“The focus on consumers needs to be the lens through which you look at anything” — Loio’s interview with Jared Correia

Jared

This interview is part of Loio’s series of interviews with legal enthusiasts about the ins and outs of the legal industry.

The following is the interview with Jared Correia, a consultant and legal technology expert. Jared is a founder and CEO of the Red Cave Law Firm Consulting, co-founder of the chatbot software for law firms, and a professor at the Suffolk University Law School. Above all, Jared is the host of the Legal Toolkit Podcast and the Non-Eventcast at Above the Law. Furthermore, Jared is an author of the Legal Tech-to-English Dictionary series featured on Above the Law.

A former practicing attorney, Jared now helps law firms and legal institutions to boost their efficiency, increase their revenue, and successfully compete on the legal market by innovating their business management processes. Jared is an industry expert in legal technology with excellent public speaking skills and an unquenchable desire to help legal entrepreneurs maximize the profitability of their businesses. 

Dive in!

Hi Jared! Thank you so much for being here! I am amazed by the variety of great legaltech projects you’re part of. You’ve been doing some amazing stuff on a Legal Toolkit Podcast. By the way, I loved how you managed to marry legaltech and art by mentioning movies or other art pieces every time. How did you come up with this idea?

Thank you! I just felt that lawyers are real people who have interests that are not just legal-related. It took me a long time to convince the podcast network to reformat the interview show I used to do for decades. But the idea worked well –– we doubled our downloads after implementing the new concept of running podcasts in the format of the late-night TV show. 

You also created a Legal Tech-to-English Dictionary as a part of your contribution to Above the Law. Could you please share what is the idea behind this?

The idea was that it will be a continuing discussion on legaltech that’s not anchored to a conference model: nobody has to go anywhere and nobody has to book hotel rooms. 

The editorial team at Above the Law came up with that idea, and they asked me if I can do something with this. And I liked it. The Legal Tech-to-English dictionary is a humorous look at legal technology definitions that don’t often get defined.

Sounds great, thank you! So, you’ve done a lot of pretty great things, and I don’t know how you’ve managed to do it all. What are your time-management and productivity habits?

Oh Lord, do I have any good ones? (Jared laughs)

I’ve got a pretty busy schedule. I am usually blocked off with meetings from 9 to 5 ET. 

And I will say one thing. When the pandemic hit, things got crazy.

I was working at home by myself for years. And it was great. I could watch TV or take a nap if I wanted to. But, all of a sudden, everybody’s home with me all the time. My whole family’s here. I never get breaks anymore. 

I had to figure out a way to get back those three to four hours I used to have for myself. And the way I decided to do it was to start waking up very early. Every day I wake up at four AM, and I get three hours of working. I just do the stuff I need to do that day, then I work out, and when my kids go downstairs for school, I’d already had three or four hours under my belt. That’s been very effective. If I get some time by myself in the morning, which is a productive time for me, that sets me up for the whole day. 

Do you have a planner? 

No. A lot of what I say about my habits is very hypocritical in a sense. When I talk to attorneys, I tell them to do the opposite, but yeah, I don’t use a planner. I used Notion, Trello, and Asana in the past, and I know that many lawyers use TimeHero and SkedPal which are pretty good programs as well, but I don’t need time blocking so much. If I set my alarm and wake up knowing that nobody in the house is not waking up until 7:30, I know I have these three hours blocked for me at the beginning of the day when I can knock out some big projects. I can even have a meeting if my client is in the next time zone. 

It’s a roughly simple thing to do, but it works for me. 

It’s fascinating! Thank you! Let’s go back to legaltech. You’ve interviewed hundreds of legaltech enthusiasts at your legaltech podcast. Aren’t you afraid that one day you’ll run out of people to interview?

What I like about the legaltech space, is that there’s always something new that is happening. When I think I’ve run out of stuff to talk about, two things occur. 

Firstly, I realize that some of the stuff I’ve been talking about for 12 or 13 years, lawyers are still working on right now. Maybe that means I’m innovative (laughs), maybe that means that lawyers are late adopters, but I find that I can come back to topics here and there. That’s a good refresher for people who are still working on that. As crazy as it sounds, a lot of law firms are still trying to get paperless, and a lot of law firms are still trying to get into the cloud. And I started to talk about those things in 2008. 

