In the past few decades, technology has completely reinvented business. It has permeated nearly every company function, from how companies sell to their customers, to their hiring and retention of star employees, to how they develop new products… and everything else.
While this reinvention has happened across the economy, one area, however, has remained relatively unchanged: the big law firm. 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.
As we all know, legal work is critical and ubiquitous — in fact, over $300B is spent per year in the enterprise legal market. Yet 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. This all empowers lawyers to spend more time actually advising their clients, in turn enabling them to deliver complex services that aren’t automatable (such as venture financings) faster and better. In short, the widespread use of technology can unlock a much better experience for both businesses and lawyers, making both more productive and able to focus on the most important work.
The Atrium team has impressed us with their amazing progress since the start. In the past year, Atrium LLP has helped 250 clients raise a total of over $500M in financings. They are now over 100 employees, with a notable client roster including Alto, Bird, MessageBird, and Sift Science, who have raised tens of millions and more. These strong early results convinced us of the company’s momentum, and proved there is a hunger for their services.
This is, as always, also a bet on the people, who also embody the combination of technology plus legal expertise that makes Atrium so powerful. I first met Justin Kan, co-founder and CEO of Atrium, nearly ten years ago when he was running around San Francisco with a camera tethered to a hat and a backpack full of computer gear, live streaming his life to the internet. His then-company Justin.tv ultimately evolved into the live streaming gaming platform company Twitch, later acquired by Amazon for $970M. Justin’s co-founder Augie Rakow is a former partner at Orrick LLP who represented autonomous car technology company Cruise Automation in a $1 billion sale to General Motors.
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.
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