Law Firms

Solo practitioners saw steeper revenue declines amid COVID-19, new report finds

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Solo practitioners had a harder time weathering the initial economic impacts of the COVID-19 pandemic than others in the legal industry, according to a new report that cloud-based company Clio released on Tuesday.

From April through June 2020, solos saw their revenue drop between 5% and 7% more than firms with more lawyers, according to Clio’s Legal Trends for Solo Law Firms. In May alone, solo practitioners’ revenue declined by 19% compared to the previous year.

The steeper revenue decline came even as the drop in new casework solos experienced was similar to the decreases at larger firms, according to the report. For example, solos saw casework fall 32% last April, which was slightly less than the average for all firms. However, criminal casework, a common practice area for solo practitioners, dropped by 59% last spring.

“While solo lawyers are typically more agile—burdened less with organizational bureaucracy and coordination between staff and decision makers typical of a larger firm environment—solo lawyers often struggle with fewer resources to determine what actions to take and how to implement changes,” the report states. “As a result, while many solo lawyers have been able to operate more nimbly, offering more attentive and responsive service, many struggled to keep up with the rapidly evolving client needs throughout 2020.”

The economic fallout from the pandemic for solo practitioners was also evident in surveys Clio conducted of lawyers through last spring and fall. About 66% of solo practitioners reported being concerned about the success of their legal practice, and 47% worried about making a living. On a related note, 72% of solos conveyed that they were concerned about their clients’ ability to pay, and by last July, 15% reported having to lay off staff.

Clio’s new report focusing on solos comes on the heels of its 2020 Legal Trends Report released in October, which found that attorneys who have embraced using technology to provide virtual legal services have had more success weathering the pandemic-driven economic downturn.

The latest report highlights a similar trend among solos who have used electronic payments, client portals, client intake tools and customer relationship management solutions. In 2020, solo practitioners utilizing those technologies brought in $52,507 more revenue than other solos, according to the report. On a percentage basis, solo practitioners using those technologies generated up to 58% more revenue and 50% more casework than solos not utilizing those tools amid the pandemic.

“As client expectations continue to shift, and new behaviors become more habituated, it’s clear that firms that continue to adapt and innovate in the interest of their clients are the ones that will reap the benefits both in the immediate future, and in the years to come,” the report says.

One of the other trends the new Clio report mentions is how solos are far less likely to possess commercial office space than law firms.

Only 58% of solo practitioners have commercial office space, with 9% reporting that they had stopped operating out of a commercial location since the start of the pandemic. An additional 9% report being unsure whether they will keep their office space even after the impact of COVID-19 recedes, which the report says “suggests solo lawyers may continue to shift to virtual formats.”

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