Along comes the Am Law Daily article today, Reality Check: In Setting Billing Rates, Location and Size Matter; Experience…Not So Much, to tell us what many corporate counsel suspected or have experienced over the last 24 months with outside counsel. Legal bills from 2007 through 2009 (that includes 5 quarters during the Great Recession, folks) were examined from 36 large corporations. Here are just a few findings:
- Discounts were illusory, and volume of work given a firm did not correlate with reduced rates. Them what gots…got more.
- Even as the economy tanked, law firm rates kept rising — sometimes at the healthy clip of 21%.
- 85 % of lawyers charge clients different rates for the same work.
- In-house counsel approve 75% of law firm rate hikes.
CFOs of the world – please take note.
The numbers speak for themselves…actually SHOUT for themselves.
There is an enormous need for a more orderly, rational and cost-effective approach to providing legal services. It’s hardly surprising that firms and enlightened legal departments are embracing Legal Project Management (LPM) – which offers a disciplined approach for planning, controlling and executing a legal matter within the constraints of time, budget and agreed-upon performance requirements.
This also is why those law firms that are adopting LPM have the chance to outdistance their disorderly, inefficient competitors in the highly-competitive legal services market. Clients may still feel they lack the leverage to beat back law firm rate increases, but when it comes to an approach for driving more value into service as LPM does, they know when they are being offered a good thing.
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