{"id":11543,"date":"2024-06-20T12:15:22","date_gmt":"2024-06-20T11:15:22","guid":{"rendered":"https:\/\/www.clio.com\/uk\/?p=11543"},"modified":"2026-02-28T00:00:43","modified_gmt":"2026-02-28T00:00:43","slug":"solo-small-law-firms-2024-legal-trends","status":"publish","type":"post","link":"https:\/\/www.clio.com\/uk\/blog\/solo-small-law-firms-2024-legal-trends\/","title":{"rendered":"Highlights from the 2024 Legal Trends for Solo and Small Law Firms Report"},"content":{"rendered":"

Since 2016, legal professionals have relied on Clio\u2019s annual <\/span>Legal Trends Report<\/span><\/i><\/a> for an impartial and comprehensive analysis of trends within the legal field.\u00a0<\/span><\/p>\n

As the most extensive analysis of the legal industry, the <\/span>Legal Trends Report<\/span><\/i> compiles essential data on law firm performance and identifies key factors driving changes in legal practice.\u00a0<\/span><\/p>\n

For lawyers in solo and small firms, we offer specialised insights through our annual <\/span>Legal Trends for Solo and Small Law Firms <\/span><\/i>report. We are excited to announce the release of the <\/span>2024 Legal Trends for Solo and Small Law Firms<\/span><\/i> report<\/span><\/a>, which examines these cohorts from various perspectives\u2014including performance trends, strategies for improving payment collections, and attitudes towards artificial intelligence.\u00a0<\/span><\/p>\n

Below, we\u2019ll present the key takeaways from this year\u2019s reports\u2014but be sure to explore the full <\/span>2024 Legal Trends for Solo and Small Law Firms <\/span><\/i>report<\/span><\/a> for an in-depth overview of the trends shaping practice today!\u00a0<\/span><\/p>\n

Solo and small firms are capturing more clients and revenue than ever, but only enjoying modest gains in billable hours<\/span><\/h2>\n

While <\/span>solo<\/span><\/a> and <\/span>small firms<\/span><\/a> are opening more new matters and billing and collecting more than ever, looking at this performance within a larger context indicates that solo and small firms are only making modest gains in overall performance\u2014and, in some cases, being outpaced by larger firms in performance areas previously dominated by solo and small firms.\u00a0<\/span><\/p>\n

Compared to 2016, solo and small law firms have only experienced minor growth in the number of billable hours captured by their employees. Small law firms have captured over 8% more billable hours than in 2016, while solo firms have captured over 1% more. Both solo and small firms also appear to be experiencing a decrease in the number of billable hours captured compared to 2016. This performance trails significantly behind the growth enjoyed by larger law firms: since 2016, these firms have captured nearly 25% more billable hours.\u00a0<\/span><\/p>\n

Despite the downward trend in billable hours among solo and small firms, the average lawyers in solo and small law firms are actually billing and collecting more than ever before. Solo lawyers are billing over 75% more and collecting over 80% more than in 2016, while small firm lawyers are billing over 90% more and collecting nearly 100% more than in 2016. Even when adjusting for inflation, solo firms are billing 38% more and collecting 42% more, while small firms are billing 49% more and collecting 55% more than in 2016.\u00a0<\/span><\/p>\n\n\t\n\t\t\t\n\t\t\t\t\n\t\t\n\t\t\t\t\t\t\t\t\t\n\t\t\n\t\t\t\t\n\t\t\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\n\t\t\t\t\t\t\t\n\t\t\n\t\t\t\t\n\t\t\t\t\t\n\n\n\t\n\t\t\t\t\t

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But when we look at overall key performance indicators, we aren\u2019t seeing the same levels of improvement.\u00a0<\/span><\/p>\n

Solo and small firms struggle with overall realisation and collection performance<\/span><\/h2>\n

Since 2016, utilisation rates (the percentage of time in an 8-hour workday that goes towards billable work)\u00a0 have generally risen steadily for firms of all sizes, suggesting that firms are finding more effective ways to streamline their workdays and put more time toward billable work. These increases are much more prominent among larger firms, who have consistently outperformed solo and small firms and, as of 2023, enjoy average utilisation rates that are 10% higher than small firms and 15% higher than solo firms.\u00a0<\/span><\/p>\n

Overall, solo and small firms have enjoyed similar overall increases in their realisation rates (or the percentage of billable work that ends up on an invoice) since 2016. Solos have managed to increase their realisation rates by 9% since 2016 while small firms have increased their realisation rates by 7%. Still, these improvements are outperformed by the improvements of larger firms, which have increased their realisation rates by 12% since 2016.\u00a0<\/span><\/p>\n

Finally, since 2016, solo and small firms have only increased their collection rates (the percentage of invoiced work that gets paid by clients) by 4%. Larger firms have not fared much better\u2014they have only increased their collection rates by 5%. So, while firms of all sizes are improving their collection practices, it appears that they may not be fully realizing opportunities to more efficiently collect payment from clients.\u00a0<\/span><\/p>\n

Some solo and small firms face significant struggles with lockup performance\u00a0<\/span><\/h2>\n

Law firms must pay close attention to how <\/span>quickly<\/span><\/i> and <\/span>consistently<\/span><\/i> they are getting paid. Far too many firms find their revenue held in \u201clockup\u201d\u2014the period in which billable work has either not been invoiced or collected on.\u00a0<\/span><\/p>\n

Lockup consists of three components (measured in days):\u00a0<\/span><\/p>\n