3 Important Insights from the 2018 Legal Trends Report
Most firms want to hire more staff and are spending too much time on administrative work.
Clio’s 2018 Legal Trends Report focused on the Client Experience and analyzed actual user-data, mostly from small and boutique firms, surveying 1,900+ lawyers and 1,300+ consumers. This report is by far the most comprehensive data analysis of the current state of the legal profession in the small law market.
We were particularly interested in the focus of this year’s report and specifically what consumers think about before and after hiring a lawyer, and how lawyers can better position themselves accordingly. There were three trends that really caught our attention:
1. Lawyers are only averaging 2.4 hours a day on billable work and too much time on administrative tasks.
84% of lawyers surveyed said increasing revenue was a goal defined success. Yet, only 23% said increasing billable hours was important, and only 24% found increasing their client base important. Improving client care and reducing non-reimbursable expenses, ranked higher. If increasing both client base and billable hours are so critical to revenue, why are lawyers overlooking the biggest drivers of business success?
One potential reason: lawyers don’t feel that they can take on any more clients. The report reveals that law firms are already struggling to dedicate time to billable hours and are only averaging 2.4 billable hours in an 8-hour workday.
So where are the other 5.6 hours going?
Bookkeeping, accounting, and business development seem to be the biggest offenders. Lawyers admit to averaging up to an hour on advertising and social media related activities. With all of these distractions, it’s not surprising that lawyers don’t believe they have time for increasing clients or billable hours.
Our take: It’s too expensive not to outsource or automate administrative tasks. Lawyers are being “penny wise, pound- foolish” and not realizing how much “doing it all” is costing them. Increasingly larger firms are turning to Lean Methods and outsourcing. Smaller firms can do the same by identifying their biggest efficiency-killers and implementing processes and tools to address them.
They can also outsource many administrative tasks. In our experience (we’ve struggled with these same issues as a growing company) outside contractors can be most effective because they don’t get pulled into internal fires.
2. Embrace technology, but not (always) when dealing with clients.
While technology can increase revenue by taking away administrative distractions— is this the answer when it comes to client service? The report answers: it depends, but often no.
For example, only 2% of lawyers believe clients want to talk on the phone to schedule an appointment, when in fact 59% of the consumers surveyed said that they do. One of the parts of the study that surprised us is that millennials—the “digital” generation—would rather work with a lawyer face-to-face than over a platform. This could be because millennials are unfamiliar with working with lawyers so, unlike other purchases, prefer the comfort of face-to-face contact.
Additionally, the report showed that consumers want their lawyers to be available by phone much more than lawyers expect. Clients have high expectations for communicating by phone when making appointments (59%), getting quick questions answered (46%), and getting status updates on a case (37%). But this need to be available by phone can lead to even more interruptions and less billable work (#1), and lawyers need to think about how they can deliver more in this area with less time.
Our take: For those points of contact where the report identified consumers prefer personal interaction—such as initial intake (59%) or reviewing documents (64%)—make yourself available to your clients by giving them access to you remotely, through video, live messaging, or some other tool, that saves both parties time and costs on travel. Automate the other tasks where consumers like updating— such as client billing and trust ledgers.
Blocking out time regularly on your calendar for giving updates on case statuses and client engagement—rather than being interrupted by a client phone call—is a good way to improve client service while improving your own time management and focus. Clio’s recommended quick wins based on client preferences are online payments and client portals for updates.
3. Most firms want to hire more staff, even though more than half want to reduce spending.
According to Clio (and every lawyer person we know) there aren’t enough hours in the day. As a result, 77% of firms want to hire more staff, even though many firms (58%) also want to reduce spending. And lawyers also see hiring staff as third most important in defining the success of their practice, just under generating revenue and improving efficiency.
Sometimes hiring is the only solution and the report supports that personal interaction and support for non-billable work are crucial to the client experience and more billable work for firms. Spending can be decreased or revenue can be increased to more than pay for new salaries when too much time is being spent on non-billable work and/or work is being turned away to due to capacity.
Our take: Think about areas of your practice where hiring can be a revenue-driver, not just an added expense. Start by determining how much your firm is really spending on administrative work. For example, if you charge $250/hour, and spend one hour per week advertising on social media—can you pass that task off to someone else at a lesser rate?
The focus of Clio’s report—the client experience—can help firms to more effectively and efficiently attract, engage, and retain clients. The data and related recommendations should help law firms to achieve their primary goals of higher revenue and greater operational efficiency.
As Clio points out in the report: “The most useful data insights are often those that surprise you. When the data challenges how you think, it signals an opportunity to reflect on your practice and your goals as a business.”