6 ms·

Atrium Raises $65M

208 points by justin 8y ago

btrautsc 8y ago
I would like to nominate myself to be an outside Board Observer. JKan and Seibel are two of the best dudes in SV. Adding Marc and Anthony to the mix will make for incredibly fun board meetings. I will take notes if that role isn't already covered.
unmiss 8y ago
Next after Atrium becomes Unmiss https://spellc.net/unmiss https://spellc.net/unmiss
jamestimmins 8y ago
Congrats @justin. I'm curious about culture, as the article mentioned that employees with different backgrounds have very different cultural expectations. Have y'all actively managed/shaped culture? Are you shoehorning non-tech employees into a tech culture, or is it more of a middleground?
- justin 8y ago
  Thank you! It hasn't been a linear journey - I have lots to say on creating a culture that joins multiple disciplines (where neither is dominant). I suspect companies like Compass (the real estate brokerage) and One Medical face similar issues. One of the primary gaps we need to bridge at Atrium is simply educating different disciplines on what everyone else does. EPD (eng, product, design) and operations teams need to learn what it is like being a lawyer; lawyers and paralegals need to learn what product can help with (and what it can't). We've slowly added more and more cross functional education around these things (onboarding, shadowing, etc) -- and probably have a ways to go. I'd say it's a middle ground between tech culture and legal. Certain things that are ok culturally in tech (for example, moving fast and worrying about IT security later in the game) are not ok for a venture like Atrium. At the same time, we are trying to innovate in an industry that doesn't get a lot of innovation, so we do want to re-think things from first principles as often as we can (in fact, it is one of our company values). Happy to explain more if people are interested.
  - toekyoe 8y ago
    @justin, as a patent attorney, I've wondered if Atrium has considered exploring providing patent-related services to clients. Is this something that is on the horizon? You mentioned the need to educate people about different disciplines. Patent attorneys seem like a great fit for a company with that need since most patent attorneys have previous careers as engineers. Also, patent attorneys could greatly benefit from the exposure to the transactional/corporate side of law, which appears to be Atrium's current focus.
    - Alex3917 8y ago
      The problem is that if you knowingly infringe on a patent, it's triple damages. So most companies that are big enough to have any budget aren't going to be allowed to use any product that involves them or anyone else searching through the patent database or using data from the patent database, since any record that they did so could result in massive legal liability. There are about 15 companies in this space offering various services, but because of this issue the market has remained relatively small even though a lot of these companies have been around for a decade or more and have pretty mature offerings.
      - toekyoe 8y ago
        Thanks for the informative reply!
  - jamestimmins 8y ago
    Thanks for the response! It's interesting to consider what drives the culture in these various domains (risk, incentives, leadership values, etc.) and how many of them can vary based on the environment. For example, if making partner is no longer an incentive for the lawyers then that may alter culture automatically, whether or not they're working in tech; however, changing the environment may not have any bearing on legal risk, meaning the component of legal culture associated with risk is non-negotiable.
asparagui 8y ago
Just wanted to say that I've been enjoying the events you all have been hosting in SF, please do more!
- justin 8y ago
  Thank you! We have many more events planned with great partners in the upcoming few months. Would love any feedback on types of events, speakers, or topics you'd be interested in. Our goal is to create a community that is helpful for founders at any stage.
  - asparagui 8y ago
    Maybe it's just where we're at right now, but anything about growth would be interesting. I particularly enjoyed the Q&A at AWS. Hiring, sales, and building a unified team culture are what we're currently struggling with. There are no easy answers but hearing many different perspectives gives me the clues I need to (usually) make the right decisions.
    - justin 8y ago
      Thank you; have sent along to our events team.
cozy101 8y ago
Dealing with lawyers as a newbie is such a freaking nightmare. Please bring this to Canada :(
jucjuc 8y ago
Congratulation @justin, we don't know each other (unfortunately), but damn, you're like a machine: justintv, twitch, and now atrium How do you do it?
- type-2 8y ago
  is it possible to learn this skill?
  - justin 8y ago
    Absolutely 100% possible to learn company building skills. No one starts off as a natural; like anything there is 10,000 hours of practice involved. When I started on my journey 14 years ago I was shy, not good at selling, a terrible programmer, had no management experience, had no connections and was not a super strategic thinker. Now I am much better at all those things (except I'm still a fairly mediocre programmer). The last 14 years were mostly about learning how to be better at those skills (not all at once). The important thing about being in a startup was that I was put into positions where I was forced to learn them by doing (which was at times an incredibly painful process -- because most learning involves failure and these failures felt particularly high stakes). If we could start by strapping a camera to my head and calling it a startup, and then create >1b in value across half a dozen startups in the next decade -- literally anyone who is reading this right now can be successful building a business.
