Key Insights from the 2021 Legal Trends Report
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The 2021 Legal Trends Report by Clio reveals significant disparities between lawyer and client expectations regarding communication and service delivery. Key insights indicate that a large portion of lawyers' time is lost to non-billable tasks, while clients increasingly expect remote options and timely responses. Technology adoption is identified as a key factor in the success of growing law firms, as they adapt to evolving client demands.
![• Clio’s Legal Trends Reports
• Upcoming December CLE Webinar: How to Get More Out of Cloud
Technology at Your Law Firm
• Innovate Legal Online: Clio Cloud Conference 2021 Encore Series
•November 18: [Replay + Live Q&A] The Wow Factor Trifecta: Brand,
Marketing & Driving Referrals
•November 19: [Replay + Live Q&A] Improving Service to Better Guide
Your Clients
•November 22: [Replay + Live Q&A] From System to Software:
Mapping Your Law Firm Tech Stack
Upcoming Resources](https://image.slidesharecdn.com/2021legaltrendsreport-webinarversion-211116210332/85/Key-Insights-from-the-2021-Legal-Trends-Report-101-320.jpg)
Key Insights from the 2021 Legal Trends Report
- 1. Key Insights from the 2021 Legal Trends Report
- 2. Joshua Lenon Lawyer in Residence E: [email protected] T: @JoshuaLenon
- 4. Clio App Data Aggregated and anonymized data from tens of thousands of legal professionals in the United States. Legal professional and consumer surveys We surveyed 1,056 legal professionals and 1,002 consumers in May and June 2021. Longitudinal Study This year’s report includes a multi-year study of over 1,600 law firms grouped into three cohorts— growing, stable, and shrinking. Data Sources
- 6. Our sixth annual edition Legal Trends Report 2016 Powered by Clio
- 9. #1: Introducing the Law Firm “Funnel”
- 10. Utilization rate Number of billable hours worked Number of hours in a day 30% Realization rate Number of billable hours invoiced 81% Number of billable hours worked Collection rate Number of hours collected upon 85% Number of billable hours invoiced ÷ = ÷ = ÷ = Law firm key performance indicators (KPIs)
- 11. 1.9 hours realized 6.1 hours missing 5.6 hours missing 2.4 hours utilized Utilization rate 8 hour work day 1.6 hours collected 6.4 hours missing How many hours were billable?
- 12. #2: What happens to the missing six hours?
- 13. 48% Administrative tasks 16% Licensing and continuing education 16% Office administration 15% Generating and sending bills 1 1% Configuring technology 6% Collections Too much time eaten by non-billable administrative tasks Not enough clients to support billable targets 33% Business Development
- 14. 62% 37% 31% 28% 16% 13% 13% 7% 6% Get a referral from friend/family Use an online search engine Get a referral from another lawyer Look in a lawyer directory or listing Look in the yellow pages Contact a lawyer seen in a TV ad Contact a lawyer seen in an online ad Contact a lawyer heard in a radio ad Contact a lawyer seen on a billboard How do consumers find a lawyer?
- 15. 67% Responds to first call/ email right away 64% Offers free initial consults 47% Offers fixed fees 28% Let’s clients pay by credit card 27% Exchanges texts with clients 19% Great-looking website What potential clients look for
- 16. #3: The chasm between lawyer and client expectations.
- 17. LAWYERS CLIENTS
- 18. 46% 46% 31% 31% 30% 32% 28% 29% 45% 27% 17% 51% 15% 33% 1 1% 25% 8% 40% Disparity between lawyers and clients Anxiety Control Annoyance Anger Confusion Relief Urgency Disbelief Frustration Lawyer perception of client emotions Actual client emotions Client emotions vs lawyers’ perceptions
- 19. Communication by type: In person Phone Email Website or online portal/app Other 39% 51% Lawyers 18% 7% 70% Consumers Perception vs. reality: telling a lawyer all the facts or details of a situation
- 20. Communication by type: 44% 44% 8% Lawyers 23% 14% 55% 5% Consumers In person Phone Email Website or online portal/app Other Perception vs. reality: learning about the legal aspects of a case
- 21. #4: Do law firms deliver on client expectations?
