The new normal is that there is no normal. That may seem to be the lesson from 2020. All is thrown into the air and determining a trend for how things might land is an impossibility. The same holds for the state of the legal industry being on tilt. Or is it?
From solo and small firms to BigLaw, the COVID-19 pandemic played no favorites in impacting organizations and their clients. The storm blew hard, and the waves were fierce as most just tried to hold on. Nevertheless, as troubled waters certainly haven’t abated, the legal industry has charted a new course: a new trend led by accelerated tech adoption in delivering legal services.
Lost Demand vs. Deferred Demand
In the past eight months, while economic shutdowns impacted markets, the demand for legal services didn’t halt. In fact, sharp increases in civil legal aid needs were seen in the areas of eviction, foreclosures, unemployment assistance and appeals, consumer debt, and income maintenance. Yet, access to justice was reduced even further as legal aid struggled and courts closed.
Despite these needs, many consumers are putting off dealing with a legal problem until the pandemic subsides. According to Clio’s 2020 Legal Trends Report, 61% of consumers reported that they couldn’t afford a lawyer for legal issues. And 33% of consumers believed lawyers had stopped offering services during April and May 2020, while in reality, only 2% of firms had stopped.
“There is a tsunami of legal demand coming at us,” said Clio CEO Jack Newton this month during the Clio Cloud Conference 2020 opening keynote. “There is a backlog of existing demand forming and a whole raft of new COVID-19 legal issues that consumers are encountering at a personal and professional level. So, we need to think of the quiet now as a time to build for the tsunami of legal demand.”
Returning Market
As legal consumers inevitably return to the legal marketplace, the lawyers and firms they will likely engage are those who clearly express their value. As marketing guru and idea spreader Seth Godin put it in his keynote at Clio, “Marketing is everything you do that touches the market; so, when your consumers see the market, what do they see?”
If this accelerated tech adoption trend holds, consumers will see those providers who best position themselves to answer why and how their service solves problems as better than their competitors. According to Clio’s report, building a demonstrated value delivery position starts with deploying cloud-based, client-facing technologies. Specifically, online payments, client portals, and client intake and consumer relationship management (CRM) software.
Using aggregated and anonymized data from thousands of legal professionals who use their platform, Clio evaluated the impact on case volume and revenue collection when each of these tools was adopted individually and cumulatively. Not only did firms using these technologies outperform firms that did not, but the advantages also increased through the onset of the pandemic.
For example, firms using client intake and CRM solutions saw nearly double the revenue growth in the first months of 2020 compared to firms without them. Not only that, they maintained better–annualized performance during the initial months of the pandemic. These firms then returned to positive revenue growth from June onward while the pandemic continued and other firms didn’t fare as well.
The report goes on to state firms using all three technologies collected $19,541 more revenue per lawyer in 2019 and are projected to collect $37,622 more revenue per lawyer in 2020. These data make it abundantly clear that firms that are positioning themselves to serve clients with technology solutions better increase client intake and their bottom line.
When you’re a solo or small firm trying to mitigate the negative impact of COVID-19, advantages like these may be the turning point in your viability.
Lastly, as we meet the market demand for tech implementation, we might actually be ahead of meeting our client expectations. Eighty-one percent of consumers are equally or more comfortable with technology now than before the pandemic, but they have a lesser perception of lawyers’ comfort levels. For example, consumers think only 26% of attorneys meet with clients virtually, when in reality 83% do, according to the Clio report. While these numbers come from Clio users themselves, a group likely more tech–savvy than the norm, it’s nevertheless reassuring.
How will you build a better normal for your current and future clients with accelerated tech adoption?
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