Business of Law

Lawyers are only billing a fraction of their time; how can they be more efficient?

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Clock and money

The folks at Clio dropped a bombshell that stunned attendees at the fourth annual Clio Cloud Conference to silence. And no, it wasn’t the Clio employee that did “The Worm” on stage during the obligatory kickoff dance party.

During his opening address Monday at the Radisson Blu Aqua Hotel in Chicago, Clio CEO Jack Newton unveiled the “Legal Trends Report,” which delivers benchmark data on subjects like average hourly rates among the company’s users. He shocked many in the audience after revealing that, among Clio’s 150,000 daily active users, lawyers were only billing 28 percent of their available work hours (approximately 2.24 hours of an 8-hour work day). That number, according to Newton, was closer to 22 percent for solo practices.

“Holy crap,” Victoria Giambra, an immigration attorney from Texas, tweeted during Newton’s speech. “For average solo [practitioner’s] 8 hour workday—2 hours are utilized for work, 1.6 of that is billed and 1.4 collected. Explains a lot.”

“WOW!?!? Lawyers only collecting on 1.4 hours of their 8 hour workday… law firms are dead if they don’t reinvent themselves,” tweeted David Leary, a small business ecosystem evangelist at Intuit who led a session entitled What Lawyers Can Learn From Accountants and their Journey to the Cloud.

Among the report’s other findings: average hourly billing rate across the U.S. among Clio users is $232. The report also found that Washington, D.C. lawyers on average have the most costly billable hour ($281) while lawyers in Iowa have the least costly ($145). But George Psiharis, Clio’s vice president for business development, noted in a later presentation that along with D.C’s high hourly rate was one of the lowest realization rates.

Having all of this data could only help lawyers make better decisions, Newton said. “The practice of law today is not data driven in any way, shape or form,” said Newton. “We’ve seen how data can transform industries and we hope to drive that.”

For one thing, data can help lawyers be more efficient and “get the missing six hours per day back,” according to Newton. To help attendees do this, the conference provided sessions and speakers designed to help them choose the right tech tools and keep track of the right metrics.

Mary Redzic, co-founder of Shape the Law, had slightly different numbers but came to same conclusion as Newton: Lawyers only bill a fraction of their available time. “Technology can help minimize your own risk; bill more, work less; and get more clients,” she said during a session entitled 3 Reasons to be Excited About the Future of Technology.

Redzic suggested using customer relationship management software, automated client intake and predictive analytics programs to allow lawyers to expend less time on routine, wasteful or futile tasks. Product names mentioned included Clio (of course), Concord, Lexicata, Les Machina, Ravel Law, Casetext and even Google Voice and Google Scholar.

But don’t just use tech for tech’s sake, Redzic and co-presenter Zach Abramowitz warned attendees. For one thing, they said, companies that promise they can do everything short of winning the case for you should not be trusted. For another, they argued, it is vital for the right people at a firm or office to make the decision as to what software or tool to use.

“It’s important to figure out who will use the tech and have them test it,” said Redzic.

Another session emphasized the need to see law firms as businesses and keep track of key performance indicators the way most industries do. New York-based lawyer Anthony Marrone II used popular TV show Shark Tank as a reference point and pointed out that the investors on that show always asked about sales, as well as the true costs of services—questions that lawyers rarely have the answer to.

“Until you can replace yourself in the role of doing routine, minor stuff, you won’t be able to scale and grow,” Marrone said.

It’s also vital for lawyers to differentiate themselves from their competition. To that end, he suggested providing superior customer service, tying into last year’s Clio Cloud Conference theme of providing consumers with an effortless experience.

Short of that, freebies are always a good idea.

“One thing I do is send pies to my clients,” said Marrone. “That’s because I like pies and hope, maybe, my clients will send me some.”

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