Maybe we’re looking in the wrong places for AI-driven legal transformation. As Jay Madheswaran, CEO of Eve – whose company just bagged $47m in a funding round led by Andreessen Horowitz – puts it: ‘AmLaw 100 firms are fear-tripping about AI, while plaintiff firms see profits.’
His startup, which has some serious backers now, focuses on small-to-medium size law firms, especially on the plaintiff side. It provides a suite of tech tools, heavily backed by AI, to help lawyers triage potential cases, manage a litigation, and handle many of the laborious doc-centred tasks.
‘With plaintiff law firms we go in and change things,’ he observes, and adds that with Eve the firms see they can process more potential cases and grow their business, but with the same number of lawyers.
‘[With AI] they are not labour-constrained in terms of growth,’ Madheswaran says.
He goes on to explain that plaintiff firms ‘care about different things’ to large defence law firms, and importantly ‘they do not rely on billable hours’. This means that the arrival of AI and greater efficiency is welcome, in fact, it’s a promise of far greater profits and much less time spent on process work they don’t get paid for.
‘In a personal injury case there can be 10,000 pages of medical records, there is a lot of data,’ with AI reviewing it, this work can be reduced to a few hours, he notes. ‘What might take 100 hours to prepare manually, Eve can now do in minutes.’
As these firms use tech to streamline their processes they can in turn ‘focus on how to organise their labour’. I.e. lawyers can be deployed on higher value tasks. And because laborious work is of no monetary value to such firms, they can really make this happen.
(At this point we have a discussion about Adam Smith, the famous pin factory essay, tech-driven efficiency, and the division of labour.)
And it’s so very refreshing to hear all of this. Artificial Lawyer has been writing about ‘changing the means of legal production’ since 2016, and about the inherent barriers to using legal tech to change the game, rather than make some small modifications around the edges of it.
Some large law firms have indeed taken purposeful steps with certain workflows to transform how things are done, which is great – but it’s still a minority of firms that do this, if we’re going to be frank. Moreover, it feels like many BigLaw lawyers are still not engaging with the idea of tech-based transformation with great enthusiasm. (And of course, why would they….given how things are working at present…?)
But, now, we can take a look at a different segment of the market: smaller, plaintiff firms – and we find a group of lawyers who see a major upside to using AI tools. In turn there are now companies, such as Eve, ready to help them.
Or as Madheswaran puts it, to help them to become ‘AI native’, even if they didn’t start that way. I.e. their entire approach to the main ‘process workflows’, e.g. finding and triaging potential cases, onboarding matters and paperwork, managing cases, handling high volume tasks like reviewing 100s of documents, changes to one that is AI-backed, and where AI is central to how the firm operates.
‘They have a more intelligent intake, and handling of knowledge, and they get better outcomes and better revenue,’ he adds.
He adds that using Eve and bringing AI tools (and other forms of automation) into the business, the firms they work with can move from 1 or 2 cases per lawyer per month, to 10 cases per month.
Madheswaran explains that they did initially talk to plenty of major law firms, but decided to focus on plaintiff firms because there was a genuine welcoming of what could be achieved with tech. ‘On the defence side we could give them efficiencies [with our tech] but they [would want to] put it on non-billable work. Plus, there is also an inherent fear [about AI]. If they are more efficient, then they can’t charge as much.’
So, Eve has found a market segment eager to be helped, rather than nervous about what’s on offer. What now? They have about 30 people so far, but use AI throughout the company as a force-multiplier. Moreover, with the new funding they have plenty of resources to grow headcount if they wish to. But, the main goal is to build market share among what is a vast number of small-to-medium size law firms.
‘The plan is to go deeper; we want to be the software partner for plaintiff cases. If it can be done by AI, then it should be done by AI,’ Madheswaran concludes.
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As noted, this is a breath of fresh air to Artificial Lawyer. Rather than a tech founder having to be stoic about the battle to help transform a segment of the market that is – and let’s be honest here – still reticent about really moving forward at speed, Madheswaran is able to speak happily about the apparent lack of barriers to adoption.
As ever, this comes back to the business model and culture of the firms. And this leads us back to the first point: what if legal tech has been barking up the wrong tree all these years? What if the real great hope for legal transformation is among the thousands of smaller law firms that see no structural obstacles to adopting AI and other legal tech tools? Because for them, efficiency is always a win-win. While for BigLaw, it’s always a much more complex discussion.
It’s going to be fascinating to see how things change across the wider market.
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You can learn more about what Eve offers here.