With the Virtual Pricing Director Pricing Espresso® we aim to bring you your pricing 'shot' - some of the most interesting, thought-provoking and informative material we can find globally which will be of interest, relevance and help to you in your firms' pricing challenges.
The Foonberg Gratitude Curve
Few lawyers today will have heard of Jay G. Foonberg, an American lawyer born in 1935 who practised law for over five decades. He is best known for his classic ABA bestseller, "How to Start and Build a Law Practice" which spectacularly sold over 300,000 copies, a remarkable achievement for a niche topic.
He articulated a concept which came to be known as the Foonberg Gratitude Curve to describe the correlation between the progression of a piece of legal work, the client’s appreciation of that work and their willingness to pay, set against a timeline.
We are all too aware that law firm cash flow is positively or negatively impacted by the timing of invoicing and the timing of payment of those invoices. Read more...
Higher Billing Rates, More Reflection Are Leading Some in Big Law to Go Small
Some lawyers are heading into smaller firms or launching their own boutiques, due to a mix of billing rate pressures, remote-work flexibility and taking a breather after a busy 2021.
Conditions are ripe for Big Law lawyers to go small this year, some analysts and firm leaders say, by forming their own law firms or moving down to smaller firms.
An infusion of remote-working flexibility and a bit of a breather after a busy 2021—plus a desire to control billing rates—are leading some lawyers to downsize into smaller firms or spin out into their own boutiques in 2022. A surge in profits, too, has expedited late-career lawyers to the Big Law offramp. Read more...
Hogan Lovells Sets Out Hours Requirements to Become Partner
An internal memo from the firm's CEO has specified what is expected of lawyers aiming to make it into the partnership.
Hogan Lovells has laid out what steps lawyers need to take, including the number of hours required, to become a partner at the firm.
In an internal memo sent earlier in May to the entire firm, Hogan Lovells CEO Miguel Zaldivar provided information on what steps could be taken to succeed on the route to partnership within the firm, according to one London partner. Read more...
Legal Tech Must Shift Focus from Cutting Legal Costs to Controlling Them
Software providers should refocus on helping lawyers deliver more value from every dollar spent on legal services, rather than the traditional focus on cutting costs.
For a long time, legal technology providers led with a value proposition of cost savings. That idea claims an important legacy in the history of the business of law, but it’s untenable today and perhaps, even, counterproductive. Collectively, we need to focus on control—getting more value from the budget the legal department spends—rather than cutting it.
Allow me to explain. Read more...
Reed Smith Offers Billable Hour Credit for Sustainability Projects
The credit is part of a two-year sustainability plan which includes carbon emission targets and comes at a time when firms are ramping up ESG efforts.
Reed Smith is allowing its fee-earners across the firm to record time spent on sustainability projects as billable hours, as part of a wider environmental plan.
In a firm announcement on Tuesday, it said all timekeepers will now be able to annually designate up to 25 hours of work and activities related to sustainability projects as billable time. Read more...
As Big Law Rolls into Miami, Locals Ask: Who Will Pay Kirkland's Rates?
The newcomers appear interested in more than just talent, but natives say their success will depend on whether local clients see the added value in their significantly higher fees.
If you want to know whether Miami is more than just a talent play for its recent Big Law entrants, look no further than 830 Brickell, a rising office tower in the heart of the city’s financial arena.
The 57-story tower is still being built, but it already symbolizes a who’s who of companies that are serious about Miami. Microsoft, WeWork and private equity firm Thoma Bravo all lay claim to space in the tower, which is leasing at $100 per square foot—36% higher than the average price in Brickell and 21% higher than the average in Manhattan. Read more...
Lawyer's $2,465 hourly rate draws objection in J&J talc bankruptcy case
The United States is objecting to a Johnson & Johnson subsidiary’s bid to add Hogan Lovells partner Neal Katyal to its legal team in a high-stakes bankruptcy case, citing his hourly rate of $2,465 — a possible new legal industry high.
Johnson & Johnson is using the proceedings to try to resolve claims that its baby powder and other talc-based products caused cancer. The company, which maintains the products are safe, in October assigned thousands of talc lawsuits to a new subsidiary, LTL Management LLC, and placed it in bankruptcy. Read more...
Our secretaries are now time recording as well
A granular overview of secretarial time can give law firms a better idea of costs, productivity, and merit for recognition – says Glyn Morris, partner at Higgs.
“Did I hear you correctly?” or “I bet that went down like a lead balloon”, might be just two of the most reasonably anticipated retorts from amongst any law firm management team, upon discovering that our secretaries (for ease we’ll use this generic term to refer to personal assistants/secretary/administrative and legal support) are now time recording.
In this, the first of two articles, let me explain why it makes such absolutely perfect sense that everyone will wonder why they haven’t been doing it before. And then, in the second article, Michelle Jamieson, head of legal services will elaborate on how we implemented time recording, and the rather unexpected and surprising reaction from the individuals involved. Read more...
Should Firms Use Billable Hour Targets to Incentivize More Collaboration?
Firms can use lawyers' natural incentives to meet billing goals in a broader effort to collaborate toward bigger aims.
