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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

SLAUGHTER AND MAY ANNOUNCES FOURTH COLLABORATE COHORT

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International law firm Slaughter and May today announces the legal tech companies selected for the fourth cohort of the firm’s legal tech programme, Slaughter and May Collaborate.

Collaborate was launched in 2019 and enables the firm to engage with a range of exciting new legal tech startups. The programme enables cohort members to test and develop their tools in a legal environment, through Slaughter and May’s lawyers and business service professionals and via the firm’s Client Innovation Network, made up of over 70 client organisations. Read more...

Big Law Takes Bigger Bet on Contingency Fee Practices

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Kirkland, Crowell, Quinn and Susman Godfrey, among others, have all had financial gains from contingency fee cases. "We've seen a noticeable increase in interest in building out plaintiff side practices," said Evan Meyerson, at Burford Capital.

In a quest to maximize profitability, Am Law 200 law firms have grown their share of business tied to contingency fees, a gamble that has paid off for some firms in recent years.

Kirkland & Ellis, Crowell & Moring, Quinn Emanuel Urquhart & Sullivan and Susman Godfrey are among the firms that have represented plaintiffs on a contingency fee basis, agreeing to take on certain litigation in return for a portion of any recovery in a settlement or judgment. Read more...

Top Biglaw Firm Finally Announces Market Raises, But Not All Associates Will See Market Money

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These salaries are based on billable hours, and some associates will be missing out on tens of thousands of dollars.

It may be March, but Biglaw still isn’t done with associate salary increases. The latest firm to announce raises is none other than Reed Smith, a firm that brought in $1,417,599,000 gross revenue in 2022, putting it at No. 29 in the most recent Am Law 100 ranking. According to our sources, the firm’s latest scale is… interesting, to say the very least.

Back in 2021, Reed Smith adopted the then-market standard salary for first-year associates, but compensation for the rest of its lawyers was left “unclear” as the firm restructured salaries across all of its offices. With the latest round of raises at the firm, effective July 1, 2024, it seems that associates have once again been left “unclear” on their compensation — but this time, it’s as to why they’re being sorted into the A squad and the B squad based on their billable hours. We believe that Reed Smith may be the first top Am Law firm to take such measures. Read more...

Realization Rates Keep Falling in the Am Law 200. But Does That Matter?

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While a few firms attributed declining realization to market factors, the majority are gladly exchanging lower realization for strong rate increases.

Compared to law firms’ advertised rack rates, collections in Big Law continued to slump in 2023, according to reports from Am Law 200 firms that disclosed last year’s realization rates to The American Lawyer this spring.

In a group of 86 Am Law 200 firms, those within the Am Law 50 saw an average realization decline of 2% in 2023. Smaller firms fared better: The Am Law 51-100 had realization fall by an average of 1.6%, while the average decline was 1.3% for the Second Hundred. Meanwhile, realization at midsize firms remained flat. Read more...

Generative AI and Reducing the Costs of RFPs on Marketing Teams

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Firms are currently spending a majority of the RFP response time on activities that don’t directly correlate to increasing win rates.

Everyone knows that requests for proposals put a lot of pressure on law firm marketing departments, but just how much can be surprising when you start putting numbers to it. On average, firms spend about 46 hours on any particular RFP or 4,738 hours per year and it is costing the firm about $959,141.34 annually—but these numbers often swell on the higher end to over 100 hours on an RFP or $2 million annually.

When you take these numbers and consider that law firm win rates are around 18%, one may start wondering what can be done to improve this process. Read more...

Why Law Firms Must Be More Entrepreneurial

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Harbour's Maurice MacSweeney says firms that prioritise innovation in pricing, new tech, and external finance, will end 2024 in good health.

At the outset of 2024 it was clear large commercial law firms were encountering several simultaneous economic headwinds, and the picture has not changed much at the end of Q1.

The challenges posed by the perennial problem of lockup, inflationary pressures, the rising cost of retaining key talent, and client demands for more innovative pricing and improved payment terms, come at the same time as firms seek to invest in technology and take advantage of market consolidation opportunities. Add in global political and economic uncertainty and you have a heady mix facing the leaders of top firms. Read more...

Creating new advisory service and pricing models with AI

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AI facilitates the shift in legal services towards advisory roles, offering firms new value exchange opportunities and efficiency.

AI is touching all professions these days, including the legal profession. The opportunities for legal firms of all sizes to leverage AI in ways that will make them more efficient paves the path for revolutionizing how legal firms can serve their clients. Offering a wider range of services more efficiently challenges firms to think about how they can introduce more advisory services to their clients and offers a way to modernize the hourly billing model that has dominated the profession into a more flexible model. Read more...

Law firms remain resilient in tough economic times

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Against a tough economic backdrop and with the cost of living rising sharply, law firms saw profits go only marginally down, according to the Law Society’s Financial Benchmarking Survey that provides an overview of the financial performance of the legal sector.

The research shows that profits per equity partner continued the pre-COVID trend, with median net profit decreasing by 0.7% (from £211,204 in 2022 to £209,650 in 2023).

Despite the economic environment, the number of support staff in law firms increased by 3% and total salary costs as a percentage of fee income increased by 0.2%. Read more...

Rimon Lures Restructuring Veteran from Gibson Dunn with Innovative Fee Structure, Plants Flag in Singapore

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Troy Doyle is moving over, citing client demands for true flexible fee structures and experienced partner involvement on restructuring matters.

Hybrid virtual firm Rimon Law has hired Gibson Dunn & Crutcher’s global co-chair of restructuring and insolvency to become its restructuring practice head and leader of Asia Pacific.

Veteran restructuring lawyer Troy Doyle, who was also the head of the Asia restructuring and insolvency practice at Gibson Dunn, is moving across giving Rimon the opportunity to plant a flag in Singapore, its third outfit in Asia after Shenzhen and Seoul. Read more...

Big Law's Big Realization?

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Am Law 100 firms last year saw their lowest realization rates in five years: 80.93%, down from 82.2% in 2022 and 83.11% in 2021.

During the pandemic era, it may have been easy to assume high realization rates were going to be a part of the “new normal.” Firm leaders saw the benefits firsthand in 2020 and 2021, when transactional demand soared and lawyers working remotely were more diligent in their billing practices and better able to reap the benefits. Plus, firms for years have been adding business professionals to help them make the most of their pricing strategies. Read more...

Costs

Firm avoids wasted costs order despite 'reprehensible' mistakes

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The High Court has rejected a client’s bid for a wasted costs order against his former solicitors – despite being heavily critical of repeated failings in running the case.

Deputy Master Grimshaw was asked to rule on the ‘somewhat unusual’ application in Tarboush v Cassam for a wasted costs order against east Midlands firm Hegarty LLP.

The claimant had suffered severe injuries after a road traffic accident but his claim was beset by procedural failures culminating in him being unrepresented at the final strike out hearing last October. Grimshaw said the case served as an example of why parties should not ‘bury one’s head in the sand’ when problems in litigation arise. Read more...

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