- 22. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% Timely response Easy to understand Understanding process Knowing next steps Answering each question Cost expectations Friendly tone Getting a meeting request Most important 2nd most important 3rd most important Importance to clients
- 23. of consumers expect a response to an initial inquiry within 24 hours. 79%
- 24. So, we put 1,000 law firms to the test…
- 25. 60% never responded to the inquiry at all.
- 26. #5: Which firms are winning?
- 27. New casework and firm revenue compared to previous year 20% 10% 0% -10% -30% -20% Jan 2020 Feb 2020 M ar 2020 Apr 2020 M ay 2020 Jun 2020 Jul 2020 Aug 2020 New matters (YoY) Revenue (YoY)
- 28. Revenue advantages to using technology solutions (per lawyer)* 2019 2020 $40,000 $30,000 $20,000 $10,000 Electronic payments Client portals Client intake and CRM Multiple solutions* $0
- 29. YOUR FIRM THE CLIENT JOURNEY A w a r e n e s s R e s e a r c h C o n s u l t D e c i s i o n D u r i n g a C a s e B i l l i n g a n d P a y m e n t R e v i e w a n d R e f e r r a l R e t e n t i o n
- 30. Areas of focus in 2021 What changes in client expectations are here to stay? What advantages are successful firms capitalizing on? What investments can firms make to adapt to these conditions?
- 31. Download the 2021 Legal Trends Report clio.com/ltr
- 32. Apply the 2021 Legal Trends Report clio.com/ltr
- 33. Part I: Changes in client expectations are here to stay.
- 34. – Steven, Solo Family Attorney “Resiliency is just learning how to change with the times, learning how to be okay.”
- 35. 2018 Clients look for more remote options today 2021 Lawyers with remote options Lawyers with in-person options 23% 79%
- 36. • Reaching out to a law office • First meeting/consultation • Receiving status updates • Communicating about key decisions • Receiving reminders • Viewing or sharing documents • Making payments Intake During a matter Concluding a matter The Client Journey
- 37. Phone In person Email Text message Secure mobile app Website chat 71% 71% 59% 53% 52% 47% 80% 60% 40% 20% 0% Reaching out to a law office
- 38. In person Phone Video conference Email Text message Secure mobile 76% 70% 58% 54% 48% 47% 80% 60% 40% 20% 0% First meeting or consult Website chat 45%
- 39. Factors influencing choice of lawyer 100% 50% 25% 0% Responsiveness to questions Price transparency Free consultations Payment plans availability Positive online reviews Personal recommendation Searchable online Provide remote options Available outside business hours Available via text or IM Support online bookings 75% Somewhat positive influence Very positive influence 26% 26% 28% 30% 33% 34% 33% 34% 35% 33% 33% 60% 59% 56% 51% 49% 47% 47% 45% 44% 44% 39%
- 40. – Constance, Solo, Estate Planning & Probate “That instant response expectation needs to be managed with clients, more than anything else.”
- 41. Communicating about key ideas 75% During a Matter 71% 61% 57% 56% 53% 51% 44% 43% 0% 20% 40% 60% 80% In person Phone Video conference Email Secure client portal Text message Secure mobile app Website chat By mail
- 42. Receiving status updates 73% During a Matter 68% 60% 61% 59% 56% 45% 0% 20% 40% 60% 80% Phone In person Email Secure client portal Video conference Text message Secure mobile app By mail 66%
- 43. Making payments Online Automated Payment Mobile app In person By mail Phone 66% 61% 61% 59% 47% 46% 80% 60% 40% 20% 0% Concluding a Matter
- 44. 60% First meeting or consult Communicating about key decisions Receiving status updates Viewing or sharing documents 58% 61% 49% Consumer preference for video conferencing
- 45. – Melissa, Senior Paralegal “As much as we appreciate more electronic communication features and video chat, the clients do too. They don’t have to take off a half day of work to drive over here to sign paperwork.”
