BURNABY, BC, October 10, 2022 /CNW/ – Today, Cliothe world’s leading provider of cloud-based legal technologies, released its 2022 Report every Act, ushers in a new era of working in law firms in a time of great business growth. From 2021, companies have seen a return to business while navigating macroeconomic challenges including inflation and demand. The report shows higher than average resignation rates across the legal profession. Finding balance in engagement is a cornerstone of this year’s findings.
Highlights from 2022 Report every Act enter:
- On average, attorney fees are 3% below where they should be given inflation factors.
- New business growth among law firms increased an average of 10% from March 2021 to June 2022
- Of the 1 in 5 attorneys who changed careers in the past 12 months, 37% said a better work-life balance was the reason for their decision.
- Lawyers using a cloud-based LPMS are 29% more satisfied with their professional lives
- A separate workforce is seen with 49% of lawyers indicating a desire to work from home
“The last two years have really changed the way lawyers describe the role of work in their lives,” he said. Jack Newton, CEO and Founder 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 the flexibility needed for today’s lawyers, and this new report encourages Clio to continue to innovate for change and stability. legal future.”
Impact of inflation on the cost of legal services
Clio’s Billable Hour Index measures the average hourly cost of in-house legal services the United Statesreported annually in the Report every Act. In a comparison of the Hourly Billing Index and the Consumer Price Index over time, the average cost of legal services has not kept up with the increase in prices for goods and services since 2019.
- Measured by changes in the Consumer Price Index (CPI), inflation has picked up significantly this year, reaching 9.1% by mid-20221
- On average, attorney fees are 3% below where they should be given inflation factors.
This scenario will result in an increase in legal firm rates in 2023 as firms seek to adjust to increased spending and profits to pre-pandemic levels.
Law firms must prepare for both boom and bust
Insights from the report show a steady increase in the number of cases handled by law firms.
Compared to 2019, the last “normal” year, the caseload has increased by 10% over the period. March 2021 to June 2022, while credit hours were 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 clients has increased by an average of 28% compared to 2019, and the average amount collected has increased by 31%, the means that all the hours of legal work have been very beneficial to all businesses. .
- Utilization rates alone saw a 6% relative increase from 2021, a significant jump compared to the inflation rates reported in previous years.
- Completion and collection rates have maintained the significant increase seen in recent years, remaining at 84% and 89% respectively.
- Despite recent increases, businesses can still collect up to 34% more revenue by optimizing fulfillment and collection rates.
Firms must manage varying pressures as they rise and fall and demand for legal services. Along with more revenue, the current increase is the increase in tasks related to communication, document management, deadlines, billing and payment collections. Although businesses are still busy and collecting more money than in previous years, global inflation trends and rising interest rates will increase spending and a possible slowdown throughout the rest of 2022 and 2023.
Last year’s high demand for legal services was a huge financial opportunity for many firms. But with steady inflation and dire recession forecasts looming, there are clear warning signs that the industry should prepare for a challenging year ahead. Clio’s research team continuously monitors trends across the industry to equip it with the legal expertise and tools necessary to not only be resilient, but to be truly impactful.
Irregular and imperfect work schedules are the norm for lawyers
The research data shows a historical increase in monthly income and an increase in working hours to meet the increase in customer demands and deadlines. As of 2020, the lines between work life and personal life have become blurred.
- 86% of lawyers say they practice abroad a 9am to 5pm working day
Although many lawyers choose to work abroad a 9am to 5pm scheduling, many may work evenings and weekends to meet customer needs. At least 69% of lawyers talk to clients on weekends and 74% after hours. Some may want to meet their customers outside of business hours. However, those who work on different schedules show that they perform less well.
- Attorneys who work regular hours rated their mental and emotional well-being as higher (68%) than those who work off-hours (51%)
Those who work part-time are more satisfied with the money they earn for their work, and are more satisfied with their wages than those who work no hours. Lawyers who delayed work into odd hours did not get the best of their fees.
Lawyers need flexible work arrangements and fewer days in the office
The “Great Recession” has permeated the legal profession and resignation rates have reached 19%. Compared to non-legal professionals, this major shift represents a labor market with demands that involve work-life balance and higher wages.
Lawyers are looking for more flexibility in where and when they work. New technological capabilities are part of a long-term trend that has increased the demand for more remote-friendly legal services. Among those who left or planned to leave a job, work-life balance was 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
While the data suggests that legal professionals have returned to working regularly from an office, they have also embraced the flexibility of the workplace, spending less time in the office.
- Before 2020, about 40% of lawyers worked exclusively from the office—now, less than 30% do.
Businesses that don’t offer flexibility in location may struggle to compete for talent among professionals who want to work from home. The legal profession is deeply divided on this topic, with 49% of lawyers expressing a desire to work from home. To stay competitive, a flexible approach to the office and its role in personal and professional life will best suit these needs.
Businesses using cloud-based compliance management systems (LPMS) are succeeding in the new business era
As more lawyers embrace flexible work environments, data from the report shows that firms that have not yet adopted a cloud-based LPMS will struggle to keep up.
Legal professionals who work in firms that use cloud-based LPMS report better performance than those in firms that do not. Most importantly, cloud users report having good relationships with customers.
- Attorneys who use a cloud-based LPMS to manage their practice are 60% more likely to have positive relationships with their clients.
Cloud users also found other benefits, from the joy of collaborating with others in their industry, flexible work schedules, and increased job satisfaction.
Lawyers using cloud-based LPMS include:
- 44% more likely to have positive relationships with coworkers
- 44% are more likely to work throughout the day instead of the traditional 9-to-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,” Newton said. “In the long run, finding a healthy and productive balance between work and personal life is a sacrifice on both sides. knowing the way forward.”
It’s Clio’s year Report every Act The industry’s leading research for law firms, attorneys, and legal clients. Now in its seventh year of publication, it is considered the benchmark database of key insights for the legal profession.
It’s 2022 Report every Act available now at clio.com/ltr.
Clio is transforming the legal experience for everyone by creating the world’s leading cloud-based technology for law firms—making lawyers and their clients better connected throughout the legal process. Businesses of all sizes and locations use Clio products—Clio Manage, Clio Grow, and Lawyaw—to streamline business operations, simplify billing and payments, automate legal documents, and improve customer experiences. After his US$250M Series D funding, led by TCV and JMI Equity, and its US$110M Investment Series, led by T. Rowe Price Associates, Inc. and OMERS Growth Equity, Clio has made history by becoming the world’s first regulated unicorn. Learn more at clio.com.
For more information: Contact: Juliet Mafua, Senior Public Relations Specialist, Clio, 1-800-347-8314, [email protected]