The other thing is that there has been an upward swing in legaltech that hasn’t stopped yet. The first wave of innovation was in 2008-2009 when the cloud-based law practice management software started to come out, and that’s when people started to think of it as a powerful set of tools. And when I think of all the progress and innovation that happened since then, I realize there’s so much more legaltech that people can offer. Something new is always happening in this space. 

Another piece of it is that there are regulatory buttons that are getting pushed now. In the United States, there are two states at this point that are working on the alternative business structure arrangements for non-lawyer ownership in law firms, namely, Utah and Arizona. I think this is going to percolate for the next decade. 

For me, it’s less about will I run out of things to talk about, but more about how do I talk about all the things that are going on. I find the legaltech space to be continuously interesting.

Thank you! What states do you think are the most innovation-minded in the U.S.? 

That’s a good question. Actually, I don’t see innovation coming from states necessarily. 

I view innovation more coming from forward-looking practitioners, regardless of where they are based.

Frankly, what you’re seeing a lot more is people opening law firms in one place, and having an impact on others. Especially if they’ve got a national practice area and good marketing. Some of these attorneys are operating across several different states, and I don’t even know where their main offices are. Because that’s less of an issue than it ever was before. Nobody cares where you’re working from anymore. You can work at your house, you can work in a co-working space, you can work in offices all over the country — nobody cares. 

In terms of regulatory stuff, I would say that Arizona and Utah are ahead of things because they are rethinking the non-lawyer ownership concept. 

You’re also seeing some good trends taking place, for example, some states have allowed law firms to use brand names, though it didn’t happen before. For instance, New York recently changed its rules on that. 

But even though I don’t see anything particularly innovative coming from states, I’m seeing practicing lawyers doing innovative things, regardless of where they’re located, in the U.S. or elsewhere around the world. 

Alright, thank you very much! Let’s talk a bit more about efficiency. Your firm’s website reads: “We help solo and small law firm leaders realize that there are more efficient ways to run their law firms.” Why do you think it’s important for solo and small law firms to become more efficient?

Clio’s Legal Trends Report of 2019, which is a large attitudinal study of nearly 500 law firms, had a little nugget about efficiency within law firms. According to the report, the average utilization rate for law firms is around 28%. That means that out of every eight hours that a lawyer sets aside to bill, they bill about two and a half hours. 

The firms that were five percent ahead of that utilization rate doubled their revenue every five years. On the contrary, law firms that were five percent behind that utilization rate lost their revenue every five years. 

What that tells me, is that more efficient law firms make more money. And the reason for that is obvious — they can bring more cases in and do more work more quickly. It is the same reason why it is quicker to make a car on an assembly line than to build it by hand. I talk with law firms a lot about efficiency and moving cases forward. This is the most obvious and easy way to get more revenue.

So, with a lot of the law firms I work with, one of the big focus points I have is to get workflows and processes in place, so that you could not only push things forward quicker but have a better sense of the timing of everything that happens within a law firm. 

I work with law firms on a variety of workflow types. We can work on substep workflows, in-take workflows, remarketing workflows, administrative workflows. You can always fine-tune to make your firm more efficient. And most firms I talked with have only just started getting to the tip of the iceberg. There’s always a lot more work to do, but if you can run an efficient law firm in 2021, that’s how you are going to make the most money. 

Great, thank you! What’s your take on the current legaltech trends in the legal industry, for solo and small law firms in particular? And a follow-up question right away: has the pandemic changed the perception of legal technology? 

That’s a great follow-up question. Let me take the latter first: yes. The pandemic has blown up a lot of people’s ideas of how to run a law firm. 

I talk to a lot of lawyers across the spectrum. Old, young, middle-aged. The older lawyers always used to be like “You know what? Let me stick it out for a little while longer and see how it goes”. They never end up retiring. But I’ve seen a lot of people just walk away from the practice, which is a new thing, and that’s good in a way. It is okay to retire if you worked in legal practice for a long time. You don’t have to die at your desk as most lawyers do. 

And you have always got middle-aged attorneys that are maybe not super into legal technology, but they are smart enough to know that things are changing now and that we’re in the convenience economy where we have to be consumer-centric. 

Law firms were not traditionally run that way. 

The way that law firms have traditionally worked is that they made things easy for a law firm, but hard for the client. Now, I find a lot more law firms that I’m talking to looking more at how they can be more consumer-centric and how they can start putting workflows in place to become more efficient. 

And that’s great because nobody was asking these questions before. So, I think that the whole mindset has changed during the pandemic. And the tag on to that is that to be more efficient, it is necessary to reset the technology that was used earlier. 

