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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.
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The Connection Between Process Improvement, Project Management, and Pricing
By Catherine Alman MacDonagh and Frederick J. Esposito Jr.
Law firms must continuously review business and legal processes to operate and interact with less waste and costs and develop pricing models that address client needs while generating profits for the law firm. This is actually simple, but not easy to do.
After Another Big Year, Law Firms Should Plan for Recession
By J. Mark Santiago
Planning for the downturn in a clear, methodical way by investing the existing good fortune that most firms enjoy into strengthening your technical infrastructure, trimming expenses, and rethinking how administrative services are delivered to the attorneys.
The Stenography Shortage Is Impacting Client Service: What’s the Future of Court Reporting?
By Dean Whalen
In the court reporting market, technology has matured to match or exceed stenography’s stronghold on speed and accuracy and, as such, is poised to disrupt the market.
Why Focusing on Client Experience Is Critical and How to Get Started
By Kristen Dallman
In this marketplace, one thing is abundantly clear: To remain competitive, you must adapt. So how can you adapt in a way that meets the increased expectations of today’s client? Focus on client experience.
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