, but you will need less people per project, right? But the other thing, as long as you have less people per project, you might have like way more projects. So I'll give you a really good example of this, or like a very simple one. We are going to have a bunch of regulations about AI use, for sure. There's no universe in which we aren't going to end up there, right?

• 50:04Speaker 00

  In the same way, we have a lot of audit restrictions on banks, right? For like, when you make a trade, you have to put XYZ down. That's going to happen for models, for sure, right? Who's going to be in charge of that, monitoring that? Lawyers, right? The legal department. And so there is an area where I think like there's going to be a massive expansion of legal work. Think about like a data room, what a data room is going to have in 10 years, if you've been using AI to create all the contracts. It's going to be 20 times larger, right? 50 times larger. It might get to a point, honestly, where we have agents that are basically creating all the contracts, negotiating with each other, and a human can't absorb all this data. Like, you literally can't. Like, it has to be an agent plus a

• 50:48Speaker 00

  human, otherwise you wouldn't be able to do the complexity of these transactions.

• 50:52Shane Parrish?

  You're probably at that point now where, you know, an LLM can digest all case law ever written, every transcript, every argument, everything, whereas a human could never...

• 51:01Speaker 00

  Could never do that, exactly. And my point is, the expectations are just going to change, right? Like, if you think about the largest effect that email had on the legal industry was people expected you to respond with work product faster.

• 51:14Shane Parrish?

  Right.

• 51:15Speaker 00

  That's it, right? Like, that's the main thing that it did. It's going to be the same here, right? Like, again, it's a supply and demand market, and so you have a bunch of competition. And if you're a firm and you say, "Hey, I can get this deal closed in 48 hours," and another firm says, "It'll take me three weeks." If I'm a CEO and I want a deal to get done, I want the one that's done in 48 hours so it doesn't get leaked to the press. So that, you know, someone doesn't get cold feet or something, my stock price goes down, something like that, right? And so there's a huge value and a competitive pressure that will come from just being able to do these things faster and at higher quality.

• 51:52Shane Parrish?

  Faster, more accurate?

• 51:53Speaker 00

  Yeah.

• 51:53Shane Parrish?

  Is that what you mean by quality?

• 51:54Speaker 00

  For sure. One way to think about the professional services is they're cyclical and counter cyclical, but mostly cyclical, right? And so like legal, I'll just use legal as an example. A lot of the revenue from the top law firms comes from M and A, right? Or transactional work, which is mostly cyclical, right? And so the economy goes up, the economy booms and you have more M and A, right? And so I think that folks think a lot about legal in a vacuum where they say, oh, these L L Ms, you know, are going to get so good that they can do all legal work, et cetera. And what they're missing is it can do legal work today. What does legal work look like in 10 years?

• 52:32Speaker 00

  Like, what is the product review for a lawyer look like when Medicare can ship 50 times as many products daily, right? That is going to change a lot of this world.

• 52:45Shane Parrish?

  And you don't see a world in sort of the next five years where there's like almost an all AI law firm where it's, you know, I call up, I get Harvey on the line and I give my case, I give all the facts and then all of a sudden all the briefs come out, all the information, the documents get filed with courts.

• 53:04Speaker 00

  So you can't do that in the US right now. So you need a lawyer. Basically, there's two rules. One is state by state, which is the unauthorized practice of law. It's actually a felony. And so, you know, you actually need to be barred in order to give legal advice. And then the other one is an ethical rule. So it's by the ABA, which basically says that you can't have non-lawyers invest in a law firm. And so the combination of those two make it actually impossible to do what you just said, other than in Arizona and Utah, where they have changed the rules to create a sandbox. They've created like a regulatory sandbox where you can experiment with that and you don't actually, both of those are gone. Yeah.

• 53:44Shane Parrish?

  That's fascinating. Do lawyers have an obligation to disclose that they're using AI on client work?

• 53:51Speaker 00

  It completely depends on the client right now. A, it's jurisdiction by jurisdiction and state by state, but right now mostly it is driven, like the consensus of it is driven by client by client. So, and that's changed a lot, right? Like over the past three and a half years, I'd say it's changed every six months, three months, maybe, where some clients are like, oh, you can use it on this, you can't use it on anything. Now you can use it on everything.

• 54:16Shane Parrish?

  Right.

• 54:17Speaker 00

  And the transition, like most generally, has been 2023 was don't use it at all, or you have to tell me exactly what you're using it for. Don't use it, and if you are, you have to tell me exactly how on these like very small use cases. 2024 was you can use it by certain different types of matters. So like, I'm okay with you using it for IP work, but I'm not okay for you using it for, you know, something else. And then 2025 started being you need to use it and you need to tell me how you're using it and how are you saving me money?

• 54:52Shane Parrish?

  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 backend. Why is that?

