clio

Report: Clio’s 2025 Legal Trends Report For Mid-Sized Law Firms

Clio’s 2025 Legal Trends Report for Mid-Sized Law Firms provides a comprehensive look at how mid-sized law firms in the US are adapting to industry changes; particularly as it relates to AI adoption, billing models, client acquisition, and technology investments.

Although the results are based on data from US-based firms, the results are arguably applicable here in Australia and more broadly so here’s a summary of the key takeaways:

🚀 AI Adoption & Transformation

  • Mid-sized firms (20+ employees) are now leading AI adoption in legal tech, surpassing smaller firms.
  • 93% of surveyed professionals in these firms use AI, with 51% using it widely or universally.
  • Common AI tools include legal research platforms, document automation, eDiscovery, and predictive legal analytics.
  • AI is viewed as a way to increase efficiency, reduce costs, and improve client engagement.

💰 Billing Models & Pricing Trends

  • Flat fees are now the most common billing method among mid-sized firms, outpacing hourly rates.
  • Firms are shifting away from hourly billing due to AI’s impact on time-based work and client preference for predictable pricing.
  • Subscription models are also gaining traction, especially for ongoing legal services to business clients.
  • Despite the shift, hourly billing remains prevalent, particularly with highly varied rates by role and experience.

📈 Client Acquisition & Marketing Strategies

  • Mid-sized firms use multiple marketing channels: websites, SEO consultants, social media, online reviews, and referrals.
  • They’re less reliant on referrals than smaller firms, but invest more in digital marketing.
  • Tools like e-signatures, intake forms, and online scheduling directly improve conversion rates and revenue (up to 20% higher).
  • Chatbots are underused despite 51% of clients finding them helpful—a missed opportunity.

💸 Spending & Technology Investments

  • Staff salaries dominate expenses (41%), followed by rent, marketing, and office costs.
  • Mid-sized firms spend less on office expenses (5%) than solo and smaller firms, due to economies of scale and flexible work arrangements.
  • Spending on software and professional fees is rising rapidly—showing a strong focus on tech and professional development.

☁️ Cloud Technology Adoption

  • Mid-sized firms lag behind smaller firms in cloud adoption (only 38% vs. 71%).
  • Firms with 20–49 employees are more likely to use cloud tools than larger mid-sized firms.
  • Hesitation around switching legacy systems or internal decision-making bottlenecks may be holding back adoption.

🧭 Strategic Takeaways

  • Mid-sized firms embracing AI + modern billing models + tech investments are poised to outpace competitors.
  • The real threat isn’t automation—it’s firms that adapt faster.
  • Cloud-based tools, client intake tech, and AI are critical for efficiency, growth, and client satisfaction.

You can download the full report here.

Get in touch if you want to discuss the outcomes of this Report or need assistance with your strategy.

📩 richard@gsjconsulting.com.au

Survey: Production returns; Billings fall; Firms need to find new ways for clients to pay

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Having reported a cliff-fall in new matter instructions post-COVID in its Legal Trends Report Briefing #1 in May of this year, June’s updated Briefing #2 by Clio shows a subsequent significant upward spike in new matter instructions that have, effectively, netted out year-on-year the number of new file matter instructions.

While, at first glance, a return to quasi-normal file opening matter numbers look to be good news for law firms, as the latest Briefing numbers also shows, if you scratch the surface you’ll soon see (diagram below) a far bigger underlying problem is starting to emerge – namely clients’ inability (or possibly unwillingness) to pay!

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While the above wheel-chart is, at first glance, alarming, it’s also worth keeping in mind that a client’s ‘ability‘ to pay a legal fee pre and post the pandemic is not necessarily the same as its ‘willingness‘ to pay that fee. Which is to say there may be (and likely are) other underlying reasons as to why clients are saying they are not willing to pay fees – including a re-evaluation on the part of the client in respect of the perceived value being provided.

Of more concern to law firm management, however, should lie in the second of these two charts, namely the fact that rather than chasing fees 25% of firms are electing to forfeit the revenue.

Again, there could be a whole raft of underlying reasons why a firm may decide it would rather forfeit some of its billed revenue, and without undertaking a root-cause analysis we left to guess these (including my favourite – trying to preserve the relationship), but we should be left under no illusion that discounting and write-offs will have the biggest impact on profitability*.

A willingness to look at alternative payment methods

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For me, a somewhat surprising take-out from the latest Briefing was the statistic that 72% of consumers would prefer to pay their legal fees via a payment plan. Again, the term “consumer” isn’t defined and so we are left wondering if this is B2C or B2B; but even then, that only 53% of firms are equipped to offer payment plans seems odd.

Take away?

So what’s my top 3 take outs from this latest Briefing from Clio?

  1. Once things settle down, law firms will be as busy as ever,
  2. Cashflow will be king and clients are struggling with their own cash-flow, so
  3. Think outside of the box when it comes to pricing and how you ask clients to pay and you should be okay.

As always, these just represent my thoughts and always interested to hear your views.

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* N.B. If hourly billing is the way you work and you want to get a better understanding of the effect that discounting/write-offs has on your firm’s profitability, take a look at this post by Patrick Johansen that profiles Stuart Dodds’ ‘1-3-4 Rule‘