
Atrium Raises $65M - justin
https://www.forbes.com/sites/alexkonrad/2018/09/10/twitch-counder-raises-65-million-atrium/#1652fc7c40cf
======
zaius
> “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.

~~~
arikr
> 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.

To be clear, was this with Atrium or a different law firm?

~~~
fossuser
Since the rest of his comment talks about the pressure of people making
partner - it sounds like it's a different law firm.

------
justin
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
why not grow organically? why give away a big chunk of the company early on?

~~~
teej
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
agree, but Justin is already credible enough, no?

~~~
dopamean
This is a pretty different venture from the one that gave him his credibility.

------
jamestimmins
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
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
@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
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
Thanks for the informative reply!

------
mrnobody_67
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-2bc04...](https://medium.com/future-
literacy/a-plan-for-humanity-2bc04088e3d4)

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
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
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.

~~~
justin
In 1800, 83% of American jobs were in agriculture. Now it is 2%, not because
people eat less per capita but because of increased technology. We have
invented a lot of stuff for those people who would have been farmers to do:
advertising, lawyering, flipping burgers, programming, etc

Many of the jobs we invented are crank-turning jobs (like most ag jobs were
previously). The process of creative destruction is that the most crank-
turning of them will be automated and we will invent new and innovative cranks
to turn! For example: full time Twitch broadcaster. We are very good at making
up new work for people.

~~~
quadcore
_In 1800, 83% of American jobs were in agriculture. Now it is 2%_ [...] _We
are very good at making up new work for people._

We've been over the past 200 years. Small data set though.

------
vasilipupkin
Curious: how do you get around prohibition for non-lawyers to own law firms ?

[https://biglawbusiness.com/the-debate-over-non-lawyer-
firm-o...](https://biglawbusiness.com/the-debate-over-non-lawyer-firm-
ownership-is-officially-closed-for-now/)

~~~
justin
Here is a good explanation of Atrium's structure:
[https://abovethelaw.com/2017/09/competition-is-for-losers-
th...](https://abovethelaw.com/2017/09/competition-is-for-losers-the-rise-of-
atrium-part-i/)

~~~
vasilipupkin
Interesting. So the law firm is an independent entity that can theoretically
sever ties with the tech company any time ? But still, clever structure.

------
jucjuc
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
is it possible to learn this skill?

~~~
justin
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
Well said.

------
slicebo123
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
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.

------
foobaw
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.

------
cozy101
Dealing with lawyers as a newbie is such a freaking nightmare. Please bring
this to Canada :(

------
btrautsc
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.

------
tosh
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
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.

------
andreygrehov
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
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.

~~~
JacobDotVI
>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. @justin - I’d love to hear your thoughts here regarding how you
are tackling this. From Atrium.co your pricing appears to be a mix of
subscription and fixed prices. Presumably the trade-offs for any one lawyer to
switch to fix cost is insufficiently lare, but if you create a company with
scale than at the aggregate level the value capture across enough clients is
large enough. Is that right?

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

~~~
justin
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
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
Thank you; have sent along to our events team.

------
quadcore
[https://www.atrium.co/](https://www.atrium.co/)

------
joejerryronnie
@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
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
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.

------
silentsea90
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
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!

------
not_that_noob
@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
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
Proud of you buddy. Now time to get back to work.

------
stevenAthompson
I misread this as "Autism Raises $65M."

For a moment, I was proud of my humanity.

