Category: News Feeds

Two years ago, when Atrium made its much-ballyhooed launch — backed by Silicon Valley entrepreneur and Twitch founder Justin Kan –- it 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, as I wrote in my column here at the time, I could not avoid a sense of déjà vu all over again at hearing the news, remembering the demise of the strikingly similar Clearspire. “Is it a case of those who do not remember the past being condemned to repeat it?” I wondered.

Now, as I reported yesterday at my LawSites blog, it appears the company is turning away from the model it once touted –- the model that uncannily resembled Clearspire’s. Reports indicate it is letting go most of the lawyers and staff who provide direct services to clients and shutting down that part of its operation.

Instead, one person familiar with the company speculated — and other evidence appeared to corroborate — 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, Atrium invited some of the lawyers who are being let go to offer their services independently through this marketplace.

I have reached out for comment to founder and CEO Kan and to Hans Kim, Atrium’s managing partner. Neither has responded. I have also reached out to several Atrium lawyers through LinkedIn. Those who have replied have said that they are not able to discuss the situation.

Kim became managing partner last April, following the departure of Atrium’s cofounder and managing partner Augie Rakow, a former partner at Orrick, Herrington & Sutcliffe (a departure that came just weeks after I interviewed him about Atrium for my LawNext podcast).

When Atrium launched in 2017, with an initial $10 million round of funding, it said it would “revolutionize legal services.” Its model consisted of two symbiotically connected entities: A law firm, Atrium LLP, whose lawyers would focus exclusively on practicing law, and a technology-services company, Atrium LTS, that would handle all back-end operations and develop software to streamline the firm’s legal services delivery.

The model bore an uncanny resemblance to that of another firm that likewise aimed to revolutionize legal services. Clearspire opened in 2010 and shut down four years later. Like Atrium, Clearspire operated as two entities. The law firm, Clearspire Law, promised high-end legal work delivered efficiently, collaboratively, and transparently, at fixed prices. The service company, Clearspire Service Co., supported the firm’s business operations and infrastructure and developed a custom software platform, Coral, to support the law firm.

But Kan’s pedigree was seductive, and all signs were positive. Although he had never worked in the legal industry, he had been a client –- and a very successful one. He founded the live-video platforms Justin.tv and Twitch.tv, selling Twitch to Amazon in 2014 for $970 million. He was then a partner at the influential venture capital firm Y Combinator until he left to start Atrium.

Then, a year after its founding, Atrium raised a whopping $65 million in a round that included some of the biggest names in Silicon Valley venture capital, with Andreessen Horowitz leading the round and General Catalyst, YC 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.”

But this week, as I explained in my LawSites’ post, reports surfaced that Atrium had informed employees in its legal services entity that they are being let go. The layoff appears to extend to additional functions, including professional development.

So is this déjà vu all over again? Is it history repeating itself?

Well, no. At least it appears not.

When Clearspire shut down, it shut down both entities. Atrium is not shutting down. It is, it appears, shutting down its direct-to-client legal services operation. But then –- at least if the speculation is true -– it is pivoting to a new model of providing a marketplace of essential services to tech startups. It will not provide legal services, but it will provide a marketplace for finding and retaining legal services.

With $75 million invested in Atrium, I do not expect it to go away. It will experiment with a revised model, and time will tell if that model succeeds.

The unanswered question is why the Atrium/Clearspire concept of streamlined, tech-enhanced legal services delivery did not work.

Mark A. Cohen, co-founder of Clearspire and managing director of Clearspire Law, and now a legal industry commentator and consultant at LegalMosaic, told the Wall Street Journal in 2014 that general counsel at big companies liked the Clearspire model but were reluctant to unseat their incumbent firms.

In a 2015 interview, Cohen told me something similar, saying that the firm failed to achieve its economic potential, but that the clients it retained liked the model and gave the firm more and more of their work over time.

But in a 2014 column at the ABA Journal, Patrick J. Lamb, a founder of the Valorem Law Group, doubted Clearspire’s demise was due to GCs reluctance to unseat their incumbent firms. Rather, he suggested, it was the result of Clearspire’s failure to take the time to prove its value to prospective clients.

“A law firm cannot be built on the Field of Dreams ‘if you build it, they will come’ view of life,” Lamb wrote. “That approach may work in movies, but even those with a passing understanding of business development know that something special may earn a try-out, but performance and solutions to client problems are the things that earn more work.”

Many thought Clearspire was simply ahead of its time. That seemed to foretell a different future for Atrium. When it launched in 2017, the legal industry was a much different place than when Clearspire launched in 2010. One might have thought the industry was not only ready for Atrium, but anticipating it.

