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-Maureen
February is Black History Month. It’s a good time to look at Diversity, Equity, and Inclusion (DEI) in our own spheres, to take stock of how we are doing today. The common knowledge is that diversity is moving slowly at most law firms. But is there any data, particularly any granular data, over time?
Enter the NALP “2021 Diversity in U.S. Law Firms” report by the National Association for Law Placement, Inc. (NALP). I highly recommend this report for its detailed, annual data on diversity in U.S. law firms. The report is a free PDF download.
As you can see from the graph above, the growth in Black Partners has been modest. The percentage of Black Partners is 2021 is 2.22%, up from 1.7% in 2009. The NALP Diversity report shows data both for “People of Color” as well as for Black, Asian, and Latinx people. The granular view is essential as the growth of Black partners lags the growth of “People of Color.” The reality of these figures speaks for itself.
While the overall growth in diversity of Associates is improving, the growth for Black Associates is slow. From 4.66% in 2009 to 5.22% in 2021, with an apparent dip from 2011 to 2016, the percentage of Black Associates is on the slow rise again.
Below is the table from the NALP table with the detail on demographics in U.S. law firms.
I have barely scratched the surface of the rich data which the NALP report provides on diversity in U.S. law firms, including women, LGBTQ lawyers, and veterans by state and by size of law firm. My objective was to crystalize for myself what the current state of diversity for Black lawyers in U.S. law firms is today and the trend lines.
You can find the report here: National Association for Law Placement “2021 Report on Diversity in U.S. Law Firms.”
-Maureen
It was this time last year when began to learn how profitable law firms had been in the first year of the pandemic. That profitability cast a completely different light on the historical law firm pressure to work long hours in the office.
Therefore, I looked forward to this year’s Thomson Reuters report. There are many terrific charts in the report. Below I’ll highlight three charts, mainly to encourage you to read the entire report. You can find the report here.
This could be called “The Money Chart” in the legal market, growth in Profit Per Equity Partner (PPEP). Growth in 2021 was quite healthy, even compared to the robust growth in 2020. Mid-sized firms lead with 22.4% rolling 12-month growth.
The strong demand in legal services lead to the high turnover rate, especially amongst associates. The associate turnover rate for all firms reached 23.2% across all firms. For Am Law 100 firms the turnover rate hit 23.7%. See the report for a chart which breaks this out by firm size.
For Big Law firms “facing the retention crisis,” there was nowhere to go but up. Associate compensation rose by over 15% in the Am Law 100.
There is so much more in this report, including:
The report navigates “managing the way back” and lists specific, actionable recommendations. A new, essential approach for law firms: “flexibility.”
I encourage you to download the “Thomson Reuters Institute and Georgetown University Law Center on Ethics and the Legal Profession: 2022 State of the Legal Market Report.
In case you are wondering, I am not associated with either entity. I like data and thought that many of you would find this data interesting, too.
-Maureen
The 8th annual Okta Businesses at Work report is a treasure trove of data. It’s fantastic that Okta shares this data. Moreover, the report is very visual, full of graphs and charts. Here are four which illustrate enterprise web application usage in 2022.
While the gap between Microsoft 365 and the rest of the pack widens, Google Workspace moves into third place.
Of Okta’s customers who use Microsoft 365, what are the most popular “best-of-breed” apps which those customers also use? One of the stories here is growing use of Google Workspace. Zoom is still growing. Reminder: this is only a picture of Okta’s customers.
Phenomenal growth by these up-and-comers, although you may not be familiar with a few of these applications. Netskope provides cloud-native security products and services. Notion is for collaboration. TripActions covers travel, credit card, and expense. Postman is a platform for building and using APIs.
You can see the steep growth in remote work here. Amongst Okta users, Palo Alto Networks Global Protect and Cisco AnyConnect are the leaders in remote access.
There is much more:
I hope that you discovered something new.
You can download the report here.
-Maureen
The notion that legal tech can reduce burn out is a huge proposition. But a very interesting topic.
I recommend this article because this question is answered by seven current or former law firm employees, from former partners to firm innovation leaders. I always like to hear from the source. 🙂
Dig into this article for more on these topics:
“Legal tech” is not the panacea for lawyer burnout. However, I think all of us in the legal ecosystem want legal technology solutions to make work easier for attorneys. We want to enable attorneys to get more or work done in less time. We want to reduce and simplify repetitive and tedious work. Software solutions have a major role to play.
Read more on “Can Legal Tech Reduce Lawyer Burn Out?”
Maureen
A “Good Read” post is a brief pointer to an article worth a deeper reading.
By Jenna Greene in Reuters
FisherBroyles is a 283 attorneys law firm whose attorneys and staff are “distributed” or remote, a model which is increasingly attractive to attorneys. In their model, attorneys take home 80% of what they bill. In traditional law firms, the take home is often closer to 33%. In 2021, FisherBroyles top-paid attorney took home $6,742,540.
Managing partner, Michael Pierson, says that their hourly rates are often two-thirds what a traditional law firm would charge as there is no real estate cost.
