Real-Time Data on COVID-19’s Impact on the Legal Profession Shows Some Recovery, Continued Concerns
In its second briefing on the impact of the COVID-19 pandemic on law firms, Clio presented data showing continued decreased business and lower monthly billing volumes for law firms. There are signs of recovery, however, with a sharp increase in new case matters reported over the last few weeks.
Clio has been gathering real-time data of the pandemic’s impact on the legal industry via app data from tens of thousands of legal professionals, as well as by surveys of U.S. legal professionals and consumers of legal services. Surveys and data gathered through the end of May and presented at Clio’s June 17, 2020, briefing demonstrate some encouraging news and some continued areas of concern:
THE STATE OF LAW FIRMS
New matters
- The number of new matters dropped to a low in mid-April
- Slow and steady recovery is apparent since hitting that low
- There was a significant recovery in the amount of new matters in early June, although still down from pre-COVID levels
- The rate of new matters is an early indicator of recovery.
Monthly billing volume (MBV)
- MBV has decreased significantly since pre-pandemic levels
- There was a rapid deceleration, almost 30% from pre-COVID levels
- This should change with the uptick in new matter creation
- The MBV is probably more of a lagging indicator of recovery.
Technology
- 85% more legal professionals are using videoconferencing more since start of pandemic
- 78% of law firms are seeing the increasing importance of technology since start of pandemic
- 77% of legal professionals are equipped to handle videoconferencing
Maryland Law Firm Trends
Clio’s Legal Trends database allows users to view state-specific live data sets, free of charge
- Maryland bottomed out in new matter creation on April 20, when levels dropped by 35%
- As of June 1 there has been uneven recovery, and new matter volume was at 15% of pre-COVID levels
CONSUMER TRENDS
- There is an increase from April in how many consumers anticipate legal issues in near future, and those anticipating COVID-related legal issues
- 71% legal pros concerned about clients’ ability to pay than before pandemic
- 53% of consumers cannot afford the cost of dealing with legal issue; there is a very clear access to justice (A2J) gap
- 25% of law firms are forfeiting more revenue due to unpaid bills
- 25% of consumers anticipate a legal issue in the near future
- 21% anticipate having COVID-19 related legal issues
ADAPTING TO “NEW ABNORMAL”
Legal Professionals
- 60% of attorneys are highly concerned about the success of their practices
- 43% of attorneys are concerned about their ability to make a living
- 36% of law firms are adapting their client acquisition strategies and finding ways to pivot in terms of how they meet clients; for example, adopting new technologies
- 29% of law firms expect to have future layoffs
- 27% of firms have already laid off employees29% expect future layoffs
- 21% of legal professionals are negatively affected by working from home (this is down from 36% in April)
- Only 16% of legal professionals believe we will see economic and social distancing recovery in three months
Consumers of Legal Services
- 72% of consumers would prefer to pay law firms by payment plan
- 56% of consumers believe they should be able to deal with most legal matters remotely
- 56% prefer videoconferences rather than phone calls
- 53% of law firms are equipped to offer payment plans
- 46% of clients believe a remote trial will have a negative impact on case outcome (up from 38% in April)
- 30% believe lawyers have stopped offering services (this is up from 22% in April)