I hate it when people talk about dysfunctional families. That suggests there are functional ones, but I sure haven’t seen one yet.

Smokeball, a cloud-based legal practice management software provider, today released its 2024 State of the Law Report. It reveals some pretty scary findings about smaller law firms and their lack of knowledge of fundamental business principles. The Report also shows a certain lack of consistency between what these firms believe is happening in the market and what they are doing about it. The Smokeball study suggests that many legal professionals in smaller firms are not rushing to adopt technologies, like Generative AI that could help them better serve their clients and be more profitable.

Smokeball surveyed some 775 legal professionals worldwide. The Survey was designed to get a handle on industry shifts and emerging trends impacting firms of less than 30 employees. It’s basically a survey of small firms and solo lawyers. That’s important since most lawyers in the US are in small law firms or practice solo, according to recent statistics.

Business Acumen

The Study reveals a startling lack of business sense:

  • A full 50% of those surveyed have no clue whether their billings declined or grew last year. 
  • Only 30% of the firms think their highest priority for the future is growing and maintaining their client base. 
  • 30% have no clue what drives their growth. 
  • A full quarter of the firms have no marketing plan to achieve that growth. 
  • And despite not knowing what drives growth, 52% somehow believe their profits will increase.

Focusing on growth is a hedge against future risk

Think about those stats. Half of the firms don’t know if they lost business last year. A third think growth is the highest priority for the future. The next highest concern for the future? Managing inflation. However, those firms that are not focusing on growth are asking the wrong question. For most businesses, including law firms (yes, they are businesses!), it is not what do we do about inflation. The better question is what we can do to protect against fluctuations in costs, supply, and demand. Focusing on growth is a hedge against future risk. But only ¼ of the firms have any plan to achieve growth. 

Another concerning fact: 40% of the larger firms think they can achieve growth by merely hiring more people. But you can’t hire more people unless you have more work to do. For the third of the firms that have no understanding of what drives growth and for the 25% of firms that have no growth plan, the chances of new business magically walking in the door are pretty slim.

Many firms fail to appreciate today’s labor dynamics

And even if hiring more people was a good strategy for growing, many firms fail to appreciate today’s labor dynamics. Simply put, as the Smokeball report discusses, there is more demand for workers right now and in the future, than there is worker supply. Even though firms have to compete for what talent there is, many of the firms surveyed by Smokeball insist on working conditions many find unacceptable. 2 in 3 firms surveyed will not consider hiring remote workers. 70% of firms of more than three people demand workers be in the office full time.

But what most workers—workers that are in short supply–want is flexibility and the ability to work remotely. How are you going to attract workers in a tight supply market if you are tone-deaf to their desires?

The bottom line for many small firms: 

  • You don’t know if you lost business last year, you don’t understand growth, and you have no plan. 
  • The plans you centers on hiring people but you demand conditions that are unacceptable to most workers. 
  • You don’t know what drives business, but you have a pollyannish few that things will just get better.

What line of business has such a lack of understanding of basic economics?

What About AI and Tech?

We see this same poor fit between reality and expectations when it comes to AI and technology. Granted, most of those surveyed by Smokeball have heard of generative AI, for example. Over half of those surveyed say AI will, in fact, transform the practice of law. But despite that belief, 80% have ethical concerns about using. 83% are uneasy about using AI for legal research or contract analysis. (Never mind that AI has been used for this for some time already. I think the unease is with the use of Gen AI programs. The responses reflect a critical lack of understanding of the difference between Gen AI and plain old AI. We have seen the same confusion, by the way, with some judges who want the use of any AI in any filing revealed).

Over-focusing on ethical concerns and reluctance to use the tools suggest plain old foot-dragging. Ir reflects the unwillingness to do what is necessary to understand AI tools in general and generative AI in particular. What many of the firms seem to be saying is that there is a tool that will probably change our world, but let’s look for ways not to use it.

What many of the firms seem to be saying is that there is a tool that will probably change our world, but let’s look for ways not to use it.

