For the second year in a row, Thomson Reuters released the 2017 State of U.S. Small Law Firms, a survey with input from over 300 small and solo law firms. In this episode of Law Technology Now, host Bob Ambrogi talks to Bill Josten about the results of this survey including the common challenges facing small and solo firms, their biggest sources of competition, and how they are investing in technology to improve efficiency. They also discuss how these firms measure success and tips for improving client intake.
Bill Josten is the senior legal industry analyst for the Thomson Reuters Legal Executive Institute and consults with law firms nationally on issues related to law firm profitability, pricing and cost recovery.
Law Technology Now
2017 State of U.S. Small Law Firms Survey from Thomson Reuters
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Bob Ambrogi: Welcome to Law Technology Now on the Legal Talk Network. This is Bob Ambrogi. Today we are going to be talking about a recent small firm survey conducted by Thomson Reuters. I have written a little bit about it on my LawSites blog and also on Above the Law. But we are going to go into a little bit more depth on it today with William Josten, the Strategic Content Manager for the Legal Executive Institute at Thomson Reuters. Bill, welcome to Law Technology Now.
Bill Josten: Bob, thanks so much for having me. Nice to talk to you again.
Bob Ambrogi: Nice to talk to you again. Bill, just to start off, tell me a little bit about who you are and what you do.
Bill Josten: Sure. So I am a former solo attorney that’s now with Thomson Reuters; I have been with TR for about seven years. And I have been with our Thought Leadership Organization, the Legal Executive Institute for about the last two, two-and-a-half years.
In my role with the Legal Executive Institute, it’s my job to sort of plan and manage content that’s geared specifically towards engaging legal decision makers and executives. So targeting managing partners, practice area heads, corporate GCs, LDO professionals on the corporate side, and trying to figure out what issues are they asking about, what issues should they be asking about, and what messages should we be delivering to those audiences to help really drive the conversation in a meaningful way and hopefully help spark meaningful change within the industry that’s going to help pull the business forward.
Bob Ambrogi: This is the second year that Thomson Reuters has done this small and solo survey, I believe. I believe it’s just the second year.
Bill Josten: Correct.
Bob Ambrogi: I don’t know, were you involved at all in actually conducting this survey or you have just been kind of involved in digesting and analyzing it. What’s your role in this?
Bill Josten: Actually a little bit of both. Both years I have been fortunate enough to be involved in helping to put the questionnaire together and then doing a lot of the analysis and writing about the results as they have come in.
Bob Ambrogi: So tell me in general terms about the survey, about what it was for and why Thomson Reuters decided to do it?
Bill Josten: Well, we wanted to have a survey that looked specifically at the small law market. Traditionally that’s been sort of an underserved population, when you look at analysis of the legal industry. We see a lot of stuff coming out around the corporate legal department. We see a lot of stuff that’s focused on the larger firms, midsize on up to the AM Law Firms. But that small law firm market is hard to get a handle on. It’s something that doesn’t get studied as much, but it’s a huge proportion of what makes up the legal market in the United States.
So we wanted to do something that was specifically geared towards that market and we wanted to specifically engage the managing partners, the leaders at those firms, and especially trying to drill into the solo market, because there’s a lot of insight that we can gain from what they are experiencing, looking at are things from the larger firms trickling down to these smaller firms, what are their unique challenges, just really trying to get at some of that and really trying to come at it from not just a quantitative standpoint, but a more qualitative and emotional standpoint.
So as you look through the survey, things like, where do you see most of your competition coming from, that stuff is hard to get at if you are looking at quantitative data from a financial system. Those are things that you are connecting on a much more emotional level, because you are getting into that gut feel of what these attorneys are experiencing on a day-to-day.
And I think that’s an important way to be able to look at the industry, both from a quantitative perspective to understand what’s happening, but also from a qualitative, to get at to the how and why. That’s really what we are trying to do with this particular survey, it’s some of the quantitative analysis, but also understanding what it is our attorneys are feeling, where their pain points are.
