How much are your peers getting paid? Reliable, detailed information on compensation for solo practitioners and small firm attorneys is surprisingly scarce. To address this information gap, Above the Law has partnered with Clio to conduct the 2018 Solo and Small Firm Compensation Survey. For an overview of the findings, please join Breaking Media’s Research Director Brian Dalton and Clio’s Lawyer-in-Residence Joshua Lenon for a free webinar on Tuesday, September 18. The findings will increase transparency for the benefit of both law students considering joining a small firm, as well as practicing attorneys looking to benchmark their own compensation in order to make more informed career decisions. Our free webinar will cover survey findings including average numbers for: Total annual compensation for solos and small firm attorneys Target bonuses (as a percentage of base pay) Actual bonuses and raises Percentages of total compensation based on collections and origination fees

1. #ClioWeb
A Clio Webinar
Breaking Down the
2018 Solo and Small Firm
Compensation Survey

2. Joshua Lenon
• Lawyer in Residence
at Clio
• Attorney Admitted
in New York
• @JoshuaLenon
#ClioWeb

3. Brian Dalton
• Director of Research
and Consulting at
Breaking Media
#ClioWeb

4. Billie Tarascio
• Founder and Owner
of Modern Law
• Founder of Access
Legal
• Attorney Admitted
in Arizona
• @MyModernLaw
#ClioWeb

5. Agenda
• Above the Law’s Solo and Small Firm Compensation
Survey Overview
• Clio’s Legal Trends Data and Compensation
• Special Guest: Billie Tarascio
• Compensation Models are Firm Culture
• Questions
#ClioWeb

6. 2018
Solo and Small Firm
Compensation Survey
#ClioWeb

8. RESPONDENT DEMOGRAPHICS

9. RESPONDENT DEMOGRAPHICS

10. RESPONDENT DEMOGRAPHICS

11. COMPENSATION

12. COMPENSATION

13. SURVEY FINDINGS

14. SURVEY FINDINGS

15. COMPENSATION BY POSITION

16. COMPENSATION BY POSITION

17. COMPENSATION BY POSITION

18. AVERAGE RAISES

19. AVERAGE RAISES BY FIRM SIZE

20. PERCENTAGE OF TOTAL COMPENSATION
BASED ON COLLECTIONS

21. PERCENTAGE OF TOTAL COMPENSATION
BASED ON ORIGINATION FEES

22. APPROXIMATE ANNUAL COMPENSATION
BY PRACTICE AREA

23. Clio’s Legal Trends Data
and Compensation
#ClioWeb

24. #ClioWeb

25. The Legal Trends Report
(LTR) has been prepared
using data aggregated
and anonymized from
the usage activity of
approximately 60,000
Clio customers.
These customers were identified using the
following criteria:
• They were paid subscribers to Clio, meaning
customers who were evaluating the product
via a free trial, or were using Clio as part of
our Academic Access Program were not
included in this data set.
• They were located in the contiguous United
States, thus including the District of
Columbia but excluding Hawaii and Alaska.
No customers in other countries were
included in our data set.
• Any data from customers who opted out of
aggregate reporting were excluded.
• Outlier detection measures were
implemented to systematically remove
statistical anomalies from the dataset.
#ClioWeb

26. #ClioWeb

27. #ClioWeb

28. • Client lacks the funds to pay
(44%);
• Client has adequate funds but
payment is still late (31%);
• 25% of firms mail bills / 29% rely
on checks;
• Firms accepting credit card
payments are paid 40% faster.
Collection Rates
Law Firm Survey Insights

30. Clio’s LTR vs
ATL Compensation Survey CAVEATS
• We’re comparing apples to oranges
• Clio tracks revenue
• ATL surveyed on compensation
• You are not the average law firm
#ClioWeb

31. Solo Compensation vs
Average Billed Revenue
26%
18%
10%
12%
15%
13%
6%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
$90k

