INSUBCONTINENT EXCLUSIVE:
Let the computers do the legal busy work so attorneys can focus on complex problem solving for their clients
That the lucrative idea behind Atrium LTS, Twitch co-founder Justin Kan machine learning startup that digitizes legal documents and builds
applications on top to speed up fundraising, commercial contracts, equity distribution and employment issues
For example, one of its apps automatically turns startup funding documents into Excel cap tables.Automating expensive legal labor has led to
a rapid rise to 110 employees and 250 clients for Atrium, including startups like Bird and MessageBird
Atrium only came of stealth a year ago with a $10.5 million party round before going into Y Combinator last winter
Today it announces it raised a $65 million round led by Andreessen Horowitz.In characteristic dude fashion, Kan tells me &I&m pretty stoked
about that because of having more resources for Atrium.& The venture firm partner Andrew Chen istaking a board seat and famed co-founder
Marc Andreessen is joining as a board observer
&I wanted a visionary who always going to be pushing us to build something really big,& Kan says
General Catalyst, YC Continuity Fund and Ashton Kutcher Sound Ventures are also joining the round.With the massive influx of cash, Atrium
will be able to develop more internal tools it can use to crank out client work faster than its traditional competitors
&We can ultimately be this platform on top of which you&re building these legal businesses and eventually other professional services and
software services,& Kan explains.&They&re all sitting on top of the platform that understands legal documents.&In more Atrium news, Y
Combinator leading partner Michael Seibel will join the startup board, too
And it acquired Tetra, a YC artificial intelligence startup that had raised $1.5 million to analyze voice, &to help us build our platform
that understands and structures data,& Kan tells me.What Kan didn&t initially mention is that two of Atrium co-founders, CTO Chris Smoak and
legal partner BeBe Chueh, have left
He later admitted they had transitioned out of the company several months before the new funding
&BeBe wanted to spend time working on family (she just got engaged); Chris and I disagreed on his job role& regarding the definition of the
CTO position, Kan tells me
He&ll now be running Atrium with remaining co-founder Augie Rakow, formerly of mega-law firm Orrick, and Kan long-term business partner and
former McKinsey analyst Nick Cortes.Justin Kan (Atrium) at TechCrunch Disrupt SF 2017The law firm business model has left the door open for
disruption by technology companies like Atrium
&Law firms generate revenue from hourly billing, and lack an incentive to vastly improve efficiency,& Chen writes
&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 is hard to build inside a software company, much less a law firm.&But Atrium is an engineering company with a legal clientele
It takes the most common and time-consuming activities — often related to ingesting mountains of documents — and builds machine learning
Atrium lawyers can focus on advising their clients on what to do, rather than burning the midnight oil doing it as they look for tiny quirks
The legal services get faster, cheaper and more predictable, so Atrium can offer upfront pricing
It been using fundraising workshops and other educational materials to drum up leads.Here what you&ll learn at Atrium fundraising
workshopFor now, Atrium tech is limited to a narrow band of use cases
But &over $300 billion is spent per year in the enterprise legal market,& Chen writes, so there plenty of room to grow now that Atrium is
It will have to convince big corporations to ditch the old way and let computers lend a hand
Luckily, Atrium isn&t a SAAS company forcing clients to use the tech themselves
Done right, they shouldn&t even know that it machine vision software, not junior associates, pouring over their docs
It will have to out-match fellow legal tech startups like Ravel, CaseText, Judicata, Premonition and more, though they&re often just tools
rather than software-equipped law firms.Kan also cops to his lack of experience in legal.&I think for any full stack vertical startup
started by a non-subject matter expert (i.e
me who is not a lawyer), there is a risk that you come in and are very prescriptive on how things work
Then you build software that says ‘the providers must do it this way!&,& Kan tells me
&But the practical reality is that it doesn&t work with the nuanced, non-linear workflows that providers already have
So the technology doesn&t get adopted and fails to provide value
That to me is the biggest upcoming risk.&Justin Kan, from lifevlogger to legal giantYet if Atrium can ease clients into this new world
service by service, it could generate network effects that fuel the whole business
It just a matter of prioritization
&One of the things I always need to be focused on is…focusing
That sometimes a blind spot.& From Justin.tv to Twitch to its acquisition by Amazon to his role as YC partner, Kan delivers, but can be
&As an entrepreneur, I have a tendency to take on too much.&But after leaving YC because &I had felt like I&d stopped learning,& Kan has
found the legal space so full of knowledge and opportunity that it can hold his attention
&Part of why I like this business is because it was so different
I didn&t think it was something that would be as easily competed with,& Kan recalls
&I had this calendar company and Google came out with something similar.I told [Twitch co-founder] Emmett ‘We have to do something no one
At least Google will never do this.& Then they did.&But unlike with that game streaming startup, Atrium doesn&t have to worry about beating
or getting bought by some legal tech giant
Instead, it wants to become one.
