Insiders Say Atrium May Scale Down Legal Services, Will Focus on Selling Legal Tech To Market

In news that comes as a shock to some, but perhaps not to others who always doubted the business model, the pioneering Californian law firm Atrium LLP is understood to be looking at scaling back its legal services offering, with the other half of the business, Atrium LTS – a tech development group – to focus on creating and selling legal tech to the wider market.

Initially the idea had been that the tech group, backed by tech entrepreneur Justin Kan and others, would build tech solutions exclusively for the lawyers of the LLP, who in turn would serve the US startup market’s legal needs, in what was hoped would be a better and more efficient way.

However, one insider with detailed knowledge of the firm told Artificial Lawyer: ‘They have only managed to gain in the low hundreds of clients since they started.’

It’s worth adding that they were perhaps a little naive to believe that just because they had new workflow tools and document generation software, that this would make Atrium capable of out-competing the leading Californian tech law firms – which have an incredible hold on the market there.

Moreover, their competitors are also using a lot of tech, so, the ability to really compete at a different level just wasn’t there.

Now, it appears that the willingness to maintain the current strategy has changed. Artificial Lawyer has contacted Atrium, but as of early morning Monday GMT has not heard back yet.

Atrium launched in 2017 as the new shape of law firms, i.e. with a legal group and an associated tech group funded with millions of dollars.

Atrium raised $10.5 million in the winter of 2017, then in late 2018 announced it had raised a $65 million round led by Andreessen Horowitz.

The insider added: ‘There was a view from some that mainly focusing on investing in tech would be the solution. Others there maintained that having great lawyers would be the way to succeed, no matter what tech they developed.’

It appears that the latter opinion has proven to be correct.

What happens now to the dozens of lawyers at Atrium LLP is unclear – at least officially – (however one previous employee – see below – has stated that he has received word that multiple staff are to be let go). The insider noted that as it is a regulated law firm it could not take funding from outside, but it’s possible the LLP business received loans or other forms of debt from the LTS group to allow it to grow so fast.

The insider went on: ‘The goal initially was the LTS would make tech just for Atrium LLP. They now appear to have reversed track on this strategy and will now make legal tech products for the wider market.’

When asked if this meant the complete end of offering legal services, the insider – who wished to remain anonymous – stated that: ‘They are still trying to figure out what to do with the LLP.’

Therefore it’s important to note that, at least officially, Atrium has not said what it is going to do. However, if information now streaming through the US market is to be believed – then Atrium must surely be close to announcing a radical change.

Also of interest is this contribution: Tony Wang who worked at Atrium as a lawyer until December 2019, but now runs his own legal business, Mission Law, said in a LinkedIn post on Sunday (12 Jan 2020) –

Just officially got the word last night that Atrium is undergoing an internal restructuring and that a large part of the legal workforce is being let go.

Many of my colleagues at Atrium were among the hardest working, team-oriented, and forward-thinking individuals I’ve had the pleasure of working with in my legal career and I’m sad to see this happen, as it comes as a complete surprise and shock. For those of you at law firms, recruiting firms, in-house, or at legal tech companies, please let me know if you have any open positions, in particular for startup attorneys and paralegals at all experience levels.

Happy to help connect people where I personally think there’s a good fit and also put folks directly in touch with the recruiting team at Atrium. And props to Atrium for making their recruiting team available for outbound support – this isn’t something you see everyday. Praying that everyone will be okay and that no one’s severely impacted by this. And as a wise wizard once said, “Fawkes is a phoenix, Harry. Phoenixes burst into flame when it is time for them to die and are reborn from the ashes. p.s. No, I did not know that this was going to happen. I’m as surprised by this as everyone else.’

Of course, it’s important to also note that Wang is not currently an employee of Atrium and therefore his post is not an official statement by Atrium LLP. That said, there is no reason not to see this post’s content as credible.

[ P.S. if you are working at Atrium, or were, and would like to have an off record chat, please drop me a line: ]

On 18th June, 2020, Artificial Lawyer will be hosting the Legal Innovators California conference in San Francisco. For more info and tickets, see here.