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: Did You Not Get the Memo – There is a Problem?
In quick succession over the last 2 weeks, three articles hit my in-box, each of which in their own way highlight the need for firms to take pricing as seriously as any other existentially critical initiative. Many are doing so, but there are plenty for whom the light still hasn’t gone on. If there isn’t a sense of urgency now, time is running out.
Look, I know that just because we as an organisation do nothing but eat, drink and sleep pricing, not everyone shares our passion. But to state the obvious if you can’t get paid properly everything else is utterly irrelevant. Read more...
2024 is going to be challenging.
At least that seems to be the consensus amongst managing partners and firm’s management boards, and few would have cause to disagree.
LexisNexis have just published a blog in which they open with the comment… “We look at the legal trends set to define the year ahead, including the rise of generative AI, the acceptance of alternative legal fees, exploration of new markets, and so much more. The legal sector is evolving at breakneck speed…”
As pricing specialists, one of these trends caught our attention….Read more...
Despite US Economy Concerns, Big Law Looks to Rate Hikes and Hiring to Grow in 2024, ALM’s Q3 Economic Flash Survey Finds
As Big Law turns the page on another taxing year, reasons for optimism in 2024 are apparent, headlined by plans for aggressive rate increases.
Large law firms of all sizes appear to have weathered another challenging year and are relatively optimistic for the year to come, according to the results of ALM’s Q3 2023 Economic Flash Survey.
While few would call 2023 a banner year, most respondents claimed they’ve met or exceeded expectations of performance and profitability set entering the year. And while there is still uncertainty for 2024 surrounding the U.S. economy, there are comparable levels of optimism for Big Law specifically, driven by plans for aggressive rate hikes and increased demand projections. Read more...
McDermott IP Trio Split to Launch Rimon’s Japan Practice, Citing Big Law Rates
"The biggest issue is our rates were too high to do patent prosecution,” said new Rimon partner Tomoki Tanida.
Three of McDermott Will & Emery’s longtime IP partners have relocated to distributed firm Rimon P.C., citing their new firm’s greater flexibility on rates.
Partners Tomoki Tanida, Takashi Saito and Michael “Mike” Fogarty arrived at Rimon’s Northern Virginia office Oct. 23, bringing a team of five patent agents, staff and a 100% Japanese clientele from the Am Law 50 firm, lawyers at the firm said. Their moves fuel Rimon’s growth in the IP space and help it launch a new Japan practice. Read more...
Pushing back against outside firms’ rate hikes starts with data
Data can help legal teams buy show outside firms they’re asking for too much money, billing specialists say.
Data is key to getting law firm billing rates under control because it gives in-house attorneys context to push back against budget-breaking rate increases, billing specialists said in a Corporate Counsel Business Journal webcast.
“The insights and the reports [from e-billing software] are what open up the eyes of the corporate legal department,” said Yolanda Fuhrmann, a veteran in-house legal operations manager who now helps others in that role as a client success manager with Thomson Reuters. “If they don’t see money or percentages, they don’t really understand … how much higher this rate is compared to others.” Read more...
New guideline hourly rates published
The new guideline rates coming into force next year have been published, with top-fee earners in London now able to claim £546 an hour.
The judicial office outlined the figures that will be applied from 1 January, covering grades A to D for London and the rest of the country.
Master of the rolls Sir Geoffrey Vos revealed last month that he would accept all the recommendations of the Civil Justice Council’s costs review, including an uplift in guideline hourly rates in accordance with the Services Producer Price Index (SPPI). Read more...
With AI presenting an opportunity to finally ensure the profitability of AFAs, law firm leaders are actively collaborating with external AI partners and making tech hires
The exponential rise of generative AI is causing seismic changes in the legal profession. Princeton University concluded in a survey undertaken this year that legal services are set to be the most drastically impacted by generative AI. Indeed, artificial intelligence poses both the biggest threat, and opportunity, that law firms have ever faced. Those who navigate the risk, make quick decisions, and leverage the technology to their advantage, will ride both the immediate wave of success and come out on top in the long-term.
With a recent European Legal Tech Association survey found that with 9 in 10 lawyers already trying their hand at using generative AI, and 85% supporting incorporating legal tech into law degree curricula, this is clearly a revolution set to stay. Read more...
Qualified legal representatives will now get expenses but Law Soc says fees ‘still too low’
The Law Society has welcomed the announcement that expenses will be added to the qualified legal representative (QLR) scheme in domestic abuse cases, but says fees are still too low.
The QLR scheme, which aims to reduce the risk of domestic abuse victims being retraumatised, sees cross-examination in domestic abuse cases carried out by court-appointed legal professionals.It was brought in as part of the Domestic Abuse Act 2021 which banned abusers from questioning their victims in family and civil court.
According to the Ministry of Justice, hundreds of lawyers have signed up to the scheme. In a bid to encourage more lawyers to join, the government has announced that expenses can now be claimed. Read more...
Largest law firms charge nearly $1,000 an hour, report finds
The 4.8% rate increase through Q3 2023 was more than triple the bump last year among the Am Law 100, according to a Brightflag report.
