Legaltech Trends and Their Impact on Lawyer Efficiency – Joshua Lenon – S5E17

00:02 Robert Hanna:

Welcome to the Legally Speaking Podcast. I’m your host Rob Hanna. This week I’m delighted to be joined by Joshua Lenon. Joshua is the lawyer in residence at Clio. And attorney admitted to the New York bar. Joshua brings legal scholarship to the conversations happening both within Clio. And with its customers, Joshua has worked extensively to educate lawyers on technologies capability to enhance their practice, while also teaching tech companies about the unique needs of the legal system. Joshua has a keen understanding of the challenges facing the legal space in the UK, particularly in relation to legal aid. So a very, very warm welcome, Joshua.

00:43 Joshua Lenon:

Thank you very much. I’m very excited to be here, Rob.

00:46 Robert Hanna:

Our absolute pleasure. And before we dive into all your amazing achievements within the legal space to date, we do have a customary icebreaker question here on the Legally Speaking Podcast, which is on a scale of one to 10, 10 being very real, what would you rate the hit TV series Suits in terms of its reality?

01:07 Joshua Lenon:

I have very strong opinions about the hit TV series suits, and how it portrays the practice of law. So in terms of realism, horribly, horribly bad at depicting the practice of law, in addition, to which every character on that show, will unfortunately end up in jail for fraud. There’ll be sued by every past client for misrepresentation and unauthorized practice of law. Their insurers will flee from them in horror when they discover how badly they have mismanaged that law firm. And they will spend the rest of their lives seeing every decision, every contract every bit of litigation overturned, because of their horrible, horrible reliance upon misrepresentation on the qualifications of everyone on that show. It is, without a doubt, the worst depiction of lawyers ever portrayed on the small screen.

02:06 Robert Hanna:

There we go. And you know, what gesture, I think you win the prize for the most anti suits, fan and comprehensive answer to justify your one, which I think is very, very justified. So thank you for sharing that. And welcome once again. So let’s start. Let’s talk about you though, let’s start at the beginning. Because you did you know, have some interesting, interesting background before joining clear to just tell us a bit more about your career path from a sort of legal journey and you know, other people listening in because you know, you’ve landed yourself in this wonderful role at Clio. But I’m sure that was something you probably didn’t initially imagine when you first started out in the law.

02:43 Joshua Lenon:

Oh, no, absolutely, I actually went to study the law, because it actually pulls the curtain on our society, if you read Gillian Hatfield’s book rules for a flat world, for example, she talks about how in different societies and at different points in history, the law is constantly being reinvented, and there’s no society to date that doesn’t have some type of rules based structure. Because we collectively need the law and the legal system to really function as a group. And from the smallest villages to the largest empires, we see that the law is the foundation of how we interact with each other, how we progress, and how we encapsulate a lot of the values of society. And I had kind of inherent understanding of that when I went to law school, and a desire to learn more. And that’s part of why I did international and comparative law, because we do see, and I’m very again, privileged to see this from my international perspective, that there are different approaches, I’m certain that your listeners will be familiar with the differences between civil and common law, for example, and how they both oftentimes have similar goals, but different approaches and foundations behind them. And I see that in Canada, where we have both civil and common law between the different provinces that are here. And I see the differences between my home country of the United States and the 90+ countries around the world that I help advice Clio on through the research that I do on their behalf. So that that foundation is something that always interested me. And so I attended law school and was very fortunate to have experiential learning not every law student in the United States gets that where I spent my time with the Missouri Attorney General practicing law and litigating on behalf of the state to help prevent human rights abuses within the state and those were enabled by both federal and state statute within that jurisdiction, taking a look at discrimination and all sorts of categories based on age based on ethnic background based upon the ability of individuals and ambling. half of the state, we tackled commercial entities that either were unaware of their obligations as it came to human rights or blatantly ignored them. And it was incredibly gratifying to take these types of situations where people had been wronged or hurt, and come up with a solution that not just benefited that individual, but all of the citizens of the state of Missouri. And then, when I had this twist that I talked about this turn away from litigation and into private practice, it wasn’t something I had planned, but it wasn’t supportive, a significant other and their life goals as well. And that was the next bit of hard learning in my legal career, where and I’m sure your listeners will understand this as well, that oftentimes, legal training doesn’t travel well. So you become licensed and trained within a particular jurisdiction and transiting to another jurisdiction is incredibly difficult. And so we find ourselves as legal professionals, sometimes in a bit of a box, when it comes to the type of law that we practice, even if we have interest in other practice areas, and the geography where we can practice. Interestingly, when we get a little later into some of the things we want to chat about, there are some big changes happening in the background of that the last year has seen enormous shifts and how lawyers are really viewing where they can practice law. And I think importantly, regulators are starting to understand that the boxes lawyers find themselves in are too constrained. And we’re going to continue to see some regulatory shifts around that. So from there, I had to learn lots quickly, I had to learn how to go from working in a large, well supported team, like the Missouri Attorney General, to managing everything myself from business development, and finding clients and selling myself, somebody upon whom they would rely, as well as creating new workflows and processes for areas where my licensing deemed that I was competent. But my own personal experience and my own desire to do right by my clients really led to a protectionist approach that had both benefits and drawbacks as well. And learning a whole new side of technology that I didn’t have to manage before the Missouri Attorney General was incredibly paper based. And now I out of both desire and necessity was turning towards a paperless law firm. Well, before that was the norm. And so all of those things were things that I had to learn very quickly. And the one thing that I learned, in addition to just how difficult we systemically make the practice of law, is also the toll that that can take on you, when you can do everything right by a client. And even then there’s no certainty in the outcome was something that I found

08:13 Joshua Lenon:

Just surprising, and, and worrisome. And something that I don’t think we often talk about widely outside of the profession of law, how much we take on behalf of our clients, and how little support there is for the lawyers out there who are struggling, rightfully so, with all of those concerns every day.

08:34 Robert Hanna:

Yeah, I think that’s a very valid point. And, you know, obviously clear is doing some great roles and, you know, do some great work to ultimately remove some of those pain points for lawyers and, you know, emerging are a number of trends. So, you know, could you maybe tell us a little bit more and give us some more background to the legal Trends report that clear producers?

08:53 Joshua Lenon:

Absolutely. I’m incredibly proud of the legal Trends report, I believe it is groundbreaking. So, to explain it, there are two bits that I should I should give background on. The first of which is I discussed the portability of Clio and why it was the best fit for my burgeoning law firm. And the reason it’s portable is it is cloud based. And that means that the data and the programming don’t exist on the law firms computers, but instead exist in a centralized data center, where Clio is able to use an economy of scale to provide like a huge amount of development resources and security resources. And so that’s the functionality of Clio is that it exists in this data center. But there’s an unintended benefit. That has led to the legal Trends report and that is that because this data is in a centralized structure, even though Clio has contractual and technological blocks on our ability to see the law firms data, we can see a limited amount of usage data from those law firms how they’re using the tool. And the example I like to give is that of billable rates. So, Clio has to support a wide range of billing functionality. And as such, we have certain visibility into how law firms are using the settings of Clio, and how they bill. And so an example might be a law firm, for whatever reason, has a billing rate of 20 pounds an hour. And on the opposite end of a bell curve, there might be a billing rate of 2000 pounds an hour. And Clio has to be able to support the functionality and calculations behind both of those. But interestingly, there is a bell curve between those that we can see, I can’t tell you which firm is charging 20 pounds an hour, versus which firm is charging 2000 pounds an hour, but I can see the bell curve in between them. And that allows us to interpret a lot of data on how law firms are approaching the practice of law. And we’ve been publishing that as part of our legal Trends Report. Anybody who works with data, though, will tell you that data tends to raise more questions than answers. And so we’ve been taking the questions raised by that data, and supplementing it with surveys of both legal professionals and legal consumers, those who are clients of law firms, or those who want to be clients of law firms, to find out where both the challenges and opportunities exist. And we’ve been able to combine all of this into an annual report that we call the legal Trends report, in 2021 version is our sixth annual report. And it takes a look at a whole variety of issues, from billing, to client experience, to growth opportunities, including the first longitudinal study of law firms that has ever existed, where we’re able to take a look at cohort of law firms across a period of years and really see what are the differences between growing law firms and shrinking law firms. And it even led to an incredible amount of insight into how the law firms were handling the pandemic as it became global in 2020. And how law firms are able to start moving beyond the pandemic as we exit 2021. So right now, there are currently over 150,000 legal professionals using Clio and contributing that data in insight to this report. And I do want to point out that it isn’t contribution law firms can turn off their participation in this type of analysis. But we’re very fortunate that the benefits that the legal Trends report is giving to the legal industry as a whole, I think is led to the spirit of volunteerism, amongst our customers, where they’re continuing to contribute this data and work with us on the type of insights that I can share with you. When clients and law firms were telling us about these remote experiences that they’re looking for. We turn that back around into our cohort data that longitudinal study longitudinal study. And what we found is there were three tools that were driving a much greater selection when they had these available, and the outcomes for the law firms themselves were much more positive as well. So what we found is there were three tools, online payment solutions, where the client can pay their bills online client portal, where the law firm and the client can share documents, calendar entries, firm and the client can share documents, calendar entries, task and communications quickly and easily with each other, especially if there was a mobile version. And the ability to do an online client intake. So for clients to enter their own information and identify themselves and get the ball rolling with the law firms. And what we found is growing law firms were 30 Rolling with the law firms. And what we found is growing law firms were 30 Rolling with the law firms and 7% more likely to use an online blonde line client intake i.e. 7% more likely to use an online client intake is 7% more likely to use an online.

14:16 Joshua Lenon:

And when use together these three to M when use together these three to view and fat in addition to being selected more often by client be $40,000 in additional revenue act utilized in the law firms that were a part of this study per lawyer if you were a solo dollars, average additional revenue. And so while those are US dollars as part of the study, the sheer numbers are just staggering when you think about how technology.

14:51 Robert Hanna:

Brilliant and thank you so much for giving such a comprehensive overview and I think it is a wonderful, wonderful report. For a quick break from the show, are you a legal aid practitioner in England and Wales specializing in civil or criminal legal aid matters, if you are, this message is for you. As a legal aid solicitor, you don’t have time to waste on legal aid case management software that doesn’t work to your needs. That’s why Clio has developed a quicker, more accurate and affordable solution to Legal Aid solicitors in England and Wales. It could save you hours in your month, particularly when it comes to end of month invoicing and claims to the legal aid agency to see how it all works. Visit cleo.com. Forward slash UK forward slash Legal Aid. That’s Clio.com/uk/legalaid/.org Now back to the show. I guess for some of our listeners listening in what was some of the key findings of the report?

15:56 Joshua Lenon:

So way back in 2016, I think the balm that we dropped upon the legal profession, was the understanding that how we thought lawyers worked and were compensated was vastly different than what data is actually telling us. And so what we found is surveys by companies like Thomson Reuters and LexisNexis told us that lawyers were billing, you know, six to seven hours a day, they were really spending their times heads down on being a lawyer and doing legal work. And Clio’s data, which is again, based upon billing data showed us unfortunately, that law firms on average, were only billing about 2.6 hours a day, a drastic difference in what that self-reported survey was telling us. So we looked at what lawyers told surveyors versus what the data showed there was this gulf in between, and it actually got worse from there. What we found is, lawyer survey tell us on average, they work about eight hours a day, some days more, some weeks more, but on average about eight hours, and then they’re only billing just a little over two of those hours. From there, we saw that those hours that they recorded, were actually being reduced by the law firm further, they were giving themselves this, this haircut. And our own surveys tell us there’s a whole variety of reasons for that it might be empathy for the client, not really wanting to charge them too much. It could be a bit of fear that the lawyer is feeling like they aren’t productive enough or efficient enough. And so that time entry is too large for the result that came out. But whatever it is, they’re cutting themselves down to under two hours a day. And from there, they’re actually finding that the client is then refusing to pay that measly less than two hours. And so the average law firm on a day to day basis is only getting paid for about 1.6 hours of their day. And the rest of that day is either being spent on time that is built in lost or is being spent on non-billable activity. So that was 2016, where we discovered this lawyer funnel and this vast difference between what law firms said they were doing, and unfortunately, what the data was telling us. And its potential impact on the sustainability of solo and small law firms. Right? If you’re if you just aren’t doing revenue generating activity, how can you expect to continue to operate as a service on behalf of clients into the future? So our further research looked at where is this approximately six hours of the day going. And what we found is at least half of that was being spent on administrative task. So time entry, which is a non-billable activity, or billing and collections or managing it or administration of your law firm. All of these are necessary activities. But do they need to take as much time as they are doing? We believe that they do not. And that’s actually one of the driving focuses on Clio’s development is how can we take a look at this approximately three to four hours of your day, and reduce the amount of effort that goes into that such that you could turn back to the remaining portion of your day, which should be spent on advising and counseling clients or business development, which was the other significant chunk of time that we found our lawyers doing? From there. We took those measurements, and we’ve turned them into key performance indicators. So KPIs for sure, and made those into dashboards where firms can do a year over year comparison on am I spending my time effectively, both on behalf of my client and the law firm. And how am I comparing against now these national benchmarks that we’re seeing those measurements those KPIs then led to a longitudinal study, where we found law firms that are growing law firms that are stable in law firms that are shrinking, and again, data always raises more questions. And so I can’t tell you why a law firm might be shrinking, it could be that the lawyer is dealing with outside life issues that is necessitating them bringing on less work, a new child, maybe they’re being the caregiver for an elderly parent, could be that the lawyer is entering retirement, and so is, is maintaining their current client base, but not bringing on new business there. There are lots of things that I can’t tell you about some of this data. But I can tell you there exists a cohort of growing law firms. And those growing law firms over a period of about five years in our study doubled their revenue, without doubling the number of cases they handle, without doubling the number of clients they have, or without doubling the amount of lawyers and other billable staff that they bring in. And what we found made the difference in revenue amongst those law firms is that they were able to slowly and surely improve the amount of time they spent on legal billable work. And when I say improve, it wasn’t a big improvement at all, they went from a 28% utilization rate, meaning they were able to take 28% of their business day and spend it upon billable work, and gradually over a period of five years, bring that up to about a 33% utilization rate. So not a huge change. But those small incremental improvements lead to a doubling of revenue. And that means that as a law firm, that can be sustainable over a period of time, that can take a moment to breathe, and assess the type of workflows that they have. And are they really providing the best services for their clients, they can experiment and bringing on new practice areas or new locations. And that type of flexibility is exactly the type of situation that we think law firms should be having. And so as we see the ability to measure this data, and start asking questions about this data and review this data has led to I think some really interesting opportunities when it comes to the practice of law.

22:17 Robert Hanna:

Yeah, no, absolutely. And I think you gave some cracking examples there. And, you know, it’s just another example of what Clio’s doing and clear. Also, recently, I understand launch day and matter management and billing feature for legal aid for firms, I think, in England and Wales. So tell us a little bit more about this, and why Clio was promoted to introduce it.

