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.
Pricing legal services using available technology
The first in our series of webinars will reveal key statistics and will be based on a Q&A format, with Law Firm Ambition partner Richard Burcher of Virtual Pricing Director® taking centre stage.
A panel will then take questions from the host and the attendees. Surveys and live polls will ensure that the speakers cover the aspects that the attendees deem most important.
For this session on pricing and technology, we envisage that the questions will be based on: Read more...
Law Firm Billing Breakdowns Go Bonkers
Nothing like white-hot demand for 2 years to bring out law firm billing creativity — and stress a few systems.
Top legal decision makers tell us they are looking at never before seen surprises. We all know billing surprises are never good — and even worse when they are previously unseen.
Here is what they are dealing with right now: Read more...
Law Firms Are Suing Ex-Clients More Frequently, Unwilling to Leave 6-Figure Legal Fees on Table
Realization rates are trending upward. But as firms pay closer attention to their margins, so is fee litigation.
Despite the hazards of suing a past client for unpaid legal fees, these lawsuits are on the rise as firms are increasingly unwilling to let crucial six-figure payments slide, according to several attorneys who regularly advise other lawyers.
Realization rates in the legal industry trended upward in 2021, an indication to malpractice attorneys that law firms and their clients are finding new ways to ensure proper compensation for legal services. However, litigation by law firms to recoup allegedly unpaid legal fees has increased in recent years, and the amount of money at stake is growing too, as law firms pay closer attention to their margins. Read more...
As Billing Rates Skyrocket, Historic Fee Leaders Find Company at $2,000 Per Hour
Weil, Kirkland, Skadden and Latham once outpaced the rest of Big Law on what they could charge, but that may begin to change.
In the past few decades, four law firms—Weil, Gotshal & Manges; Kirkland & Ellis; Skadden, Arps, Slate, Meagher & Flom; and Latham & Watkins—have represented close to one-third of large public companies in Chapter 11 bankruptcy proceedings. For their services, the firms have traditionally charged higher rates than other large firms with less extensive bankruptcy practices. But their fee dominance may be beginning to wane.
Last year, the average rate for top-billing partners among the four historically dominant firms was $1,838. By comparison, top-billing partners among a group of seven Am Law 100 firms with smaller restructuring practices averaged $1,674. This year, not only are rate hikes up across the board—our total group of 11 firms raised rates an average of 12.3% in 2022 versus 5.3% in 2021—but Big Law’s other bankruptcy practitioners are catching up with the leaders, drawing even and in some cases surpassing the rates in the top four. Read more...
To Improve Profitability, Law Firms Are Falling Back on the Basics Instead of Transformational Shifts
Large law firms this year are working on fundamentals in billing rates, talent strategy and client development to build profit, according to results of a new survey of firm leaders.
Despite law firm profits soaring in the last year, firm partnerships are increasingly uncertain about the future. As a result, according to new survey results, law firms are now doubling down on financial fundamentals such as pricing, clients development and talent.
The 2022 Law Firm Profitability Survey from LawVision and Iridium now part of BigHand, published this week, found that nine out of 10 firms were satisfied or very satisfied with their profits over the last three years, and more than a quarter of respondents reported double-digit profit growth during that span. Still, factors such as inflation and geopolitical tension are coloring firm leaders’ outlook. Read more...
Practice Innovations: Law firm pricing — An exercise in identity
How law firms price their services and how their clients view that pricing process goes a long way to defining that law firm's identity in the marketplace
I often ask our outside law firm partners, “What does your pricing team do?”It is typically a great test to see what the partners within a law firm believe the role of a pricing team should be. More often than not, my heart sinks when they reply, “Our pricing team pushes our rates higher and makes us more profitable.”
This should stop us in our tracks. When it comes to law firm pricing and the roles of these teams within law firms, the need for clarity into what pricing is, why it is important, and how these teams add strategic value should be clearly defined. Read more...
