Second annual Legal Trends Report dives deeper into the state of the legal industry

VANCOUVER, B.C. — Clio is releasing their second annual Legal Trends Report, with new insights into the state of the American legal industry. Included in this year’s report is data from two supplementary surveys that offer further insights into how lawyers spend their time. This groundbreaking report helps lawyers make informed, data-driven decisions based on benchmark data.

Last year, the Legal Trends Report introduced three key performance indicators—utilization, realization, and collection rates—to measure how much of a lawyer's workday contributes to actual earnings. A key finding was that the average lawyer’s utilization rate—the number of hours billed in a typical workday—was only 2.3 hours. Worse, when factoring in realization and collection rates, firms only collected an average of 1.6 hours of billable time per day. This prompted Clio to investigate how lawyers are spending their unbillable time, and to identify opportunities for improving collection and realization rates.

To address these questions, eight Clio data scientists examined 1,026,038 matters, 10,981,286.13 hours billed, and $2,562,864,876.43 in billables to create this year’s Legal Trends Report. They increased the scope and scale of analysis, including two supplementary surveys: one of nearly 3,000 lawyers (both Clio users and non-Clio users) to continue the investigation into how lawyers are spending their time, and one of over 2,000 consumers to understand how clients are finding and choosing their legal representation.

By leveraging anonymized, aggregated data from over 60,000 Clio users, the Legal Trends Report provides new insights into topics including average billing rates by state, practice area, and role; law practice-specific key performance indicators; and how efficiency scales with firm size.

“We are continuously pushing the industry forward while simultaneously bettering our offerings—the Legal Trends Report is no different,” said Jack Newton, CEO and co-founder of Clio. “The data provides critical insights that are foundational to running a successful practice. Unlike self-reported data, this anonymized and aggregated data eliminates factors like social desirability bias, and makes the Legal Trends Report a uniquely trustworthy window into the legal world.”

Some of the high level findings in the 2017 Legal Trends Report include:

• Lawyers spend only 2.3 hours (29% of an 8-hour workday) on billable tasks.

• On average the majority of lawyers’ nonbillable time is spent on an administrative tasks (48%) and business development (33%) and if they had more time, 41% of law firm survey respondents said if they would use it to look for clients.

• 54% of law firms actively advertise to acquire new clients, yet 91% of firms aren't able to calculate a return on their advertising investments, and 94% don't know how much it costs their firm to acquire a new client.

• 28% of consumers want to be able to pay law firms via credit card, and firms using a secure online credit card payment platform to collect fees get paid 39% faster than by other means.

• Only 54% of legal professionals can estimate their annual billings for 2017, and only 40% of firms that track time have hourly billing targets.

• 59% of firms deal regularly with late payments, with 25% of firms still mailing bills and 29% relying on clients to pay bills by check.

• The average law firm collects only 86% of what it bills clients, which means 14% goes unearned.

Also new this year, is the Legal Rates Benchmark Tool, which lets users input their state, practice area, and hourly rate to benchmark against other lawyers, therefore allowing them to make more informed, data-driven decisions.


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