    - TaylorGood 8y ago
      Well said.
joejerryronnie 8y ago
@justin, do you feel the automation you're developing now will be applicable to other fields of law and do you anticipate branching out into other fields of law over time? Entertainment Law seems like a natural fit based on where tech is going.
- justin 8y ago
  Yes, but I think that is in the medium term. In the short term we are laser focused on building things that help fast growth startup companies with corporate transactional work. But I think the general techniques for what we are doing can apply to almost every practice area of law.
  - theodorewiles 8y ago
    I would also look into PE corporate transaction work. This is a growing market (PE deal volume is up), I’m assuming most offering memorandum, etc. are very boilerplate, and I’m also assuming the clients would appreciate the differentiated up-front pricing model. Likely to be repeat customers as they could do a few deals per year, and the community is tight-knit so WOM would work. Finally, you already probably know this but I am assuming there is some overlap between the VC investment community and the PE investment community so you probably already have accounts today that could be natural entry points / “customer zero” for the adjacency. Just my 2c. Love thinking about this stuff.
justin 8y ago
I'm very thrilled to announce this round to the world today. I've always looked up to Marc Andreessen and A16Z, and it very exciting to be able to work with them. Fundraising is not a destination, but just a means to get there, and the team is happy to get back to work building Atrium to help fast growing startups with legal. Also, super happy to be working with Michael Seibel again, who you all know is an amazing advocate for startups as CEO of YC. Happy to answer any questions about what we are doing here!
- vasilipupkin 8y ago
  why not grow organically? why give away a big chunk of the company early on?
  - deleted 8y ago
    [deleted]
  - teej 8y ago
    In addition to what others have said, raising from quality investors is a positive signal to Atrium's potential customer base. It adds credibility and makes growth easier. Smart fundraising adds value for everyone.
    - vasilipupkin 8y ago
      agree, but Justin is already credible enough, no?
      - dopamean 8y ago
        This is a pretty different venture from the one that gave him his credibility.
    - eldavido 8y ago
      Investors provide at least three separate things: (1) Cash (2) Credibility (3) Operational help/advice This feels like a bundle that might get redone. Already venture capital unbundles cash from credibilty/endorsement. Angel investors provide both. A VC uses their own credibility to scout good investment opportunities, which then receive cash from limited partners. VCs often invest in their own funds, but just enough to make limited partners believe they have "skin in the game": the real thing they have on the line isn't capital, but their reputation as good deal-pickers, which let them raise funds later from their investors, limited partners. I wonder if someday, there won't be a class of people who are pure reputational endorsers, who say "this company is going to do well", and that signal by itself is enough to attract a big amount of pure cash. Maybe the "I like this" and the "I'm putting my money in this" have to be the same in order for others to believe the "endorser" has enough skin in the game.
mrnobody_67 8y ago
Should bots and A.I.s that are displacing humans be taxed? Also what do you think of Bryan's essay - https://medium.com/future-literacy/a-plan-for-humanity-2bc04088e3d4 https://medium.com/future-literacy/a-plan-for-humanity-2bc04... Specifically: "The future of the human race can be forecasted through a single metric: return on investment (ROI) of intelligence. Our current economic incentives (the engine that drives the world) are perfectly designed to put humans out of business and make us irrelevant as fast as possible."
- justin 8y ago
  To be clear, while journalists often write hyperbolic headlines about how Atrium is replacing lawyers with AI, what we are really doing is building tools that empower and enable lawyers (by automating the crank turning work and freeing legal professionals up to focus on what they like doing, which is advising clients). When we were selling Twitch, we didn't want an AI lawyer, Uber for lawyers, a marketplace of lawyers, or workflow software for selling your company. We wanted an M&A attorney with years of experience selling multi-billion dollar deals to tell us that everything we were doing was right. This is the philosophy we're taking to Atrium, which is the best clients will go where the best lawyers go, and the best lawyers will go where they are empowered and life is better :). More broadly, technology has always displaced humans and whether we should ramp taxes on capital is largely dependent on the distribution of ownership of that technology. We are probably swinging back towards robber-baron levels of value creation accruing to capital, and so I predict taxes to increase in the medium term.
