Harvey CEO: How a 31-year-old Runs an $11B Company

the next, you know, year or two years are basically going to define the companies that are successful for the next decade, probably, right? If not more. >> 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? >> So, basically, I mean, I can break down the whole document. So, at the top, it basically has like the couple things that I want to remember, right? Um you know, kind of like motivational things. Some of the ones that I 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 3 to 6 months, you have to completely redo how you do prioritization as a leader, I think. Um 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. Um and so, it you know, if I'm concerned about a certain part of the org, then it'll have, you know, like a revenue tracker if I'm super concerned about like uh post-sales or we need to do much better like customer service on the back of things like that. It'll have a document there that has like a bunch of stats on that, right? And then under that, it'll have what are the three goals for the quarter? And almost always, it's usually like one higher uh like one product feature. I mean, we ship now we're getting to the point where shipping like four new products every quarter, um 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 the thing that's good about it, like all of the company dashboard stuff and motivation, like I think everyone has a 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. And the re-ranking is I think really important because what I found is the more times I click into that doc that's called the list, and I re-rank 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 re-org something, put something in first place in bold, and ignore everything else. So, it's more of a prioritization like document. >> What do you say no to? >> Most things. Um and I think an increasing amount of things as the company goes on. I used to say no to almost nothing. >> What's your inner monologue when you're sort of looking at something and you're trying to decide does this make my list? >> Yeah. >> Or do you capture it, or do you just let it go? Like what is that? >> When I get really bad at it, I ask my chief of staff to force me to write a paragraph about why I'm going to take a meeting. Full paragraph about why I should take a meeting. And it's so easy if you do it that way, because for 99% of meetings or events or whatever, you start writing the first sentence and you're like, I don't want to do this. And if you don't want to do this, and you're like, this is a waste of time, probably the meeting or the event is also a waste of time. For the things that I think are really important, when I'm like, I got to write that paragraph, I could write 20 pages. >> Right. And it's easy. >> 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 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 it's those are two different skill sets, I think. Um 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 you're never going to hire the right staff, you're never going to process these right, you're never going to build the right product. And so, you have to be constantly, how do 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. Um, and I try to focus on like the number one thing that's burning. >> I want to come back to meetings for a second cuz I want to tie this to psychology maybe, and maybe not, you can tell me I'm wrong. But, when you're saying no to somebody, why is it we have a problem saying no to people? You don't want to take this meeting. You you this paragraph, you're you're stressing, you're like, "Oh, this doesn't make sense. I don't want to Is that because we want to be liked?" >> The reason I think people have a really hard time saying no is they say yes to a lot of things that make them look good in the short term, instead of being able to take the pain of ignoring it, and then doing so well because you ignored it, that people back off. So, let me give you an example of this. If a third party or like an investor or someone like that says, "It's really important for you to hire a certain person right now, right?" What you might end up doing is you take a bunch of meetings with that C-suite, right? And you take tons of those meetings because the investor says, you know, "You're having revenue problems, right? And the reason you're having revenue problems, it must be because you don't have a certain C-suite, right?" But, deep down, you're like, "The reason we have a revenue problem is cuz 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 third party can see it immediately. So they'll start doing the meetings cuz 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. And then in a 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 the problem long-term. And then six months later or a year later, I mean, hell, sometimes it's 10 years later, 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. That takes a lot of conviction and a lot of discipline to be able to do that. >> If you were to create a Google document of your principles for decision-making, what would be in it? >> Yeah. So determine if something's a one-way or two-way door immediately. Like that's the first thing, right? Um 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 P0? Right? Um and based off of what your P0 is, does this help the P0? Does this hurt the P0? Or is this irrelevant to the P0? Why that's important is if it's irrelevant to the P0, it doesn't matter that much what decision you make. And so just do something and go. If it's negative to the P0, as in it like takes distraction away from the P0, the decision is no. Full stop. And then three is be realistic about who is going to be doing it. >> How would you explain Harvey to somebody listening to this who doesn't work in legal? >> What we're doing is building a system for lawyers to use all of these models to do their work in a much better way and much more streamlined way. That's an incredibly broad explanation for what the company does. Another way to think about it is we are basically tracking the progress of all of these models in the system and applying it to an industry, right? So in a way what you're kind of doing is building like a legal brain, right? And it's the same thing that other folks are doing in other verticals like in the medical vertical. It's like what you're trying to build over time is a medical brain. There are a lot of things to break down there where what you have to do is, okay, where is a model going to do a lot of the work? Where is a human going to actually be reviewing this? How do you change the processes and structures of legal departments and law firms? How do you change the process of delivering these services? It's less just, hey, we produce a product. It's actually these products are transitioning to how does the product redefine how the the profession actually operates? >> So was there a moment when you were an associate and you're like, oh my god, we need to start >> Yeah. >> this firm. What happened? >> So I um got very lucky where I met my co-founder. Um 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 