How Law Firms Use Technology Impacts Whether They Succeed or Stagnate

Image of lawyers and marketers discussing legal trends and graph charts

In 2020 and 2021, law firms have had to rapidly pivot and adapt to the “new normal” of doing business in a pandemic. And, for a lot of law firms, this has meant diving much deeper into technological solutions. 

Has that move been good for law firms overall? Has it impacted everyone in the same ways?

Well, those are some good questions to ask, given the time and expense of putting new technological solutions in place. And, luckily, our friends over at Clio have put in the real research we need to get answers. 

Their Legal Trends Report analyzes the tech trends that impact law firms every year, and it is a hugely valuable resource to anyone that runs or markets a law firm. Want to check it out?

You can download the 2021 Legal Trends Report here.

So, what did Clio reveal about legal tech trends in the second year of the pandemic? Well, the shift to remote communications for attorneys was, of course, a big one. 

But that isn’t the only way tech has played into law firm trends over the last year. 

Boiling Down How Technology Benefits Law Firms

Before we talk about Clio’s findings in depth, let’s talk a little bit about why law firms need to embrace technology at all. While you can get bogged down in all the details and features of any particular software product, Clio’s report shows us that there are basically two main ways that technology benefits law firms. 
It all really boils down to:

  • Improved law firm efficiency. Technology can make your law firm work better. It can improve your intake and internal processes. It can improve the performance of your staff, as well as how your team communicates internally and how they work together. It can also streamline your daily tasks, or even fully automate some of them! 

  • Better client service. Technology can be the bridge between you and your clients, whether they’re able to communicate with you better or just engage with your law firm sooner in their customer journey. This has been an especially hot topic during the pandemic, as client expectations have shifted toward more remote options and better access to 24-7 information online.

If you have a better handle on the tech that helps you serve your clients and run your law firm, you free up staff time to keep those great client experiences happening. And, with the right mix of software, law firms can get both of the above at the same time, which typically correlates with improved business performance overall. 

It makes sense, right? You save the time and energy you would be sinking into routine tasks, freeing up you and your staff to focus on being a better law firm!

3 Things Growing Law Firms Did That Shrinking Firms Did Not

So, what kinds of technology contribute to making a law firm successful? In its 2021 report, Clio dug into the question of what differentiates firms that are growing their revenue from those that are shrinking or stagnant. 

They discovered some eye-opening trends, including these three things growing firms tended to do that shrinking and stagnant firms did not: 

  1. Growing firms are early adopters of client intake software. Intake is a crucial point in a client’s experience with your firm. It’s the point at which you either start a positive client relationship or lose great leads entirely. If you understand the client experience, it should be no surprise that growing law firms invest in the solution that makes their intake processes work better, go faster, and cement more leads as clients. The right software makes this so easy—and so harmonious with the rest of your workflow—that you’ll wonder why you ever waited so long to get it going!

  2. Growing firms are early adopters of client relationship management (CRM) solutions. If you’ve used CRM software for your law firm, you probably have a good idea of why it’s associated with growing law firms. Imagine doing everything your CRM can do by hand! It would be painfully time consuming—and some tasks just wouldn’t be possible. Adopting a powerful CRM is what keeps your best leads from falling through the cracks, keeps your potential clients engaged, keeps you on track, and helps you manage customer service for potential, current, and past clients. The connection with online forms is a big deal, too. You get the benefit of lead notifications and automated connection with the rest of your internal workflow, while your potential client gets the convenience of reaching out to you online. And, since the software handles so many of these tasks automatically (or allows your staff to automate them), you know it gets done every time. Check out these 3 Reasons a CRM Is More Valuable Than Another Salesperson.   

  3. Growing law firms are twice as likely to use law firm reporting tools. We saved one of the most shocking findings for last. According to Clio’s research, law firm growth in 2021 was very strongly correlated with the use of law firm reporting tools that track key business metrics. Growing law firms were two times as likely to use reporting tools compared to shrinking firms—a trend that was obvious even in the years before the pandemic! Overall, shrinking law firms showed low adoption rates and little change over time in this area. Meanwhile, there was a huge spike in the adoption of these tools by law firms in 2021, which generally correlated with positive revenue growth.  

In short, Clio’s research shows a strong link between law firms that adopt these technologies and an upward growth in revenue. Growing law firms tended to adopt these technologies sooner than their competitors, and they implemented them in ways that streamline and automate crucial processes.   

The takeaway from this data is that growing firms are more likely to increase their revenues because they have access to the information and insights that help them assess how their business is performing, which also allows them to focus more attention on planning for additional, ongoing growth over the long term.

Why Law Firms Struggle to Adopt the Technology That Will Benefit Them

It’s tough to adapt and remain competitive in challenging years like 2021. Lots of law firms have had no choice but to rapidly adopt technologies that meet the new expectations for remote communication and client service. But there are also lots of law firms that have been hesitant to “take the plunge” and pivot with the changes. 

So, what’s holding those hesitant law firms back from the technology that clearly works for their competitors?

Well, Clio’s report brings up a great point: Attorneys often don’t get the type of business training they need to run their law firms effectively. Law school teaches you how to be a great lawyer—not necessarily a great business owner! 

That lack of training also translates into a general hesitance to change with a changing world. If you don’t know what’s possible with the software solutions available, you won’t trust that they can make a difference. If you’re too confused and overwhelmed with the options, you won’t even get started! So, lots of attorneys deprive themselves of the business tools that could improve their revenue and internal processes in favor of doing things the way they’ve always done things. 

It’s what they know, and that makes it seem “safe,” even when it’s wrecking your business.   

I think Clio’s Legal Trends Report is so important because it shows that law firms CAN continue to grow in changeable and uncertain times, but only if they learn, adapt, and adopt the technology that makes it possible. 

Successful businesses are the ones that change with the times in ways that benefit themselves AND their clients. 

“Being successful now is about adapting to what clients want. Remaining successful in the future depends on being prepared to continuously adapt and lead the way towards better, client-centered ways of delivering and accessing legal services.”  —Clio, 2021 Legal Trends Report

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