With Validatum Pricing Espresso® we aim to bring you your morning pricing 'shot' - the best, most interesting, thought provoking and informative material we can find globally which will be of interest, relevance and help to you in your legal services pricing challenges. [Note: we don't always agree with the content of others that we post but the philosophy of Validatum Pricing Espresso® is shared perspectives, not a personal 'soap-box']
Retainers: A Squandered Revenue & BD Opportunity
I can keep honest counsel, run, ride, mar a curious tale in telling it and deliver a plain message bluntly. That which ordinary men are fit for, I am qualified in, and the best of me is diligence.
The Earl of Kent, King Lear’s faithful old retainer, King Lear, Shakespeare
Client retainers are an oft misconceived, poorly executed and under utilised strategy. At face value, the development and deployment of retainer arrangements across suitable parts of the client base is predominantly a business development issue, which indeed it is. However, it is also a pricing issue because we view retainers as not simply a method of service delivery but as a discrete pricing methodology in its own right. Read more...
Burcher Jennings launches new Litigation Funding service
Leading costs, pricing and funding expert Burcher Jennings is today launching Burcher Jennings Litigation Funding.
The new service provides law firms and their clients with tailored, expert advice, on a case by case basis, on the full range of funding options.
With Burcher Jennings Litigation Funding, firms ensure that their clients can make informed decisions about financing and obtain the right funding for their case. Read more...
A Virtual Whip Round for Costs?
We’ve all been in an office when a likeable colleague has left and the remaining staff have had a whip round to get them a leaving gift.
The 2016 name for a whip round is ‘crowdfunding.’ Although this may seem like a thoroughly modern concept, crowdfunding has actually existed in many forms over the years. Issuing war bonds during the Second World War was a way of crowdfunding the military, for example, and the donations political parties receive in the run up to the general election are also a type of crowdfunding.
Crowdfunding in its modern form is a new phenomenon thanks to the driving force of the Internet and social media and the global reach it now has. This has allowed crowdfunding to make a huge impact, across all sectors, since the initial popular and mainstream use in arts and music communities. Read more...
Reaping the benefits of legal project management: fewer malpractice claims and time/fee write-downs…and less stress
Would it surprise you to know that only one third of all legal malpractice claims have anything to do with bad lawyering?
According to the Lawyers’ Professional Indemnity Company (LawPRO), two thirds of claims made between 2003 and 2013 resulted not from legal mistakes but case management issues including: communication failures between lawyers and their clients, missed deadlines and limitation periods, and not doing all the work that needed to be done.
Most of these claims could be avoided with better project management. Read more...
The True Size of the U.S Legal Market
The Legal Executive Institute recently published this infographic titled “How Big is the U.S. Legal Services Market?” The infographic presented several important data points on the legal industry:
- According to the LEI, the size of the legal market is about $437 billion. Out of this figure, law firms’ total revenue combined account for $276 billion, about 63% of the total legal market. Corporate Legal Departments share the other 37% with $160 billion.
- The law firm market is split: 39.2% are Small Law Firm (1 – 20 attorneys), 26.4% are Mid Size Firms (30 to 175 attorneys) and 34.4% are Large Firms (175+ attorneys). Read more...
Allowing lawyers to invest directly in litigation is coming, says QC
Solicitors will be funding litigation directly in the next few years, a leading silk predicted last week.
Nick Bacon QC said he did not understand why cases from the nineteenth and early twentieth centuries were still driving the law on lawyers sharing in the proceeds of litigation in this way given that there was no practical distinction with conditional fee or damages-based agreements (DBAs).
Speaking at the JLT commercial litigation conference in London last week, the 4 New Square barrister said he had seen some DBAs being used, despite continuing concerns about the rules governing them. One solicitor, he recounted, had “taken a punt” on a case with a DBA and made more from that one matter than he had from a decade of litigation. Read more...
5 things you should do to succeed in buying legal services
For a long time, legal services have been seen as the "final frontier" for procurement professionals. But Legal Procurement has been on the rise since 2010. More and more companies with significant legal spend now bring in procurement professionals to help source legal services.
Here are five pointers for buying Legal:
- Look beyond Discounts: In the legal category, value gains come through process improvements, service unbundling, innovation, risk reduction, and incentive alignment, and not via discounts. The real opportunity lies in identifying the ways in which firms & suppliers can help you better meet your organisation’s business objectives, consume less, and become less expensive to serve. To read Gerard Chick’s LinkedIn post, click here. Firms create value by reducing costs, reducing waste, and improving process controls. Read more...
Client RFPs Hit 15-Year High
More clients are using more RFPs to hire law firms than any point in the last 15 years
56% of corporate counsel issued RFPs for law firms in 2015, up from 45% in 2014. We now face a majority of clients using RFPs to hire new law firms. The increase is due directly to the rock-like drop in client service performance clients are experiencing.
We are witnessing a combination of more demanding corporate counsel responding to new pressures from management, and a new generation of corporate counsel simply having different expectations of their law firms. Read more...