Bob Ambrogi: So it’s not just data and billing and profitability and hours worked and that sort of thing, but really kind of an impression of, as you say, sort of first person impressions of the challenges and issues and concerns that small firm lawyers have.
Bill Josten: Absolutely, because let’s say, from a quantitative perspective we do a lot of quantitative analysis of the legal market as well from various data sources that we have in TR, like Legal Tracker, Peer Monitor, Monitor Suite, and those are great because we can see the nuts and bolts; what are firms investing in, what do their billable hours look like, what does rate growth look like, those quantitative KPIs that are vital to understand when you are looking at the health market.
But equally important is getting at the so why are these things changing. I mean you can look at data that says technology investment is increasing by such-and-such a percentage, but getting into some of the more emotional things that we do with the State of Small Law Survey that lawyers still feel to a certain extent a bit overwhelmed at the pace of change of technology.
But at the same time they also feel that embracing that technology and the efficiency that it brings is vital to not only their past success, but also their future strategy. That’s the type of insight that we are really trying to get at here.
Bob Ambrogi: Yeah. And I should interject here that the full survey can be downloaded from the Thomson Reuters website; although, there’s not a short URL that I can easily recite here in the middle of this broadcast that I know of, maybe there is, but certainly I think if somebody just googles 2017 State of U.S. Small Law Firms, they will get to the survey and when we post this show I will make sure the Legal Talk Network people include a link to it there as well.
But I want to ask you, I mean you are a former solo practitioner yourself, so when you looked at this year’s findings, was there anything that really kind of jumped out at you about what it reported?
Bill Josten: Well, looking at it from my own background, having been a solo attorney for a number of years, what jumped out both last year and this year to me was just how much I connected with so many of the challenges that the lawyers responding to the survey identified.
They talk about things like challenges acquiring new client business, spending too much time on administrative tasks, those being sort of the top two challenges that were identified by the bulk of our respondents. Those are things that I immediately connect with. Those are things that have been among the top challenges for both years that we have done this study and they are things that I very much can appreciate from my time in practice, understanding especially as a solo practitioner, trying to figure out where does that next check come from.
I know when I was in practice I did a lot of my work flat rate, so I would often joke, but I mean it’s only half of a joke that the only meeting with the client I ever really got paid for was the first one. Obviously I am getting paid to do the work for them, but in that first meeting, if I do my job right, they like me, they are going to engage the matter with me, they write me a check, that’s the last dollar I am going to see from that client. So then in order to continue to sustain my business, I have got to continually have a stream of clients coming in.
So that was something I very much related to because that’s definitely a challenge, and I think it’s still an open question what’s the best way to be able to get at new business, and of course there’s a lot of different answers to that.
But then also that idea of spending too much time on administrative tasks, again, I have joked in different presentations that when I was in practice I did primarily criminal defense, but I said I spent about 50% of my time as a bill collector, 40% of my time as a guidance counselor and 10% of my time as an actual practicing lawyer. And of course that’s a exaggeration, but that’s how it felt to me that most of my time was going to running the office and trying to make sure that I was getting paid and those types of things that they don’t really prep you for in law school, but if you are going to be successful at running a law firm as a business, they are absolutely vital.
And if you are in a solo attorney practice or even in a smaller shop, you don’t have a choice, that has to be your job, that’s a hat you have got to wear. You don’t have necessarily the staff to be able to pass that on to. So those are things that I immediately connected with from the first time I saw these results.
Bob Ambrogi: Yeah, it was really interesting, the survey both years kind of made the point that solos and smalls are spending an awful lot of time on administrative tasks. This year it was basically 70% of respondents saying they are spending too much time on administrative tasks and 25% saying that’s a significant challenge for them.
What are some of the other challenges that they are facing besides getting clients and dealing with administrative stuff?
Bill Josten: The other things that they have identified is really their key challenges, at least in terms of what’s a significant challenge for their firms, things like client is demanding more — basically demanding more for less, dealing with client rate pressures. That’s also been a consistent theme for both years.
