Lawyers Only Bill 2.3 Hours A Day. What Happens To The Rest Of It?

The average lawyer bills for less than 30 percent of their work day, and the same amount of time is spent looking for new clients, according to Clio's 2017 Legal Trends Report. 

Clio’s report takes an in-depth look at the legal industry, using data to inform law firms about their businesses and clients. Data for the report came from Clio’s internal data collected from more than 60,000 Clio users. Clio also surveyed 2,915 legal professionals and 2,002 consumers. The data provides an insider’s perspective on how law firms operate, and how consumers seek legal services.

Utilization rates were up 1 percent in 2017 at 29 percent. For lawyers working an 8-hour workday, this means that they only bill for 2.3 hours of their time. After factoring in realization and collection rates, the average lawyer only collects 1.6 hours of billable time per day.

There are two factors that limit the average lawyer’s ability to spend more time on billable work, according to the report. First, too much of lawyers’ time is spent on non-billable administrative tasks. Second, law firms do not have enough clients to support billable targets.

Business development turned out to be one of the biggest time investments cutting into billable time, the report revealed. Collections, licensing and continuing education, and office administration also required significant time. In all, administrative tasks account for 48 percent of the average lawyer’s day.

Law firms spend 33 percent of their time on finding new clients, almost as much time as they spend on billable time. Although the average law firm commits a significant amount of time to business development, 41 percent of law firms said they would spend even more of their day looking for clients if they had extra time.

The survey data indicated that a large chunk of business development efforts are not scalable. For example, 30 percent of business development involves one-on-one time with clients. Also, 91 percent of firms reported that they are unable to calculate a return on their advertising investments, and 94 percent reported that they do not know how much it costs them to acquire a new clients. 

To streamline business development efforts, the Clio report suggests “firms may want to invest in other activities, such as public presentations and writing for publications which reach a wider audience for the given amount of time and effort.”

The 2017 Legal Trends Report studied how consumers are seeking legal services. Consumers responding to the survey reported that traditional advertising, such as billboards, radio, TV and yellow pages, were less likely to influence their decision in hiring a law firm. A family or friend referral was the most effective in influencing consumer decisions at 62 percent. Search engine results were the second most influential at 37 percent.

Building a strong web presence is important for law firms that want to increase their visibility online (and rankings in search results), but there are other factors that ultimately influence a consumer’s decision to hire a lawyer, according to the study.

Providing immediate responses to initial calls and emails was the most important factor for potential clients at 67 percent. Free consultations were also important, influencing 64 percent of hiring decisions. Other important factors included pricing predictability (flat rates), flexible payment methods, text message communications and “great-looking websites.” 

As more consumers search for legal services online, their expectations are also changing. As the report suggests, millennials are aging into the legal market and will become the legal consumers of the future. Their expectations will shape how law firms seek future clients and deliver legal services.

Text and email, for example, are preferable to phone calls and face-to-face meetings, 19 percent of millennials reported. Also, 30 percent of millennials say they would prefer the use of document sharing technology to review legal documents with their lawyers. Online payments and credit card transactions are also favored over other payment methods. 

Clio’s 2017 Legal Trends Report also discusses the viability of billable hours and flat fees, case valuations, collections issues and geographic impacts on hourly rates. The full report can be found here

 

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Tyler Roberts is an editor for The National Jurist. You can follow him on Twitter at @wtylerroberts