2025 Legal Trends Report

Artificial intelligence has sparked the most rapid technological transformation in the history of the legal profession. It’s a shift being driven by the pivotal innovations that have emerged in AI technologies within just a few short years. Yet, even with the pervasive uptake of AI among law firms, there is a vast amount of untapped potential still to be realized.

For many law firms, gains in productivity and efficiency will create opportunities for growth. Others, however, are seeing their traditional business models quickly become obsolete. After all, how can a lawyer charge clients for several hours when the same work can be done by AI in minutes?

These are the types of questions forward-thinking law firms are wrestling with. The ramifications will shape the nature of legal practice in the years to come, and in turn, they’ll redefine how businesses succeed and fail.

Examining growth and success at scale

This year’s report includes an analysis of what sets the highest-performing law firms apart from their lower-performing peers.

The most successful firms in our analysis are meeting the challenges that all firms struggle with, and they’re the ones overcoming them to reap the rewards. As a result, they are leaps and bounds ahead of the competition, with revenues more than doubling since 2020.

For these firms, breakthroughs are key to unlocking further gains. These innovations ultimately compound to create growth that becomes exponential over time.

A new look at technology-enabled performance

While there are countless examples of law firms that operate maintain high standards and have seen great success, the human cost has been a trade-off for many working in the legal profession, which has a reputation for long hours, high stress, and poor work-life balance.

According to a study by Bloomberg Law, attorneys reported feeling burned out in their job 42% of the time. The top challenges faced included the inability to disconnect from work (49%) and trouble focusing on work tasks (44%).¹ Another study by ALM Intelligence and Law.com Compass found that about 73% of attorneys and staff said they felt their work environment contributed to mental health issues.²

In a first-of-its-kind neurological study of legal professionals, we look in depth at how legal technology has a positive influence on everyday brain functioning. With this lens, we see how working with the right tools can greatly support individuals’ mental bandwidth while improving both the quality and efficiency of their work.

The cognitive abilities of legal professionals are a finite resource for law firms, and managing them effectively can create better working conditions for individuals. The knock-on benefits include both the improved mental health of individuals and better contributions to the success of their law firms.

We look in depth at how legal technology has a positive influence on everyday brain functioning.

Law firms must navigate a burgeoning market for AI solutions

The ubiquity of AI poses many opportunities for law firms, and the sheer range of options makes it difficult to know which are suitable for legal practice.

First-to-market AI solutions like ChatGPT are the most widely available, but they lack the foundational training and grounding in legal data needed to be proficient in law. In addition to potential privacy issues, these solutions can “hallucinate,” or fabricate, precedent examples that don’t exist.

But law firms also have access to legal-specific AI solutions that are knowledgeable about the law and trained specifically based on vast amounts of proprietary legal databases. These solutions give legal professionals greater certainty in their accuracy and an edge over other practitioners that haven’t yet adopted these resources.

As firms adopt AI more widely in their practices, it’s also shaping the nature of their businesses.

AI is shifting client perspectives

Consumers have access to their own AI solutions, and these technologies are shaping how potential clients experience and understand their legal problems. Today’s clients are both more knowledgeable and able to take more initiative in solving their own issues.

Ultimately, a lawyer’s reputation is based on their ability to both solve problems for their clients and create trust with them. Law firms will need to stay abreast of these shifting market dynamics, as they’ll influence what potential clients look for in a lawyer. As AI becomes more ingrained into consumer-facing platforms online, this will in turn influence how consumers find their next lawyer.

There is still a vast untapped market for legal problems that lawyers and their firms have yet to take advantage of. Knowing what today’s clients are looking for, and delivering on those expectations effectively, will increasingly be what defines future success.

How people and technology enable growth

Legal professionals today have access to technologies that weren’t even dreamed of a generation ago. With these innovations, firms have the ability to redefine legal practice as we know it.

In our look at the workloads of responsible lawyers, we provide an insider’s perspective into how firms of all sizes approach business growth and how they staff for change.

The patterns we’ve uncovered throughout this report point to a profession that will be more productive and sustainable for lawyers, their firms, and their clients alike. In turn, leaders in the industry will be solving some of the greatest challenges faced within the profession.

Our most in-depth study yet

The Legal Trends Report uses a range of methodological approaches and data sources to deliver the most relevant insights into the state of legal practice and strategies for future growth.

Clio data

We analyzed aggregated and anonymized data from tens of thousands of legal professionals in the U.S. This data provides important insights into how technology is being used by legal professionals, as well as its impact on firm performance.

Survey of legal professionals

We surveyed 1,702 U.S. legal professionals from a market panel (500 respondents) and a cohort of current Clio customers (1,202 respondents). The legal professionals we surveyed included lawyers as well as support staff, such as paralegals and administrators, who are engaged in the management side of their practice.

Survey of consumers

We surveyed 1,000 adults in the U.S. general population from a market panel. This survey was designed to gauge attitudes, opinions, preferences, and behaviors regarding the legal profession among individuals who have hired lawyers in the past or who may become potential legal clients in the future. This sample is representative of the U.S. population by age, gender, region, income, and race/ethnicity based on the most recent U.S. census statistics.

Interviews and diary study of legal professionals

We conducted 24 virtual interviews with legal professionals using Clio, each lasting 45–60 minutes. Our diary studies involved 24 participants (representing seven growing firms, 10 stable firms, and nine shrinking firms, all of which were Clio customers), each committing to 30 minutes per day for five days. Quotations from interviews have been referenced with pseudonyms throughout this report.

Neurological scanning

We worked with Neuro-Insight to conduct a neurological study of 63 legal professionals using patented Steady State Topography (SST™) methodology. Researchers used SST to analyze electrical brain activity to assess cognitive load across a variety of tasks using Clio versus a control. Participants all worked in private practices and had used legal practice management solutions in the past; some of them had used Clio.

Cohort analyses

To determine characteristics that distinguish successful law firms from others, we’ve looked at different categories of law firms based on how much their revenue has grown or shrunk over the past four years:

• Growing: Firms that have increased revenues by more than 20%
• Stable: Firms that have maintained revenues within +/- 20% growth
• Shrinking: Firms that have seen revenues decrease by at least 20%

These segments are based on aggregated and anonymized data from thousands of law firms using Clio. By analyzing these segments, we’re able to identify key trends that help define success.

Growing firms are those that stand out from the rest. These firms should be seen as role models to others based on their sustained growth and success. As we identify key characteristics within this group in terms of their knowledge, mindset, and approach to their businesses, we can form a blueprint for actions that other firms can adopt.

[1] Bloomberg Law, “Attorney Workload and Hours (2024 Wrapup),” Bloomberg Industry Group, 2025.
[2] ALM, “Mental Health by the Numbers: The 2025 Survey Infographic,” Law.com, May 2025.