Another finding that demonstrates the lack of understanding of what AI can do: partners were more than twice as likely as paralegals to perceive AI as a potential threat to their jobs. But AI, in fact, can free up more experienced lawyers to do what they do best and which is most valuable. Things like strategy and advice that clients value the most. These are the exact things that AI can’t do. 

The Survey responses about the general use of technology also show this same lack of understanding and planning. For example, more than eight different kinds of software are being used in firms of less than two people. As the Report puts it, “staff becomes the manual messenger between the systems, which means tech isn’t making your life much easier.”

The Survey reveals that most of those responding believe ease of use is the most important factor in tech decisions made by most firms. Factors further down the list cited by the respondents were features, the ability to scale with the firm, and the ability to integrate with other software.

Certainly, ease of use for busy lawyers is important. Yet it is the features, and the ability to scale and integrate with the firm that determine ease of use. All too often, software looks easy to use until you try to integrate and use it in your firm. Focusing just on ease of use is myopic and will lead to failure and frustration.

A Potential Dismal Bottom Line

All in all, the Survey paints a dismal picture of small firms and the business of law. Yes, there are outliers. And yes, fortunately, there are solutions to many of the concerns raised in the Survey, including technology and tools offered by Smokeball and other vendors.

But the future poses increased threats, particularly to those without a clear view of the challenges and opportunities. And for those without a plan and understanding of the threats, it could spell disaster. 

Every now and then, I publish guest posts. I’m especially thrilled to offer the following posts for a couple of reasons. First, it is written by the esteemed and well-known plaintiffs’ lawyer, Jeffery Kimmel. His bio is at the end of the post but suffice it to say he’s a talented plaintiffs’ lawyer and author who frequently appears as an expert legal source for national media. The second reason I’m happy to offer this is that the post looks at the use of technology from a plaintiffs’ lawyer perspective. I come from a defense, bill by the hour, perspective so it’s refreshing to see another viewpoint. I hope you find the post as interesting as I do.

Innovative Advancements: How Plaintiff Attorneys Use Technology and Work Processes Differently

The use of technology in the legal industry has become increasingly important. This is especially true for plaintiff attorneys who represent individuals or groups of individuals wronged by another party. In the Bloomberg Law 2022 Legal Ops and Tech Survey, 86% of the survey participants agreed that legal tech significantly impacts their firm’s ability to meet client demands. With continual advancements in technology, this blog post aims to delve into the diverse ways plaintiff attorneys utilize these tools to effectively navigate the intricacies of their legal practice, adapt, and stay ahead.

Leveraging Legal Research Tools

Continue Reading Guest Post: Innovative Advancements: How Plaintiff Attorneys Use Technology and Work Processes Differently

Thomson Reuters announced several new generative artificial intelligence tools and platforms earlier this week. I had the privilege of attending a press briefing hosted by Thomson Reuters in advance of the announcement. Thomson Reuters personnel discussed the new products and offerings and allowed several of us to try them out. The presentations and products were impressive.

Continue Reading Thomson Reuters Unveils Next-Gen AI Tools with a Vision for the Future

A recent Major Lindsay & Africa Survey shows a startling gap between law firm management and law firm associates. Major Lindsay & Africa is a legal search firm that conducted its study at the beginning of 2023.

Here are some results that should cause management to take notice:

  • 60% of the associates surveyed say their firms are doing little to nothing to keep them at their firms.
  • 25% say they do not plan to stay at their firm for over a year.
  • 92% say they have yet to be asked to participate in an interview to give feedback on their experience at the firm.
Continue Reading Law Firm Associate Expectations: What Law Firms Need to Know. And Do

For years, many of us toiling away in law firms thought that life would be so much better as an in-house counsel. You didn’t have to bill time; you didn’t have billable hour quotas. You didn’t have to hustle business. Life would be so much simpler.

But a couple of recent surveys pretty clearly confirm that the grass is seldom greener. A study by Axiom, an alternative legal service provider, for example, has disturbing news for those thinking about jumping ship to in-house. 89% of the in-house lawyers surveyed say they are dissatisfied with their positions. That’s just about every in-house counsel surveyed. 61% say they are very stressed with their current jobs (so much for the simplistic, carefree life we outside lawyers envisioned).

