Washington Lawyer - May 2020 - 7

PR AC TICE MANAGEMENT

METRICS FOR FIRM SUCCESS
By Dan Mills

(PART ONE OF A TWO-PART SERIES)

n October 2019, practice management
software provider Clio released its muchanticipated Legal Trends Report,1 an annual
analysis on law firm productivity and client
behavior that often informs business decisions
among firms and attorneys. Because of Clio's
deep business relationship with so many small
firms, the data in its surveys is considered
unique for showing how small firms are
managing and why they are growing.
Among the key findings in Clio's latest report:

While firms want to increase business, they
* struggle
to find the new business they want;

Meanwhile,
clients struggle to find the right
* lawyer for their
problem;
Most lawyers rank revenue as the most
* important
indicator of growth;
Thriving firms grew by 20 percent to 30
* percent
year over year from 2013 to 2017;

Thriving
firms increased their lawyers by 32
* percent over
five years while the number of
cases worked increased by 57 percent. These
firms' total revenues jumped by over 100
percent;

The average utilization rate for law firms in 2019
* was
31 percent. This means the average lawyer
spent 2.5 hours on billable work each day;

Growing firms have a 90 percent realization
* rate
- the amount a firm invoices compared
to the amount of billable work. And growing
firms have collection rates above 90 percent;

Increasing hourly rates is not effective in
* driving
long-term growth;
Only 59 percent of clients sought a referral
* from
a trusted source when seeking a lawyer,
57 percent searched on their own, and 16
percent did both; and

While most lawyers are confident in their
* skills,
only half are confident in running the
business side of their firm.
Reactions from several experienced small firm
practitioners in Washington, D.C., confirm
many of the report's findings, mainly that

clients have high expectations from lawyers,
they value responsiveness, and they tend to be
savvy consumers when it comes to selecting
a lawyer.
"It's the great paradox," says Margaret M. Cassidy
of Cassidy Law PLLC, "that lawyers want new
clients, but clients often don't know how to find
the right lawyer." Cassidy's firm helps clients
manage legal risks through ethics and compliance programs and defends clients under government investigation. She was surprised to learn
from the Clio study that 57 percent of consumers
search for a lawyer by themselves and do not rely
upon a referral from a trusted source.
"The big takeaway from the Clio study for me is
that lawyers need to be very good at communicating to clients about potential legal issues and
how we can help solve those issues, especially
when it's not clear to the client that there may
be an issue," she says.
Matt Kaiser, founding partner of the litigation
boutique KaiserDillon PLLC, found the survey
results interesting. "The practice areas that
they chose don't necessarily line up with our
practice, or those of many lawyers in the District
of Columbia. But I think there are some timeless
points to pull out of the survey, regardless. For
example, clients want to know that the lawyer
they hire is someone who will be responsive
and will care about their problem. If the lawyer
can't even return a phone call, it's a pretty bad
way to start a relationship."
Jessica Adler, who has had her own family law
firm, the Law Office of Jessica E. Adler, for 14
years now, looks at Clio's client expectation
analysis for guidance. "I like to start the relationship on the phone or face to face. That is a trustbuilding exercise for us. I want to be sure we
can work together. I always talk about fees right
away. I have to know if the client can afford my
services," Adler says.
For Sogand Zamani of Zamani & Associates
PLLC, the latest Legal Trends Report was validating. "I use data to measure our growth,

and it was good to know we are considered
a thriving firm by the Clio study," says Zamani,
who launched her family law firm in 2010. "The
study affirmed for me how important productivity is for my firm. We recently implemented
flex schedules for [our] lawyers and actually
saw productivity increase."
Zamani's firm also engaged a consultant to help
improve its invoicing and collection, and as a
result, its collection rate remains above 90 percent.
"It was validating to know from the Clio study that,
compared to other family law firms, this is a
positive statistic for our firm," Zamani says.
"A majority of our new business comes from
referrals. We built a strong referral network
when we launched the firm and tend to that
network regularly. Other professionals and other
family law attorneys are a part of that network,"
adds Zamani. "We do onboard clients who
come to us from the web after reading
[positive] reviews of our firm."
Once the case resolves, Zamani says her firm
circles back to the client to get feedback face to
face. "Within a month or two of the conclusion,
we arrange to meet over coffee or lunch and
find out about our client's experience. We really
care about their experience, and this meeting
gives us valuable information."
As the Clio study demonstrates, lawyers who
focus on business metrics have a much better
opportunity to do well professionally and to
create a thriving law firm. Lawyers who develop
an entrepreneurial skill set and approach to
their firm will grow and profit.

For practice management help, contact the Bar's
advisors, Dan Mills and Rochelle Washington, at
pmas@dcbar.org.

NOTE
1 See clio.com/resources/legal-trends.

MAY 2020

WASHINGTON LAWYER

http://www.clio.com/resources/legal-trends

Washington Lawyer - May 2020

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