Data insights can transform industries. For years, businesses in the manufacturing, healthcare, and finance sectors have been leveraging big data to make better business decisions, but the legal profession has not had the same opportunity. Until now.
Clio CEO Jack Newton has announced the inaugural Legal Trends Report, the first ever data-driven report on the legal industry. It’s aimed at helping lawyers understand how the legal profession is evolving and how they can make better business decisions.
Past reports on the legal industry have been based on survey responses, rather than raw data. This is problematic, as survey respondents often provide information that is inaccurate—or at least less accurate—compared to raw data. Past reports are out-of-date and were taken from small sample sizes—the last demographic survey from the ABA came out in 2005.
However, the Legal Trends Report leverages data from Clio to provide up-to-date, accurate information. “You can think about the legal trends report as a State of the Union for the legal profession,” Jack said.
Here are a few high-level insights:
- The Clio Billable Hour Index shows the average rate billed by lawyers across the United States is $232 per hour.
- The total utilization rate (billable hours as a proportion of hours available in a working day) for lawyers in 2015 was just 28 percent. For solo lawyers, that number drops to just 22 percent, but there’s a noticeable increase in efficiency for firms that have more lawyers, with a plateau around five to nine attorneys.
- The total 2015 realization rate (actual hours billed as a proportion of actual billable hours worked) came in at 81 percent, but this differed noticeably by practice area and by state.
- The total 2015 collection rate (actual revenue proportional to hours billed) was 86 percent.
The Legal Trends Report is generated using aggregate, anonymized data from Clio. We respect your privacy—no client files or data are accessed, and no personally identifiable information is extracted or used. For more information on privacy, data collection, and the Legal Trends Report, see here.
The report cannot work without customer participation, and there’s a wealth of valuable information available that could help you improve your practice. For example, the report includes data on hourly rates by state and practice area, so you’ll be able to confidently make decisions about what you want to charge.
In short, the Legal Trends Report will give you the data you need to make better business decisions for your firm. Join us in moving the legal industry towards becoming a more data-driven profession.
The Legal Trends Report holds data insights to help you transform your firm. Get your free copy of the Legal Trends Report here.