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.
Berkshire law firm Gardner Leader is adopting SaaS legal pricing platform Virtual Pricing Director, which will integrate with its P4W practice management system.
VPD, which was conceived of and built over four years by UK cost consultancy Burcher Jennings and legal pricing experts Validatum, integrates with any of the major practice management systems including Elite 3E, Aderant and Fulcrum/SAP.
Derek Rogers, managing partner at Gardner Leader said: “VPD is a very impressive solution to a business-critical challenge with which all of us in the profession have been grappling for years. Read more...
Devotion to billable hours holding back inclusion, LSB research finds
A culture of achieving high billable hours at all costs and a lack of flexibility in working practices is holding the legal sector back from embracing diversity, a new study has found.
Research from the Legal Services Board found evidence of ‘inequality and inequity’ in the profession with certain features, traditions and practices holding back efforts to create a more inclusive environment. Read more...
Q1 LFFI Analysis: Rate growth driving significant improvement
Diving deeper into the recent Q1 LFFI report shows that the Index's improvement was driven primarily by the rise in the rates that law firms were able to charge their clients
The first quarter of 2023 saw a remarkable improvement in the financial performance of law firms, as evidenced by Thomson Reuters’ Law Firm Financial Index (LFFI) score, which surged by 14 points to reach 44 at the start of the year. While this score follows the all-time low score seen at the end of last year and still sits low historically, this relative growth was driven by a multitude of factors that contributed to the overall enhancement of large law firms’ business fortunes. Notably, historic rate increases were among the key drivers of this improvement. Read more...
Law Firm Partner Hourly Rates Rose Last Year at Biggest Clip in at Least a Decade
“Touching partner compensation is the third rail of law firm politics. You don't touch it. It can cause a lot of consequences you're not ready for," said Ken Callander, principal at Value Strategies.
Hourly rates for law firm partners jumped 4.5% in 2022, driven in part by law firms’ fears of profitability losses from inflation and a drop in M&A activity, according to a report from LexisNexis CounselLink.
The report, based on $52 billion in legal spending across 420,000 timekeepers and 1.4 million legal matters, says that annual percentage increase was the largest since CounselLink put out its first report in 2013. Read more...
Clients Keep Complaining, But Law Firms Are STILL A Bargain Even After Historic Rate Hikes
Maybe the problem with rising legal costs is coming from inside the client's office.
Clients don’t like to hear this, but outside counsel are offering a pretty fair deal.
Whenever a law firm raises its rates, clients bemoan the added stress to tightening budgets and might lodge some empty threats about refusing to pay, but ultimately everyone realizes that no one gets fired for hiring Cravath — or another peer firm — and in-house counsel fork over the cash. Law firms raised rates last year and while most coverage focuses on the hikes being the biggest in a decade, it turns out law firms are still running behind inflation. Read more...
Where Are Partner Billing Rates Surging the Most in Big Law?
The median hourly rate for partners in M&A shot up the highest, while partners in Chicago, D.C. and LA saw some of the largest increases.
While partner billing rates rose last year all over, they skyrocketed in certain practice areas in Big Law and several U.S. cities, according to a new analysis. Going forward, billing rates are expected to continue another steep increase this year.
Partner billing rates surged to record levels last year “in all tiers of law firms and in all practice areas,” but it was high-dollar practices that commanded some of the largest rate increases, with mergers and acquisitions, commercial and contracts, and corporate practices leading the way, according to the latest trends report from LexisNexis CounselLink. Read more...
The Cities Where Biglaw Partner Billing Rates Now Cost Even More Money
You may be surprised by which cities are the worst offenders.
According to the latest LexisNexis CounselLink report, Biglaw partner billing rates are surging in certain areas of the country. In 2022, which cities had the highest percentage rate increases in the U.S.?
Hint: While the average partner billable rate increased by 4.5% overall, these six major metropolitan areas saw median partner billable rates climb by higher than 5%. Read more...
In Battle for Billable Hours, Not Coming in Will Cost Some Associates Their Jobs
“Frankly, I do not give assignments to associates and junior partners who are not in the office at least 3 days a week," wrote one Am Law 100 practice leader.
Tension is growing between associates and partners along fault lines of hourly commitments and return-to-office policies, as associates continue asking for more flexibility around remote work and lower billable-hour requirements while some partners believe this generation of associates’ expectations are mismatched with the realities of a profession that’s supposed to hold client service above all else. Read more...
Strapped Legal Departments Finding Savings by Shifting Litigation to Smaller Law Firms
"Clients are starting to understand that there are a lot of good attorneys out there that can provide lower-matter-value services at better prices," said Ken Callander, principal at Value Strategies.
Grappling with higher hourly rates for outside counsel and rising litigation costs, big corporate law departments are shifting more of their litigation to smaller law firms, according to a recently released study.
The study found that the percentage of litigation work that law firms with fewer than 250 lawyers received from Fortune 50 companies has soared from 56% in 2018 to 79% now. Read more...
Law Firms Divided on Rate Increases as Economic Uncertainty Lingers
Firms are taking varied approaches to billing rate increases, weighing client incentives and the cost of inflation.
Inflation, the economy and pandemic-era obstacles remain at the forefront of firm leaders’ minds. Chief among a long list of concerns are billing rate increases as clients tighten their belts. How much are they willing to budget on legal spend?
