Photo: Diego M. Radzinschi/NLJ

A month after founder Justin Kan announced he was dissolving Atrium, the legal software company backed by $75.5 million in venture capital, four of the last attorneys from the law firm side of the business have joined Crowell & Moring in San Francisco.

Jon O'Connell, a founding member of Atrium LLP who previously managed Atrium's venture capital financing team, began looking for new opportunities when Kan announced in January that he would be shedding most of the outfit's legal staff as part of a restructuring. The next blow came at the start of March, when Kan pulled the plug on the software side of the hybrid business, leaving a rump law firm led by Michael Melville and Michel Narganes.

The pair had arrived at Atrium in December to help pivot the law-firm side of the business toward a new model based on relying on outside providers. But now all three have joined Crowell as partners in the firm's emerging companies and venture capital practice, with O'Connell starting in the middle of March, and being joined a week later by Melville and Narganes.

"Michel and I had a lot of success reintegrating clients and selling the Atrium vision, but the difficulty was managing it," Melville said. The Goodwin Procter and Lowenstein Sandler veteran acknowledged the challenges that the pair faced after Kan said he was shuttering Atrium's software startup. "Neither of us wanted to run a small law firm," Melville said.

At that point, in early March, O'Connell was already deep in negotiations with Crowell, as he looked to follow his Atrium experience with a move to a more traditional law firm. The strength of the firm's regulatory practice in particular stood out.

"For my clients that are operating in regulated spaces, that's going to be a huge value add," he said.

Melville and Narganes wound up piggybacking on his existing talks, hopping a flight to Los Angeles on March 5. After meeting with much of the firm's senior leadership there, their part of the move came together in just a week and a half.

"Our goal was to make sure that we could provide the same level of legal services to our clients. We still believed that there was an area of the market for clients that wasn't necessarily being served by traditional Big Law," said Narganes, who previously worked as a senior corporate lawyer at global software and marketing company Sitecore.

Left to right: Michael Melville, Michel Narganes and Jon O'Connell (Courtesy photos)

They are joined by counsel Matt Pelnar, also from Atrium. Several Atrium paralegals have also joined Crowell. According to Melville, they function as "junior associates," as part of the team's model of keeping down costs for startup clients.

Former DLA Piper attorney Steve Ryan has also joined Crowell's emerging companies practice in Washington, D.C., as counsel.

Crowell had been looking to rebuild the firm's San Francisco office after a slew of retirements and departures of junior lawyers to government and nonprofits. Managing partner Phil Inglima said the 10-year-old office has always had a strong litigation component, but the new team offers an opportunity to expand the new and emerging company work driven by corporate group co-chairman Jeff Selman in San Francisco.

"We're not bringing them in with an expectation that they simply conform to our model, rather that they be completely symbiotic with it, including on the level of pricing and client support that makes sense with regard to the client relationships that they've built over time," he said.

Melville, who has spoken in the past about the challenge of serving startups with a traditional law-firm pricing and compensation model, also cited that flexibility.

"That was a big selling point for me," he said.

Inglima highlighted the range of the new attorneys' relationships to tech companies at various stages of scaling upward.

"It means that there are different entry points to match up our talent with these clients and watch them grow and prosper over time," he said.

Inglima acknowledged the challenge of the new team joining while their San Francisco colleagues were already working remotely as a result of coronavirus social distancing measures, but he said they were fortunate to complete the earlier face-to-face meetings

The wider firm, meanwhile, remains focused on helping clients anticipate and adjust to the extreme challenges of the economic fallout of the public health crisis. Inglima would not say how the firm's finances or demand had been impacted in March, but he said that he anticipates the more significant consequences will be in months to come.

"We are studying a number of things that we can do to better position ourselves," he said.  "There's no question we've already been taking prudent steps to minimize expenses and make sure we have the liquidity to persevere in the months ahead,"

With regard to serving the startup community in Northern California, the last three weeks have been a mixed bag. O'Connell said that he's been flooded with inquiries about the CARES Act, one of the federal responses to the coronavirus crisis, and Crowell's team of government contracting attorneys has been a crucial resource.

And while some startups are focused on dealing with interruptions to their business, others are seizing new opportunities. One of Melville's clients that previously served corporate cafeterias has quickly pivoted.

"Corporate catering is gone but they're seeing a huge uptick in delivery to houses of employees  themselves," he said.

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