Small Law Firms, Solo Practitioners

Who Knew Workers' Comp Paid Better Than IP?

Clio's Legal Trends Report is just the first step.

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Yesterday, at its wildly popular Clio Cloud User Conference, practice management giant Clio released its second annual Legal Trends Report. Culled from anonymized user data (only when specifically authorized), Clio’s Report is the first to aggregate unfiltered data to offer broad insights into  how lawyers work and interact with clients. Yet as important as the Report is, it’s not worth much unless we can question the assumptions and use the results to improve the legal profession.

Last year, I attempted to do as much. I questioned the Report’s headline grabbing finding that a majority of solo and small firm lawyers use just 28 percent of an 8 hour day on billable hours — a statistic which rose to 29 percent this year. It’s an interesting number, and certainly it can suggest that lawyers are inefficient and devote too much time to administrivia and marketing. But remember — the data comes from Clio users who are already predisposed towards efficiency. Otherwise they wouldn’t even be using practice management software. Moreover, why are Clio users spending so much time on administrivia if they use practice management software. Certainly, it’s not the product — Clio garners rave reviews, after all. Is it possible that the work just isn’t there, and solos and smalls are barely scraping by? Or are some solos and smalls so efficient that they can make a good living working just 10 hours week. In short, the number itself is interesting, but why isn’t the legal media asking what it means?

This year’s survey generated another set of fascinating findings that have been somewhat under the radar in the media coverage I’ve seen so far: specifically, the average value of a case in a particular practice area. On their face, the results are somewhat counter-intuitive. For example, I’d always assumed that IP is one of the most lucrative practice areas. Yet according to the Legal Trends Report, the mean value of an IP case is $1973 compared to $3680 for workers’ comp, $3334 for Personal Injury and $3165 for family law. Practice areas like litigation, construction law and insurance weigh in at even higher mean per-case values of $4000 or more and that’s not entirely surprising since these matters may involve representation of corporate clients whose cases will, on average have a higher value than individual cases.

There’s another aspect of the case values that piqued my curiosity: they seem awfully low. For example, the case value of a family law case ranges between $500 and $7000, with a mean of $1500. This means that half of the family lawyers using Clio are making less than $1500/case. Personal injury has a mean of $1500 and criminal law $750 -which again, means half of the lawyers whose data was used in the survey are earning less than $750 per case in criminal law and less than $1500 for personal injury.  Those are rather troubling statistics – but they also suggest that perhaps the access to justice gap isn’t as significant as portrayed. Is $750 really too much money to pay for criminal defense, or $1500 too much to pay for divorce.

Of course, that’s just one explanation. Is there something else going on? Are users classifying pieces of a given case as a separate matter? For example, if a lawyer handling a criminal defense case includes the preliminary hearing as one matter, discovery and plea negotiations as another, and so on, the $750 price, while still not substantial is at least acceptable.

I’m not criticizing what Clio is doing — the report is a professional and scientific product that clearly involved significant resources that Clio has generously shared with the profession. But as the report itself states (quoting Peter Drucker), if it can’t be measured, it can’t be managed. Measurement is just the first step — but if we don’t follow that up with a dialogue about what the data might mean, then we may wind up managing a problem that doesn’t exist.

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Carolyn ElefantCarolyn 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 practice, social 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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