In this solo presentation, Linda Artesani of Artesani Bookkeeping walks viewers through key findings from Clio’s 2019 Legal Trends Report and connects them to practical accounting and advisory opportunities for law‑firm clients. She begins by emphasizing the importance of tracking marketing spend and lead sources, then contrasts Clio’s all‑in‑one platform with LeanLaw’s billing‑focused solution. Artesani highlights several law‑firm performance metrics—utilization, realization, and collection rates—showing how only a fraction of an attorney’s day is billable and paid. She discusses the gap between lawyers’ perception of client communication (phone/email) and clients’ expectation for face‑to‑face interaction, advocating for more in‑person engagement. The talk also covers Clio’s categorization of firms (growing, stable, declining), attorney confidence in legal versus business skills, and the need for budgeting, forecasting, and accounts‑receivable workflows. Artesani stresses that higher billable rates alone don’t guarantee revenue growth and that modest improvements in utilization can significantly boost cash flow. She concludes with actionable recommendations for accountants working with attorneys—track marketing ROI, implement surveys, manage AR, and provide strategic financial planning—while inviting viewers to connect via her website and a Facebook community.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping. So in last week's post, we talked a little bit about KPIs and how we can work towards looking at the data inside the accounting when you work with attorneys. And I think a lot of the law firms out there, they probably don't even think about some of the things that we can really analyze. Had a great conversation with a client this week, and we really talked about her marketing costs and the things that she's spending money on. She just hired a new marketing firm. And one of the questions I asked was, how are you measuring when the people come in the door or as you start to build on your client base, how are they— how do you measure where they came from? And it's the same thing I do with my firm. I have to figure out when I get a lead, where'd the lead come from? And especially if it's a good lead, did the lead come from my accounting pros with LeanLaw? Did it come organically through videos like this? It's important to start to look at those metrics to see where my marketing dollars should be spent or my time in the case of the videos. This week, Clio dropped their Legal Trends Report, and they've been doing it for the last 4 years. It was fascinating to watch and listen to because it really dived into— they've got the data. Clio, I didn't realize, Clio is a different application than LeanLaw. And it is— sometimes you'll have an attorney that you work with that maybe wants to use that product. And one of the things that's interesting, it's different than LeanLaw. It's not just a billing and time and billing program. It also does— it's also a platform where they can do calendar, they get their calendar and other parts of it. So it's a more robust system than just time and billing that LeanLaw does. It's more expensive. So you'll find that sometimes the smaller firm, it's like a little all-in-one package is what they're looking for. Doesn't work as well with QuickBooks as LeanLaw does, but they have the data behind all these records, right? Because they're able to see the data. So they take the data, aggregate it in, make it anonymous, and they just study it to see where, where the trends are. And this is what's really fascinating. So they've got this data. I didn't realize that only Clio really works with smaller firms. They're not in the bigger firm mode where LeanLaw is trying to really grasp that mid-market client that's the bigger firm. We were working with one right now that has 26 partners. There's going to be another one that we're going to be working with— Sarah and I will be working with 40-something, 40-plus partners. So LeanLaw can work in a product like that. It can work and do those mid-market firms and get the time and billing and actually add some more user seats when you start to layer it on with QuickBooks Online Advanced. But I wanted to get into some of the metrics really briefly here. I'm going to pull up a couple of slides from this. presentation from Clio because I thought some of the information was fascinating because of the fact that the 2 industries, the accounting and the legal industry, are very parallel. We're both being kind of challenged with the fact that automation's coming in. So it's taking away some of the mundane things that we do and it's giving us the time to do a little bit more. And I think that it's fascinating, some of the trends in this report on how the rates and how attorneys can work with the rates. So let me just bring up a slide here and then we'll look at it and see the stat. I'm just going to share part of what was in their report, and I'll get into it a little bit more in the next few weeks, maybe skip a week in the holiday, but we'll get into it. So let me bring up the slide. So I think with moving forward to 2020, I love this graphic because this is perception