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. This is like early 2022, right? And so, everyone had access to this. This was very public. I'm very confused at why not more people use this in like other industries or just we're 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 Dungeons & Dragons game. It was like the first thing. It's 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, 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 uh to the same statute or the the statute to the fact pattern. And it got really good outputs. Then to kind of like test it even more, we went on r/legaladvice, which is a subreddit where people ask a bunch of legal questions. And the answer 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 and for my co-founder where we said we need to do something in this industry. >> And so what happened next? You get this you get the response from the lawyers and you're like holy And then what? >> 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 Quan. I think he's the chief strategy officer now." And we emailed them the results and we basically said that 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 and things like that. 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. >> And they were your original investor? >> 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. Um did you know how good they are right now and do you know anyone doing this?" >> Talk to me about how you used to convince lawyers that this was viable and good product. >> Yeah, the the hardest thing to do in the beginning was actually get lawyers' attention. Um 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's a nice advantage where a lot of what you file and 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 would you poke holes in this you know this contention 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. 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 V 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 guy's with his video games like this and then all of a sudden he was Yeah it's like that and they would just watch the screen and read every single word that came out of Harvey. Super risky because you know a decent amount of time it would hallucinate and get something wrong. And if it hallucinated the lawyer was like okay this is useless like get me off this demo. But when it worked it worked super well. The riskiest version of this is we did it during our 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 Peg Grady emailed me afterwards and was like is that what you normally do because it got them really riled up. And you know it 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. And so I think like a lot of what we had to do in the beginning was literally just get lawyers to pay attention cuz they're super busy right? And it was just figuring that out. The personalization of all these demos matters so much cuz I don't think you get it until you really feel it on something that you work on. >> I feel like so many people tried ChatGPT on like the first week and they were like, "Oh, it's hallucinated." And they kind of wrote it off. >> they're still not using it because of that. Like I think there are still folks that have tried this like 3 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 tried your product like 3 years ago, we didn't think it was good enough and we don't we're unsure if it's improved. And then they log in and they're like, "I don't even remember trying the product 3 years ago." Like this is so different. And I think that also that rate 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 models around that and think about, "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?" >> The sponsor of this show is CoinShares. While most of the industry was still arguing about whether digital assets were legitimate, CoinShares was quietly building the infrastructure to invest in them properly. They now manage over 6 billion in assets and have stayed profitable through every market cycle. Fully regulated with the kind of transparency and governance that serious investors actually expect. Whether it's crypto ETFs, active strategies, or Bitcoin mining ETF exposure, you can access all of it through your existing brokerage account. CoinShares, the adults have arrived. Learn more at coinshares.com. This is not investment advice. >> You're in meetings all day. You're trying to stay present, but you're also worried you'll forget the decision, the action item, the important next step. That's where Granola comes in. Granola is an AI-powered notepad for meetings. You jot down rough notes like you always do and in the background Granola transcribes and turns them into clear useful notes when the meeting ends. There are no bots joining your calls, no distractions, just a clean notepad that helps you focus. During or after the call, you can chat with your notes. You can ask Granola to pull out action items, help you negotiate, make a decision, write a follow-up email, and so much more. I even use it when I'm listening to podcasts. Once you try it on a first meeting, it's hard to go without. Head to granola.ai/shane and get 3 months free with the code Shane. That's granola.ai/shane. >> Is there any advice you've been given but not taken? >> Yes. Uh I I think like hiring senior executives, I've been very up and down about it. Um 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 6 months too long. But if I would have taken the advice when it was given, I think it would have been a huge mistake. >> How did you know that you were late? >> Um 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, 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? 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 6 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. >> 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? >> One of them was super early on. We thought we 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 early 2024. So, about like a year and a half into the company, a little bit less. The idea was basically we're going to buy this company that ended up it was 10 times bigger than us people wise. Um and about the same like we're going to 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? Like KKR used to do this all the time where they'd basically like sign the deal for the leverage buyout and then they go raise the money. Um it was a very common thing they used to do. And that's kind of what we did and so we got the term sheet. We like locked them up for a certain amount of time and then we went to go uh get the money. And of the money we were short uh 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. Right. So, it's not in in dollars, it's actually in percentage points of the company. Uh 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. >> 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? >> It's like 24 hours. Um it's really fast. And I think like the reason it was so fast And by the way, I've had a lot of periods like this. Like I've had other times when we've like failed massively and I had 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 got basically failed out of my first like high school I went to. I was like, this is over. This is done. I remember when like I took the LSAT for the first time and I didn't quite get what I got. I was like, okay, well, that's over. But my point is you just have to get used to this of like it's over, it's over, it's over, it's over and then everything's fine. And now you know, you take those moments and then you just get like a you build resilience. Like you build resilience for for losing, for you know, suffering, things like that. And I think you get the same thing in the company. And one thing that gives me I'm more confident in the company today than I've ever been confident about the company, which is weird because externally we face way more threats than we did last year. It's not even close. Like it's 10 times the amount of threats as we did 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. 