The One Mistake That’s Costing Law Firms New Clients - Clio Legal Trends Report

Sophie: Welcome back to another episode of the File Notes podcast. For our regular listeners, you may be familiar with the man on the screen, William Burry, from our previous episode about ALPMA, another legal conference that we were recently at in Brisbane. But for those that don't know William, he is the CRO at VXT, and he's recently been at ClioCon.

And today, we're going to dive into everything ClioCon and the Legal Trends Report that has just been released. But before we dive in, let's set the stage. ClioCon is one of the biggest legal conferences out there.

And Clio itself is the largest case management system in North America. They've just completed a $900 million raise, which is the largest legal tech raise ever in history, which is insane. So William, you've been to quite a few conferences, but this was your first ClioCon. What were your first impressions?

William: It was really impressive. I think Clio really nailed showcasing themselves. They had sections where people could learn about different parts of the products, speak to experts, but I also feel like they did a great job providing a lot of really cool and exciting speaking events for the attendees to go to. But also, I can't pass up the opportunity to talk about Austin as well.

It was a fantastic city. My first time in Austin, very hot compared to New Zealand, but it was cool getting to explore the city around the conference too.

Sophie: Do you have any highlights while you were there? I heard that the barbecues there are pretty great.

William: Yeah, Texas is famous for its American-style barbecue, which it turns out New Zealand has actually adopted a little bit since pre-COVID as well. Somewhat familiar with it here, but it was really cool going to the heart of barbecue and trying some of Franklin's barbecue there, which is really famous. A colleague and I also got to see the bats, which everyone we spoke to about what we should do in Austin highly recommended—going to watch the bats fly at sunset.

Which was really sweltering—34 degrees Celsius—and standing under a bridge waiting for some bats to fly off was a great way to spend the evening.

Sophie: Interesting. So another interesting aspect of this ClioCon was that it was in Austin, like you said, which is actually the home territory of AffiniPay, the parent company of MyCase, which is another integration partner of VXT. And AffiniPay did something quite cool here. They really seized the opportunity of being on home turf because they actually don't have their own conference and did some guerrilla marketing.

So guerrilla marketing is an unconventional way to promote yourself. Or, I like to call it, just doing something really rogue. You were on the ground. You would have seen what was going on. What was AffiniPay doing to guerrilla market at ClioCon?

William: It was really clever. When I landed at Austin airport, they had banners welcoming legal professionals to their hometown. They had branded and hired these little pedicabs offering rides around the ClioCon conference.

And then one of the nights, they ran a party featuring renowned chef Aaron Franklin, and they held that on the second night of ClioCon as well, in direct competition with one of Clio’s events. It was very exciting, and hats off to them for thinking outside the box.

Sophie: Yeah. And all in good spirits, right?

William: Yeah, of course.

Sophie: So now let's get into this Legal Trends Report, which I think was a fantastic report. We were just speaking before we started recording that it’s one all legal professionals should read. It was really easy to consume and seemed to address all the topics people are talking about at the moment, mainly automation and improving client experience.

Before we delve into sharing all these statistics that we found interesting, I just want to share where these statistics were drawn from. So, to come up with this report, Clio interviewed over a thousand legal professionals, 1,400 Clio customers, and 1,000 people from the general population who might be consumers or future consumers of legal services. They also did a secret shopper experiment or survey of 500 law firms. You’re familiar with the report. What stood out to you?

William: I found it really interesting. A lot of the findings that they highlighted and dived into were things that we at VXT are focusing on and noticing in our own engagements with the legal market. Essentially, we’ve built a phone system that’s all about helping law firms communicate better and automate the admin work they’re stuck with by connecting that directly with their case management systems. So essentially, we’re tackling a lot of the issues the report talks about, especially when it comes to providing excellent client service and finding ways to automate those repetitive tasks.

So yeah, excited to share some real-world examples of how VXT can make life easier for firms as we chat deeper into the report.

Sophie: I think we said in our episode that one of your favorite sessions you went to was with Laura Vickers because she gave a talk and really practical examples. You came away from that saying it was such an awesome presentation. So hopefully we can give some practical examples that can go alongside this data in the Clio Legal Trends Report.

So starting off with automation, as you just mentioned, one of the statistics was that 74% of law firms’ billable tasks are able to be automated. And I’m sure all law firms would love to be able to automate 74% of their tasks. So can you tell me what kind of tasks we’re talking about here?