versus reality, right? So what does a lawyer think the way that the communication is going to happen, the initial communication between a client and them, and what does the consumer believe? What does the client think how we're going to communicate? So a lawyer believes that it's going to happen Partially on the phone. They think 39% of the interaction between them and their client is going to happen on the phone, and the rest of the time they believe email. So they're going to hide behind the email, and of course then website portals and other. When you look at what the consumer thinks, they think, I'm going to be doing it all face-to-face, in person. This is how they believe the whole lawyer and client situation is going to happen, and then a little bit on the phone, a little bit by email. They're not really looking at communication in this piece. So I found this to be very fascinating, and I believe the same thing that— Most of us don't like the coldness of an email. A lot can be misinterpreted with communicating in this way. For me, I am finding after this week and actually going out to meet my client in person, I realized there was a tremendous value there. So as I start to elevate my practice to move towards larger customers, more mid-market, moving toward more advisory services, the best way for me to do the advisory services is to actually go and be with the client. I thought Zoom was great, and Zoom is great, but being in person with her was mind-blowing. So I think that for me, I'm starting to realize that there's a huge value. And Sarah and I talked about it. We talked about maybe we're going to fly out and meet with some of these big clients that we have, be able to really work through some of this kind of barrier of not being in person and doing it through a Zoom, or which Zoom, like I said, is great, or email. So we're trying to get away from that and make 2020 more about that hands-on, one-on-one communication. So this, this slide blew me away, and this is so important for the attorney because what is the utilization rate? How many hours were billed? So you've got your 8-hour workday, and the most important thing to notice, notice here is that out of a Attorney's 8-hour day, only 2.4 hours are utilized or billed, but only 1.9 hours are paid for. So there's 6 point— actually, 1.6 hours are collected, so only 1.9 hours are realized. So out of the 2.4 hours of actual doing billable work, they're only billing out 1.9. Maybe they're discounting it or something like that. And then out of all of that, they're only getting 1.6 hours a day. That's amazing stuff. It's an eye-opening stat. I would— I, like I said, I'm going to go back into the other years and take a look, but this was really shocking to me. So some of the things that this agenda popped into, and like I said, I'm not going to do the whole— this whole video on this, but I really— it really was surprising to me. Law firm growth. What does thriving look like? So they looked at 3 types of law firms: one that's really growing, maybe new and growing, or just off-the-charts growing quickly, kind that we love to get as accountants because we can kind of manage the growth and make sure that they're not making the mistakes or running into the issues that happens when they grow without— disorganized grow instead of a controlled grow. Then they looked at staple companies and how the staple companies manage their business, that they just stayed the same. And then they actually looked at declining law firms. So that was really fascinating too. Some of the law firms are actually losing money and it's hard to believe in this economy. They wanted to look at also how were client expectations met. So also they put the law firms to the test. Do they deliver on the expectations? And it's funny because this morning I listened to the Friday Night Accountants talking about this very same topic with accountants. Are the expectations met? I think one of the ways we can capture that metric is to do a survey. And I can tell you, because we get surveys after webinars, sometimes surveys are They hurt your heart. The best way to put it, they can hurt your heart. You can get some really mean responses back, and you can sit back and you can kind of beat yourself up over them. Or if you can look at them as a whole, as a general, you can kind of look at where do I need to pivot and make things better. So there's value to surveys, and I'm really going to think about implementing them in my practice as I start to move towards my new way of moving My firm into 2020. The law firm growth. 87% of lawyers agree that they want their firms to grow. So if you're thinking about moving into working with attorneys in a niche, this is the place to do it. Working with attorneys is— they really want to grow their firm in the next 3 years, and 67% said they want to grow their firm more than a little. That's incredible. It's really exciting. I think it's very exciting. 76% of lawyers say they're overworked. I would love to see this stat on accountants. I know my little inner circle of friends probably will all raise their hand. It'd be 99.9% say they're overworked. 