CLIO is a Canadian firm providing cloud-based law firm practice
management software...in 90 countries!
Their very useful annual Legal Trends Report takes data from over 60,000
U.S. users.
Back in 2016 the Report concluded that about 6 hours of the average
lawyer’s input (assumed at an average 8 hours) was spent on non-billable work,
an alarming and astounding figure in anyone’s language!
In pursuit of better understanding what was happening to what CLIO
described as “the missing 6 hours”, for the 2017 Report they spread their net
wider for additional data, and comprehensively surveyed nearly 3000 legal
professionals, CLIO users and non-users, to find out how they used their day.
As an experienced observer of human behaviour might expect, a clear
trend in the lawyers thus surveyed was to point to what amounts to an astonishing
volume of time investment per day in what I call “FirmTime™”.
CLIO reports that when combining utilisation, realisation and
collections rates the average lawyer only collects 1.6 hours of their time per
day!
Where was the rest of the time alleged to be invested?
Business Development…33% or 2 hours.
Licensing and Continuing Education…16%
Office Admin., Billing, Configuring technology, and Collections took up
almost 3 hours a day at 48%.
It might not be such a problem if it were true, and the time was
invested wisely and effectively.
However, my statistics from a large body of client firms, combined with
nearly 40 years of observation in hands-on work in over 1350 firms, are very
clear that nothing like the alleged investment of FirmTime™ is actually made,
and most of it is not planned, or effective, in many firms.
For example, my evidence over more than thirty years shows that it next
to impossible to get the average lawyer to consistently invest 30 minutes a day
in Business Development, let alone two hours.
The Report indicates that in effect lawyers are investing two hours in
Business Development to get two hours work, a very poor return indeed. The
survey responses in the Report itself indicate that lawyers who felt they knew
what they were doing in Business Development would hope to get a 2-3 times
return, and I would expect a lot higher.
Clearly much of the Business Development done is not effective, and it
is not surprising that 94% of firms surveyed admitted to not knowing what it
cost them to acquire a new client.
Another indication that the figures are a nonsense is the notion that it
could take 1.26 hours of the average day generating, sending and collecting
bills that are the result of a fraction over two hours client file work!
One proven method for fixing the structural deficiency that CLIO reports
on is to carefully plan each lawyer’s investment of time using a WorkPlan™.
Given that the information required to plan usefully is critical to firm
profitability, I counsel firms to capture details of each investment as
carefully as most would ClientTime™, the time spent on client files. After all,
on a cost-plus pricing basis, an hour of time invested in either area is of the
same “value”.
Both sorts of work are of equal importance if carried out effectively,
and indeed, on the CLIO figures, at present FirmTime™ is three times more
important.
Only by accurately tracking FirmTime™ investment, and analysing
effectiveness into outcomes, can a firm learn enough to properly manage this
huge resource.
Non-billable time, or at least the part of each day I call FirmTime™,
cannot be allowed to rank in management’s thinking as wasted or lost time. It
is essential to law firm success, but only when invested effectively by the
right people in a proper ratio to ClientTime™.
In my long experience the averages that CLO reports should be able to be
reversed, at least, so that 2 hours a day is useful or unavoidable FirmTime™,
and 6 hours a day is ClientTime™.
The Report is a free
download, and well worth a considered read by any lawyer or manager wanting to
get a better handle on how to plan a pathway out of the messy maze that the big
majority of law firms are in.
