The
competition
for
law
firm
customers
for
legal
specific
AI
tools
is,
to
say
the
least,
intense.
Virtually
every
legal
tech
player
almost
daily
touts
enhancement
and
upgrades
designed
to
give
them
an
edge.
From
Clio,
whose
user
conference
takes
place
this
week,
to
NetDocuments,
whose
users
conference
takes
place
next
week,
to
legal
research
vendors
like
LexisNexis
and
Thomson
Reuters,
all
are
trying
to
gain
market
share.
Add
to
this
the
fact
that
almost
all
of
these
vendors’
models
run
or
are
built
on
OpenAI
or
similar
models
and
you
have
the
makings
of
a
potentially
interesting
competitive
upheaval.
It
was
this
very
upheaval
that
the
founders
of
Harvey,
the
new
100-pound
gorilla
in
the
field,
noted
in
a
recent
interview
published
in
Business
Insider
(subscription
required).
Winston
Weinberg
and
Gabe
Pereyra
built
Harvey
seemingly
by
magic
and
almost
overnight
into
a
big
player,
lapping
the
competition
as
I
discussed
recently.
They
launched
a
stealth
player
by
evaluating
the
field
and
needs
of
law
firms,
and
by
understanding
law
firm
needs
and
motivations.
In
essence,
they
figured
out
how
to
beat
their
competition
before
the
competition
even
realized
what
was
happening.
Beyond
their
success,
they
have
a
proven
ability
to
understand
and
anticipate
market
dynamics.
When
Weinberg
and
Pereyra
Talk…
So,
when
Weinberg
and
Pereyra
talk
about
competition
in
the
market,
it’s
worth
listening.
As
most
now
know,
Harvey
was
founded
in
2022.
Within
three
years,
it
grew
in
value
to
$5
billion
and
now
has
over
50
law
firm
clients
in
the
Am
Law
100
according
to
the
article.
Harvey
offers
domain-specific
AI
tools
for
law
firms
and
works
off
the
firm’s
internal
data.
It
has
also
entered
into
a
recent
partnership
with
LexisNexis
to
seamlessly
provide
legal
research
capabilities.
What,
Me
Worry?
So
why
are
Harvey’s
founders
who
built
such
a
powerhouse
in
such
a
short
time
worried?
Harvey
is
built
on
OpenAI’s
infrastructure.
Indeed,
OpenAI
is
one
of
Harvey’s
financial
backers.
But
Harvey’s
founders
now
see
OpenAI
as
both
a
partner
and
an
indirect
competitor.
According
to
the
Business
Insider
interview,
they’re
less
concerned
about
legal
tech
vendors
and
more
about
competition
from
OpenAI
itself.
Somewhat
candidly,
they
admit
that
OpenAI
could
enter
the
legal
tech
space
directly
and
cut
out
the
middleman
legal
tech
vendors.
Moreover,
even
if
OpenAI
never
targets
the
legal
field
directly,
it
very
well
could
release
general
tools
offering
the
strong
privacy
protections,
enhanced
accuracy,
and
stronger
security
lawyers
and
legal
professionals
crave.
In
fact,
OpenAI
recently
mentioned
a
contract
review
tool
it
developed
and
is
using
internally.
And
all
that
would
threaten
Harvey’s
value
proposition
and
differentiation.
Add
to
this
the
fact
that
many
lawyers
already
use
tools
like
ChatGPT
to
do
all
sorts
of
legal-related
tasks.
Lawyers
and
legal
professionals
are
already
used
to
using
these
tools,
which
could
make
for
easy
future
adoption.
All
these
things
keep
Weinberg
and
Pereyra
up
at
night.
They
realize
that
OpenAI
is
already
its
biggest
indirect
competitor.
They
realize
that
Harvey
must
continue
to
up
its
game
to
try
to
stay
ahead
of
what
entities
like
ChatGPT
offer.
While
they
believe
that
Harvey
offers
value
by
deeply
integrating
legal
domain
knowledge,
law
firm
workflows,
and
firm
specific
customizations,
as
OpenAI
develops
stronger
and
perhaps
less
expensive
advances,
it
also
may
make
it
easier
for
big
players
to
encroach.
The
threat
is
real.
Why
Now?
Historically,
legal
tech
vendors
have
been
somewhat
immune
from
this
kind
of
upstream
competition.
Microsoft,
for
example,
has
dipped
its
toe
in
legal
tech
for
some
time
but
hasn’t
gone
after
the
downstream
customers
like
law
firms.
It
has
been
content
to
offer
services
and
products
to
legal
tech
vendors
that
can
be
wrapped
and
sold
to
their
customer
law
firms.
The
reasons
Microsoft
and
so
far
the
LLM
players
haven’t
gone
head-to-head
with
legal
tech
vendors
likely
stem
from
the
uniqueness
of
legal
market
needs.
And
also
from
the
fact
that
the
upside
profits
haven’t
appeared
to
be
enough
to
invest
the
time
and
energy
needed
to
compete
directly
with
the
vendors.
But
that
may
be
changing.
Various
reports
confirm
the
amount
of
investment
capital
going
into
legal
has
exploded
exponentially
recently,
signaling
there
may
be
profits
for
the
taking.
And
AI
and
GenAI
make
mastering
the
legal
needs
and
unique
issues
much
easier
than
ever
before.
So,
it
stands
to
reason
that
the
big
players
may
start
jumping
in.
Why
let
the
legal
tech
vendors
skim
the
profit
when
you
can
cut
them
out
and
charge
the
downstream
customers
for
services
directly?
The
Irony
of
It
All
Somewhat
ironically,
I
recently
wrote
a
piece
on
the
possibility
that
legal
tech
vendors
might
make
a
play
to
sell
their
services
directly
to
clients
and
take
a
chunk
of
the
law
firm
profits.
I
say
ironically
because
the
legal
tech
vendors
themselves
may
end
up
being
subject
to
the
same
phenomenon
if
the
ChatGPTs
of
the
world
decide
to
compete
directly.
It’s
ironic
too
that
the
very
AI
tool
responsible
in
large
part
for
the
increased
investment
and
explosion
of
products
in
legal
tech
may
itself
enable
and
encourage
the
bigger
players
to
try
to
cut
out
current
legal
tech
providers.
So
when
Weinberg
and
Pereyra
who
built
an
empire
on
evaluating
and
outmaneuvering
their
competition
are
worried
about
an
existential
competitive
threat
like
OpenAI,
the
rest
of
legal
tech
better
listen.
Stephen
Embry
is
a
lawyer,
speaker,
blogger,
and
writer.
He
publishes TechLaw
Crossroads,
a
blog
devoted
to
the
examination
of
the
tension
between
technology,
the
law,
and
the
practice
of
law.