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Justin Kan Raises $10M for New Legal Startup

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Re: Justin Kan Raises $10M for New Legal Startup

#91

Post by rayiner »

vqc wrote: post #84
rayiner wrote: post #46

Earlier quoted context omitted.

> "spend less time [billing] on research" is not, and never will be, an effective value proposition; and which would be obvious to anyone in anything but the most niche putt-putt fields of practice. I'll note that for many cases these days, there is an incentive to enhance efficiency. Alternative fee arrangements, e.g. fixed monthly fee irrespective of hours, are getting more and more common, particularly with regard…

I get the feeling Big Law firms are reaching the point where they can no longer rely on increasing hourly rates as a primary source of growth. And I think for the first time in the the history of Big Law, the incentives are such that efficiency might finally be valuable. It might be the only way these law firms can continue to grow revenue. Rates can only go so much higher and there aren't that many more hours in the…

Revenue per lawyer among the 100 largest law firms is flat in current dollars over the last decade. Rates have gone up a lot, but realization has gone from over 90% to around 80%. There is a lot of pressure to write off time in excess of budget targets, which creates an incentive for achieving efficiencies.

Re: Justin Kan Raises $10M for New Legal Startup

#92

Post by pnmahoney »

rayiner wrote: post #71
pnmahoney wrote: post #51

Earlier quoted context omitted.

Really?? The move away from standard billing had always felt like it would "always be in the future"; but I take that back if that's now A Thing in lit heavy on case research. Still assuming that ^ research is better facilitated by pagerank+semantic centrality, as opposed to the boolean features that the attorneys who do the most motion drafting work are already most well-versed in. The most valuable usage I'd heard…

Yes. Even in the context of billable-hour matters, it is typical for firms to write off hours that exceed certain targets per sub-unit of the matter. That is, in effect, a shift towards pricing based on unit of work ( e.g. a motion to dismiss) rather than pure hours. I disagree about pagerank being appropriate for legal research. Pagerank-type algorithms will help you find the seminal, widely-cited cases in an area.…

I'll own that I could see why you might think that I think a certain way but consider that we do not disagree? I pointed out that - with a premium on billing efficiency - the linchpin the product's actually delivering value in such an environment would still rely on (what I note as) _the assumption that_ a semantic+graph -based product does in fact cut down research hours, compared to the boolean-based approach.

Your explanation about the value of exceptions to rules in research is correct and would occur to, say, pretty much anyone who has drafted a motion (worth clarifying: not a drag on you). Far from a disagreement, the truth of this premise is why - as I pointed out - the most experienced/valued appellate drafters effectively rely on boolean. (Except, I guess, the 'within' operator might count as a semantic operator. Although that's been in lexis and west for as long as I've seen them, and I suspect have found immense use for much longer than that...)

edit: Adding that of course only one of the two following premises need be incorrect (firms should use products which enable them to spend less time on research; the citation graph enables lawyers to spend less time on research while yielding identical quality; firms should use citation graph -based products). Depending on your circumstances, only one may in fact be wrong.

Re: Justin Kan Raises $10M for New Legal Startup

#93

Post by raleighm »

justin wrote: post #28
gnicholas wrote: post #23

Earlier quoted context omitted.

Are you targeting corporate transactional practices, litigation, or a mix? What size of firm are you going after?

At first building tools for corporate transactional practices, but we have big plans for other practice areas.

That's the right starting point. I was in-house counsel at a large tech company and worked in biglaw before that. Most companies let law firms specify how work is done. But most lawyers will accommodate if a client says "this is the tool that we require all of our lawyers to use for [project management] [billing/invoice management] [contract generation/status tracking] [etc]".

Re: Justin Kan Raises $10M for New Legal Startup

#94

Post by SmellTheGlove »

programmarchy wrote: post #53
SmellTheGlove wrote: post #5

This is a good idea. I hope it gets traction (I'd love to work on this problem as well). As for why some of this isn't done yet: The legal profession is old school. If you want to know where your work is, you can ask for a status memo, and you'll get billed for the time it takes to write it. Or the phone call. Either way. In industries where the product is the billable hour, you'll find things get done the way they'v…

Isn't this just evidence that the old school is ripe for disruption? If a startup like Atrium can streamline legal workflows, then new school firms don't need to bill for writing that status memo. That should lower prices and attract more customers. Seems like a win/win.

In many other industries, yes. In law, not as much as you'd think.

Big law firms aren't really looking for efficiency. They charge for every 10th minute that they're doing something. If they have more work than they can handle, they'll hire more associates at lockstep salaries based on their "year" - or contract attorneys at less than half that if they only need some spare capacity to do rote tasks. Their labor costs are known and very stable, and with the sheer number of underemployed lawyers out there, it's going to stay that way. No matter what, they're billing those associates or contract attorneys at far more than they're paying them. And the kicker is, the culture of "prestige" in the industry will basically prevent the largest firms from ever marketing that they'll do the same work in fewer hours. They don't pitch on a lower bill than their competitors, they pitch on expertise in a given area of law and a favorable track record of outcomes from similarly sized/situated clients. And because of that, few GCs want to take a chance on a firm doing things differently.

