Insights Into Billables From Cloud Computing

• Author: Omar Ha-Redeye
• Date: September 25, 2016

The Clio Cloud Conference is sort of like the Burning Man Festival of the legal industry. You have to attend it at least once in your lifetime, and once you do, there are no words to truly describe the experience.

There’s the high-energy environment, with a concert-like production. And when you look at the fellow groupies in the audience, you notice they’re all leaders in the law. Years later, I’m still talking about it.

This year the conference provided another extra tidbit – insight into how lawyers apply the billable hour in their practice. The advantage of a large cloud-based practice management system, as opposed to some of the local hard installs in this area, is the ability to generate analytical data on the aggregate behaviour of lawyers. Clio provided some of these insights in their new “Legal Trend Report,” which will be released on October 17, 2016.

What has been released is that the total utilization rate, defined as the number of billable hours as a proportion of the hours in a working day, was only 28% for lawyers in 2015. The number was even lower for sole practitioners, who were only billing at 22%.

Their big data from practice management info of 150,000 daily active users is able to identify a breakpoint for optimal efficiency for billable hours, with firms larger than 5-9 lawyers or more generally finding some efficiencies of scale that smaller practices don’t realize. The larger practices than this don’t receive as noticeable a benefit from scaling larger.

Clio is also able to identify the average billable hour rate for lawyers across the U.S. ($232), look at the hours billed as a proportion of those worked (81%), and how much money lawyers actually collect once they’ve billed (86%).

The point of this data was to help lawyers recapture the other two-thirds of their working day, highlighting tools and techniques to help practitioners keep on track. The ABA Journal reports,

Having all of this data could only help lawyers make better decisions, [Clio CEO Jack] Newton said. “The...