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Setting the next year’s billing rates follows a simple formula at most firms: last year’s rate plus a common percentage increase across all lawyer cohorts. A more disaggregated approach is needed. Specifically, firms should set higher percentage increases for senior lawyers and lower increases for junior lawyers. Why? Because, over the next 10 years, hours leverage (i.e., the number of associate hours per partner hour) at elite law firms will decline as more of the lower value-added work is handled not by junior lawyers but by enhanced technologies, in-house counsel, and alternative service providers. To maintain profitability, the margin that was earned on the displaced junior lawyer time has to be recouped through higher margins on senior lawyer time. Failure to increase senior billing rates differentially, and thus to rebalance the source of margin from junior to senior lawyer time, will result in a calamitous decline in profitability. It can be avoided if firms start now to gradually change their billing rate structures.
By John Fitzgerald and Christopher Imperiale
Being asked to join the partnership of a firm is a measure of success as a legal professional. With that achievement comes tax and financial responsibilities that, surprisingly, few attorneys are fully prepared to deal with. These responsibilities include the unexpected individual federal and state and local tax filing and payments.
By Lawrence L. Bell
With the cost of doing business consistently on the rise combined with the increasing difficulty to find/retain great employees, there is no better time to pursue employment-based tax credits. There are both federal and state employment-based credits available that can help businesses offset income tax liability.
By Gregory N. Miskulin, Jamie Carstens and Lindsay Powell
Orion’s ePrebill Manager allows corrections to prebills to be tracked and applied in real time, with a one-click acceptance and approval process. Further, by distributing prebills electronically, attorneys can see the edits made by others, the overall net effect of write-downs, and how these affect the realization of both the working timekeepers and the client overall, in real time.
By Kent Zimmermann
Strengthening Cultural Expectations Is Key
Client relationship succession planning is a top concern among law firm leaders. Firms of all stripes frequently develop goals in their strategic plans to facilitate more effective client relationship transitions. However, there is room for many firms to take a more formal and proactive approach to effectively transition client relationships across generations.