Some of the most innovative companies of the 21st century leverage data to make better business decisions and stay ahead of their competition. Unfortunately, unless you work for one of a few giant law firms who have put resources into it, being data driven hasn’t been an option. Solo, small, and medium sized firms make up 80% of the legal profession. That’s a huge percentage of firms left in the dark… Until now!
For the first time probably ever, data insights for solo, small, and medium sized firms have been aggregated, analyzed, and reported, thanks to Clio. Clio is a cloud-based law practice management software that has aggregated anonymized data from its many users. Clio’s Legal Trends Report synthesizes actual usage data from its practice management platform. Here are some key insights we found in the Legal Trends Report.
One of the most glaring things in the Legal Trends Report was the low utilization rate by law firms. Clio’s data uncovered that on average, only 28 percent of a lawyer’s work is billable. So, out of a typical workday, lawyers only bill 2.24 hours to clients.
This clearly shows that lawyers spend a great deal of their time on tasks that are not billable. It also suggests that not enough firms are utilizing tools to help them automate their non-billable tasks.
The Legal Trends Report uncovered an average of 6 unpaid hours per day. According to the report, small-to-mid-sized firms only collect 1.4 hours of paid time for each workday. Where do they lose those six hours? Clio suggests it may be a matter of not having enough work to support more billable hours per day. It may also be a bandwidth or efficiency problem, meaning firms may not have the capacity to devote more than 1.4 hours to billable work because they spend too much time on non-billable work.
Things like administrative tasks and marketing are necessary, time-consuming, and non-billable. This is another sign that more firms need to harness tools (such as Name Warden for you trademark lawyers) to automate non-billable tasks.
Another big piece of helpful data from the report was the breakdown of hourly rates. The report uncovered average hourly rates by state as well as hourly rates versus the Consumer Price Index. It turns out, the legal industry has failed to keep up with inflation. The report showed that lawyers are actually making less money today than they were in 2010.
Overall, the Legal Trends Report put hard data behind a some real challenges in the legal industry: productivity, time spent on non-billable matters, and rate-setting. Legal professionals need to take note of the latest and greatest legal tech out there. Between automation tools, dashboards, and tools with A.I. capability, delegating non-billable tasks to robots is a reality. For IP Lawyers, Name Warden is a tool that will free you of time consuming tasks like data entry and tracking marks and deadlines.