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Posted September 26, 2017, 11:03 am CDT
If you want to get paid faster, get a credit card machine.
That was one of the main takeaways from Clio’s 2017 Legal Trends Report, released on Monday during the first day of its annual Clio Cloud Conference in New Orleans. Taking user data from Clio’s cloud management software, as well as supplemental surveys with clients and lawyers, the report provided new insights, including how attorneys lose money, how clients find an attorney and what factors matter to them when deciding on representation.
The report found that 14 percent of law firm billing is not collected. In 44 percent of cases, clients lack funds to pay, while 31 percent of clients have the money but still pay late. The report also pointed out that 29 percent of firms rely on checks and 25 percent of firms use mail for billing, which slows process time and collections. However, those attorneys who accept credit cards are paid 40 percent faster.
The data also analyzed consumer preferences. When asked how consumers choose a lawyer, 67 percent said it was when the attorney calls or emails right after the potential client’s initial contact. George Psiharis, vice president of business operations at Clio, presented this information while citing a study from the Massachusetts Institute of Technology that showed if an online inquiry is not responded to within one hour, the chances of converting that person into a client drop dramatically.
Other factors that clients prioritized when choosing an attorney were whether the attorney provided consultations (64 percent) and offered fixed fees (47 percent). Less dispositive was if the client could pay with a credit card (28 percent) and if the firm has a great-looking website (19 percent).
Clio CEO Jack Newton, during his keynote address, referred to the report saying that potential clients are not looking to see if an attorney graduated at the top of their class. “They’re looking for referrals” from friends, family or other lawyers.
The 2017 Report showed that 62 percent of consumers find an attorney through a friend or family member as compared to 37 percent who find an attorney from an online search. Only 13 percent find a lawyer through an online ad and 6 percent from a billboard ad.
Beyond the data itself, Clio created a billable hour benchmarking tool so attorneys can compare their rates across a jurisdiction. The data also provided a look at billable hours by comparing attorney rates in urban and rural areas as pegged to inflation.
Last year’s report found that lawyers only use 28 percent of an eight-hour work day for billable work. The 2017 Report showed that figure rose to 29 percent.
Newton referred to this finding from 2016 as an “epiphany” in Monday’s opening keynote. The fact that two-thirds of a work day were being lost to administrative and business development tasks guided many of the Clio updates and added features announced at the conference.
“We should work backwards from what’s keeping us from 100 percent,” says Newton in an interview with the ABA Journal after the keynote. “We have an honest shot at inverting those ratios.”
However, releasing this data is only a part of the battle. “A lot of lawyers are great at being lawyers but really struggle with how to run a business and be an effective entrepreneur,” Newton says.
To help attorneys digest and use the information in the report, Clio undertakes “a significant education component” according to Newton. This includes talks at this year’s conference and other efforts aimed to increase data literacy, including webinars, white papers and other publications.
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