Office Hours: The Future of Legal Tech and AI, How to Cope with Financial Stress as an Entrepreneur, and Why Young and Ambitious People Should Move to a Global City

0:27Adobe Acrobat Studio, so brand new.

0:38Welcome to the Proctu Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehours at profgmedia.com. Again, that's officehours at profgmedia.com. I have not seen or heard these questions. First question. Hello, Scott. My name is Grant, and I'm an attorney focused on plaintiff's litigation and criminal defense in the Midwest. My question is about innovation in the field of legal services. I recently read a Twitter thread about hospitals and doctors providing high-end concierge services advertised as executive physicals.

1:21The idea being that for a cost of several thousand dollars a year, a patient can get a customized physical in a luxurious setting that gives them information about optimizing their health outcomes that might be more in-depth than a run-of-the-mill physical. Are you aware of similar products or services that are offered in the legal arena? If you don't know of any examples, is there a legal product that you think is missing from the market? Love the podcast. Thanks for answering. So, look, demographics are destiny. You talked about healthcare, and I'm more comfortable talking about healthcare because I know more about it or I think I know more about it.

2:03I think two enormous trends are one, AI, and two, income inequality. And if you were to try and figure out where those or where that heads, these concierge services, I don't know what you call them, VIP medical services. So I'm in that market. I read about something or a friend recommended me or referred me to something called, I think it's called Atticus. and it's basically this super high-end Gattaca-feeling health clinic. And I think you pay like 80 grand a year and that's for you and your family and you get a health scan. And they're just all over anything. And basically the way I would describe it is taking healthcare from a defensive disease-driven industry to an offensive health-related industry where they say, we're going to look at everything and just figure out how to optimize all of your levels, do all your blood work and say, we're going to solve problems before they evolve into something really serious.

2:49And we're going to just try and optimize your life. And I love this guy, Peter Attia. And I like what he says, that basically people shouldn't be focused on life extension. They should be focused on the quality of life. And he says, show me the last 10 years of your life when you're healthy versus unhealthy, and I'm going to show you an entirely different decade of life. So the healthcare system, the top 1%, all leads to these VIP, AI-generated services, what have you. In the legal field, in the legal field, I have no idea what's going on here. It seems that AI is going to do a lot in legal services, document review, translating, reviewing and summarizing documents, drafting first drafts of legal documents.

3:26I'd hate to be just a mediocre regional lawyer somewhere that doesn't have very strong relationships because I can go to chat GPT and say draft me a lease for a retail client in a residential strip mall with annual increases of 3%. and I just give it all these parameters, and it'll spit back a first draft that a paralegal or a lower-level lawyer would spit back. So at the same time, if you have good relationships or creative or smart, understand the nuances of the specific tax code or legal compliance or zoning requirements, you can use AI like a freaking going from a spear to a howitzer gun and become an incredibly productive lawyer.

4:03So it all comes back to the same place. AI is not going to take your job. Someone who understands AI is going to take your job. So the best lawyers are going to make a lot more money. This is kind of what happens with technology is you create sort of a winner take most. And the question is, what do we do with that additional income or prosperity? The mistake we've always made is we don't use any of it to kind of retrain or focus on services for the people left behind. Anyways, I can't imagine that the legal industry isn't going to be upended by this. I can see an environment where using AI and some really talented people, they say, okay, you're in this way class, pay us this annual fee, individual, wealthy individual or corporation, and we're just going to give you a flat fee.

4:42And although we won't make as much money, it'll be more robust. What do you mean by that? The cash flows will be more predictable because you're on subscription. The way it works is with Foley Hoag is they would give me all sorts of kind of free money-losing advice when my company was small. And then when L2 got sold for 158 million, they charged me like$1.5 million to do the deal. That's where they made their money. That ecosystem is a little strange. I think it's better if they just say, okay, startups, 10 ,000 a month, M &A deal when it happens, we're going to charge you a supplemental fee of a quarter of a million, but we're just going to keep, as you get better, charge you a monthly fee.

5:17That way their revenues might not be as great, but they're more predictable. It feels like the legal market is ground zero for AI. And as happens in any real innovation, that people understand the technology and can incorporate it into their practice, end up garnering or having access to cheaper capital, They pull away from the rest of the competition, and those folks get rich. And the people who kind of sit on their hands and make excuses for why they are immune to this technology shift and don't incorporate it into their everyday practice end up slowly but surely bleeding out. And that's the problem.

5:51It's slow. They'll find signals that they're doing okay. They'll have one good quarter, but slowly but surely the oxygen will be sucked out of the room in some, in some. To situate yourself between consumers, wealth and consumers, and law and health care is a good place to be. And also to situate yourself between AI and how it's going to disrupt either the health care or the legal industry is a fantastic place to be. Fantastic question. Fantastic question. Thanks for your time. Question number two. Hi, Prof G. My name is Matt. I live in East Village, Manhattan. I'm a longtime listener for my question.