In 2023, Harvard Business School published a study conducted by the Boston Consulting Group in partnership with several experts in the field of AI learning and adaptation. The landmark study found that AI greatly improved the work performance of consultants taking on complex tasks.

Those using AI in the experiment completed 12% more tasks and finished them 25% faster than those not using AI. They also produced 40% higher quality in their work. Across the board, consultants at all levels of experience saw increases in their performance, demonstrating that AI benefits all types of workers regardless of their skill or prior training.³

In our own research, we’ve seen similar gains in law firms using AI, with the highest adoption seen among growing law firms. Those using AI are the ones most likely to see the benefits in their work, their firm’s success, and their own personal well-being.

Growing firms are the quickest to adopt AI

In our cohort analysis, growing law firms are those that have grown revenues by more than 20% over the past four years. These law firms take on substantially more casework with only minimal increases in their staff, therefore achieving substantial gains in per-employee productivity. Compared to others, these firms have adopted more technology and, in particular, AI.

Our analysis shows that growing firms use AI in Clio twice as much as stable and shrinking firms.

Growing a business is no easy task. Throughout this report, we look at multiple perspectives that help explain the success of growing law firms through the use of technology, and specifically AI. Our analyses show how AI helps legal professionals achieve substantial improvements in their work quality, efficiency, and overall engagement with their work.

These improvements are precisely what enable individuals to help their firms succeed and grow. They create work environments that can handle a higher volume of inputs, while at the same time eliminating friction.

Unnecessary processes, systems that create confusion or missteps in workflows, or redundant touchpoints may seem inconsequential on their own, but when added up, amount to significant losses in productivity over time. These are the types of challenges that technology and AI solve.

Time-saving automations are integral to growing law firms

Automation through technology is another category of innovation that includes multiple areas of time-saving operations. Growing firms use time-saving automations twice as much as stable firms, and nearly three times more than shrinking firms.

These efficiencies are what save staff from the burdens of repetitive administrative tasks that take a mental toll on individuals. In turn, eliminating menial tasks from daily work frees up capacity to focus on more impactful work that contributes to business growth.

In our analysis, the most frequently used time-saving automations include:

• Automated consultation bookings in Clio Grow: Potential clients book consultations from a firm’s website or Google Business Profile and receive automated email confirmations, follow-ups, and reminders.
• Document drafting with Clio Draft: Firms draft legal documents by populating client information, which is collected from a questionnaire form, into smart templates that adjust language for grammatical elements like gender and verb agreement.
• AI in Clio: Individuals use AI to securely summarize documents and matter details, prioritize tasks, draft client communications, and automate administrative work like managing tasks, calendar entries, and time tracking.

Each of these technologies creates substantial gains in efficiency by reducing the time and energy invested in menial tasks and instead shifting resources to more client-facing work. Automation also helps eliminate the risk of errors by ensuring processes are clearly defined with a high degree of precision and reliability.

For more on what differentiates growing law firms from others, see Part 4.

Law firms benefit from AI, but not at the expense of jobs

While the uptake of AI in many industries has coincided with losses in entry-level jobs, a recent report from the National Association for Law Placement shows that employment rates for law graduates in 2025 is at an all-time high of 93%, marking a four-year trend in strong employment for new grads overall.

While previous years attributed high employment rates to smaller classes, the latest graduating class sizes were the largest in nearly a decade.

New graduates are also being hired for better, more lucrative entry-level positions than in previous years. More are being hired into “attorney positions” that require bar admission, and more are being hired in full-time, long-term roles. Eighty-three percent of grads landed full-time, long-term attorney positions compared to just 57% in 2011.⁴

In contrast, research from Stanford University shows that early-career workers (ages 22–25) in occupations that are more exposed to AI have seen a 13% decline in employment. These drops are attributed to occupations where AI is more likely to automate, rather than augment, work.⁵

At a time when law firms are seeing significant growth and success, AI is fueling that growth while keeping legal professionals integral. AI has the ability to greatly support and enhance the abilities of those working in a law firm, but individual legal professionals are still the ones to oversee the work while building and maintaining relationships and trust with clients.

Legal professionals see the value in AI

In our surveys of legal professionals, most of those using AI are seeing improvements in the quality of their work, responsiveness to clients, and work capacity.

Looking forward, many still see untapped opportunities, especially in time savings and efficiency. Many firms still see potential to adopt AI further in their operations, and AI technologies themselves will see further advancements in the years to come. For example, agentic AIs, which can take on complex tasks independently, are already being developed for niche applications, including core law firm processes.

 

Wide adopters of AI see more revenue gains

Thirty-six percent of legal professionals say that AI has had a positive influence on revenues. Among wide adopters, the number jumps to 69%.

In other words, firms that better integrate AI into their systems and workflows are more likely to see the financial benefits. This is another advantage of legal-specific AIs, which can be used more widely within law firms and can help realize financial gains quicker.

By far, administrative operations were the largest category of improvement. They include document creation, automating administrative work, reviewing documents, and more. Few legal professionals attributed accuracy as a benefit to improving revenue, suggesting that they’re confident in their ability to avoid errors in their work.

 

Impact on competition and hourly billing

As AI improves efficiency in law firms, it raises important considerations:

• Administrative efficiencies: AI will greatly reduce the time that law firms spend on non-billable administrative tasks, allowing them to focus more on their clients and their revenue-generating work.
• Competition: Lawyers using legal AI will deliver higher quality results in less time, which translates to better value for clients. Firms delivering quality experiences will be quicker to earn more clients in the future, which will only reinforce their competitive advantage.
• Business and pricing: For law firms that rely on hourly billing, substantial gains in efficiency will result in less time spent on individual clients and less revenue per matter, leaving much to be made up for in case volume. This will require many lawyers to reevaluate their reliance on the billable hour.

The bottom line for any business is to ensure value for the customer. The firms that do this the best will be the ones that figure out how to adapt and thrive with these new capabilities.

We look more deeply into these issues of quality, competition, and billing models in Part 3.

AI benefits firm culture and well-being

AI isn’t just making legal work faster; it’s changing how legal professionals feel about their jobs. Our surveys show AI has boosted curiosity and motivation to explore new legal technologies, showing that AI is opening the door to new ways of working.

In an industry where many struggle, AI improves quality of life

In an industry that struggles with overwork, burnout, and mental health challenges, nearly half of legal professionals say that AI has reduced work stress, improved work-life balance, and increased job satisfaction. More than half feel empowered to tackle more complex work overall.

These are major benefits for legal professionals and their families. They are also good for law firms. In a recent study, 24% of female and 17% of male lawyers were considering leaving the legal profession due to poor mental health, burnout, or stress.⁶ Reducing these problems will help avoid turnover, saving managers the time and effort of having to find, hire, and train new staff.

