AI’s Impact on Employment: Insights from Victor Lazarte

As artificial intelligence (AI) continues to evolve, discussions about its implications for employment are becoming increasingly pertinent. On a recent episode of the podcast “The Twenty Minute VC,” Victor Lazarte, a general partner at the venture capital firm Benchmark, expressed a candid view about the transformative role of AI in the workforce, particularly in the legal and recruiting sectors.

Concerns from Industry Experts

Lazarte criticized the narrative often promoted by large tech companies that AI is merely augmenting human capabilities. “It’s bulls—t,” he asserted, underscoring his belief that AI is not just a support tool but is indeed replacing human jobs. He specifically mentioned that two professions — lawyers and recruiters — should remain especially vigilant as AI technologies advance.

The Future of Legal Professions

According to Lazarte, the legal field is on the cusp of significant disruption. He predicts that within the next three years, AI systems will be capable of handling various routine tasks that are currently performed by entry-level lawyers. These tasks often include extensive research and document review, areas where AI is already making strides.

A recent report from the American Bar Association highlighted that tools like Claude, ChatGPT, Gemini, and Copilot are becoming essential resources for legal professionals. Moreover, a study by the University of Michigan Law School indicated that legal analyses generated with AI assistance showed quality improvements of up to 28% among law students.

AI in Recruitment

The recruitment industry is experiencing similar changes. Lazarte points out that AI is increasingly being utilized to streamline the hiring process. Research from Jobscan shows that 99% of Fortune 500 companies now employ AI for applicant tracking, and a recent Resume Builder survey revealed that over 40% of businesses are using AI for conducting interviews. This trend is catching many candidates off guard as AI systems engage with job seekers in place of human recruiters.

Startups within the AI recruitment space are rapidly innovating. For instance, OptimHire successfully raised $5 million in seed funding to further develop its AI-driven hiring processes, while ConverzAI secured $16 million in a Series A funding round to enhance its virtual recruiting capabilities. Additionally, the startup Mercor, which employs AI to match candidates with jobs, raised an impressive $100 million in February and has OpenAI among its client base.

AI’s Broader Impacts on Business

While Lazarte acknowledges the potential for job displacement due to AI, he also posits that it can foster the creation of new business models and companies. He envisions a future where small teams are capable of building trillion-dollar enterprises, driven by the efficiencies afforded by AI technologies.

Benchmark itself has a notable portfolio, backing well-known companies like Asana, Snap, and Uber. As the landscape evolves, the dialogue surrounding AI’s role in the economy will continue to grow in importance.

Conclusion

The emergence of AI technologies brings both opportunities and challenges to various sectors. As AI continues to advance, it is crucial for professionals in fields like law and recruitment to adapt in response to the changing job market.