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Atrium shuts down, laying off 100

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Re: Atrium shuts down, laying off 100

#121

Post by btown »

kemitchell wrote: post #81
eganist wrote: post #46

Earlier quoted context omitted.

Legal is a notoriously sluggish industry, one that's almost infuriatingly incapable of adopting change and technology. Atrium's original pitch was exactly the opposite of what most legal teams are used to interacting with, and I can't think of a single biglaw attorney (sorry for the anecdote) who had faith in the idea or its execution. The original concept, as a reminder: https://techcrunch.com/2018/09/10/atrium-lega…

I believed that law was a sluggish, tech-averse industry when I signed up to join it. But I don't see it living up to its tech-resistant reputation. It's very easy to blame the customer that way, when you have something to sell. As a lawyer, a coder, and legal toolmaker, I've been there. But my lived and observed experience of practice is that lawyers adopt what makes them competitive. As a result, they've often been…

It’s vital that tech for professional services empower the professionals. I do think venture capital fails in this regard - don’t start with “disrupting law,” start with empowering it, which may be a lifestyle business at first but very possibly a sustainable one. Then look to scale from there. Not sexy, but it’s how I think the market will be cracked.

Whoever can build tooling to help lawyers decipher a 100 page credit agreement in half the time, reliably all the time... will do way better than someone replacing those lawyers with AI-outsource hybrids that can do it in 1/10 the time, but only succeed half the time.

Re: Atrium shuts down, laying off 100

#122

Post by tptacek »

eganist wrote: post #49
harryh wrote: post #44

Earlier quoted context omitted.

Working at a zombie company with very little chance of success isn't a great gig either. Shutting it down cleanly, paying decent severance, and letting the staff move on is a good move for them too.

Absolutely, but at the same time, the founder and team with nothing to lose is more likely to pull a rabbit out of that blood-equity-soaked hat. I'd rather pitch into the latter, which I suppose is sunk cost fallacy manifest.

I don't understand what this even means. For everyone involved in a startup, time is the most precious resource they're investing. If the startup is doomed, pretending it isn't and keeping employees on the hook is the worst thing a founder can do. And what is "blood equity"?

Re: Atrium shuts down, laying off 100

#123

Post by hef19898 »

hardwaresofton wrote: post #106

> Atrium had attempted a pivot back in January, laying off its in-house lawyers to become a more pure software startup with better margins. Some of its lawyers formed a separate standalone legal firm and took on former Atrium clients. But Kan tells me that it was tough to regain momentum coming out of that change, which some Atrium customers tell me felt chaotic and left them unsure of their legal representation. It'…

Especially lawyers, who by definition aren't too bad at screwing over others legally themselves.

Re: Atrium shuts down, laying off 100

#124

Post by speedplane »

tptacek wrote: post #122
eganist wrote: post #49

Earlier quoted context omitted.

Absolutely, but at the same time, the founder and team with nothing to lose is more likely to pull a rabbit out of that blood-equity-soaked hat. I'd rather pitch into the latter, which I suppose is sunk cost fallacy manifest.

I don't understand what this even means. For everyone involved in a startup, time is the most precious resource they're investing. If the startup is doomed, pretending it isn't and keeping employees on the hook is the worst thing a founder can do. And what is "blood equity"?

>> founder and team with nothing to lose is more likely to pull a rabbit out of that blood-equity-soaked hat.

> what is "blood equity"?

Even failing startups, with little cash and poor market penetration are often worth something to somebody. It could be a small client list, the team, patents, or just an attractive domain name. Most founders leading failing startups will try to sell to suitors for pennies on the dollar invested. Sometimes they get a small cash bump (or in WeWork's case, a small $1B), but it also means they can say they were acquired rather than simply failed. And they're right, building a company and selling it for $1.00 is far more difficult than not selling it at all.

Investors don't always like this because they recognize the loss at acquisition, which hurts their published returns. But more often, they don't care. They know the odds before-hand and prepare for events like this.

The people who lose the hardest are the employees with just stock-options or small equity stakes. Everyone's stock will be worthless, but the founder can potentially walk-away with a decent "consulting" contract. The best a standard employee can hope for is being hired by the acquiring company and that their culture doesn't suck.

From the employees perspective, the bright side is that they are often the first people to figure out that a company is doomed (before investors, customers, or the press). They have the advantage of time when it comes to planning their next move.