William: I think in essence, the tasks that are the easiest to automate tend to be repetitive or follow a clear process. A good example of tasks that are potentially harder to automate might be negotiating settlements where understanding the emotions and adjusting the strategy in real-time is key and very challenging to automate for systems and processes. But something like taking notes from a call and saving them to a case in Clio is much more suited for automation.

Take VXT for instance, attorneys use our software when making and receiving calls, which are automatically recorded, transcribed, and summarized using AI. These notes are directly saved to cases in Clio. We see this cut down about five to 10 minutes per phone call. This is the type of automation that a lot of firms are really looking to adopt going into 2025.

Sophie: Definitely. Yeah. It’s all about those incremental gains. If you think that attorneys bill in six-minute increments, you save five or 10 minutes here and there or for every phone call, it really does add up. And I know I just mentioned six-minute increments, but another big takeaway from the report was that automation is really shaking up the billable hour model. And it makes sense, right? If automation can handle tasks that an attorney would usually be doing, how do you track and bill for that? You can't really do it like firms have been doing it forever, right? But at the same time, they should still be getting paid for the value they’re providing. But that’s just going to have to look different.

So that’s a big question of how that’s going to eventuate. But William, I’m interested. You’re talking to firms every day. Are you seeing more firms moving to a fixed fee or value-based billing model?

William: I think so. There definitely is a clear divide. I think what’s probably the most common and what we’re seeing is a firm will do a combination of both depending on the type of work they’re doing, especially in general practice but within more specialized firms committing to one or the other.

I think in both camps, whether you’re doing time-based or fixed fee, understanding the time going into the work you’re doing is really crucial to ensure that you’re charging a fair amount for the work that’s being put in. There were some really interesting statistics in this report as well. Clients are happier and more likely to pay their bills on time with fixed fees, which was something that I hadn’t considered before and was really interesting to understand. Firms billing with flat fees get their bills paid five times faster than those billing hourly, which speed to market and efficiency around that is a huge driver.

So it sounds like a really appealing reason to go to that fixed fee model.

Sophie: I found those statistics super compelling. Like you said, I hadn’t really thought of that perspective either. But it’s a super important thing to consider in firms because cash flow is super important in these times. So something else I read in this report relating to the fixed fees and the move to fixed fees is that it’s really going to force firms to seek out efficiencies. Once they move from the billable hour, there’s a natural incentive to create a simple process that can be repeated and therefore automated as much as possible.

And then there’s that financial incentive behind it as well, where the more efficiently you can complete that work, the more profitable your firm becomes as well.

William: I think it’s a really interesting observation. It’s not something that we run into directly, but there is definitely a huge drive for constant efficiencies on both sides of the billable model. For those billing hourly, typically they aren’t billing for data entry work, so increasing efficiency there is also really valuable. But yeah, definitely on both camps.

Sophie: So what we’ve spoken about so far has focused on the law firm side, but a massive part of this report focused on client experience. So I want to switch tracks to talk about that now. And the stat I want to start with is that 72% of clients felt like they received outstanding service when their phone call was answered. That’s compared to only 22% when they contacted the firm via email or 26% via an intake form. What are your initial thoughts on this? And maybe you can also give us an example of how VXT as a legal phone system actually helps.

William: I think that’s a really interesting stat. Law firms receive a lot of phone calls, some from clients, but a large volume of them not. I think law firms are responding to that by making it harder to speak to someone on the phone, requiring forms or emails or even being directed to a contact center first. But especially in a post-COVID world, people want to talk to people. It’s critical to feel like you’re connecting to another person now more than ever.

And one of the great things VXT is doing in this space is because we connect with your practice management system, your team knows if a client’s calling or if, for example, an external party is calling. It makes it really easy to evaluate whether you should answer that phone call or potentially let it go to your outsourced team but definitely prioritizing that client experience.

Sophie: And I think also, if you’re calling an attorney, you’re probably in a pretty stressful situation. There could be a whole range of things happening like terrible events, divorces, or stressful business situations. You need to be able to just talk to someone straight away. It’s incredibly frustrating if you’re trying to communicate through a form and you don’t know how long it’s going to take for them to reply, or if this attorney can actually help you. So I definitely see how that statistic comes to light.

The stat that actually blew me away the most, and I shared a little graphic about this on our VXT LinkedIn already because I was pretty baffled, was that in the secret shopper survey that Clio did where they tried to get in contact with 500 different law firms, nearly half of the firms in this experiment didn’t answer the phone to a potential client that was calling. That’s a massive amount of calls not being answered. And that’s potential for new business just going down the drain because you probably just move on to the next law firm on Google or in the directory. Why do you think more firms aren’t answering the phone?