Pundits will ponder this news for weeks, months, maybe years to come. Meanwhile, I’ll keep my fingers crossed that Kan gets back to me. I’d love to hear his perspective and learn about his plans.

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Robert Ambrogi is a Massachusetts lawyer and journalist who has been covering legal technology and the web for more than 20 years, primarily through his blog LawSites.com. Former editor-in-chief of several legal newspapers, he is a fellow of the College of Law Practice Management and an inaugural Fastcase 50 honoree. He can be reached by email at ambrogi@gmail.com, and you can follow him on Twitter (@BobAmbrogi).

Kent Brockman: Professor, without knowing precisely what the danger is, would you say it’s time for our viewers to crack each other’s heads open and feast on the goo inside?
Professor: Yes I would, Kent.

In the above passage from The Simpsons, feel free to replace beloved Channel 6 anchor Kent Brockman with “Citi Private Bank Law Firm Group” and the professor with “the leaders of the major law firms.” It’s that time of year for Citi Private Bank to release the results of its law firm management confidence survey. Last year, like most years, confidence levels were thoroughly middling, with management fairly confident that the economy would putter meekly forward. Lawyers aren’t known for unbridled optimism, but this year’s results, even judging on an attorney’s curve, are a lot more gloomy.

From the executive summary of the Law Firm Confidence Index, we see that “confidence in the US economy dipped significantly below neutral, while projections for global economic growth continued to dip even further.” Law firms continue to see demand improvements, though expectations were moderated. But law firm demand usually enjoys a slight uptick when the bottom falls out of the economy so that’s not exactly encouraging.

They are also less optimistic that pricing pressure will abate and expect a deceleration in revenue and net income growth. Despite a more modest outlook for the first half of 2020, law firm leaders plan to accelerate headcount growth.

Revenue down… headcount up. At least until the mad dash to cover bankruptcies and emergency mergers starts to die down and the firm is left to consider exactly how many of these heads they want to keep counting every day. There could be some bumpy times ahead folks.

Earlier: Law Firm Leaders Are Completely Confident That They Don’t Have Much Confidence

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Having gone through several episodes of violence, Zimbabwe must have a conversation on how its reparations programme must look like in order to bring healing to victims and survivors.

Realising the importance of this matter, the National Transitional Justice Working Group (NTJWG) is hosting a Policy Dialogue Session on 20 January 2020 in Harare at the Holiday Inn at 5:30pm.

Special Guest at the Dialogue Session will be Ms. Paula Gaviria, a Colombian Expert on Reparations who served as the Director of Colombia’s Reparations Programme in the Office of President Juan Manuel Santos in 2012.  During her tenure, the Colombian reparations programme documented over 6 million victims of the Colombian conflicts and provided reparations to hundreds of thousands of victims in what Harvard University called the most comprehensive and ambitious reparations programme in history.

Ms. Paula Gaviria will bring her expertise to Zimbabwe and share with stakeholders some of the strategies she employed during her tenure in the Government of Colombia.

She will be joined by Dr. Frances Lovemore, the Executive Director of the Counselling Services Unit (CSU) whose organisation has provided medical and psycho-social support to thousands of victims and survivors in Zimbabwe.  Dr. Lovemore is the NTJWG’s Thematic Leader on Reparations and Rehabilitation.

NTJWG is privileged to be hosting this special dialogue of experts and stakeholders on this important matter for our country.

It is with great pleasure that we are extending this invitation you to join the conversation on Monday 20 January 2020 from 5:30pm at the Holiday Inn, Harare.  Please use the link here to register, or email [email protected] .

Post published in: Featured

What sitcom character’s career evolved from law student to judge over the course of 9 seasons?

Hint: The fictional character’s career path also included the very realistic turn of stifling his public interest aspirations for a corporate gig.

See the answer on the next page.

Ian was no different from you—a brilliant, driven, professional struggling internally to meet the demands of work he loved and feeling unable to seek help because of intense fear around the stigma of mild mental health issues and diabetes. His story is also not too different from that of countless men (mostly) and women in the law who have also taken their own lives. He was coping reasonably well until suddenly he wasn’t, and it was too late. This “he just snapped” phenomenon is all too common, and I promise that you are not immune to it.

—Dr. Marny Morrison Turvill, widow of legal marketer Ian Turvill who died by suicide two years ago, writing for Law.com about her husband’s mental health issues that led to his death. She says that the culture at Biglaw firms can prevent folks who need help from seeking it. Turvill also says a change in paradigms in the understanding of mental health is necessary to truly address the problem.