Now, fortunately in 2017 we saw a slightly smaller percentage of respondents actually saying that that’s a significant challenge for their firm. How much of that is due to a little bit of a different population of respondents and how much of that is due to maybe some changing strategies to be more effective in dealing the clients, that’s probably an open question, which I don’t necessarily know we have a great answer to.
But that’s something that — that’s one of the strengths we see across the industry, no matter what size law firm you are looking at, that idea of clients pushing back on rates, realization suffering as a result of that, that’s something that we see very, very commonly across all size firms. So that was something that — it was a bit reassuring, not surprising to see it happening in the small law space as well and I think you can talk to just about any small lawyer and they are going to say, yeah, especially in my B2B type relationships that’s something that they feel a lot.
Bob Ambrogi: So to the extent that attorneys recognize the challenges their firms face, what are they doing to address those challenges and meet those challenges?
Bill Josten: Unfortunately the sad answer is not much. When you look at some of the survey results we see very high percentages of respondents identifying a particular challenge, but we also see almost an equally high percentage of respondents saying that’s really not doing much to address it.
When you look at the actual report itself, the percentage of lawyers saying that they are identifying — for example, 75% of respondents said they have challenges acquiring new business, but 71% of those same respondents say that they are not really doing much to address that challenge. So out of every 10 lawyers that say they have a challenge acquiring business, 7 out of 10 of them really haven’t adopted a strategy of how to confront that. And I think part of that is probably they just don’t know what steps to take.
And I think especially in the small law space when we are looking at not addressing the challenges, again it comes back to that idea of just their scale. I know in my practice I was both a solo and a small firm and we certainly recognized that we were among the 70% of respondents that said we had a challenge spending too much time on administrative tasks. But we really didn’t do anything to address it because it’s an _______ operation and if you are taking a day or two out of your working week to try and address some of these issues and to try and implement systems that are going to more effectively combat some of these things you are looking at from an administrative task standpoint, well, then that’s a day or two that you are not bringing in new business, and like I said before, I am always looking for what’s the next check coming in, when is my next client or my next potential client going to come in such that I can get a paycheck for that day.
And if I am taking two days to try and figure out, well, let’s redo our client relationship management or let’s figure out a more efficient way to on board clients or those types of tasks, then it’s really taking away from my ability to run the other side of my business that’s actually getting me paid. And you don’t necessarily think far enough down the road to figure out, well, if I take a day or two to address this issue, that’s going to create enough capacity for me that within the first month or two months or whatever I will have more than made up for it because I will be spending a lot less time on administrative stuff, I can spend a lot more time with clients.
Thinking much more in the immediate, what does my day-to-day look like and which clients am I going to sign today so that I have income coming in. That longer term, couple of months down the road payback, the investment to build that efficiency doesn’t really necessarily enter your equation.
Bob Ambrogi: So when I looked at this I wondered if it was quite as bleak as it might seem at first glance insofar as, while only a small percentage of respondent firms here were saying that they had actually kind of affirmatively taken steps to address these challenges, it seemed that an additional percentage said they had plans in place to address these challenges, which seemed to suggest they were working towards actively addressing these challenges, even if they weren’t.
I know the blog post I wrote about it I kind of combined those numbers to say if you look at those that have actually implemented changes and those that say they have a plan in place to address those challenges, then you get up into much higher percentages in terms of firms that are again either actively or planning to actively address the challenges. Is that a fair way to look at it or am I missing something there?
Bill Josten: Yeah, I think it’s definitely a fair way to look at it, because when you start talking to the lawyers that are actually living this day-to-day, you don’t necessarily hear a lot of, no, we are not going to do anything about that. You hear recognition of the challenge and maybe a bit of frustration from some of them, but they don’t know quite what they want to do to address it, but they understand that there are things that do need to be addressed.
So I think you are starting to see more motivation around, well, let’s look at what a potential solution might be, and they are starting down sort of that iterative path of, well, so let’s try X as a solution, we will see how that works and then we will sort of pivot off of that and continue to try new things until we land on something that seems to work for us.
