The annual CLIO Legal Trends Report provides a snapshot of the legal market, unusual in surveying both lawyers and consumers, as well as aggregating data on law firm performance from thousands of attorneys who use CLIO services.
Like most sectors, the pandemic has had disastrous impacts on the legal industry. Across the board, law firms lost matters and saw declining revenue in the early months of the pandemic. Practice areas based on interpersonal relationships and litigation – criminal, family, personal injury – were more severely impacted than traditionally transactional practices like real estate, business, and IP. Although there has been some recovery in the summer and fall, nearly a quarter of firms have laid off staff. One third of attorneys are worried about just making a living.
In terms of loss mitigation, the CLIO data shows that attorneys and law firms who already used some law practice management technologies saw fewer losses and more gains year over year. The more technologies they used, the greater the growth. Technological efficiencies had a clear multiplier effect on firm revenue generation.
Perhaps the most important theme that emerged from the 2020 Report, however, was this: for the first time, there was alignment between what lawyers thought clients wanted, and what clients actually say matters to them. How did this happen? The pandemic placed everyone into the same context, clarifying key priorities. This convergence points to a renewed focus on the client experience when using legal services.
For law firms, the 2020 report provides actionable steps towards maintaining this alignment as we move into 2021 and the eventual post-pandemic world. Here are the top five takeaways:
- Focus on client-centered technology. The three types of technology studied were electronic payments, client intake and CRM (customer relationship management) technology, and client portals. Electronic payments reduce the friction of money exchanges. Streamlined intake systems and CRM reduce administrative work and make generating new matters simpler. Client portals make information more accessible, which can reduce client calls and free up time for attorneys to do billable work. All of these technologies improve the client experience, and they are each correlated with law firm growth.
- Sell your services – including your tech. Although attorneys have done a great job moving to online work, clients don’t always know it. Law firms need to highlight their client-centered technology alongside their legal services. Even as record numbers of attorneys pivoted to remote practice, large numbers of consumers were unaware that law offices were still open, and a majority of consumers don’t think attorneys use basic technology like cloud storage or electronic payments. Make sure your webpage and marketing materials tell clients what to expect if they retain your services – accessible information, streamlined communication, and flexible payment options.
- You don’t need an office. Or at least not a commercial office space. Clients no longer prioritize meeting in person, and video conferencing will be fine for most client meetings, which also saves costs on administrative support. When you do need meeting space for transactions or initial consults, you can find flexible, cheaper options, and pass your cost-savings along to your clients.
- Clients need flexible payment options. In an economic downturn, most people cannot afford more than 1.4 hours of attorney time (that’s not a lot!). But firms should not engage in a race to the bottom. Instead of reducing rates overall, attorneys need to get creative: payment plans, subscription models, and fixed fee billing are all potential options. As the report notes, “there is more than one dimension to affordability.”
- The access to justice gap is leaving money on the table. Clients who can’t afford lawyers are not pursuing viable claims. In 2021 and beyond, lawyers would benefit from identifying what types of matters are not being represented – and how to affordably represent these underserved clients – in order to claim that untapped market share. Embracing innovation, client centered models, and flexible payment options will open up new market possibilities.
Two last thoughts:
In 2021, it’s time to retire the narrative that lawyers hate technology. Across the country, attorneys have adapted quickly to virtual practice in order to continue to serve their clients in difficult times, and this technology focus is here to stay. Most lawyers plan to maintain some aspects of their virtual practice post-pandemic, and over 90% of attorneys support expanding online access to the court system. The legal profession is no longer the dinosaur of popular imagination, and those of us who report on the legal industry should adjust our content to reflect this.
Finally, the legal profession must invest in traditional legal services organizations in order to close the access to justice gap. Underserved communities also frequently lack basic tech hardware and internet access. In the coming recession, there will be significant pressure on states and cities to cut budgets, which will impact indigent legal services tremendously. Legal professionals nationwide need to advocate loudly against austerity measures that would prevent the most vulnerable individuals from addressing their basic legal needs.
And that’s a wrap on the 2020 CLIO Legal Trends Report! Check out the full report here. If you’re looking to jumpstart your own 2021 planning and overall firm growth, check out Lawline’s full lineup of courses tailored for Business and Professional Development.
Have a safe and happy holiday season!