22:38 Joshua Lenon:

Oh, absolutely. So a good chunk of the legal trends experience of research now is focused upon the client experience. And the reason we’re focusing on that is, we’re starting to see that the practice of law, especially from the client expectation, is shifting more towards shared responsibility. In order for lawyers to be productive and handle, quite frankly, the sheer volume of demand for legal services, they can’t do it all themselves. And technology is enabling a more collaborative approach for this. But there is a portion of the marketplace that’s still excluded. And that is those types of clients who unfortunately need to rely upon legal aid in order to be able to afford access to legal services. And as we know, over the last decade, there have been tremendous changes to the Legal Aid structure within the United Kingdom, who is eligible, what types of cases are eligible for legal aid, and the amount of, quite frankly, administrative overhead that is necessary for practitioners to be able to support these types of clients is just grown. So it’s a problem that has come up over and over again, and the research that we’ve done upon the marketplace, and we realized that it’s something where we can help we can’t eliminate all of these problems, but we can help. So we’ve joined the call for protection of Legal Aid within England and Wales, because we believe that it’s continued investment in and commitment to having legal aid available is necessary for increasing access to justice within the United Kingdom and globally. I want to give proper credit to the lost sight of England and Wales for their 2021 review of civil legal aid provisions. Where are they found that 40% of the population of England and Wales does not have housing Legal Aid provider in their local authority area that rises to 63% for immigration and asylum legal aid providers, 67% for Community Care, legal aid providers and 79% for welfare, legal aid providers, there are these legal aid deserts springing up across England. I think they’re especially prevalent in northern England right now. And so, the ability for a provider to be able to address these gaps is something that we’re hoping to help with. What we see is that, especially Legal Aid law firms are struggling to keep up with this growing demand. So we have built some new legal aid features that are part of all Clio plans at no additional cost that we believe will help Legal Aid advocacy organizations within the UK. And basically what we offer is built in reporting to streamline Legal Aid matters. But currently, we’re focusing on civil certificate, civil control, controlled and criminally controlled legal aid work with our plans to expand even more types of legal aid cases in 2022. How this helps legal aid providers is one of the focuses is on billing. So right now where you’ll be able to generate legally aid compliant billing within a matter of minutes, if not hours and have them ready for upload to the CWA portal it months in. So you don’t have to take time away from the work that you’re doing in order to be compensated for the work that you’re doing. We’ll also we’ve also built in legal aid code lookups. Right now, so you don’t have to look at frankly, the horrendous PDFs, and the codes that are available for them, you can actually just find them quickly and easily for civil and criminal legal aid matters as a part of your billing. And we built in threshold notifications as well. And so we know, there are unfortunate limits to what legal aid will compensate. And so in order to help firms really be mindful that they aren’t committing themselves to a situation where they’re hurting their firm and their ability to help other legal aid claimants. On behalf of a current claimant, they have easy to read dashboards with Legal Aid thresholds built in such that you’ll never approach a threshold without being aware of that risk. And so you can manage it appropriately. And all of these things we believe will help legal aid providers really just be as efficient as possible. And that administrative work, such as they can focus then on the best outcomes for their clients and the communities that they’re serving. Yeah, no.

27:19 Robert Hanna:

And thank you so much for giving such a comprehensive, comprehensive, shall I say, get my words out overview of that, because I think it’s such meaningful, important work. So yeah, thank you so much for that, Joshua. And following on from this, you know, you’ve traveled a lot, you’ve seen particular differences in the way lawyers adapt to technology in different countries. So just tell us a bit more about that.

27:39 Joshua Lenon:

Absolutely. So interestingly, the United Kingdom is definitely one of the places where the changes in legal regulations early on, have led to opportunities for the adoption of technology, I think, more so than what we’ve seen in the United States. And so as there’s been not an uncertainty, but a willingness to embrace legal regulation change, what we’ve seen especially is that law firms in the United Kingdom are much more open to seizing the opportunity of technology than we’ve seen in a lot of other jurisdictions. And so if we look at the alternative business structures that came into being way back in 2012, the biggest adopters of those structures are actually law firms themselves, where they’re looking to experiment with a new type of legal service or a new type of partnership with other technology providers. And while that’s a narrow view, just looking at ABS is what I’ve seen is that law firms of all sizes throughout England and Wales are definitely seeing the opportunities of technology and willing to jump onto that. And there’s never been a better time and our current legal trends research, what we’ve seen is that, while law firms themselves are shifting towards new technologies, what we’re seeing is there is a consumer demand for tech forward law firms. So back in 2018, our research showed us that only 23% of legal consumers were open to working with a lawyer remotely. And this year’s report 79% of consumers so nearly three times as much, are want to see the ability to work remotely with a lawyer and they see it as a key factor in choosing whom to work with. In fact, 67% are actually open to just in working with a lawyer entirely remotely. And so when we look at situations like the Legal Aid desert, in the UK, and the need for enhanced coverage across different geographies, the willingness of English And of English law firms to utilize a remote service, something that has the ability to share documents online, has the ability to communicate with clients via mobile devices has the ability for law firms to make appearances for over video or access their files as they work from home. All of these things are enabling this remote experience for the consumers of legal services, and setting up in English and Wales law firms to be the leaders and how clients and lawyers collaborate together. So yeah, it’s been phenomenal to have England and Wales and Scotland as a part of, I think, the leading edge for technology adoption, and see what’s worked there start to spread throughout the world.

30:50 Robert Hanna:

And it is super exciting times, and I can’t wait to see what’s gonna happen in in the future. And I thoroughly enjoyed sort of our chat today, and you give us a really comprehensive overviews and some of the detailed, I guess, stuff that Clio has been up to, and is doing to really help lawyers, law firms in terms of particularly becoming more and more client centric. So I’m sure lots of people are going to be inspired, educated and want to get in touch. So if people want to follow you and get in touch about anything we’ve discussed today, what’s the best way for them to do that, feel free to shout out any web links or any relevant social media handles, and we’ll also share them with the show for you too.

31:27 Joshua Lenon:

Now, it’s amazing, thank you so much. I want to actually keep highlighting the legal Trends report is a free resource that we publish, for everyone to utilize. And so you’re able to download every version from 2016 to date for free@clio.com/ltr/ for legal Trends report. And if you’re looking to connect with me, personally, I’m available on both LinkedIn under my name Joshua Lennon, but I’m especially active on Twitter, it got me my connections that led to Clio, it continues to lead to conversations with practicing lawyers around the world. And so I still find a lot of lot of value in that service. And so you can check me on Twitter at Joshua Lenon, where I’m often discussing the regulation of the practice of law, technology’s impact on it. And very frankly, I post a lot of food pics because I’m a bit of an amateur chef. So I hope people enjoy that as well. And if you’re looking to connect with me, via email, you can reach out to me at joshua@clio.com, where I’m happy to continue our conversation one to one as well. There’s a lot that we did not discuss as probably Google Trends report, we did a survey of how quick lawyers are to respond to phone calls and emails, and the shocking numbers of that. And we actually didn’t talk about what features are driving both clients to select a law firm and huge financial improvements within the law firms themselves. So I really cannot stress enough that people should swing by, grab these reports, read them, digest them and see what works best for your law firm, and how we can help provide those types of opportunities for you and your clients.

33:15 Robert Hanna:

Amazing. Thank you so much, Joshua. It’s been an absolute pleasure having you on the show, wishing you all involved at Clio lots of continued success but all of your future pursuits, but from all of us for now, over and out. This week’s review comes from Mitch Jackson, five stars. One of my favorite experiences in 2021 is binding this podcast and diving in while running along the beach or paddle-boarding down at the harbor. When done right. I believe the law is an exciting profession. Rob and his team do a good job of sharing inspiring and entertaining episodes that help us all learn from each other while enjoying the journey. And what a journey the practice of law is. Subscribe, listen and enjoy the share. That’s my formula to the Legally Speaking Podcast. Have fun. Thank you so much, much for your lovely kind words from all of us on the Legally Speaking Podcast team. We really appreciate!