The top 100 U.S. law firms charged clients an average of $961 an hour in the first nine months of 2023, a recent report found.
The average blended rate billed by Am Law 100 firms is a 4.8% increase from the $917 an hour those firms charged throughout 2022, according to the hourly rates analysis from e-billing and matter management platform Brightflag. Read more...
6 Significant ALSP Developments in 2023
From developing generative AI tools to reshaping the industry through far reaching M&A deals, ALSPs have had a busy 2023.
From developing generative AI tools to reshaping the industry through far-reaching M&A deals, alternative legal service providers (ALSPs) have had a busy 2023, and it’s likely that more changes are in store for next year. With some companies looking to expand their technology development efforts, further establish themselves in new markets, and grow their footprint across the globe, ALSPs are positioning themselves to become a bigger presence and disruptor in the legal ecosystem. Read more...
Top bankruptcy firm Kirkland boosts billing rates, nearing $2,500 an hour
Dec 15 (Reuters) - One of the world's busiest bankruptcy practices is raising its top hourly billing rates to $2,465, as law firms press for higher and higher fees in major corporate restructurings.
U.S. law firm Kirkland & Ellis disclosed the new maximum rate on Thursday in a series of court filings in bankruptcy cases involving its clients Rite Aid, WeWork, and Yellow Corp.
The companies and Kirkland did not immediately respond to requests for comment. Read more...
No Surprises: As Law Firms Double Down on Year-End Collections, GCs Detail Pet Peeves
"You need to make sure there's good alignment between what the firm thinks it's being asked to do and what the in-house counsel is asking them to do," said Elliot Mark, the former general counsel at crisis-management software firm Everbridge.
General counsels say that while firms often send bills in a timely manner, they will delay payment if a law firm sends them a surprise bill or higher bills than they expect because they’re trying to ramp up collections to close out the year.
General counsels agree that if there’s one thing they don’t like, it’s surprises. Read more...
AI could transform law firm billing “beyond recognition”
Artificial intelligence (AI) could transform law firm billing “beyond recognition” as the time taken to complete tasks becomes “almost irrelevant”, a report has predicted.
Accountants BDO also said non-lawyer technologists, who were becoming “key” to delivering for clients, could in the future be seen as “more valuable and harder to recruit than some associates”.
In A new era for law firms, it said law firms faced a situation where “expensive AI” reduced the time taken to complete legal work, sometimes to “a fraction of the time” previously taken by associates. Read more...
As Billing Rates Soar, Law Firm Clients Move to Spread Work Around
"Many law firms have seen their ability to collect on those increasing rates falter, and clients have become more aggressive about trying to tier work to lower-cost firms," according to a new industry report.
Sagging productivity within Big Law and declining realization have combined to put a damper on law firm profitability growth, and even the high pace of billing rate growth hasn’t been able to remedy it, according to a new report.
Now, “many law firms have seen their ability to collect on those increasing rates falter, and clients have become more aggressive about trying to tier work to lower-cost firms,” said the authors of the Thomson Reuters 2024 Report on the State of the Legal Market, published Tuesday. Read more...
Top Big Law Partners Are Earning More Than $2,400 Per Hour, as Rates Continue to Climb
Dechert has hiked its rates for top partners by 20%, while McDermott is charging top partners out at $2,590 hourly, according to recent bankruptcy court filings.
In September, a committee of unsecured creditors hired Dechert to represent them in the bankruptcy of Benitago Group, an Amazon e-commerce business acquirer. At most, Dechert would charge them $2,000 per hour, according to an employment application in the U.S. Bankruptcy Court for the Southern District of New York.
While Dechert’s current top-billing partner for the Benitago bankruptcy costs $1,825 hourly, the law firm disclosed a 20% firmwide rate increase for top partners of $2,400 hourly in a recent court filing. Read more...
Even As Billing Rates Increase, Lack of Confidence in Fees and 'Subtle Psychology' May Lead to Less Profit
The majority of law firms believe write-offs will increase over the next year, even after many firms made these billing adjustments in 2023, according to new results of a survey of firm leaders.
Billing rates are expected to climb again in 2024. But a majority of firms also expect their bill write-downs or write-offs — the kind of fee erosion that’s led to falling realization — to go up, according to a new report this week.
Three-fifths (60%) of law firms stated they believe write-offs will increase over the next year, after roughly the same number (59%) said these bill adjustments already increased in 2023, according to an annual law firm leader survey from BigHand. Read more...
High Court judge says costs orders can ‘register condemnation’ of unreasonable parties
A judge in a family court case reminded lawyers of their duty to advise clients that an ‘untenable case risks adverse costs orders being made’.
In HO v TL (costs) Mr Justice Peel made an order for £7.75m in the wife’s favour but ordered she pay £100,000 towards the husband’s costs as she ‘did not negotiate reasonably until late in the day’.
The judgment said the wife sought £17.2m despite being ‘sufficiently well informed…to know that such a figure was unsustainable’ and acknowledged that ‘lawyers must advise their clients accordingly’. Read more...