6:27I'm a fairly longtime small business owner. I work in the real estate space, but always kind of did it as a bit of a side gig from my full-time W2 sales job, which was a pretty decent paying job, even in New York. But I've recently quit that job and gone all in on my business. The question for you as somebody who's run numerous businesses is how do you manage your finances when you go from this steady W-2 income to strictly business income where some months you may absolutely flush it and make a ton of money. And then other months, you know, your personal burn as well as your business burn may be higher than the income that you bring in.

7:17Thanks for your help. Thanks for your question, Matt. I appreciate your transparency. and this is something every entrepreneur deals with, a couple of things. Everyone's got to play to your advantage. At the end of the day, strategy is just answering one question. What can I or we do that is really hard? So your strategy, what can I do that is really hard? It is really hard to start a business. You know what's also really hard? Living below your means. And if you're a young person and you don't have kids, what I would argue is that the greatest wealth generator is to partner with someone who's competent, is either making money themselves or manages finances really well, and just be as frugal as possible when you're young.

7:57And I know that's not popular, and I know it's like live life, live for today. But boss, I'll tell you, the thing that saved my ass was I, for the most part, lived below my means. And that is, I never got into debt. I always tried to spend less than I made. The reality is, if you are starting a business, you are going to have financial stress. So I thought I was rich when I was 30. I had just started profit, had profit was making, profit was almost profitable from day one because it was a services company. And that's the nice thing about a services company is that, you know, all of the expenditures are people.

8:31And quite frankly, people are easy to fire. They're much easier to get rid of than costs around R &D or infrastructure. So a services company is client driven, you can be profitable from day one. But when I started these companies, so I started profit, made good money, thought I was going to be rich, boom, divorce. And divorce took the majority of my assets away, not because of the divorce itself, but because I wasn't diversified enough. Divorce typically means you have to become a forced seller of assets. It always comes at the wrong time. I think I was a bit arrogant, kept doubling down on companies, kept not spending more, but investing more in my companies when I should have been taking money off the table and diversifying a little bit, and then clawed my way back to financial security.

9:18And then boom, the 2008 financial crisis hit. And that was about the time my first kid came marching out on my girlfriend. And that was a very stressful time. And then I decided to start L2. And I had, I think, I don't know, a million bucks to my name, which no one's going to feel sorry for. But I thought at that point, I'd have a lot more money given all the risks I'd taken and success that I'd registered. And it was costing me$100 ,000 a month to fund L2. And we got profitable in about seven or eight months, but I ripped through the majority of my savings. That is hard and it's stressful. There's no magic formula here.

9:54There's a couple of things. One, if you have a partner, be transparent with your partner about the risks you're taking and what his or her role is in financial support for the household. Two, throw nickels around like they're manhole covers at your existing business. Don't kill yourself. Don't work 16 hours a day because you think that the world is going to recognize you're working 16 hours a day, but work efficiently and productively and very hard and find revenues. Set up some real benchmarks. And that is, if this company isn't break even by this date, I'm going back to getting a steady paycheck somewhere.

10:24because the real stress happens when you enter into consensual hallucination that your business is working when it's not. And it begins to put pressure on the household. It begins to put huge pressure on relationships. Number one cause of divorce is not infidelity. It's not sickness. It's financial stress and pressure. So from the outset, if you're in a relationship and you didn't say if you were or not, you want to be very transparent and approach it as a team attitude. Your superpower as a young person, you sounded young, is to just, quite frankly, not spend any money. And then a superpower as an entrepreneur is to be really, really cheap and realize that expenses and spending money doesn't create a business.

11:03I feel under this trap all the time. My most recent business, I raised a shit ton of money, and then I went and raised 8 ,000. And then I went and leased 8 ,000 feet in a super Tony office. And it's like, what the fuck was I thinking? You know, it's revenues that make a business, not expenses. But there's no secret sauce here, boss. And then maybe at some point trying to diversify some of that risk by raising money. I always started businesses with partners because I found, A, just psychologically it's less stressful to have someone else you're talking about this with and also to share some of the risks.

11:31You share some of the upside. But if a company is successful, there's going to be enough to go around for a lot of people. And then having a group of people around you who can be honest with you about whether it's time to move on or time to raise capital, put together a kitchen cabinet. I think being an entrepreneur is sort of a young man or a young woman's game. And when I speak to people, say, I'm going to go to work here for a while, get the credentials, and then maybe be an entrepreneur. I'm like, no. Entrepreneurs are kind of born. They're not made. And also, being an entrepreneur, at least initially, unless you have a lot of money or rich parents, involves living pretty, you know, pretty frugally, pretty thin.

12:02And it's much easier to do that when you're young. Once you have kids, it is hard to live really frugally because guess what? That kid is really annoying and wants his own or her own bedroom and schooling and clothes. and you just, you want to feel like a failure. Don't be able to provide for your kids or be worried you're not going to be able to provide for your kids. Then you really feel like you're failing on a cosmic level. What is the algorithm for wealth? Focus, find something you're good at that people will pay you for. There's a big difference. Something you're good at that people will pay you for.

12:31Spend less than you make, create an army of capital that you can deploy, then diversify it, diversify it, and then let time take over and don't trade. Anyways, I think you can apply those same things to building a business. Thanks so much for the question, Matt from Manhattan. and thanks for the kind words and good luck with your business. We have one quick break before our final question. Stay with us.

