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Atrium lays off lawyers, pivots to tools

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Re: Atrium lays off lawyers, pivots to tools

#51

Post by gumby »

woah wrote: post #27

My company used Atrium to help us think through some very complicated niche legal issues. We were on a flat rate plan, and it was nice to be able to brainstorm without watching the clock. We were pretty happy with their service, but it all came from one attorney, who also was the one who found us and brought us in. Whenever we dealt with anyone else there, it was disorganized and low quality. When our main attorney l…

It’s always been weird to me when a law firm tells me about all the services and such they have. It’s not the firm, it’s the lawyer, and if they decamp, you follow. Likewise just because I am really happy with lawyer X at firm Y Doesn’t mean I’m interested in Y’s patent practice when I need patent assistance.

For his reason I’ve always been puzzled why law firms merge. You ever pay multiples of revenue; it’s just literally a pro data merge with a little goodwill thrown in from one side.

Re: Atrium lays off lawyers, pivots to tools

#52

Post by jimmydddd »

duxup wrote: post #34
nrp wrote: post #31

Earlier quoted context omitted.

Most/all law firms have templates they hold internally and modify slightly for their clients. Very few billable hours are going into handing you your standard agreements like NDAs, offer letters, CIIAA, and so on. Your lawyers are really there to help you when things go non-standard, which is inevitably going to happen with any non-trivial business. I evaluated Atrium out of curiosity when I was looking for a law fir…

Yeah I have some limited visibility to a very large law firm. Paperwork you can just script never comes up as a problem and it's not like these organizations would just duplicate effort like that if they could avoid it / save themselves money. Also I never got the impression that the really profitable customers are shopping for those kinds of efficiencies....

"... really profitable customers ... ." I agree. If an attorney can choose their customers, they are not going to choose the penny pinchers.

Re: Atrium lays off lawyers, pivots to tools

#53

Post by gumby »

heymijo wrote: post #9
duxup wrote: post #5

>Its goal was to improve on the traditional law firm model, by developing software to improve efficiency for both its attorneys and clients. Any word on what they actually were doing to gain these efficiencies?

If I had to guess based on parsing these articles, Atrium went up against incentives in the legal industry and lost. [0,1] Legal firms bill hourly. Efficiency means less billable hours. (warning: moving into personal experience and conjecture) Yes, boilerplate forms for repetitive use cases seems like it should be a thing, but in my experience building businesses, every lawyer I have dealt with has found any reason p…

> Yes, boilerplate forms for repetitive use cases seems like it should be a thing, but in my experience building businesses, every lawyer I have dealt with has found any reason possible to have custom documents.

Good lawyers in the Valley should indeed be giving startups the boilerplate for free, not charging for board meetings, not charging for the partner time (not that you’ll get much — or need it) but charging for associate time. This is what I’m used to and expect, whether Gunderson Dettmer, Cooley, Orrick etc. From startups they make the money on the financing even though those docs are mostly boilerplate too. Oh no billable hours until you get a term sheet.

Then if you get big they also make the big bucks, especially on exits.

But it’s not worth chasing the scraps of billing from startups. I mean how much lawyering do you typically need in the first couple of years anyway?

Re: Atrium lays off lawyers, pivots to tools

#54

Post by Digory »

staticautomatic wrote: post #43
birken wrote: post #26

Earlier quoted context omitted.

I think it is a doubled edged sword. It was an audacious idea that made a lot of sense, and the fact that the founder could raise a lot of money based on name alone probably helped make the gamble on the audacious idea possible. If the startup could have reached escape velocity and be passed off to somebody else then I think you have the best of all worlds. Serial entrepreneur can shift to something else while the su…

"It was an audacious idea that made a lot of sense" I've spent my whole career in the legal field and built a number of legal tech automation tools with varying degrees of sophistication and commercial success, and I genuinely have no idea how he thought Atrium was going to work. From the outside, the only audacious thing I see is that Atrium tried to do something that's famously impossible to do.

Based on the pivot language in the release, I suspect they ran smack-dab into the ethics rules.

Lawyers can't directly solicit funding and M&A deals. Whatever a "Fundraise Concierge" is, it can cold call founders all day long.

Wouldn't be surprised to hear they're ramping up direct sales.

Re: Atrium lays off lawyers, pivots to tools

#55

Post by staticautomatic »

Digory wrote: post #54
staticautomatic wrote: post #43

Earlier quoted context omitted.

"It was an audacious idea that made a lot of sense" I've spent my whole career in the legal field and built a number of legal tech automation tools with varying degrees of sophistication and commercial success, and I genuinely have no idea how he thought Atrium was going to work. From the outside, the only audacious thing I see is that Atrium tried to do something that's famously impossible to do.