[3] Fabrizio Dell’Acqua et al., “Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of AI on Knowledge Worker Productivity and Quality,” Harvard Business School Working Paper 24-013 (September 2023).
[4] Nikia L. Gray and Danielle A. Taylor, “Employment for the Class of 2024: Selected Findings,” National Association for Law Placement, 2025.
[5] Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen, “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence,” Stanford Digital Economy Lab Working Paper (August 26, 2025).
[6] Justin Anker and Patrick R. Krill, “Stress, Drink, Leave: An Examination of Gender-Specific Risk Factors for Mental Health Problems and Attrition Among Licensed Attorneys,” PLoS One 16, no. 5 (May 12, 2021).

The cognitive demand put on legal professionals is incredibly high, both in terms of the sheer volume of work they take on and the intense mental effort required. This, in addition to the high stakes that virtually every law firm must deal with in terms of the potential impacts on the lives of their clients, can take a significant toll on individual workers.

To better understand how law firms can ease the mental load on their staff, we worked with Neuro-Insight, one of the leading neuroanalytics research companies in the world, to conduct a first-of-its-kind study of the neurological activity in legal professionals as they performed everyday legal tasks.

In our research, we looked at several aspects of cognitive load, including emotional strain, memory demand, active focus, and visual effort. When aggregating findings across each of these measures, we determined that the use of legal technology can reduce cognitive load by up to 25%, which in turn offers benefits to both productivity and personal well-being.

Mental fatigue hurts performance and personal well-being in legal professionals

Many in the legal industry suffer from burnout and serious mental health issues. Bloomberg Law’s recent study found that lawyers reported feeling burned out in their work 42% of the time. Two key problems were that 49% were unable to disconnect from their work and 44% had trouble focusing while performing work tasks.⁷ Another study from ALM Intelligence and Law.com Compass shows that 73% of lawyers and their staff say they felt their work environment contributed to mental health issues.⁸

Mental fatigue has been shown to be a key contributor to these types of issues. Research shows that mental fatigue decreases productivity and overall cognitive performance—both key areas that affect knowledge workers, and specifically legal professionals.

When suffering from mental fatigue, workers are less able to concentrate and process information, which can lead to a higher risk of errors. Mental fatigue can also be exacerbated by stress, especially when performing tasks requiring higher cognition and attention, as well as during long working hours and job strain, all of which are typical of the law firm environment.⁹

Over time, individuals who are put under sustained mental loads often feel mentally fatigued, stressed, and anxious about their work. These symptoms lead to burnout, emotional exhaustion, and depression.^{10 11}

Repetition and context switching contribute to mental fatigue

The problem isn’t just the difficulty of the work. It’s also the repetition and fragmentation of menial tasks that contribute an unnecessary expense on cognitive load. Simple tasks (like checking email, managing time tracking, or reviewing client bills) may seem like basic, rote work, but dealing with them in a high enough volume creates a significant drain on the brain’s executive functioning.

Context switching can be taxing in and of itself; simply switching between software applications creates stress hormones that have a negative impact on the ability to focus.

A recent study found that it takes an average of 9.5 minutes to reorient after switching between different work contexts. In another study, researchers found that the average worker spends four hours per week reorienting between apps. Over the course of a year, that amounts to five weeks, or 9%, of annual work time.¹²

The average worker spends four hours per week reorienting between apps, amounting to five weeks, or 9%, of annual work time.

Measuring cognitive load in everyday legal work

We worked with Neuro-Insight to conduct a neurological study of legal professionals to better understand subconscious brain activity while performing certain tasks typical of any given law firm. Neuro-Insight is one of the world’s leading neuroanalytics companies. They measure people’s brain reactions using a proprietary technology called Steady State Topography (SST).

Neuro-Insight’s research is based on Cognitive Load Theory, an area of study that assumes an individual’s memory is limited. Exceeding or pushing that limit can hinder our ability to process information and stay focused. Cognitive load itself is the measure of mental effort used in intellectual tasks. When cognitive load is high, it’s an indication that the brain is working harder to complete a given task. And when cognitive load remains high for extended periods of time, it can result in mental fatigue and affect overall mental performance.

The work from Neuro-Insight gives us an important look into how environmental factors within a law firm, namely the tools and operations used, can have a profound impact on the cognitive load put on legal professionals.

Methodology

The researchers used SST to measure the speed of electrical activity in key brain regions within 63 legal professionals as they performed a set of timed work tasks.

Each participant was fitted with an SST cap, used to hold electrodes to measure electrical activity in the brain. While wearing the SST device, participants then performed a series of tasks, each of which was performed twice: once with a method used as a control and the other modified with the use of Clio. The control tasks and the task with Clio were performed in randomized order.

During the experiment, the researchers collected neurological data across four measures of brain activity, each contributing to an individual’s cognitive load:

1. Emotional strain: The mental and emotional cost on an individual that occurs while performing a task.
2. Active mental focus: The conscious, deliberate effort spent on directing one’s attention to a task while ignoring distractions.
3. Memory demand: The mental effort required to remember information to complete tasks.
4. Visual effort: The cognitive energy used to direct visual attention during a task.

The data from the experiment was then averaged among participants and compared between the control tasks and the modified tasks with Clio to determine the net change in each measure of brain activity. The changes in each measure were then averaged to determine the total change in cognitive load.

Study participants

The study was conducted with 63 participants, each of whom:

• Works in privately owned law firms
• Has used legal practice management software in the past

Participants by role

• Lawyer: 48%
• Paralegal: 30%
• Managerial/administrative: 13%

% using Clio

• Clio users: 23%
• Other: 77%

Work tasks performed

The study compared the cognitive load, measured in brain activity, in participants as they completed a series of tasks using general office tools (like Microsoft Excel, PDF documents, and other pen-and-paper workflows) as controls to using Clio. Each participant in the study performed the control task and the task with Clio in a randomized order.

Each task had its own time limit, ranging from 2.5 to 5 minutes depending on the complexity of the task. Time limits were kept the same between Clio tasks and their controls and were designed to reflect the time it might realistically take a legal professional to complete them in the real world.

Clio reduces emotional strain in data-entry tasks

When legal professionals experience emotional strain, their minds are preoccupied with processing and managing their feelings. This is valuable mental effort that could be harnessed for high-demand, billable tasks.

Since the majority of participants in the study were first-time Clio users, our researchers expected to see higher levels of emotional strain due to participants having to learn a new tool compared to the control.

However, Clio reduced emotional strain by 16% for participants during their client intake tasks when compared to the control task, and by 9% when creating a matter in Clio.

