US firms see sharp slowdown in new matters as coronavirus dents demand, study finds
Clio research shows that matter creation has fallen by 30% since the start of the year
US law firms have seen new matter creation drop by almost a third since the start of the year as the impact of the coronavirus pandemic crimps demand for legal services, according to research from Clio.
The number of new legal matters being created each week has slowed by more than 30% compared to the average seen in the first five weeks of the year, extending to 40% when compared to the busiest period at the end of February, the data compiled by the Vancouver-based practice management software specialists showed.
The research was based on aggregated and anonymised data from Clio’s legal tech apps and surveys of 485 US legal professionals and 1,042 US consumers.
By early April, more than three-quarters of law firm respondents said their day-to-day operations had been impacted since the start of the outbreak — with two-thirds fearing their day-to-day operations will continue to be strained even after the pandemic eases.
In an online research briefing, Clio noted: “Respondents expressed widespread concern over the future success of their businesses and their ability to make ends meet. Much of this concern is likely due to the fact that the majority of firms have seen a drastic decrease in the number of people reaching out for legal services.”
Clio added that 49% of US consumers would delay seeking legal support until after the pandemic has subsided, even if almost two-thirds of those respondents said they would still seek a lawyer to solve their legal problems rather than trying to fix them in another way. A further 13% said they expect to encounter legal issues that are directly related to the Covid-19 outbreak.
While 11% of legal professionals think that social restrictions imposed to limit the spread of the virus are an overreaction, 75% say they are suffering higher levels of stress and anxiety, and almost half say they are more concerned about their financial future than their health.
However, not all law firms have been impacted. Some 23% of respondents said they had not seen a significant drop off in demand, while 14% said they had seen a significant increase in the number of people reaching out for legal help.
Respondents also reckon that technology will play a key role in how firms adapt to the long-term impacts of the virus, with 69% agreeing that tech is more important now and 83% identifying cloud technology as being necessary for their survival.
Research published by HFW and litigation analysts Solomonic last month revealed a 65% slump in claims lodged with the UK's High Court over the past four weeks.
And in Q1, global deal making ground to a halt with the value of Q1 2020 transactions falling back to levels not seen since 2013, according to analysis by Mergermarket.
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'Now is the time for law firms to deliver on their stated values' — Consultant Tony Williams advises law firm leaders to avoid knee jerk decisions and go into communication overdrive during the Covid-19 crisis
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Coronavirus risk may be unprecedented, but the fundamental principles of crisis response still apply — Crisis PR specialist Bethaney Durkin advises law firms impacted by the coronavirus to act quickly while avoiding a kneejerk response