If you or someone you know is depressed and in need help, please call the National Suicide Prevention Lifeline (1-800-273-8255) or a lawyer assistance program in your state

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Alphabet Chief Legal Officer David Drummond will leave the company at the end of the month and will not receive a severance package. No need to cry for Drummond though since he routinely found himself on the annual list of the highest paid in-house attorneys in the land.

Technically, Drummond is retiring to make way for the company’s new leadership, but with Alphabet quick to point out that Drummond won’t be receiving an exit package and that there’s still on ongoing investigation, it looks like Google compiled its annual Year In Search and someone kept noticing their own legal department making all the wrong headlines.

As we recapped the situation back in September on the occasion of Drummond’s wedding: “the GC just married an employee this weekend, but not the employee who says he neglected their baby after he had an affair with her while married to yet another person.” Why doesn’t Google have a streaming service, because that’s top-notch drama right there! The former employee with the baby, Jennifer Blakely, had an affair with Drummond in 2007. That kid is going to be going to high school soon — that’s how long Google’s had a heads up about how the legal department works. And Blakely claims that Drummond had numerous other affairs with employees before deciding to marry… an employee.

Even if everything happens above board, turning the office into a dating pool reflects a broken professional culture at best, and as worst can lead to downplaying sexual misconduct throughout the company — which is theoretically something the legal department is tasked with policing. If a legal department adopts the worldview that asymmetrical power relationships aren’t a barrier to sexual relationships, then it’s that much easier to dismiss harassment — when hitting on employees is acceptable harassment becomes “a misunderstanding.”

A culture like this is exactly how Android’s Andy Rubin ends up with millions after credible allegations of misconduct:

Drummond was most recently one of several executives at the center of an internal investigation regarding Google’s handling of sexual harassment and misconduct, including the $90 million exit package given to disgraced Android co-founder Andy Rubin following Rubin’s own credible allegations of sexual misconduct.

The investigation that followed the worldwide uproar over the company trying to sweep Rubin’s story under the rug with a $90 million payout may not be the reason Drummond’s leaving, but it’s a pretty good reason why he had to go. Even if the investigation ultimately clears Drummond, the employee response to the Rubin package indicates a lack of confidence in the leadership of the department and that requires a change for the company to move forward.

But in case you were still worried, Drummond sold around $200 million in stock over the past several months, so he’s fine no matter what the investigation decides.

Alphabet’s top lawyer is leaving with no exit package following misconduct scandals [The Verge]

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

“What’s the difference between the judge and another lawyer,” my first-year law professor once asked a group of students.

“The black robe.”

Indulge me for a moment. Please suspend your judgment and rank the words below in the order of perceived importance.

Partner, senior counsel, legal process outsourcing (LPO) attorney, general counsel, legal vendor, bar association president, legal recruiter, associate general counsel, of counsel, solo, legal tech investor, paralegal, legal marketer, law school professor, associate, contract attorney …

Do the first thing that comes to mind. Just write it down or mentally arrange these words.

Quick. Don’t overthink it! Yes, it’s uncomfortable, I know. Just do it!

Surely this is list is not comprehensive. Plenty of other legal designations and titles are out there if you think of a few that are missing. But for the purposes of this exercise, this list is plenty.

I have done this ranking game with more legal professionals than I can count, in numerous locations under numerous circumstances. In fact, I travel with a set of index cards on which these and other legal titles are written in big letters just in case.

Sometimes, I do it over a meal or beverage with another legal professional. Other times, it’s just me, the index cards, and a very puzzled stranger or friend who happens to be a member of the legal profession.

I have done it in groups and in one-on-one conversations. I have done it in person and through a video conference chat.

I am here to report that remarkably, the outcomes are basically the same, every time.

There are some differences in the margins. Occasionally an “it depends” response leads to a philosophical discussion about hierarchy and importance. But by and large, the results are very similar every time.

These consistent results are disturbing. They suggest the existence of a rigid legal caste system. They make the swim lanes and very high barriers to entry in the legal profession that so many of us have suspected exist hard to deny.

I believe that this rigid social stratification in law has huge impacts on collaboration, innovation, and, ultimately, progress in law. After all, the cross-pollination of ideas is almost always at the core of collaboration, innovation, and progress. And it’s made impossible by a rigid social structure.

This makes me wonder: what if we stop buying into this invisible hierarchy of importance among legal professionals? What if we approach every interaction with an open mind? What if the difference between a lawyer and a judge is just the black robe that one is wearing?