  - mrnobody_67 8y ago
    Fact is, the majority of jobs are "crank work". Whether sewing shirts, flipping burgers, making coffee or, in this case, reviewing NDAs or other mundane agreements. I'd argue there isn't simply enough "work that people like doing" to give everybody full-time jobs with all this automation. Nobody in their right might would do boring/uninteresting work if a better option was available to them -- including lawyers.
    - 8y ago
tosh 8y ago
Incredible news. What's the main challenge for you atm that you don't know exactly how to approach yet? How can we help?
- justin 8y ago
  Main challenges aren't that unique, as anyone who has build a company at scale can probably attest to: need to create alignment around a medium term plan, and we need to execute faster (mostly by better prioritization and hiring the right leaders in the right places). It's weird how similar startups can be even when they are in wildly different spaces.
foobaw 8y ago
Good luck to Atrium. I've interviewed for them a while back and saw a lot of passion! I personally have a lot of qualms about the legal industry while working at a bunch of startups so I see a lot of innovations possible.
andreygrehov 8y ago
Great news and congrats, @justin. What's the story behind the moment when you had no plans launching a legal services platform and realizing that this could be a thing? Did you brainstorm ideas with the team or someone told you like, "hey, man, there is this problem in the legal industry" or was it something else?
- justin 8y ago
  It is a bit of a long story, but maybe can be helpful to someone out there considering what to do with his or her life, so will write it out here: About 2 years ago I realized that as an investor (partner at YC) I had stopped learning. I felt like what I was doing was helpful to some startups, but personally I didn't feel growth any more; being an investor felt to me like being retired. That's not to say that YC isn't hugely impactful (it is), but rather that the cadence didn't really fit my personality any longer: I wanted a shorter feedback cycle around trying something and seeing results. When you are an investor the feedback cycle between trying something (investing in a startup) and seeing results (M&A, IPO, success) can be many years. In a chance encounter I met the author of Essentialism, which basically is a book about saying no to things. It made me really try to distill down what I liked doing on a day-to-day basis, and I came up with these 3 things: 1) learning about how tech can affect and interact with new industries, 2) trying things and seeing numbers go up as a result, 3) mentoring people over extended periods of time. I decided I wanted to do something that maximized my ability to do those three things on a daily basis. At first I thought about raising a VC fund, but then realized that wouldn't be much different from YC. Then I thought about incubating 4 or 5 startups at once and finding someone else to be CEO of each. I realized while that would be interesting and minimize personal stress, it wouldn't maximize my growth opportunity to see even later stages of company development. Ultimately I decided the most personal growth maximizing thing to do (that would enable me to focus on the three above things) would be to just start a single company and swing for the fences (try to make it as big as possible). At the same time, I had been fascinated by the legal innovator's paradox: the fact that there is an intrinsic disincentive to innovate when you don't capture the gains of increased productivity, which is true in an hourly billing model. I also thought lots of the things we had done at YC around building software could be applied in the legal market, and it seemed like a huge one, which incidentally I had experienced my entire career as a founder. After months of research, it seemed like a meaty enough opportunity that really solved a problem of my own, and I decided this would be my one "swing for the fences" company. Lots of people have asked before so will repeat here: I'm 100% on Atrium now full time as CEO and not doing any other things.
not_that_noob 8y ago
@justin - congrats! How do the fees compare vs a traditional law firm? I love the price-predictability part, but can you shed a bit more light?
- justin 8y ago
  Everything is priced up front. We do this by estimating the amount of work it will take, and then we absorb any variance. Please email hello@atrium.co if you have specific questions! Thank you.
jondishotsky 8y ago
Proud of you buddy. Now time to get back to work.
vasilipupkin 8y ago
Curious: how do you get around prohibition for non-lawyers to own law firms ? https://biglawbusiness.com/the-debate-over-non-lawyer-firm-ownership-is-officially-closed-for-now/ https://biglawbusiness.com/the-debate-over-non-lawyer-firm-o...
- justin 8y ago
  Here is a good explanation of Atrium's structure: https://abovethelaw.com/2017/09/competition-is-for-losers-the-rise-of-atrium-part-i/ https://abovethelaw.com/2017/09/competition-is-for-losers-th...
  - vasilipupkin 8y ago
    Interesting. So the law firm is an independent entity that can theoretically sever ties with the tech company any time ? But still, clever structure.