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. Um and you know, I 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. >> 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 listen 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. >> 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. Um but the impact of of firing someone when you're a 10-person company, right? It's probably not going to destroy your company. Uh 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? 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. >> I like the Do you think stress focuses you? >> Yeah, massively. Um I think it's less it's less stress, it's going through stress and then that reduces it for the next thing. Like I think like one of one of the things that I've I'm good at for This is maybe not even good at, it's just I do it a lot and it's could be good or bad. I make decisions really fast, like really, really fast. And I do that for two reasons. One is I really care about knowing what's going on in the company the entire time. And part of that is just because I've never taken any time off really. And so you just all you have to do is update my contacts window from like the one day to the next, that's it. Like that's all I have to do. And the other part of that is I've also done every part of the company. Like I've played every single role at the company at one point. Like I've run everything at some point and then hired somebody to take that. And so that gives me a lot of com- confidence and I know what's going on and I have a good pulse on the company. And then the second reason is everything that I regret at the company or whenever I regret something, it's not making a decision fast enough. It's not I made the wrong decision. What I've always regretted is sitting at the bottom of the stairs for too long instead of jump up a stair and then I'll figure it out and then jump up a stair and I'll figure it out and then jump up a stair I'll figure 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 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. Um and I'm just starting to do that, but I think that's like the next step. >> Would you say you're hyper-sensitive to threats? >> 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 I mean by this? When you're like a 50-person company and the CEO's 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 that and we all move on. When you're an 800-person company if the CEO gets too stressed about something, 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? >> How do you take care of yourself? >> It's a good question and it's a work in progress. I like getting enough sleep and working out are the main things for me. It's 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 a shock, basically, and then the rest of the day you're like calm her 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's 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? Because what you do is you take the stuff that isn't really a huge problem, 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 trashy. You aren't poking as much cuz 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? Um but, you can just focus on how do you incrementally improve that terminal issue. >> How do you maintain urgency? You're you're sort of in a sprint here. >> Yeah. The best way to do this is hiring. There's no other do it. Um it is hiring and culture. And so, what you need to do is hire a very good team that all feels the same way you do. And what your job then is is how do you instill a sense of urgency into the rest of that team? And then those leaders will instill it into their team, and then those leaders will instill it into their team, right? So, it's more how do you create a culture and a hiring process that hires and promotes people that have a sense of urgency and can instill that into the rest of folks cuz that will scale. If it's just you poking, you're just going to cause so much trash that the company's not going to move in a good direction. >> What's the one thing you look for when hiring people? Like the most critical thing. >> 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, you know, year, or 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 as that way, right? So, one of the main things that I 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. Like 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 freaking one-way door, right? I like moved multiple high schools, right? I guess technically when I 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? And you can't hire people like that cuz 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 going to lose. Like you're going to lose so many times and you're going to lose a bunch and you're going to win a bunch and you have to have a tolerance for doing that or you're just going to break. No one at the company ever has been let go because they made too many mistakes. It's never happened. I've I have personally never done it. I've 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 to 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 I 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 going to be okay with making mistakes? 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 going to face pretty soon. >> I think people often they don't step their decisions. 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? >> 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 >> Right. Each way to the top. >> spot. >> In this spot on the yeah, yeah. Maybe there's like 10 options of stairs and it's like I'm going to do this one then this one then this one then this one and then 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 what your surroundings you 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. 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 you just like don't care. 