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Comment by bradleyjg | Hacker News Reader

There's a big unanswered question in the article.

It says that the company is a law firm, that only two of the four co-founders are lawyers, and that it raised $10.5 million dollars, presumably on an equity basis.

However, law firms are not permitted to have non-lawyers as owners. It is considered unethical as it would mean decisions would be made by people that aren't obligated to follow the cannons of legal ethics or subject to bar discipline. The only U.S. jurisdiction I'm aware of that doesn't follow this rule is the District of Columbia, but Atrium is based in California.

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We raised $10.5M for our legal technology company, Legal Technology Services (LTS). My cofounders of LTS who are lawyers, Augie Rakow and BeBe Chueh, started a firm called Atrium LLP. Atrium LLP is LTS' first customer, and allows us to reduce our development cycle on building that software. I am not a partner at Atrium LLP (and am not a lawyer, nor do I give legal advice).

It's a complex story that has been a little misinterpreted and simplified.

Thanks for the reply, that makes a lot more sense than how the story was portrayed in the Post.

Quick question: for jury selection, do trial lawyers used a statistically tested line of inquiry for prospective jurors, or is it just seat-of-the-pants, intuition based selection?

They hire jury consultants, who do those things.

And the jury consultants, in turn, consult statistical tables. For example, one dimension they look at is authoritarianism. A person is deemed "authoritarian" if they are likely to side with the State in a criminal trial.

I helped my buddy, who is an owner of a jury consulting firm, port one of the statistical tables to a ruby model. Here's the code, if you're curious.

https://gist.github.com/zackster/ac3bca42c441f16cbf2b4895fdb...

We wanted to build software to democratize the jury selection process (and bring justice to all, not just those who could afford expensive jury consultants) but the marketing process was kind of challenging and the lawyers we reached out to were unresponsive. Also, jury consultants want to keep this knowledge a trade secret in order to justify their expensive fees despite these statistical tables being available for purchase by anyone who knows where to look.

Somewhere in between. In many federal cases, there is little "picking" allowed. And where picking is allowed, it's mostly intuition.

In large cases, jury consultants have typically been hired to use their intuition, with a scientific-sounding gloss, so the lawyers and corporate managers have someone to blame if something goes wrong. They were famous for proposing questions that were supposed to tip you off to something important, like "Does anyone here regularly fill out a crossword puzzle?" Given the tiny samples, it was difficult to have scientific questions, or to prove that the questions were bunk. (I am less jaded about trial consultants, who deal with argumentation, compared to the 'jury consultant' industry -- which famously gave us Dr. Phil).

In today's mega-cases, the money is spent on rapid profiling of the potential jurors' actual opinions, using their public-facing social media. There's still lots of armchair psychology, but not as much based on bullcrap questions.

The crossword puzzle question as quoted could be a logical/grammatical trick-question, because most people who know they don't don't know though if any one of all of them does.

Justin, with respect, there are many organizations working within the structure that you've put together. All of them get by on the basis that they argue the scope of what software does is not the practice of law.

My concern is that in order to secure regulator approval for this position most of these legal support contractors substantially misrepresent the scope and depth of the work they provide.

Do you have any plans in place to mitigate the risk of crossing the line, and how will that inform your product development plans?

> most of these legal support contractors substantially misrepresent the scope and depth of the work they provide.

source?

I work in the field, have money invested in the field and have spoken with both the organizations in question (as well as their compliance counsels) as well as their regulators.

In law, new business models often are in violation, compliance wise, until they make the case that they shouldn't be. If the model is successful & profitable, they fight to change the rules and sometimes end up with a complete or partial victory in that campaign - this is largely a political fight at the bar. If not, they vanish and the lack of regulatory oversight is irrelevant.

Can't give you more than that without going out of bounds.

Reviewing Atrium's legal careers section, they clearly understand the need to monitor the regulatory environment with respect to compliance - see their lead counsel post. That said, I'd counsel justin not to reply to my question if I was advising him.

AtriumLTS appears to be working on tools for lawyers, however; wouldn't you agree that's a much easier sell for regulators? As opposed to a LegalZoom or even Clerky model?

Now, if they're trying to gin up some "big data" tools, and using Atrium-client data as inputs for those tools, that raises really sticky questions. There would need to be a whole lot of education and disclosure about to clients about AtriumLTS's access to, and use of, the client's information, and the profits generated from that. You just can't monetize lawyer-client relationships like you do in the finance field.

In my experience, the regulators aren't really being sold in the first place. They don't have the resources or willingness to stir up a hornet's nest if they can get away with it.

Normally the key battle is in determining if the work in question falls within the definition of the practice of law. The more rote and mindless the work is (say, bates numbering a discovery compilation), the safer it is, but most of the low hanging stuff in this area is already done and most of the new entrants aren't trying to provide new tools in that area.

The big new wave is based on using ML and other tools to search, sort and classify documents for contract management, due diligence, discovery, etc. This is an area where support services already operate. As third parties, these support organizations allow firms to launder responsibility. They can claim that the primary firm is responsible for performing the legal work, which allows them to use non-lawyers to perform the work lawyers would, while simultaneously allowing the primary firm to claim that the searches they perform are defensible and therefore even if mistakes have been made that their efforts were sufficient to discharge their responsibilities.

Can you expand on the document classification etc - one would have thought that a large company would have all its contracts in one place / data room. For things like discovery etc I can see searching a gazillion emails is classification territory, but as you said that is mostly a done market?