- fullofsid 8y ago
  From their footer - Atrium Legal Technology Services, Inc. is a non-law corporation incorporated under the laws of the State of Delaware
zaius 8y ago
> “One of the things big law partners say when they talk about Atrium is that we get people who wouldn’t make partner,” says Kan. “And I say, they’re the people who are doing the work for you anyway, but they transition out because they hate the lifestyle.” I had some paperwork come back from a fundraise that was riddled with errors. I lost a lot of faith in my lawyers and I had to double check all their work. Not what you expect when you're paying $600/hr. Underneath every partner is the army of associates who actually do the work. I got on the phone with the associate who had handled the paperwork. He was trying to make partner; he was clearly overworked, underslept, and stressed out. I switched to another associate with less experience but who wasn't yet feeling the pressure of making partner. The quality of work massively improved. If Atrium can give work-life balance to lawyers, and give me paperwork that I don't have to double check, then I'm all for it.
- igurari 8y ago
  A lot of the errors you'll see in lawyer work product is not just from being overworked, but also comes from poor quality control mechanisms and insufficient use of technology in law firms. On the litigation side we regularly see significant typos, misquotes, and even misspellings of the judge's name - and those are just the more basic types of errors we see. By building the technology they're using Atrium will be able to not just drive efficiency but also improvements in the quality of the legal work product they sell. It's a very exciting company.
- not_that_noob 8y ago
  +1. I feel you. The only upside - it made me read everything more carefully. Significant deal points can be missing, or subtle giveaways that negate the actual deal term two paragraphs up. And the best part - they charge you by the hour for correcting their damn mistakes! Yeah I'm not buying what that partner's selling.
- jacquesm 8y ago
  Pay for the partner, get the paralegal. Oldest trick in the book.
- arikr 8y ago
slicebo123 8y ago
Could you give any insight into what problems you're trying to solve with the engineering side of Atrium? When you commonly hear about legal tech, its in the context of e-discovery/case-tracking/forensic tools.
- justin 8y ago
  When we started Atrium, we thought the main tools would be web software applied to the legal business: CRM, project management, workflow tools, document generation. What we've learned is that there is a more interesting/difficult technical challenge to what we want to build. I think of Atrium's technology as a platform comprised of several layers: a document storage system (stores legal docs -- think PDFs and Word documents), an ML layer that parses those legal docs and turns them into structured data, an API / web platform layer that exposes that data to applications, and then a bundle of applications that sit on top of that data. That may be a little complex, so I'll give you one example of this in action, which we currently use in production: When a startup does a Series A financing, the first step is a VC hands the founder a term sheet. The founder then gives this term sheet to their attorney, who will take it and read all the company's previous SAFEs and convertible notes line by line. They then will create a pro forma cap table (basically, an excel model that shows who gets what at the end of the financing). This process can take a lot of human effort (i.e. the lawyer will spend hours reading the notes and creating the model), and it can often be error prone (because someone is doing it manually). Of course, any programmer who looks at this process is going to realize it can largely be automated. We ingest those documents into our platform before the founder gets the term sheet. Our models then turn those SAFEs and convertible notes into structured data by mapping them to a schema of what we expect to be in those documents (this is verified after the fact by humans). Then another application just renders the pro forma cap table, taking a process that took hours and reducing it to a matter of minutes. This spits out an XLS, so the attorney can take it and use it to advise the founders (or send to the VC's counsel) just like they would a cap table they built themselves (i.e. we aren't prescriptive on how they advise). My goal is that eventually we understand every kind of corporate legal document, and make that data accessible to a universe of client / lawyer applications that can streamline workflows and the delivery of service.
quadcore 8y ago
https://www.atrium.co/ https://www.atrium.co/
silentsea90 8y ago
Justin, how big do you anticipate Atrium to become? Given how much money flows into legal services, my guess is over $10 billion as a conservative measure. Is there a ballpark figure that A16z or you think of as conservative, ambitious etc?
- justin 8y ago
  Well, this is largely speculative, but I think Atrium can be a multi-tens of billions of dollars in value company, mostly based on the industry / market-need and the potential adjacent expansions. But obviously that depends a lot on actually executing well!
stevenAthompson 8y ago
I misread this as "Autism Raises $65M." For a moment, I was proud of my humanity.
person_of_color 8y ago
Are you hiring?

