KEY POINTS

  • Atrium lays off 10 to 50 of its legal workforce
  • The two and a half year startup is doubling down on professional services
  • Justin Kan assures that this is necessary to create a sustainable model

Sometimes tough decisions have to be made early on to steer a company in the right direction and possibly prevent it from financial catastrophe. That's the kind of choice Atrium CEO Justin Kan had to take so that his client-lawyer collaboration software business can survive.

Layoffs have been a common theme for most tech startups, but some of them took too long to realize the unsustainability of their operation. In Kan's case, his two and a half-year-old company is already refocusing their attention to restructuring, which permits growth and new services. 

Kan stated via a blog post, "We've made the tough decision to restructure the company to accommodate growth into new business services through our existing professional services network. This change impacts our workforce in a couple of ways."

And the impact Kan talked about affected between 10 to 50 in-house lawyers.

Atrium covers consultations with a legal team that is led by a lawyer, tax and accounting filing reminders, legal documents audit, guide books, events, and other services all bundled in a $500 monthly membership. Atrium blends the realm of tech and law and produces new services with the two fields working in tandem. Its tech's machine learning capabilities, for example, can recommend procedures as well as generate fundraising contracts and hiring offers.

However, its renewed approach moves them away from this model that makes legal services less costly for startups. The lawyers that are part of the affected workforce will be given the option to become preferred providers in its professional services network. Kan said that the company would only retain a small group of partners who will cater to its clients for services, including financing, M&As, and general corporate legal assistance.

Atrium is also increasing more professional services for startups and founders.

"We will continue to invest in legal and are excited to shortly announce new senior partners. Our partners will work with the specialists in our professional services network to deliver exceptional legal services in a fast and transparent manner," Kan stated.

Kan also told TechCrunch that it is a "natural evolution" for his company to undergo such a dramatic change. In his blog post, Kan cited how he'd made similar difficult decisions for Justin.tv, which sold for $970 million to Amazon, a live video streaming service more popularly known today as Twitch.

justin-kan Justin Kan, one of Twitch.tv's founders. Photo: Courtesy/Wikipedia