The emotional experience of using new technologies

There was a slight uptick in emotional intensity when legal professionals used Clio’s AI tool to analyze a will. This could, in part, be due to the novelty of the technology, since AI in law firms is still very new. Importantly, the increase was under 10%, meaning the emotional strain was minimal in comparison.

While Clio created an overall less emotional experience, we were also able to determine whether the dominant feelings were positive or negative—since either could directly affect the wellbeing of legal professionals.

We found that 93% of all emotions felt while using the Clio platform were positive. Within that, excitement (47%) and happiness (47%) dominated. In contrast, during the client intake task specifically, the control task triggered negative emotions like anger. Whereas with Clio, the client intake experience was 100% positive.

Clio reduces the active mental focus required in data entry and time-entry calculations

Putting effort into focusing on a task expends mental energy. In contrast, allowing the brain to function more passively, or to coast, while doing a task helps conserve mental energy for more demanding work.

Clio reduced the amount of active focus required for calculating billable hours by 72% and for creating a new matter by 25% compared to the control tasks.

These tasks represent the work that doesn’t get billed to clients, and therefore, doesn’t generate revenue for law firms. Reducing mental load in these areas means that staff expend less energy, and could even get these tasks done quicker, freeing them up to focus on more important work.

When analyzing a will with Clio’s AI, there was a small uptick in active mental focus compared to the control task. This is likely because engaging with the AI tool requires individuals to actively type, input, and interact, demanding more sustained attention; traditional methods, in contrast, often lean more on passive reading.

And while using Clio’s AI for document review required more active focus, the benefits were instead seen in reductions in memory demand as well as the overall quality and completion of the task.

Clio reduces memory demand in document review

When a task requires a lot of information to be remembered, it places a heavy demand on a brain’s memory center, increasing the intrinsic cognitive load of the task.

AI in Clio reduced the memory demand of reviewing and summarizing a will by 11% compared to the control task. By far, this was the most “memory-intensive” task in our evaluations, as participants needed to keep track of key details from the will and apply them to the context in which they were being contested.

The tasks of creating a new matter and calculating billable hours also saw small reductions in memory demand when using Clio compared to the control tasks, which again is a positive sign that legal professionals using Clio need to spend less mental energy remembering information.

Clio doesn’t introduce added visual effort for new users

Workers expend more of their mental energy when they need to actively search and scan for what they need. Conversely, being able to find what they’re looking for quickly and more intuitively creates less of a drain on mental energy.

Visual strain assessments inherently disadvantage new platform users, as participants are less familiar with their visual design. When assessing visual strain, most of the participants (77%) had never used the Clio platform before, so the benchmarks for positive results were to see minimal differences in visual effort.

Neuro-Insight’s research didn’t see any significant impact on visual effort when comparing the use of Clio to control tasks. As most participants were using Clio for the first time, this indicates a positive result for the intuitive user design of the Clio platform, especially since findings were consistent across all four tasks.

As users become more familiar with new platforms, researchers typically see reductions in visual strain, which is what they expect to be the case for Clio as well. Among the small sample of Clio users in the study, they were nearly twice as likely to say that the platform was intuitive compared to those who hadn’t used it before.

Composite findings: Clio reduces cognitive load by up to 25%

When looking at the biggest advantages across all measures of cognitive load, Clio on average reduces cognitive load by up to 25%.

This means that across the work that legal professionals perform throughout their workday, using a solution like Clio can free up the mental capacity of workers across multiple categories. These resources can be reinvested in other key focus areas:

• Improving the quality of work performed: As legal professionals reduce the cognitive load while they work, they’re able to focus more attention on the substance of their work and the details that matter, ensuring a better work product for their clients.
• Increasing work capacity to take on more work overall: With the right tools, legal professionals can get tasks done quicker, allowing them to take on more work than they would without these technologies.
• Taking on more billable work: With an increased work capacity, legal professionals can put more time into revenue-generating work for clients and contribute more overall to their firms.
• Reducing stress and improving well-being: In an industry where many legal professionals struggle to keep up with their work, leading to issues of burnout and poor mental health, being able to get work done more competently and with less mental stress opens new opportunities for better, healthier work environments, and happier, healthier employees.

[7] Bloomberg Law, “Attorney Workload and Hours.”
[8] ALM, “Mental Health by the Numbers.”
[9] Kaveena Kunasegaran et al., “Understanding Mental Fatigue and Its Detection: A Comparative Analysis of Assessments and Tools,” PeerJ 11 (August 2023): e15744.
[10] Léon G Faber, Natasha M Maurits, and Monicque M Lorist, “Mental Fatigue Affects Visual Selective Attention,” PLoS One 7 no. 10 (October 2012): e48073.
[11] Razia AG Khammissa et al., “Burnout Phenomenon: Neurophysiological Factors, Clinical Features, and Aspects of Management,” J Int Med Res. 50, no. 9 (September 2022): 03000605221106428.
[12] Rohan Narayana Murty, Sandeep Dadlani, and Rajath B. Das, “How Much Time and Energy Do We Waste Toggling Between Applications?” Harvard Business Review, August 29, 2022.
[13] Sebahattin Kilinç, Mehmet Alper Akdemir, and Murat Sağbaş, “Managing Cognitive Load in the Workplace: A New Role for Managers?” paper presented at the 14th International Başkent Congress on Social, Humanities, Administrative, and Educational Sciences, Ankara, December 2024.

In just a few years, artificial intelligence has reached a critical mass of adoption among legal professionals. It’s a trend driven by the rapid advancements made in AI, and also by the dramatic results these tools have had in improving the quality and speed of work done in law firms, especially among firms that use them more widely.

But we’ve only just seen the beginning of what’s possible with AI in legal, since the most popular tools among legal professionals are first-to-market consumer-based solutions like ChatGPT.

Legal professionals now have access to AI tools created specifically for legal practice. These solutions provide outsized advantages, both in their security and in their proficiency in working with the law. As we see more law firms adopt AI solutions trained on the law, we’ll also see much deeper integration within law firm operations.

AI adoption remains high among legal professionals

This year’s data shows that AI adoption among legal professionals remains high: 79% use artificial intelligence in their firms. While legal professionals may have been much quicker to adopt AI solutions early on, professionals in other industries are catching up.

As we discuss below, the types of AI that law firms invest in make a difference in terms of their use and impact. Law firms using consumer-oriented AIs, like ChatGPT, instead of solutions designed for legal practice may struggle to fully integrate them into their core workflows. As legal-specific AI solutions become more prominent, we expect to see greater adoption in firms.

Younger generations are quicker to adopt AI

More than five times as many Millennials and Gen Xers have adopted AI widely in their firms compared to Baby Boomers. Baby Boomers are most likely to not be using AI at all.