So I think you are starting to see more of that happening and I think you are going to continue to see that as lawyers sort of start to realize that a lot of these things are permanent trends. Stepping outside of the State of Small Law Survey, somewhere in the neighborhood of 95% of respondents to the Altman Weil Law Firms in Transition Survey this year said that a need for increased efficiency is going to be a permanent trend in the profession.
So there’s nearly universal recognition, you can’t get 95% of people to agree on just about anything, but there’s nearly universal recognition that things like getting more efficient in how we run law practice is going to be a permanent trend, and law firms, even small law firms, can be challenging ships to turn. There’s just a lot of institutional inertia I call it, within those organizations, for the reasons that we have already talked about. We don’t necessarily step away from the business to fix the business, but that is becoming more of the reality of their day-to-day.
Bob Ambrogi: You were talking about some of the — I guess some of the institutional challenges even in small firms to address change and to address efficiency within their firms, how does that play into competition? I mean one of the challenges, one of the chief challenges for small firms is getting new clients, what does the survey tell us about what firms are doing to address that challenge of getting new clients and who are their chief competitors? Who are they going up against here?
Bill Josten: Yeah, that’s a great question. In terms of their chief competitors, most of the respondents to the survey, both last year and this year, identified other law firms of similar size as their chief competitors. And then we also see things like significantly larger firms that compete for the same clients, that’s a significant source of competition.
And one that we really saw a big jump in this year is online health help or legal DIY sites, so the LegalZoom type competitors. Last year we saw 55% year-over-year increase in the number of respondents saying that legal DIY sites are presenting significant competition to them and candidly, I think that that number is still too low. It went from about 11% last year to 17% this year.
I mean that’s a healthy jump, but I think that number is probably still a little bit low, and when you look at breaking that number down by sort of a sub segmentation of the small law firms, when you look at like for example solos, that number jumps to almost 30%; I think it’s actually 28% are saying that they are facing competition from legal DIY sites. So you know that it’s a big source of competition in the market.
In terms of what they are doing to differentiate, in terms what they are doing to win that new business, you see a lot of focus on wanting to sort of become the best of best. They want to build internal efficiencies so that they can better serve their clients.
A lot of their efforts on how are we going to win new business are focused around how do we keep our current clients happy such that we have repeat business from these clients whenever possible and how do we turn them into good referral sources.
When you look at what are the success factors that law firms have identified is helping to drive their success in the past 12 months, client referrals is a fairly substantial source of that, where clients, word of mouth saying I worked with this particular lawyer and they did a fantastic job, that’s been a good source of new business for a lot of these small and solo law firms, and that’s going to I think continue to be a focus.
And a lot of that has to do with how are they serving their clients, how easy are these law firms to do business with. You are seeing a lot of focus there, on how they are delivering client service, and that’s something that really trickles throughout the entire market; it’s certainly not unique to the small and solo space.
How small and solo lawyers do it of course is different than how a large AM Law Firm would do it. It’s much more interpersonal. You don’t necessarily have a client team that you are dealing with at a small firm, you are the client team, you are the one who is really in charge of that relationship, but it’s how that overall firm operates, how quickly do you get to a good result, how easy is it to get the law firm paid, how close do you come to the client’s expectation in terms of what the costs are going to be, those are all issues that factor into that.
Bob Ambrogi: Well, in that competition from the do-it-yourself sector, does the survey offer any hints or do you have any insights from your own analysis of the legal industry as to how small firms can counter that?
Bill Josten: It’s a huge challenge I think for small firms, just because we like to do everything online. When you look at larger firms, you see some of the really big firms starting to offer, what have sort of been dubbed in the industry freemiums, where it’s essentially work product from the large firm that is available at low or no cost to a potential client.
So thinking like a startup business, some of the business formation paperwork being offered as a competitive opportunity to some of these legal DIYs. I don’t know that you are necessarily going to see that as much in the small law firm space; I think where the small law firms can really sort of start to differentiate themselves, and an argument that I have heard small law firms making is, yes, you can go and you can get forms, but you don’t know for sure how current those forms are, because you don’t really know when the last time they were updated was, you don’t know who is doing the maintenance on those forms.
