An interesting survey conducted by the Canadian Lawyer suggests that using a large firm (more than 25 lawyers) to handle a two-day civil trial costs clients on average over twice as much as using a 5-25 attorney firm. The survey results can be read here. The large firm average (in Canadian dollars) was $51,875 with a high of $165,368. The small firm average was $21,790 with a high of $36,691.
Contributed by Eric A. Welter.Archive for the ‘Law Firm Economics’ Category
Big Law in Canada Costs More Too
Tuesday, August 3rd, 2010Shortage Of Legal Work At Large Firms Causes Clients To Pay More
Thursday, May 6th, 2010An article in the DC Bar’s April 2010 Washington Lawyer caught our attention. The article is entitled “Cost and Effect: Financial Outlook Forces Law Firms to Reexamine Billing, Head Counts, and Services.” One observation made in the article is that the shortage of legal work at large firms is leading clients to pay a higher hourly rate for routine matters because the work is being done by more senior attorneys while the lowest level associates are being laid off or not hired. More after the break.
Contributed by Eric A. Welter.Is Your Lawyer Too Concerned About Making Money?
Wednesday, December 23rd, 2009We were intrigued to read last week about a recent study on the state of the legal industry. Frequent readers are already aware of our series of posts on law firm economics. One graph from the study, however, caught our attention because it visually portrayed what we perceive as the dichotomy between the interests of clients and the self-interest of many lawyers. More after the break.
Contributed by Eric A. Welter.“Prying [the] cash out of our clients’ hands”
Tuesday, December 1st, 2009Not exactly the kind of attitude most clients want their employment law attorney to have. More after the break.
Contributed by Eric A. Welter.“The Most Oppressive Motion Ever Presented To A Superior Court”
Monday, October 12th, 2009Not exactly the way you want your employment lawyer’s summary judgment motion described by the court of appeals.
Followers of this blog are aware of our occasional commentary on “law firm economics,” namely, how large, institutional law firms manage to churn out huge profits per partner every year despite the public relations spin that they are really concerned about how much their clients are spending on legal fees. Today we read about a California case involving a national employment law firm that is perhaps the clearest example of how large law firms turn routine employment cases into Armageddon-like clashes between civilizations. The case is Nazir v. United Airlines, Inc., ___ Cal.App.4th ___ (Oct. 9, 2009). The California Court of Appeals characterized it as “a case involving what may well be the most oppressive motion ever presented to a superior court.”
More after the break.
Contributed by Eric A. Welter.Law Firm Economics — Recession Style
Monday, June 15th, 2009Former law clerks to the U.S. Supreme Court may no longer get $250,000 signing bonuses. Law.com article here.
“Cravath, Swaine & Moore LLP, the fifth-most profitable U.S. law firm, is offering $80,000 to incoming lawyers to defer their starting dates for a year, according to an internal memo obtained by Bloomberg News.” Bloomberg.com article here. The Business Insider has a story here. The Manpower Employment Blawg has a post about the topic here.
As a client, are you excited about paying for attorneys who are doing no work for you to take a year off? Do you really feel that you are getting great value from your law firm when they are using your fees to subsidize a $250,000 signing bonus for a lawyer who has never practiced law? Just asking.
Contributed by Eric A. Welter.Law firm economics, 2009-style
Monday, April 6th, 2009“Companies dump big Wall Street law firms for smaller, cheaper outfits.”
UPDATE: Additional thoughts on this topic here.
Contributed by Eric A. Welter.BigLaw Ensures Profits In Downturn Through “Alternative Billing” Arrangements
Tuesday, January 13th, 2009An email I received yesterday regarding a seminar on increasing law firm profitability in a down economy caught my attention. The email caught my attention not because of the topic, but because of one of the bullet points within the email.
Lately, the press has been reporting on alleged dissatisfaction with the billable hour model. (For example, see here.) In our opinion, the problem with the billable hour model is not the model itself, but rather a lack of trust in attorney/client relationship. That is a topic for another day.
The bullet point in the email caught our attention, however, because it illustrates our thoughts in prior posts regarding the misguided priorities in law firm economics (for our prior posts on law firm economics, see here). More after the break.
Decisions Reveal Priorities In Law Firm Economics
Thursday, November 13th, 2008We have been discussing law firm economics and employment litigation in a recent series of posts – here is the most recent. One theme we have been emphasizing is that law firms are businesses too, and businesses make decisions about pricing and cost management based on certain priorities. A question we have been raising is, in the context of employment litigation, what are the priorities that clients want to be paying for? More after the break.
Are Alternate Billing Arrangements The Answer?
Tuesday, November 11th, 2008Law.com has an article today called “Billing Gets Creative in Souring Economy: Retainers, flat and ‘success’ fees in play.” The article discusses the efforts of large corporations to reduce legal expenses with new alternative billing arrangements such as fixed fees, blended rates, fee caps and monthly retainers. Apparently some corporations have met with success in this effort — at least if success is measured by lower legal bills.
As part of our ongoing discussion about economic issues in the legal practice of employment law (recent posts here and here), I offer some brief thoughts on alternative billing arrangements in employment cases (and welcome comments) after the break.
More On Law Firm Economics As It Relates To Employment Law
Thursday, November 6th, 2008In a recent post, I commented on the economy and law firm economics. An article on Law.com today discusses some of the same pros and cons of hiring super-sized institutional law firms — Why Law Departments Should Beware Super-Sized Firms. The author, Rees Morrison, has his own blog on law department management here. More after the break.
Economy Impacts Law Firm Economics — Are There Other Alternatives?
Tuesday, October 21st, 2008The Washington Post reported yesterday here that law firms are tightening their belts as clients increasingly demand reductions in legal fees. As the economy shifts, even old line firms with substantial revenues have failed. But as we have noted elsewhere, an economic downturn is likely to result in an increase in employment litigation. Given the conflicting pressures that companies will face, in coming weeks, we plan to comment more on the economics and management of employment litigation.