These generational patterns are typical: younger generations embrace new technologies quickly, while older demographics stick to more familiar methods, at least until the benefits are clear.

The lack of AI adoption among Gen Z may seem like an anomaly, but this generation is more representative of junior lawyers and paralegals that have much less autonomy in their roles. They typically perform work that is more prescribed and highly supervised, giving them less freedom to experiment with new tools.

Millennials and Gen X are 5.6x more likely to use AI widely in their firms than Baby Boomers.

Larger firms see more AI adoption

When comparing by firm size, those working in larger and enterprise-level law firms have adopted AI more than smaller firms.

Firms of this size have more resources to invest in new technologies, and even dedicated people to implement new procurements and training. On the other hand, adoption cycles with larger firms can be slower due to more robust purchasing and approval processes, which can lead to longer timelines for getting new solutions approved.

Larger firms also have a steady influx of younger talent who are more keen to use AI (and who may be using it, whether approved by the firm or not). Solo and small law firms, on the other hand, typically have more seasoned and experienced lawyers who may be less interested in new technologies.

 

“More than half of legal professionals say their firm has no AI policy or they are unaware of one.”

For more on AI policies, read “Law Firm AI Policy Template, Tips & Examples” on the Clio blog.

Non-legal AI poses risks to law firms

By a significant margin, generic, non-legal technologies are the most prevalent in law firms. Nearly half of legal professionals are using a generic AI solution like ChatGPT, Gemini, Claude, or Perplexity in their work, up from about a third last year. These solutions are increasingly popular among consumers, and their free tiers make them easy to adopt, which likely explains why they are so widely used among legal professionals as well.

Generic AI tools can be used for a broad range of tasks, including research, drafting, and review, but they come with serious limitations for legal work:

• Data privacy: Free tiers often lack confidentiality guarantees, which means that firms should be careful in what information they share, especially with sensitive client information.
• Hallucinations: Generic AIs lack training in legal data, leaving them open to fabricating false statements or citations that don’t exist, creating a critical risk for licensed legal professionals.

Celeste, a partner at a mid-sized family law firm in Nebraska, says her team has strict guardrails when using ChatGPT: “We have rules and regulations in place for what we can and can’t put in ChatGPT. We can’t upload any confidential information, we can’t reference specific account numbers, we can’t reference client names.”

Generic non-legal AI tools may include ChatGPT, Gemini, Claude, Perplexity, Microsoft Copilot, etc; legal research platforms include Casetext, FastCase, etc; document drafting or automation include Spellbook, LegalMation, Midpage.ai, Lexis+ AI; e-discovery solutions include Relativity, etc; virtual receptionist include Smith.ai, Fireflies.ai, etc; contract review or analysis include IronClad, Evisort, Luminance, LawGeex, etc; predictive legal analytics include DocketAlarm, Lex Machina, Premonition, etc.

“We have rules and regulations in place for what we can and can’t put in ChatGPT.”

Not enough firms rely on legal AI solutions

Just 40% of legal professionals are using a legal-specific AI solution, down from 58% in 2024, which could pose challenges for those who are shifting their use of AI to generic solutions like ChatGPT.

Legal-specific AI solutions are designed for legal work, offering a much more comprehensive knowledge of case law and how to apply it within the context of legal practice. Because these solutions are trained in the law, they offer more assurances based on the needs of legal practitioners:

• Data privacy: They offer guarantees for data privacy, ensuring user data isn’t stored or used for training in any way, so that firms aren’t putting their clients’ data at risk.
• Quality results: They offer a more comprehensive review of all relevant and preceding cases, and more accuracy than other generic, consumer-facing AI models.

Legal specific includes legal research platforms, document drafting or automation, e-discovery solutions, contract review or analysis, and predictive legal analytics; generic non-legal AI tools may include ChatGPT, Gemini, Claude, Perplexity, Microsoft Copilot, etc; other business tools includes virtual receptionist and others.

Some firms see early revenue gains, while others continue to adapt

As discussed in Part 1, 36% of firms using AI have seen a positive impact on revenues. For wide-adopters of AI, that number jumps to 69%. We also see that growing law firms are twice as likely to be using AI in Clio.

For such a new technology, the potential revenue impact will only increase as these technologies continue to evolve, and as law firms incorporate them more into their operations.

Nearly two-thirds of legal professionals have yet to see the benefits, however. While 16% haven’t seen an impact on income, many just aren’t sure. The largest category (32%) say that it’s too early to tell, suggesting that they are still learning to adapt to new ways of working with AI.

Two potential factors that could be affecting revenue gains:

• Firms may struggle to increase the volume of clients they work with to offset gains in efficiency.
• Many firms haven’t adapted their billing models to account for the use of AI. As discussed below, hourly billing isn’t compatible with gains in efficiency resulting from AI. Despite the vast majority of firms billing by the hour, most haven’t made any adjustments to their pricing to account for the use of AI.

Why the billable hour is (even more) outdated with AI

Though it’s been the primary method for billing clients, hourly billing creates a conflict of interest; it rewards lawyers for taking more time on client work and disincentivizes innovation and efficiency. When billing based on time, lawyers who take advantage of AI to increase the efficiency and quality of their work ultimately make less than they would without AI.

For most firms, spending substantially less time on client matters would lead to a drop in revenue if they can’t make up the difference in volume. As firms come to rely more on AI for their work, many may be approaching an existential reckoning; it’s estimated that as much as 74% of billable work could be automated with AI.¹⁶

For clients, hourly billing creates uncertainty in cost. And at the end of the day, when hiring a lawyer, clients are buying expertise and outcomes; getting a lawyer’s “time” isn’t enough. As legal-specific AI solutions become more widely used in day-to-day legal practice, law firms will see increased pressure to revisit their pricing models.

More law firms are adopting flat fees

While the vast majority of law firms still bill on an hourly basis, a growing number also offer flat fee services. In all of 2024, more than half of firms (54%) billed both hourly and flat fees, and only 41% billed exclusively by the hour. In total, 59% of firms billed flat fees exclusively or in addition to offering an hourly rate in 2024.

While this is a trend that started in 2020, it’s one that’s likely being accelerated by AI, since law firms using AI more widely are more likely to see an impact on their revenues, and more have made adjustments to their pricing.

Greater AI adoption has a stronger influence on firm pricing

Most legal professionals either haven’t had any issue meeting their billable targets due to their use of AI or don’t have an opinion yet on potential impact.

However, among those using AI more widely, one in five say AI is posing a challenge to meeting their billable targets, and nearly half (45%) have made adjustments to their pricing because of it. Of the wide-adopters who have changed their pricing:

• Most (26%) have increased what they charge.
• Some (11%) have reduced pricing, likely passing cost savings to clients and increasing their competitiveness in their markets.
• Some (8%) have introduced new types of fees to account for AI-specific services specifically.