William: Yeah, as you said, that was a baffling stat and much lower than I would have intuitively thought before reading the report. But I think it touches back to what I was saying before, right? Law firms are receiving a lot of phone calls from people who aren’t clients or potential clients, and they’re building processes to insulate themselves from that experience.

On top of that, attorneys are busy people, and sometimes it’s easier to avoid answering the phone because they’re working on other cases or matters at the moment. And there’s a big drive for efficiencies on the revenue side, pushing firms away from ad-hoc client phone calls.

But as I said before, one of the great things about VXT is that contact sync. You know if a client’s calling or if a non-client’s calling, and you can evaluate on a call-by-call basis whether you want to pick up that phone and speak to your clients or not.

Sophie: Yeah. And I think there’s some other things in VXT as well, like analytics is super important. And I know other phone systems have this as well, but it’s super important to drill into where you can see why your attorneys are missing calls. Is that one person overworked, or are they just deciding not to answer the call? And if they are overworked, then there are some things you can do about that relating to call flows and support, maybe outside of the phone system itself.

William: That’s a good point. I was talking to a law firm earlier today, actually, who are obsessed with their client experience and analyzing it through analytics. One figure they champion above all others is: How long does it take on average for a client’s phone call to be answered? And I think that stat is a great way of reinforcing the client experience you want.

And as Sophie rightly mentioned, you can build a call flow and an intake process to help manage those stats. But understanding that data is critical to delivering that client experience.

Sophie: And similar to phone calls, there was a statistic about emails as well, and that was also worrying. It was that 67% of those law firms didn’t respond to emails. And the phones I get—maybe you’re busy—but an email is there, and it’s permanent, right in front of you. But 67% didn’t get responded to, which blew me away. You’re our CRO, so you’re dealing with emails all the time and outreach and response rates. I’d love your insights on this.

William: Yeah. Speaking from a sales perspective, a 33% reply rate would be incredible. But given it’s a client email, you’d expect that to be markedly higher than the numbers we’re currently seeing here. But again, I think that touches back to what I was saying before—people are receiving a lot of emails and notifications, and it’s drowning out clients in the inbox. And again, attorneys are just really busy, and it’s easy to push an email back into the pile and get back to it later.

Sophie: So going back to the phone call track we were on, in the legal industry, referrals are one of—if not the—largest sources of new business for law firms. And when people in the survey were asked about whether they would promote a law firm they interacted with, 39% of clients said they are likely to promote a law firm if their phone call was answered, compared to just 12% for other methods like chatbots. So answering the phone is super important for client experience, but it’s also super important for business.

William: Again, I think it circles back to what we spoke about before—people really want to be connecting with other people, especially in this incredibly digital world where you’re on Zoom meetings, listening to podcasts, engaging with AI chatbots. People want to know that when they are in a really stressful time of their life and they need someone compassionate, empathetic, and understanding, they can get through to them.

And I can imagine that definitely leads into how likely someone is to refer the firm. But on the flip side, I also read that when firms fail to answer the call, 73% of clients become detractors. But this drops to 38% if the call was answered.

Being engaged with your clients is definitely more important now than ever.

Sophie: So the gap between 73% of clients becoming detractors dropping down to 38% if the call was answered is massive. So here I’d like to do a bit of a summary tying in the ways that VXT’s legal phone system can help because I genuinely think that we are solving a lot of the problems in this report. Do you want to give a summary to round us off?

William: Definitely. I think in summary, law firms need to be answering client calls more than they are today. The stats prove it themselves, right? 73% dropping down to 38%—that’s a massive difference. And I think there are a couple of things that go into that. As we said before, there are a lot of phone calls going into law firms today that aren’t clients. So having software that can filter that out so you can ensure your clients are prioritized as they should be is essential. And as Sophie mentioned, VXT has technology that can suppress non-clients, elevate clients, and inform you which clients are calling.

It could be a resourcing issue or a process issue, but until you look at the analytics and data, it’s really hard to understand how you can deliver the best client experience.

Sophie: Thank you so much. This was a great chat about the Legal Trends Report. I know that VXT will be putting out a lot more content about this report. So if you would like to see more, you can go to vxt.co.nz. I hope you all enjoyed this wrap-up, and until next ClioCon...

William: In Boston, I hear, so incredibly exciting.

Sophie: Exactly. See you there.

William: See you there. Thanks so much.

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