Hourly rates for magic circle partners reach £1,500, analysis finds
Hourly rates at the richest law firms in the UK have doubled in the past 15 years, according to new analysis of the top-end legal market.
Costs expert Jim Diamond, whose new book The Legal Extortion Racket is out later this year, said rates for magic circle partners have now reached between £1,000 and £1,500. This compares with £625-£700 charged in 2007, according to Diamond, who has taken regularly annual snapshots of the sector over the past two decades (see table below). By comparison, according to the Bank of England, inflation has climbed 36% over the same 15-year period.
Partners in US firms based in London charge between £950 and £1,350 an hour (compared with £450-£500 in 2007), while the top London firms outside the magic circle charge up to £900. Read more..
Liberis’ General Counsel Doesn’t Like Panels, Billable Hours or (Much) Legal Tech—Here’s Why.
Alexis Alexander shares who her favorite partners are and why she says 'a lot of legal tech is a lot of bells and whistles for a lot of money.'
Alexis Alexander has been general counsel at global financial services group Liberis since 2020, prior to which she was the company’s head of legal for nearly four years.
Here, she shares who her favourite partners are, how firms can win big mandates from her and the most outrageous bill she’s received (and did not pay.) Read more...
As Hourly Fees Become 'Painful,' Focus Grows on Alternative Fee Arrangements
"Companies are getting a lot more cost-conscious, and really paying attention to the bottom line," consultant Ken Callander said. "As we move forward, you're gonna see that more."
As corporate legal teams brace for economic turbulence, alternative fee arrangements are coming into sharper focus as another method to reduce costs and keep predictability in legal department budgets.
Legal departments are being asked to tighten their belts due to inflation, said corporate consultant Ken Callander. At the same time, Callander said law firms are responding to similar pressures by raising their rates. Read more...
Don’t Be Afraid to Raise Your Legal Fees
Some lawyers always seem fearful of increasing legal fees — recession or no recession, crisis or no crisis. If you are wondering whether to raise your hourly rates or fixed fees, my advice — with very limited exceptions — is to go for it. Clients are never as price-sensitive as you think.
The Two Biggest Reasons Lawyers Are Afraid to Raise Legal Fees
Reason No. 1: Fear of Losing Business to Competitors
Do you really think your long-term clients are going to abandon you because of a modest price increase? Every other business has been raising the price of goods and services. Take this headline, for instance: Read more...
Dollar's Strength May Influence Billing, Talent and Expenses in Big Law
Exchange rates could affect how U.S. law firms manage certain expenses, set billing rates and attract laterals. And firms outside the U.S. could also benefit.
Law firms won’t totally pivot their international strategies based on the fluctuating value of currency. But the dollar’s increased strength may influence how U.S. law firms manage certain expenses, set billing rates and perhaps give them a boost when they’re trying to attract laterals around the globe, say law firm leaders and industry analysts.
The U.S. dollar has gained significantly against other world currencies this year and is close to level with the euro for the first time in roughly two decades, due to a mix of aggressive rate increases, comparably less exposure to the war in Ukraine, and the perception that it’s a safe bet for investors. Read more...
Fees are increasing. Why, and how can in-house teams manage?
Corporate counsel are seeing rates for their external providers increase. There are numerous potential reasons for this, and also a handful of ways that law departments can respond.
When asked if they have noticed fees from external legal service providers having gone up in recent times, one general counsel — who asked to remain anonymous — said they have indeed increased, in the vicinity of 10-40 per cent, depending on whether it is a junior lawyer or partner completing the work.
Sydney Fish Markets GC Michael Guilday has also seen increases. Read more...
$795/Hour: Greenberg Traurig Team Earned More Than $1M in Attorney Fees
“Here in the U.S., many lawyers think they can file a lawsuit and they don’t have to consider the risk that their client might have to pay the other side’s attorney fees,” said Gregory Herbert, a shareholder at Greenberg Traurig.
How much does a Greenberg Traurig shareholder charge?
A federal magistrate judge’s report and recommendation provides some insights into billing rates at the Big Law firm. Read more...
