Post-pandemic: Lasting Changes to Law Firms and the Delivery of Legal Services

Written by: Todd C. Scott, Minnesota Lawyer’s Mutual Insurance Company, Minneapolis MN

With countless challenges faced by legal professionals during the COVID-19 pandemic, and many system modifications necessary for most firms to stay in business, there is no doubt that the events of 2020 will have a lasting impact on the legal profession.

The pandemic is not over, and there is much analysis that needs to occur to determine its lasting impact on the legal profession. But it seems clear that changes in the practice of law during 2020 has significantly impacted the legal profession in three ways:

• The COVID-19 pandemic created “winners” and “losers” for lawyers practicing in certain specific practice areas.
• The COVID-19 pandemic put the legal profession into “fast-forward” mode when adopting cloud-based legal technology systems.
• Virtual conferencing with clients and colleagues is here to stay, which is likely to contribute to another law firm trend already underway: the broadening of a firm’s territorial market when offering legal services to the public.

The pandemic’s legal winners and losers

One of the best resources for determining the overall effect of the COVID-19 pandemic on lawyers in private practice is the 2020 Legal Trends Report, recently published by Themis Solutions, Inc., the makers of Clio legal practice management and client intake software. See https://www.clio.com/resources/legal-trends/2020-report/.

Since 2016, Clio has published a yearly legal trends report based on data aggregated and anonymized from tens of thousands of legal professionals who are users of the Clio products in the United States. Additionally, Clio conducted ongoing surveys of thousands of legal professionals and consumers since the start of the COVID-19 pandemic. The data uncovered in these studies was released by Clio in two publications: “COVID-19’s Impact on the Legal Industry,” published in September 2020, and the company’s year-end report titled, “2020 Legal Trends Report,” published in May 2021. See COVID-19’S Impact on the Legal Industry, Sep. 16, 2020, https://www.clio.com/resources/legal-trends/covid-impact/.

When reviewing the data in these studies, it is clear 2020 started out looking like it would be a pretty good year for attorneys. From January to February 2020, the national average for monthly new matter volume jumped in a year-over-year comparison. Monthly billing volume also jumped nationally at the start of the year, when comparing year-over-year billing averages, adjusted for annual growth. (See Figure 1 and Figure 2.)

Figure 1. New Matter Volume 2020 (US average) Source: Themis Solutions, Inc. (Clio), COVID-19’s Impact on the Legal Industry, https://www.clio.com/resources/legal-trends/covid-impact/.

Figure 2. Monthly Billing Volume 2020 (US average) – Year over Year, adjusted for growth Source: Themis Solutions, Inc. (Clio), COVID-19’s Impact on the Legal Industry, https://www.clio.com/resources/legal-trends/covid-impact/.

But the growth in new matter volume during 2020 was short-lived for most legal professionals, and although the national average for new case volume returned to 2019 levels, monthly billing volume never saw the levels that were achieved by legal professionals in 2019.

One of the most revealing trends in the Clio studies is the impact of COVID-19 on practice areas. Certain practice areas—primarily in the areas of business formation, business transactions, commercial sale of goods, intellectual property, and real property—fared well in 2020, even during the darkest days of the pandemic. (See Figure 3.)

Figure 3. Practice Area Caseloads Less Effected by COVID-19 Pandemic – Jan-Aug 2020 Source: Themis Solutions, Inc. (Clio), COVID-19’s Impact on the Legal Industry, https://www.clio.com/resources/legal-trends/covid-impact/.

Conversely, during 2020, the negative effects of the pandemic as measured by overall firm caseload was felt the most by lawyers practicing in the areas of Criminal, Family, Personal Injury, and Traffic Offenses. For most of these firms, overall case volume dipped below 2019 levels in mid-March 2020, and never returned to previous-years case volume for the remainder of the year. (See Figure 4.)

Figure 4. Practice Area Caseloads Less Effected by COVID-19 Pandemic – Jan-Aug 2020 Source: Themis Solutions, Inc. (Clio), COVID-19’s Impact on the Legal Industry, https://www.clio.com/resources/legal-trends/covid-impact/.

The negative impact of COVID-19 on the business volume of lawyers practicing in the areas of Family Law and Personal Injury may be particularly troubling considering the risks associated with those practice areas. Data that was published by the ABA Standing Committee on Professional Liability in September 2020 revealed that the risk factors for practicing in Personal Injury remain high, and the likelihood of acquiring a malpractice claim as a practitioner in Family Law had grown noticeably over previous years.
Attorneys in 2020 on the fast track to adopting technology
As an attorney in private practice in 2020, if you did not already have top, up-to-date technology systems, chances are you pursued them very quickly. Topping the list of systems attorneys embraced in 2020 are:

• Cloud-based, remote audio-visual systems for communicating in real-time with legal colleagues and clients.
• Cloud-based document production tools for creating and sharing electronic copies of documents—including electronic signature tools for obtaining remote, electronic signatures.
• Cloud-based data storage tools and mobile hardware tools for the creation of a safe virtual law office environment.