208 points by justin 8y ago

I would like to nominate myself to be an outside Board Observer. JKan and Seibel are two of the best dudes in SV. Adding Marc and Anthony to the mix will make for incredibly fun board meetings. I will take notes if that role isn't already covered.

unmiss 8y ago

Next after Atrium becomes Unmiss https://spellc.net/unmiss https://spellc.net/unmiss

jamestimmins 8y ago

Congrats @justin. I'm curious about culture, as the article mentioned that employees with different backgrounds have very different cultural expectations. Have y'all actively managed/shaped culture? Are you shoehorning non-tech employees into a tech culture, or is it more of a middleground?

justin 8y ago
Thank you! It hasn't been a linear journey - I have lots to say on creating a culture that joins multiple disciplines (where neither is dominant). I suspect companies like Compass (the real estate brokerage) and One Medical face similar issues. One of the primary gaps we need to bridge at Atrium is simply educating different disciplines on what everyone else does. EPD (eng, product, design) and operations teams need to learn what it is like being a lawyer; lawyers and paralegals need to learn what product can help with (and what it can't). We've slowly added more and more cross functional education around these things (onboarding, shadowing, etc) -- and probably have a ways to go. I'd say it's a middle ground between tech culture and legal. Certain things that are ok culturally in tech (for example, moving fast and worrying about IT security later in the game) are not ok for a venture like Atrium. At the same time, we are trying to innovate in an industry that doesn't get a lot of innovation, so we do want to re-think things from first principles as often as we can (in fact, it is one of our company values). Happy to explain more if people are interested.
- toekyoe 8y ago
  @justin, as a patent attorney, I've wondered if Atrium has considered exploring providing patent-related services to clients. Is this something that is on the horizon? You mentioned the need to educate people about different disciplines. Patent attorneys seem like a great fit for a company with that need since most patent attorneys have previous careers as engineers. Also, patent attorneys could greatly benefit from the exposure to the transactional/corporate side of law, which appears to be Atrium's current focus.
  - Alex3917 8y ago
    The problem is that if you knowingly infringe on a patent, it's triple damages. So most companies that are big enough to have any budget aren't going to be allowed to use any product that involves them or anyone else searching through the patent database or using data from the patent database, since any record that they did so could result in massive legal liability. There are about 15 companies in this space offering various services, but because of this issue the market has remained relatively small even though a lot of these companies have been around for a decade or more and have pretty mature offerings.
    - toekyoe 8y ago
      Thanks for the informative reply!
- jamestimmins 8y ago
  Thanks for the response! It's interesting to consider what drives the culture in these various domains (risk, incentives, leadership values, etc.) and how many of them can vary based on the environment. For example, if making partner is no longer an incentive for the lawyers then that may alter culture automatically, whether or not they're working in tech; however, changing the environment may not have any bearing on legal risk, meaning the component of legal culture associated with risk is non-negotiable.

asparagui 8y ago

Just wanted to say that I've been enjoying the events you all have been hosting in SF, please do more!

justin 8y ago
Thank you! We have many more events planned with great partners in the upcoming few months. Would love any feedback on types of events, speakers, or topics you'd be interested in. Our goal is to create a community that is helpful for founders at any stage.
- asparagui 8y ago
  Maybe it's just where we're at right now, but anything about growth would be interesting. I particularly enjoyed the Q&A at AWS. Hiring, sales, and building a unified team culture are what we're currently struggling with. There are no easy answers but hearing many different perspectives gives me the clues I need to (usually) make the right decisions.
  - justin 8y ago
    Thank you; have sent along to our events team.

cozy101 8y ago

Dealing with lawyers as a newbie is such a freaking nightmare. Please bring this to Canada :(

jucjuc 8y ago

Congratulation @justin, we don't know each other (unfortunately), but damn, you're like a machine: justintv, twitch, and now atrium How do you do it?

type-2 8y ago
is it possible to learn this skill?
- justin 8y ago
  Absolutely 100% possible to learn company building skills. No one starts off as a natural; like anything there is 10,000 hours of practice involved. When I started on my journey 14 years ago I was shy, not good at selling, a terrible programmer, had no management experience, had no connections and was not a super strategic thinker. Now I am much better at all those things (except I'm still a fairly mediocre programmer). The last 14 years were mostly about learning how to be better at those skills (not all at once). The important thing about being in a startup was that I was put into positions where I was forced to learn them by doing (which was at times an incredibly painful process -- because most learning involves failure and these failures felt particularly high stakes). If we could start by strapping a camera to my head and calling it a startup, and then create >1b in value across half a dozen startups in the next decade -- literally anyone who is reading this right now can be successful building a business.
  - TaylorGood 8y ago
    Well said.