32. Solo Compensation vs
Average Billed Revenue
26%
18%
10%
12%
15%
13%
6%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
$90k
44% of law firms

33. 2 to 5 Compensation vs
Average Billed Revenue
18%
30%
16%
14%
9%
7% 6%
0%
5%
10%
15%
20%
25%
30%
35%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
$322k
18% for 5 lawyers
60% for 2 lawyers

34. 2 to 5 Compensation vs
Average Collected Revenue
18%
30%
16%
14%
9%
7% 6%
0%
5%
10%
15%
20%
25%
30%
35%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
$322k
18% for 5 lawyers
46% 60% for 2 lawyers
$290k

35. 6 to 10 Compensation vs
Average Billed Revenue
27%
25%
18%
15%
9%
4%
2%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
70% for 10 lawyers
15% for 6 lawyers
$1.1m

36. 6 to 10 Compensation vs
Average Collected Revenue
27%
25%
18%
15%
9%
4%
2%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
52% 70% for 10 lawyers
18% 15% for 6 lawyers
$1.1m
$866k

37. 11 to 25 Compensation vs
Average Billed Revenue
15%
17%
23%
29%
8%
6%
2%
0%
5%
10%
15%
20%
25%
30%
35%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
32% for 25 lawyers
52% for 11 lawyers
$2m

38. 11 to 25 Compensation vs
Average Collected Revenue
15%
17%
23%
29%
8%
6%
2%
0%
5%
10%
15%
20%
25%
30%
35%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
15% 32% for 25 lawyers
40% 52% for 11 lawyers
$2m
$1.6m

39. 26 to 50 Compensation vs
Average Billed Revenue
12%
24%
16%
27%
9%
6% 6%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
36% for 50 lawyers
43% for 26 lawyers
$4.5m

40. 26 to 50 Compensation vs
Average Billed Revenue
12%
24%
16%
27%
9%
6% 6%
0%
5%
10%
15%
20%
25%
30%
<$50K $50-74.9K $75-99.9K $100K-149K $150-249K $250-499K $500+K
#ClioWeb
12% 36% for 50 lawyers
40% 43% for 26 lawyers
$4.5m
$3m

41. Clio’s LTR Considerations
• Lawyer compensation is inhibited by law firm
revenue concerns
• More bodies are not enough to equal more salary
for the average law firm
• Collections matter
• Law firms need a strategy
#ClioWeb

42. Register Now for 2018’s LTR
#ClioWeb
Clio.com/LTR

43. Determine Your Vision,
Values and Culture
Your compensation model is a reflection of
your Vision, Values and Culture
#ClioWeb

44. Examine your Values
#ClioWeb
Example: How Using A Low Cost Model to
Attract Clients Affected Us
Billie Tarascio, Modern Law, Access Legal & Modern Law Practice

45. Location of Space
Office Setup
Lawyers paid as contractors
Not a lot of frills
Few employee benefits
#ClioWeb
How Do Values Affect Decisions?

46. With our new values
• Relocated to an upscale area
• Included benefits, bonuses, trips
• Reduced turnover

47. • Are you overpaying or underpaying?
• Look to the data
• Communicate!
• Ask your employees if they feel adequately compensated
#ClioWeb
The Change Altered Pricing

48. • What other perks do you offer?
• What’s your management style?
• What’s your system for managing?
• Are you competitive?
#ClioWeb
Consider Transparency

49. Not many of us truly spend time
thinking about finance, budgeting,
pricing, and how you compensate your
attorneys.
#ClioWeb
Think about budget in
the broad terms:

50. • Cost of labor/employees
• Fixed Costs
• Marketing & Advertising
• Profits
#ClioWeb
Think about budget in broad terms

51. Profits First
The Financial
Model for Service
Companies
#ClioWeb
Employee costs = 50%
Marketing costs (fixed) =30%
Profits = 20%

52. Questions

53. Thank You
Joshua Lenon
joshua@clio.com
@JoshuaLenon
Linkedin.com/in/joshualenon
1-888-858-2546