“2023 is a year of uncertainty,” said Ken Van Winkle, the managing partner of Am Law 200 firm Lewis Roca Rothgerber Christie. “It would be easier if we called it a crash or a boom. It could break either way.” Read more...
Legal Tech vs. the Billable Hour: Experts Weigh In
Few things symbolize the legal industry’s commitment to maintaining the status quo as much as the endurance of the billable hour.
For something that has exhibited such staying power, the legal industry seems to enjoy regularly forecasting the demise of the billable hour. Time and again, people have predicted the its death, only to see it continue on without even a significant wound. And with every new technological advancement in the legal industry, someone expects that law firm business models will finally change. Read more...
Elite Announces Completion of Majority Acquisition by TPG
Elite, a provider of financial and practice management solutions to law firms, today announced that it has completed its previously announced acquisition by TPG, a global alternative asset management firm. TPG acquired the business from Thomson Reuters, which has retained a minority interest in Elite. In addition to the closing of the transaction, Elite’s board of directors has appointed Mark Dorman as Chief Executive Officer of the company. Read more...
As Layoffs Loom, How Much Control Do Associates Have Over Low Billable Hours?
As law firms wait and see whether the economy picks up in the third quarter, associates at risk of layoffs are feeling the other side of the billable hour’s wrath.
While billable hours remain low at transactional practices across the Am Law 100, associates are feeling the pressure to get their hours up as “performance-related” cuts threaten to end their employment.
Asked in a recent American Lawyer survey what they would change about the legal profession to benefit their mental health, just as many associates seemed to lament their inability to bill a full day as the number who are grinding under a pile of work. None of the survey’s roughly 1,500 associate respondents lauded their firm’s ability to deliver a steady workload that didn’t threaten to invade their personal life or put them on the chopping block as demand peaked and plummeted. Read more...
Q1 LFFI Analysis: Will rising law firm rates push clients away?
As the rates that law firms can charge clients for legal services continue to rise, will there come a tipping point at which clients simply balk at the higher price tag?
Law firms’ worked rates — those rates agreed to by clients to engage new work — rose at a dramatic pace in the first quarter, according to the Thomson Reuters Institute’s Law Firm Financial Index for Q1 2023. Further, we previously offered additional details on the rates picture, exploring rates by work type and timekeeper group, and even looking a bit at what collection levels of those newly raised rates look like. Read more...
As Kirkland Doubles Down in Salt Lake, Partner Billing Rates Soar in Region
Kirkland is now the third-largest law firm in Salt Lake, based on attorney head count last year.
While law firm office openings in Salt Lake City have slowed, Big Law’s commitment—and business opportunity—has been on display lately.
The city’s biggest, recent law firm entrant, Kirkland & Ellis, this week doubled down on the market, touting a new and expanded office downtown that the No. 1-ranked Am Law 100 firm said will “further cement our place in the city.” The firm is now the third-largest law firm in Salt Lake, based on attorney head count in 2022, according to ALM data, with only regional firms Parsons Behle & Latimer and Kirton McConkie ahead. Read more...
After Billing Endlessly For Years, Associate Turns Down Biglaw Partnership To Focus On Work-Life Balance
'Biglaw partnership is a mirage,' he told Above the Law.
Biglaw associates face constant pressure when it comes to meeting their billable hour expectations — and that pressure can grow even more when an associate hopes to become a partner someday.
But with a professional life that depends on billing, sometimes work-life balance gets tossed aside and lawyers find themselves missing out on other important things, like staying connected to their families and their friends. Important milestones can pass you by in the blink of an eye unless you take a moment to evaluate where your life is headed. If you take a step back, you may suddenly realize that this is not the life you envisioned for yourself. Read more...
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...
Costs bills based entirely on estimates 'intentionally misleading'
Claimant solicitors who submitted ‘intentionally misleading’ costs bills acted unreasonably and improperly, a judge has found.
Senior Costs Judge Gordon-Saker said Liverpool firm Parkerwall Limited had claimed for the cost of work where there was no evidence in the file that the work had been done.
He ruled in Ann Francis Ikin & Ors v Shawbrook Bank Limited & Ors that the bills for work on nine cases relating to mis-sold solar panels were not accurate and that virtually all the time claimed in each of the bills had been estimated. This was not stated in any of the bills or in response to requests for more details from defendant solicitors. Read more...
Costs budgeting works but can be tailored to cases, review finds
A major review of legal costs has concluded that budgeting should stay and that guideline hourly rates should be updated every year.
The Civil Justice Council today published the outcome of a working group’s year-long study into how costs are decided and apportioned by the courts.
A working group set up by the CJC concluded unanimously that costs budgeting, introduced 10 years ago following the Jackson report, has been a ‘significant and valuable shift’ and should be retained. Read more...
MoR not concerned ahead of fixed costs extension
The fixed costs extension is going to ‘change the landscape’ of civil justice when it comes into force in October - but should not have a negative effect on access to justice, the master of the rolls has forecast.
Speaking to the House of Commons justice committee yesterday, Sir Geoffrey Vos dismissed some critics’ suggestions that the extension for most claims valued up to £100,000 would make it more difficult for some people to find representation.
The rules are now finalised and signed off ahead of the extension being implemented from 1 October, with firms spending the summer revising their models to ensure this work is still profitable. Read more...