At what point is maintaining the system as it exists too costly for the profession and individual practitioners? What do you think?

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Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw, an organization dedicated to preparing women in-house attorneys to become general counsels and legal leaders, and WISE to help female law firm partners become rainmakers. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can email Olga at olga@olgamack.com or follow her on Twitter @olgavmack. 

Marc Kasowitz had an altogether disastrous 2017, but things have been fairly quiet ever since he stepped back from Russiagate and handed the role of “ostensible lawyer spewing wild nonsense” job over to Rudy Giuliani.

But last week, Kasowitz got sued by not one but TWICE. The two lawsuits, one in Texas and one in California, may be entirely independent but they have a lot in common. In both suits, a diverse former partner alleges that the firm stiffed him on pay before firing him. Both even allege that the firm was paying them on the same deficient scale.

The first suit was brought by Kyung Lee, who joined the firm’s Houston restructuring practice in 2018. According to the complaint, the firm agreed to a $550K in annual comp for Lee’s first year on the job and then proceeded to pay him $20K/month — on target for $240K/year. When Lee asked for the remaining $310K, he claims that was told on October 15, 2019 that the firm would take a $51K offset and would pay him “$125,000 today” which doesn’t add up. He says that Kasowitz responded soon afterward by making “false allegations.” On October 16, he received the $125K and on October 17 he complained that he felt as though punitive actions were being taken against him. On October 18, he was fired. Lee noted that this was done without a proper vote of the firm’s Executive Committee.

In the second suit, San Francisco white collar partner David Fermino, a gay African-American attorney, alleges a number of discriminatory incidents from his time at the firm. Not to downplay the seriousness of those allegations, let’s focus on the compensation issues because that’s where the two suits come together. Fermino, who joined Kasowitz in 2017, alleges that the firm promised him an annual salary of $400K. You’ll never believe what Fermino alleges happened next:

Between Plaintiff’s start date and December 2017, Kasowitz paid Plaintiff a salary of $20,000 per month, or $240,000 on an annualized basis, substantially less than his agreed upon compensation.

I guess $20K/month is a magic number! Fermino says the firm made a partial payment of the deficiency in January 2018 before reducing monthly compensation to $10K in April and later to $9K. Fermino then claims that Kasowitz made “false and defamatory statements” about him to others in the legal community before terminating him unilaterally… without the proper vote of the firm’s Executive Committee.

For its part, the firm informed Texas Lawyer that “Kyung Lee’s allegations are false, and his claims are unfounded.” The firm has yet to make a specific statement on Fermino’s claims.

Two partners, two different offices, two different specialties. And yet some disturbingly familiar allegations: diverse partners, paid an associate’s salary despite earlier agreements, subject to false claims when they raise complaints, and then unilateral termination without proper EC process.

These are two cases to keep an eye on.

(Check out the full complaints on the next two pages…)

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Dumb, smart, poor, rich-but-not-obscenely-rich, Democrat, or even Republican, among we Americans, there is consistent, overwhelming majority support for a wealth tax. The tsunami of polls on this subject is itself a bit overwhelming.

Most recently, a Reuters/Ipsos poll of 4,441 American adults found that 64 percent either somewhat or strongly agreed with the statement that “the very rich should contribute an extra share of their total wealth each year to support public programs.” This general result largely held across demographic categories. There was a difference in support based on political affiliation: 77 percent of Democrats supported the idea of a wealth tax, but among Republicans there was still majority support, with 53 percent of GOP respondents supportive of a wealth tax on the very rich.

Last November, a New York Times/Survey Monkey poll found similar levels of support for a specific wealth tax proposal. Of the 2,672 people surveyed, 63 percent supported Elizabeth Warren’s wealth tax that would place an annual 2 percent tax on the wealth of those with assets worth more than $50 million, and a 3 percent annual tax on the wealth of billionaires. Elizabeth Warren’s wealth tax proposal got the support of 77 percent of Democrats, a very consistent figure compared to general Democratic support for a wealth tax, and the added level of specificity got a few more Republicans on board as well, with 57 percent of GOP respondents expressing favorable views of this policy.

A bevy of additional polls in 2019 from a variety of different polling outlets found varying levels of support for a wealth tax, but all of them found overall majority support for the policy proposal.

That’s quite astonishing, really. It’s rare to get levels of support that high on specific policies in American politics. In antebellum America, there wasn’t even that level of bipartisan majority support for the policy idea that “slavery is bad.”

What’s even more astonishing is such a high level of support for a policy we don’t even have yet and have no clear path to implementing anytime in the near future. Why kind of politician can’t or won’t take action on a policy that clear majorities of both parties want?