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 the grander stage, I guess, then you're going to fully collapse. >> How do you assess resilience when you're hiring somebody? >> You can ask some like I I try to spend a lot of time on like tell me about your life, like what do you want to do? What do you like doing? Like tell me mistakes you've made, things like that. Like you can do it in the hiring process, right? What I like to do a lot is I go through like a Google Doc, and I do like a live editing process. Um so, I'll I'll 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 cuz I really like to work async, and so I need to be able to work with someone async, and it's a good like litmus test to tell that. The other thing that it does is you can tell when some people like take too long. Like they'll write like a 20, you know, paragraph response to something. And you're like, you're just hedging constantly. Like this was basically a like option A or option B question, right? And you can tell that if they're massively hedging like that, what are they going to be like in high-stakes decisions? >> 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. >> 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. Um and so, I do think you're you're seeing like the power law of ability Um just increase by a lot, right? And there's a couple 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. 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 in 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? >> Yeah. >> And the models are so good that they'll come up with like a one-pager that is like a perfect comparison. >> Yeah. >> 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 good ideas and that's like 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 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 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 up, you know, they don't look as prestigious, they maybe not don't have like the resume that everyone likes, they aren't as good at communication and 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. >> 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? >> 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. Like you have this thing at a lot of the law firms where, you know, you call them rainmaker partners. And you know, there's an argument of like how many how much better are they at every single task than everyone else? Like probably not that much better, but they're slightly better at a couple things and then those things compound. And then the vast majority of work goes there. >> 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. >> Yeah. >> In law firms. So you could identify like junior associates who actually have the strength of argument >> Yeah. >> of maybe a senior or partner level associate. >> And this is a really good point is right now in 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 going to they're going to 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 uh that are locked up and you basically get rewarded by how senior you are, not how good you are necessarily. And I'm not saying that like wisdom and and knowledge from being, you know, more senior isn't important. It can make you better. But in some instances, it doesn't, right? Um 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 um because the slope is just going to keep going and in 2 years, 3 years, they're going to be way higher than the senior exec that you thought about hiring. >> Totally. It's almost like um an equalizer or meritocracy or bringing more merit-based to firms that are >> I think that's right. And I 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." >> What would you tell people in law school today? >> 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. Um cuz the first year in law school you take like basic like contracts, con law, all 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. >> Oh, it's not relevant. >> 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 It's maybe a little bit kind of like um 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. Um cuz the second and third year of law school uh 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, 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 master 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, 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? >> Yeah, so it's sort of like slight variations in your skill or your argument will be amplified. >> 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 AB test etc. 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 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&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 principals, you know, the the folk one person's trying to buy a company and 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. 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 make >> Because a human is doing the decision point, is that why the value is there? >> Yeah, exactly. >> But do you think a human will I mean, in the foreseeable future always be doing that or does AI get to a point where it's actually better than humans at that? >> Yeah, I think maybe a a good way to think about this is in professional services, I think there's two types of work. There are there is I have 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 what 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. In fact, my guess is it's actually going to be more valuable over time. >> Why? >> 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&A, a lot of the very good like top M&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, etc. And I think it's going to be very difficult for the models to get that data over time. >> I wanted to see what it would feel like having AI version of me challenge my own thinking. So, I built one with HeyGen. Let's see how this goes. 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? Invert this for me. After almost a decade of doing The Knowledge Project, what would quietly make the 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. 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That's drink >> If you had to guess, what does it look like in 5 years? >> 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. >> So, law firms, what it sounds like is they'll be getting smaller. >> Yeah. >> Um and doing more work. >> 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 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 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 really good example of this. Um 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? 