A Tale Of Two Studies On How Solos Practice

Two reports on solo and small practice provide key insights, and yet both miss the whole picture.

Carolyn ElefantYesterday, two big Kahunas of the legal technology scene — venerable, century-old Thomson Reuters, (parent to Westlaw and Findlaw and not-yet adolescent start-up practice management provider Clio each released studies — State of US Small Firms Study Report and Legal Trends Report (Thomson Reuters) and the Legal Trends Report (Clio) — that offer insights into how today’s solos and small firms practice. What’s most fascinating about the reports (other than some of the conclusions) are the respective methodologies: Thomson Reuters surveyed and interviewed (at least some) 300 solo and small firms while Clio relied on data generated from 40,000 users over the course of the past five years. Juxtaposed, the two studies starkly show law’s past and future, with yesterday’s legal professionals relying on a handful of cases or precedent and years of experience to make predictions and advise clients, and tomorrow’s relying on data-driven analysis.

So which approach is more accurate when it comes to evaluating the state of solo and small firm practice today? Though you’d assume that data-driven analysis produces far better results (if only because it eliminates the bias factor in self-reporting since many lawyers either over-estimate, or may be ashamed to admit their billing rates or hours worked per day) from what I can tell, both approaches have certain limitations and reading them in tandem provides the best snapshot of the state of solo practice today.

Let’s take the matter of attorney efficiency. The Thomson Reuters report concluded that the majority of solos surveyed spend less than 53 percent of their time practicing law, while 81 percent identified “spending too much time on administrative tasks” as the most significant problem in their practice. At the same time, the “happiest” and “most successful” lawyers spend 63 percent of their time on law — which suggests that even for the upper tier of solos and smalls, efficiency rates of above 70 percent remain elusive. By contrast, the Clio Trends report found that its solo and small firm users spend just 2 hours a day on billable matters; assuming an 8-hour workday (as Clio did), that’s just 25 percent of time practicing law — far less than the Thomson Reuters report concluded.

Yet there’s bias in both sets of statistics. We don’t know what types of solos comprised the Thomson Reuters survey pool — but if the lawyers were chosen from the Thomson Reuters’s user base, my guess is that they’re likely less familiar with or trusting of new technology that can automate a practice, thus explaining the 81 percent who complained about spending too much time on administrative tasks. And again, the Thomson survey suffers from the small size of the survey pool and self-reporting bias.

As for the Clio data, because Clio segregated billable hour matters from flat-fee matters (which are accounted for differently in the system) its report overlooks that a lawyer with a predominantly flat-fee practice may only occasionally enter hourly matters, thus bringing down the overall average numbers of hours worked per day (an issue that I described here). On the other hand, because Clio users are already using practice management software, they are likely to already be more efficient than the average lawyer — thus suggesting what former ATL columnist Keith Lee did: time for solos to run for cover because two hours of work per day isn’t enough to make solo practice sustainable.

As data analytics improve and the Clio team gains more experience in identifying appropriate metrics to review (for example, I’m not sure how valuable it is for Clio’s report to focus on average billable rates without any additional information about each firm’s practice areas, years of experience or gross and net billings), the Clio Legal Trends Report will have increasing value for those of us who cover the solo and small firm space while the small curated reports and insights like those of Thomson Reuters will likely wind up a casualty of the brave new world of technology, just like Martindale-Hubbell and paper court filings.


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Carolyn Elefant has been blogging about solo and small firm practice at MyShingle.comsince 2002 and operated her firm, the Law Offices of Carolyn Elefant PLLC, even longer than that. She’s also authored a bunch of books on topics like starting a law practicesocial media, and 21st century lawyer representation agreements (affiliate links). If you’re really that interested in learning more about Carolyn, just Google her. The Internet never lies, right? You can contact Carolyn by email at elefant@myshingle.comor follow her on Twitter at @carolynelefant.

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