What Clio’s COVID-19 Impact Research Briefing tells us about the legal market

June survey results shine a light on what law firms might be doing better, says Kevin Cheung

Kevin Cheung

Clio's second “COVID-19 Impact Research Briefing,” released June 17, 2020, provides an update on the effects of the pandemic on legal professionals and their clients. Clio surveyed lawyers and consumers, and collected data from those using Clio’s own software. The report is based on data from the American market, though the results would likely be similar for Canadian firms.

Trends in the demand for legal services

As expected, new matter openings decreased during the early stages of the COVID-19 pandemic, and billing volumes correspondingly decreased. According to the report, law firms billed 14 per cent less in April than in the year prior. In May, the figure was 27 per cent less than in the previous year. However, the volume of new matters began to increase by June.

With billings down, 35 per cent of legal professionals surveyed reported government support as being essential to their survival. That number is disconcerting, particularly if the pandemic continues to affect people’s ability to earn income and afford legal services.

Despite the recent uptick in new matters, the survey found that there remains a concern over the ability of clients to pay their legal bills, as unemployment rates remain high. Chances are good that a higher percentage of clients will need flexibility in fees, and lawyers may want to consider alternative fee arrangements or reduced rates to keep and attract clients. Interestingly, only 53 per cent of law firms surveyed by Clio said they were equipped to offer flexible payment plans, despite a high demand for this.

Consumers were anticipating coronavirus-related legal issues such as employment matters or breaches of contracts due to the coronavirus, so firms may want to consider increasing marketing efforts in such practice areas. And even with the upward trend in new matters, about half of consumers surveyed say they are holding off on pursuing legal matters until more of a normalcy returns to life.

The report notes that traffic, criminal, and personal injury practice areas have been the most adversely affected by the pandemic, likely due to a reduction in court services and people driving vehicles less. Business-related matters such as intellectual property, insurance and commercial sale of goods have been less affected.

We can communicate better

One-third of consumers surveyed thought that law firms had stopped operating during the pandemic, even though legal services in the United States, as in Canada, were deemed essential services, and just two per cent of firms reported stopping their services. This tells us that firms are not communicating effectively, or enough, with their clients and the public.

Clients were and are curious about how restrictions to courts and other services have affected their matters. Rather than simply posting a notice on the firm website advising that it is open for business, firms could be outlining options and solutions for clients to keep their matters moving. For example, firms could let their clients know that examinations for discovery and mediations can be conducted by videoconference, or that documents can be executed remotely. And if there is a second wave of the pandemic, let your clients know what you can do for them even when courts and legal services may appear to be at a standstill.

The report notes that law firms are adapting client acquisition strategies; it points to research suggesting that key considerations in hiring a lawyer include responsiveness and access to information, and having face-to-face interaction during an initial consultation with a lawyer. These factors can be addressed through technology. Fifty-six per cent of consumers surveyed believe that matters can be handled remotely without having to meet in person, and 56 per cent again said they prefer videoconferencing to a phone call. Law firms should embrace these insights, which may also allow them to deliver more efficient and affordable services.

Leveraging technology

Law firms have recognized the increasing importance of technology since the start of the COVID-19 pandemic. Many firms would not have been able to continue operating without videoconferencing, electronic document sharing and electronic signatures. Most legal professionals reported being equipped to use these technologies, although that does not necessarily mean comfort with or efficient use of them.

Perhaps more than anything, though, the pandemic has shone a light on the preparedness of legal professionals to navigate crises situations. The silver lining in all tis may be that it has opened new possibilities in how we interact with and deliver services to clients. These should not be viewed as temporary fixes to the current situation, but incorporated permanently into provision of legal services.

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