Takeaways from Clio's legal trends report

Clio, a company that most of us probably recognize, released its third annual Legal Trends Report last fall. While the report is based on data from the U.S. market, there are some interesting insights that Canadian sole and small firms can consider in trying to improve their business.

Kevin Cheung

Clio, a company that most of us probably recognize, released its third annual Legal Trends Report last fall. While the report is based on data from the U.S. market, there are some interesting insights that Canadian sole and small firms can consider in trying to improve their business. Clio's report is based on data from three sources; data from users of their software (70,000 legal professionals), law firm surveys (1,968 legal professionals) and consumer surveys (1,336).    


Measures of success 


The data suggests that law firms consider revenue as the most important measure of success. However, the primary factors driving revenue, growing a client base and billing more hours, were ranked lowest on the scale of factors important to a firm's success. This is striking because if one's goal is to increase revenue, why not focus on the critical areas for achieving this goal? Perhaps there is a misalignment between firm goals and knowing how to achieve them. It may suggest an inclination to shy away from increasing workload. Or perhaps there is a desire to try to increase revenue by tackling other areas, such as inefficiencies.  


Clio does look at goal-setting and whether lawyers feel they are achieving goals. Surprisingly, they found that only about 25 per cent of respondents were in the realm of satisfaction of their goals and plans to achieve them. Furthermore, only 43 per cent of law firms saw improving data insights and reporting as a priority. How can one achieve goals if measuring them is not a priority? Goal-planning is something that we have all been told is in our best interests to do, but there may be an underlying issue as to why goal-setting and planning is lower on our priority list. It could be just a time-management issue, or it could be that lawyers need better education in the area.    


Clio's data also revealed that law firms have a hard time allocating time to billable work. In fact, only 2.4 hours out of an 8 hour day is dedicated to billable work. This becomes even more concerning, when we factor in the tendency to not invoice for all billable hours worked, and the inability to collect on all billable hours invoiced. According to the report, lawyers are only earning 1.6 billable hours per 8 hour day.  


If lawyers are only working 2.4 billable hours per day, where does the missing time go?  This is an ideal point of leverage for increasing revenue.  Clio identifies daily administrative tasks and work related to marketing and earning new clients as taking up large chunks of time that could be spent on billable work.  Lawyers are also working more hours than they planned to each work week, but the primary reason for this is that they are catching up on work they could not get to during regular hours.  


The legal consumer   


When looking at consumers of legal services, Clio found that cost, value of the service, and price transparency are factors that worry consumers. Consumers did not seem to be that worried about the difficulties of a legal problem, and about a quarter of respondents indicated that they liked to handle their problems by themselves. The most common areas where people do not feel the need to engage the legal system were traffic violations, family-related issues, and estate planning.   


When looking at why consumers avoid lawyers, the cost of a lawyer had surprisingly little impact on choosing one or not. Rather, the ease of hiring a lawyer was a significant factor (consumers feel that hiring a lawyer is overwhelming or too much trouble). The desire to do things on their own was also a significant factor in avoiding lawyers. Respondents indicated that they hired lawyers if they could not handle the issue without one, they saw a clear benefit to hiring one, or the issue was serious enough to hire a lawyer.  


The client experience  


When consumers who had hired a lawyer in the past 2 years were asked how likely they were to recommend the lawyer, the legal profession scored in the same range as airlines, banks, wireless carriers and credit cards. Clearly this is not what lawyers are striving for. However, only a very small percentage of legal professionals collected feedback from their clients. Even if firms do collect feedback, it is usually done casually or informally, which is not conducive to honest opinions.  It would be difficult to improve the client experience if we do not even know how clients honestly feel about our service.  


The most important factors impacting the likelihood of a client recommending a lawyer are cost, ease and responsiveness.   Improving the client experience in these areas should increase the chances of a positive recommendation.  We can start by enhancing transparency regarding costs and educating clients on the value of the service,  as well as improving the ease and responsiveness of interacting with the lawyer.  


In looking at how to improve client experience, Clio looked at how clients prefer to interact with their lawyers. Though we are in the age of online video conferencing, emails and chats, more than half of the respondents indicated that they preferred face to face meetings for learning about the legal aspects of their case, describing their matter to the lawyer, and signing, viewing sharing or delivering documents. Clients also preferred lawyers who offered online payments and client portals.       




While the report should be taken with a grain of salt as it does attempt to illustrate the need for products such as those offered by Clio, there are important insights that can motivate us to improve our business. We are likely not as efficient as we want to be, spending too much time on non-billable tasks. Whether you want to hire more administrative staff or streamline and automate such tasks, this is an area for improvement. And improving client experience, from on-boarding to ease-of-communication, to payment, can help our chances of being hired and being recommended.

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