So I think that over the last year and a half, attorneys that I’ve spoken to have been far more open about the technology, whereas before they wouldn’t have an interest in it. More and more law firms are affirmatively acting to change and be more modern, which I think is great.

That has opened up access to a lot of trends. One of the trends I’ve seen is the focus on consumers, how you manage that in the legal spectrum as well. For a long time, the main objective of technology providers was to make sure that attorneys are efficient in the back office. But now it is more about managing client intake, improving customer experience, and generating the user journey. That’s a relatively new thing. 

You’re also seeing more and more software companies focus on automation. That could be done through workflows, that could be done through document templates or tools for contract management, — all of that is in the forefront now. 

The other thing I’ve seen in terms of trends is that if you get the technology and store the data about your practice, the next step is that you start using that data to make decisions about your firm. 

If you want to be a super-efficient firm, you’re not making decisions based on your gut anymore. You’re making decisions based on the data that technology brings in.

From what I’ve seen with software companies, a lot of them are doing a better job with reporting, business intelligence, and visualizing those metrics. 

So, I think there’s a lot of stuff going on in the legaltech area. That’s like a two-way push-pull: the more interest there is from lawyers in this type of technology, the savvier they get, the more pressure they put on legaltech companies, the better features providers come up with. 

Wonderful, thank you! My next question is, what legaltech story has caught your eye in 2021?

I guess it’s an aggregation of stories. It’s about all the acquisitions that are happening. All of these companies are getting bought up for a reason. Because there is a certain number of big players out there who have lots of capital and want to create this notion of an operating system for legal by aggregating these different technologies together.

The ending to that story is yet to be written. What I am interested to see more than anything else, is do lawyers latch onto this notion of one giant software provider to take care of everything, or do they still prefer to couple different software together through integrations. I think it’s an open question. And if I’m an innovative attorney, I am looking suspiciously at the giant company that wants to create one technology system. So, I find the idea of stapling together a bunch of different back-office software and making it everything a lawyer needs to run their practice very dubious. There’s a direction that things are heading, but I am just not sure if the marketplace is going to accept that as a model. So, that’s one of the stories I’ve been following closely this year. 

Thank you! My next question is: do you know a solo or small law firm that has done a great job in digital transformation this year? 

I’ve got a guy I work with right now from South Carolina. He’s got a personal injury law firm. His name is Brooks Derrick, and he’s got a firm called Derrick Law Office down there, and he’s done a great job this year. He dove into working with case management software systems, building out workflows, pushing cases in his injury law firm. He just had a bottleneck of cases they needed to get through. And he worked hard to build workflows, push the envelop, get processes in place, get stuff to buy in, and when that workflow cleared, there was a pot of gold waiting at the end of the rainbow. He closed a bunch of cases in the near term. And now their practice is running super smooth. 

By the way, we’ve invited Brooks Derrick to speak at our webinar on innovation in small law firms. Check out the recording if you’d like to hear his story! 

I see more lawyers doing that now than I’ve ever had before, which is great, but he’s a guy who bought into what he needed to do. Build those workflows, which was the hardest part, and then maintain them. This works every time. You just have to be able to commit to it. And very few people can commit to it. 

And why it is hard for some people to commit to it?

One of the pieces is instant gratification. When I consult with people, I always say that this is going to suck. Changing the way you run your business is going to take a lot of effort and there’s going to be some stress involved. And you’re probably going to hate me. I am asking you to do challenging things and ask you challenging questions, and you’re not going to want to answer them. You will want to go back to the way how things worked before. It’s always easier to pull the cover back up over your head and stay asleep than wake up and start the day, and it’s a very similar thing. So, there’s the instant gratification thing of it. 

Another piece of it is that lawyers are so focused on maintaining the revenue they have now that they are stepping over dimes to pick up pennies. Lawyers do too much work on their own rather than delegating it because they are used to doing it and they think they can do it the best. Lawyers are hyper-focused on their revenue, which means they just keep their heads down on work and are not raising their fees as they should be. Lawyers’ fees rarely keep up with inflation. So, they would rather stick to what they know than what they understand to be a positive change, just because the status quo is such a strong draw for them, and nurture is always the biggest enemy of any change in law firms. Just getting people to do something differently in legal is a real problem, and that’s partly because of their focus on today’s revenue rather than how your revenue could look like moving forward. 

