Takeaways from Clio’s 2024 Legal Trends Report

TO:___Attorneys & Managing Partners
FROM:_Benji Albrecht, Founder and CEO of BPAgency
DATE: October 8, 2024
RE: Takeaways from Clio’s 2024 Legal Trends Report

Clio’s 2024 Legal Trends Report provides insight on how law firms operate, bill clients, and attract new business. From the rise of AI to the growing demand for flat-fee billing models, the legal industry faces potential disruption.

For small to medium-sized firms, this moment presents both challenges and enormous opportunities. By embracing these trends, your firm can streamline operations, increase revenue, and deliver a client experience that sets you apart from the competition.

Let’s dive into the key findings and actionable steps you can take to stay competitive in 2024 and beyond.

Reducing Costs with AI-powered Automation

A staggering 79% of legal professionals are using AI in some capacity. The report estimates that 75% of billable work will eventually be handled by AI, including tasks like document drafting, information gathering, and data analysis.

However, increasing efficiency with the use of AI doesn’t bode well for firms who rely on hourly billing models, where performing the work quickly actually reduces the amount billed and the revenue realized by the firm.

Takeaway: Firms who intend to automate tasks should consider shifting to flat-fee billing models to sustain revenue as they adopt automation.

The Rise of Flat Fees

Since 2016, the proportion of flat fee billing has grown by 34%. The report emphasizes that flat fees offer greater predictability for clients and allow firms to take on more cases in a shorter period.

Flat fee billing is particularly suitable for tasks like routine legal documentation, estate planning, and business formation—areas where work is more standardized. However, it may be less applicable in litigation-heavy cases where the scope of work can be unpredictable.

Takeaway: Consider implementing flat-fee billing models for routine legal services such as estate planning and business formation.

Responsiveness is Suffering

The report highlights a critical issue facing many law firms: poor responsiveness to potential clients. A shocking 67% of law firms failed to respond to email inquiries, and 48% did not pick up the phone. This leads to lost business opportunities and can damage your firm’s reputation. Firms that prioritize responsiveness can see up to 52% higher revenues, according to the report.

Takeaway: Make sure your staff understands the importance of responding to new client inquiries as soon as possible and define the role and responsibilities of your staff to make it clear who is responsible for handling potential client requests. Set a standard for response times and hold your team members accountable for meeting the same.

Don’t Lose the Human Touch

Clients, particularly younger generations, are becoming more comfortable with firms using AI. Nearly 70% of clients are either neutral or prefer working with AI-enabled law firms.

While automation is improving law firm efficiency, the human element remains irreplaceable in areas like client communication and legal strategy. AI is best used to handle repetitive, information-heavy tasks, allowing attorneys to focus on personalized, high-value work that builds client trust and satisfaction.

Takeaway: Use AI to optimize administrative and information-heavy tasks but keep human interaction central to client relationships and legal strategy.

The 2024 Legal Trends Report makes it clear that AI, automation, and client expectations are driving significant changes in the legal industry. For small to medium-sized law firms, now is the time to adapt by embracing AI, transitioning to flat fee billing, and improving client responsiveness.

Actionable Steps for Your Firm:

• Review your billing models and consider shifting to flat fees.

• Leverage AI to streamline document prep and other routine tasks.

• Focus on improving client communication and responsiveness.

By making these changes, your firm can capitalize on these trends, deliver better client experiences, and position itself for long-term success.

This email is brought to you by Benji and the team at BPAgency.

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