I attended the 2022 Clio Conference in Nashville, TN, and I was able to get my hands on a copy of the much-anticipated 2022 Legal Trends Report. I was also able to ask Joshua Lenon questions about the report, and I included the key points from Jack Newton’s opening address at the conference.

Two Thousand Lawyers Push For Legal Innovation

The following is adapted from a speech delivered at the recent Clio Cloud Conference in Nashville TN by Jack Newton, the CEO of the two-billion-dollar legal-tech company, Clio.

Before conferences like the Clio Conference existed, lawyers had to earn their CLE credits in soulless windowless hotel boardrooms. What was missing was a conference on the unique opportunity for lawyers to transform their practice using legal technology, increase access to justice, and make law firms more accessible to the consumer.

What might be even more important was that lawyer conferences were boring and no one wanted to go.

Clio Con is all about gathering forward-thinking lawyers with thought-leading tech people, all in one place. This year that happened at the Gaylord Resort in Nashville TN.

Photo: Gaylord Opryland Resort in Nashville TN/ Alistair Vigier

The first Clio Con happened ten years ago, and 200 lawyers showed up. This year’s 2022 conference had 3000 lawyers attend. 2000 lawyers showed up in person, and 1000 attended remotely. The conference and Clio have grown tenfold over the last decade. 

It was also the first hybrid conference that I have ever attended. There was an in-person remote conference “mini party” in London, England.

Lawyers need to be innovative

It’s important that lawyers see opportunities where others see only threats and risks. One way to do this is to look at what the research shows. The Legal Trends Report is read by tens of thousands of lawyers and it’s cited by law school professors.

Law firms should be founded around the teaching of the report. And if the law firm is already established, it should change its ways. This year was the 7th annual Legal Trends Report. 

A lot of innovation happened in 2022, including the rise of Clearway’s lawyer directory. If you are a lawyer, go to our homepage (on this website) and search for your name. If you already have a profile, claim it and customize your profile. It’s important.

Photo: 2022 Legal Trends Report- Lawyers who work regular hours have more positive relations with clients and colleagues.

Law firms need to find new ways to operate

While the legal industry has done quite well since 2019, there will be major upcoming challenges for law firms. It’s clear that we are years away from smooth water.

All we need to do is look at the headlines in the media right now. Each day there are scary stories. There are talks about the Russian war, the stock market and real estate collapse, a recession that is either here or coming soon, and inflation that is at a 40-year high. Volatility is the new norm for lawyers, at least for the next three years. Every lawyer must deal with it.

While it might seem counterintuitive, I see the headlines as an opportunity. The reason for this is that in every downturn, there are always law firms and companies that find a way to thrive.

Photo: The front of The Economist in 2008 when Clio was founded. Not the best time to start a company?

This was the heading in The Economist back in 2008 when Clio was founded. Major companies were going bankrupt or selling for 5% of what they were trading for the previous month on the stock exchange.

Photo: The S&P 500. You can see that the current situation is just as bad as 2008 was.

Pushing ahead in hard times

The two founders of Clio, Jack Newton and Rian Gauvreau decided to push forward anyway, and now Clio is a two-billion-dollar company. 2008 was scary, but it turns out it was a great time to innovate.

The great financial crisis was the wake-up call that many law firms needed to rethink their technology needs. The old-school ways were out, and legal technology was and still is, the solution.

The Legal Trends Report clearly lays out how great law firms are separated from weak ones. The weak ones have been struggling, their revenue has decreased, their headcount has shrunk, and some have even shut down.

But there’s another type of law firm that has been doing well. Throughout the turbulent years since 2019, they have been able to tread water. They have found a way to survive. These law firms have not only survived but have gotten much stronger through adversity. 

What were the differentiating factors that separated the firms that grew from the firms that shrunk?

The firms that shrunk clung to the old way of doing things. This includes pen and paper, bricks and mortar, and old-school technology. The way these firms ran their practices was rigid and had a hard time adjusting to Covid-19 and now 40-year high inflation.

They were fragile, and things only went well assuming that everything externally remained stable. They were completely unprepared for change. Their outdated business models shattered when they were exposed to these new external stressors.

The firms that did well rose to the challenges and embraced new ways of doing business. They adapted to chance because they already had a strong foundation of technology to build on. They were able to quickly evolve based on new demands from their clients and staff. These law firms were not fragile.

What is the opposite of fragile? The opposite of fragile could be something that gets better once it is exposed to challenges and stressors. How about the world “anti-fragile?” Law firms need to learn how to become anti-fragile.

