Fed up with his law firms’ inefficient and costly practices, serial-entrepreneur Justin Kan decided to take matters into his own hands. Now, Kan isn’t a lawyer, so he couldn’t start his own law firm. And given the size of his companies, my guess is that DIY wasn’t an option. But what Kan could do is form a company – Atrium LTS to build a technology platform that would enable law firms to provide the kind of service that Kan and his start-up colleagues demand. And he could also identify a team of lawyers to form a law firm – Atrium Legal to test drive the technology that Atrium LTS created. Both Tech Crunch and Bob Ambrogi’s Law Sites Blog covered Atrium’s launch yesterday.
Although Kan’s venture is decidedly 21st century, the motivation behind it isn’t. Many lawyers are driven to start law firms to be the kind of lawyer they wish they had been able to find to handle their problems. For example, I can think of at least two family law attorneys who having gone through expensive and messy divorces, started their own firms to help clients avoid those same experiences. The same holds true for many other practice areas as well.
Of course, what sets these types of firms apart from Kan’s venture is that the founders are lawyers, not clients. And Kan’s new model should have law firms running scared. Many law firms count on unhappy clients sticking around either due to inertia or lack of better options. Others will ply clients with discounts and incentives to stick around. But Kan has just shown that clients are not captive, and that even the short-term lure of discounted services isn’t a particularly effective incentive when better service is available at a lower price. For law firms, the competition is no longer other lawyers. Instead, it’s their own clients.