The boring genius of how Atrium kills authorized busy work
Law corporations have little incentive to construct or purchase software program that can save their legal professionals time as a result of they typically invoice purchasers by the hour. Tasks like monitoring down authorized paperwork, extracting key data and drawing up hiring gives or funding time period sheets add as much as make legal professionals costly, even when they’re always repeating senseless busy work.
That’s why authorized startup Atrium is so thrilling — although it’s growing tech which may appear boring on the floor. After elevating $75 million from Andreessen Horowitz and General Catalyst whereas rising to 400 purchasers, right this moment Atrium is asserting its first customer-facing merchandise.
Atrium Records creates a collaborative file locker for you and your lawyer so that you at all times have entry to the most recent variations of company paperwork. Atrium Hiring mechanically generates hiring gives and contracts from particulars you add to a type, and tracks everybody’s approvals and signatures.
Rather than having to pay for these instruments individually, they arrive as a part of a subscription to a bundle of Atrium’s authorized companies, with particular initiatives like counsel by an acquisition costing additional. This enterprise mannequin incentivizes Atrium to work as effectively as doable as an alternative of bilking hourly charges, and construct instruments to remove less-skilled work or help with frequent company duties. That’s allowed it to hurry up authorized work on incorporations, financings, M&A and contract negotiations.
“One of the reasons we partnered with Andreessen Horowitz on the last round [a $65 million Series B] was we really align with the way they approach venture capital,” Atrium co-founder and CEO Justin Kan tells me. “Marc’s preliminary remark was . . . let’s not simply present capital but in addition different companies like a expertise community. We have type of performed the identical stuff. Not solely are we serving to individuals with the authorized stuff they need to get performed however with the opposite stuff surrounding it.”
For instance, Atrium’s Fundraising Concierge service gives help to startups for outlining their narrative, establishing investor conferences and producing truthful time period sheets. Atrium has so far aided startups with elevating greater than $1 billion, from seed rounds of $200,000 to large $50 million rounds
Developing drab however helpful software program for enterprises is a drastic shift for Kan. He pioneered life vlogging by strapping a digicam to his head at his startup Justin.television that finally blossomed into Twitch and bought to Amazon for $1 billion. It’s been fairly an adjustment for Kan going from making video-game-streaming shopper apps and angel investing to Atrium. “Two years. It has been an interesting and crazy ride. I wanted to get back to starting companies. That was the fastest learning I’d ever had. But I forgot learning means failing a lot,” he says with a wry smile.
Whatever tribulations they required appear value it now that Atrium’s new merchandise are prepared. Atrium Records improves on the clumsy established order the place purchasers must dig by emails from their legal professionals hoping to seek out essentially the most up-to-date variations of necessary company paperwork. If they will’t, they wait round after emailing their lawyer who has to hope they bear in mind the place they buried that time period sheet or cap desk of their agency’s file tree. This messy course of can rack up billable hours, result in knowledge mismatches and let necessary signatures or approvals fall by the cracks.
Kan says he’s seen some grisly conditions. “You by no means signed your fairness paperwork so that you truly haven’t any fairness on this firm. And now that there’s financing, there could possibly be a taxable occasion. Tright here’s typically surprisingly severe issues that occur.” Atrium’s senior product supervisor Sahil Bhagat walks me by how Atrium may also help purchasers keep away from a problem like, “Maybe you hired 10 employees but didn’t update your cap table and then you’re hiring the 11th employee but you don’t have any equity to grant so you have to go through the hassle of increasing your options pool.”
Atrium Records acts like your searchable authorized Dropbox. The startup works along with your final regulation agency to ingest your paperwork round fairness, taxes, staff and IP, and ensure they’re all updated. Machine studying extracts important knowledge about financings and cap tables in order that’s immediately accessible within the Atrium dashboard and also you don’t must dig into the unique docs. Plus, you don’t must pay for legal professionals or paralegals to try this manually. And your lawyer can construct a job record of paperwork so that you can edit or signal so that you at all times know what to do subsequent, which is a aid once you’re wrangling approvals from all of your present buyers.
Atrium Hiring operationalizes one of many greatest founder time-sucks. Instead of writing hiring contracts from scratch every time, you fill out a type and use menu choices to set the wage, share rely, vesting schedule and provide expiration. Looking throughout its anonymized knowledge set of contracts, Atrium can suggest the very best clauses and commonest set ups, like four-year vesting with one-year cliffs. You can see the standing of the contracts each step of the way in which, from drafting and finalizing to getting staff to just accept.
Kan tells me Atrium’s objective is to proceed constructing on its archive of greater than 100,000 authorized paperwork to develop aggregated swimming pools of knowledge purchasers might decide into. If they’re keen to share their wage knowledge, vendor contract pricing and extra, they’ll get entry to that of Atrium’s different purchasers. “You’ll be able to see if you’re on the high end of being paid by Salesforce for a contract,” Kan explains. That’s a way more data-driven strategy than when most legal professionals simply consider the previous couple of salaries they noticed for that place and provide you with a tough common.
“Being able to tell what the market norms are is a powerful negotiating tool.” The startup has even been providing its ideas free of charge as a part of fundraising workshops it makes use of to draw purchasers. The problem for the corporate shall be making certain effectivity doesn’t imply reducing corners.
Atrium has grown to 150 staffers cut up between authorized practitioners and its product group in its two years since launch. Kan is making an attempt to construct a tradition the place everybody cooperates, in contrast to infamously cutthroat regulation corporations the place companions can compete for instances. He hopes that expertise will keep on with Atrium as a result of it’s deleting essentially the most tedious elements of their jobs. “No one wanted go to law school to review 1,000 hiring docs.”