Nathaniel Whittemore

This is not meant to be a commercial product.

Around 180 outside tech professionals have been contracted to work on the system, which, while we don't have a ton of details, it appears that partly it will function as an extensive knowledge base, aggregating information gathered from hundreds of Kirkland lawyers and partners, with Kirkland expecting it to replace other software platforms used at the firm.

Essentially, it seems the system will allow partner-level knowledge to be applied in every single case.

Chairman Bayless also discussed the prospect of AI tools ending the concept of billable hours by automating routine tasks, such as time-consuming discovery and litigation.

He said, People talk about the evolution of the billable hour.

We already do a number of matters on value-based pricing, and that trend will only continue and it will accelerate.

We're going to lean into it.

We're looking forward to leaning into it.

Now, the record of corporations rolling their own big-time AI solutions is not particularly encouraging.

You might remember, for example, back in 2023 when Bloomberg GPT, their own custom-built model based on their data, which just absolutely got bitter pills smashed as larger general-purpose models made it totally irrelevant almost immediately.

And when it comes to this project, there is certainly a lot of first impression scoffing, particularly among VCs, many of whom have funded companies like Harvey.

Investor Steven Sanofsky wrote, It isn't difficult to see why an industry leader would want to seek a competitive advantage at a rapidly changing platform transition, but history sees this as a challenge.

It's difficult to see how one firm outside of the technology leaders could move faster or more adroitly than an entire industry.

He then goes on to talk about all the reasons, why in the past when companies have tried to build their own database, CRMs, operating systems, etc., it just hasn't worked.

But this is pretty different.

And I think Steven's critique on that basis is kind of missing the mark here.

While we don't have a ton of details, it seems to me like what Kirkland and Ellis is trying to do is ward against the fact that at some point, these law rapper companies like Harvey are 100%.

100% just going to start to offer the services and cut out the middleman.

Think about it.

If you're Harvey and you're charging law firms to automate routine legal tasks, why wouldn't you just let people who need those same routine legal tasks do it directly through Harvey if you could scalp a better margin?