Speaking to the lawyer in residence at Clio

Joshua Lenon is the lawyer in residence and data protection officer at Clio, based out of beautiful Vancouver, BC. He is both a lawyer (New York Bar) and someone who travels to many events around the world (including India) and speaks to lawyers, Bar Associations, and law firms about how Clio’s legal technology can assist them.

Most of this article is in a point form format to simply get you the statistics to run your practice. I’ve also included some screenshots from the report. All of the screenshots are from the 2022 Legal Trends report.

A key trend through the report is the fact that COVID-19 isn’t really behind us, as it has led to inflation. There are a lot of people wanting to hire lawyers out there, but the unstable economy might cause some trouble. The best way to stand out in the competitive legal industry is to be innovative in your law practice.

Below are some of the key points from the 2022 Legal Trends Report

• Inflation has reduced attorney fees by around three percent, and this means many lawyers will increase their rates
• Over the past year or so, law firms’ revenue is up around 10%
• Almost 40% of lawyers who left their job said that work-life balance was the main reason (another top reason is to find better pay)
• Lawyers who used legal technology were around 30% happier than those who didn’t
• Half of the lawyers want to work from home, and half want to work from the office

2022 Legal Trends Report

Since COVID-19, lawyers have been forced to change how they run their legal practices. They have had to think about how to work from home while having access to all the technology and equipment that they used to have at their law firm.

With many lawyers returning to the office, law firms are continuing to think about how to meet the expectations of their clients and employees while remaining profitable. Legal technology is the key to managing this balance, and the 2022 Legal Trend Report shows how tech will lead to a sustainable future for lawyers.

The topic of work-life balance was brought up often at the Clio Con conference in Nashville. Many lawyers asked questions about how to achieve it.

2022 Legal Trends Report Interesting Legal Statistics

• Despite inflation, law firms are billing 10% more per case than in 2021.
• Law firms are collecting thirty-one percent more revenue from billables than before. This is likely due to legal technology.
• 86% of lawyers say they work outside of normal working hours
• Around 70% of lawyers work on weekends
• Lawyers who work outside of regular hours were 17% more likely to be unhappy
• The two main reasons why lawyers leave a law firm is because of work-life balance or because another law firm is offering better pay (or perceived better pay)
• Before the pandemic 40% of lawyers worked only from the office, now it’s closer to 25%.

Below are some of the questions that I asked Joshua Lenon of Clio.

What is the biggest opportunity for lawyers right now given the turbulent global economy?

It depends on how we are defining growing practice. People often think of revenue as the best way to measure law firm growth. Revenue growth is about raising rates and improving the collections process.

If they don’t find better ways to collect, they might be left behind. They should use payment plans as most law firm clients want payment plans. Only 50% of law firms are equipped to offer payment plans.

Law firms that use Clio software can now offer payment plans.

If they want to grow the firm based on more matters or clients, they should focus on client experience. Lawyers want the same things as clients. They want the option of remote meetings. They want to be able to choose their hours for consultations, flexible billing and payment options. Lawyers need to focus on law firm operations and improving practices. 

A survey of law firms was done regarding how law firms used tech. The study showed that lawyers who used cloud-based tech (Clio or competitors) were 29% more satisfied with their co-workers.

It also showed that the clients were more likely to leave a positive review of the law firm. There was also increased work-life balance and positive mental health. If you want to grow your practice, start internally.

Is the pandemic behind the legal industry?

It’s still positively impacting law firms in most cases. Many law firms have seen massive growth, with average matters per law firm increasing 10% over the 2019 baseline. There has been pent-up demand with people waiting to hire a lawyer for non-urgent matters.

Solicitors and barristers have different needs, with solicitors being happy to work from home. Barristers need to go to court. Clio is trying to find solutions for those who need to go to court or lawyers who are still working from home or the office.

What should lawyers do about inflation?

Inflation has led to a big impact on hireability. The location of lawyers has less impact on hiring than ever before. When it comes to hiring, where the lawyer works is only important 1% of the time. The lawyer being right next door is less important than pre-covid, they can be anywhere in the state. 

Many law firms are downsizing their commercial real estate. Clients said they don’t care about commercial space, and some are still okay with the home office going forward. Lawyers are working from home, with back-office non-lawyers working from the office. Paralegals and support staff are many working from commercial office space.

What is the most important thing a managing partner should take away from the 2022 Legal Trends Report?

Look at the statistics on lawyer mobility. 1 in 5 lawyers changed their jobs in the last year. Many other lawyers are considering leaving their jobs. Work-life balance is the highest reason for doing so.

If managing partners want to retain their staff, they need to have flexibility around work-from-home options. Law firms that have adapted have higher satisfaction and higher client satisfaction. It’s a win-win around creating the best law firm. That is the key takeaway.

The 2022 Legal Trends Report is now available at clio.com/ltr.