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Exclusive: First Look At New Survey Of Solo And Small Firms

There’s some great news about the overall state of small-firm lawyering: most attorneys consider themselves successful.

Acquiring and keeping clients is the most significant challenge facing solo and small law firms, and increasing numbers of those firms see do-it-yourself legal websites as their competitors for those clients. Despite acknowledging this challenge, however, nearly three quarters of firms are doing nothing to address it.

These are among the findings of the 2017 State of U.S. Small Law Firms, a survey conducted by Thomson Reuters of more than 300 law firms ranging in size from solo to 29 attorneys. I have been given an exclusive preview of the survey, which will be available for download later this month. (You can sign up now to receive a copy when it is available.)

This is the second year Thomson Reuters conducted the survey. I reported on last year’s survey in a series of posts here and at my blog Lawsitesblog.com. In last year’s posts, I gave an overview of the survey and then covered what the survey found about small firms’ greatest challenges and what they’re doing to address them, how small firms measure success, and the kinds of technology small firms are using. My final post last year looked at how solos differ from other small firm lawyers.

Again this year, I will report on the survey in a series of posts both here and at my own blog. Key topics covered by the survey include:

  • Top challenges facing small-solo firms;
  • How firms address the challenges they face;
  • Sources of competition;
  • How firms define success; and
  • Investments in technology and efficiency.

For lawyers in solo and small firms, the top challenge they face is acquiring new clients. Three quarters of lawyers say this is either a moderate or significant challenge, with 28 percent saying it is a significant challenge. The second greatest challenge they face is spending too much time on administrative tasks, with 70 percent of lawyers saying it is either a moderate or significant challenge and 25 percent say it is a significant challenge.

Yet even as they acknowledge the challenges they face, most firms are doing little to address them. Of firms that identify finding new clients as a challenge, 71 percent say they are doing nothing to address it. Of firms that identify client pressure to reduce rates as a challenge, 80 percent say they are doing nothing to address it. Across the board with respect to the challenges firms list, 66-80 percent of firms are doing nothing to address them.

As it did last year, the survey asked lawyers about who they view as their competition for new clients. Not surprisingly, nearly 75 percent said that other law firms of similar size are a source of competition. Roughly half said that significantly larger firms are also competing against them for the same clients.

One notable jump over last year is in the number of lawyers who view do-it-yourself legal websites as competition. In last year’s survey, 11 percent of respondents saw DIY websites as competition. This year that rose to 17 percent. Solo attorneys are more concerned about DIY sites than their larger counterparts.  Fully 28 percent of solo attorneys identified DIY providers as competitors, while only 3 percent of firms with 11-29 attorneys said the same. In addition, 12 percent of respondents list pro se consumers as competition.

Among the questions I found most interesting in last year’s survey were those involving how lawyers define and measure success and how they rate the success of their own firm. When asked how they define success, the top measures they list are:

  • Client satisfaction ratings (90 percent);
  • Repeat business (82 percent);
  • Overall profits (81 percent);
  • Work/life balance (81 percent);
  • Overall revenues (74 percent);
  • Case win percentage (56 percent); and
  • Revenue per partner (40 percent).

Interestingly, however, when they are asked to pick their primary measures of success, the weighting changes. As a primary measure of success, lawyers first list overall profits, followed by client satisfaction ratings, repeat business, and overall revenues.

Firms were then asked to characterize the success of their firms. Surprisingly, 86 percent say their firm is either successful (56 percent) or very successful (30 percent). Thirteen percent said they are neither successful nor unsuccessful. Only 1 percent say they are not successful.

As with last year’s survey, lawyers this year say they spend nearly 40 percent of their time on activities other than the practice of law. There is somewhat of a correlation between success and time spent practicing law, the survey suggests. The lawyers who describe their firms as very successful say they spend nearly 62 percent of their time practicing law. But lawyers who characterize their firms as unsuccessful spend less time practicing law — 58 percent of their working day.

Over the next couple of weeks, I will go into further detail on specific aspects of the survey. Watch for further posts here and at Lawsitesblog.com.

Overall, however, I remain struck this year — as I was last year — by the percentage of solo and small-firm lawyers who characterize their firms as successful or very successful. I hear so much about the difficulties of running a small firm, and this survey confirms many of those difficulties. Lawyers are challenged to get more work, lower their rates, attend to administrative tasks, and keep up with changes in law and technology.

In the face of all of this, 86 percent consider themselves successful. That is good news about the overall state of small-firm lawyering.


Robert Ambrogi Bob AmbrogiRobert Ambrogi is a Massachusetts lawyer and journalist who has been covering legal technology and the web for more than 20 years, primarily through his blog LawSites.com. Former editor-in-chief of several legal newspapers, he is a fellow of the College of Law Practice Management and an inaugural Fastcase 50 honoree. He can be reached by email at ambrogi@gmail.com, and you can follow him on Twitter (@BobAmbrogi).

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