Continue Reading The Harsh Reality of Being In-House Counsel: An Opportunity for Outside Lawyers?

I was recently a guest on a podcast called Discussions at the Round Table. The podcast is put on by the Round Table Group. The Group is a premier expert referral service. It locates, vetts, and engages expert witnesses in complex litigation matters. I was asked to talk about my work as a practicing lawyer with experts over the years.

For most of my career, I was a national mass tort defense lawyer. I had the chance to work with all sorts of experts in all types of cases and jurisdictions. Some of these experts were better, and some were worse. And the fact that the rules concerning what must be disclosed and how detailed expert reports must be sometimes made working with experts complicated.

Continue Reading Unlocking Success in Complex Litigation: 10 Essential Strategies for Lawyers and Experts

In the ever-evolving legal technology landscape, innovation has become synonymous with progress. Clio, a leading provider of cloud-based legal technology, has taken a significant step forward for one market segment by recognizing the specialized needs of personal injury law firms and lawyers. The product is called Case Management Software for Personal Injury Firms. The product is an add-on to Clio’s cloud-based legal practice management software, Clio Manage.

Clio is now offering plaintiffs’ lawyers features that it hopes will maximize settlements, streamline medical record management, and accelerate recovery proceeds and disbursements.

Continue Reading Clio’s Personal Injury Case Management Software: Tailoring Innovation to Meet Legal Needs

Photo by Luis Villasmil on Unsplash

With all the hype over GenAI, the metaverse, the digital world where people/avatars can mingle, has been largely forgotten. After all, the notion of working in teams of cartoonish avatars seemed unlikely at best. And silly at worst, particularly for any business purposes. No one seemed interested in dealing face to face with an avatar that looked like, say, Donald Duck. So, most of us dismissed the metaverse, putting it in the same class as blockchain. Much ado about nothing. Solutions in search of problems.

But then I happened to come across some groundbreaking work that Meta (formerly known as Facebook) is doing. The program is called Codec Avatars. It focuses on making the avatars closely resemble what we really look like and less abstract. They call these things Codec avatars. The goal is to make the avatars what they call “photo realistic” as opposed to expressive. Ok, you say, big deal, they are still unrealistic avatars with no arms and legs, etc. Why not just keep using Zoom?

Continue Reading The Metaverse and Blockchain for Legal: We’re Back

There’s little doubt that In today’s rapidly evolving legal landscape, the integration of artificial intelligence (AI) into legal is poised to change the way lawyers operate. Clio’s unveiling of Clio Duo, a multifaceted AI tool designed to assist legal professionals, raises some interesting questions about the future of the legal profession, what constitutes success and how being a good lawyer is defined.

Clio CEO Jack Newton introduced Clio Duo today at ClioCon. According to the press release, Clio Duo will serve as a coach, intuitive collaborator, and expert consultant to legal professionals. Clio claims that Duo will enable customers to unlock their own data, become more effective business owners, and get better outcomes for clients. The video of the tool unveiled at the keynote showed a person asking Duo about the status of bills and cases, to summarize documents and for help getting ready for client meetings. Like so many vendor introductions in this arena, the Clio GenAI tool is a promise, not a reality today. But that’s perhaps to be expected, given how quickly the area is being developed.

Continue Reading Clio’s New AI Tools: Transforming Legal Practice and Redefining Legal Success?

I recently attended RelativityFest put on by the ediscovery software provider, Relativity. Relativity is one of the largest discovery software providers. RelativityFest is its extravagant user conference. This year’s version was in Chicago. 

According to Relativity, there were some 1793 attendees at this year’s show, which was the 14th annual one. In the Keynote, Relativity’s new CEO, Phil Saunders talked a lot about the evolving data landscape. Short messaging, audio, and video have all combined to create a surge in new data. Saunders noted that there has been an over 305% year-over-year increase in the amount of data that could be subject to discovery.

Continue Reading RelativityFest 2023: The Evolution of Ediscovery Technology