In the 4,000-year history of the legal profession, unbiased information sharing has never been the norm. Instead, insights have remained siloed in large institutions—or traded anecdotally among groups at networking events.
That changes with today’s release of the Legal Trends Report. The Legal Trends Report is being published by Clio, the world’s most widely-used legal practice management platform (disclosure: I am the founder and CEO of Clio). By leveraging anonymized, aggregate data from 40,000 active Clio users and over $60 billion in billing volume, the Legal Trends Report provides new insights into topics including average billing rates by state, practice area, and fee structure, law practice-specific key performance indicators, and how efficiency scales with firm size.
For the first time ever, small to medium-sized law firms have access to information that can help them make decisions like some of the world’s best businesses. Traditionally, solo-, small-, and medium-size law firm data has relied heavily on self-reported or anecdotal data, which is often heavily skewed due to both small sample sizes and the inherent unreliability of self-reported data. When contrasted with actual usage data, an entirely different picture of the legal landscape emerges, including surprising insights such as:
- On average, attorneys are only expending 28 percent — roughly two hours — of each eight hour workday on billable activities.
- Law firm utilization rates increase as additional attorneys are added, but plateau at five to nine attorneys.
- When adjusted for cost of living, Nevada, Connecticut and Illinois emerge as the most profitable states for attorneys based on real hourly rates; conversely, Nebraska, Tennessee and Wisconsin are the lowest hourly rate states in real terms.
Over the next few weeks, I’ll be blogging about key data insights from the Legal Trends Report on Slaw, and sharing my personal view on what take-aways the profession can take from the report. You can download the complete Legal Trends Report at www.clio.com/2016-legal-trends-report.