Legal Innovation Spotlight 84 - The Collapse of Information Arbitrage: How AI Is Reshaping Consulting and Law with Usman Sheikh
Sep 3, 2025
Usman Sheikh, Managing Director at High Output Ventures, dives into how technology and AI are transforming consulting and legal services. He discusses the collapse of information arbitrage and the limitations of traditional partnership models. Usman highlights the shift toward innovative business strategies and the future of work in law. With insights on the need for adaptability and new fee structures in consulting amid budget constraints, he paints a picture of the challenges and opportunities that lie ahead in these industries.
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From Design To Services Roll‑Ups
- Usman described his entrepreneurial path from print design to VC and professional services investing over two decades.
- He shifted into services roll-ups after seeing firms struggle to move from people to technology leverage.
Information Arbitrage Is Collapsing
- Information arbitrage that sustained consulting and portions of law is collapsing due to AI automating grunt analytical work.
- Firms face margin compression from above and automation from below, forcing structural change.
AI Replaces Junior Work, Not Judgment
- Many core analysis, pattern-matching, and problem-solving tasks can be performed by AI today to junior-level quality.
- The remaining value sits in political cover, trust, and indemnity that clients buy from senior firms.