- 46. 69% 72% 59% Millennials Gen X Baby Boomers Expectations of remote options vary based on age
- 47. Consumers expect both in-person and remote options from lawyers Hired a lawyer Never hired a lawyer 79% 67% 0% 20% 40% 60% 80%
- 48. of consumers are more likely to hire a lawyer who o ff ers the option to communicate remotely 79%
- 49. of consumers expect lawyers to o ff er the option of a completely remote client experience 67%
- 50. A sea change has happened with expectations around remote options Going remote is not all-or-nothing—meet clients where they expect to be met Client expectations can also be learned behaviours—set and meet them Client expectations: takeaways
- 52. Part II: Growing firms have advantages driven by technology
- 53. – Melissa, Senior Paralegal “We couldn't let the pandemic stop the mission. So we had to adapt and luckily our files were all in our Clio document management.”
- 54. Revenue growth between firms 120% 40% 0% 100% 80% 60% 20% 2013 2014 2015 2016 2017 Growing Firms 1 12% Revenue growth 57% Matter growth 57% Client growth 32% Lawyer growth 100% 0% -50% 75% 50% 25% -25% 2013 2014 2015 2016 2017 Stable Firms 0% Revenue growth -1% Matter decline 1% Client growth -5% Lawyer decline 0% -40% -60% -10% -20% -30% -50% 2013 2014 2015 2016 2017 Shrinking Firms -54% Revenue decline -40% Matter decline -39% Client decline -17% Lawyer decline Revenue Clients Matters Lawyers
- 55. Revenue growth 100% Growing Stable Shrinking 50% 0% -50% 2014 2016 2020 150% 2018
- 56. Utilization rate among firms 40% Growing Stable Shrinking 30% 20% 10% 2014 2016 2020 50% 2018
- 57. Realization rate among firms 100% Growing Stable Shrinking 90% 80% 70% 60% 2014 2016 2020 2018
- 58. Collection rate among firms 100% Growing Stable Shrinking 90% 80% 70 2014 2016 2020 2018
- 59. Rate of client portal adoption* Jan 2015 100% 90% 80% 70% 50% Jan 2017 Jan 2018 Jan 2019 Jan 2021 *Normalized based on total adoption among growing firms Growing Shrinking 60% Jan 2016 Jan 2020
- 60. Rate of client intake and CRM adoption* Jan 2019 100% 80% 40% Jul 2019 Jan 2020 Jan 2021 *Normalized based on total adoption among growing firms Growing Shrinking 60% Jul 2020
- 61. Adoption rate of firm reporting tools* Jan 2017 100% 80% 60% 40% 20% Jan 2018 Jan 2019 Jan 2020 Jan 2021 *Normalized based on total adoption among growing firms Growing Shrinking
- 62. of law firms report the most common reason for clients not paying their bills is that they lack the funds to pay a bill all at once. 44%
- 63. Rate of online payments adoption* 100% 75% 50% 0% Jan 2017 Jan 2018 Jan 2019 Jan 2021 *Normalized based on total adoption among growing firms Growing Shrinking 25% Jan 2016 Jan 2020
- 64. of lawyers plan to accept online payments beyond the pandemic 96%
- 65. Based on online payment data we see that when collecting fees via secure online credit card payment platform, firms get paid faster than by other means. 39%
- 66. 72% When it comes to payment plans, 53% of law firms are equipped to offer payment plans. of consumers would prefer to pay their legal fees via a payment plan, while
- 67. Technology-enabled firms are winning by adapting to client expectations The performance bar is shifting—what was once innovative is now a basic expectation Flexibility is key—throughout the client journey Growing firms: takeaways
- 68. Part III: How law firms are investing
- 69. of attorneys were very con fi dent in their knowledge of their annual revenue 40%
- 70. of fi rm managers were very con fi dent about knowing their fi rm’s revenue in the previous year 51%
- 71. 20% Managing Partners/Solos Senior Partners Paralegals Administrative Staff 51% 48% 43% Confidence in knowing their firm’s revenue performance 27% Associates
- 72. Confidence in knowing firm revenue Very confident Somewhat confident Slightly confident Not at all confident 40% 40% 1 1% 9% 0% 10% 20% 30% 40%
- 73. – Terry, Partner Attorney “Basically it's the client objectives, demands, or requests that drive our spending.”
