Innovator in Residence Update: Focus on the Consumer

  • November 27, 2019

The Legal Innovation Zone is looking forward to a productive year working with the Ontario Bar Association as their Innovator in Residence.  New (to law) business approaches, rapidly evolving technology, globalization, and consumer demand are creating substantial revenue opportunities for lawyers who are prepared to change their approach in order to meet the needs of new markets.  Change is often necessary just to keep the business we already have.  Our work over the past 4 ½ years supporting legal startups, working on change with law firms, businesses and governments, and helping modernize the legal system, have given us some insights we would like to share. 

Innovation and technology discussions can sometimes be overwhelming or too detached from the immediate needs of practice.  We expect to keep our contributions relevant, practical, and helpful by focusing on foundational issues and specific examples that will strengthen the daily practice.  From time to time we will encourage you to look beyond the immediate, however, to ensure you are aware of developments, both to take advantage of them and to better prepare for them.

Where to start? The focus should always be on the consumer, both people and businesses.  What do they want, how do they want it, and what are they prepared to pay for it?    A staggering number of legal needs go unmet, that is a substantial business opportunity. However, it does require a different approach to meet that need. 

Allow us to make a few preliminary observations as you consider what changes to make in your business.   First, data and facts should triumph over anecdotes. Second, innovation often involves technology, but doesn’t necessarily and, even when it does, it usually starts with rethinking the approach and then applying technology.    Third, it’s the impact on your service delivery that matters.

Legal Trends Report The Clio Legal Trends Report (Report) combines all of these.  Clio, as most of you will know, is a practice management platform.  We will speak more about it in a subsequent newsletter.  For the past 4 years they have been publishing a legal trends analysis based on survey information from thousands of lawyers, law firms and consumers.  It is online and free and you do not need to be a client of Clio to gain access to it. 

Whether you agree that the findings apply to your practice or not, and the data is US based, it is refreshing to see data as the starting point for analysis.  If you don’t collect data on your own practice beyond billings and expense numbers, you should, as it is the starting point for effective practice improvement.  One step every lawyer can take is to know their Return on Investment (ROI) on their various service offerings. Is it better to do a lot of one thing or a few of something else – it is no longer about just practising good law, we also need to thoroughly understand our business.

The Report has measured lawyers’ time and billing utilization, realization and collection for every one of the 4 years.  Utilization is the number of hours when the lawyer actually does billable work in the day.  Realization is the numbers of billable hours that are billed, and collection the number actually paid for by the client.  While both realization and collection are quite high, the eye-popping number is utilization.  Every year it is around 2.5 hours out of every day that lawyers in the survey actually spent on billable work.  This represents a massive productivity gap.

Every year it is around 2.5 hours out of every day that lawyers in the survey actually spent on billable work. This represents a massive productivity gap.

Utilization seems dismally small, so small that you might be tempted to reject it out of hand.  Before you do that, remember that it is based on thousands of lawyers and their experience. Why not measure yours for yourself?  The information you will acquire is useful both for efficiency of effort, and from the analysis you can do on what you are otherwise spending your time on.   

Clio also surveyed consumers on how they reached out to find a lawyer, what they were looking for, and why they didn’t hire a particular lawyer.  The full survey results are fascinating, easy to understand, and relatively easy to incorporate or improve- all without new technology or remaking your practice.

The most important factor consumers were looking for was timeliness of response, with 79% of consumers expecting the lawyer to respond within 24 hours.  Clio then conducted a test by emailing 1000 lawyers, and randomly calling 500 of those.  While 89% of lawyers say they respond within 24 hours, 60 % of the tested lawyers never responded.  For the 25% of potential clients who use email to find a lawyer, this meant that these lawyers would miss this business entirely.   Knowing your consumer is the most important piece of information you can have.  Correcting the response rate will increase business at no expense. 

We look forward to supporting you as you work to strengthen your practices.  Some of that work might involve introducing advanced technology or using innovative processes, but it should all start with the consumer. 

Chris Bentley
Hersh Perlis

Legal Innovation Zone
Ryerson University

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