With Validatum Pricing Espresso® we aim to bring you your regular 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']
'Yes, we can do it for that price; 'What would you like me to leave out?'
"I am sick and tired of asking my external law firms for a garden shed and getting a bloody office tower and a bill to match!"
So opined [verbatim] a very frustrated FTSE 100 GC in a casual conversation with us recently.
Why this profound dissonance between expectation and reality? Why do lawyers keep delivering stuff the clients didn't ask for, don't want and won't pay for? Is it fair to characterise this behaviour as professional arrogance (‘…we know better than you’) and/or unprincipled and ill-considered up selling? Read more...
Political wrangling within law firms hitting client service, say general counsel
Survey of general counsel reveals service shortcomings of Big Law approach.
Inter-office rivalries and poor communication are hampering the ability of global law firms to provide a good standard of service, in-house lawyers report. Of 102 senior in-house lawyers surveyed by Legal Week Intelligence, 77% complained of poor communication between teams and 62% said relationships were blocked to preserve the income of particular partners. Read more...
For U.S. corporate legal departments, cost controls top wish list
Corporate legal departments want to use more technology and use it better in order to dampen costs. Making progress on those goals may take some time.
United States corporate legal departments — the empowered buyers in a prolonged soft market for law firm services — are reacting to a demanding environment by making changes and demands of their own.
A new report — the 2018 State of Corporate Law Departments — finds corporate counsel focused on innovation and business discipline in a effort to manage costs and leverage technology in order to realize greater efficiency, budget predictability, and value. Read more...
Client Push Back + LegalTech Creating Perfect Storm, New Data Shows
A recent report by Thomson Reuters on corporate law departments shows that client push back and the increasing use of technology to drive efficiencies is creating a perfect storm for external legal firms.
The 2018 State of Corporate Legal Departments report, which was supported by legal operations group CLOC and also survey company Acritas, has plenty of interesting data. However, the one table that really caught Artificial Lawyer’s eye was the one below, which sets out changes in hourly rates for different fee earner groups at law firms. Read more...
What Do Most Law Firms Misunderstand About Clients?
What do most law firms misunderstand about their clients? The short answer is many important things.
For example, at a recent law firm retreat, I asked partners what their clients want most with respect to legal fees. The overwhelming response was the “lowest possible prices.” In fact, survey data shows that General Counsel are looking for fees that reflect efficiency, a greater understanding of the objectives of the matter and collaborative transparency. Only 10% of clients say they want the lowest possible price. Lawyers proposing legal fees to their clients must have a more nuanced understanding of this issue. Read more...
The big bang for alternative legal services providers
Will 2018 be the 'big-bang' year for the use of Alternative Legal Services providers, asks PwC's Peter Workman?
The current legal and regulatory environment is burdensome. General counsel and their legal teams are under ever increasing pressure to reduce legal spend whilst delivering more legal and regulatory compliance. These conflicting demands are unsustainable and 2018 could see the tipping point where GCs increasingly turn to alternative legal services delivery models in order to meet these demands. Read more...
Sorry Clients: Higher Law Firm Billing Rates Really Do Pay Off
Law firms do better when they raise their published billing rates at a faster clip, even if those increases result in a widening gap between published and realized rates, according to a recent analysis by Citi Private Bank’s Law Firm Group.
“The analysis we have is how the consistently most successful firms have increased rates versus the broader industry during 2010-17,” explained Gretta Rusanow, head of advisory services for the group.
Top-performing firms increased their rates at an average annual rate of 4.4 percent, compared with an increase of 3.3 percent for the broader sample, Rusanow said in an email. While those top performers saw a wider gap between their published and realized rates, their realized rates nonetheless grew faster than at the other, less aggressively priced firms. Read more...
Barclays to law firms: no more panel reviews
Barclays is set to begin its last-ever conventional panel review, as it aims to move away from “resetting the clock every two years” with a new system that will see external advisers assessed on an ongoing basis.
The bank, which handed two-year panel appointments to 140 firms in its last review in July 2016, will carry out its last official refresh in the coming months, after which it will move to a new system it describes as “active relationship management”.
Once the next – and last – review has been completed, firms will be added or removed from the panel on an ad hoc basis. Read more...
Behold: The First Firm To Crack $3 Billion In Revenue
For any Biglaw firm interested in taking over the top spot in the Am Law 100, Latham & Watkins has thrown down the gauntlet: $3 billion in revenue.
The current #1 firm looks poised to reclaim the throne on the back of $3.064 billion in revenue in 2017, as reported by Law.com, on the back of a ~7 percent increase in attorney headcount. Profits per partner were also up at Latham to $3.25 million.
The firm’s management stressed there was a lot of strategic thinking that went into the accomplishment, and they’re poised to grow even more: Read more...
BSB reins in price publishing plan under pressure from chambers
The bar’s regulator has backed away from plans to require chambers to publish hourly rates and fixed fees on their websites, averting fears that transparency could spark a ‘price war’ among barristers.
The Bar Standards Board last night revealed that after consulting the profession it had dropped plans for barristers specialising in contentious areas to publish prices, opting instead to focus primarily on those undertaking public access work.
However, plans will be considered to require chambers’ websites to provide a link to regulatory information about members and to complaints upheld by the Legal Ombudsman and bar disciplinary tribunal. Read more...
The Big Question: The Billable Hour Debate—Yes or No?
The billable hour.
For clients and service providers alike, it’s clear the billable hour is not representative of the value a service business can deliver.
As a result, this week’s big question seemed like a no-brainer.
We all love to hate the billable hour.
In fact, Gini Dietrich recently wrote about the importance of tracking time, and made her thoughts on the billable hour very clear: Read more...
Why Elite Law Should Raise Rates
If law firms have the bargaining power to raise standard rates an average of 3 percent, and realize a rate increase of 2.5 percent, then do they have the power to raise rates at, say, 7 percent and realize a 5 percent increase?
Elite law’s self-confidence has taken a beating. First the great recession hit, and now talk of disruption abounds. But the recession is over and disruption is far from an existential threat. It’s time for elite law to rediscover belief in the value it provides and start to raise rates as it did before the recession. Specifically, elite firms should: Read more...
Billing Rate Gap Widens as Big Firms Demand Ever-Higher Premiums
When it comes to hourly billing rates, the largest firms have pulled even farther ahead.
Bigger may not always be better, but there’s no denying that partners at bigger law firms are able to get away with ever-higher hourly billing rates compared with their smaller-firm counterparts.
That was one of the takeaways from a report released Tuesday by CounselLink, LexisNexis’ legal pricing data service, and it echoes the news from other recent law firm billing rate studies. Read more...