68% feel they're unappreciated. I don't know if that stat would apply for accountants, but it's interesting because, you know, lawyers have all the bad jokes and everything else like that, and they feel like they're doing a lot of work and maybe they're just not appreciated for the work. But on the bright side, the majority love being an attorney. They love being a lawyer and they love working with their clients. So that's wonderful, right? That's a great stat. I think that's a fantastic stat. 92% of lawyers are very confident about their skills as a lawyer, but only 53% are confident in running the business side of the firm. So here again, you want that shining moment that as an accountant you want to work with an attorney? There you go. That's a pretty big stat. So a lot of the attorneys, they don't learn about how to really do accounting or, or even manage a business inside of their law firm education. So we have that ability to be able to help them out. That's what's really, really fulfilling about working with attorneys. Lawyers are confident in managing— lawyers confident in managing the business side of their firms spend more time on long-term financial planning and marketing. So there's your 2 places that you can do KPIs for, right? Because they want to work on the long-term financial planning. Do a forecast, do a budget, help them out. This is where you're, you're going to find that you'll be very helpful to the customer. A lot of them don't even know where to begin with a budget. You know, you work with a nonprofit, they're pretty familiar with budgeting. Some of the law firms just don't, don't really know how to do budgeting. So this is where we can help them in forecasting, implementing a plan. So You can do all the nice, pretty, shiny reports and graphs, but if you don't implement a plan, you're going to find that you need to help guide them through it. This is where we become their partners. This is very, very important. They looked at the growing firms, they looked at the stable firms, they looked at the shrinking firms. So as we get here into wrapping this section up, higher billable rates do not guarantee sustained revenue growth. So a lot of times attorneys, if they don't have that assistance of an accountant or CPA or a tax professional, They don't realize that just raising their rates is not going to make them more profitable. You really have to analyze a little bit more data than that. It will help in the short term, but you might find that it actually has the opposite effect. The fastest growing law firms have realization and collections rates that are stable but not perfect. So that came out of the data that they analyzed, that they're a little bit better in their realization rate. They're not on that average. They're higher than the average, but not that much more. And the collection rates are stable. So helping a law firm that has a lot of accounts receivable, or any law firm that just has accounts receivable, a lot of times they're so busy with working that they don't track and stay on top of their accounts receivable. And it's easy for it to get old and stale. And when it gets old and stale, it's harder to, harder to really collect. So it's important to really stay on this and implement some kind of workflow with your staff that this is, is in place so that they can start to collect some of those monies that they earned. So incremental increases in lawyer utilization— so 28 to 33% of growing firms can drive significant impact in revenue. So just a little tick more than that 1.6 that you saw in the beginning can really have an impact on the bottom line and the cash flow. So those are important parts. So I hope this little piece was helpful. It's, it's, to me it was just eye-opening to listen to the trend report, and I'll put a link in the notes so that you can listen to it if you'd like. It's an hour long, so it's pretty long, and it's really fascinating. So Joshua Lemon was the one that presented it. He's an attorney and he does a great job, and I really highly recommend taking the time if you're an attorney or a law firm to look at the, look at the stats. So these are stats that are general over the Clio customer base. But I think it's a fact that it doesn't really target those mid-market firms, but I think it really will give you insight into what other firms are doing and how the industry as a whole is doing. So that's the biggest thing, my biggest takeaway. So areas we can work on and help them, maybe with the accounts receivable, maybe we'd help them with just managing their marketing. So those are just a couple of places and KPIs that we can work for. and work towards helping the client. And that's the whole goal, helping the client. So I hope this was a helpful video. I hope this accompanying article is helpful too. And if you have any questions or comments, feel free to reach out to me. I have a website and you'll get the link there below. We also have a Facebook group, QB Community Live, and I would love to have you jump in and interact with us there. It's, it's a great group of people. We have a lot of fun. And we help each other, so that's the most important thing. So on that note, I hope everybody has a great week.