13:13Do that with Acrobat. Now you can do that. Do that with the all-new Acrobat. It's time to do your best work with the all-new Adobe Acrobat Studio. Let's be honest. Are you happy with your job? Like, really happy? The unfortunate fact is that a huge number of people can't say yes to that. Far too many of us are stuck in a job we've outgrown, or one we never wanted in the first place. But still, we stick it out. And we give reasons like, what if the next move is even worse? I've already put years into this place. And maybe the most common one, isn't everyone kind of miserable at work? But there's a difference between reasons for staying and excuses for not leaving.

13:59It's time to get unstuck. It's time for Strawberry.me. They match you with a certified career coach who helps you go from where you are to where you actually want to be. Your coach helps you get clear on your goals, create a plan, build your confidence, and keeps you accountable along the way. So don't leave your career to chance. Take action and own your future with a professional coach in your corner. Go to strawberry.me slash unstuck to claim a special offer. That's strawberry.me slash unstuck Welcome back, question number three Hey Prof G, how's it going? I'm Nico, messaging from Portofino in Italy I'm a big fan of your content And I've been following you since you published the four I'm 23 years old Currently working in data analytics consulting in Milan And I would like to ask for career advice So last year I did a summer internship at an investment bank in London And got a return offer for an equity trading job which will start in a few months.

15:01The trading job in London sounds really cool, the salary is great, plus after Brexit it's not easy to get a company to sponsor your visa. However, I've heard that trading is sort of a pigeonhole and it will be hard to change industry in the future. On the other hand, I'm not really enjoying the current job in Milan and overall Italy doesn't offer too many opportunities. So here's my question, should I move to London and risk getting pigeonholed or stay in Milan and keep the consulting job. I'd love to hear your thoughts. Thanks. So this is a very personal decision and you have to take into account things that you, you know, I don't know.

15:36Do you have a sick mother? Are you in love? Are you, you know, what is it? Do you get 90 % of your emotional reward from your family, which all, and they all live together. I mean, there's some nuance here, right? Having said that, based on what you told me, My brother moved to London, moved to London. Generally speaking, for people who are very ambitious, one of the key paths, one of the key algorithms to financial security and influence is to, one, get to the biggest city in your country and then get to a global city. And Milan isn't quite there. In the world of fashion, it's a global city. But despite the fact, I think it has about, I think it's 10 % of Italy's GDP.

16:24but the bottom line is Italy is sort of gone sideways the last 10 or 20 years. And that is the amount of economic growth, two-thirds of all economic growth is going to come from 20 cities. And Milan isn't one of them, but London is. And the notion around trading, if you're at a big investment bank or a big bank, trading is a fantastic way to learn the markets. My ex-girlfriend worked at Goldman Sachs and FX trading or FX sales, I think she was in, it's no longer even there. It's all computers now. But guess what? She got amazing skills, and she had the Goldman Sachs brand on her forehead and learned talented people and understood the markets and could leverage those skills for the rest of her life.

17:01So the opportunity to move to London, and typically when a bank moves you to London, they do it the best way, and that is they pay for everything, and they oftentimes have people who will help you find an apartment. Sometimes they'll even give you an expat package. The opportunity to be in London, you speak fantastic English. Oh, my God, my brother, my brother, I'm going to see you at an Arsenal game because unless there's something I'm missing, you should absolutely get to London. And I can almost guarantee you that even if you at some point move back to Milan, even if it doesn't go well, you're not going to regret having moved there.

17:37To be young, to have the opportunity to move to another country, especially a super city being sponsored by an investment bank. Oh, my God, Stop with the existential hand wringing. My brother, my brother, this is London calling. This is London calling. This is a fantastic opportunity. Congratulations. Do you realize that 99.9 % of young men in Italy and Milan want to be you right now? Let me get this. You're going to move to one of the second best city in the world? I still think New York's the best city in the world, but a close second, London? Come on. Pub culture, incredible. incredible clubs, incredible restaurants, one of the greatest concentrations of wealth in the history of mankind, right?

18:22Because the private property law is put in place by Tony Blair. You are in a fantastic seat. And to not take advantage of that opportunity to head to London, I just think you would regret that the rest of your life. Everybody wants to be you. Everybody wants to be you. Take time to pause and register your blessings. My guess is there's some people who are irrationally passionate about your well-being that you owe a lot to, that you grew up in a great culture, that you probably have a great education. A lot of it is you, but most of it is not your fault, and that is other people. And state-sponsored education or the incredible democracy that's in Italy or whoever, for God's sakes, encouraged you to learn English so fluently.

19:05You are just so blessed. So take time to pause and recognize your own achievements and how blessed you are, that you have the opportunity to move to London and make a life for yourself there. Well done, my brother. Well done. Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehours at proptomedia.com. Again, that's officehours at proptomedia.com.

19:35This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer, and Drew Burrows is our technical director. Thank you for listening to the Prop G pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice as read by George Hahn and on Monday with our weekly market show.

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