Well, the kind who likes money, apparently, and realizes that there are no longer any consequences in our system of government to just ignoring the will of the majority as long as you serve moneyed interests. The one demographic category among which the idea of a wealth tax falls flat is a very small one: the obscenely rich.

In an interview released in January, sports merchandising billionaire Michael Rubin blasted the idea of a wealth tax and said, “What would happen is people won’t start businesses here anymore.” Oh, the same argument that everyone has used against every tax ever that hasn’t resulted in America being anything but the best place in the world for startups? Yeah, OK, go ahead, move to Uganda and start a company from scratch there and make a billion dollars from it, we’ll wait.

Other prominent billionaires to recently slam the idea of a wealth tax include hedge fund manager Leon Cooperman, former CEO and promulgator of the $6 coffee Howard Schultz, and megabillionaire Bill Gates. Even Michael Bloomberg, who is seeking the Democratic presidential nomination seemingly based on the sole qualification of being a billionaire, said that a wealth tax would drive rich people to hide their incomes or withdraw money from the economy. As opposed to the other kinds of taxes that already exist that don’t do that at all -– we lawyers have surely never seen anybody try to hide income based on something like an income tax, for instance.

A lot of billionaires also call a wealth tax unconstitutional. Did everyone just collectively forget that we had to pass a constitutional amendment to put a national income tax on ourselves? That was the Sixteenth, look it up. If we can amend the Constitution to put a tax on everyone, I’m pretty sure we can figure out a way to enact a tax on the tiny sliver of people with more than $50 million dollars, especially when that idea is already enjoying the support of close to two-thirds of the electorate.

Why do we keep letting these grotesquely wealthy people dictate national policy to the rest of us? According to U.S. News, there were 607 billionaires in the United States in 2019. There are about 329,175,736 nonbillionaire Americans. In 2020, the teeming masses should turn the tables and make the billionaires swallow our ideas for a change. Frankly, billionaires should thank whatever gods they keep that two or three percent is all we want.

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Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

In a story summarizing biopharma executives’ forecasts for 2020 last weekend, one said that while it may take a political solution to address the issue of high out-of-pocket costs for patients, it would be up to drugmakers themselves to bring down list prices. A new startup, founded by a well-known health policy expert and a biotech industry exeutive, plans to do that.

Cambridge, Massachusetts-based EQRx announced its launch Monday with a $200 million Series A financing whose participants include GV, ARCH Venture Partners, a16z, Casdin Capital, Section 32, Nextech and Arboretum Ventures, in addition to other investors.

The company aims to provide what it calls a market-based solution for the rising cost of drugs by changing the process of creating medicines from discovery all the way through to patient delivery in order to make the process cheaper. It will then offer its drugs at costs lower than those of drugs on the market. Per a spokesperson, its initial focus will be on small molecule drugs in cancers, immuno-inflammatory and rare genetic diseases, with the goal of eventually producing biologics as well.

“The process of developing and bringing new drugs to market should and can be organized toward the goal of their being affordable, both for patients and society,” said Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York and a co-founder of EQRx, in a statement. Bach will act as an adviser to the company. “Today, even people with insurance are delaying filling prescriptions or going without due to the high cost sharing that’s part and parcel of high drug prices.”

Fellow co-founder Sandra Horning – former executive vice president, chief medical officer and global head of product development at Genentech/Roche – will also serve as an adviser to EQRx.

List prices from drug manufacturers, which in recent years have soared to eye-popping levels in the hundreds of thousands or even millions of dollars, are distinct from the out-of-pocket costs that patients typically pay, but they contribute to those costs nonetheless. That has led to a number of proposals from both major political parties that include everything from requiring more transparency in negotiations between manufacturers and pharmacy benefit managers to allowing Medicare to negotiate drug prices, which it currently is prohibited by statute from doing.

However, Tim Mayleben, CEO of drugmaker Esperion Therapeutics, previously said that while the solution to out-of-pocket costs would probably have to be political, given that it stems more from cost-sharing policies imposed by payers and PBMs, it would likely be up to drugmakers to lower list prices.

“Over the last several decades, society has benefited from unprecedented technological advances and a deeper understanding of disease biology, revolutionizing the way many diseases are treated today,” EQRx CEO Alexis Borisy said in a statement. “That said, the pricing of new therapeutic approaches is pushing beyond the limits of common sense, preventing people and society from equally benefiting from innovation. The time is now for a market-based solution to rising drug costs.”

Photo: gerenme, Getty Images