In contrast, firms that are using AI less are much less likely to have made changes to their pricing; 70% of partial-adopters haven’t made any changes at all.

While those using AI more widely are more likely to see challenges in meeting their billable targets, they’re also more likely to make changes. As we see more firms adopt AI more fully into their operations, we’re likely to see similar trends in firms facing challenges in meeting their billable targets, and needing to adjust their pricing accordingly.

 

Legal professionals still anticipate more AI adoption

With AI advancing rapidly, and especially in models trained on case law, its potential will only continue to grow. Most legal professionals recognize the opportunity.

Eighty-two percent expect to be using AI more in the next 12 months. This is similar to last year, which shows sustained anticipation for further innovation. While solos have been the slowest adopters of AI, they show the highest anticipation for future use.

 

[14] ABA Task Force on Law and Artificial Intelligence, AI and Legal Education Survey Results (American Bar Association 2024).
[15] ABA World Justice Project, “Global Insights on Access to Justice: Findings from the World Justice Project General Population Poll in 45 Countries,” 2018.
[16] Clio, “Legal Trends Report,” 2024.

Law firms aren’t the only ones with access to artificial intelligence. Consumer-facing solutions are just as accessible to potential clients. In fact, these AIs are seeing widespread use among consumers in answering legal questions.

In other words, AI isn’t just changing how law firms work; it’s shaping the legal experience for clients. Law firms need to consider what this means for their business, and how it affects the decision to hire a lawyer.

Many AIs offer a very simple, seamless user experience, accessible from a mobile phone. If these services start to compete in the market for legal services, law firms should focus heavily on ensuring the same convenience and accessibility in their own services. As we’ll see, firms that incorporate technology more deeply into their workflows are the most likely to see success.

Consumers are consulting AIs with legal questions

More than half of consumers have or would consider using AI to answer their legal questions. For those who have, just over half said that AI sufficiently answered it (see below). Not surprisingly, younger generations are more likely to use AI in this way, indicating that this is likely to become a growing trend in the future.

Most consumers asked general legal questions about certain requirements or terms. But many queries had to do with problems related to constitutional rights, housing, employment, and contract review. These are just the top searches; the list goes on to cover virtually every aspect of the law.

AIs are answering legal questions

More than half of consumers who used an AI for a legal question felt their AI had sufficiently answered it. While it could seem that AIs are cutting in on the legal market, the situation is likely more complex. In many cases, consumers may be more swayed to seek professional legal support: 28% of consumers were directed by their AI to contact a lawyer.

Consumers using AI may also be more informed about their issue. For example, they may have a better sense of their options and the proceedings required. These potential clients may be less likely to be sold on actual legal recommendations and more on factors like price, quality of service, and convenience.

In 12% of cases, consumers were convinced by an AI that their legal problems weren’t worth pursuing. If accurate, these services could save firms from putting valuable time and resources into consultations with very little business potential.

“28% of consumers were directed by their AI to contact a lawyer.”

“In 12% of cases, consumers were convinced by an AI that their legal problems weren’t worth pursuing.”

Consumers hold law firms to a higher standard

As more consumers turn to their AIs for their legal questions, more than half take issue with the use of AI by legal professionals. Nearly half aren’t comfortable hiring a lawyer who uses AI to make decisions about their legal issue, and over a third are less likely to trust a lawyer who uses AI.

In other words, more consumers will use AI for themselves but believe the professionals should instead rely on their own personal knowledge and experience. The majority would also rather their lawyer turn to a paralegal for support instead.

While disclosure leads many to be more open to lawyers using AI, most remain concerned, even when using AI would make legal services more affordable. These findings are similar to those from 2023, though consumers are slightly more uncomfortable with lawyers using AI, and more keen on getting disclosure of its use.

In fact, disclosure could reinforce client trust when firms demonstrate that they use more sophisticated, legal-specific AIs rather than the same general-purpose solutions that most consumers already have access to. Knowing that a lawyer is getting the benefit of AI-assisted work, with the added layer of expertise provided by a dedicated legal solution, would make clients feel like they’re also benefiting.

Firms are unsure whether to disclose their use of AI

Most clients want to know whether their lawyer is using AI, which puts law firms in a difficult position. Disclosure could reinforce trust with those clients who are supportive, but it risks losing those who are not.

As it is, just over a third of law firms disclose the use of AI on an at least somewhat of a regular basis. Another third either never or rarely disclose its use with clients.

Lawyers say clients care more about the quality of work

Ivan, a partner at a small criminal defense law firm in California, says his clients aren’t interested in how he gets the work done: “Clients are interested in the results: the finished document, the outcome, the summary. As far as how you get there, whether sitting through hours of video and reading thousands of pages of police reports, or whether a machine does it for me, they don’t seem to care or appreciate it.”

Sebastian, owner of a small law firm working in real estate, construction disputes, and transactions in California, shares a similar experience: “I don’t specifically tell clients, ‘This was generated by AI.’ But I have seen that clients are happy with the quality of the work, product, and clarity.”

Most clients don’t have problems finding a lawyer

Of those who have hired a lawyer recently, 70% say they had an easy time finding and hiring one, largely thanks to referrals and online searches (discussed below).

Overall, clients are more likely to be satisfied with their lawyer than to hire them again. Twenty-four percent said they would be unlikely to rehire the lawyer they last worked with, which could make client retention difficult for firms. Even if clients are happy, many still look for other options the next time they need a lawyer.

Clients rely on referrals, but are turning more to the internet

Of those who hired a lawyer recently, most sought a referral, while some searched the internet and used a firm’s website.

For future legal problems, more say they would turn to online resources. While most would still look for a referral, more than half would also turn to the internet, with firm websites and online reviews playing strong roles. In other words, in addition to asking clients for referrals, firms should ask for online reviews, which could be key drivers for future business.

Online resources are a bigger focus for consumers hiring their next lawyer

Millennials and Gen Zers were even more likely to use digital channels to find a lawyer, and those of all generations (including older generations) are likely to turn to the internet to find their next lawyer.

Law firms are marketing in the right places

When marketing their firms, lawyers are investing more in the channels that matter to consumers. The vast majority boast having a website and relying on referrals, both of which have seen increased prominence since last year.

Online reviews also make up a significant focus for nearly two-thirds of firms compared to last year. Aside from social media and search engine optimization, all other forms of marketing have seen declines, with podcasts and television ads seeing the sharpest drops.

Clients still care about experience and reputation

Aside from reaching clients, it’s crucial that firms create positive experiences for those who reach out. Experience and reputation remain two of the top considerations that clients look for in a lawyer, which means firms should look to build trust with current and future clients more than anything.