joejerryronnie 8y ago

@justin, do you feel the automation you're developing now will be applicable to other fields of law and do you anticipate branching out into other fields of law over time? Entertainment Law seems like a natural fit based on where tech is going.

justin 8y ago
Yes, but I think that is in the medium term. In the short term we are laser focused on building things that help fast growth startup companies with corporate transactional work. But I think the general techniques for what we are doing can apply to almost every practice area of law.
- theodorewiles 8y ago
  I would also look into PE corporate transaction work. This is a growing market (PE deal volume is up), I’m assuming most offering memorandum, etc. are very boilerplate, and I’m also assuming the clients would appreciate the differentiated up-front pricing model. Likely to be repeat customers as they could do a few deals per year, and the community is tight-knit so WOM would work. Finally, you already probably know this but I am assuming there is some overlap between the VC investment community and the PE investment community so you probably already have accounts today that could be natural entry points / “customer zero” for the adjacency. Just my 2c. Love thinking about this stuff.

justin 8y ago

I'm very thrilled to announce this round to the world today. I've always looked up to Marc Andreessen and A16Z, and it very exciting to be able to work with them. Fundraising is not a destination, but just a means to get there, and the team is happy to get back to work building Atrium to help fast growing startups with legal. Also, super happy to be working with Michael Seibel again, who you all know is an amazing advocate for startups as CEO of YC. Happy to answer any questions about what we are doing here!

vasilipupkin 8y ago
why not grow organically? why give away a big chunk of the company early on?
- deleted 8y ago
  [deleted]
- teej 8y ago
  In addition to what others have said, raising from quality investors is a positive signal to Atrium's potential customer base. It adds credibility and makes growth easier. Smart fundraising adds value for everyone.
  - vasilipupkin 8y ago
    agree, but Justin is already credible enough, no?
    - dopamean 8y ago
      This is a pretty different venture from the one that gave him his credibility.
  - eldavido 8y ago
    Investors provide at least three separate things: (1) Cash (2) Credibility (3) Operational help/advice This feels like a bundle that might get redone. Already venture capital unbundles cash from credibilty/endorsement. Angel investors provide both. A VC uses their own credibility to scout good investment opportunities, which then receive cash from limited partners. VCs often invest in their own funds, but just enough to make limited partners believe they have "skin in the game": the real thing they have on the line isn't capital, but their reputation as good deal-pickers, which let them raise funds later from their investors, limited partners. I wonder if someday, there won't be a class of people who are pure reputational endorsers, who say "this company is going to do well", and that signal by itself is enough to attract a big amount of pure cash. Maybe the "I like this" and the "I'm putting my money in this" have to be the same in order for others to believe the "endorser" has enough skin in the game.

mrnobody_67 8y ago

Should bots and A.I.s that are displacing humans be taxed? Also what do you think of Bryan's essay - https://medium.com/future-literacy/a-plan-for-humanity-2bc04088e3d4 https://medium.com/future-literacy/a-plan-for-humanity-2bc04... Specifically: "The future of the human race can be forecasted through a single metric: return on investment (ROI) of intelligence. Our current economic incentives (the engine that drives the world) are perfectly designed to put humans out of business and make us irrelevant as fast as possible."

justin 8y ago
To be clear, while journalists often write hyperbolic headlines about how Atrium is replacing lawyers with AI, what we are really doing is building tools that empower and enable lawyers (by automating the crank turning work and freeing legal professionals up to focus on what they like doing, which is advising clients). When we were selling Twitch, we didn't want an AI lawyer, Uber for lawyers, a marketplace of lawyers, or workflow software for selling your company. We wanted an M&A attorney with years of experience selling multi-billion dollar deals to tell us that everything we were doing was right. This is the philosophy we're taking to Atrium, which is the best clients will go where the best lawyers go, and the best lawyers will go where they are empowered and life is better :). More broadly, technology has always displaced humans and whether we should ramp taxes on capital is largely dependent on the distribution of ownership of that technology. We are probably swinging back towards robber-baron levels of value creation accruing to capital, and so I predict taxes to increase in the medium term.
- mrnobody_67 8y ago
  Fact is, the majority of jobs are "crank work". Whether sewing shirts, flipping burgers, making coffee or, in this case, reviewing NDAs or other mundane agreements. I'd argue there isn't simply enough "work that people like doing" to give everybody full-time jobs with all this automation. Nobody in their right might would do boring/uninteresting work if a better option was available to them -- including lawyers.
  - 8y ago

tosh 8y ago

Incredible news. What's the main challenge for you atm that you don't know exactly how to approach yet? How can we help?