I am just wondering where this next wave really is going going

> one room

At scale, almost no one has a "room." Think about a mortgage bank or cell phone provider, or a car insurance company. Even if they tried to use 'a form', they have to manage hundreds of little details about millions of clients -- based on whatever version of the form was filled out, where they lived, where the product is used, has a deed or title been properly recorded, did the Supreme Court of State X strike down part of your agreement, has anyone sent a written complaint sufficient to trigger the Fair Credit Reporting Act, etc. We've all criticized big lenders who can't come up with proof at a hearing -- but that's because managing that much data is hard. Compliance/contract management software is still growing rapidly.

Second, another wave of tech for lawyers is taking huge databases of publicly-filed contracts, and suggesting clauses in agreements similar to yours. If 80% of compensation contracts filed by publicly traded companies say X, and your deal says Y, you'd like to know that.

Agreed that this is happening; laundering is pejorative, but AFAICT, the Bar has said it's all kosher so long a lawyer is ultimately responsible for the advice and making the effort reasonable.

So, for our friends at Atrium, whether or not their systems 'practice law,' as long as that product is 'given' by the client's attorney... doesn't that look like it meets the UPL hurdle? (At least at this oversimplified level, IANYL)

Depends on how the regulator interprets the bar on sharing billings with non-lawyers. Westlaw and Lexis have massive offerings that do a ton to make work easier, so there's obviously room to work with, but they aren't providing products that practice law. They provide tools to practice law with.

With ML-driven autonomous determinations of relevance, however, you're literally doing associate legal work 101, with a system applying skill and judgement to the facts of the matter to make a determination of a legal nature. That's a difference in kind. This becomes doubly interesting, because most of these platforms are cloud hosted, so they're not 'given' by the attorney in the way that a land registry look-up would be after being vetted by a clerk. They're a stand-alone service that functionally makes choices for you.

I have no clue if Atrium is going down that route, but that's where the million dollar cost savings are. Maybe they're just making snazzier client-focused billing software. I've asked before, but no one will tell me what products they're actually working on.

Isn't this the same sort of quasi-entity that the patent troll firm that is suing Cloudflare is using?

Not saying that what this gent is doing is even remotely as bad (or even really bad at all), but seems they are employing the same mechanism to skirt the regulations a bit.

Just do it Justin. Make it cheaper for the public to fight their cases and be massively successful. If Uber and Airbnb can get away with it, so can you. If people paid attention to the naysayers nothing would ever change in the world.

It's not particularly complex compared to the structure of mutual funds: http://www.yalelawjournal.org/pdf/1228.Morley.1287_zmw59iqn....

Seems like there is enough leeway in ABA rule 5.4 that they are probably covered, but I'll bet some people will contest it.

Augie is a great lawyer so I would be confident that he's thought through all of that.

https://www.americanbar.org/groups/professional_responsibili...

Where do you see any leeway in this?

(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:

(1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;

(2) a nonlawyer is a corporate director or officer thereof or occupies the position of similar responsibility in any form of association other than a corporation ; or

(3) a nonlawyer has the right to direct or control the professional judgment of a lawyer.

There are a lot of ways to structure things that would fall into one of those exemptions.

I think the organization disclosed above fits into that exception so long as there is sufficient separation between the tech company and the law firm. Structuring the law firm as a customer of the tech company probably qualifies.

That said, I wouldn’t want to be putting my law license on the line for uncharted territory. Ethics enforcement can be really arbitrary.

The ABA rules are model rules - they provide a framework for state bars to build upon, but they aren't directly enforceable unless a state bar decides the ABA model code is their code.

The state bar of california has their own set of rules. See: http://www.calbar.ca.gov/Attorneys/Conduct-Discipline/Rules/...

http://www.calbar.ca.gov/Portals/0/documents/rules/Rules_Tit...

Rules 3.157 (A) A shareholder of a law corporation must be licensed and entitled to practice law.24

(B) The shares of a law corporation must be owned only by that corporation or a shareholder.25

Yeah, California prohibits this.

Just because something is considered "unethical" doesn't necessarily mean it's illegal. My guess, is that by building software no one is really going to question the ethics... In one sense the legal system should be devoid of anything but facts. So as along as a machine doesn't intentionally falsify information (which idk how it could), then it's not unethical.

> Just because something is considered "unethical" doesn't necessarily mean it's illegal.

In the legal profession it sort of does. Lawyers are regularly fined or disbarred for violating ethics rules, and the ethics rules are typically enforced by the courts.

I was using a term of art without being clear that's what I was doing.

"Unethical" as I was using it means in violation of the state bar Rules of Professional Conduct. Such violations aren't just a matter of being discourteous or something, they subject lawyers to professional sanctions up to and including being disbarred. As for non-lawyers, practicing law without a license is a crime in most states.

This is much more an issue of illegal than unethical in the colloquial sense of the word. My apologies for the confusion.

Please don't assert something as fact when you don't know what you're talking about.

A law firm is typically an LLP structure. LLPs are common even outside law firms and there is nothing I'm aware of that says only accredited/bar member lawyers can be the owners of these LLPs. Where are you getting that info from?

The restriction referenced is the bar association rule adopted in nearly all U.S. Jurisdictions that prohibits lawyers from sharing legal fees with non-lawyers.

Some non-U.S. Jurisdictions have similar rules but many don't. For example, there are publicly traded law firms in the UK.

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