A Tale of Two Legal Services Entities

The Atrium debacle has now moved out of the legal innovation news cycle having been mostly savaged (and rightly so) for its lack of understanding of the market it purported to serve, its inability to learn from the past, and a seemingly waste of investor money. It remains a sad example of how an entity built solely around hype is able to gain huge profile and raise massive amounts of money with no reasonable ROI, while entities doing really good work impacting far more people (on a shoestring!) are largely ignored.

One of the claims made on Twitter during the Atrium mess was that Atrium raised more money (on a half-baked idea) than the amount spent on legal aid for the entire state of California. Take that data with a grain of salt as it’s from Twitter, but the comment does illustrate the disparity of funding between real-life and the Silicon Valley hype machine. And yes, I’m well aware of the private sector risk/reward argument with investors…

What if Atrium had spent the time to properly research already available technology, then built something that simply leveraged off that existing technology?

What if Atrium’s founders had spoken to the founders of Clearspire, listened to its story (and demise), then bought or licenced Clearspire’s technology?

What if Atrium’s founders weren’t multi-millionaires and were hungry enough to be much more careful with their business plan and their use of funds?

What if Atrium had focussed not on legal advice for start-ups (an arguably very small niche market), but instead on the much bigger market of creating technology that enhances legal aid/pro bono services which are agnostic to jurisdiction?

I asked Lynn Burns the Executive Director of Pro Bono Ontario what she would do if someone gave her USD$65 million this year? She nearly spit up her coffee before telling me that she wasn’t sure as PBO currently operates on about 2% of that sum and serves 30,000 clients each year.

Like Atrium, PBO strives to deliver cost-effective services by leveraging humans with technology. Unlike Atrium, as a non-profit, PBO is always hungry and it doesn’t have the luxury of re-inventing any wheels; its platform is built on existing technology that they customized — with the only effort being on making any necessary tweaks. So far this year, this approach was validated when the Canadian Federal Government awarded PBO a contract to run a hotline for families of Ukrainian International Airlines flight PS752. The system was up and running within days. A week or so later, PBO was also awarded a 4-year contract to create a dedicated toll-free line for victims of sexual harassment in the workplace.

And what about that important metric, ROI? Well Atrium has yet to deliver on the massive dollars delivered by investors. While data released by PBO indicates that PBO’s return on invest was $10 for every dollar spent in 2017. Updating that to 2019, the ROI is estimated to be between $15-$20 for every dollar spent. The reports on assessing ROI are here and here.

Atrium and PBO is truly a tale of two legal services entities.

Which is the better investment?

I leave it to you to choose.

Comments

  1. The Atrium saga reads like another blind “we can all make our dreams reality” FOMO fail – the legal industry’s equivalent of Fyre Festival.

    Interesting conjecture, but any comparison between Atrium and PBO is only wishful thinking too – they are diametrically opposite entities.

    Atrium, half-baked as it was/is, raised all that money based on hope, sprinkled with sugary tech-babble pixie-dust that makes people salivate at the notion that tech can make anything better, which in turn fuels their personal view to a profit.

    Its the same fear of missing out on the next big thing, coupled with the pervasive ‘common knowledge’ that legal practice is inherently inefficient because its a service requires so much human interaction . In the tech world, humans are the weak link: costly, unreliable, prone to errors, and just plain inefficient. Ripe for technology’s scalpel.

    PBO on the other hand: not exactly a operation that seems ripe for or attractive to private investment and the lure of efficiency-driven value-added profits. This in no way denigrates PBO – they do great and necessary work . If anything, the existence of PBO is a constant reminder of the weaknesses of our legal system and the always elusive goal of A2J.

    They are just apples and oranges, though I suppose both are learning experiences – each offers a practical lesson on what works and what doesn’t.

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