At its annual Clio Cloud Conference today, legal practice management company Clio released the 2022 edition of its Legal Practice Report – its seventh year of reporting.
It can be seen that law firms are seeing an average 10% increase in new business growth, but their salaries are 3% below where they should be given their growth prospects. .
It also reveals a firm struggling with work-life balance, as many lawyers change careers in search of work-life balance and 49% say they feel better working from at home.
“The past two years have dramatically changed how lawyers view the role of work in their lives,” said Jack Newton, founder and CEO of Clio. “The challenge for every law firm is to meet the expectations of clients and employees while balancing business goals in a changing economy.
“Technology enables flexibility for today’s lawyers, and this new report encourages Clio to continue to innovate for legal change and future sustainability.”
Hourly Rates Under CPI
The Legal Trends Report includes Clio’s billable hour index, which measures the average hourly cost of legal services in the US. prices of goods and services from 2019.
Measured by changes in the Consumer Price Index (CPI), inflation has increased this year and will reach 9.1% in mid-2022. At the same time, the salaries of lawyers are 3% is below where they should be given current inflation conditions, the report said.
Advanced Business Opportunities
According to the report, law firms have seen a steady increase in the number of cases they handle.
Compared to 2019, there has been a 10% increase from March 2021 to June 2022, while credit hours are 22% higher over the same period. On average, attorneys bill more hours per case they handle.
At the same time, the number of hours paid to customers has increased by an average of 28% compared to 2019, and the average amount collected has increased by 31%, which means that every hour of legal work has been very beneficial to all businesses.
The report finds:
- Utilization rates are expected to increase by 6% from 2021.
- The achievement and collection rates maintained the significant increase seen in recent years, remaining at 84% and 89% respectively.
- Despite current increases, businesses can collect up to 34% more revenue by optimizing fulfillment and collection rates.
Another finding of the study is that lawyers are active at different hours. In fact, 86% of lawyers say they work hours outside of the 9-5 workday. At least 69% of lawyers talk to clients on weekends and 74% after hours.
Perhaps unsurprisingly, lawyers who work odd hours report lower job satisfaction, while those who work regular hours report higher satisfaction. Those who work part-time are more likely to be satisfied with their income.
Lawyers want to be flexible
The report found that “Mass Resignation” has permeated the legal profession with resignation rates reaching 19%. This indicates that in the labor market professionals are demanding work-life balance and higher salaries.
According to the report, among legal professionals who have left or plan to leave a career, work-life balance is equally likely to influence their decision:
- 37% of legal professionals cited salary increases as a reason for changing jobs.
- 37% of legal professionals cited work-life balance as a reason for changing jobs.
According to the report, legal professionals have returned to work regularly from an office, but they have also embraced the flexibility of the workplace, which means less time in the office. By 2020, nearly 40% of lawyers worked exclusively from the office. Now, less than 30% work.
According to the report the legal profession is nearly divided on working from home, with 49% of lawyers saying they would like to work from home.
In order for businesses to remain competitive, after reporting, they must maintain a flexible approach to the office and its role in personal and professional life.
Businesses can benefit from Cloud Software
Firms that use cloud-based compliance management systems are better positioned to succeed in this new work environment, according to the report.
As more lawyers embrace flexible working, data from the report shows, firms that haven’t adopted cloud-based practice management will struggle to keep up.
Legal professionals working at firms that use cloud-based platforms report better performance than those at firms that do not, according to the report. They are 60% more likely to have a positive relationship with their customers, the report says.
Among other findings, attorneys using cloud-based practice management platforms include:
- 44% more likely to have positive relationships with coworkers.
- 44% would prefer to work throughout the day instead of the traditional 9-5 schedule.
- 29% more likely to be happy with their professional life
“A law firm’s greatest asset is its people—lawyers, professionals, and clients are all critical to the firm’s success,” said Newton. “For the long term, finding a healthy and productive balance between work and personal life is a sacrifice on all sides. Today’s growing businesses can embrace the new models for work-life balance, and opportunities for positive growth for the future and a better understanding of the way forward.
The 2022 Legal Trends Report is available at clio.com/ltr.