In the article Roy sets out the following two reasons for why lawyers may be reluctant to increase their rates:
Reason No. 1: Fear of Losing Business to Competitors
Reason No. 2: Fear of Missing Out on New Clients
I’m going to put it out there and say Roy is right here, lawyers are scared/fearful of both those issues.
But, and there is always a but, only if they adopt competitor pricing – where they are always looking over their shoulder to see what their competitors in the market are charging.
My own thoughts on this issue though are this: Know your product; Understand your value; and Don’t give a damn about anyone else – you don’t have competitors, you have customers; always show them the value of your service and they will remain loyal to you. Period.
Which, to be fair, is kind of what Roy is also saying. So go over and read it – it’ll take you all of 10 minutes and it’s certainly worth it.
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…
Any law firm looking for innovative, ‘out-of-the-box’ ways to retain their lawyers during this period now known as The Great Resignation could do a lot worse than take onboard a Faegre Drinker Biddle & Reath midlevel associate’s comments on the billable hour in the recently published American Lawyer’s 2022 Midlevel Associate Survey:
The billable hour is a cancer that will slowly eat away at you if you don’t get away from it quickly enough.
Issue 318 of my Weekly Digest of all things going on in #legal #strategy #pricing #vbp #CRM #clients #customers #innovation was sent to subscribers earlier today. Check it out here: https://bit.ly/3zHxRpw