Re: Atrium shuts down, laying off 100

#125

Post by sjroot »

pontifier wrote: post #101

I contacted atrium in December to see if they could help me with an acquisition, but they didn't even want to take me on as a client because I wasn't big enough yet. I should have guessed there was some trouble behind the scenes. I ended up just going with my gut, doing my own quick study on aquisitions, and went ahead with the aquisition without a lawer on my side looking things over. I think it turned out ok... tim…

I have a similar-ish story. I actually just spoke on the phone with a representative from Atrium just a few days ago; I was interested in having some policies written/reviewed. I was particularly interested in their "start-up" package which seemed to offer general counsel for those looking to grow their business.

While I would have been happy to pay for this sort of concierge approach, I was also "declined" for being too small / not needing the specific services I suppose they were willing to provide. I imagine this kind of interaction with potential clients is one reason they got to this point.

Re: Atrium shuts down, laying off 100

#126

Post by gnicholas »

gnicholas wrote: post #109
optimiz3 wrote: post #99

Earlier quoted context omitted.

The most expensive lawyer is one the one that loses. Going cheap on legal representation is not great business advice.

I'm not sure what your first sentence means, but you're absolutely right that some GCs go with expensive outside counsel precisely because they're expensive. If it's a legal matter that's critical for the company, the GC can get blamed for going with a cut-rate firm, but not for going with a firm that's 'too expensive'.

Not sure why the downvotes. There is literally a saying in law: "nobody ever got fired for hiring Skadden". If you think this is ridiculous, don't shoot the messenger. And if you disagree that GCs hire blue-chip firms partly for CYA, please share your experience!

Re: Atrium shuts down, laying off 100

#127

Post by masonic »

nradov wrote: post #97
eganist wrote: post #46

Earlier quoted context omitted.

Legal is a notoriously sluggish industry, one that's almost infuriatingly incapable of adopting change and technology. Atrium's original pitch was exactly the opposite of what most legal teams are used to interacting with, and I can't think of a single biglaw attorney (sorry for the anecdote) who had faith in the idea or its execution. The original concept, as a reminder: https://techcrunch.com/2018/09/10/atrium-lega…

Several decades ago law firms were among the first to adopt PCs for word processing and then LANs for file sharing. They will absolutely adopt new technology when it actually works.

And word processing in general, clear back to the 1970s (e.g. Wang).

Re: Atrium shuts down, laying off 100

#128

Post by smohnot »

These full-stack “cyborg” businesses are hard; seen them in many types of prof svcs; accounting, legal, recruiting, r estate, insurance. Very few have worked, Redfin as notable exception, though it took forever. The expected operational efficiencies are very difficult to come by.

Re: Atrium shuts down, laying off 100

#129

Post by brianTheDog »

hardwaresofton wrote: post #106

> Atrium had attempted a pivot back in January, laying off its in-house lawyers to become a more pure software startup with better margins. Some of its lawyers formed a separate standalone legal firm and took on former Atrium clients. But Kan tells me that it was tough to regain momentum coming out of that change, which some Atrium customers tell me felt chaotic and left them unsure of their legal representation. It'…

LMAO! The whole legal system is there to screw over the poor and allow the rich to do what they please.

Re: Atrium shuts down, laying off 100

#130

Post by TheOtherHobbes »

paultopia wrote: post #50
eganist wrote: post #46

Earlier quoted context omitted.

Legal is a notoriously sluggish industry, one that's almost infuriatingly incapable of adopting change and technology. Atrium's original pitch was exactly the opposite of what most legal teams are used to interacting with, and I can't think of a single biglaw attorney (sorry for the anecdote) who had faith in the idea or its execution. The original concept, as a reminder: https://techcrunch.com/2018/09/10/atrium-lega…

The other thing about the original vision is that it isn't even remotely clear what the hell they're doing. Are we really talk about having ML models understand caselaw? (In which case, thompson reuters is going to be way ahead anyway always, and they suck, see, e.g., the horror that is the latest version of westlaw.) Or are they talking about building a bunch of efficiency tools? I feel like the latter model could h…

It sounds as it wasn't remotely clear to them what the hell they were doing. "Disrupt all the law things!" was always a very vague pitch.

I suspect this was really a tribal play. The real plan wasn't automation, it was to pitch the company as a specialised law firm for techpreneurs that had recognisable tribal tech features - less of the "them" that tech people feel around lawyers, and more of the "us."

The problem with law is that you need the "them" parts to be at least competitive with the rest of the industry, on its own terms.

Not only did that not happen, but the "us" parts made no real difference.

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