- 74. Very involved Involvement in firm finances 54% Not at all involved 16% Slightly involved 13% Somewhat involved 17%
- 75. Partner/solo attorney Administrative staff Legal support staff Associate attorneys Contractors & freelancers Other 86% 15% 1 1% 7% 1% 5% 100% 75% 50% 25% 0% Financial involvement by role
- 76. of attorneys reported low con fi dence in their knowledge of fi rm spending 42%
- 77. of attorneys believed their fi rms did spend strategically 80%
- 78. Where law firms would spend additional funds* Would not spend on Would spend on Non-lawyer staff Associate lawyer staff Office space Practice management software Digital and traditional marketing Hardware Professional services Marketing website and domain Utilities and connectivity Business communication software 0% 20% 40% 60% 80% Legal research software *Based on the availability of $5,000 in funds
- 79. Expenses among lawyers who are very involved in finances Large expense Moderate expense Non-lawyer staff Associate lawyer staff Office space Practice management software Digital and traditional marketing Hardware Professional services Marketing website and domain Legal research software Utilities and connectivity Business communication software 0% 20% 40% 60% 80% 27% 26% 25% 15% 23% 35% 10% 57% 10% 16% 9% 36% 9% 9% 34% 23% 7% 30% 29% 27% 3% 2%
- 80. What legal professionals say should be a large firm expense Associate lawyer staff Non-lawyer staff Practice management software Digital and traditional marketing Hardware Professional services Marketing website and domain Legal research software Utilities and connectivity Business communication software Office space 37% 29% 18% 8% 17% 15% 10% 13% 10% 12% 9% 0% 10% 20% 30% 40%
- 81. – Rose, Solo Attorney “I don’t need to be spending time traveling and I don’t need to be spending this amount of money. So the office went.”
- 82. Client expectations are driving incremental investments into remote experiences and away from office spaces. Law firms struggle to know their business performance well. There is a clear opportunity: firms report differences in what they actually spend on vs what they want to spend on. Law firm investments: takeaways
- 88. Lawyaw
- 89. Change is a client-side force.
- 90. – Marshal McLuhan “The products of modern science are not in themselves good or bad; it is the way they are used that determines their value.”
- 92. Part V Additional Resources and Questions
- 94. All New Clio Payments • Manage billing, payment collection, and reporting in one system • Remain compliant with Trust Accounting rules without any effort • Handle payments and customer data securely Available on
- 95. Sign-up to Clio Payments You can start accepting payments in moments
- 96. Who can use the new Clio Payments? • All US Customers are eligible • Available in all Clio Manage Subscriptions
- 97. Secure eCheck • Give clients flexibility to pay with their preferred method without any extra effort by you • Save time with one collection workflow
- 98. Saving Payment Method • Preferred payment method is stored • Credit cards automatically updated • Can be used to pay bills for payment plans
- 99. Payment Plans • With Secure eCheck, Debit, and Credit Card payment options • More Installment Cadences • Multiple Payment Plans per Client • Enhanced flexibility with more editing capabilities
- 100. Get the new Clio Payments Make sure to have bank information and SSN ready
- 101. • Clio’s Legal Trends Reports • Upcoming December CLE Webinar: How to Get More Out of Cloud Technology at Your Law Firm • Innovate Legal Online: Clio Cloud Conference 2021 Encore Series •November 18: [Replay + Live Q&A] The Wow Factor Trifecta: Brand, Marketing & Driving Referrals •November 19: [Replay + Live Q&A] Improving Service to Better Guide Your Clients •November 22: [Replay + Live Q&A] From System to Software: Mapping Your Law Firm Tech Stack Upcoming Resources
- 105. Joshua Lenon E: [email protected] T: @JoshuaLenon Thank you.