Collaboration has been a major strategic theme within law firms over the past several years. While some have made progress, there seems to be a ceiling on how far these efforts can actually go. My sense is that it comes down to incentives and motivation. I propose an approach to driving collaboration that uses the natural motivations of lawyers within a firm to stimulate better results. Read more...
Is Big Law Ready for a Recession?
Law firm office openings, associate hiring, and billing rates may all feel the impact of an economic downturn.
After two years of stunning financial growth in the legal industry, some in Big Law are bracing for a recession.
While nothing is certain, the specter of a recession is looming, as economists continue to throw out the chances of a downturn, amid rising interest rates, inflation and geopolitical tensions.
In the event of a downturn, law firm leaders and industry observers said, they are expecting the rate of office openings and the competition for talent to slow, while putting more focus on counter-cyclical practice areas. Those dynamics could also put pressure on billing rates and shift some of the leverage away from employees and back to law firm management for issues such as compensation and whether personnel can work remotely, industry observers added. Read more...
Covington law firm discloses $2,500 top hourly rate in new Ukraine contract
A company owned by Ukrainian billionaire Rinat Akhmetov has tapped law firm Covington & Burling for advice and U.S. lobbying services in its bid to make Russia pay for destruction wrought by the invasion of Ukraine.
Covington last week signed a contract with SCM Consulting Limited, an affiliate of an investment company whose shareholder is Akhmetov, Ukraine's richest man, a newly-public U.S. Justice Department filing shows. Read more...
Costs bill struck out after it failed to give fee earner details
The Court of Appeal has ruled that a judge was right to strike out a bill of costs because it was not possible to identify which lawyers worked on the case.
Lord Justice Newey, ruling in AKC v Barking, Havering and Redbridge University Hospitals NHS Trust,said he could ‘piece together’ some information from the details belatedly provided by the claimant, but it was still not possible to say which of the 33 fee earners named carried out particular work.
The judge, backed by Lord Justice Dingemans and Lord Justice Lewis, said the right course was to strike out the existing bill of costs and order the claimant to serve a replacement which complied with Civil Procedure Rules. Read more...
Fixed costs extension earmarked for April 2023
The extension of fixed recoverable costs is likely to come into effect from next April, it has emerged.
Officials at the Ministry of Justice have confirmed to various sources that April 2023 is now the intended start date for the change, subject to Civil Procedure Rule Committee agreement.
The government intends to impose fixed recoverable costs (FRC) across the fast-track and in most money cases worth up to £100,000. Read more...
Justice committee chair raises doubts about fixed costs in clin neg claims
A senior Conservative MP has expressed a ‘number of reservations’ about government plans to impose fixed recoverable costs on lower-value clinical negligence claims.
The Department of Health proposed in January to streamline the process for most claims worth up to £25,000 and cap the amount that lawyers can recover for doing this work. Consultation on the issue has closed, with no indication from the government about how quickly it might respond.
Speaking at the Society of Clinical Injury Lawyers (SCIL) conference, Sir Bob Neill MP, chair of the justice select committee, said he was not opposed to fixed costs in principle but that the current proposals may not be workable. Read more...
Judiciary Fights Ex-Public Defender's Request That It Pay Legal Costs in Sex Harassment Lawsuit
Caryn Strickland’s filing countered the AO’s claims that neither side walked away from that ruling as the prevailing party.
The federal judiciary is arguing it shouldn’t have to pay an ex-public defender’s legal costs after a federal appeals court revived her sexual harassment lawsuit earlier this month.
Former public defender Caryn Strickland asked the U.S. Court of Appeals for the Fourth Circuit to order the Administrative Office of the U.S. Courts and other defendants to pay $1,571 for costs associated with producing her briefs and joint appendix. The AO objected, saying the panel didn’t discuss the allocation of costs between parties in its ruling, and that Strickland was not the prevailing party. Read more...
SRA should keep costs protection, Supreme Court rules
The Supreme Court has made clear that the Solicitors Regulation Authority should continue to receive costs protection as a default position when it brings prosecutions.
The ruling came despite the court's decision today in Competition and Markets Authority v Flynn Pharma & Anor that the competition watchdog should not enjoy costs protection.
Effectively, justices ruled that the SRA’s position as a regulator funded by the legal profession sets it apart from other public bodies with a statutory function - so for the SRA the status quo should remain. Read more...
Recovering legal costs successfully
The issue of costs recovery often ends up being a low priority for lawyers, regardless of its importance to their law firms. Here, Richard Allen, a senior consultant with Burcher Jennings, gives a helpful overview of how to recover in full, the legal costs between parties – a subject which many regard as both a mystery and a minefield. (Updated 22 February 2022)
Matters often start out with a stressed client and considerable sums at stake. This, added to the pressures of other clients and cases, means that the focus tends to be on the legal work. Agreeing a detailed retainer and clearly recording costs information is often undertaken with little enthusiasm compared to the case itself.
This leads to mistakes, omissions and cut-corners that reduce the level of costs recoverable. In effect, firms are throwing money away — money that they have earned. Read more...