justin 8y ago
Main challenges aren't that unique, as anyone who has build a company at scale can probably attest to: need to create alignment around a medium term plan, and we need to execute faster (mostly by better prioritization and hiring the right leaders in the right places). It's weird how similar startups can be even when they are in wildly different spaces.

foobaw 8y ago

Good luck to Atrium. I've interviewed for them a while back and saw a lot of passion! I personally have a lot of qualms about the legal industry while working at a bunch of startups so I see a lot of innovations possible.

andreygrehov 8y ago

Great news and congrats, @justin. What's the story behind the moment when you had no plans launching a legal services platform and realizing that this could be a thing? Did you brainstorm ideas with the team or someone told you like, "hey, man, there is this problem in the legal industry" or was it something else?

justin 8y ago
It is a bit of a long story, but maybe can be helpful to someone out there considering what to do with his or her life, so will write it out here: About 2 years ago I realized that as an investor (partner at YC) I had stopped learning. I felt like what I was doing was helpful to some startups, but personally I didn't feel growth any more; being an investor felt to me like being retired. That's not to say that YC isn't hugely impactful (it is), but rather that the cadence didn't really fit my personality any longer: I wanted a shorter feedback cycle around trying something and seeing results. When you are an investor the feedback cycle between trying something (investing in a startup) and seeing results (M&A, IPO, success) can be many years. In a chance encounter I met the author of Essentialism, which basically is a book about saying no to things. It made me really try to distill down what I liked doing on a day-to-day basis, and I came up with these 3 things: 1) learning about how tech can affect and interact with new industries, 2) trying things and seeing numbers go up as a result, 3) mentoring people over extended periods of time. I decided I wanted to do something that maximized my ability to do those three things on a daily basis. At first I thought about raising a VC fund, but then realized that wouldn't be much different from YC. Then I thought about incubating 4 or 5 startups at once and finding someone else to be CEO of each. I realized while that would be interesting and minimize personal stress, it wouldn't maximize my growth opportunity to see even later stages of company development. Ultimately I decided the most personal growth maximizing thing to do (that would enable me to focus on the three above things) would be to just start a single company and swing for the fences (try to make it as big as possible). At the same time, I had been fascinated by the legal innovator's paradox: the fact that there is an intrinsic disincentive to innovate when you don't capture the gains of increased productivity, which is true in an hourly billing model. I also thought lots of the things we had done at YC around building software could be applied in the legal market, and it seemed like a huge one, which incidentally I had experienced my entire career as a founder. After months of research, it seemed like a meaty enough opportunity that really solved a problem of my own, and I decided this would be my one "swing for the fences" company. Lots of people have asked before so will repeat here: I'm 100% on Atrium now full time as CEO and not doing any other things.

not_that_noob 8y ago

@justin - congrats! How do the fees compare vs a traditional law firm? I love the price-predictability part, but can you shed a bit more light?

justin 8y ago
Everything is priced up front. We do this by estimating the amount of work it will take, and then we absorb any variance. Please email hello@atrium.co if you have specific questions! Thank you.

jondishotsky 8y ago

Proud of you buddy. Now time to get back to work.

vasilipupkin 8y ago

Curious: how do you get around prohibition for non-lawyers to own law firms ? https://biglawbusiness.com/the-debate-over-non-lawyer-firm-ownership-is-officially-closed-for-now/ https://biglawbusiness.com/the-debate-over-non-lawyer-firm-o...