For legal professionals, the great leap forward into advanced cloud-based systems was long overdue. The state of law office technology advanced about 10 years in less than 10 months. And not a moment too soon, since research estimates show that consumers have embraced technology much more since the pandemic began. Consider the following from the Clio study:

• 58% of consumers said that technology is more important to them now than before the coronavirus pandemic.
• 50% of consumers say they are more comfortable with technology now than before the coronavirus pandemic.
• 52% of consumers say they use more types of technology tools now than before the coronavirus pandemic.

Rapid change in law office systems often produces additional risks. The lagging effect of system failures can occur when end-users do not anticipate the increase in risk-prone exposures due to not fully understanding the new technology.

A classic example of increased risk-hazards due to a lack of understanding of new technology is the many instances of “Zoom bombing” that occurred early in 2020. Zoom bombing is where uninvited users log into Zoom meetings and disrupt the proceedings, occasionally performing criminal acts, visible to other members of the Zoom session. Instances of Zoom bombing were curtailed once end-users learned how to use the security settings of the communication tool, and the manufacturers of Zoom updated their software to add safety-related defaults to the product.

Attorneys were not thrilled with the prospect of real-time, electronic communications with clients when email was first developed. Many attorneys felt that email communications were inherently unsafe due to the mysterious way the communications traveled from one user to another—never knowing which third-party server may have played a role in the electronic conveyance.

Yet, despite attorney concerns, email became widely adopted by attorneys, primarily because consumers of legal services demanded it. Clients liked the speed, convenience, ease-of-use, and affordability that email communications had to offer.

The same may be said for today’s wide-spread use of audio-visual communication tools by attorneys during the pandemic. Long-distance audio-visual communication tools may have been necessary during isolation and social distancing requirements brought on by the pandemic, but if clients find the new tools to be preferable over a costly and time-consuming personal visit to their attorney’s law office, then the demand for the tools will stay long after necessity for social distancing has passed.

Permanent changes in the delivery of legal services

Specifically, lawyers responding to the Clio survey reported that they plan to use technology well-beyond the pandemic in several ways:

• Storing firm data in the cloud. (96%)
• Supporting electronic documents and e-signatures. (95%)
• Accepting electronic payments. (96%)
• Using practice management software. (96%)
• Meeting clients through videoconferencing. (83%)

Lasting changes to the legal profession brought forth by COVID-19 and the resulting pandemic may also influence changes some believe are necessary to achieve efficiency and accessibility in the judiciary. Any added efficiencies to the judiciary may impact the widespread concern for access to justice and the overall affordability of legal services.

In short, changes to the legal profession may keep on coming. The Clio 2020 study describes the lasting impact of COVID-19 changes for law firms in positive terms: “Beyond 2020, the future will remain cloud-based and client-centered.”

The implication in the statement is that the ultimate beneficiaries of changes in the legal profession are the clients who seek legal services. Clients may begin to experience online and cloud-based deliveries of legal products and services in ways that previously were only available to consumers in other industries.

After the pandemic, almost every firm has become a virtual firm. The impact of client communication and document creation tools that do not require the physical presence of the client is allowing legal practitioners to offer advice and services well-beyond their home market.

Consequently, growth in the number of firms providing long-distance delivery of legal services may result in more competition for consumers of legal services that previously were only served by attorneys within the consumer’s region.

Much can be said about the growing risks that often occur when an industry undergoes rapid change in the way it delivers products and services to consumers. To insurance and risk management professionals, anticipating risks associated with rapid change is paramount for providing proper support to attorneys in private practice who may run into bumps in the road. To attorneys, simply being aware that risk factors increase during times of change is good risk management for practitioners who plan to guide their firm safely and successfully well into the future.

About the Author

Todd C. Scott is the Vice President of Risk Management for Minnesota Lawyers Mutual Insurance Company. He is a frequent author and guest lecturer on the topics of malpractice, ethics, and practice management systems. Much of his duties include helping lawyers select and implement software systems appropriate to their particular practice. Mr. Scott had previously served as Attorney/Claims Representative for MLM, and was the head of their technology subsidiary, Mutual Software. Mr. Scott is also an adjunct professor in the Legal Studies Department at Hamline University in St. Paul, Minnesota He is a graduate of Hamline University School of Law and is a member of the American Bar Association, the Nebraska State Bar Association, and the Minnesota State Bar Association, where he has served as past Chair of the Practice Management & Marketing Section.