Clio Legal Trends Report 2023: legal productivity is "higher than ever" while professionals are "interested yet cautious" of AI

Professionals in the legal field are handling more and heavier caseloads, and yet "earn over two and a half times more for their firms than in years past", according to the latest Clio Legal Trends Report.

The cloud solutions company, which first published this report in 2016, analyzes new developments and opportunities using data from tens of thousands of firms in the US.

"On average, legal professionals are working over 25% more cases compared to 2016 and recording 35% more billable hours", states the report.

In times of inflation and higher costs, the improvement of billing processes and workflows has been one of the keys to success. In this regard, technology has helped law firms transform their business operation.

Risks for legal entities include poor cash flows and unpaid hours. "Industry-wide realization rates showed that 14% of billable hours never get invoiced, and collection rates showed that 11% of bills never get paid by clients", adds the report.

While the hourly compensation rates have risen steadily for lawyers (28% from 2016 to 2023), non-lawyers such as paralegals are falling behind, with only a 19% rate increase. "Overall, the blended law firm rate has increased by 22%, from US$ 239 to US$ 292, over the same period", according to the report. In the past year, lawyer rates have remained on par with the rise in consumer prices.

With the advent of AI and machine-learning solutions such as ChatGPT, lawyers have the possibility of taking optimization one step further.

"63% percent of legal professionals said that they were interested in learning more about AI. This interest is higher than the general population, including both clients and potential clients, of which only 54% showed interest", indicates the report.

Nevertheless, some mistrust on this technology still exists: "58% percent of legal professionals don’t believe AI is advanced enough to be considered reliable, and 39% say they don’t trust it." Clients are even less likely to trust AI, as per the report.

The main concerns of legal practitioners are linked to professional liability, client privacy and confidentiality issues, and copyright matters. On the upside, most professionals see AI as accessible and simple to use, with 32% of them agreeing that these tools can help reduce workloads.

Transparency is also an important indicator of AI adoption. "Nearly half (47%) of legal professionals say they would want their clients to know if they used it.", says the report.

Author: Marina Vanni