Welcome back to The Law Firm Disrupted. I'm back from vacation and this week we talk about a $65 million investment in a law firm that is a year old.

I'm 30 next week, so I must be worth a lot more than that. Tell me how much (or how little) I'm valued here: [email protected].

Atrium founder Justin Kan.

This week, I spoke with Jeroen Plink and Bas Boris Visser who, together, make up the leadership of a relatively new innovation center at London-based legal giant Clifford Chance.

I was talking with them about the hire of Plink to become CEO of a Clifford Chance business unit called Applied Solutions, which designs use cases for document automation and other technology products aimed at resolving regulatory and compliance issues.

It was an interesting call, which we'll get to. But it ended with a brief conversation about the day's pressing legal technology news: Silicon Valley startup Atrium Legal Technology Services Inc. receiving $65 million in funding from some big-name investors. Plink asked what I thought about Atrium, and I had to be honest: I'd been on vacation most of last week and since returning had been too tied up with other deadlines to look at the news.

So here is the news if you've not read about it already: Atrium, in the span of about a year, has provided flat-fee legal advice to 250 startups that collectively have raised more than $500 million. It has hired about 115 people. The company is half law firm, half software developer; the software developed being used by the law firm to automate simple tasks. Got it? O.K.

The $65 million investment is exciting. For a number of reasons. For one, it's about $30 million shy of the annual gross revenue of the No. 200 firm on The American Lawyer's annual Second Hundred list.

But most germane to Big Law, in my mind, is that it's another way to get outside money into a law firm, which I've been writing about a lot lately. I continue to believe outside investors are one of the most effective ways to overcome barriers to innovation inherent in the partnership model. Mostly because they allow law firms to think long term.

After reading about Atrium, I find myself asking: Why can't other law firms do this?

Atrium was founded by Justin Kan, a guy who isn't a lawyer and who made his money by realizing video games could be a spectator sport. He sold a video game live-streaming company in 2014 for $970 million to Amazon.com Inc. People love watching people play video games. Who would have thought?

Now Kan is turning his attention to automating legal documents. Maybe he's run out of Gen Z zeitgeist-breakthroughs. He said he's just sick of how law firms work. (FWIW, Latham & Watkins advised Kan's Twitch Interactive Inc. on its sale to Amazon.) Kan does not appear to be alone. To their credit, though, some law firms are trying to change by building up innovation teams.

And many of them are doing that through a corporate structure that is not all that much different than Atrium's two-part structure. Atrium LLP is a law firm, which is owned by the lawyers. Atrium Legal Technology Services Inc. is “a non-law corporation incorporated under the laws of the State of Delaware.”

The second one is the entity that got the investment, which was led by Silicon Valley powerhouse venture capital firm Andreesen Horowitz.

The money will likely allow Atrium to hire serious programming talent to help the company, as its founder Kan likes to say, develop software platform that “understands legal documents.”

I would bet that Silicon Valley engineers will help Atrium build software that “understands legal documents” probably about as well as any software could in the short-term. I would also bet that most large law firms, even if they were willing to pay them, would have trouble recruiting top software engineers.

Nevertheless, some Big Law firms are trying to build technology products. And they should! Look at Clifford Chance, as an example.

Over the past couple years, the Magic Circle firm has introduced two technology products that its head of innovation, Visser, said convinced partners that they need to hire more tech-focused employees and house them in a subsidiary.

One of those products, a collaboration with Neota Logic Inc., helped banks comply with MiFID II, a framework instituted by the European Union to regulate financial markets. Another, known as CCDr@ft, is being used by 2,100 employees at a bank in the Netherlands to document mixed market loans.

“That shows there is—in our view—great potential for these types of tech solutions. But we've learned many lessons by trying to develop these products and sell them,” Visser said. “We also drew certain conclusions around the fact that we have fantastic legal expertise and a super brand in the Netherlands, but we also lack certain skills, which a company that focuses on tech solutions absolutely need to have. And then we started to look at what is the expertise and ideal infrastructure we require. And we said, 'Let's move it into a separate venture and vehicle.'”

Part of the reason to hire Plink is because of his years of expertise in the legal tech world. He has one of the more impressive resumes in that realm you can find. He was the CEO of the Practical Law Company, which is now part of Thomson Reuters Corp. He has been on the boards of Kira Systems Inc., Compliance.ai and Casetext, while also serving as an adviser to a number of other companies.

Plink is looking for employees to cover marketing and sales, project management and, of course, software development for the CCDr@ft platform. He didn't sound terribly excited by the idea that a law firm's innovation unit might spin out and attract outside investment. He said some firms have considered it. Plink doesn't think it is in the cards for Clifford Chance, noting it's still very “early days” for the innovation unit, which is well-supported by the firm's partners.

“If there is a need for further investment to grow faster, that would be merited by the success of the products,” Plink said. “And if that good problem happens, I think the firm would look favorably on that.”

Which raises another question: Would investors actually pay money for a slice of a Big Law firm's technology products? Let me know what you think!

Roy's Reading Corner

More on Atrium: TechCrunch writes about the deal, and quotes Andreessen Horowitz general partner Andrew Chen: “Law firms generate revenue from hourly billing, and lack an incentive to vastly improve efficiency. … Many law firms dividend out all their profits at the end of each year, making it hard to invest in the expensive investment of building software. Software is hard to build inside a software company, much less a law firm.”

Read more from Chen on Big Law's innovation barriers at a blog he wrote here.

Business Insider notes: “In the last year alone, Atrium has offered its legal services to over 250 startups, who have raised a total of $500 million in funding. Its client roster includes digital pharmacy startup Alto, scooter-sharing firm Bird and fraud detection software-maker Sift Science.”

And Kan appeared on CNBC, where he spends almost half his time answering questions about video games. To the financial masses, games are decidedly more appealing than reinventing law firms. Go figure!

That's it for this week! Thanks again for reading, and please feel free to reach out to me at [email protected]. Sign up here to receive The Law Firm Disrupted as a weekly email.