I'm not saying there isn't a place for Atrium - I'm not saying it's a hard sell to be negative. I really want them to succeed. It's just more likely to be in the small and mids where their clients do apply more pricing pressure, and maybe eventually in the larger firms if it really catches on. I think there's also an in-house play, because in-house counsel is often stretched pretty thin and needs better tooling to manage internal workloads and its supervision of outside counsel.

Re: Justin Kan Raises $10M for New Legal Startup

#95

Post by SmellTheGlove »

PatentTroll wrote: post #58
programmarchy wrote: post #53

Earlier quoted context omitted.

Isn't this just evidence that the old school is ripe for disruption? If a startup like Atrium can streamline legal workflows, then new school firms don't need to bill for writing that status memo. That should lower prices and attract more customers. Seems like a win/win.

Lowering prices on mid-top tier legal work won't attract more customers, demand is largely inelastic. And their customers, who are fortune X00 types, don't really care about the cost. Oh, sure, they bitch and moan about bills and write op eds about how law firms are terrible and the billable hour is bad. But, in the end, like OP says, companies routinely go back to the same crop of biglaw firms. There is no such thin…

The only disruption that occurred was 2008-2011 or so, when the economy tanked and demand for legal services took a fall. Except most biglaw partners realized their labor model could change without consequence - they laid off tons of associates and when the demand came back, they replaced them with contract attorneys, paralegals, some offshore, some software and a small number of actual associate attorneys. It turns out what their 1st and 2nd year associates were doing was largely replaceable at a much lower cost.

That's the opportunity - but it's really hard when instead of software they can go get an actual living, breathing attorney to work on contract for $25-35 an hour. More in California because of their OT laws, so maybe that's where the opportunity exists initially for disruption.

Critically, though, I don't think anyone's figured out how to charge billable hours for what your software does. Since you can still bill contract attorneys out at 3x what you pay them, it's tough going.

Re: Justin Kan Raises $10M for New Legal Startup

#96

Post by Digory »

jacquesm wrote: post #80
rayiner wrote: post #78

Earlier quoted context omitted.

The existence of dozens of competitors is the #1 marker of a highly competitive market. I'm not sure what basis you have for raising "the possibility of price fixing on an industry wide scale" (other than that is theoretically possible in any market). In my experience pitching big companies for legal matters, the process is quite formalized. When presented with a new matter, a company will interview several firms to…

Even the worst lawyers still charge 100's of $/E per hour and to get certain services performed you have to go through a lawyer. Now, I've met some - very few - lawyers that were worth their rates (one of which is commenting in this thread) but for the most part it is simply a title that in and of itself seems to make a mediocre performer suddenly worth a very large amount of money on an hourly basis. The funny thing…

The 'inelastic' fees aren't the result of overt price fixing, but the professional rules imposed by the bars. At some point, lawyers don't take on the duties for less than $x00.

Lawyers on the internet will tell you a lot for free, and look at all the documents you want for $20/hr, as long as you don't hold them responsible for putting it in front of a judge. And no matter how many excess lawyers come out of law schools, fees don't go below $x00 for most lawyers.

In litigation, those rules are probably necessary for the benefit of the system. In transactions, there should be fewer.

Re: Justin Kan Raises $10M for New Legal Startup

#97

Post by gnicholas »

SmellTheGlove wrote: post #94
programmarchy wrote: post #53

Earlier quoted context omitted.

Isn't this just evidence that the old school is ripe for disruption? If a startup like Atrium can streamline legal workflows, then new school firms don't need to bill for writing that status memo. That should lower prices and attract more customers. Seems like a win/win.

In many other industries, yes. In law, not as much as you'd think. Big law firms aren't really looking for efficiency. They charge for every 10th minute that they're doing something. If they have more work than they can handle, they'll hire more associates at lockstep salaries based on their "year" - or contract attorneys at less than half that if they only need some spare capacity to do rote tasks. Their labor costs…

> They charge for every 10th minute that they're doing something

Every 10 minutes? Every large law firm I'm aware of bills by the sixes.

Re: Justin Kan Raises $10M for New Legal Startup

#98

Post by rhino369 »

gnicholas wrote: post #97
SmellTheGlove wrote: post #94

Earlier quoted context omitted.

In many other industries, yes. In law, not as much as you'd think. Big law firms aren't really looking for efficiency. They charge for every 10th minute that they're doing something. If they have more work than they can handle, they'll hire more associates at lockstep salaries based on their "year" - or contract attorneys at less than half that if they only need some spare capacity to do rote tasks. Their labor costs…

> They charge for every 10th minute that they're doing something Every 10 minutes? Every large law firm I'm aware of bills by the sixes.

He means every 1/10th of an hour. Thought plenty of firms try pushing for 1/4th hour billing.

Re: Justin Kan Raises $10M for New Legal Startup

#100

Post by mrmr22 »

justin wrote: post #7

Hello HN! We are excited to be building in the legal space. Raising money is a necessary step, but Atrium LTS' biggest accomplishment so far is the great team of experts we have assembled here. My cofounders are Augie Rakow (former partner at Orrick, where he worked on over 100 financings and represented Cruise through their acquisition to GM), BeBe Chueh (lawyer turned founder who sold her last company to LegalZoom)…

If you're needing help with infosec, I highly braintrace.com They specialize in law firm information​ security.
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