With the massive influx of liquidity, Atrium will be able to develop more internal tools that will allow it to get its customers to work faster than its traditional competitors. “Ultimately, we can be that platform on which you build these legal transactions and possibly other professional services and software services,” Kan says. They are all sitting on the platform that includes the legal documents. But keeping a large group of lawyers on staff proved costly. Atrium has evaluated packages of its software and legal advice through subscriptions, with additional fees for major businesses such as acquisitions. The model relied less on client trafficking at high hourly rates, measured in six-minute increments like most law firms. Atrium had already attempted a pivot in January and fired its in-house lawyers to become a purer software startup with better margins. Some of his lawyers have set up a separate independent law firm and have taken over former clients of Atrium. But Kan tells me it was difficult to regain momentum after this change, which some Atrium clients tell me felt chaotic and were unsure of their legal representation. What Kan didn`t mention at first was that two of Atrium`s co-founders, CTO Chris Smoak and legal partner BeBe Chueh, are gone. He later admitted that they had left the company a few months before the new financing. “BeBe wanted to spend time working on the family (she just got engaged); Chris and I disagreed on his role as a “job” in terms of defining the CTO position, Kan says.
He will now lead Atrium with remaining co-founder Augie Rakow, formerly of the mega law firm Orrick, and Kan`s longtime business partner and former McKinsey analyst Nick Cortes. Instead of continuing, Kan decided to close the company. The autonomous law firm Atrium will continue to operate under the leadership of partners Michel Narganes and Matthew Melville, but the start-up that develops legal software is over. Atrium`s software included Records, a Dropbox-like legal document tracking system, and Hiring, which instantly generated job offer letters based on details entered into a form while signatures were tracked. The startup hoped it could discourage clients and lawyers from wasting time rummaging through email chains or missing a permit that could put them at legal risk. Let computers do the legal work so lawyers can focus on solving complex problems for their clients. That`s the lucrative idea behind Atrium LTS, the machine learning startup of Twitch co-founder Justin Kan, which digitizes legal documents and builds apps on them to speed up fundraising, commercial contracts, stock distribution, and employment issues. For example, one of their applications automatically converts seed financing documents into Excel capitalization tables. But Atrium is an engineering firm with a legal clientele. It takes the most common and time-consuming activities, often related to capturing mountains of documents, and creates machine learning workarounds. Atrium`s lawyers can focus on advising their clients on what to do instead of burning the midnight oil while looking for tiny quirks in the paperwork.
Legal services become faster, cheaper and more predictable, allowing Atrium to offer upfront pricing. He used fundraising workshops and other educational materials to gather leads. Atrium is revolutionizing the legal industry with its innovative business model. In traditional law firms, lawyers often work independently and manage at most one or two paralegals. Atrium redefines the structure of how law firms operate and holds its lawyers accountable for the development of their teams. Justin Kan`s hybrid legal software and law firm startup Atrium is closing today after failing to find a better way to achieve better efficiency than a traditional law firm, the CEO told TechCrunch exclusively. The startup has now laid off all its employees, who were just over 100 in total. It will repay part of its $75.5 million financing to investors, including Andreessen Horowitz, head of Series B. The separate law firm Atrium will continue to operate. Atrium`s implosion could make waves on the legal technology scene and push other entrepreneurs to start with a more focused software approach. But unlike this game streaming startup, Atrium doesn`t have to worry about beating or being bought by a legal tech giant.
Instead, he wants to become one. But after leaving YC because “I felt like I had stopped learning,” Kan found the legal space so full of knowledge and opportunities that it can catch his eye. “One of the reasons I love this company is that it was so different. I didn`t think it was something you could compete with so easily,” Kan recalls. “I had this calendar company and Google came out with something similar. I said [Twitch co-founder] Emmett, “We have to do something that no one can compete with. At least Google will never do that. Then they did. Kan also reprimands his lack of experience in the legal department. “I think for any full-stack vertical startup start-up started by a non-specialist expert (i.e. me who is not a lawyer), there is a risk that you will come and tell a lot how things work. Then you create software that says, “Vendors need to do it this way!” Kan says, “But the practical reality is that it doesn`t work with the nuanced, non-linear workflows that suppliers already have.
The technology is therefore not adopted and does not offer any added value. This is the biggest risk ahead for me. Founded in 2017, Atrium has developed software for startups to manage fundraising, hiring, acquisition transactions and collaboration with their legal team. Atrium also offered in-house counsel who could provide advice and best practices on these issues. The idea was that the collaboration software would make their lawyers more efficient than a traditional law firm, allowing them to do their jobs faster, resulting in savings for clients and the atrium. Currently, Atrium`s technology is limited to a narrow band of use cases. But “more than $300 billion a year is spent on the corporate rights market,” Chen writes, so there`s plenty of room to grow now that Atrium is well capitalized. He will have to convince big companies to abandon the old method and let computers help. Fortunately, Atrium is not a SAAS company that forces customers to use the technology themselves. Done right, they shouldn`t even know it`s image processing software, not junior employees dumping their documents.
It has to compete with other legal tech startups like Ravel, CaseText, Judicata, Premonition, etc., although they are often just tools and not software-equipped law firms. Atrium is a full-service business law firm that uses modern technologies to provide startups with a fast and cost-effective experience. Automating an expensive legal workforce has led to a rapid increase to 110 employees and 250 clients for Atrium, including startups like Bird and MessageBird. Atrium came out of hiding just a year ago with a $10.5 million party round before hitting the Y Combinator last winter. Today, it announces that it has raised a $65 million funding round led by Andreessen Horowitz. Further layoffs followed quietly as the divisions associated with these lawyers were eliminated. But trying to develop software for third-party lawyers, many of whom have established older processes and frameworks, has proven challenging. Streamlined workflows may not have seemed worth using new technologies. Torch gave our leaders a greater awareness of their areas of opportunity by highlighting certain areas of separation between what they thought of themselves and what they heard in their 360. They were able to focus on what their team defined as important to them. Torch also designed a series of tailor-made training courses for Atrium leaders, each covering an area where the group needed to work together, including difficult conversations, coaching fundamentals, productivity and moderation, and public speaking.