Legal publications across the web lit up with excitement when Clio’s latest Legal Trends Report was released in October 2019. The now-annual report was created in 2016 to provide a distinctly data-driven survey on the modern legal profession, with most of its insights coming directly from Clio’s install-base of over 150,000 users. Here, we’ll breakdown what makes the Legal Trends Report significant, as well as our favorite insights from the 2019 edition.
What’s typically in the Legal Trends Report?
Traditionally, the Clio Legal Trends Report has provided an in-depth analysis on how legal professionals are spending their time on a daily basis, and how that time translates into revenue, growth, and client retention. However, the 2018 edition shifted some of its analysis to include the client’s perspective of the legal profession, including what clients look for in a law firm and its communication. The 2019 edition expanded its scope even further to include not only recent data, but collective insights based on the data from previous years.
What are lawyers doing to drive success?
It’s probably no surprise to hear that the biggest thing on the minds of law firms is growth. According to the report, as much as 87 percent of respondents indicated they wanted their firms to grow over the next three years. So, how exactly can firms accomplish this?
The key metrics that are driving success for law firms are improving not only collection rates, but what Clio refers to as realization rates. As you know, your collection rate is a measurement of how much your firm invoices compared to how much it actually collects. Realization, however, refers to how much your firm invoices compared to the actual amount of billable work your firm performs.
Generally speaking, your chances of growth will increase if your firm is able to bring on more clients and work on their cases efficiently in order to collect as much as possible on billable work.
How much billed time gets collected?
Since its inception, the Legal Trends Report has devoted a section to discussing the billable hour and how much law firms are collecting each year, as well as what they are potentially leaving on the table. It may come as no surprise that many law firms struggle to collect on every item billed year after year. In fact, the 2019 report showed that 19 percent of the billable work lawyers do each year is not even making it to their invoices. Furthermore, 14 percent of the bills that do go out aren’t getting paid. It’s safe to say that there is room for improvement to help lawyers work more efficiently and collect more of what they’ve earned.
Thankfully, the report indicated a solution to this issue that can have a significant impact on your firm’s bottom line—online payments! Using data provided by LawPay, the 2019 report showed that law firms were getting paid significantly faster by using an electronic payment solution. A staggering 85 percent of electronic bills are paid the week they are sent out, and an equally impressive 57 percent of bills are paid the same day they are sent when using an online payments solution.
It’s also worth noting that clients are looking for firms that accept online payments. The 2019 report reiterated data that it compiled from the 2018 edition, stating that 50 percent of clients would prefer hiring a lawyer that accepted payments online. Overall, your firm can stand to benefit greatly by adopting an online payment solution into its daily operations.