Based on the pivot language in the release, I suspect they ran smack-dab into the ethics rules. Lawyers can't directly solicit funding and M&A deals. Whatever a "Fundraise Concierge" is, it can cold call founders all day long. Wouldn't be surprised to hear they're ramping up direct sales.

All things considered, I would be surprised if that contributed meaningfully to any of this.

Re: Atrium lays off lawyers, pivots to tools

#56

Post by sjy »

staticautomatic wrote: post #16
KaoruAoiShiho wrote: post #2

Did they prove or felt like they proved product market fit before they hired loads of lawyers? I wonder how that worked. (Serious question, not trying to be critical).

They're probably now on the long list of law firms that tried and failed at alternative fee structures. Legal services consumers have shown time and again that they like regular old hourly billing.

Can you expand on this? It sounds plausible, but then so does the narrative being pushed by the “new law” firms – that clients want alternative fee structures because they don’t like the open-ended cost of time billing.

Re: Atrium lays off lawyers, pivots to tools

#57

Post by staticautomatic »

As far as I can tell, Kan fundamentally misunderstood the nature and value of automation in the legal services industry.

Kan was quoted in 2018 as saying "The goal with the tech side has always been...to help attorneys spend more of their time on meaningful work and less of their time on crank-turning work."

Time spent on "crank-turning work" constitutes a relatively negligible portion of billable time for any attorney billing at a reasonably high rate. They delegate as much of it as possible to people who bill at lower rates, like assistants, paralegals and junior associates. So you're not really automating much of the attorney's work at all. Even if you build an ergonomic software platform for routine tasks (like Atrium's glorified Dropbox), the amount of time/money it would save over the course of a large engagement is de minimis. And if you aren't dramatically saving time, you can't dramatically reduce client costs under any fee structure.

So they end up with this software group making tools that don't help the legal side make more money. And the tools don't contribute meaningfully to the legal side's pitching for work in part because they don't save the prospective client much money. Meanwhile, the software side can't sell the tools to other law firms because the software side is tied to a law firm. Ultimately, they end up with a bunch of lawyers and software developers who can't help each other. This outcome is so predictable that it's downright hilarious they ever thought it would be a money-making strategy, and apparently the investors didn't understand or think it through, either.

What Kan mostly got wrong was thinking that automation would be profitable for a law firm. There are lots of automation tools that would be extremely valuable to a law firm, but that usually means you should be selling them to a law firm, not from a law firm.

Re: Atrium lays off lawyers, pivots to tools

#58

Post by _jal »

anotherfounder wrote: post #23

https://www.atrium.co/inside-atrium/the-future-of-atrium/ For someone who has spent so much telling founders to cut buzzwords and speak in plain and simple English, this blog post by Justin Kan is something special. Case in point: > Similarly, at Atrium, we’ve made the tough decision to restructure the company to accommodate growth into new business services through our existing professional services network. Simple…

Culture and risk avoidance. It seems a safe way to frame things because others have did it that way before and the author can't remember anything bad happening to them.

American business communication, especially when addressing mass audiences, has its own special modes. I find a lot of it gross, and I'm a native.

I will say, ability to cut the nonsense is definitely a positive distinguishing factor when interviewing, but that's hit or miss; there are lots of smart, decent people with whom I just don't "click" and I imagine that's the case for most folks.

Re: Atrium lays off lawyers, pivots to tools

#59

Post by pmichaud »

staticautomatic wrote: post #57

As far as I can tell, Kan fundamentally misunderstood the nature and value of automation in the legal services industry. Kan was quoted in 2018 as saying "The goal with the tech side has always been...to help attorneys spend more of their time on meaningful work and less of their time on crank-turning work." Time spent on "crank-turning work" constitutes a relatively negligible portion of billable time for any attorn…

I wrote about this years ago, I think on HN. I guess I wasn't cynical enough at the time because even as an outsider what you're saying seemed obvious to me, and I assumed the founders knew that. I thought maybe this pitch was useful at the beginning to get market penetration or something, but the real thing was to phase lawyers out almost entirely.

Maybe they really poured years and millions of dollars into a stupid idea, or maybe they just failed in a planned pivot?

Re: Atrium lays off lawyers, pivots to tools

#60

Post by OnlineGladiator »

meritt wrote: post #48
mdotk wrote: post #24

Earlier quoted context omitted.

Could NEVER understand what the heck they do and how they got $75M. Just sounded like they were a law firm specialising in start ups. Big whoop.

> how they got $75M Justin Kan sold Twitch to Amazon for nearly $1B after 7 years, Socialcam for $60M in 18 months, and Exec for "under $10M" in 2 years. That's how he raised $75M. The company/product was completely irrelevant.

That downward trend is a little concerning. And honestly, "under $10M" is probably a bad exit (although I don't have enough context to say for sure).
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