LegalTech Reversal: Atrium’s Staff Cuts Show LegalTech Startups Are Not Always a Quick Road to Riches

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LegalTech startups and the overall high tech world of legal AI developments have been experiencing increased issues as high profile Atrium announced it is laying off most of its legal staff, moving away from replacing law firms to adopting a subscription model.

Atrium has raised $75.5 million from funders like Andreessen Horowitz, according to its website, but made the cutbacks announcement on Monday. It has been a favored ‘darling’ of the legaltech sector for some time.

Atrium markets itself in part as a more affordable, efficient option for startups seeking legal advice than using the traditional law firm model.

LegalTech Reversal: Atrium's Staff Cuts Show LegalTech Startups Are Not Always a Quick Road to Riches 3

Techcrunch reported CEO and co-founder Justin Kan (left), who co-founded livestreaming service Twitch, saying: “It’s a natural evolution for us to create a sustainable model.”

“We’ve made the tough decision to restructure the company to accommodate growth into new business services through our existing professional services network,” Kan wrote on Atrium’s blog.

Although he did not provide exact figures, he confirmed that not less than 50 staffers were affected by the change. The company previously had a headcount of 150.

However, the slowdown will be a warning to others about the difficulties in changing the legaltech scene with dramatic mission statements, even though, as one commentator recently pointed out, the law profession has been one of the slowest to have been “meaningfully disrupted” by technology.

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