It’s definitely working for the firm. In 2021, FisherBroyers revenue was up 30% to $136 versus $105 million in 2020.
Read more at the link, including about two of FisherBroyles major engagements in 2021.
-Maureen
While we may be happy to wave au revoir to 2021, one midnight does not change world circumstances. I think that the following four trends that are not likely to go away in 2022.
Some good, some not so good. Overall, we can be grateful for the healthy demand for legal services and that so much of legal work can be done remotely.
I wish you the best for 2022!
-Maureen
A post by Artificial Lawyer provides a clear summary of the trend in the first half of 2021, “Legal Tech Funding Hits $1.4BN, While M&A Soars.” Here, James Goodnow writes about “The Insider’s View On Legaltech VC Funding,” with some salient funding insights from Kira CEO and co-founder, Noah Waisberg. Kira was recently acquired by Litera.
But the reality is that investments are clipping along at fast pace. It’s hard to keep up. I could not find a post which captured the current rounds, so I created a spreadsheet of the past 12 months of legal tech IPOs and funding rounds (Series A and higher). I’m not claiming that it is comprehensive. I’m sure that I’ve missed a few. If you have any to add or any corrections to offer, please let me know via: contact at mobilehelix dot com.
On November 23, 2021, transcription company Verbit announced that they had closed $250 million in a Series E round that values the company at $2 billion. That’s after raising $157 million in a Series D in June 2021 at over $1 billion valuation, making it one of the first unicorns in legal tech. (To be accurate, Verbit serves more than the legal tech market.)
Also in November, Grammarly, another company with business in legal and beyond, raised $400 million at a valuation of $13 billion. I had to double-check that. Wow. Grammarly has a tool which corrects and improves writing.
Here’s my earlier post on unicorns in legal tech, “We have FOMO in legal tech!”
-Maureen
What is FOMO?
Fear Of Missing Out
Today’s legal tech headline:
“Litera secures further investment from Hg”
Terms of the deal were not disclosed. But we know that:
And there are 🦄 unicorns in legal tech!
November 2021: Everlaw raised a $202M Series D round at a valuation over $2B.
June 2021: Verbit raised $157 million in Series D funding at a valuation of over $1B.
April 2021: Clio raised a $110M Series E round at a valuation of $1.6B.
December 2020: Ironclad raised $100M in Series D funding at more than $950M valuation.
Ah, FOMO…
To quote investor Kjartan Rist on FOMO, “The fear of missing out on the next billion-dollar opportunity is one feeling that never really goes away.“
FOMO is nothing new in Silicon Valley VC-land. But it’s new and exciting in the world of what is broadly referred to as “legal tech.” Legal tech has been known for slow adoption and conservative processes, including mainly using software which is deployed on-premises at the law firm or business entity. In many cases this changed with the pandemic. The overnight necessity to support attorneys and staff working from home catalyzed adoption of cloud-hosted software throughout legal.
My short summary of the phenomenon in legal tech:
☁️ Cloud scales = hyper growth potential
💉 Accelerated by the pandemic
⚖️ Legal (law firms, corporate legal) finally accepts Cloud/SaaS
💰 Capital wants in
🙌 Win / Win / Win
There’s more to this story. For example, FOMO leads to frothy valuations.
But for today…
🥳 Congratulations to the unicorns, the parties to M & A, the newly funded, and the rapidly growing companies in #legaltech! It’s an exciting time to be in legal tech.
-Maureen
Yesterday was the first day of the Clio Cloud Conference 2021. Clio does a fantastic job of wowing the attendees and creating a community of loyal followers.
Every year the don’t-miss speaker is CEO and Founder, Jack Newton. Jack has big visions. And his execution with Clio has been huge. In April of this year, Clio raised a $110M dollar Series E funding with a $1.6B valuation. When Jack speaks, people are eager to hear what Jack is planning next.
Of the many announcements from Clio today, three are:
I’m highlighting a few points which interested me. There is much more in the report.
First Key Take-away: Client expectations have changed
As we saw in the 2020 Legal Trends Report, the pandemic understandably accelerated clients’ willingness to work with a lawyer remotely. With Clio’s annual data collection, they were able to illustrate the change from 2018 to 2021.
The report further digs into this data by stage of engagement and type of remote communication medium.
Second Key Take-away: Remote services are only part of the picture
I’ve yet to see any survey of criteria on choosing a lawyer in which responsiveness was not the top criteria. Here, “Responsiveness to questions” leads “Price transparency” by a hair. No technology, no remote or in-person meeting capability, is likely to surpass the importance of responsiveness.
Third Key Take-away: Growing firms are really growing.
This data mirrors the data which we saw in early 2021 with respect to the blockbuster year that Big Law had in 2020. See the report for a deeper dive, for example, that growing firms are more likely to be using on-line payments, client portals, and CRM.
And there is more fun stuff!
Vicariously, I like to study the hourly rates by state and by practice.
Also, the KPI data on utilization, realization, and collection rates is eye-opening.
You can download the report from Clio here.
I’d like to thank Clio for widely sharing this fascinating data about the legal market each year. They are committed to the legal community.
-Maureen