Also ranked highly are client reviews, free consultations, and clear and concise information, indicating that potential clients will put in the effort to find a firm that they feel confident about. These considerations now outweigh responsiveness, which was an even greater priority for clients previously.

In all these cases, an intake and CRM can help firms excel in these early experiences, which we explore in more detail below.

Office tools are central to firm tech stacks

The client experience can greatly influence the sense of value that people get from working with a lawyer. These experiences are created by the knowledge and expertise demonstrated by lawyers and their staff, and are also based on how easy and efficient the firm is to work with.

Law firms can optimize their client experiences by investing in the right technologies, which can both create ease for clients and free up staff to be more available to clients.

Growing firm advantages

In our cohort analysis, we see where growing law firms are more likely to invest compared to shrinking law firms. Some key areas where these firms invest more include:

• Client intake and email automation greatly simplify processes for prospective clients. Staff can manage client lead information and follow-ups in one system, which also gives them the ability to send intake forms and collect initial payments. These solutions also automate confirmations and reminders for consultation bookings, saving staff from having to manage and track follow-ups.
• Document automation offers the ability to quickly draft documents from pre-designed templates. Once a client’s information has been collected and inputted into a database, staff can use that information to quickly draft documentation from pre-designed templates. The software uses conditional logic to account for grammatical variables in gender and plural agreement, and questionnaire forms give staff an easy way to collect client information.
• Online payments allow firms to quickly collect money from clients. Clients can pay online from a bill, email, text message or by visiting the firm’s website, or they can also pay in person with tap to pay. When using a solution like Clio, firms also get features like split billing and the ability to pay via a client-facing mobile app. These capabilities save substantial administrative work in preparing and managing payment workflows, while also giving clients more options.

Most law firms want to save time, growing firms focus more on client experience

When adopting new technologies, most firms want to save time, manage caseloads, and ensure quality. In our cohort analysis, however, growing firms were much more likely than stable and shrinking firms to focus on improving client satisfaction.

In addition to improving processes and efficiencies, building a client base requires diligent attention to their needs. This means ensuring positive outcomes, but it also means eliminating as much friction for them as possible. It’s these types of experiences that will ensure more positive word-of-mouth referrals and the future rewards that come with them.

How firms realize returns on their investments

When measuring the impact of their technology, firms are most likely to assess the benefits based on the time savings, but many are also focused on revenue generation, cost savings, and improved employee satisfaction.

Shrinking firms were the most likely to not have any performance goals for the technology, and growing firms were much more likely to measure client satisfaction and even more likely to assess employee satisfaction.

All firms face barriers to adopting new technologies, but successful firms overcome them

Across all of the cohorts we looked at, the largest barriers to adopting new technologies were the same: time, integration, and learning. But, as we see below, the firms that overcome these obstacles are the ones that see the most success.

Advantages among firms using Clio

Clio offers a range of products designed to improve firm organization, efficiency, and client experience. Growing firms used 12% more products in the Clio ecosystem than stable firms, and 15% more than shrinking firms.

In addition to using more products, growing firms are also more likely to use more of the features and capabilities across Clio, which includes workflows to improve client communications, calendaring, time tracking and billing, bookkeeping, document management and drafting, e-filing, and much more.

Growing firms use 12% more Clio products than stable firms and 15% more than shrinking firms

Growing firms get more out of the technology they use

It’s not just the number of products a firm has that’s important. Fully integrating them into workflows will ensure that firms get the most from them and unlock the most value, which is a key differentiator for success.

In our cohort analyses, we looked at adoption rates within some of our products to determine how much of these solutions firms were using. Within Clio Manage, growing firms used 13% more of the software than stable firms, and 46% more than shrinking firms.

With greater adoption, growing firms are able to manage more of the case and client information in Clio, giving them the ability to better manage client communications, documents, billing and payments workflows, and much more. One of the most widely adopted features is Clio Payments, which growing firms use 13% more than stable firms, and 33% more than shrinking firms.

Growing firms get more from their client intake solution

Of firms using Clio Grow, an intake and CRM solution in Clio, growing firms have much higher adoption scores. They use 15% more of the software than stable firms, and 44% more than shrinking firms.
This means these firms are taking more advantage of being able to market their services and manage their potential clients through the intake process. In turn, they are able to drive more business to support the growth we’ve seen in this cohort.

Responsible lawyers are those assigned to oversee a matter. In addition to overseeing team members who may include more junior lawyers and paralegals, they are ultimately responsible for the actions a firm takes on a matter, including any documents filed with courts or other administrative agencies.

Typically, only one responsible lawyer is assigned to a matter. This means that looking at the casework of responsible lawyers gives a unique perspective into firm performance and growth.

The revenue contribution of responsible lawyers is a key metric for understanding the financial health and growth strategies of law firms. A lawyer’s capacity for generating revenue influences a firm’s growth and, ultimately, determines whether it’s growing, stable, or shrinking. The path to growth varies significantly based on firm size, highlighting distinct approaches to scaling a business.

Comparing caseloads based on firm size

Responsible lawyers in solo law firms take on the fewest cases on average, whereas firms with more than one employee (which could include additional lawyers or non-lawyer support staff) take on more cases.

Responsible lawyers in growing law firms take on more cases than the wider industry. Those in solo firms take on 37% more cases than other solos, and those in small firms (2–4 employees) take on 25% more. For larger firms, despite being in our growing cohort, responsible lawyers in these law firms only took on 5–6% more cases compared to industry averages for firms of these sizes.

Revenue contributions of responsible lawyers

Revenue attributed to responsible lawyers includes everything earned against all of their matters, including fees from other timekeepers. This review includes not just hourly fees, but also flat fees and contingency fees, making it the most complete analysis of law firm revenue yet published by the Legal Trends Report.

When looking at industry averages, responsible lawyers take on more work and earn between 7% and 10% more revenue for their firms.

Among our cohorts of growing, stable, and shrinking firms, we see that responsible lawyers contribute differently to firm growth.

Growing law firms

In growing firms, responsible lawyers in larger firms (5–19 and 20+ employees) increased revenue contributions by a similar amount to industry averages (9%, above). Responsible lawyers in solo and small firms (2–4 employees), however, saw twice the growth compared to industry averages. This indicates that responsible lawyers in smaller firms are taking on increasingly greater earnings for their firms.

Stable law firms

In stable firms, responsible lawyers are taking on less revenue overall, with the largest drop in solos. This does not necessarily mean these stable firms are in trouble. These law firms may be reducing overhead expenses and shortening collection lockup, which can help balance out profitability. However, shrinking revenue per responsible lawyer must be addressed for these firms to be sustainable into the future.