And if you have questions, yeah, these sites advertise that you can pick up a phone and you can talk to a lawyer, you don’t know who that person is. You have never met them. You don’t know their experience. And in a business like the legal profession, where it’s so much about the person sitting across the table from you, and I don’t mean that in the opposing counsel way, I mean that in your counsel, the person that you are meeting with that’s counseling you, a lot of clients will say I don’t hire the law firm, I hire the lawyer.
And even in a B2C situation, like you see with a legal DIY site, those individual consumers still have that idea that they want to know who it is that they are working with, because they are entrusting this person, whether it’s their estate plan or the formation of their business or whatever, they are entrusting this person with the success of that venture.
So that idea of having that personal connection and being able to deliver a meaningful relationship I think is a way that small law firms can continue to set themselves apart, at least in terms of the clients that are going to come in and want to engage you.
Now, a secondary challenge to that is how you get yourself in front of those clients or potential clients rather in a way that you sort of interrupt them or intercept them before they have a chance to get to the DIY site.
So I think employing —
Bob Ambrogi: It’s making that connection in the first place.
Bill Josten: Right, exactly. So I think employing effective technology from an SEO standpoint for your online presence. Having an effective online presence is absolutely vital. If you want to be the lawyer that someone in your area thinks of when they are looking for, for example, an estate planning lawyer, well, you better be towards the top of those Google search results, figuring out something that’s going to set you apart that really makes it unique, and that could be — first of all, it has to be how your SEO is done and how your website is positioned, but there may also be something unique that you can do from an offering standpoint. What can you bring to the table that’s maybe a bit unique where somebody goes, huh, I haven’t seen that before, and makes them want to pick up the phone and actually have a conversation with you.
Bob Ambrogi: That’s good advice. This year’s survey and last year’s survey surprised me in one way, which is that after you go through the survey and you read about lawyers who are spending too much time on administrative tasks and working hard to bring in new business and addressing all these other challenge, trying to keep up with technology and changes of the law, all these other challenges that they describe, the survey describes, when you get to the point of asking them or when the survey gets to the point of asking them to characterize their success, overall by a large majority they consider themselves successful.
The survey this year said that 56% considered themselves successful and another 30% considered themselves very successful. So overall we have got 86% of these lawyers characterizing their firms as successful.
Are they looking at themselves through rose-colored glasses? I mean how do you account for that view of themselves as successful in the face of all the challenges that they describe?
Bill Josten: Well, I wouldn’t necessarily call it rose-colored glasses, but I mean essentially the way the survey is structured is we are asking them what is your primary measure of success and how do you rate yourself against that. So I mean hopefully — I mean I would be very surprised under that type of a construction if we didn’t see a lot of firms saying that they are successful.
Now, if we were looking at it from a quantitative perspective, digging into their financial management systems or whatever their bookkeeping apparatus is, would we necessarily have the same assessment, if we are looking at it from a straight KPI standpoint, maybe, maybe not. But the fact of the matter is when these lawyers are saying, well, this is how I primarily define success, whether that be reaping client business, overall profits, overall revenues; although I hope it’s not overall revenue or their client satisfaction rating, it’s encouraging that what they are identifying as their primary driver, their primary definition of success, they feel they are marketing well against that.
That being said, one thing I would caution for those people in small law firms that are listening to this, one thing that I would caution is be careful how much of that you do off of just gut. If you are saying overall profits are your primary driver, well, that doesn’t necessarily just mean the balancing of your checkbook. I know that that was sort of — when I was in practice that was really my motivation, that was my sort of driver was, is there money in the bank account; if there’s money in the bank account, I must be doing okay. Well, it’s more complicated than that.
So understanding am I taking good business, are the matters that I am engaging actually profitable. I would often pitch matters to say, well, I normally bill at about $150 an hour, this type of stuff normally takes right about 10 hours, so client, I am going to do this for you for $1,500 flat. The majority of my work was done on flat rate. But I never really went back and looked to say how many of these things do I actually close in less than 10 hours and where did that $150 an hour number come from? Does that accurately reflect what my expenses are, plus a certain profit margin so that I can actually pay myself? I didn’t really get into those types of specifics and I think that’s vital.
