Per the 2023 Legal Trends Report, legal pros have absorbed hefty caseloads that have contributed to a substantial earnings spike for their firms. Compared to 2016, legal professionals are earning 250% more revenue for their firms now, and the surge represents the highest productivity since the report’s inception.
Additionally, the report indicates legal pros are working 25% more cases compared to 2016, recording 35% more “billable hours” and earning 72% more for their firms when adjusting for hourly rates.
“From rising inflation to keeping up with the rapid pace of technology innovation, the past year has brought no shortage of challenges and opportunities for law firms,” said Jack Newton, CEO and founder of Clio. “Adaptability is more important than ever. Technology, including the rise of generative AI, continues to fundamentally change the legal landscape by helping legal professionals prioritize what matters most: achieving justice for their clients.”
Inflation has plagued nearly every sector of the U.S. economy in recent months. Per data from Statista, annual inflation rose from 3.2% in 2011 to 8.3% in 2022. Compared to September 2022, inflation was up 3.7% this September as well.
“Over the last three years, businesses have dealt with inflation rates that have reached their highest levels in decades. Rising costs put law firms in a challenging position—on the one hand, looking for ways to reduce costs, while on the other, having to find new ways to increase revenues,” according to Clio’s analysis.
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The report also addressed another emerging trend in the legal space: the rise of artificial intelligence (AI) in the implementation of legal services. It is clear AI has dramatically reshaped the legal landscape, notes Clio’s analysis, however, how exactly lawyers grapple with these changes continues to evolve.
“Despite the opportunities provided by AI, on average, lawyers appear hesitant to wholly adopt the technology. These feelings appear to be at odds with the perceptions of the public,” Clio notes.
For example, 32% of clients surveyed expressed they believe “AI’s benefits outweigh the costs” while only 19% of the legal community responded as such. Similarly, there was a discrepancy regarding the responses of clients and legal professionals with respect to if the justice system stands to benefit from the use of AI, again 32% to 19%, if courts should deploy AI, 27% to 17% and if AI will improve the “quality of legal services,” 32% to 21%, respectively.
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Despite the reluctance of the legal community, though, 19% of the lawyers asked reported that they're already using AI in their practice, and another 51% said they want to use it at some point in the future. Additionally, fully 71% of those planning to implement AI in their practice reported wanting to do so within a year.