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Atrium’s law firm will cater to the early stage startup community, while its software company will cater to its law firm.

Atrium has been quietly building intrigue across both the technology and the legal community. The mystery project, championed by Twitch founder and Silicon Valley serial entrepreneur Justin Kan, announced in April that it would be raising $10 million in venture capital funding to “disrupt the legal industry,” a pronouncement that tends to raise eyebrows and produce very little actual disruption.

The company finally launched publicly this week as both a new law firm and a software company, two separate entities under the same roof. Atrium LTS, the venture-backed software side, will be charged with designing and deploying software for the law firm to use. Atrium LLP, the law firm, will offer flat fee services to the startup community via two specific services: Atrium Counsel and Atrium Financing.

The law firm to date has eight attorneys hired from large Bay Area law firms like Orrick, Herrington & Sutcliffe; Gunderson Dettmer Stough Villeneuve Franklin & Hachigian; and Wilson Elser Moskowitz Edelman & Dicker.

Augie Rakow, co-founding partner at Atrium LLP, explained that pairing the firm and software company is intended to allow technologists and business operations specialists space to rework many of the processes that are traditionally time consuming and inefficient within the traditional law firm.

“We’ve decided to functionally segment our operations and move all the nonadvice functions, all the nonregulated stuff over to nonlawyers. Let a nonlawyer hire engineers, train business operations people, hire people to design and improve business processes, and develop tech to give us faster access to design solutions for clients,” Rakow said.

Thus far, the software company has brought a couple different technologies to bear with the new firm. Atrium LTS developed an automation tool to quickly and accurately develop signature packets, something that most paralegals can tell you is a boring time suck. The software company also put together a tool to sort and organize intake documents per the firm’s titling conventions, and it is working on building out a pro forma generator for convertible notes.

Atrium senior associate Hans Kim said the legal team and software team aren’t just office mates, they’re encouraged to work together.

“We work closely together, so we’re collaborating on a daily basis,” Kim said. “We certainly have our designs that are on the boards on a daily basis. In terms of software development, sophisticated software development takes time. There are easy things we can do and there are longer-term projects.”

Although Atrium entered the market with the language of “disruption” common to many Silicon Valley technology startups, it isn’t the first law firm to operate a software company within its purview. A number of law firms, such as Littler Mendelson, Seyfarth Shaw, and Winston & Strawn, have productized portions of their in-house e-discovery operations for outside use.

Atrium differs specifically in its venture backing. The $10 million investment round initially put together in April tapped over 90 different investors and venture firms, making the round one of the biggest “party rounds.” That investment round was both a way to generate capital and a way to court potential clients for Atrium’s firm.

“We want to represent their clients, we want to represent their portfolio companies, and we want to build something that portfolio companies want,” Rakow said of investors.

Atrium’s heads initially intended for Atrium LTS to sell their product innovations outward to law firms, but Rakow, citing essentially the same struggles around slow sales cycles and technology reticence that most other legal technology startups deal with, said the strategy wasn’t particularly effective for Atrium either. Instead, the company decided to aim its product and process development wing specifically on its own law firm design.

“We’ve played with trying to sell legal software to lawyers, but we’ve seen how hard that is,” Rakow noted. “They generally don’t want to buy software. We want Atrium the law firm to be the first customer of Atrium the software company.”

The two services Atrium offers, Atrium Counsel and Atrium Financings, are clearly tailored to cater to early stage startups. Christine Ing, partner at Blakes and co-practice leader of the firm’s information technology group, previously told Corporate Counsel that startups tend to differ from other business clients in their reliance on general legal advising and low budget thresholds.

Kim said the flat fee structure is an attempt to cater counsel to startups who can’t handle the unpredictability of huge Big Law billable invoices.

“Those are things that are really unsustainable for the startup community. For startups, they’re just starting out; to hire a big law firm charging top law firm rates, it’s really a mismatch,” he said.

The firm’s early marketing brands it as a “billable hour killer” because of its flat fee model, but Rakow was quick to defend the billable hour as a symptom more than a cause of law firm’s high pricing.

“I think the billable hour is not the culprit here,” Rakow said, citing the administrative benefits and flexibility it offers as a billing structure. Instead, he pointed to inefficiencies as a greater sap on costs.

Pairing the firm with a software company could be a way to generate space for more efficient process design in legal practice, something typically precluded by the need for law firm partners to invest personal time and money into developing internal technology or experimenting with third-party vendors.

“We’re trying to run, I wouldn’t say more like a business, but I would say more like a Bay Area startup style-business in that we want each person to be responsible for improvement,” he said.

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