In the 4,000-year history of the legal profession, lawyers, firm owners, and decision makers have suffered from a scarcity of industry data. Without accurate and relevant data insights, law firms—especially those outside the Am Law 100—have been left in the dark when it comes to positioning themselves within their respective markets.
For the first time, we’re leveraging aggregate and anonymized data from 40,000 active Clio users to create an accurate snapshot of legal industry trends impacting small-to-medium-sized firms.
The Legal Trends Report includes:
- Average hourly billing rates by state, practice area, and fee structure
- State rankings for hourly rates adjusted for cost-of-living
- Data on key performance indicators such as the utilization rates, realization rates, and collection rates for law firms
- And more
A few of the more eye-opening statistics we found:
Washington DC, New York, and Connecticut rank the highest in terms of hourly billing rates. However, in terms of real billing rates (rates that have been calibrated for cost of living), Nevada is number one.
Utilization rates (chargeable hours versus hours available in a day) are a good measure of efficiency for law firms. According to report data, efficiency increases as law firms increase in size, though there is a plateau for firms with between five and nine lawyers.
Overall, solo law firms have it the hardest, with a utilization rate just half that of mid-sized firms of 12 lawyers.
On average, lawyers clock only 2.2 hours of billable time per day. Worse, they only bill for 1.8 hours of that time—and collect on just 1.5 hours. These unit economics would be devastating to almost any industry, and they help explain why, despite charging an average of $232 per billable hour, the average small-to-medium-sized firm struggles to make ends meet.
These data insights have created quite a buzz so far, and we’re excited to see the discussion continue. More importantly, we can’t wait to see this information make a positive difference for your law firm.
Join us for the start of the data-driven revolution in legal.
The Legal Trends Report holds data insights to help you transform your firm. Get your free copy of the Legal Trends Report here.