Leadership

Building the Tesla for Legal

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Six years ago, I started my first startup. Bright-eyed and hopeful, my team and I rallied lawyers across the country to close the “justice gap” by listing flat-fee services on our legal marketplace AttorneyFee.com. Thousands of listings and over $6 million in bootstrapped revenue later, we sold the company to LegalZoom.com to continue its mission. But we barely made a dent in the problem.

The market for legal services is huge. Some estimate the value as high as $400 billion. But if I asked you to name a legal startup that has made a meaningful dent in this market, many would fail to think of one. The fact that big improvements in this market lag behind other industries of this size invites curiosity…

Through AttorneyFee, I learned first-hand why the legal sector has been so hard to crack. Startups try their hand at disruption by (1) building legal marketplaces (2) document generation services or (3) software for lawyers.

All three approaches require the participation of lawyers to take off in a big way. Easy, right? Not so much since the way lawyers work is the antithesis of efficiency. Their core business rewards total time spent — the more hours billed, the better. And that’s why the legal sector remains one of the most profitable in the country — and partly why much has been said about lawyers being “risk averse.”

The challenges encountered by startups in legal can be illustrated by way of an (albeit imperfect) analogy to those encountered in auto tech:

Imagine you’d like to improve sustainable transportation by building an electric car. But you’re cash-strapped and lack community support so you start with a compromise: you make a vehicle part that converts gasoline cars into hybrids. You convince gasoline car manufacturers that they should buy your part and that people want hybrid cars. Then you custom your part to fit each manufacturer’s specs. In the end you’re a parts maker, gasoline is still king, and you still don’t have an electric car.

Enter Tesla, a company that set out to accelerate non-gasoline transportation by building its own electric car, the parts that go into it and scalable process improvements.

Atrium takes a Tesla approach to improving legal services. We assemble the full vertical stack of legal software tools spanning incorporation, equity management, deal management and client service. While legal software companies struggle to sell individual tools to law firms, at Atrium we have an integrated structure that allows law firm and tech company to work together in a coordinated fashion. Our law firm uses tools where good tools exist, and we co-founded a tech company— Atrium LTS (“Legal Technology Services” or “LTS”) — to build tools where no good options exist. In this unique system, we design and provide the legal service offering, from top to bottom.

The “Elon Musk” in our story is serial entrepreneur Justin Kan. After selling Twitch to Amazon, Justin spent his time mentoring and investing in Bay Area startups as a partner at Y Combinator, a startup accelerator. He noticed that founders identified with the pain he experienced as an “involuntary power user of legal services”. Having spent millions on legal, Justin found himself asking his lawyers for status updates and reasons why reviewing monthly invoices felt like a game of Russian Roulette. To solve these problems, he looked for people who could help and found Augie, Chris and I, who each carried a piece of the Atrium puzzle.

Augie was happily practicing law as a partner in Orrick’s emerging companies practice group and had been looking for a way to turn his practice into a differentiated, technology-driven law practice. When Justin approached him about Atrium, he immediately recognized the potential impact of Atrium’s vision and joined to manage our legal practice.

Chris had just finished building workflow software for a healthcare startup. Having built two YC companies and been an early team member at Amazon Mechanical Turk, Chris built one of the first successful payments platforms on Facebook. Chris loves the challenge of simplifying complex legal workflows so non-technical people can use them with little to no training.

As for me, starting Atrium feels much like my first ride in an electric car. The parts around me seem familiar in function, but the experience feels entirely new.

Like the road to fully electric cars, the road to better legal services is paved with failed efforts. And in an industry based on trust, reputation and strong personal relationships, we can’t just adopt a “technology solves all” attitude. By designing an integrated stack from tools to advice, we believe Atrium can make legal services and legal practice better for everyone involved.

If this speaks to you, join us in our mission ❤.

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Bebe Chueh is a co-founder and partner of Atrium LLP. With experience as a litigator and also having started her own company, AttorneyFee, which she sold to LegalZoom, Bebe understands what startup businesses need in terms of legal services at every stage. She designs legal product offerings for incorporation, IP strategy, employment, and business matters to give form and force to founders' business objectives.

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