So, one of the things I do with law firms is creating revenue projections with them. So that if you start to do things differently, you could see how the practice will look like two or three years from now. And then, we try to develop processes to get there. If you’re not doing everything to get there, you’re effectuating the inefficient law firm you’ve got right now, and that caps your revenue more than anything. 

Incremental changes are hard for people because they don’t see the incremental changes. If I’m talking to an average law firm, I would say something like “Hey, here are 20 things you need to change about your law practice,” and they instantly get overwhelmed. They physically almost can’t break down the tasks to get from one step to the next. So, a lot of what I do is suggesting to break this down into the components, and then start with a component one. After fixing that, we will move to component two, and so on. And that works for people. 

That’s a psychology thing in some way. Part of a lawyer’s job is to be a bartender and listen to people’s problems, and that’s part of my job too. Helping people to move from the “That’s terrible!” stage to “OK, let’s do it.” 

So, the second part of your job is being a cheerleader.  

Yeah, sometimes a cheerleader, absolutely. I think people should be rewarded for the stuff they’ve done effectively. I am very happy to talk to lawyers and say that they’ve done an awesome job. Even if you’ve managed to fix only 8 things out of 18, that’s already great progress indicating you’re capable to get this done. Everybody does something well, and I think that appreciation and support are important because they give you the motivation to move forward and do the next thing. You don’t want people to feel that they’re screwed up because they are not. Everybody does something well. 

Awesome, thank you! Would you say that solo and small law firms are more innovation-minded than larger law firms with more resources?

Absolutely. The bigger firms usually have got people in place, including internal business management consultants, or internal marketing people, and so on. And there are two problems. 

Those people are largely collecting paychecks, and not necessarily thriving to be innovative. There is not a lot of pressure on them to be innovative. And two is that when you’re a big firm, you’ve been used to billing on an hourly rate and throwing money at problems. But when you can’t throw money at every problem, you need to be more innovative. So, if you say, okay, I am going to work with a budget, and I am going to maximize that budget, that’s more of a challenge than just say hey, here is a $100 000 for a month, run an SEO campaign for us. That also means that you need to have more knowledge of everything that happens in the firm. 

So, I find that these smaller firms, which have got less apparatus, can move on to something different much quickly. They are a lot leaner. And they also tend to dive into the process a little bit more. Understanding the process better, and executing advantages on that. 

So, I think if you’re somebody who wanted to start a small personal injury law firm in the U.S., it’s very easy to feel that you’ll never be able to compete in this market. Because it seems that when you’ve got these firms that are throwing 6- or 7-figures on marketing on the monthly basis, you’re never going to compete with this. 

But you can win on margins in a lot of ways. By understanding the processes better, understanding what you can do for free with a little bit of elbow grease, understanding how to take advantage of stuff that your competitors are overlooking, etc. I find that the smaller firm owners are a lot scrappier about that stuff, and they are more innovative just because they have to be.

From what I’ve noticed, a lot of the innovation moves upward. First, you see that something happening in a small firm environment is working, and then you see some bigger firms copy that. Not vice versa. 

Interesting! Thank you! Where do you think small law firms should start digital transformation? And what processes should be optimized first?

It’s so hard to choose because there are so many places to start. When I talk with law firms in a consulting capacity, that’s largely what we’re trying to determine. What’s the first step you take. And if there’re three of these possible steps, trying to choose the biggest problem out of those can be a difficult thing. So, I am going to cheat a little bit here and say that two things are usually big problems in law firms. 

One is document management. A lot of law firms save documents all over the place. There are some paper documents. Something is digitized, something is not. They have incomplete files, they lose stuff all the time. So, step one on that front would be organizing those documents in one place and trying to create a paperless office. Most law firms are not there yet. 

And another thing that I think is important is the amount of money that law firms waste on marketing because they can’t effectively convert leads. Lawyers spend so much money on getting leads, and if they’re not spending money, they’re spending a ton of effort on networking, going to lunches with people, doing speaking engagements. But then when somebody calls a law firm, nobody picks up. Or somebody sends a voicemail for a law firm, and nobody returns that. Or somebody fills out an intake form, and nobody ever gets back to them. And this completely burns all of that effort and all of that money. So, I think that most law firms don’t have any kind of an intake workflow at all. Creating an intake workflow and managing a client journey is probably number two.  

And another thing I’d say to cheat even a little bit more is that once you start doing the document management stuff correctly, then you should start looking at a document assembly. Because that is a massive efficiency-saver. 