Law firm profitability primer: A meaningful business strategy for law firms of all sizes
In this two-part series, we examine how profitability analysis has become a crucial strategy for many smaller or solo-practitioner law firms and how these firms can best capture the profitability they need to flourish
The formula for law firm profitability had been the same for well over a century and is shockingly simple: bill as high an hourly rate as possible to cover costs and then some. This formula applied to all lawyers, from solo-practitioners to small law firms on to the largest law firms.
Of course, moving beyond this simple formula takes time to consider and critically examine the revenue, costs, and methods of practicing law. To the lawyer, the limited billable time in a day cannot be wasted in doing so. Thus, law firms merely set the prevailing hourly rates for their lines of work in their community; and ultimately, consumers had no influence on price because the only marketplace was the one established by lawyers. Read more...
Avoiding negligence claims in wills, trusts and probate law
Wills, trusts and probate work ranks third in our most recent data showing which areas of work in law firms generate the most negligence claims, after residential conveyancing and commercial conveyancing. It is sixth in terms of the value of the claims.
The most frequent cases involve retainer management, advice, and drafting errors in wills and codicils and the distribution of assets. The highest value claims involve tax errors.
The remaining areas of work – settlement, inheritance claims, investment management, Court of Protection work, and asset realisation – generate relatively fewer claims. Read more...
CJC forum brainstorms costs reform
Costs lawyers convened at the Civil Justice Council last week to discuss another overhaul. Delegates offered robust opinions, but there was little consensus.
Rarely a week goes by without the higher courts ruling on a costs dispute. Whether it is issues related to the Solicitors Act 1974, firms rebuked for charging beyond the guideline hourly rates or the application of fixed costs, this is a minefield (or goldmine?) of satellite litigation.
So it felt like a can of worms was being opened two weeks ago when the Civil Justice Council opened a consultation on all issues relating to costs. No wonder the CJC advised that anyone submitting at least 20 pages in response was obliged to add a two-page summary to their submission. Read more...
Legal sector review 2022 Q2
Part 1: Andy Poole covers:
- Recruitment and retention, and the recent webinar on this
- The pivotal importance of having a good culture, and measuring this
- Results of the latest Pulse survey of the legal sector
Part 2: Jenny Staight covers:
- How firms are coping with inflation running ahead of salary reviews
- The non-salary options for remunerating staff, starting with more holiday
- The key to a successful profit-share scheme
Legal sector risk soundbites 2022 Q2
In this video Paul Smith of Travelers reviews the claims fallout from Covid-19 (and Brexit): corporate insolvencies and failed deals in the corporate and property space, leading to contracts being put under the microscope and some being found to be defective.
- Loss of Opportunity claims
- Defective advice claims
- Commercial rent debt related claims
- AND how to prevent the errors that lead to all these claims
Government to tackle SLAPPs with early dismissal and costs cap
Courts will have greater powers to throw out so-called strategic litigation against public participation (SLAPPs) and a costs protection scheme will be introduced to ‘level the playing field between wealthy claimants with deep pockets and defendants’, the government has announced.
Journalists and campaigners facing a SLAPP case will be able to rely on a three-part test to determine whether the claim should be dismissed immediately, with courts required to first decide if the claim is brought ‘against activity in the public interest’.
The court will then examine if there is any evidence of an abuse of process, ‘such as whether the claimant has sent a barrage of highly aggressive letters on a trivial matter’, before considering whether the case has a realistic prospect of success. Read more...
Legal cashiering – an overview for partners and managers
Legal cashiering may once have been seen as a routine support function, but has now assumed added prominence – both to meet professional regulatory standards, and in the face of growing cyber attacks on law firm accounts. It is often a function that is ripe for cost savings and increased efficiency. At the same time, a generation of experienced cashiers is moving into retirement, which is speeding up the rate of change.
Whether you are a partner, a member of the senior management team or act as the firm’s compliance officer for finance and administration (COFA), you need to be sure that your firm is taking the right approach to legal cashiering. Read more...
