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Atrium Law to Continue as Small Firm After Tech Business Closes

March 4, 2020, 10:27 PM

A small law firm plans to move forward in the wake of the dissolution of a once-heralded law-software hybrid to which it previously had been connected, Atrium Legal Technology Services Inc., a law firm partner said.

Atrium’s legal technology business closed after it became apparent that “the tech side wasn’t making sense” as a profit-making business to the venture capital companies that had invested $75.5 million into it, said Michel Narganes, one of two partners who will remain with the law side of the operation.

Slightly fewer than 100 people recently were laid off as a result of the tech company’s closure, Narganes said. She could not confirm reports that that company was also in the process of returning a portion of its VC funding.

Atrium founder Justin Kan, a Silicon Valley entrepreneur, and other former company leaders did not respond to emailed questions.

Atrium was founded in 2017 by Kan with the hope that it would provide legal services for lower price points than traditional law firms, and could benefit from technologists working in the same space through automation and other cost-saving efficiencies.

In mid-January, Atrium laid off a number of its in-house attorneys in a “pivot” toward a leaner legal operation that would rely more often on a network of contract attorneys.

When Narganes and partner Matthew Melville joined Atrium two weeks later, they were given no indication that the legal tech operation might soon shut down entirely, Narganes said.

Soon after they were brought on board, the pair disconnected from the legal tech portion of the operation, Narganes said. Atrium Law LLP now operates as a stand-alone business.

When Narganes and Melville learned of the layoffs—within the last 24 to 48 hours, at about the same time Atrium’s laid off employees were told—they quickly decided they should work to maintain and grow their business, she said.

The legal operation she and Melville are running, which provides legal services, except litigation, for tech-related and other startups, will still be called Atrium Law LLP, Narganes said, though a future name change may be considered.

The firm has around five staff in total for now, she said, and will be aided as necessary by their network of contract attorneys.

Narganes said their core group of clients are sticking with them, despite the changes in the overall operation.

To contact the reporter on this story: Sam Skolnik in Washington at sskolnik@bloomberglaw.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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