Coffeemaker win lacks perk for lawyer who asked for $180K in fees but got $6,800
Plaintiff Pamella Montgomery still gets the $250 settlement she was promised after a more than two-year legal battle with Kraft Foods Global Inc. and Starbucks Corp. over her purchase of a single-serve coffee maker.
But the Michigan woman’s lawyer is receiving $6,800 in attorney fees and costs rather than the $180,000 he had sought under a federal trial court ruling that was OK’d on Monday by the Cincinnati-based 6th U.S. Circuit Court of Appeals.
Citing a briefing error in the appeal of the Grand Rapids case, the three-judge panel said counsel for Montgomery had waived the right to argue for a bigger award. Although Montgomery’s counsel did point out that the trial court award represented only about 3 percent of the attorney fees and costs requested, calling the amount a “nonaward,” counsel didn’t present arguments for an increase, explains the 6th Circuit’s written opinion (PDF): Read more...
Lawyer is censured over $71K legal bill that included $30K in interest
The Wyoming Supreme Court has publicly censured a Cheyenne lawyer who charged a client $30,000 in finance charges on an unpaid legal bill of $41,000.
The court adopted a report by the state bar’s Board of Professional Responsibility and censured (PDF) lawyer Bruce Asay on May 11 in connection with the fees charged to a client he represented on employment-related issues. The Legal Profession Blog and the Wyoming State Bar note the censure.
Asay charged monthly interest on unpaid legal bills of 1½ percent per month. Read more...
Revenues and hourly rates both up at US firms
Fresh data from Citi Private Bank has placed revenue growth at US law firms at its strongest level since 2008.
According to Citi’s latest report, law firm revenue grew by 5.8 per cent in the first quarter of this year, driven by growing demand, robust rates and a stronger collections effort. The report found that demand was up 1.8 per cent for the quarter, while rates were up an average of 3.2 per cent and the collection cycle was shortened by an average of 1.5 per cent.
The lift has almost doubled on last year’s result, when revenue growth was recorded at 2.3 per cent for Q1 2015. Citi’s results are based on a sample of 176 US law firms, including 79 firms from the Am Law 100, 45 Second Hundred firms and 52 niche or boutique outfits. Read more...
Billing $2K an Hour? Study Says Clients Will Pay If Lawyers Deliver
The top rates paid to the highest-paid partners at U.S. firms rose to a jaw-dropping $2,000 an hour last year, a 25 percent increase over 2014’s top rates, according to data released Wednesday by BTI Consulting Group.
The $2,000-an-hour hourly top rate, up from $1,600 in 2014, applied to “more than a handful” of the survey’s 322 in-house counsel respondents, according to BTI Consulting's Michael Rynowecer, president and founder of the group. Even more were clustered around $1,900 an hour.
“Yes, they’re outliers, but they’re not exceptions,” Rynowecer said. Read more...
Dispute over £4,000 repair bill racks up £300,000 in costs
A dispute between neighbours over who should pay a £4,000 bill to fix a drain has racked up legal costs of more than £300,000.
Court vs Van Dijk & Anor centres on the dispute in York over who should pay for work carried out on a common private drain. A 2013 decision in the case awarded damages of £4,227.88 plus interest to John Van Dijk and Bernardine Van Dijk.
Hearing an appeal against the decision, Lord Justice Floyd (pictured) noted that it was a ‘regrettable feature’ of the dispute that the litigation was only continuing due to the ‘enormous sums in costs which are at stake’. Read more...
In-house preference for alternative fee arrangements growing, survey finds
A new survey of in-house decision makers from law firm Proskauer has uncovered a growing appetite for alternative fee arrangements for outside legal work.
The survey, conducted by Proskauer’s Labor and Employment Law Department, shows that approximately 46 per cent of in-house counsel are expecting to increase their use of alternative fee arrangements in the coming year, while not a single respondent said they expected use to decrease.
Additionally, different pricing models and approaches were ranked by the survey’s 100+ respondents as the most desired area of change for relationships between in-house teams and outside counsel, followed closely by cost reduction and lower outside counsel rates. Read more...
Growth of fixed-fee offerings ‘inevitable’
As SMEs start to speak up about their legal service needs, more firms are going to have to start offering fixed-fee services, according to the founder of virtual firm Arro Lawyers
Speaking with Lawyers Weekly, Arro Lawyers founder and managing director Simon Reid (pictured) said the industry is changing and firms have to start listening to what start-ups and SMEs want.
"Lawyers traditionally haven’t been great at listening to their customers," Mr Reid said. Read more...
LSB warns on publishing ‘average prices’ of legal services
The Legal Services Board has expressed doubts over the consumer watchdog's recommendations to make law firms publish the ‘average prices’ of legal services, questioning whether such data might potentially be misleading.
The board was responding to recommendations made by the Legal Services Consumer Panel on ‘opening data’ in legal services.
The panel had recommended that approved regulators should require law firms and sole practitioners to publish the average cost of legal services on their websites and be mandated to provide this information on request. This should also include the average cost of disbursements, the panel suggested. Read more...