Harvey’s gross margins return to positive after AI token surge

Bloomberg reported that Harvey’s gross margin fell from about 50% to negative 50% by June as agent token use rose roughly 20-fold amid increased use of reasoning and agent workflows. Harvey founder Gabe said the company changed model usage, improved routing and post-training, and added tools to manage customer spending; he said gross margins returned to positive in a single quarter despite usage doubling month over month.

As comparisons for legal-software economics, the discussion cited DISCO at 75% GAAP gross margins, Thomson Reuters’ legal-professionals software segment at almost 50% adjusted EBITDA margins, and PwC reporting net profit margins around 41% for the top 10 firms. Grok 4.7 was described as particularly cheap on the cost-based Harvey Legal Agent benchmark, potentially directing more token spending to xAI and Groq; the benchmark’s robustness was uncertain.