• 55:10Speaker 00

  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.

• 55:56Speaker 00

  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 on to like, what are the problems in the industry and move the industry forward? A lot of what we're doing is how do we build something that's collaborative between the two? So, you know, an in-house team can work with a law firm plus AI. And the law firm's using AI to the best of their capabilities.

• 56:40Speaker 00

  They use, you know, their expert data and all of those things on top. The in-house team does the work that they want to do, and then they pass the rest of the law firm, all of that.

• 56:48Shane Parrish?

  If you had to distill the three biggest lessons you've learned about running a company into principles, what would they be?

• 56:55Speaker 00

  Yeah. So number one is, once you get to a certain level of distribution, and by that I just mean some customers know who you are, founders should spend almost all of their time on product, like as much as possible. The biggest mistakes I've ever made as an exec are I step away from product and I try to make out for it with doing sales. Terrible, terrible idea. Like, it doesn't work. It helps you for a couple of quarters and it feels great. And you're like, yeah, I'm like saving all this stuff. But product is the only thing that scales. It's the only thing, right? And so I think like focusing on product is number one. Number two is, do you have the right people in the right positions? Like, that is just so important.

• 57:39Speaker 00

  And I don't think, I don't think you can ever spend enough time on that. That's not, by the way, just like hiring and firing at all. That's also like, is this person the right fit for this role? Are you doing a good job of mentoring this person? Are they doing a good job of mentoring their team? All of those things, right? Are there clear swim lanes, et cetera? And then the third thing, I think, is vision setting needs to have flexibility, like massively. And so people really, and I haven't Got this right. This is like of those of these three, these, the first two, I've probably done the best job of improving at least. And I'm not like excellent at them, but I've done a better job of improving. Number three is the hardest, which is how do you vision set at the right level?

• 58:21Speaker 00

  That I still struggle with massively where sometimes remember in like Q3 of last year. I wrote this like long doc and it was like the vision for the product for like five years or whatever, a long time. And I think it was interpreted as like, okay, we should go build that right now. It was a huge mistake and we like missed some of our product timings and launches because I didn't do a good job communicating that. And so like, what level of vision setting are you doing? Is it really important for building a company? And I think I still need to do a much better job of that of like, when do I do this super high level vision? And when do I do the like, no, no, what do we need to do today? What do we need to do tomorrow? Still struggle with that.

• 59:01Shane Parrish?

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

• 59:05Speaker 00

  I'm really proud of my team. 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. And actually, if they listen to this, this is probably the first time I'm saying I'm proud of my team. 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. 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.

• 59:48Speaker 00

  And we've done a lot of things that are really good for like short-term growth and all that. 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 customers and then keep them. And so we've invested in a tremendous amount on like, but what happens post-sales, right? And I think that's a small example, but it's things like that.

• 1:00:31Speaker 00

  I would rather we don't have a ceiling.

• 1:00:36Speaker 00

  As a company, I'd rather set up and feel like that than feel we're going to maximize like the next three years and then like we're screwed, but at least we maximize the next three years. I don't know. And it's been hard for me to do that. It's hard to do that when you have like the looming, you know, everything else that's going on, but I'm proud of that.

• 1:00:54Shane Parrish?

  We always end with the same question, which is, how do you define success?

• 1:00:58Speaker 00

  Yeah, there's a lot of ways that I think we would like define success for the company. Which, I mean, at this point, like you kind of merge with your company to some degree when you're working on it this much. But I think that I want to feel like we left everything on the table. Like, we really did in the next couple of years, we had, you know, and again, I shout out to Harley for this because I definitely did steal it from him. I really feel like you have to like re-earn your position every six months. And to me, every six months, that bar gets so much higher. And right now, it, I mean, doubles or triples in height. And I want to get to the point where I feel like we did

• 1:01:43Speaker 00

  everything we could every six months to get over that bar. And that would make me feel incredibly proud of whatever we've built, honestly. And I think that would make me feel proud of the team and proud of everything else, too.

• 1:01:56Shane Parrish?

  It sounds like leaving it all on the field is part of how you would personally define success, too.

• 1:02:00Speaker 00

  Yeah. And I think like, for me, you know, I didn't really find my way for like 27 years before doing this company. And I definitely had some periods of my life of like dealing with pretty bad like mental health problems and things like that. And this is the most fun I've ever had. Like, it's not even close. I mean, this is also like, it's very painful, but it is by far the most I've ever enjoyed life. It's genuinely not close. Like, I feel like there was a life before this and there was a life after, and I never want to go to life before. And so I think I'm just extremely grateful for like the position I'm in, and I don't want to lose that position. Like, I just don't want to lose it. And I don't want to feel like I, you know, kind of didn't put everything that I possibly could into it when I had the opportunity.

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