The theme of this year’s ClioCon, an annual legal technology conference produced by legal software provider Clio, was “Momentum.”
During the conference, which was held October 7 and 8 in Austin, Texas, Clio CEO and Founder Jack Newton used the image of a flywheel to illustrate the theme. A flywheel takes energy to start spinning but then builds momentum as it continues. This represents the “perpetual motion” that law firms need, Newton said.
For example, it takes law firms time and effort to build and implement new processes like client intake. But once they are in place, they help bring in new business more efficiently.
Critical focus areas for today’s lawyers
The 2024 Clio Legal Trends Report, which is an annual evaluation of the industry based on data from tens of thousands of Clio users and survey responses from more than 1,000 legal professionals and over 1,000 consumers in the U.S. general population, identifies challenges for attorneys and opportunities to grow, streamline, and increase their momentum.
The 2024 report identified AI, alternative billing models, and building client pipelines as specific areas of focus.
Newton summarized the takeaways of the report in a press release, saying, “AI has reached the level of adoption the cloud took a decade to obtain, with 79% of lawyers now using AI daily. This increased efficiency is pushing firms to adopt more flexible billing options, like flat fees, that better align with the value they deliver.
“While the appetite for AI is promising, our report reveals that many firms still miss crucial growth opportunities by failing to respond to client inquiries promptly. A real advantage lies in improving client engagement, which will help firms stay competitive, deliver superior service, and secure long-term success in the evolving legal market,” he continued.
Read on for more takeaways from the 2024 Clio Legal Trends Report.
AI is valued by attorneys and clients
The number of legal professionals who use AI in their daily work has increased by 60% in just one year — from 19% in 2023 to 79% in 2024, according to the report.
According to Clio’s analysis, 74% of a law firm’s billable tasks can be automated with AI. Most of these are traditionally performed by administrative assistants (81%), but a significant number are typically handled by paralegals (69%) and lawyers (57%) too.
Tasks that can be automated with AI include expediting and documenting client intake to analyzing and interpreting firm data. These tasks often make up 66% percent of hourly billable work.
Lawyers who use AI said in the survey that using AI saves them time and increases efficiency (54%); improves the quality of their work (36%); helps them manage caseloads more productively (36%); improves client experience and satisfaction (23%); and increases their firm’s revenue (22%).
And clients are becoming increasingly more comfortable with law firms using AI in legal work. According to Clio’s report, 70% of clients would either prefer to work with firms that use AI or do not have a preference if firms use AI or not.
This percentage has increased since the 2023 report, when only 46% of clients said they were open to working with law firms that used AI.
Moving away from the billable hour
Using AI in legal work has raised concerns about how it will impact billable hourly work. AI automation may mean lawyers spend less time on tasks and therefore have less time to bill for.
The American Bar Association weighed in on this with its Formal Opinion 512, which says generative artificial intelligence tools “may provide lawyers with a faster and more efficient way to render legal services to their clients, but lawyers who bill clients an hourly rate for time spent on a matter must bill for their actual time.” Meaning the savings must be passed along to clients.
Clio’s report estimates that AI automation could reduce hourly billing per lawyer by $27,000 annually.
The report partially credits AI adoption for the 6% increase in firms that have adopted flat fee billing in the past year. Since 2016, the percentage of firms that have embraced flat fee billing has increased by 34%.
However, the report notes that clients may also be driving this shift, with 71% saying they prefer to pay a flat fee for their entire case.
Lawyers who use flat fee billing are five times more likely to get bills to clients almost immediately, the report says, are twice as likely to be paid by clients almost immediately, and close their cases nearly three times faster.
Nearly half of law firms aren’t answering potential client calls
For the 2024 report, Clio conducted a secret shopper survey, building on the findings of a similar survey conducted for the 2019 Legal Trends Report. They found significant room for improvement in terms of potential client engagement.
Clio hired a third-party research company to contact 500 law firms acting as an interested client and asking questions about cost, process, experience, and options for booking a consultation.
Only 1 in 3 law firms (33%) responded to emails from the secret shoppers and 2 in 5 (40%) answered their phone calls. Clio reported that, overall, 48% of law firms were “essentially unreachable” by phone.
While nearly three-quarters (73%) of secret shoppers said they would not recommend the firms they contacted, those who reached law firms by phone tended to have the most positive interactions.
Thirty-nine percent of shoppers said they would recommend firms they spoke with directly via phone, the highest percentage compared to other methods of contacting the firm (e.g., email).
The report also identified room for improvement on law firm websites. While most potential clients (84%) said they could find contact information on law firm websites, only about one-third said the process of finding a lawyer was seamless (36%) and easy to understand (30%) based on the website.
The report recommended using different technologies to streamline the intake process and improve responsiveness, including online schedulers, intake forms, and text messaging.
Click here to download the full 2024 Clio Legal Trends Report.
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