Shrinking law firms

In shrinking law firms, the most significant reductions in firm revenue are reflected in the contributions of responsible lawyers within smaller law firms (solos and 2–4 employees), and are less pronounced in larger firms (5–19 and 20+ employees).

Different paths to growth in larger versus smaller law firms

Responsible lawyers in larger law firms see less change in their casework and revenue contributions across all of our growing, stable, and shrinking cohorts. This gives us two different perspectives on growth and contraction in firms of these sizes:

• In growing law firms, larger firms are more likely to hire additional lawyers to take on their share of the firm’s increasing revenue growth.
• In shrinking law firms, layoffs are more likely when casework declines, which helps ensure that their responsible lawyers maintain a higher volume of casework.

For smaller firms, responsible lawyers are able to increase their capacity to take on a greater share of revenue growth. Equipping their lawyers with better technology to handle higher volumes of casework, for example, allows firms to greatly increase their overall revenues without increasing headcount, a defining characteristic of growing law firms in our cohort analysis.

This has been achieved by firms better managing their time and, in particular, their non-billable administrative work. With advancements in AI, these benefits are likely to increase further, enabling individual lawyers to take on even more casework and contribute even more revenue to their firms.

Additionally, improving firm operations with technology instead of adding headcount is also a cost-effective way to increase firm capacity without incurring the high cost of hiring and training new lawyers. This means that these firms are better positioned to weather slow periods in casework without having to lay off staff.

Defining opportunities for strategic growth

When it comes to growth, firms can add more people, but they can also focus on making their people more impactful. Hiring more staff increases a firm’s capacity, but it also increases complexity and overhead. The alternative is to amplify the contributions of those already in the firm.

The revenue contributions of responsible lawyers show that firms of different sizes typically employ different strategies for growth.

Smaller firms generally achieve growth through a vertical model, increasing the caseload and efficiency of existing lawyers, often by leveraging technology to boost productivity. This approach allows them to expand capacity without incurring the high costs of adding new staff. Larger firms, by contrast, typically pursue a horizontal growth model, expanding by hiring more lawyers rather than expecting their staff to take on a higher volume of work.

The distinction highlights the strategic trade-offs firms make: prioritizing efficiency and capacity-building versus focusing on expanding human capital to scale operations.

Each Legal Trends Report includes data on average hourly rates and key performance indicators (KPIs) to help analyze lawyer and law firm productivity, efficiency, and revenue generation.

Key performance indicators

Clio’s law firm KPIs provide benchmark insights into how law practices are performing over time, giving firms insight into how to measure and improve their performance. They include:

• Utilization rate: the percentage of an eight-hour day that gets put towards billable work.
• Realization rate: the percentage of billable work that gets invoiced to clients.
• Collection rate: the percentage of invoiced work that gets paid.

Since 2016, firms have seen steady improvements across all KPIs, meaning that firms are becoming more productive and efficient in generating revenue over time.

Compared to 2016, firms are invoicing 36% more hours per day, billing 16% more of their billable work to clients, and collecting 7% more of what they bill.

When looked at in the context of the lawyer’s funnel, we can see how shortfalls in each KPI reduce the overall efficiency in collecting revenue on a full eight-hour day.

For example, a utilization rate of 38% means that five hours of a lawyer’s day goes unbilled. A realization rate of 88% means that only 2.6 hours of billable work actually gets captured in client bills. And a 93% collection rate means that firms are collecting on only 2.4 hours of billable work each day.

Yet, when factoring each KPI in this way and comparing it to historical firm performance, the average law firm is collecting on nearly twice as many billable hours compared to 2016.

Lockup

Lockup consists of three measures within the billing process and is measured in days:

• Realization lockup: This is the amount of revenue that is unbilled at any given time (also known as “work-in-progress lockup”).
• Collection lockup: This is the amount of revenue that is uncollected at any given time (also known as “debtor lockup”).
• Total lockup: This is a combination of revenue held in both realization and collection lockup.

Realization lockup has been trending down, meaning that firms are carrying less unbilled time and instead billing that work quicker to clients. Collection lockup, however, has been creeping up, which means that while firms are quicker to get bills out, clients have been slower to pay—resulting in firms having to deal with more unpaid bills.

Overall, total lockup has remained fairly flat for the last two years, meaning that the average law firm is carrying about 93 days worth of work that is either unbilled or unpaid at any given time.

Legal productivity index

The average timekeeper has seen substantial gains in terms of their casework and the revenue they bring into their firms. Since 2016, timekeepers have been working 25% more cases and earning over 75% more revenue (adjusted for changes in hourly rates).

In addition to being able to find more clients, the steady increases in firm KPIs, and the resulting improvements to the Lawyer’s Funnel, help explain these gains. As individual timekeepers put more of their time towards billable work, ensure that work gets billed to clients, and eventually collect upon that work, all of these factors contribute to the substantial increase in performance for individual timekeepers.

Hourly rates in legal

Overall, hourly rates for lawyers have largely kept pace with inflation. Non-lawyer rates, however, have remained relatively flat. This resulted in average firm rates falling behind increases in the Consumer Price Index in 2021, and they haven’t caught up.

Hourly rates and KPI data for states and practice areas

Download the pdf version to get access to the full report, including appendices that include hourly rates, business metrics based on state and practice area, and additional data on responsible lawyers.

Download the report

The Legal Trends Report uses aggregated and anonymized data collected from the Clio platform. By synthesizing actual usage data, we’re able to identify trends that would be otherwise invisible to most firms.

The Legal Trends Report has been prepared using data aggregated and anonymized from tens of thousands of legal professionals. These customers were included in our dataset using the following criteria:

• They were paid subscribers to Clio. Customers who were evaluating the product via a free trial or were using Clio as part of our Academic Access Program were not included.
• They were located in the United States.
• Any data from customers who opted out of aggregate reporting was excluded.
• Outlier detection measures were implemented to systematically remove statistical anomalies.

Data usage and privacy

The security and privacy of customer data is our top priority at Clio. In preparing the Legal Trends Report, Clio’s data operations team observed the highest standard of data collection and reporting.

Data collection

• All data insights were obtained in strict accordance with Clio’s Terms of Service (section 2.12).
• All extracted data was aggregated and anonymized.
• No personally identifiable information was used.
• No data belonging to any law firm’s clients was used.

Reporting

Aggregate data has been generalized to avoid instances where individual firm data could be identified. For example, to avoid reporting data on a small town with only one law firm, which would implicate all of this town’s data to this firm, we only report at country and state levels.

Additionally, raw datasets will never be shared externally. Clio is effectively a tally counter for user interactions—much like stadiums use turnstiles to count visitors without collecting any personally identifiable information from their customers. Similarly, as users interact with the Clio platform they trigger usage signals we can count and aggregate into datasets. We can identify trends without collecting information that reveals anything specific about individual customers.