Alleged fraudster can spend frozen assets on legal fees, Supreme Court rules
A suspected fraudster can spend frozen assets on reasonable legal expenses in civil proceedings ahead of a criminal trial over an alleged £15.25m Ponzi scheme, the Supreme Court ruled today.
The Proceeds of Crime Act 2002 (POCA) does not preclude ‘an exception for legal expenses in respect of civil proceedings’ where that case is brought in relation to ‘the same or similar allegations, alleged facts and/or evidence as those of the offence(s) … which gave rise to the making of the restraint order’, the UK’s highest court held.
Independent financial adviser Andrew Luckhurst, 71, was sued by investors in his financial services business in 2016 and made subject to a £2.71m worldwide freezing order, which was discharged after part of the civil proceedings settled the following year. Read more...
Fine for partner who failed to detail work on client files
A partner who billed for her time ‘considering’ matters but did not detail in attendance notes what she had actually done has been fined by the Solicitors Regulation Authority (SRA).
Ann-Marie Matthews accepted a £2,000 fine and £2,000 contribution to the SRA’s costs as part of a regulatory settlement agreement which means she will not have to face a disciplinary tribunal.
Ms Matthews, who worked her way up from trainee to full partner of Lowestoft firm Nicholsons, qualified in 2004. Her work required her to act as a co-trustee and/or attorney on matters where the testator or donor had appointed her and/or the firm. This meant she and/or other partners were deemed the ‘client’ on files. Read more...
MoJ considers £5,000 costs cap to protect defendants against SLAPPs
The Ministry of Justice (MoJ) has suggested that people defending themselves from strategic lawsuits against public participation (SLAPPs) could be protected by a £5,000 costs cap.
The MoJ said a costs regime for SLAPPs would be introduced through secondary legislation alongside primary legislation enabling courts to apply a three-part test to decide whether cases should be struck out at an early stage.
Responding to the call for evidence it issued in March, the MoJ noted submissions that suggested SLAPPs were “no more than the rough and tumble of ordinary litigation and note too submissions based on the fact that everyone is entitled to representation in court as part of the right to a fair trial”. Read more...
Professional indemnity insurance for law firms FAQs: Part one
How to keep your PI insurance costs down
While the cost of professional indemnity insurance (PII) may seem high relative to the fee income of firms, the premiums in recent years have not been sufficient to pay for all the claims that the insurers have settled. The number of claims has been high, and so too has the average value of claims.
The SRA continues to set the Minimum Terms and Conditions (MTC) for insurance. Underwriters cannot alter the wording, so price is the number one factor to win and retain accounts. Read more...
Professional indemnity insurance for law firms FAQs: Part two
PI insurance policies and cover
Longer term policies are beginning to become available again, but typically only for lower risk firms.
The uncertain economic and political environment means that those firms involved in areas of practice that are more susceptible to recession-linked claims are unlikely to be offered extended policy periods at this time. Read more...
PR for law firms
As a lawyer, you know that your reputation is critical to your success in winning and retaining clients. When potential clients realise they have a problem or ask a contact for a recommendation, you want to be the first person to come to mind. But how can you make that happen?
PR is about how you manage and improve your reputation. Effective PR involves much more than issuing the occasional press release. You need to manage all your communications, both through the media and more directly, to improve your image and strengthen relationships.
PR can't build a reputation overnight, nor can it make your firm or service credible if it isn't credible in the first place, or explain away a bad service. Nor can it do the job of advertising, which is basically "to tell and sell", whereas the basic role of PR is "to show and glow". Read more...
Costs in lower-value clin neg cases ‘far exceed damages’
Doctors’ representatives in clinical negligence cases have claimed that average costs far outstrip the compensation secured for cases worth less than £25,000.
New figures published by the Medical Defence Union suggest that in 2021 the average sum paid in claimant legal costs on medical claims settled for up to £10,000 was around £18,500.
For claims settled between £10,000 and £25,000, claimant costs were on average almost £35,000. Read more...