Another thing that really jumped out from the survey was the number of firms that said that client satisfaction was either the primary definition of success for them or a key component of success, had a lot of firms saying that that was something that they really paid attention to, and yet when we asked — the way we phrased the question is, which of the following metrics do you track within your firm? Only 34% of respondents said that they tracked client satisfaction rate and that doesn’t even necessarily — we didn’t get specific into are you compiling Net Promoter Scores or any specific methodology. Client satisfaction ratings could be as simple as are you reading your online reviews and do most of them seem to be somewhat positive.
Only about a third of lawyers said that they are tracking client satisfaction ratings; far more said the client satisfaction ratings were important. Well, if it’s important, you should be measuring it. That’s some advice that I would offer then to those small firms is, once you have identified what matters, are you measuring it so that you can manage it?
Bob Ambrogi: So KPIs are important.
Bill Josten: Absolutely.
Bob Ambrogi: This is Law Technology Now, we haven’t talked about technology all that much yet, but I did want to talk about that because the survey did ask about this a little bit and particularly asked about law firms adoption of new technology and how that fits into their practice. So can you summarize for us what the survey found about lawyers using technology?
Bill Josten: Sure. In looking at the results both years 2016 and 2017, about half of the respondents to the survey said they had adopted new technology within the past 12 months. And when we look at the reasons for why some of that is and we look at the reasons why law firms are making major changes, one of the top — two of the top really reasons for those changes; one they want to improve quality of service; two, they want to reduce cost, and a lot of that ties back to being able to increase efficiency.
If you are able to increase the efficiency with which you are operating, then you can do things in a more efficient manner, you can serve your clients better, you reduce overall complexity, so the types of technology that they are investing in are the things that enable them to make those types of adjustments, and that could be from a matter management standpoint, actually streamlining their day-to-day workflows and it could also be from the standpoint of how they handle their back office.
When you look at — we have already talked about that idea of spending too much time on administrative tasks. Well, when you look at those firms, you mentioned the break down of firms that identified themselves as either neither successful nor unsuccessful or just plain said, yeah, I am not being very successful. You compare those to the firms that say, no, I am very successful. One of the big differentiators is the sort of middle-of-the-road unsuccessful firms said they spend nearly twice as much time on administrative tasks than did the very successful firms. The very successful firms say it’s about 8% of their time; unsuccessful firms say it’s over 15% of their time. So it’s almost double.
You also see about a four percentage point differential between those two populations in terms of the amount of time that they spend actually practicing law. So I think it’s something in the neighborhood of 62% of a very successful lawyer’s day goes to practicing law; 58% of an unsuccessful lawyer’s day goes to practicing law.
So between those two figures right there you are talking about almost a 12 point differential in terms of how they are spending that time, and that 12 points goes into other things that really help to maintain and drive the business, like client development and business development. So those types of efforts do have a return on the investment that you are making, if you can find those types of efficiencies.
And when we look at other results that sort of tie into that technology aspect, a lot of it focuses on that ability to improve internal efficiencies and just finding better ways to be able to produce results.
Bob Ambrogi: To me it’s heartening that lawyers seem to be finally getting it, that technology will actually help them improve the quality of the services they are delivering and reduce the costs of the services that they are delivering. The survey seems to suggest that lawyers get that now or are starting to get that in greater numbers.
Bill Josten: I think that’s absolutely true. And one of the other — when you look at some of the earlier results of the study, when we are talking about the challenges that small law firms are facing, 67% of respondents last year said that they faced a challenge from increasing complexity of technology. So that’s two-thirds of respondents saying they feel kind of underwater with all this newfangled machinery stuff, but then you look at this year’s results and that same option, that increasing complexity of technology, has dropped to 45%.
So I think we are seeing lawyers either getting more comfortable with increasing technology or realizing that saying it’s just too much of a challenge, it’s too complex, I don’t want to deal with that isn’t an option.
