Law firms are seeing major slowdown in business because of COVID-19, data shows
Image from Shutterstock.com.
The shock to the global economy stemming from the COVID-19 pandemic has produced a 40% drop in the number of new legal matters being opened each week in the U.S. compared to late February, according to cloud-based company Clio’s recent analysis of data from its practice management software.
In a separate survey, Clio found that the slowdown in business is being driven in large part by consumers deciding to put off their legal problems during the pandemic.
Almost 50% of the more than 1,000 consumers surveyed in April said they would likely delay seeking legal help until after the COVID-19 crisis has relented, according to information Clio publicly released Monday.
Another 22% of consumers surveyed said they thought lawyers have stopped providing legal services entirely. Meanwhile, the survey indicated 56% of law firms have seen a substantial decrease in requests for legal assistance. Only 14% of firms say they have seen an increase in business during this time.
“We’ve seen no indication that the need for legal services has subsided during the pandemic, but for many people, dealing with them right now isn’t top of mind,” said Jack Newton, Clio’s CEO and co-founder, in a statement.
According to Newton, firms that have embraced technology will be best poised for success during the upheaval caused by the novel coronavirus.
Clio’s survey data found that 58% of consumers would prefer to meet a lawyer by videoconference rather than in-person if they were to hire an attorney in the next two months.
“Law firms concerned about cash flow should be focused on understanding what barriers currently exist for clients, and be sure they are prepared to adapt their services to current and future needs of clients,” Newton said.
Clio’s survey of legal professionals indicates the importance of being tech-savvy during the pandemic. Nearly 70% said they think technology is more important now than before COVID-19, while 83% said they think cloud technology was necessary for survival.
According to Clio, the information it released Monday will be the first of several updates that it provides about COVID-19’s effects on the legal industry. The data will contribute to the Legal Trends Report that it releases annually.
