Tag: rates

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hmmm…

Two articles with vastly different headlines:

‘As Law Firms Push Aggressive Rate Increases, Clients Have Room to Negotiate‘ by Andrew Maloney in the American Lawyer, and

‘Almost half of US lawyers see no rate increases in 2022, Wolters Kluwer report shows‘ by Ben Edwards* in The Global Legal Post

In the first article:

the mean rate increase across law firm segments last year was around 5.6%.

In the second article:

Some 27% of law firm timekeepers saw no increase, while 13% saw average rates go down

So what’s the problem?

Well here it is: both articles are written from the same underlying source material – the recently published Wolters Kluwer’s LegalVIEW Insights report.

As usual comments are my own.

rws_01

  • disclosure: I know Ben Edwards and he is a fine journalist (which is not to say that Andrew Maloney isn’t, just that I don’t know Andrew).

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Quote of the Week 13.01.23 – Data and price increases

Only got around to reading this interesting post by William Josten on the Thomson Reuters website this week. In the post – ‘How to improve handling of law firm rate increase requests through data: A view from in-house counsel‘ – Josten comes up with this gem that is well worth keeping in mind the next time you ask your clients for a rate increase and makes it my Quote of the Week for this week:

From law firms’ perspective, understanding the data that informs a client’s financial position is a helpful way to focus their rate increase conversations onto a productive end for both sides.

As usual comments are my own.

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#QuoteOfTheWeek

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Survey: ‘Does your law firm plan to raise rates in 2023?’

Interesting take-out from a recent survey undertaken by the Managing Partner Forum (MPF) to the question:

“Does Your Firm Plan to Raise Rates in 2023?”

to which the results were:

  • Twenty-four percent (24%) of participating firm leaders said their firms plan to increase rates by 10% or more.
  • Forty-one percent (41%) said they were raising rates by 5-9% on average per time-keeper.

My take on this:

  • 35% will be looking to raise their rates by between 1-4%; or
  • 35% had recently just raised their rates (probably by a lot more than 10%) and feel they cannot raise rates again so soon; or
  • 100% of respondents are too afraid to answer the question honestly.

I’ll leave it to you to decide.

As usual, comments are my own.

rws_01

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The £600 an hour baby gorilla

According to a post in the Law Society Gazette, which in turn quotes from Jim Diamond’s new book ‘The Legal Extortion Racket‘, partners at Magic Circle firms in 2007 charged clients, on average, between £625-£700 an hour.

If that’s not scary, then it is impressive.

An hour of that partner’s time today would set you back somewhere between  £1,000 and £1,500.

We could probably call it and say that’s law’s version of ‘Moore’s Law‘.

But while we all might agree that’s an impressive, if not scary, number – if that’s your want or need you are, after all, getting an hour of a partner’s time. You’d have to imagine said partner would know a thing or two (otherwise how did they get to be a partner in a Magic Circle firm?) and get you the result you want. You may, at a stretch, even be able to argue that said partner works more efficiently than partners in other [non-Magic Circle] firms because they have done the rounds on big ticket matters and know a little about what they are talking about.

All of which could be perfectly true and fair.

So you let it go and turn your attention to another stat in the article quoting Diamond’s book:

Newly qualified lawyers at magic circle firms and US firms in London charge up to £600 an hour

To be clear, what we are talking about here is a ‘newly qualified lawyer‘ who most likely has a rudimentary understanding of the law at best, no idea what ‘utilisation‘ and ‘realisation‘ are, but by now will certainly know very well what a time-sheet is and how important that is to getting his/her/their bonus, charging clients £600 an hour!

That gives me a nose-bled just thinking about it.

For those who follow the hourly rate discussion, Diamond’s table makes for fascinating reading…

Photo credit  Dixon Newman on Unsplash