With its much-ballyhooed launch in 2017 and its backing by Silicon Valley entrepreneur and Twitch founder Justin Kan, Atrium said it would “revolutionize legal services” through its dual-entity model of a law firm and a separate-but-connected entity to provide back-end services and technology.

But now there are signs the revolution is at least partially raising a white flag. The company this week reportedly notified numerous lawyers and others who work in its legal services entity that they will be let go.

The reports suggest that Atrium will no longer directly provide legal services, but rather will focus primarily on its technology development.

One person familiar with the company speculated that Atrium will become a marketplace of special services for seed-stage and Series A-stage technology startups, with the services provided by third parties.

Reportedly, some of the lawyers being let go have been invited to offer their services independently through this marketplace.

I do not know when the layoffs will take effect or how many employees are involved.

This news follows the departure last April of Atrium’s cofounder and managing partner Augie Rakow, a former partner at Orrick, Herrington & Sutcliffe (just weeks after I interviewed him about Atrium on my LawNext podcast).

When Atrium launched in 2017, with an initial $10 million round of funding, I questioned in my Above the Law column whether it was a case of Clearspire déjà vu, recalling the demise of the strikingly similar dual-entity firm Clearspire, which opened in 2010 and shut down four years later.

But a year later, the company raised a whopping $65 million in a round that included some of the biggest names in venture capital, with Andreessen Horowitz leading the round and General CatalystYC Continuity Fund, and Sound Ventures as co-investors.

“Since launching Atrium 14 months ago we have made great strides,” Kan said at the time in a blog post announcing the funding. “We’ve helped over 250 clients raise a total of over $500 million in primary financings, and have built the A-team into over 110 great employees who are motivated to change this industry.”

I have reached out for comment to Kan and to Hans Kim, who became managing partner after Rakow left, but have not received replies as of this writing.

An anonymous email I received this morning claimed, “We know firsthand that the Atrium employees came in for an all hands meeting on Tuesday Jan 7 and were told that the entire law firm part of the business is being shut down. What’s more, they were in that same meeting encouraged to ‘start their own firms and use Atrium software.'”

Tony Wang, whose LinkedIn profile identifies him as a lawyer at Atrium, posted yesterday on LinkedIn that he had just learned he and others were being let go.

“Just officially got the word last night that Atrium is undergoing an internal restructuring and that a large part of the legal workforce is being let go. Many of my colleagues at Atrium were among the hardest working, team-oriented, and forward-thinking individuals I’ve had the pleasure of working with in my legal career and I’m sad to see this happen, as it comes as a complete surprise and shock.”

I have reached out to Wang, but he declined further comment.

In a comment to Wang’s post, another Atrium employee, Larry Brown, whose LinkedIn profile describes him as senior learning and development manager, said that he “is in the same boat as the legal team.”

I contacted Brown through LinkedIn, but he declined to provide further information.

As I explained in a 2018 post, the idea behind Atrium was that it would provide corporate clients with a compelling alternative to traditional large firms, with Atrium’s lawyers focusing exclusively on practicing law, while Atrium LTS — the legal technology services company — would handle all operations for the firm, even including marketing, and would develop and operate software to streamline the firm’s workflows.

LawNext Episode 36: Atrium Cofounder Augie Rakow on the Alternative Firm’s Successes and Challenges

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Photo of Bob Ambrogi Bob Ambrogi

Bob is a lawyer, veteran legal journalist, and award-winning blogger and podcaster. In 2011, he was named to the inaugural Fastcase 50, honoring “the law’s smartest, most courageous innovators, techies, visionaries and leaders.” Earlier in his career, he was editor-in-chief of several legal…

Bob is a lawyer, veteran legal journalist, and award-winning blogger and podcaster. In 2011, he was named to the inaugural Fastcase 50, honoring “the law’s smartest, most courageous innovators, techies, visionaries and leaders.” Earlier in his career, he was editor-in-chief of several legal publications, including The National Law Journal, and editorial director of ALM’s Litigation Services Division. At LexBlog, he oversees LexBlog.com, the global legal news and commentary network.