Legal industry disruptor Atrium lets legal staff go amid internal restructuring

It created shockwaves across the legal industry at its launch in 2017 and has promised to revolutionise legal services, raising over $75m in investment over four rounds, but Atrium is now undergoing internal restructuring according to sources close to the company, who suggest that a large part of the legal workforce have been let go.

Atrium’s law services and tech company business model has enabled the company to work around US legislation, which restricts law firms from sharing profits with outsiders – something that has long been cleared in the UK thanks to the Legal Services Act 2007.

The principle is that Atrium’s legal services arm can take a tech-first, fixed fee approach, leveraging the companies own tech arm and monetising services for startups that are often loss leaders for more established players such as Cooley and Perkins Coie. In September of 2019 Atrium, which was founded by CEO Justin Kan, announced three new subscription packages to meet the growing legal needs of startups that packaged up professional services with “purpose-built technology”. It is particularly radical within the US, where firms are still wedded to the billable hour.

Summing up its raison d’etre, Atrium says on its website: “We came together to build a law firm and technology company because we believe that obtaining premium corporate legal services for startups does not have to feel like a burden out of the 1900s.”

What is driving the current restructuring is still unclear but a number of staff have confirmed on social media that they have been let go, albeit one of those posts has subsequently been deleted.

Responding to a post from former Atrium counsel Tony Wang, now founder and managing partner at Mission Law, who says he has received word that Atrium is undergoing internal restructuring and that a large part of the legal workforce is being let go, office co-ordinator Kelsea Jordan replies: “Thank you for the post, Tony. I’ve also been let go so if you hear of any office coordinator/admin positions please let me know!”

Writing on LawSites, US-based legal tech journalist Bob Ambrogi writes: “Atrium employee, Larry Brown, whose LinkedIn profile describes him as senior learning and development manager, said [in response to Tony Wang’s post] that he “is in the same boat as the legal team.” That post has subsequently been edited, with reference to being in the same boat deleted.

People throughout the industry have been quick to offer help, include Elevate founder and CEO Liam Brown, who says: “Tony (or anyone directly affected) please put people in touch with me or get in touch with me directly. Elevate is building a services first, technology forward business in the legal sector. I’ve admired what Atrium was doing from a different vantage and I’m sorry to see this particular approach came to an end.”

One area of speculation – albeit from people with knowledge of Atrium – is that their talent pool wasn’t matched with the type of complex legal outsourcing work that they have been targeting.

The move comes as certain states in the US explore opening up the profession to non-lawyers: in Utah the Supreme Court has effectively given the green light to changes that could see the creation of multi-disciplinary organisations. In California, where Atrium is headquartered, a task force is also looking at deregulation, albeit in the face of some strong opposition.

We have contacted Atrium for comment and will update you with more information as we receive it.

Here is Tony Wang’s post in full:

“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.”