Bob Ambrogi: Yeah, although I wonder about that, only because I know just from my own experience when I go out and speak to groups of lawyers, I am still hearing an awful lot of lawyers, especially in smaller firms, who are just struggling with the challenges of technology and struggling to keep up with technology. So it will be interesting to see how that continues to evolve over the next couple of years.
I want to ask one last question. The survey looked at firms of basically from solos up to 29 lawyers and I am wondering if anything jumped out at you regarding the differences between solos and some of the other larger firms in the survey. Is there anything kind of unique about solos that stands out from the survey?
Bill Josten: There’s a lot that’s actually different about solos and how they think and just their attitudes about the business. One of the big ones I think initially is that idea of the source of competition from DIYs, that small lawyers — the majority of firms — the average was 17% said that they saw competition, but 28% of solos said that they saw it. So they are feeling that pinch a lot more.
There were other things that really jumped out as differentiators that really weren’t all that surprising. With solos we are much more likely to see the majority of their business being B2C, with individual consumers, as compared to businesses. Just the numbers really quick, solos say that roughly 75% of their revenue on average comes from individual consumers compared to only 20% from businesses, and those are almost exactly inverted for firms that are between 11 and 29 lawyers, where they are saying that 65% of their revenue comes from businesses, 20% comes from individual consumers. So there’s a big gap there.
And then just some of the other things, like in terms of their success ratings, solos were a little bit more likely to include client satisfaction ratings as a success factor, and in terms of what they defined as the primary definition of success, there again we saw a little bit of a differential. Larger firms are more likely looking at things like profit, and that certainly is a key factor threshold as well, the overall profits, but then we also saw larger percentages looking at things like repeat business, client satisfaction ratings, not necessarily the same financial metrics, some of the more qualitative, more touchy-feely type metrics.
And the reason for those differences, there’s a variety of possibilities to that, some of them could be that they — because they are dealing more with consumers they are more concerned with that emotional connection, that satisfaction that the client is feeling. And another reason could simply be that they aren’t as sophisticated with their bookkeeping, so they don’t watch the profits as much because they have a harder time calculating their profit as compared to just looking at the revenue coming in.
Bob Ambrogi: Bill, wrap it up for us, any kind of final thoughts, big takeaways from this survey that you want to close with?
Bill Josten: I think that one of the things that we are going to start to see as we trend this year over year going into the future, I think we are going to start to see more and more firms saying that they are addressing some of the challenges that they are feeling.
I don’t necessarily see that we are going to see the percentages of firms saying that they are experiencing these challenges decreasing, because I think that the pace of change in the legal market isn’t going to slow down. We are going to continue to see challenges in acquiring business. The legal market is going to stay relatively flat for demand. That’s going to stay essentially zero sum. We are competing with other law firms for market share. Those types of things I think are going to be trends for the foreseeable future.
But hopefully we do see an increase in firms saying that they are confronting those challenges, because they are looking around what are bigger firms doing that I could maybe emulate on a smaller scale, what are my competitors doing that I can copy, what can I do that’s maybe different that brings something to the market that perhaps hasn’t been presented particularly before that really sort of sets me apart.
I am hopeful that we will start to see those types of things as we get further down this path and lawyers continue to confront the reality that these things aren’t just going to be what they are, it’s going to be permanent, we are going to have to figure out a way to deal with it.
Bob Ambrogi: Bill, thanks so much for taking the time to be with me today and discuss the survey, share your thoughts on it, I really appreciated it.
Bill Josten: Oh, it’s been my pleasure Bob. Thank you so much for having me.
Bob Ambrogi: We have been talking about the 2017 State of U.S. Small Law Firms Survey conducted by Thomson Reuters with Bill Josten, Strategic Content Manager for the Legal Executive Institute at Thomson Reuters.
This is Bob Ambrogi, on behalf of everybody at the Legal Talk Network and my Law Technology Now co-host Monica Bay, thanks for listening and stay tuned for another episode of Law Technology Now.
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