So, in terms of steps, these would be three that I would take first in the nearer term if I was a law firm. And I would probably choose between the intake workflow and getting the document situation square away.

OK, thank you! How can a small law firm owner make sure that legaltech doesn’t create more inefficiencies than there’re already are? 

Great question. I think the main way to do that is to not buy everything you see. I talk to a lot of law firms, and some of them have around 50% of the software they purchased but don’t use in the firm. Or, they’ve got one software, and they’ve got another software that does the same thing. Even if to talk about all of these companies that try to become operating systems for legal: if you’ve got a case management system, you’ve probably got an e-signature tool that’s included, and maybe an e-payment tool as well. And yet there are so many law firms that have separate products for that. So, I think the biggest challenge out there, is trying to trim all these subscriptions. 

And there’s a reason why everybody does cloud-based subscriptions — they are very sticky. Even if I stopped ordering from Amazon for about six months, I won’t even think of canceling the Amazon Prime subscription. If I’m not watching a movie on Netflix for two months, I wouldn’t cancel Netflix. People are just not acclimated to going through this process in their life. But as a law firm, you’d probably want to do this on an annual basis to make sure that you’re not using redundant technology. 

Thank you! Do you think legaltech will level the playing field for smaller and larger firms?

Absolutely. And it’s not necessarily the technology, it is much more about the cost of the technology. Back in the day, about 15 years ago, if somebody wanted to start a law firm, or reinvent their technology strategy, they had to pay around $30,000. Because you’re buying this premise-based software, you have to set it up and you have to get a server. The cost of buy-in was so expensive. By extension, the cost of revisiting and revising your technology infrastructure was also hyper-expensive. It was so hard for smaller firms to compete because bigger firms could just throw cash at this problem. 

The subscription cloud-based model means that the only thing you pay upfront is the first monthly service charge. And if you want to switch from one software to another, it’s not that massive time-consuming issue where you’re swapping information back and forth, setting up physical devices, and ensuring everybody in the office has an update made on their laptop. That just doesn’t exist anymore. That’s leveled the playing field more than anything. 

The ease of getting into this system short of money and the ease of swapping into and out of systems have leveled the playing field for smaller firms. And there’s still a lot of room to grow, but there are some really good technology platforms out there that solo and small law firm attorneys could take advantage of. 

What are your predictions for 2022 in terms of trends for solo and small law firms? And, as a follow-up question, what changes should law firm leaders expect and focus on?

I think the consolidation trend will continue. You’re going to see larger companies snapping up smaller tech companies. And what’s interesting to me about that is will that make smaller companies better or worse. I think that’s something to watch out for.

Another trend you’re going to see is a lot more automation in legaltech software. One thing that needs a lot of work is that a lot of legaltech software, even very good ones, requires a lot of manual operations. So, I think you do need more automated toolsets in those solutions. That is something I’m hoping a lot of providers will start to add. This would bring more efficiency to law practices. 

Another thing I hope lawyers will start focusing on in 2022 is document management. I hope the document assembly and contract management tools will get more and more popular among lawyers. Taking advantage of this technology that is out there that lawyers might not be aware of yet, — that to me is the easiest place to gain more efficiency as a law firm. I’m hoping that this becomes a trend in 2022.

And for the second part of the question, I don’t think that the convenience economy is going away. I think there’s this narrative out there saying that even though the pandemic has changed everything, we’ll get coronavirus under control at some point, and things will go back where they were before. But nothing’s going back to the way they were before, and that’s not because of the coronavirus. The convenience economy was happening before this. Even before the pandemic, some people were starting to work on online streaming and food delivery services. This was already happening. The pandemic just pushed that forward and accelerated that process. So, I think if you’re out there and you’re a law firm owner thinking that you’re going to get back in 2019 at some point, that’s not going to happen. 

The focus on consumers needs to be the lens through which you look at anything. How does this affect the legal consumer? How can I be more transparent in the way I deal with my customers? How can I make my clients happier? How can I make what I offer as a service convenient to them? The rubric is no longer what’s convenient to the law firm. That’s going to continue to get more and more focused.

So, as a law firm in 2022, keep pushing ahead aggressively, even if the pandemic is under control, and keep focusing on the convenience economy because that is not ever going away.

Thank you very much, Jared! 

As told to Jane Kuhuk, PR Manager at Loio. 

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