We first heard publicly from Justin Kan and his Atrium venture in July 2017 when we learned that he raised US$10.5 million to revolutionise legal services. There was little information shared publicly about how this money would be spent and exactly what products or services would be created. There was however, a lot of mentions about providing legal services to startups and fast-growing companies.
The picture is now becoming clearer about what this venture is about and it has also gained the financial support of the ‘who’s who’ of Silicon Valley venture capitalists.
Justin Kan announced, [10 Sept 2018] “Atrium has raised a [US]$65M round of funding led by Andreessen Horowitz with General Catalyst, YC Continuity Fund, and Sound Ventures as co-investors. Andrew Chen and Michael Seibel will be joining our board, and Marc Andreessen will be joining as a board observer.”
He added: “Since launching Atrium 14 months ago we have made great strides. We’ve helped over 250 clients raise a total of over $500 million in primary financings, and have built the A-team into over 110 great employees who are motivated to change this industry. We are also announcing that this summer we acquired the AI company Tetra to help us build our technology platform.”
When starting Atrium, Justin Kan described himself as a power user of legal services. He is an entrepreneur and founder of successful startups including Twitch. The people at Andreessen Horowitz have been very candid about why they made this investment and it could be painful reading for some in the legal industry. It is worth reading in full – link at bottom.
Andreessen Horowitz partner, Andrew Chen writes [excerpts]:
For law firms around the world, the customer experience, the business model, and the type of work they do have remained largely unchanged for decades, even while technology has transformed their clients and their industries. The adoption of software has happened very slowly, and only in the most low-hanging areas.
… pain points like predictability, pricing, and quality of service remain sources of huge friction. How do you know how much a project will cost? What’s the state of your closing documents for your critical fundraising round? Do all the documents match up with all the cap table? Is this contract that’s in the 10th email exchange the latest and correct one? These are all problems that can be improved with software.
Like many in the technology ecosystem, I have experienced all of this first hand as both an entrepreneur and an investor. I have endless stories about chasing down old documents, fixing mistakes on important contracts, paying for projects like convertible notes and advisor agreements that feel like they should just be templated web UIs — all the while feeling like I’ve paid too much. We are all unwitting, unwilling power users of legal services, bestowed a standard of service that hasn’t changed in decades. For all clients, and particularly high-growth startups that want to move quickly, it’s becoming clear that the law firm experience could just be so much better!
The underlying reasons for the lack of technology adoption is complex — a combination of regulatory issues, organizational dynamics, culture, and business models. Law firms generate revenue from hourly billing, and lack an incentive to vastly improve efficiency. Many law firms dividend out all their profits at the end of each year, making it hard to invest in the expensive investment of building software. Software is hard to build inside a software company, much less a law firm – so recruiting and building a world class engineering team is difficult. They aren’t easy to solve.
Which is why we are thrilled to announce our newest investment: Atrium, a legal technology startup based in San Francisco. Atrium’s software, combined with a law firm that consists of lawyers previously at top-tier Silicon Valley firms, helps deliver legal experience that’s faster and more transparent, with upfront pricing. Atrium’s team of lawyers have deep expertise in equity issuance, employment matters, blockchain, commercial contracts and fundraising. The combination of this expertise plus sophisticated software creates a “full stack” approach to entering the market, first focused on startups and then beyond.
Atrium’s approach allows them to deliver a legal experience that’s been made completely modern and efficient — from on-boarding to service to account management and more. Atrium’s software platform uses machine learning to ingest documents and convert them into structured data, and product UIs to support common workflows for both attorneys and companies. Prices are given upfront, and repetitive tasks are automated.
We believe this is the company that will finally transform the legal industry, and we’re excited to work with Atrium to make it happen. https://a16z.com/2018/09/10/atrium-announcement/