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 is 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 human, otherwise you wouldn't be able to do the complexity of these transactions. >> You're probably at that point now where you know, an LM can digest all case law ever written, every transcript, every argument, everything, whereas a human could never >> could never do that. Exactly. And my point is, the expectations are just going to change, right? Like if you think about the the largest effect that email had on the legal industry was people expected you to respond with work product faster. >> Right. >> That's it, right? Like that's the main thing that it did. Um 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 3 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, um 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. >> Faster and more accurate. Is that what you mean by quality? >> 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 for as an example. A lot of the revenue from the top law firms comes from M&A, right? Or transactional work, which is mostly cyclical, right? And so, the economy goes up, the economy booms, and you have more M&A, right? And so, I think that folks think a lot about legal in a vacuum, where they say, "Oh, these LLMs, you know, are going to get so good that they can do all legal work, etc." And what they're missing is it can do legal work today. What does legal work look like in 10 years? Like, what is the product review for a lawyer look like when Meta can ship 50 times as many products daily, right? That is going to change a lot of this world. >> And you don't see a world in sort of the next 5 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 all the information, the documents get filed with courts. >> So, you can't do that in the US right now. Um so, you need a lawyer. Basically, there there's two rules. Um one is state by state, which is the unauthorized practice of law. It's actually a felony. Um and so, you know, you actually need to be barred in order to give legal advice. Um and then the other one is an ethical rule. So, it's by the ABA, um which basically says that you can't have in uh 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 done. Yeah. >> That's fascinating. Do lawyers have an obligation to disclose that they're using AI on client work? >> It completely depends on the client right now. A jurisdiction by jurisdiction and state by state, but right now mostly it is driven like the consensus of it is 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. >> Right. >> Um and the transition like most generally has been uh 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 with 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 you're saving me money. >> I was talking to somebody in private equity a couple nights ago who spends a fortune on legal fees and they had mentioned one of the things that surprised them the most is they're not seeing those legal fees come down at all despite the firms that they're engaged with using tools like Harvey on the back end. Why is that? >> I think that there's two reasons for this. One is the tools at this point do task automation, but they don't do like entire workflow automation. So it's hard to exactly say where the savings are, right? So my point with this is like the the tools are not at the point where they can automate entire diligence, right? They can automate bits and pieces of the diligence and so I think it's hard for the law firms right now to come up with exactly how much time have they saved, exactly, you know, what are the benefits and ROI of these tools. That's going to change really, really fast, and we're starting to see that change fast now. The other thing that needs to happen, I think, is the in-house teams as they adopt it more and more, they understand what the law firm could be using, right? And for a while, the in-house teams weren't really adopting this. They were about a year behind. And so, they didn't really have insight into like, what could you do with the tools, right? Like, how much of this work could be done by AI, etc. And I think that there needs to be a lot more communication between the two sides. And a lot of what we're doing with our product, and this is what I was talking about earlier, where it's not just a product, it's basically like, how do you map the product onto like, what are the problems in the industry, and move the industry forward. A lot of what we're 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. 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. >> If you had to distill the three biggest lessons you've learned about running a company into principles, what would they be? >> 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. All like, as much as possible. Um, the biggest mistakes I've ever made as a as an exec are, I step away from product and I try to make up for it with doing sales. Terrible, terrible idea. Like, it doesn't work. It helps you for a couple 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? Um, and so, I think like, fo- focusing on product is number one. Number two is do you have the right people in the right positions? Um like that is just so important 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 um etc. 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 been done a better job of improving. Number three is the hardest which is how do you vision set at the right level? That I still struggle with massively where sometimes remember in like uh 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 cuz 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 the 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. >> We've talked about a lot of things you got wrong today. What do you think you've gotten right? >> I'm really proud of my team. Um like insanely proud of my team and it's a it's hard cuz I I like I have very high standards and I'm harsh and I've been actually if they listen to this this is probably the first time I'm I'm saying I'm proud of my team. Uh no I but like I can definitely be like pretty harsh but I think that like we have built a very resilient group of folks um, and they really care like about the company. And it feels like if to me if we can survive the next like kind of chaos years, I think that we are really set up for the long term. And I'm really proud of that because I'd rather that be the case than we're like a flash in the pan company and we've done a lot of things that are really good for like short-term growth and all that, um, but we haven't set ourselves up for long term. But I think that because of the choices that my co-founder and I have made and a lot of the choices on who we've hired and how we've thought about structuring the team and what we should 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 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 invested in a tremendous amount on like what happens post sales, right? Um, that's a small example, but it's things like that. I would rather we don't have a ceiling 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. 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. >> We always end with the same question, which is how do you define success? >> Yeah, there's a a lot of ways that I think you we would like define success for the company, um, 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, I I 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 6 months. And to me every 6 months that bar gets so much higher. And right now it I mean doubles or triples in in height. And I want to get to the point where I feel like we did everything we could every 6 months to get over that bar. And that would make me feel incredibly proud of whatever we built, honestly. And I think that would make me feel proud of the team and proud of everything else, too. >> It sounds like leaving it all on the field is part of how you would personally define success, too. >> 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 in 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 it's 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.