Aakash Gupta@aakashgupta1d ago

Harvey was valued at $15.5B in September, selling AI to lawyers. Many of them still get paid by the hour. Every hour the software saves them is an hour they can no longer bill. Thomson Reuters ran the math. If AI cuts a one-hour task to 12 minutes, a firm billing hourly loses 80% of the revenue on that task. So an hourly firm has little reason to pass the speed on to the client. My guess is that's a big part of why legal still feels slow to the people paying for it. The gain goes to the firm that changes the pricing. A firm that charges per document keeps every hour AI saves, so it has every reason to get faster. The client gets a known price and a quicker turnaround, and the firm keeps the difference. Arceus launches today as that kind of firm. It says AI prepares every output and a licensed attorney approves each one before it goes back. Clients send work over Slack and approve a flat price up front. The firm says a contract review typically comes back in 4 to 6 hours. Big firms could move to flat fees tomorrow. Alternative fee arrangements have sat around 20% of law firm revenue since roughly 2014, per Thomson Reuters. When partner pay rides on billable hours, I think a flat fee looks like a pay cut until the firm gets fast. Legal AI keeps selling time savings to firms whose product is time.