justin 8y ago
Here is a good explanation of Atrium's structure: https://abovethelaw.com/2017/09/competition-is-for-losers-the-rise-of-atrium-part-i/ https://abovethelaw.com/2017/09/competition-is-for-losers-th...
- vasilipupkin 8y ago
  Interesting. So the law firm is an independent entity that can theoretically sever ties with the tech company any time ? But still, clever structure.
fullofsid 8y ago
From their footer - Atrium Legal Technology Services, Inc. is a non-law corporation incorporated under the laws of the State of Delaware

zaius 8y ago

> “One of the things big law partners say when they talk about Atrium is that we get people who wouldn’t make partner,” says Kan. “And I say, they’re the people who are doing the work for you anyway, but they transition out because they hate the lifestyle.” I had some paperwork come back from a fundraise that was riddled with errors. I lost a lot of faith in my lawyers and I had to double check all their work. Not what you expect when you're paying $600/hr. Underneath every partner is the army of associates who actually do the work. I got on the phone with the associate who had handled the paperwork. He was trying to make partner; he was clearly overworked, underslept, and stressed out. I switched to another associate with less experience but who wasn't yet feeling the pressure of making partner. The quality of work massively improved. If Atrium can give work-life balance to lawyers, and give me paperwork that I don't have to double check, then I'm all for it.

igurari 8y ago
A lot of the errors you'll see in lawyer work product is not just from being overworked, but also comes from poor quality control mechanisms and insufficient use of technology in law firms. On the litigation side we regularly see significant typos, misquotes, and even misspellings of the judge's name - and those are just the more basic types of errors we see. By building the technology they're using Atrium will be able to not just drive efficiency but also improvements in the quality of the legal work product they sell. It's a very exciting company.
not_that_noob 8y ago
+1. I feel you. The only upside - it made me read everything more carefully. Significant deal points can be missing, or subtle giveaways that negate the actual deal term two paragraphs up. And the best part - they charge you by the hour for correcting their damn mistakes! Yeah I'm not buying what that partner's selling.
jacquesm 8y ago
Pay for the partner, get the paralegal. Oldest trick in the book.
arikr 8y ago

slicebo123 8y ago

Could you give any insight into what problems you're trying to solve with the engineering side of Atrium? When you commonly hear about legal tech, its in the context of e-discovery/case-tracking/forensic tools.

justin 8y ago
When we started Atrium, we thought the main tools would be web software applied to the legal business: CRM, project management, workflow tools, document generation. What we've learned is that there is a more interesting/difficult technical challenge to what we want to build. I think of Atrium's technology as a platform comprised of several layers: a document storage system (stores legal docs -- think PDFs and Word documents), an ML layer that parses those legal docs and turns them into structured data, an API / web platform layer that exposes that data to applications, and then a bundle of applications that sit on top of that data. That may be a little complex, so I'll give you one example of this in action, which we currently use in production: When a startup does a Series A financing, the first step is a VC hands the founder a term sheet. The founder then gives this term sheet to their attorney, who will take it and read all the company's previous SAFEs and convertible notes line by line. They then will create a pro forma cap table (basically, an excel model that shows who gets what at the end of the financing). This process can take a lot of human effort (i.e. the lawyer will spend hours reading the notes and creating the model), and it can often be error prone (because someone is doing it manually). Of course, any programmer who looks at this process is going to realize it can largely be automated. We ingest those documents into our platform before the founder gets the term sheet. Our models then turn those SAFEs and convertible notes into structured data by mapping them to a schema of what we expect to be in those documents (this is verified after the fact by humans). Then another application just renders the pro forma cap table, taking a process that took hours and reducing it to a matter of minutes. This spits out an XLS, so the attorney can take it and use it to advise the founders (or send to the VC's counsel) just like they would a cap table they built themselves (i.e. we aren't prescriptive on how they advise). My goal is that eventually we understand every kind of corporate legal document, and make that data accessible to a universe of client / lawyer applications that can streamline workflows and the delivery of service.

quadcore 8y ago

https://www.atrium.co/ https://www.atrium.co/

silentsea90 8y ago

Justin, how big do you anticipate Atrium to become? Given how much money flows into legal services, my guess is over $10 billion as a conservative measure. Is there a ballpark figure that A16z or you think of as conservative, ambitious etc?

justin 8y ago
Well, this is largely speculative, but I think Atrium can be a multi-tens of billions of dollars in value company, mostly based on the industry / market-need and the potential adjacent expansions. But obviously that depends a lot on actually executing well!

stevenAthompson 8y ago

I misread this as "Autism Raises $65M." For a moment, I was proud of my humanity.

person_of_color 8y ago

Are you hiring?